[Federal Register Volume 64, Number 72 (Thursday, April 15, 1999)]
[Rules and Regulations]
[Pages 18553-18563]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9350]



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  Federal Register / Vol. 64, No. 72 / Thursday, April 15, 1999 / Rules 
and Regulations  

[[Page 18553]]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1477

RIN 0560-AF75


1998 Single-Year and Multi-Year Crop Loss Disaster Assistance 
Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Final rule.

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SUMMARY: This final rule sets forth the terms and conditions of the 
1998 Single-Year and Multi-Year Crop Loss Disaster Assistance Program 
(CLDAP). The purpose of the program is to provide payments to eligible 
producers who suffered losses due to an eligible disaster in crop year 
1998, or in at least 3 of the crop years from 1994 through 1998.

DATES: Effective April 15, 1999.

FOR FURTHER INFORMATION CONTACT: Rebecca Davis, (202) 720-9882.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This final rule is issued in conformance with Executive Order 12866 
and has been determined to be economically significant and therefore 
has been reviewed by the Office of Management and Budget (OMB).

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 rule making 
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 
12988. The provisions of this rule preempt State laws to the extent 
such laws are inconsistent with the provisions of this rule. Before any 
judicial action may be brought concerning 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.

Paperwork Reduction Act and Small Business Regulatory Enforcement 
Fairness Act

    The provisions contained in this rule are authorized by the 
Agriculture, Rural Development, Food and Drug Administration and 
Related Agencies Appropriations Act, 1999 (``1999 Act'') (Pub. L. 105-
277, 112 Stat.2681). Section 1133 of the 1999 Act provides that such 
rules shall be issued as soon as practicable and without regard to: (1) 
the notice and comment provisions of section 553 of title 5, United 
States Code; (2) the Statement of Policy of the Secretary of 
Agriculture effective July 24, 1971 (36 FR 13804), relating to notices 
of proposed rulemaking and public participation in rulemaking; and (3) 
chapter 35 of title 44, United States Code (commonly known as the 
``Paperwork Reduction Act''). Accordingly, these regulations are being 
issued as a final rule without a notice and comment period, and the 
forms and the collection of information do not require prior OMB 
approval.
    In addition, this rule was determined to be a major rule as defined 
in the Small Business Regulatory Enforcement Act of 1996 (SBREFA). 
Section 1133 of the 1999 Act provides that these regulations shall use 
the authority provided under section 808 of SBREFA that allows an 
agency to promulgate a rule at such time as it determines necessary, 
notwithstanding the Congressional review of major regulations provided 
for in section 801 of SBREFA. It is hereby determined that delaying 
this rule would be contrary to the public interest because of the need 
for expeditious implementation of the rule as expressed in the text of 
the 1999 Act. Accordingly, this rule is effective upon publication.

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 final rule adds 7 CFR part 1477 setting forth the terms and 
conditions under which producers who suffered crop losses as a result 
of natural disaster may apply for benefits to compensate for their 
losses for the crop year 1998 or for at least 3 of the years from 1994 
through 1998 as authorized by the 1999 Act.
    Producers who seek benefits under this subpart must file an 
application for benefits during the sign-up period, February 1, 1999, 
through April 9, 1999, or other ending date as determined by the Deputy 
Administrator. False certification carries strict penalties; and the 
Department will spot-check and validate applications. Because funding 
for the program is limited, national factors for reducing payments will 
be determined after the end of sign up, if necessary, to ensure that 
total outlays do not exceed the amount of funds made available under 
this program.
    The rules set a payment limit on the amount of benefits that can be 
received and limit the multi-year benefits to ``producers'' with the 
qualifying history

[[Page 18554]]

for which purposes changes in the farming operation will be considered 
to involve different producers. This will allow the history 
determinations to reflect the actual composition of farms during the 
history period, consistent with the purposes of the 1999 Act. It will 
at the same time permit the agency to accurately verify losses. 
Further, as to the multi-year program, the rules build on existing 
programs which have identified the general Federal policy on when crop 
losses should be covered. This, as well, will permit the verification 
of losses. Existing policy has emphasized the importance of crop 
insurance where such insurance is available and in cases of non-
insurable crops (those for which Federal crop insurance is not 
available) has allowed only for coverage in limited instances in which 
there is a verified area-wide loss. However, these programs have never 
provided full relief and this rule will partially alleviate the 
shortfalls in those Federal programs for farmers who have had long-term 
losses. The Secretary has been given a wide discretion in the 
implementation of the 1999 Act and these rules will be consistent with 
existing Federal policies and with the understanding of the desire of 
Congress to attempt to alleviate the shortcomings in current programs. 
These rules will, in addition, allow relief to be made available 
quickly, and effectively, within the limits of the funding available 
for this program.

List of Subjects in 7 CFR Part 1477

    Disaster assistance, emergency assistance, reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, a new 7 CFR part 1477 is 
added to subchapter B of 7 CFR Chapter XIV to read as follows:

PART 1477--1998 SINGLE-YEAR AND MULTI-YEAR CROP LOSS DISASTER 
ASSISTANCE PROGRAM

Subpart A--General Provisions

Sec.
1477.101  Applicability.
1477.102  Administration.
1477.103  Definitions.
1477.104  Producer eligibility.
1477.105  Time for filing application.
1477.106  Limitation on payments and other benefits.
1477.107  Crop insurance premium discounts.
1477.108  Requirement to purchase crop insurance.
1477.109  Miscellaneous provisions.
1477.110  Matters of general applicability.

Subpart B--1998 Single-Year Crop Loss Disaster Assistance Program

1477.201  Single-year crop losses.
1477.202  Calculating rates and yields.
1477.203  Production losses, producer responsibility.
1477.204  Determination of production.
1477.205  Calculation of acreage for crop losses other than 
prevented planted.
1477.206  Calculation of prevented planted acreage.
1477.207  Quality adjustments to production.
1477.208  1999 crop losses.
1477.209  Value loss crops.
1477.210  Other Specialty crops.

Subpart C--Multi-Year Crop Loss Disaster Assistance Program

1477.300  Multi-year crop losses.

    Authority: Sec. 1101 and 1102 of Pub. L. 105-277, 112 Stat.2681; 
15 U.S.C. 714b and 714c.

Subpart A--General Provisions


Sec. 1477.101  Applicability.

    (a) This part sets forth the terms and conditions applicable to the 
1998 Crop Loss Disaster Assistance Program. Under sections 1101 and 
1102 of the Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies Appropriations Act, 1999 (``1999 
Act'') (Pub. L. 105-277, 112 Stat. 2681), the Secretary of Agriculture 
will make disaster payments available to certain producers who have 
incurred losses in quantity or quality of their crops due to disasters. 
Producers will be able to receive benefits under this part for losses 
to 1998 crops, or losses occurring in at least 3 years for which 
payments were received for the period 1994 through 1998, as determined 
by the Secretary. Accordingly, this part contains three subparts. 
Subpart A contains general provisions applicable to both the single-
year and multi-year aspects of the 1998 Crop Loss Disaster Assistance 
Program, which are contained in Subparts B and C, respectively.
    (b) In accordance with section 1102(g)(2) of the 1999 Act, the 
Secretary has authorized use of a portion of the funds authorized by 
the Act to establish crop insurance premium discounts for the 1999 crop 
year (2000 crop year for citrus fruit, avocados in California, and 
macadamia nuts in Hawaii). This part establishes provisions and 
requirements for implementation of those discounts.


Sec. 1477.102  Administration.

    (a) The program will be administered under the general supervision 
of the Executive Vice President, Commodity Credit Corporation (CCC), 
and shall be carried out in the field by State and county Farm Service 
Agency (FSA) committees.
    (b) State and county FSA committees and representatives do not have 
the authority to modify or waive any of the provisions of this part.
    (c) The State FSA committee shall take any action required by this 
part which has not been taken by a county FSA committee. The State FSA 
committee shall also:
    (1) Correct or require a county FSA committee to correct any action 
taken by such county FSA committee which is not in accordance with this 
part; and
    (2) Require a county FSA committee to withhold taking or reverse 
any action which is not in accordance with this part.
    (d) No delegation herein to a State or county FSA committee shall 
prevent the Deputy Administrator from determining any question arising 
under the program or from reversing or modifying any determination made 
by a State or county FSA committee.
    (e) The Deputy Administrator may authorize the State and county 
committees to waive or modify deadlines or other program requirements 
in cases where lateness or failure to meet such other requirements does 
not adversely affect the operation of the program or when, in his 
discretion, it is determined that an exception should be allowed to 
provide for a more equitable distribution of benefits consistent with 
the goals of the program provided for in this part.


Sec. 1477.103  Definitions.

    The definitions in this section shall be applicable for all 
purposes of administering the 1998 Crop Loss Disaster Assistance 
Program and all subparts of this part.
    Actual production means the total quantity of the crop appraised, 
harvested or which could have been harvested as determined by the 
county or State FSA committee in accordance with instructions issued by 
the Deputy Administrator.
    Additional coverage means with respect to insurance plans of crop 
insurance providing a level of coverage equal to or greater than 65 
percent of the approved yield indemnified at 100 percent of the 
expected market price, or a comparable coverage as established by FCIC.
    Appraised production means production determined by FSA, RMA, FCIC, 
a company reinsured by FCIC, or other appraiser acceptable to CCC, that 
was unharvested but which was determined to reflect the crop's yield 
potential at the time of appraisal.

[[Page 18555]]

    Approved yield means the amount of production per acre, computed in 
accordance with FCIC's Actual Production History Program (7 CFR part 
400, subpart G) or for crops not included under 7 CFR part 400, subpart 
G, the yield used to determine the guarantee. For crops covered under 
the Noninsured Crop Disaster Assistance program, the approved yield is 
established according to part 1437 of this title.
    Aquaculture means the reproduction and rearing of aquatic species 
in controlled or selected environments, including, but not limited to, 
ocean ranching (except private ocean ranching of Pacific salmon for 
profit in those States where such ranching is prohibited by law).
    Aquaculture facility means any land or structure including, but not 
limited to, a laboratory, hatchery, rearing pond, raceway, pen, 
incubator, or other equipment used in aquaculture.
    Aquacultural species means aquacultural species as defined in part 
1437 of this chapter.
    CCC means the Commodity Credit Corporation.
    Catastrophic risk protection means the minimum level of coverage 
offered by FCIC.
    Catastrophic Risk Protection Endorsement means the relevant part of 
the Federal crop insurance policy that contains provisions of insurance 
that are specific to catastrophic risk protection.
    Control county means: for a producer with farming interests in only 
one county, the county FSA office in which the producer's farm(s) is 
administratively located; for a producer with farming interests which 
are administratively located in more than one county FSA office, the 
county FSA office designated by FSA to control the payments received by 
the producer.
    County committee means the local FSA county committee.
    Crop of economic significance means a crop with a value equal to 
ten percent (10%) or more of the total value of the producer's share of 
all crops grown in the county for the relevant crop year. However, an 
amount will not be considered economically significant if the potential 
liability under the Catastrophic Risk Protection Endorsement is equal 
to or less than the administrative fee required with respect to such 
insurance for the crop, or, if applicable, the crop type or variety.
    Crop insurance means an insurance policy reinsured by the Federal 
Crop Insurance Corporation under the provisions of the Federal Crop 
Insurance Act, as amended.
    Cropland means cropland as defined in part 718 of this title.
    Crop year means: for insured and uninsured crops, the crop year as 
defined according to the applicable crop insurance policy; and for 
noninsurable crops, the year harvest normally begins for the crop, 
except the crop year for all aquacultural species and nursery crops 
shall mean the period from October 1 through the following September 
30, and the crop year for purposes of calculating honey and tree losses 
shall be the period running from January 1 through the following 
December 31.
    Deputy Administrator means the Deputy Administrator for Farm 
Programs, Farm Service Agency (FSA), or a designee.
    Disaster means damaging weather, including drought, excessive 
moisture, hail, earthquake, freeze, tornado, hurricane, typhoon, 
volcano, excessive wind, excessive heat, or any combination thereof; 
and shall also include a related condition and all eligible loss 
conditions, excluding price risk for 1998 single-year losses, as 
determined by the crop insurance policy, if RMA has made an eligible 
loss determination.
    Double-cropped means a condition in which a subsequent crop of a 
different commodity is planted on the same acreage as the first crop 
within the same crop year if the county committee determines both crops 
were or could have been carried to harvest.
    End use means the purpose for which the harvested crop is used, 
such as fresh, processed or juice.
    Entity means any legal organization or joint venture of any kind, 
including, but not limited to, corporations, trusts and partnerships.
    Expected market price (price election) means the price per unit of 
production (or other basis as determined by FCIC) anticipated during 
the period the insured crop normally is marketed by producers. This 
price will be set by FCIC before the sales closing date for the crop. 
The expected market price may be less than the actual price paid by 
buyers if such price typically includes remuneration for significant 
amounts of post-production expenses such as conditioning, culling, 
sorting, packing, etc.
    Expected production means, for an agricultural unit, the historic 
yield multiplied by the number of planted or prevented acres of the 
crop for the unit.
    FCIC means the Federal Crop Insurance Corporation, a wholly owned 
Government Corporation within USDA.
    Final planting date means the date established by RMA for insured 
and uninsured crops by which the crop must be initially planted in 
order to be insured for the full production guarantee or amount of 
insurance per acre. For noninsurable crops, the final planting date is 
the end of the planting period for the crop as determined by CCC.
    Flood prevention means with respect to aquacultural species, 
placing the aquacultural facility in an area not prone to flood; in the 
case of raceways, providing devices or structures designed for the 
control of water level; and for nursery crops, placing containerized 
stock in a raised area above expected flood level and providing 
draining facilities, such as drainage ditches or tile, gravel, cinder 
or sand base.
    FSA means the Farm Service Agency.
    Good nursery growing practices means utilizing flood prevention, 
growing media, fertilization to obtain expected production results, 
irrigation, insect and disease control, weed, rodent and wildlife 
control, and over winterization storage facilities.
    Growing media means:
    (1) For aquacultural species, media that provides nutrients 
necessary for the production of the aquacultural species and protects 
the aquacultural species from harmful species or chemicals; and
    (2) For nursery crops, media designed to prevent ``root rot'' and 
other media-related problems through a well-drained media with a 
minimum 20 percent air pore space and pH adjustment for the type of 
plant produced.
    Harvested means: For insured and uninsured crops, harvested as 
defined according to the applicable crop insurance policy; for 
noninsurable single harvest crops, that a crop has been removed from 
the field, either by hand or mechanically, or by grazing of livestock; 
for noninsurable crops with potential multiple harvests in one year or 
harvested over multiple years, that the producer has, by hand or 
mechanically, removed at least one mature crop from the field; and for 
mechanically harvested noninsurable crops, that the crop has been 
removed from the field and placed in a truck or other conveyance, 
except hay is considered harvested when in the bale, whether removed 
from the field or not. Grazed land will not be considered harvested for 
the purpose of determining an unharvested or prevented planting payment 
factor.
    Historic yield means, for a unit, the higher of the county average 
yield or the producer's approved yield.
    Individual stand means, with respect to trees, an area of eligible 
trees that are tended by an eligible producer as a single operation, 
whether or not the trees are planted in the same field or

[[Page 18556]]

similar location, as determined by the county committee. Eligible trees 
not in the same field or similar location may be considered to be 
separate individual stands if county committee determines that there 
are significantly differing levels of loss susceptibility.
    Insurance is available means when crop information is contained in 
RMA's county actuarial documents for a particular crop and a policy can 
be obtained through the RMA system, except if the Group Risk Plan of 
crop insurance was the only plan of insurance available for the crop in 
the county in the 1998 crop year, insurance is considered not available 
for that crop.
    Insured crops means those crops covered by crop insurance pursuant 
to 7 CFR Chapter IV and for which the producer purchased either the 
catastrophic or buy-up level of crop insurance so available.
    Intended crop means an insured crop which the producer timely 
indicates for RMA insurance purposes as the crop the producer intends 
to produce.
    Limited coverage means plans of crop insurance offering coverage 
that is equal to or greater than 50 percent of the approved yield 
indemnified at 100 percent of the expected market price, or a 
comparable coverage as established by FCIC, but less than 65 percent of 
the approved yield indemnified at 100 percent of the expected market 
price, or a comparable coverage as established by FCIC.
    Multi-use crop means a crop intended for more than one end use 
during the calendar year such as grass harvested for seed, hay, and/or 
grazing.
    Multiple planting means the planting for harvest of the same crop 
in more than one planting period in a crop year on different acreage.
    Noninsurable crops means those crops for which crop insurance was 
not available.
    Normal mortality means the percentage of damaged or dead trees in 
the individual stand or the percentage of dead aquacultural species 
that would normally occur during the crop year.
    Operator means operator as defined in part 718 of this title.
    Palmer Drought Severity Index means the meteorological index 
calculated by the National Weather Service to indicate prolonged and 
abnormal moisture deficiency or excess.
    Pass-through funds means revenue that goes through, but does not 
remain in, a person's account, such as money collected by an auction 
house for the sale of livestock which is subsequently paid to the 
sellers of the livestock, less a commission withheld by the auction 
house.
    Person means person as defined in part 1400 of this chapter, and 
all rules with respect to the determination of a person found in that 
part shall be applicable to this part. However, the determinations made 
in this part in accordance with 7 CFR part 1400, subpart B, Person 
Determinations, shall also take into account any affiliation with any 
entity in which an individual or entity has an interest, irrespective 
of whether or not such entities are considered to be engaged in 
farming.
    Planted acreage means land in which seed, plants, or trees have 
been placed, appropriate for the crop and planting method, at a correct 
depth, into a seedbed that has been properly prepared for the planting 
method and production practice normal to the area as determined by the 
county committee.
    Producer means producer as defined in part 718 of this title.
    Related condition means with respect to disaster, a condition 
related to a disaster that causes deterioration of a crop such as 
insect infestation, plant disease, or aflatoxin that is accelerated or 
exacerbated naturally as a result of damaging weather occurring prior 
to or during harvest as determined in accordance with instructions 
issued by the Deputy Administrator.
    Reliable production records means evidence provided by the producer 
that is used to substantiate the amount of production reported when 
verifiable records are not available, including copies of receipts, 
ledgers of income, income statements of deposit slips, register tapes, 
invoices for custom harvesting, and records to verify production costs, 
that are determined acceptable by the county committee.
    Repeat crop means with respect to a producer's production, a 
commodity that is planted or prevented from being planted in more than 
one planting period on the same acreage in the same crop year.
    RMA means the Risk Management Agency.
    Salvage value means the dollar amount or equivalent received by the 
producer for the quantity of the commodity that cannot be marketed or 
sold in any recognized market for the crop.
    Secondary use means the harvesting of a crop for a use other than 
the intended use, except for crops with intended use of grain, but 
harvested as silage, ensilage, cobbage, hay, cracked, rolled, or 
crimped.
    Secondary use value means the value determined by multiplying the 
quantity of secondary use times the CCC-established price for this use.
    Secretary means the Secretary of the United States Department of 
Agriculture.
    Substitute crop means an alternative crop whose sales closing date 
has passed and that is planted on acreage that is prevented from being 
planted to an intended crop or where an intended crop is planted and 
fails.
    Trees means maple trees for syrup, or orchard trees grown for 
commercial production of fruits or nuts.
    Uninsured crops means those crops for which Federal crop insurance 
was available, but the producer did not purchase insurance.
    Unit means, unless otherwise determined by the Deputy 
Administrator, basic unit as described in part 457 of this title which, 
for ornamental nursery production shall include all eligible plant 
species and sizes.
    Unit of measure means:
    (1) For all insured and uninsured crops, the FCIC-established unit 
of measure;
    (2) For aquacultural species, a standard unit of measure such as 
gallons, pounds, inches or pieces, established by the State committee 
for all aquacultural species or varieties;
    (3) For Christmas trees, a plant or tree;
    (4) For turfgrass sod, a square yard;
    (5) For maple sap, a gallon; and
    (6) For all other crops, the smallest unit of measure which lends 
itself to the greatest level of accuracy with minimal use of fractions, 
as determined by the State committee.
    United States means all 50 States of the United States, the 
Commonwealth of Puerto Rico, the Virgin Islands and Guam.
    USDA means United States Department of Agriculture.
    Value loss crop will have the meaning assigned in part 1437 of this 
chapter.
    Verifiable production records means evidence that is used to 
substantiate the amount of production reported and that can be verified 
by CCC through an independent source.


Sec. 1477. 104  Producer eligibility.

    (a) Producers in the United States will be eligible to receive 
disaster benefits under this part only if they have suffered either:
    (1) 1998 crop losses as a result of a disaster and as further 
specified in Subpart B; or
    (2) Multi-year crop losses as a result of a disaster and as further 
specified in Subpart C.
    (b) Payments may be made for losses suffered by an eligible 
producer who is now deceased or is a dissolved entity if a 
representative who currently has

[[Page 18557]]

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.
    (c) As a condition to receive benefits under this part, a producer 
must have been in compliance with the Highly Erodible Land Conservation 
and Wetland Conservation provisions of part 12 of this title, for the 
year or years for which benefits are sought.
    (d) The provisions of paragraph (c) of this section do not apply to 
producers receiving benefits under this part for value loss crops.


Sec. 1477.105  Time for filing application.

    (a) Applications for benefits under Subpart B, the 1998 Crop Loss 
Disaster Assistance Program Single Year 1998 Losses, shall be filed 
before the close of business on April 9, 1999, in the county FSA office 
serving the county where the producer's farm is located for 
administrative purposes.
    (b) Applications for benefits under Subpart C, the1998 Crop Loss 
Disaster Assistance Program Multi-year Losses, shall be filed before 
the close of business on April 9, 1999, with the county FSA office 
designated as the producer's control county.
    (c) The Deputy Administrator may grant general exceptions to these 
deadlines for filing applications.


Sec. 1477.106  Limitations on payments and other benefits.

    (a) A producer may receive disaster benefits under either subpart B 
or C, but not both.
    (b) A producer qualifying for disaster benefits under both subparts 
B or C, may receive whichever amount is greater as calculated according 
to this part.
    (c) Payments will not be made under this subpart for grazing 
losses. Further, the Deputy Administrator may divide crops based on 
loss susceptibility, yield, and other factors.
    (d) No person shall receive more than a total of $80,000 in 
disaster benefits under this part. No person shall receive more than 
$25,000 in disaster benefits under this part for tree losses.
    (e) No person shall receive disaster benefits under this part in an 
amount that exceeds the value of the expected production for the 
relevant period as determined by CCC.
    (f) A person who has a gross revenue in excess of $2.5 million for 
the 1997 tax year shall not be eligible to receive disaster benefits 
under this part. If the person does not have a 1997 tax year because 
the entities were dissolved in a prior year, the last tax year for the 
person will be used. Gross revenue includes the total income and total 
gross receipts of the person, before any reductions. Gross revenue 
shall not be adjusted, amended, discounted, netted or modified for any 
reason. No deductions for costs, expenses or pass-through funds will be 
deducted from any calculation of gross revenue. For making this 
determination, gross revenue means the total gross receipts received 
from farming or ranching operations if the person receives more than 50 
percent of such person's gross income from farming or ranching; or the 
total gross receipts received from all sources if the person receives 
50 percent or less of such person's gross receipts from farming and 
ranching.
    (g) Payment eligibility under this part shall be in addition to 
whatever eligibility the producer may have to other payments including 
but not limited to:
    (1) Payments under the noninsured crop disaster assistance program 
established under the Agricultural Market Transition Act (7 U.S.C. 
7333);
    (2) Crop insurance indemnities provided under the Federal Crop 
Insurance Act (7 U.S.C. 1501 et seq.);
    (3) Emergency loans made available under subtitle C of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 1961 et seq.);
    (4) Payments received by a person for participation in a Production 
Flexibility Contract authorized under Title 1 of the Agricultural 
Market Transition Act (7 U.S.C. 7211 et seq.); and
    (5) Market Loss Assistance payments made under Sec. 1111 of the 
1999 Act.
    (h) In the event the total amount of applications for disaster 
benefits under this part exceeds the available funds, payments shall be 
reduced by a uniform national percentage. Such reductions shall be 
applied before any determination of limits on compensation due to 
multiple USDA benefits and after the imposition of applicable payment 
limitation and gross revenues caps.


Sec. 1477.107  Crop insurance premium discounts.

    (a) A crop insurance premium discount is available to all producers 
who have limited or additional coverage crop insurance policies for the 
1999 crop year (for the 2000 crop year for citrus fruit, Avocados in 
California, and Macadamia Nuts in Hawaii) as follows:
    (1) Producers of crops that have sales closing dates for the 1999 
crop year (2000 crop year for citrus fruit, avocados in California, and 
macadamia nuts in Hawaii) on or after July 31, 1998, and on or before 
February 15, 1999, must have by the following dates purchased limited 
or additional coverage and submitted their acreage and production 
reports:

----------------------------------------------------------------------------------------------------------------
                                                                                          Production/acreage
            States                              Application deadline                        reporting date
----------------------------------------------------------------------------------------------------------------
Arizona, Florida, Georgia,      February 28, 1999..................................  April 15, 1999.
 Hawaii, Louisiana,
 Mississippi, and South
 Carolina.
All other States..............  March 15, 1999.....................................  April 30, 1999.
----------------------------------------------------------------------------------------------------------------

    (2) For crops with a final planting date on or after December 31, 
1998, but before August 15, 1999, the acreage reporting date will be 
the later of the date shown in paragraph (a)(1) of this section or the 
acreage reporting date specified in the producer's crop insurance 
policy.
    (3) For crops that have sales closing dates for the 1999 crop year 
(2000 crop year for citrus fruit, avocados in California, and macadamia 
nuts in Hawaii) after February 15, 1999, producers must purchase 
limited or additional coverage by the sales closing date for the 
applicable crop.
    (b) Producers who are currently insured by the sales closing date 
for the applicable crop may not:
    (1) Lower their insurance coverage or transfer to another insurance 
provider for crops with extended dates specified in paragraph (a)(1) of 
this section; or
    (2) Cancel their insurance policy if the cancellation date has 
already passed, unless the producer is changing insurance plans at the 
same or a higher coverage level.

[[Page 18558]]

    (c) Producers who are presently ineligible for crop insurance 
coverage due to a delinquent debt will be allowed to satisfy such debt 
and obtain coverage during the extended application period specified in 
paragraph (a)(1) of this section.
    (d) The exact percentage for the crop insurance premium discount 
will be calculated once the total amount of premium for the 1999 crop 
year (2000 crop year for citrus fruit, avocados in California, and 
macadamia nuts in Hawaii) at the limited and additional coverage levels 
has been established.
    (e) An additional crop insurance premium discount may be made 
available for any crops insured for the 1999 crop year by producers who 
have suffered multiple losses due to scab and/or vomitoxin damage as 
provided below; this discount is in addition to the premium discount 
referenced in paragraph (a) of this section and in order to qualify for 
this discount, a producer must:
    (1) Have insured wheat, barley, oats, or rye in at least two crop 
years during the 1994 through 1998 crop years (A producer must provide 
evidence of such insurance if the insurance provider has no such 
record; and
    (2) Provide evidence that wheat, barley, oats, or rye produced by 
the producer was subjected to a discounted price or decrease in yield 
due to scab or vomitoxin damage in at least two crop years during the 
1994 through 1998 crop years.
    (f) The two years of insurance specified in paragraph (e)(1) of 
this section, the two years of discounted prices or yields due to scab 
and/or vomitoxin specified in paragraph (e)(2) of this section, and the 
small grain crops affected need not be the same (e.g., a producer could 
have insured 1995 and 1996 wheat, but had scab and/or vomitoxin damage 
on 1997 and 1998 barley).
    (g) This discount in paragraph (e) of this section can only be 
applied to the same identical producer that met the qualifications for 
the discount as required in paragraph (e) of this section.
    (h) The total premium discounts allowed under this section to any 
person cannot exceed $80,000. The $2.5 million gross revenue limitation 
does not apply to the premium discounts specified in this section.


Sec. 1477.108  Requirement to purchase crop insurance.

    (a) As required in 1102(g)(3) of the Act, any producer who receives 
crop loss assistance under this part who did not purchase crop 
insurance for all insurable crops for the 1998 crop year (1999 crop 
year for citrus fruit, Avocados in California, and Macadamia Nuts in 
Hawaii) must purchase crop insurance for the 1999 and 2000 crop years 
(2000 and 2001 crop years for citrus fruit, avocados in California, and 
macadamia nuts in Hawaii) for all crops of economic significance 
produced by such producer for which insurance is available.
    (b) Any producer who is required to purchase crop insurance in 
accordance with paragraph (a) of this section who does not purchase 
either limited or additional coverage by the sales closing date for the 
applicable crop or the extended application dates specified in section 
1477.107(a)(1), may purchase catastrophic risk protection until April 
28, 1999. Such producers will have until the following dates to provide 
their acreage and production reports:
    (1) For policies under which the crop was planted on or before 
December 31, 1998, or the crop is a perennial crop, the producer must 
submit the acreage and production reports at the time of the 
Catastrophic Risk Protection application; or
    (2) For spring crops, the acreage and production reports must be 
submitted by the later of May 29, 1999, or the latest spring acreage 
reporting date specified in the crop insurance policy.
    (c) Nothing in this section supersedes the provisions contained in 
7 CFR part 400, subpart T, relating to the availability of Catastrophic 
Risk Protection coverage whenever a producer is unable to plant the 
intended crop or it is not practical to replant a failed crop before 
the final planting date, and the producer plants a substitute crop.
    (d) If any producer fails to purchase crop insurance as required in 
paragraph (a) of this section, the producer will be required to pay 
liquidated damages in an amount and within a reasonable period of time 
as determined by the Deputy Administrator.


Sec. 1477.109  Miscellaneous provisions.

    (a) Disaster benefits under this part may be withheld in accordance 
with Sec. 1403.8 of this chapter.
    (b) No interest will be paid or accrue on disaster benefits under 
this part which are delayed or are otherwise not timely issued unless 
otherwise mandated by law.
    (c) A person shall be ineligible to receive disaster assistance 
under this part if it is determined by the State or county committee or 
an official of FSA that such person has:
    (1) Adopted any scheme or other device which tends to defeat the 
purpose of a program operated under this part;
    (2) Made any fraudulent representation with respect to such 
program; or
    (3) Misrepresented any fact affecting a program determination.
    (d) In the event there is a failure to comply with any term, 
requirement, or condition for payment or assistance arising under this 
part, and if any refund of a payment to CCC shall otherwise become due 
in connection with this part, all payments made in regard to such 
matter shall be refunded to CCC, together with interest as determined 
in accordance with paragraph (e) of this section and late-payment 
charges as provided for in part 1403 of this chapter.
    (e) Producers shall be required to pay interest on any refund 
required of the producer receiving assistance or a payment if CCC 
determines that payments or other assistance were provided to the 
producer and the producer was not eligible for such assistance. The 
interest rate shall be one percent greater than the rate of interest 
which the United States Treasury charges CCC for funds, as of the date 
of payment. Interest that is determined to be due CCC shall accrue from 
the date such benefits were made available by CCC to the date repayment 
is completed. CCC may waive the accrual of interest if CCC determines 
that the cause of the erroneous determination was not due to any error 
by the producer.
    (f) All persons with a financial interest in the operation 
receiving benefits under this part shall be jointly and severally 
liable for any refund, including related charges, which is determined 
to be due CCC for any reason under this part.
    (g) In the event that any request for assistance or payment under 
this part was established as result of erroneous information or a 
miscalculation, the assistance or payment shall be recomputed and any 
excess refunded with applicable interest.
    (h) The liability of any person for any penalty under this part or 
for any refund to CCC or related charge arising in connection therewith 
shall be in addition to any other liability of such person under any 
civil or criminal fraud statute or any other provision of law 
including, but not limited to, 18 U.S.C. 286, 287, 371, 641, 651, 1001 
and 1014; 15 U.S.C. 714m; and 31 U.S.C. 3729.
    (i) Any person who is dissatisfied with a determination made with 
respect to this part may make a request for reconsideration or appeal 
of such determination in accordance with the

[[Page 18559]]

regulations set forth at parts 11 and 780 of this title.
    (j) Any payment or portion thereof to any person shall be made 
without regard to questions of title under State law and without regard 
to any claim or lien again the crop, or proceeds thereof.
    (k) Disaster benefits under this part will be made without taking 
any applicable offsets. The regulations governing offsets found at part 
792 of this title and 1403 of this chapter shall not apply to payments 
made under this part.
    (l) Payments which are earned under this part may be assigned in 
accordance with the provisions of part 1404 of this chapter upon 
filling out the applicable assignment form.


Sec. 1477.10  Matters of general applicability.

    (a) For calculations of loss made with respect to insured crops, 
the producer's existing unit structure will be used as the basis for 
the calculation and may include optional units established according to 
7 CFR Part 457 of this Title. For uninsured and noninsurable crops, 
basic units will be established for these purposes.
    (b) Loss payment rates and factors shall be established by the 
state committee based on procedures provided by the Deputy 
Administrator.
    (c) County average yield for loss calculations will be the simple 
average of the 1993 through 1997 official county yields established by 
FSA.
    (d) County committees will assign production when the county 
committee determines:
    (1) An acceptable appraisal or record of harvested production does 
not exist;
    (2) The loss is due to an ineligible cause of loss or practices 
that cause lower yields than those upon which the historic yield is 
based;
    (3) The producer has a contract providing a guaranteed payment for 
all or a portion of the crop;
    (4) The crop is planted beyond the normal planting period for the 
crop; or
    (5) Other cause, as determined by the Deputy Administrator, exists 
for such case.
    (e) The county committee shall establish a maximum loss level based 
on other losses in the county for the same crop. The maximum loss level 
for the county shall be expressed as either a percent of loss or yield 
per acre. The maximum loss level will apply when:
    (1) Unharvested acreage has not been appraised by FSA, RMA, FCIC, a 
company reinsured by FCIC, or other appraiser;
    (2) The crop's loss is because of an ineligible disaster condition 
or circumstances other than a natural disaster; or
    (3) Acceptable production records for harvested acres are not 
available from any source.
    (f) Assigned production for practices that result in lower yields 
than those for which the historic yield is based shall be established 
by:
    (1) Determining the acres planted to the low-yielding type of 
practice;
    (2) Multiplying the State office determined yield reduction factor 
times the county average yield; and
    (3) Multiplying the result of paragraph (f)(2) of this section 
times the acres in paragraph (f)(1) of this section.
    (g) Assigned production for crops planted beyond the normal 
planting period for the crop shall be calculated according to the 
lateness of planting the crop. If the crop is planted after the final 
planting date by:
    (1) 1 through 10 calendar days, the assigned production will be 
based on one percent of the payment yield for each day involved.
    (2) 11 through 24 calendar days, the assigned production will be 
based on 10 percent of the payment yield plus an additional two percent 
reduction of the payment yield for each days of days 11 through 24 
which are involved.
    (3) 25 or more calendar days or a date in which the crop would not 
reasonably be expected to mature by harvest, the assigned production 
will be based on 50 percent of the payment yield or such greater amount 
determined by the county committee to be appropriate.
    (h) Assigned production for producers with contracts to receive a 
guaranteed payment for production of an eligible crop will be 
established by the county committee by:
    (1) Determining the total amount of guaranteed payment for the 
unit;
    (2) Converting the guaranteed payment to guaranteed production by 
dividing the total amount of guaranteed payment by the approved county 
price for the crop or variety or such other factor deemed appropriate 
if otherwise the production would appear to be too high; and
    (3) Establishing the production for the unit as the greater of the 
actual net production for the unit or the guaranteed payment.

Subpart B--1998 Single-Year Crop Loss Disaster Assistance Program


Sec. 1477.201  Single-year crop losses.

    (a) To receive disaster benefits under this subpart which covers 
single-year 1998 crop losses, the county committee must determine that 
because of a disaster, the producer with respect to the 1998 crop year:
    (1) Was prevented from planting a crop;
    (2) Sustained a loss in excess of 35 percent of the expected 
production of a crop;
    (3) Sustained a loss in excess of 35 percent of the value for value 
loss crops; or
    (4) Sustained damage in excess of 20 percent of an individual stand 
of eligible trees, after adjustments for normal mortality.
    (b) Calculation of benefits under this subpart shall not include 
losses:
    (1) That are the result of poor management decisions or poor 
farming practices as determined by the county committee on a case-by-
case basis based on instructions issued by the Deputy Administrator;
    (2) That are the result of the failure of the producer to reseed or 
replant to the same crop in the county where it is customary to reseed 
or replant after a loss;
    (3) That are not as a result of a natural disaster;
    (4) To crops not intended for harvest in crop year 1998;
    (5) To losses of by-products resulting from processing or 
harvesting a crop, such as cotton seed, peanut shells, wheat or oat 
straw;
    (6) To home gardens; or
    (7) As a result of water contained or released by any governmental, 
public, or private dam or reservoir project if an easement exists on 
the acreage affected for the containment or release of the water.
    (c) Calculation of benefits under this subpart for ornamental 
nursery stock shall not include losses:
    (1) Caused by a failure of power supply or brownouts;
    (2) Caused by the inability to market nursery stock as a result of 
quarantine, boycott, or refusal of a buyer to accept production;
    (3) Caused by fire;
    (4) Affecting crops where weeds and other forms of undergrowth in 
the vicinity of the nursery stock have not been controlled; or
    (5) Caused by the collapse or failure of buildings or structures.
    (d) Calculation of benefits under this subpart for honey where the 
honey production by colonies or bees was diminished, shall not include 
losses:
    (1) Where the inability to extract was due to the unavailability of 
equipment; the collapse or failure of equipment or apparatus used in 
the honey operation;
    (2) Resulting from improper storage of honey;
    (3) To honey production because of bee feeding;
    (4) Caused by the application of chemicals;
    (5) Caused by theft, fire, or vandalism;

[[Page 18560]]

    (6) Caused by the movement of bees by the producer or any other 
person; or
    (7) Due to disease or pest infestation of the colonies.


Sec. 1477.202  Calculating rates and yields.

    (a) Payment rates for 1998 single-year crop losses shall be:
    (1) 65 percent of the maximum established RMA price for insured 
crops;
    (2) 65 percent of the State average price for noninsurable crops;
    (3) 60 percent of the maximum established RMA price for uninsured 
crops; and
    (4) 65 percent of the established practice rate for damage to 
eligible trees.
    (b) Disaster benefits under this subpart for losses to crops other 
than trees shall be made in an amount determined by multiplying the 
loss of production in excess of 35 percent of the expected production 
by the applicable payment rate established according to paragraph (a) 
of this section.
    (c) Disaster benefits under this subpart for losses of trees shall 
be made in an amount determined by multiplying the quantity of acres or 
number of trees in a practice approved by the county committee 
according to instructions issued by the Deputy Administrator, by the 
payment rate established according to paragraph (a) of this section.
    (d) Separate payment rates and yields for the same crop may be 
established according to instructions issued by the Deputy 
Administrator, when there is supporting data from NASS or other sources 
approved by CCC that show there is a significant difference in yield or 
value based on a distinct and separate end use of the crop. In spite of 
differences in yield or values, separate rates or yields shall not be 
established for crops with different cultural practices, such as 
organically or hydroponically grown.
    (e) Each eligible producer's share of a disaster payment shall be 
based on the producer's share of the crop or crop proceeds, or, if no 
crop was produced, the share the producer would have received if the 
crop had been produced. In cases where crop insurance provides for a 
landlord/tenant to insure the tenant/landlord's share according to part 
457 of this title, disaster payments will be issued on the same basis.
    (f) When calculating a payment for a unit loss:
    (1) The unharvested payment factor shall be applied to crop acreage 
planted but not harvested; and
    (2) The prevented planting factor shall be applied to any prevented 
planted acreage eligible for payment.
    (g) Production from all end uses of a multi-use crop or all 
secondary uses for multiple market crops will be calculated separately 
and summarized together.


Sec. 1477.203  Production losses, producer responsibility.

    (a) Where available, RMA loss records will be used for insured 
crops.
    (b) If RMA loss records are not available, producers are 
responsible for:
    (1) Retaining or providing, when required, the best verifiable or 
reliable production records available for the crop;
    (2) Summarizing all the production evidence;
    (3) Accounting for the total amount of unit production for the 
crop, whether or not records reflect this production; and
    (4) Providing the information in a manner that can be easily 
understood by the county committee.
    (c) In determining production under this section the producer must 
supply acceptable production records to substantiate production to the 
county committee. If the eligible crop was sold or otherwise disposed 
of through commercial channels, acceptable production records include: 
commercial receipts; settlement sheets; warehouse ledger sheets; or 
load summaries; appraisal information from a loss adjuster acceptable 
to CCC. If the eligible crop was farm-stored, sold, fed to livestock, 
or disposed of in means other than commercial channels, acceptable 
production records include: truck scale tickets; appraisal information 
from a loss adjuster acceptable to CCC; contemporaneous diaries; or 
other documentary evidence, such as contemporaneous measurements.
    (d) Producers must provide all records for any production of a crop 
which is grown with an arrangement, agreement, or contract for 
guaranteed payment. The failure to report the existence of any 
guaranteed contract or similar arrangement or agreement shall be 
considered as providing false information to CCC.


Sec. 1477.204  Determination of production.

    (a) Production under this subpart shall include all harvested 
production, unharvested appraised production and assigned production 
for the total planted acreage of the crop on the unit.
    (b) The harvested production of eligible crop acreage harvested 
more than once in a crop year shall include the total harvested 
production from all these harvests.
    (c) If a crop is appraised and subsequently harvested, the actual 
harvested production shall be used to determine benefits.
    (d) For all crops eligible for loan deficiency payments or 
marketing assistance loans with an intended use of grain but harvested 
as silage, ensilage, cobbage, hay, cracked, rolled, or crimped, 
production will be adjusted based on a whole grain equivalent according 
to instructions issued by the Deputy Administrator.
    (e) For crops with an established yield and market price for 
multiple intended uses, a value will be calculated for each use.
    (f) For crops sold in a market that is not a recognized market for 
the crop with no established county average yield and market price, 60 
percent, if insured or noninsurable, or 65 percent, if uninsured, of 
the salvage value received will be deducted from the disaster payment.
    (g) If a producer has an arrangement, agreement, or contract for 
guaranteed payment for production (as opposed to production based on 
delivery), the production to count shall be the greater of the actual 
production or the guaranteed payment converted to production according 
to instructions issued by the Deputy Administrator.
    (h) Production that is commingled between units before it was a 
matter of record and cannot be separated by using records or other 
means acceptable to CCC shall be prorated to each respective unit 
according to instructions issued by the Deputy Administrator. 
Commingled production may be attributed to the applicable unit, if the 
producer made the unit production of a commodity a matter of record 
before commingling and does any of the following, as applicable:
    (1) Provides copies of verifiable documents showing that production 
of the commodity was purchased, acquired, or otherwise obtained from 
beyond the unit;
    (2) Had the production measured in a manner acceptable to the 
county committee; or
    (3) Had the current year's production appraised in a manner 
acceptable to the county committee.
    (i) The county committee shall assign production for the unit when 
the county committee determines that:
    (1) The producer has failed to provide adequate and acceptable 
production records;
    (2) The loss to the crop is because of a disaster condition not 
covered by this subpart, or circumstances other than natural disaster, 
and there has not otherwise been an accounting of this ineligible cause 
of loss;
    (3) The producer carries out a practice, such as double cropping, 
that

[[Page 18561]]

generally results in lower yields than the established historic yields;
    (4) The producer has a contract to receive a guaranteed payment for 
all or a portion of the crop; or
    (5) A crop is late-planted.
    (j) For sugarcane, the quantity of sugar produced from such crop 
shall exclude acreage harvested for seed.
    (k) For peanuts, the actual production shall be all peanuts 
harvested for nuts regardless of their disposition or use as adjusted 
for low quality.
    (l) For tobacco, except flue-cured and burley, the actual 
production shall be the sum of the tobacco: marketed or available to be 
marketed; destroyed after harvest; and produced but unharvested, as 
determined by an appraisal. For flue-cured and burley tobacco, the 
actual production shall be the sum of the tobacco: marketed, regardless 
of whether the tobacco was produced in the current crop year or a prior 
crop year; on hand; destroyed after harvest; and produced but 
unharvested, as determined by an appraisal.


Sec. 1477.205  Calculation of acreage for crop losses other than 
prevented planted.

    (a) Subject to paragraph (b) of this section, the acreage of a crop 
planted in each planting period shall be considered a different crop 
for the purpose of determining disaster benefits under this subpart.
    (b) In cases where there is a repeat crop, double crop or a 
multiple planting, each of these crops may be considered different 
crops if the county committee determines that:
    (1) Both the initial and subsequent planted crops were planted with 
an intent to harvest;
    (2) The subsequent crop was planted after the time when the initial 
crop would normally have been harvested;
    (3) Both the initial and subsequent planted crops were 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.
    (c) In cases where an initial crop is planted and fails due to an 
eligible disaster condition and it is generally considered too late to 
replant and a subsequent crop is planted on the same acreage within its 
normal planting period in the same crop year and also failed because of 
an eligible disaster condition, both crops are eligible for disaster 
assistance if they meet all other eligibility provisions of this part.


Sec. 1477.206  Calculation of prevented planted acreage.

    (a) When determining losses under this subpart, prevented-planted 
acreage will be considered separately from planted acreage of the same 
crop.
    (b) Except as provided in paragraph (c) of this section, for 
insured crops, disaster payments under this subpart for prevented-
planted acreage shall not be made unless RMA documentation indicates 
that the eligible producer received a prevented planting payment under 
the RMA-administered program.
    (c) For insured crops, disaster payments under this subpart for 
prevented-planted acreage will be made available for the following 
crops for which prevented planting coverage was not available and for 
which the county committee will make an eligibility determination 
according to paragraph (d) of this section: California safflowers; 
peanuts; peppers; popcorn; Central/Southern potatoes; sweet corn (fresh 
market); tomatoes (fresh market); tomatoes (processing).
    (d) For uninsured or noninsurable crops, or the insured crops 
listed in paragraph (c) of this section, the producer must prove, to 
the satisfaction of the county committee, an intent to plant the crop 
and that such crop could not be planted because of an eligible 
disaster. The county committee must be able to determine the producer 
was prevented from planting the crop by an eligible disaster that both:
    (1) Prevented most producers from planting on acreage with similar 
characteristics in the surrounding area; and
    (2) Unless otherwise allowed by the Deputy Administrator, began no 
earlier than the planting season for the 1998 crop.
    (e) Prevented planted disaster benefits under this subpart shall 
not apply to:
    (1) Aquaculture, including ornamental fish; perennial forage crops 
grown for hay, seed, or grazing; ginseng root and ginseng seed; honey; 
maple sap; millet; nursery crops; sweet potatoes; tobacco; trees; 
turfgrass sod; and tree and vine crops;
    (2) Any acreage which is double-cropped, even if the producer has a 
history of double-cropping acreage;
    (3) Uninsured crop acreage that is unclassified for insurance 
purposes;
    (4) Acreage that is used for conservation purposes or intended to 
be left unplanted under any USDA program;
    (5) The same acreage from which any benefit is derived under any 
program administered by the USDA on which a crop is planted and fails 
during the crop year except as provided in 1477.106(f) of this part;
    (6) Any acreage on which a crop other than a cover crop was 
harvested, hayed, or grazed during the crop year;
    (7) Any acreage for which a cash lease payment is received for the 
use of the acreage the same crop year unless the county committee 
determines the lease was for haying and grazing rights only and was not 
a lease for use of the land;
    (8) Acreage for which planting history or conservation plans 
indicate that the acreage would have remained fallow for crop rotation 
purposes;
    (9) Acreage for which the producer or any other person received a 
prevented planted payment for any crop for the same acreage, excluding 
share arrangements; and
    (10) Acreage for which the producer cannot provide proof to the 
county committee that inputs such as seed, chemicals, and fertilizer 
were available to plant and produce a crop with the expectation of at 
least producing a normal yield.
    (f) Disaster benefits under this subpart shall not apply to acreage 
where the prevented-planted acreage was affected by a disaster that was 
caused by drought or the failure of the irrigation water supply unless 
the acreage is in an area classified by the Palmer Drought Severity 
Index as in a severe or extreme drought during the time period 
specified by the producer.
    (g) For uninsured or noninsurable crops and the insured crops 
listed in paragraph (c) of this section, for prevented planting 
purposes:
    (1) The maximum prevented-planted acreage for all crops:
    (i) Cannot exceed the number of acres of cropland in the unit for 
the crop year; and
    (ii) Will be reduced by the number of acres planted in the unit;
    (2) The maximum prevented planted acreage for a crop cannot exceed 
the number of acres planted by the producer, or which was prevented 
from planting, to the crop in any 1 of the 1994 through 1997 crop years 
as determined by the county committee;
    (3) For crops grown under a contract specifying the number of acres 
contracted, the prevented-planted acreage is limited to the result of 
the number of acres specified in the contract minus planted acreage;
    (4) For each crop type or variety for which separate prices or 
yields are sought for prevented-planted acreage, the producer must 
provide evidence that the claimed prevented-planted acres were 
successfully planted in at least 1 of the most recent 4 crop years; and

[[Page 18562]]

    (5) The prevented planted acreage must be one contiguous block 
consisting of at least 20 acres or 20 percent of the intended planted 
acreage in the unit, whichever is less.


Sec. 1477.207  Quality adjustments to production.

    (a) Subject to paragraph (b) of this section, the quantity of 
production of crops that were damaged due to disaster resulting in 
diminished quality, shall be adjusted by the county committee in 
accordance with instructions issued by the Deputy Administrator.
    (b) Crops eligible for quality adjustments to production are 
limited to:
    (1) Barley; canola; corn; cotton; flaxseed; grain sorghum; mustard 
seed; oats; peanuts; rapeseed; rice; safflower; soybeans; sugar beets; 
sunflower-oil; sunflower-seed; tobacco; wheat; and
    (2) Crops with multiple market uses such as fresh, processed or 
juice, as supported by NASS data or other data determined acceptable in 
accordance with instructions issued by the Deputy Administrator. RMA 
loss production figures will not be used to conduct this quality 
adjustment unless the Deputy Administrator determines otherwise.
    (c) The producer must submit documentation for determining the 
grade and other discount factors that were applied to the crop.
    (d) Quality adjustments will be applied after production has been 
adjusted to standard moisture, when applicable.
    (e) Except for cotton, if a quality adjustment has been made for 
multi-peril crop insurance purposes, an additional adjustment will not 
be made.
    (f) Quality adjustments for crops, other than cotton, peanuts, 
sugar beets and tobacco, listed in paragraph (b)(1) of this section may 
be made by applying an adjustment factor based on dividing the Federal 
marketing assistance loan rate applicable to the crop and producer 
determined according to part 1421 of this chapter by the unadjusted 
county marketing assistance loan rate for the crop. For crops that 
grade sample and are marketed through normal channels, production will 
be adjusted according to instructions issued by the Deputy 
Administrator. County committees may, with state committee concurrence, 
establish county average quality adjustment factors according to 
procedures issued by the Deputy Administrator.
    (g) Quality adjustments for cotton shall be based on the difference 
between:
    (1) The loan rate applicable to the crop and producer determined 
according to part 1427 of this chapter; and
    (2) The adjusted county loan rate. The adjusted county rate is the 
county loan rate adjusted for the 4-year county average historical 
quality premium or discount, in accordance with instructions issued by 
the Deputy Administrator.
    (h) Quality adjustments for quota peanuts shall for unused quota be 
based on the difference between the adjusted sales price and the quota 
price. The adjusted sales price is the quota price minus discounts for 
quality, regardless of the actual sales price received. Adjustments for 
other peanuts may be made as determined appropriate by the Deputy 
Administrator.
    (i) Quality adjustments for sugar beets shall be based on sugar 
content. The 1998 actual production for the producer shall be adjusted 
upward or downward to account for sugar content according to 
instructions issued by the Deputy Administrator.
    (j) Quality adjustments for tobacco shall be based on the 
difference between the sales price and the support price.
    (k) Quality adjustments for crops with multiple market uses such as 
fresh, processed and juice, shall be applied based on the difference 
between the producer's historical marketing percentage of each market 
use compared to the actual percentage for 1998, as determined in 
accordance with instructions issued by the Deputy Administrator.
    (l) Quality adjustments for aflatoxin shall be based on the 
aflatoxin level. The producer must provide the County Office with proof 
a price reduction because of aflatoxin. The aflatoxin level must be 20 
parts per billion or more before a quality adjustment will be made. The 
quality adjustment factor applied to affected production is .50 if the 
production is marketable. If the production is unmarketable due to 
aflatoxin levels of at least 20 parts per billion, production will be 
adjusted to zero. Any value received will be considered salvage.
    (m) Any quantity of the crop determined to be salvage will not be 
considered production. Salvage values shall be factored by .60 for 
insured and noninsurable commodities and .65 for uninsured commodities.
    (n) Quality adjustments do not apply to value loss crops.
    (o) Quality adjustments shall not apply to: hay, honey, maple sap, 
turfgrass sod, crops marketed for a use other than an intended use for 
which there is not an established county price or yield.


Sec. 1477.208   1999 Crop Losses.

    (a) Producers have the option to receive benefits on 1999 crop 
rather than 1998 loss when both the following apply:
    (1) The 1999 crop was affected by disaster-related conditions that 
occurred in calendar year 1998; and
    (2) Harvest for the 1999 crop would normally begin in calendar year 
1998.
    (b) Producers may elect to use the 1999 crop for 1998 single-year 
CLDAP benefits only.


Sec. 1477.209  Value loss crops.

    (a) Special provisions to assess losses and calculate disaster 
assistance under this subpart apply to the following crops and such 
other crops as may be identified in instructions issued by the Deputy 
Administrator: ornamental nursery; Christmas trees; ginseng root; and 
aquaculture, including ornamental fish.
    (b) Disaster benefits under this subpart are calculated based on 
the loss of value at the time of disaster, as provided by instructions 
issued by the Deputy Administrator.
    (c) For aquaculture, disaster benefits under this subpart for 
aquacultural species are limited to those aquacultural species which 
were placed in the aquacultural facility by the producer. Disaster 
benefits under this subpart shall not be made available for 
aquacultural species that are growing naturally in the aquaculture 
facility. Disaster benefits under this subpart are limited to 
aquacultural species that were planted or seeded on property owned or 
leased by the producer where that land has readily identifiable 
boundaries, and over which the producer has total control of the 
waterbed and the ground under the waterbed. Producers who only have 
control over a column of water will not be eligible for disaster 
benefits under this subpart.
    (d) For ornamental nursery crops, disaster benefits under this 
subpart are limited to ornamental nursery crops that were grown in a 
container or controlled environment for commercial sale on property 
owned or leased by the producer, and cared for and managed using good 
nursery growing practices. Indigenous crops are not eligible for 
benefits under this subpart.
    (e) For Christmas trees, disaster benefits under this subpart are 
limited to losses which exceed 35 percent of the value of the Christmas 
trees present at the time of the disaster. Christmas tree producers 
seeking disaster assistance under this subpart must provide acreage 
data, dates of plantings and the quantity of trees planted on each 
date.

[[Page 18563]]

Sec. 1477.210  Other specialty crops.

    (a) Other special provisions to assess losses and calculate 
disaster assistance under this subpart apply to the following crops and 
such other crops as may be identified in instructions issued by the 
Deputy Administrator: turfgrass sod, honey and maple sap.
    (b) For turfgrass sod, disaster benefits under this subpart are 
limited to turfgrass sod which would have matured and been harvested 
during 1998, when a disaster caused in excess of 35 percent of the 
expected production to die.
    (c) For honey, disaster benefits under this subpart are limited to 
table and nontable honey produced commercially for human consumption. 
For calculating benefits, all honey is considered a single crop, 
regardless of type or variety of floral source or intended use.
    (d) For maple sap, disaster benefits under this subpart are limited 
to maple sap produced on private property in a controlled environment 
by a commercial operator for sale as sap or syrup. The maple sap must 
be produced from trees that are: located on land the producer controls 
by ownership or lease; managed for production of maple sap; and are at 
least 30 years old and 12 inches in diameter.

Subpart C--Multi-Year Crop Loss Disaster Assistance Program


Sec. 1477.300  Multi-year crop losses.

    (a) The disaster benefits under this subpart, the 1998 Crop Loss 
Disaster Assistance Program Multi-year Losses, will be equal to 25 
percent of the producer's previous loss payments for the qualifying 
losses if the producer received:
    (1) Crop insurance indemnity payments for crop losses on insured 
crops under the RMA-administered program, excluding replanting or 
raisin reconditioning payments; or
    (2) Payments from the Non-insured Crop Disaster Assistance Program 
for multi-year crop losses, including any 1994 ad hoc disaster payment 
of a noninsurable crop.
    (b) In order to receive benefits under this subpart, the producer 
must have received (a)(1) or (a)(2) in at least 3 of the 5 crop years 
running from 1994 through 1998 and only such losses shall be considered 
qualifying losses for purposes of paragraph (a) of this section.
    (c) For multi-year eligibility based on crop insurance indemnity 
payments, RMA will determine the producers that meet the eligibility 
requirements along with indemnity amounts and pass the data to FSA.
    (d) For NAP multi-year eligibility, FSA will determine eligible 
producers. Because the multi-year payments are based on payments 
previously received, area loss provisions apply.
    (e) For purposes of paragraph (a) of this section, the ``Federal 
loss payments'' shall only be those payments which were received for 
qualifying losses under the programs identified in paragraphs (a)(1) 
and (a)(2) of this section. In addition, benefits under this part will 
be permitted only where the qualifying losses were suffered by the 
identical producers, as determined under instructions of the Deputy 
Administrator. Changes in the organization and control of entities or 
production units will be considered to be changes in producers for crop 
history purposes. Likewise, in joint ventures, the entity will be 
considered to be the producer, not the individual members, and 
representational entities, such as a trust, will be considered 
different producers than the beneficiaries of the entity, except as 
otherwise allowed by the Deputy Administrator. The provisions of this 
subsection shall be used for qualifying purposes only for multi-year 
benefits and shall not, for qualified recipients, affect other 
restrictions that limit the maximum payment amount that may be received 
under this program.

    Signed at Washington, DC, on April 9, 1999.
Keith Kelly,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 99-9350 Filed 4-12-99; 12:42 pm]
BILLING CODE 3410-05-P