[Federal Register Volume 63, Number 111 (Wednesday, June 10, 1998)]
[Rules and Regulations]
[Pages 31593-31601]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-15405]



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  Federal Register / Vol. 63, No. 111 / Wednesday, June 10, 1998 / 
Rules and Regulations  

[[Page 31593]]


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DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Part 301

[Docket No. 96-016-29]
RIN 0579-AA83


Karnal Bunt; Compensation for the 1996-1997 Crop Season

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: We are amending the Karnal bunt regulations by adding 
compensation provisions for certain growers, handlers, seed companies, 
owners of grain storage facilities, flour millers, and participants in 
the National Karnal Bunt Survey who incur losses and expenses because 
of Karnal bunt in the 1996-1997 crop season. The payment of 
compensation is necessary in order to reduce the economic impact of the 
Karnal bunt regulations on affected wheat growers and other 
individuals, and to help obtain cooperation from affected individuals 
in Karnal bunt eradication efforts. The amendments are necessary to 
make compensation appropriate for circumstances in the 1996-1997 crop 
season.

EFFECTIVE DATE: June 10, 1998.

FOR FURTHER INFORMATION CONTACT: Mr. Mike Stefan, Operations Officer, 
Domestic and Emergency Operations, PPQ, APHIS, 4700 River Road Unit 
134, Riverdale, MD 20737-1236, (301) 734-8247, or e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    Karnal bunt is a fungal disease of wheat (Triticum aestivum), durum 
wheat (Triticum durum), and triticale (Triticum aestivum X Secale 
cereale), a hybrid of wheat and rye. Karnal bunt is caused by the smut 
fungus Tilletia indica (Mitra) Mundkur and is spread by spores, 
primarily through the movement of infected seed. In the absence of 
measures taken by the U.S. Department of Agriculture (USDA) to prevent 
its spread, the establishment of Karnal bunt in the United States could 
have significant consequences with regard to the export of wheat to 
international markets. The regulations regarding Karnal bunt are set 
forth in 7 CFR 301.89-1 through 301.89-14. Among other things, the 
regulations define areas regulated for Karnal bunt and restrict the 
movement of certain regulated articles, including wheat seed and grain, 
from the regulated areas.
    On May 6, 1997, we published a document in the Federal Register (62 
FR 24745-24753, Docket No. 96-016-17, effective April 30, 1997) making 
final an interim rule that amended the regulations to provide 
compensation for certain growers and handlers of wheat grain, owners of 
grain storage facilities, and flour millers in order to mitigate losses 
and expenses incurred in the 1995-1996 crop season because of actions 
taken by the Secretary to prevent the spread of Karnal bunt. The final 
rule also added compensation provisions for handlers of wheat grain 
that was tested and found negative for Karnal bunt, handlers and 
growers with wheat inventories from past crop seasons, and participants 
in the National Karnal Bunt Survey whose wheat grain tested positive 
for Karnal bunt in the 1995-1996 crop season. On January 9, 1998 (63 FR 
1321-1331, Docket No. 96-016-25), we published a final rule providing 
compensation for growers and seed companies for the loss in value of 
wheat seed and straw in the 1995-1996 crop season. The compensation 
regulations in both these final rules are set forth at 7 CFR 301.89-14.
    On July 11, 1997, we published in the Federal Register (62 FR 
37159-37166, Docket No. 96-016-15) a proposal to amend the regulations 
to add a compensation program for wheat harvested in 1997. The proposed 
provisions for 1996-1997 crop season wheat provided compensation for 
certain growers and handlers of wheat grain and seed, owners of grain 
storage facilities, flour millers, and participants in the National 
Karnal Bunt Survey who incurred losses and expenses because of Karnal 
bunt in the 1996-1997 crop season.
    We solicited comments concerning our proposal for 60 days ending 
September 9, 1997. We received nine comments by that date. They were 
from wheat growers and wheat industry associations. All the commenters 
recommended additions or revisions to the compensation provisions. They 
are discussed below.
    Six of the nine commenters requested compensation for growers whose 
fields are located in the areas listed as surveillance areas under the 
Karnal bunt regulations. Specifically, several of the commenters stated 
that they ``wished to register the strongest opposition to this 
proposed rule for its failure to provide compensation to those growers 
whose fields are located in the Arizona surveillance area.'' It is 
unclear to us what the concerns are. Under the Karnal bunt regulations, 
regulated areas are divided into restricted areas and surveillance 
areas. The proposed rule provided compensation for growers and handlers 
with positive testing wheat grown in regulated areas. The proposal made 
no distinction between whether or not the regulated area was a 
restricted area or a surveillance area. Any wheat grown in a regulated 
area, including a surveillance area, that is tested by the Animal and 
Plant Health Inspection Service (APHIS) and found positive for Karnal 
bunt in the 1996-1997 crop season will be eligible for compensation 
under this rule.
    Under the regulations, designation of an area as a surveillance 
area has an impact only on the movement of wheat grain from that area; 
wheat seed is subject to the same restrictions whether it is grown in a 
surveillance area or in any other part of the regulated area. 
Therefore, because the commenters are specifically concerned about 
compensation to growers with fields in surveillance areas, we can 
conjecture that they are concerned about loss in value of wheat grain. 
Wheat grain from a surveillance area that tests negative for Karnal 
bunt may be moved under certificate to any destination without 
restriction. We do not expect growers with negative-testing wheat grain 
to experience a loss in value of the grain due to our regulations. For 
this reason, this final rule does not offer compensation to growers for 
wheat

[[Page 31594]]

grain that tests negative for Karnal bunt. Wheat grain from a 
surveillance area that tests positive for Karnal bunt may be moved only 
under a limited permit and will be subject to measures intended to 
mitigate the risk of the grain spreading Karnal bunt. Due to our 
restrictions, most positive-testing grain will be sold for use as 
animal feed. This final rule offers compensation to growers for the 
loss in value of positive-testing grain. We have made no changes to the 
rule based on these comments.
    Two comments specified that compensation should be paid to growers 
with fields in surveillance areas who chose not to plant wheat in the 
1996-1997 crop season in order to avoid losses due to Karnal bunt. 
According to the comments, alternative crops to wheat (for example, 
barley) are of lower value than wheat; therefore, the comments claim 
that the choice to plant alternative crops resulted in losses in annual 
income for these farmers. The commenters said that, since it is APHIS' 
desire to encourage growers in regulated areas to stop growing wheat, 
APHIS should consider growers who voluntarily planted alternative crops 
as contributing to the Karnal bunt eradication effort, and should 
compensate them accordingly.
    We are not making any changes to the proposed rule based on these 
comments. At the time growers were making planting decisions for the 
1996-1997 crop season, the Karnal bunt regulations did not prohibit 
growers with fields in surveillance areas from planting wheat, unless 
the field had been planted with known contaminated seed in 1995. 
Growers who chose to plant alternative crops in order to avoid losses 
related to Karnal bunt did so as a business decision, and not as a 
result of any restrictions placed on them by the regulations. 
Currently, and at the time planting decisions were being made for the 
1996-1997 crop season, wheat grain from surveillance areas that tests 
negative for Karnal bunt may be moved under a certificate to any 
destination without restriction. Therefore, when making planting 
decisions, growers should not have expected to experience losses due to 
Karnal bunt unless their wheat tested positive. If their wheat tested 
positive, this final rule offers them compensation for the loss in 
value.
    Three comments requested compensation for losses such as demurrage 
charges on railcars, the cost of cleaning and sanitizing railcars prior 
to loading, losses due to delays in transportation caused by the Karnal 
bunt regulations, extra storage costs due to shipping delays, and labor 
costs for cleaning and disinfecting combines. We are not making any 
changes to the proposal for 1996-1997 crop season compensation in 
response to these comments. Compensation has not been offered for these 
costs and losses in the 1995-1996 crop season. In determining what 
specific losses to compensate, a top priority was compensation for 
wheat and other articles the Agency ordered destroyed or prohibited 
movement. For this reason, the focus of compensation for Karnal bunt 
related losses is the loss in value of wheat seed and grain. We 
recognize that the compensation we have offered may not fully account 
for every loss experienced by growers and handlers resulting from 
Karnal bunt. However, we believe the compensation provisions in this 
final rule will significantly mitigate losses due to the actions taken 
by USDA to control Karnal bunt.
    One comment requested compensation for decontaminating storage 
facilities and conveyances found with wheat testing positive for Karnal 
bunt. Both the proposed rule and this final rule provide for 
compensation for this purpose. Section 301.89-16(a) provides that, in 
States where the Secretary has declared an extraordinary emergency, 
owners who have decontaminated their grain storage facilities pursuant 
to an Emergency Action Notification (EAN) (PPQ Form 523) issued by an 
inspector are eligible to be compensated, on a one time only basis for 
each facility for each covered crop year wheat, for up to 50 percent of 
the direct cost of decontamination. However, compensation will not 
exceed $20,000 per grain storage facility. Grain storage facility is 
defined in Sec. 301.89-1 of the regulations to mean ``That part of a 
grain handling operation or unit of a grain handling operation, 
consisting of structures, conveyances, and equipment that receive, 
unload, and store grain, and that is able to operate as an independent 
unit from other units of the grain handling operation. A grain handling 
operation may be one grain storage facility or may be comprised of many 
grain storage facilities on a single premises.''
    Two comments said that growers and handlers should not have to 
provide copies of Karnal bunt certificates in order to claim 
compensation, and also asked that we remove the requirement that 
growers and handlers provide copies of Emergency Action Notifications 
(EANs) for wheat grown in an area that was not regulated for Karnal 
bunt but for which an EAN had been issued. The commenters' reason was 
that Karnal bunt certificates and EANs were issued by USDA, and should 
not have to be provided back to USDA to claim compensation.
    We are making no changes to the proposed rule based on these 
comments. We understand that filing claims for compensation does 
require claimants to provide a number of documents, and collecting 
these documents may seem cumbersome. Claims submitted under this final 
rule for 1996-1997 crop season wheat seed and grain will be processed 
by the Farm Service Agency (FSA). APHIS will process claims for 
decontamination of grain storage facilities and treatment of millfeed. 
While FSA and APHIS are both a part of USDA, they do not share offices, 
computer systems, or recordkeeping systems. This would make it 
difficult and time-consuming for APHIS and FSA to exchange copies of 
the required documents for each claimant. In addition, in most cases, 
claimants were provided with copies of EANs and Karnal bunt 
certificates. If they were not, copies may be obtained by the claimant 
from APHIS for submission to FSA. Claimants should not have difficulty 
in collecting EANs or Karnal bunt certificates. At this time, the most 
efficient way for FSA and APHIS to process compensation claims is for 
the claimant to provide the documents to FSA and APHIS.
    We have been made aware, however, that some owners of grain storage 
facilities ordered decontaminated due to Karnal bunt were not issued 
EANs. A number of owners of grain storage facilities found to have 
positive grain in the 1996-1997 crop season were issued letters from 
APHIS declaring their grain to be positive for Karnal bunt and ordering 
the grain storage facilities to be decontaminated. To accommodate this, 
owners of grain storage facilities may claim compensation under this 
final rule if their facility was decontaminated pursuant to an EAN 
issued by APHIS or pursuant to a letter issued by APHIS ordering the 
facility to be decontaminated. We will require that, to claim 
compensation, claimants provide APHIS with either a copy of the EAN or 
a copy of the letter from APHIS ordering decontamination of the 
facility. These changes appear in Sec. 301.89-16 (a) and (c).
    Two commenters were concerned about the proposed compensation for 
heat treating millfeed. The proposed compensation is the same as what 
was offered for heat treating millfeed in the 1995-1996 crop season. 
The commenters said that they believe heat treating millfeed is not 
necessary, and were under the impression that APHIS was eliminating 
this requirement.

[[Page 31595]]

    In the preamble to the proposed rule, we stated that APHIS was 
considering proposing to eliminate the requirement to heat treat 
millfeed. We also stated that, if this requirement is eliminated by a 
future rulemaking, compensation will not be paid for millfeed that is 
heat treated after the effective date of such a rule. To date, the 
requirement for heat treating millfeed has not been eliminated from the 
regulations. On January 28, 1998 (63 FR 4198-4204, Docket No. 96-016-
22), we published in the Federal Register a proposed rule to, among 
other things, amend the requirements for treating millfeed, so that 
only millfeed resulting from the milling of wheat, durum wheat, or 
triticale that tested positive for Karnal bunt would require heat 
treatment. However, this proposed rule would have no effect on millfeed 
from grain milled in the 1996-1997 crop season. Any millfeed that has 
been treated in the 1996-1997 crop season in accordance with a 
compliance agreement with APHIS will be eligible for the compensation 
offered in this final rule.
    One commenter said that since the proposal would compensate only 
for wheat that tests positive for Karnal bunt, the industry needs 
assurance that there will not be any restrictions on the movement of 
wheat that tests negative. In the 1996-1997 crop season, no host 
material was allowed to be planted in fields in restricted areas for 
regulated articles other than seed. As a result of an interim rule 
effective on April 25, 1997, and published in the Federal Register on 
May 1, 1997 (62 FR 23620-23628, Docket No. 96-016-19), wheat grain that 
is from a surveillance area and that tests negative on one test 
conducted at the means of conveyance may move under certificate to any 
destination without further safeguarding or sanitation requirements. 
Restricted areas for seed encompass and extend beyond surveillance 
areas. Grain from fields that are in restricted areas for seed outside 
a surveillance area may move without testing and without restriction 
for any purpose but seed. Seed grown in a restricted area for seed that 
tests negative for Karnal bunt may be planted within the regulated area 
only. These regulations remain in effect.
    One commenter asked that we be more flexible in dealing with 
individual claims for compensation that do not fit the regulations 
precisely. Specifically, the commenter requested that we consider 
compensation for a grower who plowed down a field outside of the 
regulated area, and for test plots that were plowed down in California. 
The plow downs to which the commenter refers occurred in the 1995-1996 
crop season, and are therefore outside the scope of this final rule. 
Additional compensation claims for 1996-1997 crop season losses that do 
not fit the provisions of this final rule will be considered by USDA.
    One commenter requested that compensation be extended to wheat 
growers and handlers in Alabama. APHIS conducted a National Karnal Bunt 
Survey in the 1996-1997 crop season to demonstrate to our trading 
partners that areas producing wheat for export are free of the disease. 
During the survey, grain in a number of storage facilities located in 
the States of Alabama, Florida, Georgia, and Tennessee was found to be 
contaminated with spores which we believed to be teliospores of the 
smut fungus Tilletia indica (Mitra) Mundkur. The presence of 
teliospores of this smut fungus can result in an outbreak of Karnal 
bunt. Based on these findings, USDA considered declaring an 
extraordinary emergency for Karnal bunt in the States of Alabama, 
Florida, Georgia, and Tennessee.
    USDA did not, however, declare an extraordinary emergency in these 
States. In May of 1997, APHIS announced that regulation of an area for 
Karnal bunt would be based only on the presence of bunted wheat 
kernels. APHIS based this decision on the fact that a substantial 
portion of ryegrass seed produced in the United States contains 
teliospores produced by an as yet unnamed smut that are 
indistinguishable from Karnal bunt teliospores. Ryegrass is one of the 
most common weeds occurring in wheat fields, and is frequently planted 
with wheat in forage and pasture mixes. For this reason, APHIS 
determined that at the present time, it is not possible to determine 
whether a teliospore is indicative of ryegrass smut or Karnal bunt 
without the presence of bunted wheat kernels. Because no bunted kernels 
were found in wheat storage facilities located in the States of 
Alabama, Florida, Georgia, and Tennessee, USDA determined that a 
declaration of extraordinary emergency in these States was not 
warranted.
    The commenter said that, despite the absence of regulatory 
restrictions, farmers in Alabama experienced losses due to planting 
decisions made in the 1996-1997 crop season as a result of the threat 
of a quarantine. The commenter also said that the Secretary should have 
the authority to compensate regardless of whether or not a declaration 
of extraordinary emergency is declared.
    As we have explained in other rules on Karnal bunt compensation, 
the Federal Plant Pest Act (7 U.S.C. 150aa-150jj) authorizes the 
Secretary of Agriculture to take emergency action in States where the 
Secretary has declared an extraordinary emergency. The Federal Plant 
Pest Act also authorizes the Secretary to compensate growers and other 
persons in those States for economic losses incurred by them as a 
result of those emergency actions. (See specifically 7 U.S.C. 150dd.) 
Congress has not authorized the Secretary to pay compensation in States 
for which an extraordinary emergency has not been declared. The 
determination that Karnal bunt does not exist in the States of Alabama, 
Florida, Georgia, and Tennessee saved wheat producers in those States 
from Federal regulation that would have required testing of all wheat 
grown in regulated areas, and substantial restrictions on the movement 
and potential uses of their wheat crop. Some wheat producers may have 
experienced a loss in income in the 1996-1997 crop season due to 
planting decisions made as a result of uncertainty as to the State's 
Karnal bunt status. However, because an extraordinary emergency was not 
declared in these States, we are unable to offer compensation for any 
losses that may have been experienced.
    We received one comment concerning the difference in compensation 
rates offered to growers and handlers in areas under the first 
regulated crop season and growers and handlers in areas under the 
second regulated crop season. We proposed different levels of 
compensation for growers and handlers of positive wheat, depending on 
which of the following two sets of circumstances applies: (1) The wheat 
is from an area that became regulated for Karnal bunt after the 1996-
1997 crop was planted, or for which an EAN was issued after the 1996-
1997 crop was planted; or (2) the wheat is from an area that became 
regulated for Karnal bunt before the 1996-1997 crop was planted, or for 
which an EAN was issued before the 1996-1997 crop was planted. We 
proposed to call these ``areas under the first regulated crop season'' 
and ``areas under the second regulated crop season,'' respectively. In 
both cases, the area must have remained regulated or under an EAN at 
the time the wheat was sold in order for wheat grown in that area to be 
eligible for compensation.
    We proposed compensation for positive wheat grown in areas under 
the second regulated crop season of $.60 per bushel; the proposed 
compensation for positive wheat grown in areas under the first 
regulated crop season is set at a maximum of $1.80 per bushel. One 
commenter said that the proposed $.60 per bushel compensation for 
positive

[[Page 31596]]

wheat grown in areas under the second regulated crop season is 
inadequate, and that growers and handlers in those areas should be 
eligible for the same maximum $1.80 compensation as growers and 
handlers of wheat grown in an area under the first regulated crop 
season.
    As we explained in the preamble to the proposed rule, growers and 
handlers in areas under the first regulated crop season would not have 
known that their area was to become regulated for Karnal bunt at the 
time they made their planting and many of their contracting decisions, 
and would not have been prepared for the loss in value of their wheat 
due to Karnal bunt. Growers and handlers in areas under the second 
regulated crop season knew they were in an area regulated for Karnal 
bunt at the time they made planting and contracting decisions for the 
1996-1997 crop season. Understanding the restrictions, growers and 
handlers could have chosen to alter their planting or contract 
decisions. For these reasons, we believe that the proposed compensation 
amounts are appropriate for the circumstances in each area.
    One commenter was concerned that the proposed rule does not include 
a provision for review or appeal of APHIS' compensation decisions. We 
are making no changes to the proposed rule based on this comment. The 
amount of compensation to be offered to individuals affected by actions 
taken to control Karnal bunt are at the discretion of the Secretary. 
The compensation amounts offered in this final rule, therefore, reflect 
the decisions of the Secretary, and are final. Provisions for review or 
appeal of compensation decisions may be more appropriate, for example, 
in cases where compensation is based on appraisal of a claimant's 
property. In such cases, there may be provisions for review or appeal 
of the appraisal amount accepted by APHIS. Under the Karnal bunt 
compensation program, compensation amounts are based on regulations 
that apply equally to all claimants, with no individual appraisal of 
the relative value of a claimant's wheat. Therefore, it is not 
necessary to include provisions for review or appeal of APHIS' 
compensation decisions.
    One commenter requested complete deregulation of all wheat 
producing areas that were not found to have bunted kernels under the 
sampling program in the past 2 years. The commenter also requested 
changes in the regulations regarding testing and treatment of seed in 
areas where bunted kernels have been found. These comments are outside 
the scope of this rulemaking on 1996-1997 crop season compensation. 
However, we will consider these comments as we continue to evaluate the 
Karnal bunt regulations concerning regulated areas and testing and 
treatment of seed.

Miscellaneous

    On January 9, 1998, we published a final rule in the Federal 
Register (63 FR 1321-1331, Docket No. 96-016-25, effective on December 
23, 1997) to provide compensation to growers and seed companies for the 
loss in value of wheat seed in the 1995-1996 crop season. In the July 
11 proposed rule on which this final rule is based, we proposed to 
provide compensation to growers and handlers for the loss in value of 
wheat seed and grain in the 1996-1997 crop season. Even though 
compensation provisions for 1996-1997 crop season seed were included in 
the July 11 proposal, we mistakenly failed to include seed companies as 
being eligible for compensation as we did in the January 9 final rule 
for 1995-1996 crop season seed. Seed companies are also referred to as 
handlers with regard to seed. However, in order to be consistent with 
the final rule for 1995-1996 crop season seed published on January 9, 
we have added the term ``seed companies'' throughout this final rule to 
make it clear that seed companies are eligible for compensation for the 
loss in value of 1996-1997 crop season wheat seed.
    Also, under the January 9 final rule for the 1995-1996 crop season, 
only certified seed or seed grown with the intention of producing 
certified seed is eligible for compensation. The requirement that wheat 
seed be certified or grown with the intention of producing certified 
seed was not in the proposed rule on 1995-1996 wheat seed compensation, 
but was added in the January 9 final rule in response to commenters' 
concerns that this is the most reliable way to establish a grower or 
seed company's intent to produce wheat as a seed crop. Further, 
requiring that wheat seed be certified or grown with the intention of 
producing certified wheat seed ensures that the compensation is 
limited, as was our intent, to market-ready seed, and will not be paid 
for seed in other stages of development. For this reason, this final 
rule requires that 1996-1997 crop season wheat seed must be certified 
or grown with the intent of producing certified seed in order to be 
eligible for compensation.
    Further, we have added a requirement in this final rule that 
growers and seed companies claiming compensation for seed must submit 
documentation that provides evidence that the wheat being considered 
for compensation is classified as certified seed or is considered 
certifiable as certified seed by a State seed certification agency. 
Seed certification agencies usually require that applicants for seed 
certification keep records of the amount of certifiable seed harvested. 
This documentation may include one or more of the following types of 
documents: An application to the State seed certification agency for 
field inspection (to show that seed is eligible for certification); a 
bulk sale certificate; certification tags or labels issued by the State 
seed certification agency; or a document issued by the State seed 
certification agency verifying that the wheat is certified seed. 
Growers who do not have copies of such documentation can obtain it from 
the seed company or from their State's seed certification agency.
    We proposed to require that, in order to claim compensation, 
claimants submit a number of documents. Among them, we proposed that 
claimants would have to submit verification as to the actual (not 
estimated) weight of the wheat for which compensation is being claimed, 
such as a copy of the limited permit under which the wheat is being 
moved, or other verification. We have been made aware that a limited 
permit often gives an estimated weight of the wheat, not the actual 
weight. A facility weigh ticket does give the actual weight of the 
wheat, and is a document to which all claimants would have access. 
Therefore, this final rule states that claimants must submit 
verification as to the actual (not estimated) weight of the wheat for 
which compensation is being claimed, such as a copy of a facility weigh 
ticket, or other verification. This change was made in Sec. 301.89-
15(c)(1) for growers, handlers, and seed companies and in Sec. 301.89-
16(b) and (c)(1) for flour millers and National Karnal Bunt Survey 
participants.
    The proposed rule also provided compensation for flour millers who, 
in accordance with a compliance agreement with APHIS, heat treat 
millfeed ``made from wheat produced in areas that require such 
treatment.'' As discussed previously in this document, a proposed rule 
was recently published that would amend the requirements for heat 
treating millfeed, so that the area in which the wheat was grown would 
no longer be the determining factor for requiring heat treatment. To 
accommodate this potential change, and any other changes that may occur 
with regard to millfeed requirements, this final rule states that flour 
millers are eligible for compensation if they heat

[[Page 31597]]

treat millfeed ``that is required by APHIS to be heat treated.'' This 
statement will exclude from compensation eligibility any millfeed that 
is heat treated at the request of any entity other than APHIS.
    Finally, the proposed rule stated that claims for compensation must 
be received by APHIS or FSA on or before March 31, 1998. We do not 
believe that this will provide enough time for claimants to submit 
their claims. Therefore, this final rule requires that claims for 
compensation must be received by APHIS or FSA on or before 120 days 
after the date the final rule is published in the Federal Register.
    Therefore, based on the rationale set forth in the proposed rule 
and in this document, we are adopting the provisions of the proposal as 
a final rule with the changes discussed in this document.

Effective Date

    Pursuant to the administrative procedure provisions in 5 U.S.C. 
553, we find good cause for making this rule effective less than 30 
days after publication in the Federal Register. This rule provides 
compensation to persons who experienced economic losses in the 1996-
1997 crop season because of the Karnal bunt quarantine and emergency 
actions. Immediate action is necessary to compensate for these losses. 
Therefore, the Administrator of the Animal and Plant Health Inspection 
Service has determined that this rule should be effective upon 
publication in the Federal Register.

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been reviewed under Executive Order 12866. The rule 
has been determined to be economically significant for the purposes of 
Executive Order 12866 and, therefore, has been reviewed by the Office 
of Management and Budget.
    This final rule establishes compensation provisions for certain 
growers, handlers, seed companies, owners of grain storage facilities, 
flour millers, and participants in the National Karnal Bunt Survey to 
mitigate losses and expenses incurred in the 1996-1997 crop season 
because of the Karnal bunt quarantine and emergency actions.
    In accordance with Executive Order 12866, this analysis examines 
the economic impact of providing such compensation. The wheat industry 
within the regulated area is largely composed of businesses that can be 
considered as ``small'' according to guidelines established by the 
Small Business Administration. Therefore, this analysis also fulfills 
the requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.), which require agencies to consider the economic impact of rule 
changes on small entities.
    Upon detection of Karnal bunt in Arizona in March 1996, Federal 
quarantine and emergency actions were imposed to prevent the interstate 
spread of the disease to other wheat producing areas in the United 
States. The unexpected discovery of Karnal bunt and subsequent Federal 
emergency actions disrupted the production and marketing flows of wheat 
in the quarantined areas. It was estimated that the impact of Karnal 
bunt and subsequent Federal actions on the wheat industry totaled $44 
million in the 1995-1996 crop season.
    In order to alleviate some of the economic hardships and to ensure 
full and effective compliance with the quarantine program, compensation 
to mitigate certain losses has been offered to growers, handlers, seed 
companies, and other affected persons in the areas regulated for Karnal 
bunt. The payment of compensation is in recognition of the fact that 
while benefits from regulation accrue to a large portion of the wheat 
industry outside the regulated areas, the regulatory burden falls 
predominately on a small segment of the affected wheat industry within 
the regulated areas. For the 1995-1996 wheat crop, $39 million in 
compensation funding was made available to USDA through budget 
apportionment.
    As additional information from sampling and testing became 
available in subsequent months following the outbreak, the Agency was 
able to ease the quarantine in order to minimize the disruption to 
affected entities. An interim rule effective on April 25, 1997, and 
published in the Federal Register on May 1, 1997 (62 FR 23620-23628, 
Docket No. 96-016-19), substantially reduced the size of the area 
regulated for Karnal bunt and eased restrictions on the movement of 
grain and other regulated articles from those areas that remain under 
regulation. The interim rule also revised the categories of regulated 
areas into restricted areas for seed, restricted areas for regulated 
articles other than seed, and surveillance areas. No host material was 
grown in the 1996-1997 crop season in restricted areas for regulated 
articles other than seed. Wheat grain that is from a surveillance area 
and that tests negative for Karnal bunt may move under certificate to 
any destination without restriction. Wheat seed that is from a 
restricted area for seed and that tests negative for Karnal bunt may be 
planted only within a regulated area.
    Under this final rule, growers, handlers, and seed companies will 
be eligible for compensation for losses in the 1996-1997 crop season 
due to wheat grain or seed that tested positive for Karnal bunt. Only 
positive-testing wheat will be eligible for compensation because of the 
lack of restrictions on the movement of negative testing wheat. 
Different levels of compensation will be offered depending on whether 
the wheat was grown in an area under the first regulated crop season or 
under the second regulated crop season. The rule defines an area in the 
first regulated crop season as an area that became regulated for Karnal 
bunt after the 1996-1997 crop was planted. An area under the second 
regulated crop season is an area that became regulated for Karnal bunt 
before the 1996-1997 crop was planted. At the time that we proposed 
this compensation in July 1997, there were no areas under the first 
regulated crop season. Since then, an area in San Saba County, TX, has 
been added to the list of regulated areas. Growers, handlers, and seed 
companies in that area will be eligible for first regulated crop season 
compensation. Growers, handlers, and seed companies in all other 
regulated areas will be eligible to receive second regulated crop 
season compensation.
    For growers, handlers, and seed companies in the second regulated 
crop season, compensation for positive grain or seed will be $.60 per 
bushel. Growers, handlers, and seed companies in the first regulated 
crop season will be eligible for compensation at a rate not to exceed 
$1.80 per bushel. These compensation rates apply to both wheat grain 
and seed. The differential in compensation rates reflects the fact that 
affected entities in areas under the first regulated crop season would 
not have known that their area was to become regulated for Karnal bunt 
at the time that they made planting and contracting decisions, and 
would not have been prepared for the loss in value of their wheat due 
to Karnal bunt. Growers and handlers in the second regulated crop 
season knew they were in an area regulated for Karnal bunt at the time 
that they made planting and contracting decisions for the 1996-1997 
crop season. Given the restrictions, growers and handlers could have 
chosen to alter planting or contract decisions to avoid experiencing 
potential losses due to Karnal bunt. Information on the regulated 
acreage in the 1996-1997 crop season, and the wheat plantings expected 
within these areas, is presented in Table 1.

[[Page 31598]]



                  Table 1.--Karnal Bunt Regulated Areas and Wheat Plantings in Regulated Areas                  
----------------------------------------------------------------------------------------------------------------
                                                                                         Texas  (El  Texas  (San
                                                   Arizona     California   New Mexico   Paso) \1\    Saba) \2\ 
----------------------------------------------------------------------------------------------------------------
Acres Restricted for Other than Seed 1996-1997.        6,162        3,113        3,990          469       1,050.
Acres in Surveillance Area 1996-1997...........      135,000       84,000          N/A          N/A      15,000.
Acres Restricted for Seed 1996-1997 \3\........      797,000      100,000       58,650          469      20,000.
Acres of Planted Wheat in Regulated Area 1995-                                                                  
 1996..........................................      181,000      129,883       10,235          705          (*)
Acres of Planted Wheat in Regulated Area 1996-                                                                  
 1997..........................................       89,000        9,087        3,327          703      20,000.
----------------------------------------------------------------------------------------------------------------
\1\ The Texas-El Paso area is designated as a second regulated crop season area.                                
\2\ The Texas-San Saba area is designated as a first regulated crop season area.                                
\3\ Acreage restricted for seed encompasses both restricted areas for regulated articles other than seed and    
  surveillance areas.                                                                                           
* Not within regulated area in 1995-1996.                                                                       

    APHIS has completed testing of wheat from the regulated areas in 
the 1996-1997 crop season. In California, for the 1996-1997 crop, 1 
railcar of wheat tested positive for spores out of 219 railcars tested. 
In Arizona, 5 railcars tested positive for spores out of a total of 203 
railcars tested. In New Mexico and in Texas (El Paso), no grain or seed 
was found to be positive for Karnal bunt. The testing of wheat 
conducted under the National Karnal Bunt Survey in the 1996-1997 crop 
season found one new area with Karnal bunt, in San Saba County, TX. 
Positive wheat from this area will be compensated for under the 
provisions for first regulated crop season areas. Approximately 76,000 
bushels of harvested wheat that were in storage in this area were found 
positive for Karnal bunt. Compensation calculations are provided in 
Table 2.

                 Table 2.--Compensation for Positive Testing Wheat in the 1996-1997 Crop Season                 
----------------------------------------------------------------------------------------------------------------
                                   Wheat acreage                                                                
                                     grown in     Positive wheat  Positive wheat      Maximum          Total    
              Area                regulated area    grain (Bu.)     seed (Bu.)     compensation    compensation 
                                        \1\                                        (per bushel)                 
----------------------------------------------------------------------------------------------------------------
California \2\..................           9,087           3,333               0            $.60          $2,000
Arizona \3\.....................          89,000          16,667           (\4\)             .60          10,000
Texas-San Saba..................          20,000          65,641          10,494            1.80         137,044
                                 -------------------------------------------------------------------------------
    Totals......................         118,087          85,691          10,494  ..............         149,044
----------------------------------------------------------------------------------------------------------------
\1\ One acre of wheat yields approximately 100 bushels of wheat grain in this region.                           
\2\ In California only one railcar tested positive for Karnal bunt. The bushels of positive wheat is estimated  
  by assuming that each railcar carries a load of 100 tons or 200,000 pounds. At 60 pounds per bushel, one      
  railcar therefore holds 3,333 bushels per car.                                                                
\3\ In Arizona, 5 railcars tested positive for Karnal bunt.                                                     
\4\ Only 25 pounds of research seed tested positive in Arizona.                                                 

    Assuming an average market value of $5 per bushel for wheat in this 
region, we estimate the total value of wheat produced in the regulated 
areas to be $59 million in the 1996-1997 crop season. According to the 
calculations in Table 2, approximately 96,185 bushels of wheat grain 
and seed, or 0.8 percent of the wheat grown in the regulated areas, 
tested positive for Karnal bunt in the 1996-1997 crop season. We 
estimate that the 96,185 bushels would bring about $481,000 in the 
absence of Karnal bunt regulations. Under the provisions of this final 
rule, we expect compensation for this wheat grain and seed will total 
about $150,000.
    This final rule also provides compensation for the decontamination 
of grain storage facilities found with positive wheat, the treatment of 
millfeed, and participants in the National Karnal Bunt Survey whose 
wheat or grain storage facility is found to be positive for Karnal 
bunt. Compensation for decontamination of grain storage facilities will 
be on a one-time only basis for up to 50 percent of the cost of 
decontamination, not to exceed $20,000. Ten facilities that stored seed 
testing positive for Karnal bunt in San Saba County, TX, will be 
eligible for this compensation. Eight of these are small, on-site 
storage facilities; for purposes of this analysis, we estimate the 
maximum compensation for which these small facilities will be eligible 
is about $10,000 per facility. The remaining two facilities are large-
capacity storage facilities that, for purposes of this analysis, we 
estimate will be eligible for the maximum compensation of $20,000 each. 
Using these estimates, compensation for the decontamination of grain 
storage facilities under this rule should total a maximum of $120,000.
    No millfeed made from wheat grown in the regulated area has been 
heat treated in the 1996-1997 crop season, so it will not be necessary 
to compensate for heat treatment of millfeed. Owners of grain storage 
facilities found to contain positive-testing wheat during the National 
Karnal Bunt Survey are all within the newly regulated area in San Saba 
County, TX. The owners will, therefore, be eligible for first regulated 
crop season compensation.
    The Regulatory Flexibility Act requires that agencies consider the 
economic impact of rule changes on small businesses, organizations, and 
governmental jurisdictions. Growers and handlers of wheat grain and 
seed, and wheat seed companies, are those most affected by this rule 
change. It is estimated that there are a total of 373 wheat growers in 
the regulated area: 248 in Arizona, 21 in California, 23 in New Mexico, 
and 81 in Texas. There are 99 growers in the surveillance area, and 274 
growers in regulated areas lying beyond surveillance areas.1 
Most of

[[Page 31599]]

these entities have total sales of less than $0.5 million, the Small 
Business Administration's threshold for classifying wheat producers as 
small entities. Accordingly, the economic impact of this rule will 
largely be on small entities. However, grain in the five railcars that 
tested positive for Karnal bunt in Arizona is owned by one handler who 
is not considered a small entity under the criteria established by the 
Small Business Administration.
---------------------------------------------------------------------------

    \1\ The 99 growers in surveillance areas are distributed as 
follows: 21 in Arizona, 18 in California, 60 in Texas, and none in 
New Mexico. The 274 growers in regulated areas lying beyond 
surveillance areas are distributed as follows: 227 in Arizona, 3 in 
California, 23 in New Mexico, and 21 in Texas.
---------------------------------------------------------------------------

    This final rule is expected to have a positive economic impact on 
all affected entities, large and small. Compensation for the loss in 
value of wheat that tests positive for Karnal bunt serves to encourage 
compliance with testing requirements within the regulated area, thereby 
aiding in the preservation of an important wheat growing region in the 
United States. It also serves to encourage participation in the 
National Karnal Bunt Survey program.

Executive Order 12372

    This program/activity is listed in the Catalog of Federal Domestic 
Assistance under No. 10.025 and is subject to Executive Order 12372, 
which requires intergovernmental consultation with State and local 
officials. (See 7 CFR part 3015, subpart V.)

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule: (1) Preempts all State and local laws and 
regulations that are inconsistent with this rule; (2) has no 
retroactive effect; and (3) does not require administrative proceedings 
before parties may file suit in court challenging this rule.

Paperwork Reduction Act

    In accordance with section 3507(d) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the information collection or 
recordkeeping requirements included in this final rule have been 
approved by the Office of Management and Budget (OMB). The assigned OMB 
control numbers are 0579-0121 and 0579-0126.

List of Subjects in 7 CFR Part 301

    Agricultural commodities, Incorporation by reference, Plant 
diseases and pests, Quarantine, Reporting and recordkeeping 
requirements, Transportation.

    Accordingly, 7 CFR part 301 is amended as follows:

PART 301--DOMESTIC QUARANTINE NOTICES

    1. The authority citation for part 301 continues to read as 
follows:

    Authority: 7 U.S.C. 147a, 150bb, 150dd, 150ee, 150ff, 161, 162, 
and 164-167; 7 CFR 2.22, 2.80, and 371.2(c).

    2. In Sec. 301.89-1, a definition for Actual price received is 
added in alphabetical order to read as follows:


Sec. 301.89-1  Definitions.

    Actual price received. The net price after adjustment for any 
premiums or discounts stated on the sales receipt.
* * * * *
    3. New Secs. 301.89-15 and 301.89-16 are added to read as follows:


Sec. 301.89-15  Compensation for growers, handlers, and seed companies 
in the 1996-1997 crop season.

    Growers, handlers, and seed companies are eligible to receive 
compensation from the United States Department of Agriculture (USDA) 
for the 1996-1997 crop season to mitigate losses or expenses incurred 
because of the Karnal bunt regulations and emergency actions, as 
follows:
    (a) Growers, handlers, and seed companies in areas under first 
regulated crop season. Growers, handlers, and seed companies are 
eligible to receive compensation for the loss in value of their wheat 
in accordance with paragraphs (a)(1) and (a)(2) of this section if: The 
wheat was grown in a State where the Secretary has declared an 
extraordinary emergency; and, the wheat was grown in an area of that 
State that became regulated for Karnal bunt after the 1996-1997 crop 
was planted, or for which an Emergency Action Notification (PPQ Form 
523) was issued after the 1996-1997 crop was planted; and, the wheat 
was grown in an area that remained regulated or under Emergency Action 
Notification at the time the wheat was sold. Growers, handlers, and 
seed companies in areas under the first regulated crop season are 
eligible for compensation for 1996-1997 crop season wheat and for wheat 
inventories in their possession that were unsold at the time the area 
became regulated. The compensation provided in this section is for 
wheat grain, certified wheat seed, and wheat grown with the intention 
of producing certified wheat seed.
    (1) Growers. Growers of wheat in an area under the first regulated 
crop season, who sell wheat that was tested by APHIS and found positive 
for Karnal bunt prior to sale, or that was tested by APHIS and found 
positive for Karnal bunt after sale and the price received by the 
grower is contingent on the test results, are eligible to receive 
compensation as described in paragraphs (a)(1)(i) and (a)(1)(ii) of 
this section. However, compensation for positive-testing wheat will not 
exceed $1.80 per bushel under any circumstances.
    (i) If the wheat was grown under contract and a price was 
determined in the contract before the area where the wheat was grown 
became regulated, compensation will equal the contract price minus the 
actual price received by the grower.
    (ii) If the wheat was not grown under contract or a price was 
determined in the contract after the area where the wheat was grown 
became regulated, compensation will equal the estimated market price 
for the relevant class of wheat (meaning type of wheat, such as durum 
or hard red winter) minus the actual price received by the grower. The 
estimated market price will be calculated by APHIS for each class of 
wheat, taking into account the prices offered by relevant terminal 
markets (animal feed, milling, or export) during the harvest months for 
the area, with adjustments for transportation and other handling costs. 
Separate estimated market prices will be calculated for certified wheat 
seed and wheat grown with the intention of producing certified wheat 
seed, and wheat grain.
    (2) Handlers and seed companies. Handlers and seed companies who 
sell wheat grown in an area under the first regulated crop season are 
eligible to receive compensation only if the wheat was not tested by 
APHIS prior to purchase by the handler or seed company, but was tested 
by APHIS and found positive for Karnal bunt after purchase by the 
handler or seed company, as long as the price to be paid is not 
contingent on the test results. Compensation will equal the estimated 
market price for the relevant class of wheat (meaning type of wheat, 
such as durum or hard red winter) minus the actual price received by 
the handler or seed company. The estimated market price will be 
calculated by APHIS for each class of wheat, taking into account the 
prices offered by relevant terminal markets (animal feed, milling, or 
export) during the harvest months for the area, with adjustments for 
transportation and other handling costs. Separate estimated market 
prices will be calculated for certified wheat seed and wheat grown with 
the intention of producing certified wheat seed, and wheat grain. 
However, compensation will not exceed $1.80 per bushel under any 
circumstances.
    (b) Growers, handlers, and seed companies in areas under second 
regulated crop season. Growers, handlers, and seed companies are 
eligible to receive compensation for the loss in value of their wheat 
in accordance with paragraphs (b)(1) and

[[Page 31600]]

(b)(2) of this section if: The wheat was grown in a State where the 
Secretary has declared an extraordinary emergency; and, the wheat was 
grown in an area of that State that became regulated for Karnal bunt 
before the 1996-1997 crop was planted, or for which an Emergency Action 
Notification (PPQ Form 523) was issued before the 1996-1997 crop was 
planted; and, the wheat was grown in an area that remained regulated or 
under Emergency Action Notification at the time the wheat was sold. 
Growers, handlers, and seed companies in areas under the second 
regulated crop season are eligible for compensation only for 1996-1997 
crop season wheat. The compensation provided in this section is for 
wheat grain, certified wheat seed, and wheat grown with the intention 
of producing certified wheat seed.
    (1) Growers. Growers of wheat in an area under the second regulated 
crop season who sell wheat that was tested by APHIS and found positive 
for Karnal bunt prior to sale, or that was tested by APHIS and found 
positive for Karnal bunt after sale and the price received by the 
grower is contingent on the test results, are eligible to receive 
compensation at the rate of $.60 per bushel of positive testing wheat.
    (2) Handlers and seed companies. Handlers and seed companies who 
sell wheat grown in an area under the second regulated crop season are 
eligible to receive compensation only if the wheat was not tested by 
APHIS prior to purchase by the handler, but was tested by APHIS and 
found positive for Karnal bunt after purchase by the handler or seed 
company, as long as the price to be paid by the handler or seed company 
is not contingent on the test results. Compensation will be at the rate 
of $.60 per bushel of positive testing wheat.
    (c) To claim compensation. Compensation payments to growers, 
handlers, and seed companies under paragraphs (a) and (b) of this 
section will be issued by the Farm Service Agency (FSA). Compensation 
claims must be received by FSA on or before October 8, 1998. The 
Administrator may extend the deadline, upon request in specific cases, 
when unusual and unforeseen circumstances occur which prevent or hinder 
a claimant from requesting compensation on or before that date. To 
claim compensation, a grower, handler, or seed company must complete 
and submit to the local FSA county office the following documents:
    (1) Growers, handlers, and seed companies. A grower, handler, or 
seed company must submit a Karnal Bunt Compensation Claim form, 
provided by FSA. If the wheat was grown in an area that is not a 
regulated area, but for which an Emergency Action Notification (PPQ 
Form 523) (EAN) has been issued, the grower, handler, or seed company 
must submit a copy of the EAN. Growers, handlers, and seed companies 
must also submit a copy of the Karnal bunt certificate issued by APHIS 
that shows the Karnal bunt test results, and verification as to the 
actual (not estimated) weight of the wheat that tested positive (such 
as a copy of a facility weigh ticket, or other verification). For 
compensation claims for wheat seed, a grower or seed company must 
submit documentation showing that the wheat is either certified seed or 
was grown with the intention of producing certified seed (this 
documentation may include one or more of the following types of 
documents: an application to the State seed certification agency for 
field inspection; a bulk sale certificate; certification tags or labels 
issued by the State seed certification agency; or a document issued by 
the State seed certification agency verifying that the wheat is 
certified seed);
    (2) Growers. In addition to the documents required in paragraph 
(c)(1) of this section, growers must submit a copy of the receipt for 
the final sale of the wheat, showing the total bushels sold and the 
total price received by the grower. Growers compensated under paragraph 
(a)(1) of this section (first regulated crop season) must submit a copy 
of the contract the grower has for the wheat, if the wheat was under 
contract. Growers compensated under paragraph (b)(1) of this section 
(second regulated crop season) whose wheat was not tested prior to sale 
must submit documentation showing that the price paid to the grower was 
contingent on test results (such as a copy of the receipt for the final 
sale of the wheat or a copy of the contract the grower has for the 
wheat, if this information appears on those documents).
    (3) Handlers and seed companies. In addition to the documents 
required in paragraph (c)(1) of this section, handlers and seed 
companies must submit a copy of the receipt for the final sale of the 
wheat, showing the total bushels sold and the total price received by 
the handler or seed company. The handler or seed company must also 
submit documentation showing that the price paid or to be paid to the 
grower is not contingent on the test results (such as a copy of the 
receipt for the purchase of the wheat or a copy of the contract the 
handler or seed company has with the grower, if this information 
appears on those documents).


Sec. 301.89-16  Compensation for grain storage facilities, flour 
millers, and National Survey participants for the 1996-1997 crop 
season.

    Owners of grain storage facilities, flour millers, and participants 
in the National Karnal Bunt Survey are eligible to receive compensation 
from the United States Department of Agriculture (USDA) for the 1996-
1997 crop season to mitigate losses or expenses incurred because of the 
Karnal bunt regulations and emergency actions, as follows:
    (a) Decontamination of grain storage facilities. Owners of grain 
storage facilities that are in States where the Secretary has declared 
an extraordinary emergency, and who have decontaminated their grain 
storage facilities pursuant to either an Emergency Action Notification 
(PPQ Form 523) issued by an inspector or a letter issued by an 
inspector ordering decontamination of the facilities, are eligible to 
be compensated, on a one time only basis for each facility for each 
covered crop year wheat, for up to 50 percent of the direct cost of 
decontamination. However, compensation will not exceed $20,000 per 
grain storage facility (as defined in Sec. 301.89-1). General clean-up, 
repair, and refurbishment costs are excluded from compensation. 
Compensation payments will be issued by APHIS. To claim compensation, 
the owner of the grain storage facility must submit to an inspector 
records demonstrating that decontamination was performed on all 
structures, conveyances, or materials ordered by APHIS to be 
decontaminated. The records must include a copy of the Emergency Action 
Notification or the letter from an inspector ordering decontamination, 
contracts with individuals or companies hired to perform the 
decontamination, receipts for equipment and materials purchased to 
perform the decontamination, time sheets for employees of the grain 
storage facility who performed activities connected to the 
decontamination, and any other documentation that helps show the cost 
to the owner and that decontamination has been completed. Claims for 
compensation must be received by APHIS on or before October 8, 1998. 
The Administrator may extend this deadline, upon written request in 
specific cases, when unusual and unforeseen circumstances occur which 
prevent or hinder a claimant from requesting compensation on or before 
that date.
    (b) Flour millers. Flour millers who, in accordance with a 
compliance agreement with APHIS, heat treat millfeed that is required 
by APHIS to be

[[Page 31601]]

heat treated are eligible to be compensated at the rate of $35.00 per 
short ton of millfeed. The amount of millfeed compensated will be 
calculated by multiplying the weight of wheat from the regulated area 
received by the miller by 25 percent (the average percent of millfeed 
derived from a short ton of grain). Compensation payments will be 
issued by APHIS. To claim compensation, the miller must submit to an 
inspector verification as to the actual (not estimated) weight of the 
wheat (such as a copy of a facility weigh ticket or a copy of the bill 
of lading for the wheat, if the actual weight appears on those 
documents, or other verification). Flour millers must also submit 
verification that the millfeed was heat treated (such as a copy of the 
limited permit under which the wheat was moved to a treatment facility 
and a copy of the bill of lading accompanying that movement; or a copy 
of PPQ Form 700 (which includes certification of processing) signed by 
the inspector who monitors the mill). Claims for compensation must be 
received by APHIS on or before October 8, 1998. The Administrator may 
extend this deadline, upon written request in specific cases, when 
unusual and unforeseen circumstances occur which prevent or hinder a 
claimant from requesting compensation on or before that date.
    (c) National Karnal Bunt Survey participants. If a grain storage 
facility participating in the National Karnal Bunt Survey tests 
positive for Karnal bunt, the facility will be regulated, and may be 
ordered decontaminated, pursuant to either an Emergency Action 
Notification (PPQ Form 523) issued by an inspector or a letter issued 
by an inspector ordering decontamination of the facility. If the 
Secretary has declared an extraordinary emergency in the State in which 
the grain storage facility is located, the owner will be eligible for 
compensation as follows:
    (1) Loss in value of positive wheat. The owner of the grain storage 
facility will be compensated for the loss in value of positive wheat. 
Compensation will equal the estimated market price for the relevant 
class of wheat minus the actual price received for the wheat. The 
estimated market price will be calculated by APHIS for each class of 
wheat, taking into account the prices offered by relevant terminal 
markets (animal feed, milling, or export) during the relevant time 
period for that facility, with adjustments for transportation and other 
handling costs. However, compensation will not exceed $1.80 per bushel 
under any circumstances. Compensation payments for loss in value of 
wheat will be issued by the Farm Service Agency (FSA). To claim 
compensation, the owner of the facility must submit to the local FSA 
office a Karnal Bunt Compensation Claim form, provided by FSA. The 
owner of the facility must also submit to FSA a copy of the Emergency 
Action Notification or letter from an inspector under which the 
facility is or was quarantined; verification as to the actual (not 
estimated) weight of the wheat (such as a copy of a facility weigh 
ticket or a copy of the bill of lading for the wheat, if the actual 
weight appears on those documents, or other verification); and a copy 
of the receipt for the final sale of the wheat, showing the total 
bushels sold and the total price received by the owner of the grain 
storage facility. Claims for compensation must be received by FSA on or 
before October 8, 1998. The Administrator may extend this deadline, 
upon request in specific cases, when unusual and unforeseen 
circumstances occur which prevent or hinder a claimant from requesting 
compensation on or before that date.
    (2) Decontamination of grain storage facilities. The owner of the 
facility will be compensated on a one time only basis for each grain 
storage facility for each covered crop year wheat for the direct costs 
of decontamination of the facility at the same rate described under 
paragraph (a) of this section (up to 50 per cent of the direct costs of 
decontamination, not to exceed $20,000 per grain storage facility). 
Compensation payments for decontamination of grain storage facilities 
will be issued by APHIS, and claims for compensation must be submitted 
in accordance with the provisions in paragraph (a) of this section. 
Claims for compensation must be received by APHIS on or before October 
8, 1998. The Administrator may extend this deadline, upon request in 
specific cases, when unusual and unforeseen circumstances occur which 
prevent or hinder a claimant from requesting compensation on or before 
that date.

    Done in Washington, DC, this 4th day of June 1998.
Charles P. Schwalbe,
Acting Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 98-15405 Filed 6-9-98; 8:45 am]
BILLING CODE 3410-34-P