[Federal Register Volume 64, Number 122 (Friday, June 25, 1999)]
[Rules and Regulations]
[Pages 34109-34113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16167]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 Prices of new books are listed in the first FEDERAL REGISTER issue of each 
 week.
 
 ========================================================================
 

  Federal Register / Vol. 64, No. 122 / Friday, June 25, 1999 / Rules 
and Regulations  

[[Page 34109]]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Part 301

[Docket No. 96-016-35]
RIN 0579-AA83


Karnal Bunt; Compensation for the 1997-1998 Crop Season

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Final rule.

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

SUMMARY: We are amending the Karnal bunt regulations to provide 
compensation 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 1997-1998 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 efforts to contain 
and reduce the prevalence of Karnal bunt.

EFFECTIVE DATE: June 25, 1999.

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 Animal and Plant Health Inspection Service 
(APHIS), 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 in 7 
CFR 301.89-1 through 301.89-16 (referred to below as the regulations). 
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 December 17, 1998, we published a proposed rule in the Federal 
Register (63 FR 69563-69569, Docket No. 96-016-31), to amend the 
regulations to provide compensation for certain growers, handlers, seed 
companies, 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 1997-1998 crop season. The 
compensation we proposed was the same as we provided in the 1996-1997 
crop season.
    For areas under the first crop season of regulation in 1997-1998, 
we proposed that growers, handlers, and seed companies would be 
eligible for a maximum of $1.80 per bushel of positive-testing wheat. 
For areas that were regulated in previous crop seasons, we proposed 
that growers, handlers, and seed companies would be eligible for $.60 
per bushel of positive-testing wheat. For owners of grain storage 
facilities, we proposed to compensate for up to 50 percent of the 
direct cost of decontamination of a grain storage facility, but 
compensation would not exceed $20,000 per facility. For flour millers, 
we proposed to compensate for the treatment of millfeed at the rate of 
$35.00 per short ton of millfeed if APHIS required the millfeed to be 
treated. For National Karnal Bunt Survey participants, we proposed to 
compensate for positive-testing wheat at a maximum of $1.80 per bushel, 
and for up to 50 percent of the direct cost of decontamination of grain 
storage facilities, but not exceeding $20,000 per facility.
    We solicited comments concerning our proposal for 60 days ending 
February 16, 1999. We received seven comments by that date. They were 
from wheat industry associations, wheat producers and handlers, State 
departments of agriculture, and a food manufacturer. All of the 
commenters recommended additions or revisions to the proposed 
compensation. The comments are discussed below by topic.
    In the proposed rule, we said that all regulated areas in the 1997-
1998 crop season were previously regulated areas, and would, therefore, 
be eligible for the $.60 per bushel compensation rate. Two commenters 
said that (1) the ``certification are'' established by APHIS in August 
1998 is a ``first regulated crop season'' area and positive wheat from 
that area should get at least $1.80 per bushel compensation, and (2) 
the maximum $1.80 per bushel will not cover their losses, and we should 
offer the same maximum of $2.50 per bushel that we offered in the 1995-
1996 crop season (the first year we regulated for Karnal bunt).
    We are not making any changes to the proposed rule based on these 
comments. However, we agree with the commenters that wheat from the 
certification area that tested positive for Karnal bunt should be 
eligible for up to $1.80 per bushel compensation under the provisions 
for first regulated crop season areas. The certification area was 
established by APHIS as an emergency measure in August 1998 when random 
sampling of fields in Arizona showed there was a concentration of 
positive fields in a specific area. APHIS drew a boundary around the 
positive fields and called it a ``certification area.'' All of the 
certification area was within the regulated area in Arizona. Most of 
the fields within the certification area were classified as restricted 
areas for seed; the remaining fields were classified as surveillance 
areas. Under the regulations, wheat grain may move from restricted 
areas for seed without testing. Wheat grain from surveillance areas 
must be tested before movement from the area. When the certification 
area was established in August 1998, APHIS required all wheat grain 
that had not already moved out of the certification area to be tested 
for bunted kernels before movement from the area.
    Wheat grain growers and handlers from the portion of the 
certification area

[[Page 34110]]

that was outside the surveillance areas did not expect restrictions on 
the movement of their wheat grain at the time they made their planting 
and contract decisions. It is consistent with the intent of the 
compensation regulations to consider the certification area outside of 
the surveillance areas to be under the first regulated crop season for 
1997-1998. Therefore, growers, handlers, and seed companies who sold 
positive-testing wheat from the certification area outside of the 
surveillance areas will be eligible for up to $1.80 per bushel 
compensation. Positive-testing wheat grain from the surveillance areas 
within the certification area would be eligible for $.60 per bushel. 
This decision does not require any change to the proposed regulations.
    One commenter said that $.60 per bushel is inadequate to compensate 
for losses from positive-testing breeder or foundation seed. Breeder 
and foundation seed are stages in the seed production process that come 
before the final stage of certified seed (certified seed is the seed 
sold for planting). The commenter said that seed companies lost future 
royalties from not being able to use positive-testing breeder or 
foundation seed as stock for producing large quantities of certified 
seed. The commenter also said that the contract price for foundation 
seed is normally $27.00 per bushel. The commenter asked us to offer 
higher compensation for breeder and foundation seed to cover these 
losses.
    We are not making any changes to the proposed rule based on this 
comment. We have not compensated in the past for losses in future 
royalties or for other losses at the early stages of seed production. 
The loss in value of certified, market-ready seed is the most 
quantifiable and direct loss associated with actions taken by APHIS to 
prevent the spread of Karnal bunt. Many losses connected with seed in 
other stages of production are less quantifiable and may have been 
otherwise imposed by market forces, such as market demand and prices 
over the long term.
    One commenter said that we should offer the same $1.80 per bushel 
compensation for all positive wheat, and not offer less ($.60 per 
bushel) for wheat from previously regulated areas. We are not making 
any changes based on this comment. We continue to believe it is 
appropriate to provide a lower level of compensation to growers, 
handlers, and seed companies from previously regulated areas. Growers, 
handlers, and seed companies in areas under the first regulated crop 
season would not have known that their area was to become regulated 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, handlers, and seed companies 
in previously regulated areas knew they were in an area regulated for 
Karnal bunt at the time they made planting and contracting decisions 
for the 1997-1998 crop season. Understanding the restrictions, and 
realizing they were planting in a higher risk area, they could have 
chosen to alter their planting and contracting decisions to avoid 
losses from positive wheat. We believe the proposed compensation 
amounts are appropriate for the circumstances in each area.
    Several commenters requested compensation for losses not addressed 
in the proposed rule, such as demurrage charges, the cost of cleaning 
contaminated railcars, and losses due to transportation delays caused 
by the Karnal bunt regulations. We are not making any changes to the 
proposed rule in response to these comments. We have not offered 
compensation for these costs and losses in past crop seasons. However, 
we have made a decision to provide some compensation for railcar 
cleaning and demurrage costs that were incurred in the 1995-1996 crop 
season due to the presence of Karnal bunt spores found in wheat in 
railcars. We are not offering compensation for railcar cleaning and 
demurrage costs for other crop seasons. Unlike handlers in later crop 
seasons, handlers in the 1995-1996 crop season would not have been 
prepared for potential costs associated with shipping wheat from the 
newly quarantined area. At the time of the 1995-1996 wheat harvest in 
Arizona, California, and New Mexico, the extent of Karnal bunt 
infestation was not completely known. In addition, even though samples 
were taken at the field level for testing, the testing did not reveal 
all the positive wheat in the affected area. The result was that 
significant quantities of positive wheat were commingled with negative 
wheat in railcars, and, when samples were taken from railcars for 
testing, high numbers of railcars with positive wheat were found. In 
subsequent crop seasons, the areas at higher risk for Karnal bunt were 
known, and handlers were able to take precautions to not commingle 
wheat from higher risk areas with wheat from other areas or to not move 
wheat from higher risk areas out of the regulated area.
    During the 1995-1996 crop season, wheat in 22 railcars in 
California and 416 railcars in Arizona tested positive for Karnal bunt 
and the railcars were required to be cleaned, at an estimated cost of 
$50 per car. The time taken to remove the positive wheat from and clean 
the railcars often resulted in several days of demurrage charges, at a 
cost of about $50 per car per day (demurrage is charged by a railcar 
company to compensate for delays, such as if a handler fails to load or 
unload freight within the time allowed) . We estimate that the total 
cost of railcar cleaning and demurrage in the 1995-1996 crop season was 
$750,000. APHIS will contact all eligible claimants with information on 
how to submit claims.
    The following comments did not address compensation and, therefore, 
are not within the scope of the proposed rule. Nevertheless, they are 
addressed below.
    Two commenters said that Karnal bunt is not a dangerous plant pest, 
and asked that we work with trading partners to advocate international 
deregulation of Karnal bunt. We agree with the commenters that Karnal 
bunt is a minor crop pest in that it produces little direct economic 
loss to agricultural production. Research and information from USDA's 
Agricultural Research Service and international scientists support this 
view. However, international trading partners continue to consider 
Karnal bunt a quarantine issue, jeopardizing exports of U.S. wheat. 
Therefore, we continue to regulate the movement of wheat from areas 
affected by Karnal bunt to protect our export markets, although we are 
relieving restrictions on growers, handlers, and seed companies as 
appropriate.
    We have taken steps to address international views on appropriate 
levels of protection against minor crop pests like Karnal bunt. In 
cooperation with the North American Plant Protection Organization 
(NAPPO), APHIS hosted an international symposium in 1997 to assess the 
importance of bunt and smut diseases of wheat for quarantine purposes. 
Following this symposium, at the request of NAPPO, the International 
Plant Protection Convention Secretariat convened a science panel in 
June 1998 to evaluate the issue of categorizing regulated pests that 
have minor biological impacts, like Karnal bunt, for the purpose of 
determining the appropriate strength of protective measures for these 
types of pests. The science panel concluded that it was unnecessary and 
inappropriate to create a specific category for pests that have minor 
biological impact and that countries should rely on the current pest 
risk analysis process (under the World Trade Organization ``Agreement

[[Page 34111]]

on the Application of Sanitary and Phytosanitary Measures'') as the 
basis for determining the strength of protective measures. We are 
continuing to work with our international trading partners to minimize 
the impact of Karnal bunt on wheat trade.
    One commenter asked that we deregulate the Bard-Winterhaven area in 
California. One commenter asked that we address the issue of Mexico not 
accepting wheat from parts of California outside the regulated areas. 
We recently published a final rule that removes the Bard-Winterhaven 
area in Imperial County, CA, from the regulations (see Docket No. 96-
016-36, 64 FR 23749-23754, published in the Federal Register on May 4, 
1999). In regard to wheat exports to Mexico, we are working with the 
Government of Mexico to establish mutually recognized criteria for 
considering areas as free of Karnal bunt.
    Therefore, for the reasons given in the proposed rule and in this 
document, we are adopting the proposed rule as a final rule, without 
change.

Effective Date

    This is a substantive rule that provides compensation to persons 
who experienced economic losses in the 1997-1998 crop season because of 
the Karnal bunt regulations and emergency actions. Immediate action is 
necessary to compensate for these losses. Therefore, pursuant to the 
provisions of 5 U.S.C. 553, the Administrator of the Animal and Plant 
Health Inspection Service finds good cause for making this rule 
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 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 1997-1998 crop season 
because of the Karnal bunt regulations and emergency actions.
    In accordance with Executive Order 12866, this analysis examines 
the economic costs and benefits of providing such compensation. The 
wheat industry within the regulated area is largely composed of 
businesses that can be considered ``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 effects of rules 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. We estimate 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 regulatory program, we offered 
compensation in the 1995-1996 and 1996-1997 crop seasons to mitigate 
certain losses 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. The 
compensation in this final rule for the 1997-1998 crop season is the 
same as the compensation offered in the 1996-1997 crop season.
    Under this final rule, growers, handlers, and seed companies will 
be eligible for compensation for losses in the 1997-1998 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. As in 
the 1996-1997 crop season, we are offering different levels of 
compensation depending on whether the wheat was grown in an area under 
the first regulated crop season or in a previously regulated area. An 
area in the first regulated crop season is an area that became 
regulated for Karnal bunt after the 1997-1998 crop was planted. A 
previously regulated area is an area that became regulated for Karnal 
bunt before the 1997-1998 crop was planted.
    For growers, handlers, and seed companies in previously regulated 
areas, compensation for positive grain or seed will be $.60 per bushel. 
Growers, handlers, and seed companies in areas under 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 difference 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 previously 
regulated areas knew they were in an area regulated for Karnal bunt at 
the time that they made planting and contracting decisions for the 
1997-1998 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.
    We have completed testing of 1997-1998 harvest wheat from the 
surveillance areas in Arizona, California, New Mexico, and Texas. The 
amount of positive wheat from the surveillance areas is shown in the 
table below. The table also shows levels of positive wheat from an area 
called the certification area. The certification area was established 
by APHIS as an emergency measure in August of 1998 when random sampling 
of fields in Arizona showed there was a concentration of positive 
fields in a specific area. As discussed in the response to comments in 
this final rule, growers, handlers, and seed companies with positive 
wheat from the certification area (not including surveillance areas 
within the certification area) will be eligible for first regulated 
crop season compensation (maximum of $1.80 per bushel). We have not 
completed testing of wheat from the certification area outside of the 
surveillance areas. Therefore, the amounts shown in the table below are 
estimated based on the rate of infection we have found to date from the 
certification area. It should be noted that, in the proposed rule, we 
estimated that compensation for wheat grain and seed in the 1997-1998 
crop season would total $87,000. The estimated total compensation in 
the table below is significantly higher due to a higher than expected 
infection rate and the higher rate of compensation for growers, 
handlers, and seed companies in the certification area.

[[Page 34112]]



                      Compensation for Positive-Testing Wheat in the 1997-1998 Crop Season
----------------------------------------------------------------------------------------------------------------
                                                   Total bushels                      Maximum        Estimated
                                                     of wheat        Positive      compensation        total
                                                     harvested    wheat, bushels    per bushel     compensation
----------------------------------------------------------------------------------------------------------------
Arizona, surveillance area......................       1,577,858         284,042            $.60        $170,425
Arizona, certification area \1\.................       3,328,234         977,482            1.80       1,759,468
                                                                     (estimated)
California......................................       1,910,792          10,302             .60           6,181
New Mexico......................................         318,000               0             .60               0
Texas...........................................         784,200               0             .60               0
----------------------------------------------------------------------------------------------------------------
    Totals......................................       7,919,084       1,271,826  ..............      1,936,074
----------------------------------------------------------------------------------------------------------------
\1\ We estimate that the field infection rate in the Arizona certification area in 1998 was 6.45 percent. The
  amount of positive bushels in the Arizona certification area shown in this table does not reflect the field
  infection rate in this area. This is due to the fact that positive wheat was commingled with negative wheat in
  grain storage facilities in the certification area before it was known that the wheat was positive, resulting
  in a higher infection rate per bushel.

    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 per facility. In the 1997-1998 
crop season, only one grain storage facility was required to be 
decontaminated.
    Compensation for the cost of heat treating millfeed that APHIS 
requires to be treated is at the rate of $35.00 per short ton of 
millfeed. Under current regulations, APHIS requires heat treatment of 
millfeed made from wheat that tested positive for Karnal bunt. In the 
1997-1998 crop season, no positive wheat was used for milling; 
therefore, no heat treatment of millfeed was required.
    No new areas were regulated in the 1997-1998 crop season as a 
result of the National Karnal Bunt Survey. Therefore, no one will be 
eligible for compensation for National Karnal Bunt Survey participants 
under this final rule. (As discussed previously, although no new areas 
were regulated in the 1997-1998 crop season as a result of the National 
Karnal Bunt Survey, producers within the certification area in Arizona 
will be eligible for first regulated crop season compensation. The 
additional restrictions imposed in the certification area in the 1997-
1998 crop season were not as a result of testing done for the National 
Karnal Bunt Survey.)
    There are approximately 18,000 acres within the areas regulated for 
Karnal bunt where planting of wheat was prohibited in the 1997-1998 
crop season. This rule does not contain provisions for compensating 
growers in areas where wheat planting is prohibited, since many of 
these growers rotate wheat with other crops that are not prohibited 
from being planted. These growers generate revenue from these other 
crops, effectively minimizing the impact of the prohibition on planting 
wheat.
    Growers and handlers of wheat grain and seed, and wheat seed 
companies, are the entities most affected by this rule. We estimate 
that there are a total of 712 wheat growers in the regulated areas: 378 
in Arizona, 48 in California, 200 in New Mexico, and 86 in Texas. There 
are 149 growers in surveillance areas, and 563 growers in regulated 
areas lying beyond surveillance areas.1 Most of 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 effects of this rule will largely 
be on small entities.
---------------------------------------------------------------------------

    \1\ The 149 growers in surveillance areas are distributed as 
follows: 54 in Arizona, 27 in California, 68 in Texas, and none in 
New Mexico. The 563 growers in regulated areas lying beyond 
surveillance areas are distributed as follows: 324 in Arizona, 21 in 
California, 200 in New Mexico, and 18 in Texas.
---------------------------------------------------------------------------

    We expect this rule will have a positive economic effect 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.
    Under these circumstances, the Administrator of the Animal and 
Plant Health Inspection Service has determined that this action will 
not have a significant economic impact on a substantial number of small 
entities.

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 number is 0579-0140.

List of Subjects in 7 CFR Part 301

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

    Accordingly, we are amending 7 CFR part 301 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. Section 301.89-15 is amended by revising the section heading, 
the introductory text to the section, the

[[Page 34113]]

introductory text to paragraph (a), all of paragraph (b), the 
introductory text to paragraph (c), and the last sentence of paragraph 
(c)(2), to read as follows:


Sec. 301.89-15  Compensation for growers, handlers, and seed companies 
in the 1996-1997 and 1997-1998 crop seasons.

    Growers, handlers, and seed companies are eligible to receive 
compensation from the United States Department of Agriculture (USDA) 
for the 1996-1997 and 1997-1998 crop seasons 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 crop was planted, 
or for which an Emergency Action Notification (PPQ Form 523) was issued 
after the 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 or 1997-1998 crop season wheat (as 
appropriate) 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.
* * * * *
    (b) Growers, handlers, and seed companies in previously regulated 
areas. 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 (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 crop was planted, or for which an Emergency 
Action Notification (PPQ Form 523) was issued before the 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 previously regulated areas are 
eligible for compensation only for 1996-1997 or 1997-1998 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 a previously regulated area 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 a previously regulated area 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). Claims for 
compensation for the 1996-1997 crop season must be received by FSA on 
or before October 8, 1998. Claims for compensation for the 1997-1998 
crop season must be received by FSA on or before October 25, 1999. 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 these dates. To 
claim compensation, a grower, handler, or seed company must complete 
and submit to the local FSA county office the following documents:
* * * * *
    (2) Growers. * * * Growers compensated under paragraph (b)(1) of 
this section (previously regulated areas) 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).
* * * * *


Sec. 301.89-16  [Amended]

    3. Section 301.89-16 is amended as follows:
    a. In the heading, by removing the words ``1996-1997 crop season'' 
and adding the words ``1996-1997 and 1997-1998 crop seasons'' in their 
place.
    b. In the introductory text, by removing the words ``1996-1997 crop 
season'' and adding the words ``1996-1997 and 1997-1998 crop seasons'' 
in their place.
    c. In paragraphs (a), (b), (c)(1), and (c)(2), by removing the last 
two sentences in each paragraph and by adding three sentences in their 
place to read as follows: ``Claims for compensation for the 1996-1997 
crop season must be received by APHIS on or before October 8, 1998. 
Claims for compensation for the 1997-1998 crop season must be received 
by APHIS on or before October 25, 1999. The Administrator may extend 
these deadlines upon written request in specific cases, when unusual 
and unforeseen circumstances occur which prevent or hinder a claimant 
from requesting compensation on or before these dates.''

    Done in Washington, DC, this 18th day of June 1999.
Craig A. Reed,
Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 99-16167 Filed 6-24-99; 8:45 am]
BILLING CODE 3410-34-P