[Federal Register Volume 65, Number 32 (Wednesday, February 16, 2000)]
[Rules and Regulations]
[Pages 7942-7968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-3406]



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Part III





Department of Agriculture





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Farm Service Agency



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Commodity Credit Corporation



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7 CFR Parts 718, 723, 1400, et al.



1999 Crop and Market Loss Assistance; Final Rule

  Federal Register / Vol. 65, No. 32 / Wednesday, February 16, 2000 / 
Rules and Regulations  

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DEPARTMENT OF AGRICULTURE

Farm Service Agency

Commodity Credit Corporation

7 CFR Parts 718 and 723

7 CFR Parts 1400, 1412, 1421, 1427, 1430, 1434, 1435, 1439, 1447, 1464, 
1469, 1478
RIN 0560-AG13


1999 Crop and Market Loss Assistance

AGENCIES: Farm Service Agency, Commodity Credit Corporation; USDA.

ACTION: Final Rule.

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SUMMARY: This final rule implements crop and market loss provisions of 
the Agriculture, Rural Development, Food and Drug Administration, and 
Related Agencies Appropriations Act, 2000, (the 2000 Act), and the 
Omnibus Consolidated Appropriations Act, 2000. This action will 
implement the statutory provisions related to the 1999 Crop Disaster 
Program, the Livestock Assistance and Livestock Indemnity Programs, 
Market Loss Assistance Programs for Dairy, Peanuts, and Tobacco, the 
Milk Price Support Program, Recourse Loan Programs for Mohair and 
Honey, advance production flexibility contract payments, revision of 
the Upland Cotton User Marketing Certificate Program, postponement of 
the Dairy Recourse Loan Program and elimination of the enforcement of 
sugar marketing assessments through FY 2001. This rule will also amend 
the regulations to implement several other, related provisions, such as 
payment limitations and the transfer of flue-cured tobacco quota.

EFFECTIVE DATE: February 11, 2000.

FOR FURTHER INFORMATION CONTACT: Tom Witzig, Chief, Regulatory Review 
and Foreign Investment Disclosure Branch, FSA, USDA, STOP 0540, 1400 
Independence Avenue, SW, Washington, D.C. 20250-0540, Telephone: (202) 
205-5851.

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 has been 
reviewed by the Office of Management and Budget. A cost-benefit 
assessment was completed and is summarized after the background section 
explaining the actions this rule will take.

Federal Assistance Programs

    The titles and numbers of the Federal assistance programs, as found 
in the Catalog of Federal Domestic Assistance, to which this final rule 
applies are: Commodity Loan Deficiency Payments-10.051; Production 
Flexibility Payments for Contract Commodities-10.055; Conservation 
Reserve Program-10.069, Disaster Reserve Assistance-10.452.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this rule because USDA is not required by 5 U.S.C. 553 or 
any other provision of law to publish a notice of proposed rulemaking 
with respect to the subject matter of this rule.

Environmental Evaluation

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

Executive Order 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

    The provisions of Title II of the Unfunded Mandates Reform Act of 
1995 are not applicable to this rule because the USDA is not required 
by 5 U.S.C. 553 or any other provision of law to publish a notice of 
proposed rulemaking with respect to the subject matter of this rule.

Small Business Regulatory Enforcement Fairness Act of 1996

    Section 824 of the 2000 Act requires that the regulations necessary 
to implement Title VIII, Subtitle A of the 2000 Act be issued as soon 
as practicable and without regard to the notice and comment provisions 
of 5 U.S.C. 553. It also requires that the Secretary use the provisions 
of 5 U.S.C. 808, which provides that a rule may take effect at such 
time as the agency may determine if the agency finds for good cause 
that public notice is impracticable, unnecessary, or contrary to the 
public purpose. These regulations affect the incomes of an 
extraordinarily large number of agricultural producers who have been 
hit hard by natural disasters and poor market conditions. Accordingly, 
because it would be contrary to the public interest to delay this rule, 
as expressed in the 2000 Act, this rule is effective immediately.

Paperwork Reduction Act

    As provided in section 824 of the 2000 Act, these regulations are 
to be promulgated without regard to the Paperwork Reduction Act. 
However, the forms necessary to conduct these programs will be 
submitted for clearance to the Office of Management and Budget under 
the provisions of 44 U.S.C. chapter 35.

Background

    This Final Rule will implement requirements of the Agriculture, 
Rural Development, Food and Drug Administration, and Related Agencies 
Appropriations Act, 2000, (Pub. L. 106-78) (the 2000 Act), and the 
Omnibus Consolidated Appropriations Act, 2000 (Pub. L. 106-113) related 
to crop and market loss assistance for agricultural producers. It will 
also implement several other provisions of those and other Acts that 
are related to but not in themselves crop or market loss assistance 
provisions. Crop and market loss provisions of the Acts that are being 
implemented are the 1999 Crop Disaster Program, the Livestock 
Assistance and Livestock Indemnity Programs, Market Loss Assistance 
Programs for Dairy, Peanuts, and Tobacco, and advance production 
flexibility contract payments.
    This rule will also amend the regulations to implement a related 
provision of the 2000 Act, increased payment limitations. Other 
provisions, such as revision of the Upland Cotton User Marketing 
Certificate Program, the Milk Price Support Program, Recourse Loan 
Programs for Mohair and Honey, postponement of the Dairy Recourse Loan 
Program, elimination of the enforcement of sugar marketing assessments 
through FY 2001 and the transfer of flue-cured tobacco quota, while not 
necessarily related to crop or market loss assistance, are mandated by 
the same subtitle, Subtitle A of Title VIII of the 2000 Act, that 
mandated the crop and market loss provisions. Regulations implementing 
Subtitle A were mandated by the 2000 Act to be promulgated without 
regard to the public comment requirements of the Administrative 
Procedures Act, 5 U.S.C. 553. Thus, this final rule is a logical place 
to finalize these additional provisions. Finally, the revisions to the 
Upland Cotton User Marketing Certificate Program include finalization 
of proposed rules that were published earlier to implement other 
legislation,

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and removal of obsolete regulations. These revisions are appropriate in 
order to provide consistent and uniform regulations for the 
implementation of the revisions mandated by the 2000 Act.
    Descriptions of the provisions being implemented by this rule 
follow.

1. 7 CFR 718  Farm Constitution for Transfer of Tobacco Quota

    Section 803 of the 2000 Act amended Section 379(b) of the 
Agricultural Adjustment Act of 1938 (the 1938 Act) with respect to the 
organization of tobacco farms. Prior to the enactment of the 2000 Act, 
the 1938 Act provided explicitly, for tobacco, that where the same 
owner has tracts of land in contiguous counties, the owner could 
combine the tracts as one ``farm'' for program purposes so long as one 
of the tracts had a burley tobacco poundage quota and the local county 
FSA committee determined that the tracts would be operated as a single 
farming unit. The 2000 Act extended that allowance to flue-cured 
tobacco farms. The reconstitution provision at 7 CFR 
718.201(a)(4)(ii)(A) has been revised accordingly.

2. 7 CFR 723  Tobacco Quotas and Allotments

    This rule will also implement section 755 of the 2000 Act, which 
amends section 319(l) of the 1938 Act to permit, in Kentucky, Ohio, and 
Indiana, the lease and transfer of burley tobacco quota across county 
lines if such leasing is approved in a referendum of growers. 
Previously, such leasing within those states was only allowed within 
the same county. Referenda were previously allowed in Tennessee and 
Virginia. Referenda were held in Tennessee and Virginia in which 
Tennessee growers favored cross county line leasing, whereas Virginia 
growers opposed such leasing. Additional referenda will not be held in 
Tennessee or Virginia unless growers petition the Secretary. Under the 
amendments made by the 2000 Act, such referenda would be allowed in 
five states instead of two.
    In a related matter also implemented in this rule, section 803 of 
the 2000 Act amends section 316(g) of the 1938 Act to permit the 
Secretary, on request of at least 25 percent of the active flue-cured 
tobacco producers within a State, to conduct a referendum to determine 
whether the producers favor or oppose permitting the sale of a flue-
cured tobacco allotment or quota from a farm in the State to any other 
farm in the State. That section specifies that such sales shall be 
allowed if the majority of the voters approve the allowance of such 
transfers.
    Further, section 803 of the 2000 Act modifies section 316(e) of the 
1938 Act to exempt flue-cured tobacco from the prohibition of having a 
tobacco allotment that, in acres, is more than 50 percent of the total 
cropland on the farm. That provision is also implemented in this rule. 
In addition, though the 2000 Act amendments exempt flue-cured tobacco 
from the coverage of section 316(e), the amendments to section 316(e) 
retain in that subsection a definition of ``tillable cropland.'' As 
that definition, however, only had significance with respect to the 
flue-cured tobacco and the application of section 316(e), that 
definition is removed by this rule from the program regulations in part 
723.
    Finally, section 803 of the 2000 Act also amends section 379(b) of 
the 1938 Act, which provided explicitly that where the same owner has 
tracts of land in contiguous counties, the owner can combine the tracts 
as one ``farm'' for program purposes so long as one of the tracts has a 
burley tobacco poundage quota and the local county FSA committee 
determines that the tracts will be operated as a single farming unit. 
The 2000 Act amendments extend the allowance to flue-cured tobacco 
farms. That provision is implemented in this rule. Because that 
provision involves the general regulations dealing with farm 
reconstitutions that are codified at 7 CFR Part 718, it is also 
described in that section of this rule.

3. 7 CFR 1400  Limitation on 1999 Marketing Loan Gains and Loan 
Deficiency Payments

    This rule amends 7 CFR Part 1400 to set forth a revised limitation 
on Marketing Loan Gains (MLG's) and Loan Deficiency Payments (LDP's) 
for 1999 contract commodities and oilseeds as required by the 2000 Act. 
Specifically, Section 813(a) of the 2000 Act increased to $150,000 the 
maximum total amount of payments identified in section 1001(3) of the 
Food Security Act of 1985 (7 U.S.C. 1308(1)) (the 1985 Act) that a 
person may receive under the Agricultural Marketing Transition Act 
(AMTA) for one or more contract commodities and oilseeds produced 
during the 1999 crop year. This rule does not amend any other 
provisions of part 1400. It should be emphasized that the change to the 
$150,000 limitation on MLG's and LDP's is applicable only to the 1999 
crop year. The revised limitation for 1999 MLG's and LDP's does not 
affect any other payment eligibility and limitation requirements 
contained in part 1400, or any price support benefit or price support 
loan making eligibility requirements that may be contained in parts 
1421 or 1427 of this chapter, or elsewhere.

4. 7 CFR Part 1410  Recission of the Highly-Erodible Land Restriction 
for the Conservation Reserve Program

    Section 763 of the 2000 Act deleted section 1232(a)(11) of the 1985 
Act, as amended. That section required, as a condition of contract 
compliance for certain producers with Conservation Reserve Program 
contracts, that the producer not use any newly-acquired highly-erodible 
land for the production of certain crops unless the land had a history 
of crop use. This rule revises the CRP regulations at 7 CFR Part 1410 
accordingly.

5. 7 CFR Part 1412  Production Flexibility Contracts

    This rule amends the regulations governing Production Flexibility 
Contracts (PFC's) to provide for greater flexibility in the timing of 
the FY 1999 through 2002 program payments, as required by section 811 
of the 2000 Act. It also amends the regulations to reduce payments when 
contract acreage is planted to wild rice, to change the deadline for 
enrolling land that is under an expiring Conservation Reserve Program 
(CRP) contract into the PFC program and to provide that PFC payment 
shares must be redesignated within 30 days of official approval of any 
reconstitution of a PFC farm. These latter changes are intended to 
improve program delivery.
    The PFC program, enacted in 1996, allows persons with farms with 
crop bases under previous commodity support programs to enter into 
agreements for payments for the 1996-2002 crop years in return for 
limiting the use of the contract acres during the contract period.
    Section 727 of the Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies Appropriations Act, 1999 (Pub. L. 
105-277) (1999 Appropriations Act), provides that the number of acres 
on which a participant will be eligible for 1999 PFC payments must be 
reduced, acre for acre, for each contract acre on which wild rice is 
planted. Additionally, Section 727 of the 2000 Act provides that the 
number of acres on which a participant will be eligible for 2000 and 
future years' PFC payments must be reduced, acre for acre, for each 
contract acre on which wild rice is planted. Section 1412.206 has been 
amended accordingly. Also, the Emergency Farm Financial Relief Act 
(Pub. L. 105-228) amended section 112(d) of AMTA (7 U.S.C. 7212(d)) to 
provide greater flexibility in the timing

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of the issuance of the 1999 PFC payments. The 2000 Act authorizes the 
same payment options for FY 1999-2002. Section 1412.302 of the 
regulations is amended accordingly. In addition, to help establish 
clear program eligibility, 7 CFR 1412.201 is amended to provide that 
the shares on a PFC must be designated or redesignated within 30 days 
of the approval of a reconstitution on a PFC. The 30-day limitation is 
in addition to other limits that may apply. Finally, to allow greater 
time for a producer to consider the producer's options, this rule will 
allow land with a Conservation Reserve Program (CRP) contract expiring 
after August 1, 1998, to be enrolled in the PFC program anytime up 
until April 1 of the fiscal year following the fiscal year in which the 
CRP contract expires. Prior to this amendment, the deadline for 
enrolling in a PFC would have been the last day of November of the 
fiscal year following the year in which the CRP contract expires. 
Section 1412.501(d) and (e) have been amended for that reason and for 
clarity. These amendments still will not allow any land to generate 
both a PFC and CRP payment for the same year.

6. 7 CFR Part 1421  New Eligibility Rules for MLG's and LDP's

    Section 813(a) of the 2000 Act increased the payment limitation for 
MLG's and LDP's for one or more contract commodities and oilseeds 
produced during the 1999 crop year from $75,000 to $150,000. Section 
813(b) directed the Secretary, in administering the increased payment 
limitation, to allow a producer that marketed a quantity of an eligible 
1999 crop for which an MLG or LDP was not received to receive such 
payment or gain as of the date the quantity was marketed or redeemed.
    Rules governing MLG's and LDP's are codified in 7 CFR Part 1421.1, 
and those regulations are modified in this rule to reflect these new 
statutory provisions. Subject to certain conditions, the new rules will 
allow a producer that is otherwise eligible to receive a payment to 
receive an MLG or LDP even though the producer has already marketed the 
commodity. This will only apply for commodities marketed on or before 
date of publication of this rule and to otherwise eligible producers on 
commodities for which no MLG or LDP has been paid.
    This rule makes similar changes regarding eligibility requirements 
for MLG's and LDP's in part 1427.

7. 7 CFR Part 1427  Upland Cotton User Marketing Certificate Program

    This rule amends the Upland Cotton User Marketing Certificate 
Program regulations to implement both 2000 Act provisions and changes 
required by earlier legislation. The amendments will accomplish three 
distinct objectives:
    A. Changes to the regulations for the user marketing certificate 
program are necessitated by statutory changes made by section 731 of 
the Agriculture, Rural Development, Food and Drug Administration, and 
Related Agencies Appropriations Act, 1998 (Pub. L. 105-86), by section 
762 of the 1999 Appropriations Act, and by section 806 of the 2000 Act. 
These acts amended the Federal Agriculture Improvement and Reform Act 
of 1996 (1996 Act) to change the requisite conditions in the cotton 
market under which user marketing certificates must be made available. 
The 1996 Act, as amended, requires that user marketing certificates be 
made available to domestic users and exporters for raw upland cotton 
grown in the United States and consumed or exported after four 
consecutive weeks during which the U.S. price quotation for upland 
cotton, including cost, insurance, and freight (C.I.F.), delivered in 
northern Europe, exceeds the average quotation for the five cheapest 
growths of upland-style cotton quoted for delivery, C.I.F. northern 
Europe, by more than 1.25 cents per pound.
    If marketing certificates are being made available, the 1996 Act, 
as amended, provides that such certificates are interrupted whenever 
the adjusted world price (AWP) at which upland cotton marketing loan 
repayments are made rises to a level in excess of 134 percent of the 
current loan rate.
    B. About mid-April each year, price quotations for both the old-
crop (current) and new-crop (forward) marketing years become available 
and are usually published concurrently until the end of the marketing 
year on July 31. Given the parallel sets of price data, administration 
of the user marketing certificate program requires a procedure to 
effect the transition from the old crop to the new crop during the four 
weeks following July 31.
    On August 7, 1997, CCC established a transition procedure with 
respect to the weekly determination as to whether the requisite period 
of consecutive weeks has passed in which U.S. price quotations, C.I.F. 
northern Europe, have exceeded the average quotation for the five 
cheapest growths of upland-style cotton quoted for delivery, C.I.F. 
northern Europe, by more than 1.25 cents per pound. Under this 
transition procedure, current-crop price quotations are considered for 
the weeks prior to the first Thursday after July 31 to determine 
whether each week's data should be counted toward the four consecutive 
weeks the passage of which could cause special global import quotas to 
be opened.
    Under current regulations, user marketing certificate payment rates 
throughout the year are based on current-crop quotations. However, 
current regulations require that, at the marketing year transition 
period, price quotations for the forward crop be considered for the 
three weeks prior to the first Thursday after July 31 to determine 
whether four consecutive qualifying weeks have passed that would 
require user marketing certificate payments to be made available. This 
procedure is inconsistent with the procedure now used for the 
determination regarding the special global import quota. This final 
rule sets forth an end-of-year transition procedure that is identical 
to the procedure USDA established on August 7, 1997, and thereby 
attains consistency by establishing that current-crop price quotations 
from the weeks prior to the first Thursday after July 31 will be used 
for the 4-week determinations for both the special global import quota 
and the user marketing certificate program.
    C. Current regulations contain language that is obsolete and 
applied only to situations that have passed and cannot recur. The 
language remained following the regulatory revisions in 1996 so that 
prior existing claims under the user marketing certificate program 
could be handled. There is no further need for this language, so it is 
deleted from the regulations.
    A Notice of Proposed Rulemaking was published in the Federal 
Register on December 9, 1998, (63 FR 67806) regarding these issues. No 
comments were received, and those changes have been adopted in this 
rule along with the additional modifications needed to reflect 
provisions of the recent appropriations bill which revives this program 
by effectively removing the spending cap that formerly was codified in 
the legislation at $701 million.

8. 7 CFR Part 1430  Price Support Program for Milk, Dairy Recourse Loan 
Program, and Dairy Market Loss Assistance Program

    Section 807 of the 2000 Act postpones the termination date of the 
Milk Price Support Program until December 31, 2000, and continues the 
$9.90 per hundredweight support rate for milk that was in effect during 
calender year 1999 through the year 2000. Section 807

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of the 2000 Act postpones the start of the Recourse Loan Program for 
Commercial Processors of Dairy Products from January 1, 2000, to 
January 1, 2001. This rule modifies the provisions of 7 CFR part 1430 
accordingly.
    Sections 805 and 825 of the 2000 Act provided $325 million for 
assistance for livestock and dairy producers who suffered economic 
losses in 1999. Of that $325 million, $125 million must be made 
available to dairy producers. The assistance will be provided by 
extending the Dairy Market Loss Assistance Program (DMLAP), which was 
established by a final rule published in the Federal Register on May 
10, 1999 at 64 FR 24933. This present rule amends part 1430 to expand 
the current regulation to cover the second Dairy Market Loss Assistance 
Program.
    The original DMLAP implemented section 1121 of Pub. L. No. 105-277, 
which directed the Secretary to provide $200 million in assistance to 
dairy producers. Eligible dairy producers received payments under this 
program for the first 26,000 hundredweight (cwt.) of milk marketings in 
either calendar year 1997 or 1998, but not both. Eligible operations 
had to have been in existence during the fourth quarter of 1998. The 
$200 million was divided among all the eligible dairy operations that 
applied during the initial application period that ended on May 21, 
1999.
    Under the new provisions of this rule, signup has been extended 
through February 28, 2000. Dairy operations may apply in person at 
county FSA offices during regular business hours, and at that time 
complete the application form. Dairy operations that applied for and 
received payments under the May 1999 dairy market loss assistance 
program do not need to reapply. Additional payments will be issued 
based upon the original application. The per-cwt. payment rate will be 
the $125 million available divided by the eligible production of milk 
(limited to 26,000 cwt. per dairy operation) marketed commercially 
during the base period.

9. 7 CFR Part 1434  Recourse Loan Regulations for Honey

    Section 1122 of Pub. L. 105-277 provided that in order to assist 
producers of honey to market their honey in an orderly manner during a 
period of low prices, the Secretary would be required to make recourse 
loans to producers of the 1998 crop of honey on fair and reasonable 
terms and conditions, as determined by the Secretary. That section 
specified a particular loan rate and specified that repayment of such 
loans would require, in addition to repayment of principal and 
interest, collection of such administrative costs as necessary to 
operate the program on a no net cost basis. Thereafter, regulations 
were issued that were codified in 7 CFR part 1434 by a final rule 
published on March 8, 1999 (64 FR 10923). Subsequently, in Pub. L. 106-
31, Congress amended the no net cost provision of Section 1122 of Pub. 
L. 105-277 to specify that no administrative costs should be charged 
against this program to the extent that those costs were costs which 
would have been incurred otherwise.
    More recently, section 801 of the 2000 Act provided for a similar 
program for the 1999 crop. That section provides generally for the use 
of $1.2 billion in CCC funds to make emergency financial assistance 
available to producers on a farm that have incurred losses in a 1999 
crop due to a disaster as determined by the Secretary. With respect to 
honey, however, that section specifies that in order to assist 
producers of honey to market their honey in an orderly manner during a 
period of low prices, the Secretary may use funds otherwise made 
available for use under Section 801 to make available recourse loans to 
producers of the 1999 crop of honey on fair and reasonable terms and 
conditions, as determined by the Secretary. As with the program 
provided in Pub. L. 105-277 for the 1998 crop, the 2000 Act specifies 
that the loan rate shall be 85 percent of the average price of honey 
during the 5-crop year period preceding the crop year for which the 
loan is made, excluding the crop year in which the average price of 
honey was the highest and the crop year in which the average price was 
the lowest in the period. This final rule will amend part 1434 to 
expand the current regulation to cover 1999-crop honey as well. The 
1999-crop program will be operated in the same manner as the 1998-crop 
program given the similarity of the 1999-crop statutory provisions to 
those for the 1998 crop. Program details were set out in the March 8, 
1999, rule. The adopted regulations specify that the final loan date 
for 1999-crop honey will be March 31, 2000. Also, the rule amends 
section 1434.9 to reflect the change in the no-net-cost aspect of the 
program brought about by Pub. L. 106-31.

10. 7 CFR Part 1435  Sugar Marketing Assessments

    Section 803(b) of the 2000 Act provides that none of the funds 
appropriated or otherwise made available by this Act or any other Act 
may be used to pay the salaries and expenses of personnel of the 
Department of Agriculture to carry out or enforce section 156(f) of the 
1996 Act through fiscal year 2001. Section 156(f) of the 1996 Act 
provides for a marketing assessment for sugar, and regulations for that 
assessment are codified in 7 CFR part 1435. This rule modifies part 
1435 in light of the provisions of section 803(b) of the 2000 Act. 
Section 156(f) of the 1996 Act requires first processors to pay an 
assessment on the marketing of all raw cane sugar and raw beet sugar in 
fiscal years 1996-2003. That part calls for an accounting on a monthly 
basis and also provides that at the end of each fiscal year processors 
must pay an assessment on their inventories on hand even though those 
inventories have not yet been marketed.
    Section 803 does not apply to particular sugar but rather to the 
enforcement of the assessment during a certain period. However, the 
orientation of the assessment statute itself is toward month to month 
accounting and reporting. Processors will not be required to file 
reports during the period October 23, 1999, through September 30, 2001. 
Sugar that is marketed during September of 2001 will be sugar on which 
the assessment will be due when the report on that sugar is due in 
October of 2001.

11. 7 CFR Part 1439  Livestock Assistance and Livestock Indemnity 
Programs

    Section 805 of the 2000 Act provides that the Secretary shall use 
$325 million of CCC funds to provide assistance directly to livestock 
and dairy producers in a manner determined appropriate by the Secretary 
to compensate the producers for economic losses incurred during 1999. 
Section 825 of the 2000 Act provides that of the funds provided in 
section 801 (which deals with crop losses) and section 805 of the 2000 
Act, no less than $200 million shall be used for livestock producers 
for losses due to drought or other natural disasters. This rule will 
implement the livestock requirements through the Livestock Assistance 
Program (LAP) and the Livestock Indemnity Program (LIP).
    Several programs dealing with livestock matters are codified at 7 
CFR part 1439. That part was amended in March 1999 (64 FR 13497, March 
19, 1999) to set out a 1998 LAP based on Pub. L. 105-277. A new LAP 
program based on the 2000 Act will be created using the same criteria 
that were used for the 1998 LAP program. The program for 1998 was 
successful in identifying needy producers in an efficient manner. Use 
of the same criteria will help avoid confusion and should serve as well 
in

[[Page 7946]]

making it possible for benefits to be made available more rapidly.
    There is a suggestion in the 2000 Act conference report that last 
year's LAP limit per person of $40,000 in benefits be, for this year, 
increased to a higher level. However, on consideration, it has been 
decided not to adopt that suggestion as it would draw funds away from 
potentially needier farmers with smaller operations.
    As with the 1998 LAP program, benefits under the new program will 
be provided to eligible livestock producers only in those counties 
where a severe natural disaster occurred, and that were subsequently 
designated eligible counties by the Deputy Administrator for Farm 
Programs of FSA. To be designated an eligible county, the county must 
have suffered a 40-percent or greater grazing loss for 3 consecutive 
months during the 1999 calender year as a result of damage due to a 
drought or other natural disaster. Each county must qualify on its own, 
unlike in some programs in the past where contiguous counties have also 
been eligible. Further, the livestock producer must have suffered at 
least a 40-percent loss of normal grazing for the producer's eligible 
livestock for a minimum of 3 consecutive months. Losses will only be 
compensable up to 80 percent of the total grazing available and the 
compensable loss cannot exceed a maximum determined and announced by 
the local county committee. The program will be administered through 
the Deputy Administrator for Farm Programs, FSA. The producer's gross 
loss eligibility will be computed using a formula that takes into 
account the composition of the producer's livestock holdings and will 
be subject to funding and other limitations, including a per person 
payment limitation and a provision which precludes participation for 
persons whose 1998 gross revenues exceed $2.5 million. As with the 1998 
program, the regulations allow for a final payment eligibility not to 
exceed 50 percent of the eligible loss amount. To the extent that the 
funds available for the program are not enough to cover the claims, the 
claims will be pro-rated using a national factor, if applicable. For 
purposes of per-person payment limits for the new program, the 
regulations in 7CFR 1400 will be used to determine who qualifies as a 
separate ``person'.
    In addition to the LAP, a new LIP will compensate producers for 
losses of livestock. The new LIP, referred to as 1999 LIP, Phase II, 
will follow closely upon the LIP program promulgated in regulations 
published at 64 FR 58766 on November 1, 1999. That LIP program, which 
will now be known as 1999 LIP, Phase I, is authorized by provisions of 
the 1999 Emergency Supplemental Appropriations Act (Pub. L. 106-31), 
enacted on May 21, 1999, which made $3,000,000 available to the 
Secretary of Agriculture to implement a livestock indemnity program for 
qualifying livestock losses occurring in the period beginning on May 2, 
1998, and ending on May 21, 1999. That legislation specified that the 
covered losses had to be due to natural disasters declared by the 
President or Secretary of Agriculture. Further, that legislation 
specified that the request for qualifying declaration had to be 
submitted by May 21, 1999, and that, to the extent practicable, 
benefits had to be provided in a manner similar to that used for the 
livestock indemnity programs carried out by the Secretary during 1997 
and 1998. Also, Pub. L. 106-31 specified that benefits under the 
program would be subject, to the extent practicable, to the gross 
income means test and payment limitations of the 1996-crop Disaster 
Reserve Assistance Program (DRAP) previously codified in 7 CFR part 
1437. Under the 1996 DRAP, no person could receive more than $50,000 in 
payments and no person could receive any payment at all if that 
person's annual gross revenue exceeded $2.5 million. The 2000 Act does 
not carry that specificity with respect to livestock losses but rather, 
as indicated, simply provides generally that at least $200 million of 
the funds available under Sections 801 and 805 of the 2000 Act for 1999 
crop and livestock disaster losses must be made available to livestock 
producers.
    The LIP, Phase I, was a successful and fair way of making 
assistance available to producers and following the existing program 
will allow for an efficient and cohesive way of providing additional 
assistance.
    Accordingly, this rule simply expands the existing LIP rules in 
part 1439 to allow for the new LIP by extending benefits to losses that 
occurred in that part of 1999 not covered by Phase I, namely, losses 
that occurred due to a natural disaster that was the subject of a 
Presidential or Secretarial disaster declaration that was requested 
between May 22, 1999 and December 31, 1999, inclusive, and subsequently 
approved. Losses of livestock due to drought conditions are deemed to 
have been avoidable and are not eligible for benefits under LIP. 
Benefits were available to producers under LAP, which would have 
compensated the producer for purchased feed. Otherwise, with one 
exception noted below, this rule will follow the substantive terms of 
Phase I, the details of which were set out in the November 1, 1999, 
rule.
    For the 1999 livestock indemnity programs, payment rates will vary 
by class of livestock involved and the payment rate will be a 
percentage of the assigned market price for the class.
    As in Phase I, no person can receive benefits if that person's 
gross revenue, as defined by applicable regulations, exceeds $2.5 
million. The only substantive variance between the two phases, other 
than the time period covered, will be in dealing with the per-person 
payment limit. As indicated above, Phase I had a $50,000 per person 
limit, whereas LAP had a $40,000 payment limit. In order to provide for 
consistency with LAP and to provide for a better disbursal of benefits 
to smaller farms, which are generally less able to deal with adverse 
market conditions, this rule adopts a $40,000 per person payment limit 
for LIP, Phase II. Phase I and Phase II will be considered separate 
programs for payment limitation purposes and payments for a loss will 
be compensated only under one of these two programs. Only $200 million 
will be allotted to the new livestock programs and claims will be 
prorated as needed.

12. 7 CFR Part 1447  1999 Peanut Marketing Assistance Program

    Section 803(a) of the 2000 Act provides that the Secretary shall 
use such amounts as are necessary of funds of the Commodity Credit 
Corporation to provide payments to producers of quota or additional 
peanuts to partially compensate them for continuing low commodity 
prices and increasing costs of production for the 1999 crop year. The 
2000 Act specifies that the amount of the payment to producers on a 
farm of quota or additional peanuts shall be equal to the product 
obtained by multiplying the quantity of quota peanuts or additional 
peanuts produced or considered produced by the producers by an amount 
equal to 5 percent of the loan rate established for quota peanuts or 
additional peanuts, respectively, under section 155 of AMTA. In order 
to implement this new program new regulations are codified by this rule 
in part 1447. In the case of so-called ``fall transfers'' where a 
farmer with a quota is unable to sell the quota peanuts, the farmer 
will be considered to have been the producer of quota peanuts and will 
be eligible at the quota rate for peanuts. The transferee will also be 
considered the producer of quota peanuts because the peanuts will have 
been marketed using a quota. In the case of spring transfers, the 
transferrer will not be eligible for a payment unless the

[[Page 7947]]

transferrer actually planted peanuts or was prevented from doing so by 
conditions beyond the producer's control. While the transferrer in 
those cases receives what is called ``considered produced credit'', 
which allows the transferrer to avoid losing the quota for non-use, the 
transferrer is not considered to have actually produced any peanuts. 
Thus, for example, in traditional disaster programs such transferrers 
have not received disaster payments whereas a farmer who planted 
peanuts but lost them due to a disaster was considered to have produced 
the peanuts and was, therefore, eligible for payments. Persons wanting 
to participate in the new program must file an application the payment 
by January 31, 2000, or such other date as may be set by the Deputy 
Administrator for Farm Programs, FSA. Applications will be spot-checked 
and validated by FSA.

13. 7 CFR 1464  Tobacco Loss Assistance Program

    This rule provides for several amendments to existing regulations 
regarding tobacco. First, section 803 of the 2000 Act authorizes the 
Secretary to use $328 million of funds of CCC to make payments to 
States on behalf of persons whose 1999 quota or acreage allotment for 
tobacco was reduced from the 1998 crop year level due to a drop in the 
national marketing quota or poundage quota for a kind of tobacco. This 
rule implements this provision by an amendment to 7 CFR part 1464 
providing for a Tobacco Loss Assistance Program (TLAP) to distribute 
those funds to the States. The rule provides that CCC will allocate 
funds to State governments with eligible growers. It appears that the 
States that will be eligible for receipt of the quota reduction funds 
will be those states in which burley, flue-cured, fire-cured and cigar-
filler and binder tobaccos are grown. There is, it is noted, some 
question under the statute about the scope of the coverage of the 
program. That debate arises because burley and flue cured tobaccos are 
the only tobaccos for which poundage quotas are assigned at the farm 
level and because of the existence of a colloquy in the Senate's 
consideration of the bill in which it was stated that the intent of the 
provision in the statute was to grant relief for burley and flue-cured 
growers. For other kinds of tobacco the farm does not receive a farm 
poundage quota as such, but receives an allotment that limits the 
number of acres that can be devoted to the crop. However, the statute 
provides that those farms that will be eligible for the payment will be 
those farms for which the ``quantity of quota allotted'' to the farm 
was reduced between the two years in question. Thus, there is no 
specific limitation in the statute to burley and flue-cured tobacco 
that could have been easily implemented and that would have been 
clearly understood. Further, while for other tobaccos there are not 
farm poundage quotas but farm acreage allotments, which limit the 
number of acres that can be devoted to the crop, the farm's allotment 
is determined by apportioning a national marketing quota for the farm 
based on yield calculations. Hence, there is, in that sense, when there 
is a drop in the overall quota, as there was for fire-cured and cigar-
filler and binder tobaccos, a reduction in the quota allotted to the 
farm. For that reason, it appears that for producers of those tobaccos 
the statutory condition for payment is met. On the other hand, while 
the colloquy does mention cigarette tobaccos, the statute does 
specifically limit its coverage to those tobaccos for which there are 
quotas and allotments. Thus, cigarette tobaccos for which there are no 
such quota or allotments, because they have been rejected by referenda 
conducted among producers, are not eligible for the distribution.
    Insofar as distribution of the monies are concerned, the rule 
provides generally that the Secretary will distribute the $328 million 
quota reduction funds only to the State or their agents rather than to 
growers directly. The States, however, would take the sums obligated, 
except for the costs of distributing the principal and any interest 
earned on it to eligible growers in accordance with the terms of the 
2000 Act. The 2000 Act generally calls for the distribution to be made, 
where applicable, in the same manner as the current distributions are 
being made under the National Tobacco Growers Settlement Trust (the 
Trust), a special $5 billion trust created by tobacco companies to 
provide compensation to tobacco growers. States not party to the Trust 
are eligible for disaster funds but must submit a distribution plan for 
approval by the Executive Vice-President, CCC. Questions of eligibility 
under the new $328 million program would have to be resolved by 
complainants with the States themselves. In order, however, to allow 
for maximum flexibility, the rule would allow for CCC to make direct 
distributions to eligible persons if a compelling need should arise.

14. 7 CFR Part 1469  Mohair Recourse Loans

    Section 1126 of the 1999 Appropriations Act provided that in order 
to assist producers of mohair to market their mohair in an orderly 
manner during a period of disastrously low prices, the Secretary would 
be required to make available recourse loans to producers who produced 
or had mohair on hand before or during FY 1999. Section 1126 specified 
a loan rate of $2.00 per pound and that such loans would require 
repayment of principal only. The program regulations were codified at 7 
CFR part 1469 by a final rule published on March 8, 1999 (64 FR 10929).
    Section 801 of the 2000 Act provided for a similar program for 
mohair produced or on hand before or during FY 2000. Section 801 
provides generally for the use of $1.2 billion in CCC funds to make 
emergency financial assistance available to producers on a farm that 
have incurred losses in a 1999 crop due to a disaster as determined by 
the Secretary. Regarding mohair, Section 801 specifies, in language 
that is the same in substance as that for the FY 1999 program provided 
by the 1999 Appropriations Act, that in order to assist producers of 
mohair to market their mohair in an orderly manner during a period of 
low prices, the Secretary may use funds otherwise made available for 
use under Section 801 to make available recourse loans to producers of 
mohair produced during or before FY 2000 on fair and reasonable terms 
and conditions, as determined by the Secretary. The interest free 
provision specified in section 137(c)(4) of the 1999 Appropriations Act 
was removed by section 801(h)(2) of the 2000 Act. Loans made during FY 
2000 will accrue interest as provided in 7 CFR part 1405. This rule 
amends 7 CFR part 1469 to expand the current regulations consistent 
with the new legislation. The FY 2000 program will be operated in the 
same manner as the FY 1999 program. The final loan application date for 
FY 2000 mohair will be September 30, 2000.

15. 7 CFR Part 1478 1999 Crop Disaster Program

    Section 1102 of the 1999 Appropriations Act provided for a crop 
loss program that covered, with certain conditions, disaster-related 
crop losses for 1998 and prior years. The Secretary was directed, in 
that connection, not to discriminate against or penalize producers on a 
farm who had purchased crop insurance under the Federal crop insurance 
program. In order to implement that program, new rules, codified at 7 
CFR part 1477, were published on April 15, 1999 (64 FR 18553). Those 
rules were later amended with respect to an offset issue by a rule

[[Page 7948]]

published on November 1, 1999 (64 FR 58769). Now, in Section 801 of the 
2000 Act, and Pub. L. 106-113, Congress has provided that $1.386 
billion of the funds of CCC be made available to make emergency 
financial assistance available to producers on a farm that have 
incurred losses on a 1999 crop due to a disaster, as determined by the 
Secretary. Section 801 specifies that such assistance be made available 
in the same manner as provided under the 1998-crop program, including 
use of the same loss thresholds. Section 801(d) specifies that the 
program shall be applicable to losses for all crops (including losses 
of trees from which a crop is harvested, livestock, and fisheries), as 
determined by the Secretary, due to disasters. This rule implements 
those provisions of section 801 essentially by adopting the single-year 
program regulations that were published for the 1998 program. However, 
because the necessary differences between the 1999 and the 1998 and 
earlier programs would produce unnecessarily confusing regulations if 
the 1999 program were to be implemented by revising the existing 
regulations at 7 CFR part 1477, the 1999 program regulations will be 
promulgated in a new part, 7 CFR part 1478. In addition to the new 
program being a single-year program only instead of having a multi-year 
program element, the rules for 1999 differ from the rules for 1998 due 
to other clarifications and modifications, including the following:
    Adding a definition of ``eligible crops'' to clarify that all crops 
eligible for noninsured crop disaster assistance (NAP) or crop 
insurance are eligible for the 1999 Crop Disaster Program (CDP);
    Modifying the crop insurance linkage requirement so that crop 
insurance will be required for all 2000 and 2001 crops for which the 
producer received CDP payments for the 1999 crop year. Previously, the 
producer only had to obtain crop insurance on crops of ``economic 
significance'' to the producer. This eliminates the need for a 
determination of economic significance and makes enforcing compliance 
with the provision much more efficient;
    Removing the definition of ``economic significance';
    Adding a provision clarifying that the use of approved yields may 
only be used if production reports were submitted prior to the 
enactment of the 2000 Act;
    Adding language regarding crops with multiple uses that allows CCC 
to request proof of marketing history when a crop had different payment 
rates for each intended use;
    Adding vegetable and root stock as a value loss crop to more 
accurately reflect the way these types of crops are grown or sold; and
    Removing language regarding Federal Crop Insurance Corporation 
(FCIC) premium discounts. Section 814 of the 2000 Act requires the 
Secretary to transfer $400 million of CCC funds to FCIC to assist 
agricultural producers in purchasing additional crop insurance for crop 
year 2000. Previously, such premium discounts were provided directly by 
CCC.
    Producers who seek benefits under this part must file an 
application for benefits during the sign-up period, December 13, 1999, 
to February 25, 2000, 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.
    As with the 1998 program, there is a per-person payment limit of 
$80,000 and, in addition, no person can receive benefits if that 
person's gross revenue as determined under the applicable rule exceeds 
$2.5 million. Producers seeking benefits under this new program will be 
required to purchase crop insurance as a condition of receiving 
benefits, and the benefits that can be received may be reduced, if 
needed, for a failure, in connection with the 1998 crop program, to 
acquire crop insurance. Loss level requirements and payment criteria 
are essentially the same as for the 1998-crop program and are set out 
in this rule. With respect to livestock, however, benefits for such 
livestock will not be addressed within the provisions of the new part, 
but under the livestock assistance program and dairy indemnity programs 
which are otherwise provided for in this rule.

Cost-Benefit Assessment

    The table and the discussion following summarize the Cost/Benefit 
Assessments for the major provisions of this rule. For FY 2000, outlays 
total approximately $2.742 billion, including the elimination of sugar 
marketing assessments, which actually represent reduced revenues. 
Incomes of producers, processors and shippers will increase 
approximately $2,998-$3.197 billion. The differences between outlays, 
which are virtually all direct transfers to program participants, and 
income, are made up of increased dairy prices and the product of 
increased cotton prices and increased cotton production.

  Summary of FY 2000 Outlays and Changes in Producer/Processor/Shipper
                                 Incomes
------------------------------------------------------------------------
                                        Outlays  $      Change in income
              Program                    million           $ million
------------------------------------------------------------------------
Milk Price Support and Dairy                      173          $400--600
 Recourse Loan Program............
Sugar Marketing Assessments.......               41.6               41.6
Upland Cotton.....................                400                475
Crop Disaster Program (includes                 1,386          \1\ 1,340
 honey and mohair)................
Livestock Programs................                200                200
Dairy Market Loss.................                125                125
Tobacco Quota Loss................                328                328
Peanut Market Assistance..........                 49                 49
Increased Payment Limit for MLG                  39.4               39.4
 and LDP \2\......................
Advance AMTA Payment \3\..........              1,971  .................
Total.............................          \4\ 2,742        2,998-3,198
------------------------------------------------------------------------
\1\ After allowances for administrative costs provided under section 822
  of the 2000 Act and additional rice loan deficiency payments under
  section 801(f) of the 2000 Act.
\2\ 1999: $39.4 million; 2000: $29.8 million; 2001: $9.6 million.
\3\ The acceleration of FY 2000-2002 PFC payments will advance payments
  of $1,971 in 2000, $1,584 million in 2001, and $1,537 in 2002.
\4\ Does not include advance AMTA payments.


[[Page 7949]]

Limitation on Marketing Loan Gains and Loan Deficiency Payments

    Marketing loan provisions allow a producer to repay a loan at a 
rate that is the lesser of the applicable loan rate and charges plus 
per-unit accrued interest or an alternative repayment rate determined 
by CCC. A marketing loan gain (MLG) is the amount of principal waived 
when a producer repays a loan at an alternative loan repayment rate 
that is less than the applicable loan rate. In lieu of securing a 
commodity loan, a producer may instead opt for a loan deficiency 
payment (LDP) if the alternative repayment rate is below the applicable 
loan rate. Once a given quantity of a commodity has received an LDP, 
however, the quantity is no longer eligible for a commodity loan. 
Moreover, a quantity that has received an MLG is not eligible for an 
LDP.
    Combined MLG's plus LDP's for crops harvested in a given year are 
subject to a statutorily-specified payment limitation. Prior to a 
statutory change in this limit for the 1999 crops made by the 2000 Act, 
the payment limit had been $75,000 per person. This payment limitation 
is viewed by many as a means of targeting program benefits to small-and 
medium-size farming operations. However, the payment limit does not 
prevent large operations from receiving such benefits, but it may 
effectively limit the amount of benefits that large operations receive.
    The relatively high crop prices received by producers in 1995 and 
1996 began to decline in 1997 as world demand slackened and as world 
supplies increased due to generally favorable growing conditions. The 
price decline has continued into the 1998 and 1999 crop years.
    Because alternative repayment rates are tied to prices, the low 
1998-and 1999 crop prices have triggered considerable MLG and LDP 
payments to producers. Due to the relatively high 1999-crop MLG and LDP 
payment rates that have been available to producers, and due to the 
considerable amount of loan-eligible quantities that many producers 
have, potential LDP plus MLG payments have easily exceeded $75,000 for 
many such producers. In the absence of a change in the payment limit 
for the 1999 crops to a value higher than $75,000, some of these 
producers would have had an incentive to obtain loans on those 
quantities that would be ineligible for LDP and MLG benefits due to the 
payment limit, and subsequently forfeit the crop to CCC. Any indirect 
program benefits realized by a producer by forfeiting a commodity to 
CCC (i.e., the loan rate at which the quantity is forfeited exceeds the 
loan repayment rate at the time of forfeiture) are not subject to the 
payment limitation.
    By increasing the payment limitation, there will be a reduction in 
payment limit-related forfeitures and producers with large farming 
operations will be able to receive increased program benefits, 
especially at a time when prices are low and numerous other income-
stabilizing actions were enacted in the 2000 Act. Specifically, section 
813(a) of the 2000 Act amended section 1001 of the 1985 Act by 
increasing to $150,000 the maximum MLG plus LDP payments a person may 
receive for the 1999 crops. The existing $75,000 payment limitation for 
the 2000 and subsequent crops was unaffected by this statutory change.
    This statutory change has some notable effects. A majority of the 
relatively large operators whose 1999-crop payments will exceed or have 
exceeded $75,000 will be able to receive MLG's and/or LDP's on 
quantities of a commodity that were previously ineligible for such 
payments due to the $75,000 limit. The incentive for these producers to 
pledge their production as collateral for loans and possibly forfeit 
the collateral at maturity is significantly reduced for all except 
operators with very large operations. Thus, corresponding quantities of 
commodities not pledged as collateral for a loan will be free to flow 
into the market. The effect of this change on CCC inventories and 
stock-holding is expected to be relatively small, however, because most 
forfeited quantities, regardless of the payment limitation, are sold by 
CCC within a short time after they have been forfeited.
    Another effect is that CCC outlays will increase. Payments not made 
due to a payment limitation are a Government savings. Thus, increasing 
the payment limitation reduces such savings and results in an increase 
in outlays. The outlays associated with foregone payment limit savings 
will be offset to some extent by savings on such things as reduced CCC 
storage costs associated with a reduction in CCC inventories.
    The increase in the payment limit occurred at a time when many 
individuals had already reached the previously established payment 
limit of $75,000. Several of these producers sold those quantities that 
were ineligible for an MLG or LDP prior to enactment of the higher 
1999-crop payment limit. By selling those quantities, the producers 
lost beneficial interest and, in the absence of a statutory change, 
were therefore ineligible for additional benefits on those quantities 
despite the increase in the payment limit.
    Due to this situation, section 813(b) of the 2000 Act stipulated 
that producers who would otherwise be ineligible for such payments or 
gains because they had marketed the commodity could receive a benefit 
based on the relevant loan repayment rate and LDP rate that was in 
effect on the date on which the quantity was marketed or redeemed. This 
change will lead to a relatively small increase in outlays. It will 
increase the benefits to and income of the affected producers up to the 
$150,000 limit, but it will have no effect on marketings since such 
marketings have already occurred.

Price Support Program for Milk and the Recourse Loan Program for 
Commercial Processors of Dairy Products

    The total cost to CCC for extending the milk price support program 
is estimated at $173 million. Extending the milk price support program 
will help maintain the all-milk price and dairy farm incomes because 
CCC's purchase price is providing a floor under the current market 
price for nonfat dry milk (NDM). The domestic price of NDM would be 
expected to fall at least 10 cents per pound if the program were not 
extended. The 10-cent-per-pound drop in the price of NDM would be 
expected to allow a drop in the all-milk price of about 20-40 cents per 
cwt., which would reduce dairy income by about $400-600 million.

Advance Production Flexibility Contract Payments

    AMTA provided for payments to producers who signed Production 
Flexibility Contracts (PFC). These payments under AMTA were required to 
be made in two equal payments, with the first on December 15 or January 
15 at the owner's or producer's option. The second payment was then 
made at the end of the fiscal year in September. For Fiscal Year (FY) 
1999, the Agriculture, Rural Development, Food and Drug Administration 
and Related Agencies Appropriations Act, 1999, Public Law 105-277, 
(``1999 Act'') provided that producers could elect to receive their 
entire fiscal year PFC payment in a single payment or two equal 
payments anytime during the fiscal year. The 2000 Act authorizes the 
same payment options for FY 2000-2002.
    The option for producers to receive all their FY 1999 PFC payments 
in a single lump sum pushed forward the disbursement of $2,138 million 
in funds that otherwise would have been held until the final two months 
of the fiscal year. The acceleration of FY 2000-2002

[[Page 7950]]

PFC payments under a single-payment option can be expected to put as 
much as an additional $1,971 million into the hands of producers by 
early 2000, $1,584 million by early 2001, and $1,537 million by early 
2002. Under the two-payment requirement, these funds would not be 
available to producers until as late as September in each of these 
years. In addition to easing cash-flow and debt-servicing problems for 
many producers, the earlier availability of these funds could mean a 
savings of as much as $238 million in reduced interest costs for U.S. 
grain producers over the four-year period.

Suspending the Sugar Marketing Assessment

    Suspending the enforcement of the sugar marketing assessment is 
expected to reduce government revenues $41.6 million in FY 2000 and 
$41.8 million in FY 2001, for a total loss to the Federal government of 
$83.4 million. The savings on program administration are estimated to 
be insignificant--less than $10,000 per year. Processors and growers 
are expected to save about $16.7 million and $66.7 million, 
respectively, in assessment payments. Elimination of the reporting 
requirement for FY 2000 and FY 2001 will save the industry about 
$50,000 in bookkeeping costs.

Upland Cotton User Marketing Certificate Program

    Step 2 payments had been authorized to begin with the 1991 crop and 
were re-authorized for the 1996 through 2002 crops in the 1996 Act. 
Outlays were limited to $701 million for Step 2 under that Act. The 
program began operating in July 1997 after a hiatus of 131 weeks. It 
operated until December 1998, when the entire amount of funding was 
exhausted. The payment rate during the operational period averaged 5.7 
cents per pound. About 15.8 million bales were consumed by domestic 
textile mills and about 9.6 million bales of U.S.-grown cotton were 
exported and were the subject of payments under the program.
    For the 1997 marketing year the average payment rate for exporters 
was 4.6 cents per pound. The payment is believed to have contributed 
about 250,000 to 375,000 bales to total U.S. exports in 1997/98. These 
additional exports would be worth about $150 million to $200 million in 
additional farm sales receipts. Payments to exporters totaled $156 
million. For mill use in the 1997 marketing year, the payment may have 
contributed between 150,000 and 250,000 bales to total mill use worth 
$125 million to $175 million. Payments to mills in 1997 totaled $234 
million.
    The upland cotton crop in the United States in 1998 was down by 
nearly 3.8 million bales (22 percent) from the level of 1997. Total 
supplies of upland cotton were down by 4.4 million bales (20 percent) 
for the 1998 marketing year. Despite domestic mill use that was 9 
percent lower than in 1997, and even though exports dropped by over 40 
percent, end-of-year cotton stocks held about constant at 3.8 million 
bales.
    In the 1998 marketing year, the Step 2 payment rate averaged over 
10 cents per pound but covered less than half the crop. With limited 
U.S. supplies and early exhaustion of the funds, Step 2 made only a 
limited contribution to total use. However, it likely raised domestic 
prices more than it had in other years, sending more of the Step 2 
funds to farmers. The program is thought to have increased exports by 
between 100,000 and 150,000 bales, worth $200 million to $250 million. 
Payments to exporters in 1998 totaled $116 million. In 1998, mill use 
is thought to have been increased by 150,000 to 300,000 bales, worth 
$250 million to $300 million. Payments to mills were $191 million.
    Now that Step 2 has been funded for the 1999 marketing year and 
beyond, USDA's cotton estimates committee projects that exports might 
be increased by 200,000 to 350,000 bales per year. Mill use was 
determined not to respond as well to Step 2 payments when supplies are 
normal, and the program is estimated by the committee as likely to lead 
to increases in mill use of only 60,000 to 100,000 bales per year. 
These increases would be accompanied by annual expenditures of about 
$400 million in Step 2 payments and would increase farm sales receipts 
by an average of $250 million to $300 million per year due to a 
combination of higher prices and greater production.
    Step 3 also was authorized to begin with the 1991 crop and was re-
authorized in the 1996 Act. There have been two periods of sustained 
triggering of the import quotas. The first was over October 1995 
through March 1997, when 70 consecutive quotas were announced. Imports 
from these quotas totaled about 800,000 bales. Due to the end of Step 2 
in December of 1997, the second series of 35 consecutive weeks of 
import quotas began in February 1999 and ended in October 1999. Imports 
resulting from these quotas are still possible, but about 400,000 bales 
have been imported under these quotas so far.
    Supplies are now adequate in the United States, and imports have 
dwindled to virtually nothing in recent weeks. Step 3 quotas totaling 
over 900,000 bales remain open. With U.S. prices now quite low and 
competitive, few imported bales are expected for the remainder of this 
marketing year. No significant imports are projected through the 2002 
crop year.

Honey Recourse Loan Program

    The 1999-crop loan rate will be established at 59 cents per pound 
based on the statutory formula. At the current reduced price level the 
1999-crop loan rate resulting from the statutory formula is expected to 
exceed most current market prices. Producers who use the 1999-crop loan 
program are expected to save $480,000 in reduced borrowing costs 
compared with commercial loans. With current market prices in the range 
of 40 to 55 cents per pound, a market price increase of about 1.5 cents 
per pound would be needed to recover the loan interest. Domestic honey 
prices are closely related to prices of imports because of our sizeable 
imports. Without higher foreign honey prices, it would seem likely that 
domestic honey prices will remain low in spite of the 1999 honey loan 
program. The amount of honey estimated to be loan collateral would not 
be sufficient to create significant upward price pressure. With prices 
expected to be unaffected by the loan program, domestic consumers will 
not be impacted.

Livestock Programs

    The Livestock Assistance Program (LAP) will provide emergency feed 
assistance to eligible livestock producers for grazing losses in 
counties where a severe natural disaster occurred during calendar 1999 
and which has been approved by the Deputy Administrator for Farm 
Programs, FSA. Counties where precipitation was 40 percent or more 
below or above normal for at least 4 months and where there was at 
least a 40 percent, or greater, grazing loss for at least 3 consecutive 
months, are eligible for approval.
    Eligible livestock are beef and dairy cattle; buffalo or beefalo 
when maintained on the same basis as beef cattle; sheep; goats; swine; 
and equine animals used commercially for human food or kept for the 
production of food or fiber on the owner's farm. Livestock must have 
been owned for at least three months before they are eligible for LAP 
benefits.
    Individual producer eligibility is based on whether a natural 
disaster caused the producer in an approved county to suffer a 40-
percent or greater loss of grazing for a 3-consecutive-month period in 
calendar year 1999. The amount of assistance is based upon

[[Page 7951]]

the value of feed calculated on a corn-equivalence basis factored by 
the percentage of grazing loss during the approved grazing period. In 
addition, producers must certify that they have an annual gross income 
of less than $2.5 million.
    Benefits paid to eligible producers will be determined by the value 
of feed needed to maintain the eligible livestock on the farm, the 
percentage of feed production lost due to the disaster, and the rate of 
coverage of loss. Benefits are reduced if the producer did not have 
sufficient grazing to support eligible livestock under normal grazing 
conditions.
    The value of feed needed to maintain the eligible livestock is 
determined by the daily energy requirement for the kind and type of 
livestock owned by the producer, the number of each kind, type, and 
weight class of eligible livestock, the number of days in the payment 
period, the five-year (1994 through 1998 crops) average price, 
excluding the highest and the lowest years, received by the farmers for 
corn (established at $.0441 per pound, or $2.47 per bushel divided by 
56 pounds per bushel) and the amount of grazing land available for 
eligible livestock.
    Outlays were estimated for the proposed livestock assistance 
program based on the estimate of the number of livestock in the 
affected region that are likely to qualify for program benefits and an 
estimate of the average feed production loss suffered in the affected 
region (see Table 1). About 1,800 counties are expected to be 
designated as eligible for LAP based on losses in 1999 (compared with 
1,194 eligible based on losses in 1998). A 60-percent forage production 
loss level was assumed.
    Total feed needs were calculated for the entire period for each 
type of eligible livestock based on the daily energy requirement and 
the quantity of corn needed to provide the energy requirement. The 
daily energy requirement (in pounds of corn equivalent) for a given 
kind of livestock was multiplied by 120 days times the estimated number 
of livestock in the affected region times the estimated percent loss of 
feed production in the region times 4.41 cents per pound corn price.
    The potential cost of LAP (before application of a national factor) 
is estimated to be about $1.15 billion. It is estimated that over 25 
million head of cattle, 500,000 horses, and 2 million sheep are in the 
affected regions.
    Because projected claims exceed the funds appropriated for the 
program, each producer's payment will be prorated based on the ratio of 
the maximum allowed benefits to total claims. Funds available for LAP 
and LIP total $200 million. A total of approximately $9.8 million will 
be used for administrative expenses for the two programs, leaving 
$190.2 million for program benefits. Prorating expected total claims 
under each program ($1.15 billion for LAP and $6 million for LIP) 
results in payments under the LAP program of about $189 million. The 
prorating factor is 16.45 percent ($190 million/$1,156 million).
    The impact of the payments on livestock prices and feed prices is 
expected to be small. Without this program, some producers would have 
been forced to liquidate their herds, increasing livestock supplies and 
lowering prices in the short term. The changes would likely be small 
and temporary. Thus, the impact on consumers would be negligible. 
Aggregate farm income in 1999 is expected to be $199 million higher. 
Federal outlays will also increase by the indemnity payments of $199 
million.
    The 1999 LIP Phase II will provide financial assistance to 
livestock producers for losses of eligible livestock due to natural 
disasters between May 22, 1999, and December 31, 1999. Eligible 
livestock are beef, dairy, sheep goats, swine, poultry (including egg-
producing poultry), equine animals used for food or in the production 
of food, and buffalo/beefalo when maintained on the same basis as beef 
cattle.
    On a sectoral basis, the $1 million ($6 million in claims 
multiplied by a 0.1667 national factor) expected to be paid under 1999 
LIP Phase II represents a small fraction of the $55.3 billion value of 
production in 1998 (the most recent year for which data are available).
    For those producers who actually suffered the losses, however, the 
impact on their equity and cash flow positions is significant. 
Indemnity payments will assist producers affected by the disaster in 
meeting their financial obligations for inputs used in the production 
of the lost livestock and to replace breeding stock. It is assumed, in 
part as a result of the LIP, that producers affected by the disaster 
would remain in business and rebuild their foundation herds to their 
previous size.
    These funds will assist producers in meeting outstanding financial 
obligations against inputs used in the production of livestock which 
were lost in the disasters and to replace breeding livestock lost in 
the disasters. The impact of the indemnity payments on livestock and 
milk market prices and consumers is not expected to be measurable. 
Aggregate farm income in 1999 is expected to be $1 million higher, 
equaling the amount of indemnity payments. Federal outlays would also 
increase by the indemnity payment of $1 million.

Peanut Market Loss Assistance Program

    The 1999 Peanut Marketing Loss Assistance program will provide 
financial assistance to producers who have experienced increased costs 
of production and lower market prices over the last four years. The 
program will provide about $49 million to peanut producers, including 
those who fall-leased peanuts either to or from their farm. Producers 
with unmarketed quota pounds left on their marketing cards after 
harvest were determined to have shared in the risk of production and 
will be compensated as well as those who leased their quota pounds. 
Payments will assist peanut producers to meet their financial 
obligations and are not likely to impact market price for peanut 
products. No measurable impact is likely for consumers. Aggregate farm 
income will increase by about the $49 million in Federal outlays. 
Approximately 40,000 peanut farms are expected to participate in the 
program.

Mohair Recourse Loan Program

    The intent of the mohair loan provision in the 1999 Act was to 
target benefits to producers and their co-operatives, not to 
speculators. Therefore, the regulation for the Mohair Recourse Loan 
Program specifies that beneficial interest in the mohair must reside 
with the person requesting the loan until the loan is repaid. The 
person must have a separate, identifiable interest in both the goats 
and the mohair and must have been responsible for the financial risk of 
production. If the person is handling the marketing through a co-
operative, the beneficial interest must remain with the co-operative 
member, and the member must share in any marketing proceeds realized by 
the co-operative. The person requesting the mohair loan must have 
owned, for 180 days, in the United States, the goats from which the 
loan mohair was clipped. Goats younger than 180 days must have been 
born in the United States. The loan must be requested in the Farm 
Service Agency local office that serves the county in which the 
headquarters of the producing farm is located. Speculators who have 
purchased mohair from producers, or who have imported mohair, and are 
storing it in central locations are not eligible for these recourse 
loans.

[[Page 7952]]

    It is believed that a large proportion of mohair producers are of 
limited financial means. Concerns have been expressed that, if 
borrowers received $2.00 per pound from CCC, and if the market price 
for certain types of mohair were less than $2.00 per pound, borrowers 
perhaps would not be able to repay the loans. However, the program will 
provide financing for such producers. A flat loan rate of $2.00 will be 
offered on all mohair unless the producer provides inadequate security, 
in which case only $1.25 will be offered. CCC will obtain a lien 
against all present and future production of mohair by the producer 
requesting the loan. CCC may require additional security, such as bonds 
or letters of credit. In this way, even limited-means producers will 
receive some benefit from the loan program, but the integrity of the 
program will be assured.
    As of the end of FY 1999, a total of approximately 5.6 million 
pounds of mohair had been pledged as collateral for the recourse loans, 
for an estimated total loan principal outstanding of about $11.2 
million. About 85 percent of this is thought to be adult hair. No loans 
had been repaid as of the close of the year on September 30, 1999. 
Since all of the loans under the FY 1999 program were made in FY 1999 
and none repaid, the program shows a net outlay of about $11.2 million. 
These loans will mature after 12 months and must be repaid during FY 
2000, for a receipt during that year of the same $11.2 million. For FY 
2000, with most of the adult hair inventory already under loan, there 
will be less ``new-crop'' activity. It is estimated that only about 1 
to 2 million pounds of adult hair not already serving as loan 
collateral will be pledged as collateral for a loan in FY 2000, but 
that about 4.5 million pounds of hair that is already pledged as 
collateral must be redeemed during FY 2000 and then be repledged. Loan 
activity for kid hair should be reduced from last year's level. Total 
projected loan outlays for FY 2000 are $12.6 million.

Tobacco Loss Assistance Program (TLAP)

    The $328 million provided for assistance to tobacco producers will 
help quota holders and growers defray income lost in crop year 1999 due 
to quota reductions. TLAP will pay producers approximately $1 for each 
pound of quota lost in crop year 1999. This amount of payment will 
easily cover producers' and quota holders' lost profit for crop year 
1999, but is insufficient to cover long-term losses in quota, land, 
equipment, and future profits. (As previously stated, in an indirectly 
related action cigarette manufacturers have promised $5.15 billion to 
growers and allotment holders.) Further, several tobacco-growing states 
have promised a portion of the $246 billion settlement to go to tobacco 
producers.
    To the extent that the $328 million payment to producers and quota 
holders defrays costs, the TLAP enhances solvency. To the extent that 
the TLAP exceeds costs, the payment is taxable. With the national 
savings rate near zero (perhaps even less in economically depressed 
agricultural areas) the multiplier effect is substantial. The large 
multipliers assures that a substantial portion of the TLAP will be 
recycled back to local, state, and federal coffers.

Crop Disaster Program (CDP)

    The 2000 Act authorizes the Secretary to provide disaster 
assistance to producers who suffered crop losses because of adverse 
weather conditions in the amount of $1.2 billion. Public Law 106-113 
authorizes an additional $186 million for crop loss assistance under 
the same terms and conditions as the crop loss provisions in the 2000 
Act. Thus, $1.34 billion is available, after taking into consideration 
administrative expenses, rice loan deficiency payments, and honey and 
mohair recourse loans.
    Large farms would account for a disproportionate share of crop loss 
payments if there were no eligibility limitations. The 2000 Act, by 
reference to the earlier program, provides both gross income and per-
person payment limitations. A person is not eligible for benefits if 
their gross revenue is in excess of $2.5 million for the 1998 tax year. 
The 1997 Census of Agriculture indicates that less than 2.4 percent of 
the farms in the U.S. have sales greater than $500,000. Farms with 
gross incomes of $2.5 million or more only represent a small fraction 
of one percent. The gross revenue limitation thus limits eligibility to 
all but the Nation's largest farms and ranches. The impact of the $2.5 
million gross income limit will put more payments in the hands of the 
Nation's smaller farms. The per-person payment limitation of $80,000 
also directs money towards small farms.
    If total claims for 1999 crop losses approach $2 billion (similar 
to 1998 crop loss claims), a pro-ration factor of about two-thirds will 
apply.
    For further information, the following individuals may be contacted 
regarding the different parts of the Cost/Benefit Assessment:

Crop Disaster--Contact: Philip Sronce, 202-720-2711
Dairy and Sugar--Contact: Dan Colacicco, 202-720-6733
Livestock--Contact: Dan Colacicco, 202-720-6733
Honey--Contact: Candy Thompson, 202-720-4584
Mohair--Contact: Candy Thompson, 202-720-4584
Peanuts--Contact: Dan Stevens, 202-720-5291
Cotton--Contact: Wayne Bjorlie, 202-720-7954
Advance Production Flexibility Contracts--Contact: Jerry Norton, 202-
720-0967
Payment Limitations--Contact: Terry Hickenbotham, 202-690-0733
Conservation Reserve--Contact: Ed Rall, 202-720-7795
Tobacco--Contact: Tom Burgess, 202-720-4318

List of Subjects

7 CFR Part 718

    Acreage, Allotments, Quotas, Reconstitutions, Tobacco

7 CFR Part 723

    Acreage Allotment, Auction warehouses, Dealers, Domestic 
manufacturers, Marketing quota, Penalties, Reconstitutions, Tobacco.

7 CFR Part 1400

    Agricultural Commodities, Agriculture, Loan Programs, Oilseeds

7 CFR Part 1412

    Contract acreage, Contract payments, Planting flexibility, Price 
support programs.

7 CFR Part 1421

    Wheat, Feed Grains, Rice, Oilseeds, and Farm-stored Peanuts, Loan 
programs/agriculture, Reporting and record keeping requirements.

7 CFR Part 1427

    Cotton, Upland Cotton and Extra Long Staple Cotton, Loan programs/
agriculture, Marketing certificate programs, Price support programs, 
Reporting and record keeping requirements, Warehouses.

7 CFR Part 1430

    Milk, Dairy, Dairy products, Price support programs, Reporting and 
recordkeeping requirements.

7 CFR Part 1434

    Honey, Loan programs/agriculture, Reporting and record keeping 
requirements.

7 CFR Part 1435

    Loan programs/agriculture, Reporting and recordkeeping 
requirements, Sugar.

[[Page 7953]]

7 CFR Part 1439

    Animal feeds, Disaster assistance, Livestock, Reporting and 
recordkeeping requirements.

7 CFR Part 1447

    Disaster assistance, emergency assistance, peanuts, reporting and 
recordkeeping requirements.

7 CFR Part 1464

    Tobacco Loans, Importer Assessments

7 CFR Part 1469

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

7 CFR Part 1478

    Disaster assistance, emergency assistance, reporting and 
recordkeeping requirements.

    For the reasons set out in the preamble, 7 CFR Chapters VII and XIV 
are amended as set forth below.

PART 718--PROVISIONS APPLICABLE TO MULTIPLE PROGRAMS

    1. The authority citation is revised to read as follows:

    Authority: 7 U.S.C. 1373, 1374, 7201 et seq.; 15 U.S.C. 714b.


    2. Revise Sec. 718.201 (a)(4)(ii)(A) to read as follows:


Sec. 718.201  Farm constitution.

    (a) * * *
    (4) * * *
    (ii) * * *
    (A) A burley or flue-cured tobacco quota is established for one or 
more of the tracts; and
* * * * *

PART 72--TOBACCO

    3. The authority citation for 7 CFR part 723 continues to read as 
follows:

    Authority: 7 U.S.C. 1301-1314, 1314-1, 1314b, 1314b-1, 1314b-2, 
1314c, 1314d, 1314e, 1314f, 1314i, 1315, 1316, 1362, 1363, 1372-75, 
1377-1379, 1421, 1445-1 and 1445-2.
    4. Amend Sec. 723.104(h) by removing the definition of ``Tillable 
cropland.''

    5. Amend Sec. 723.216 by revising paragraphs (e)(5)(iv) and (f)(1) 
and removing and reserving paragraph (f)(7)(ii) to read as follows:


Sec. 723.216  Transfer of tobacco acreage allotment or marketing quota 
by sale, lease, or owner.

* * * * *
    (e) * * *
    (5) * * *
    (iv) Filed on or before July 1. Unless the receiving farm is 
administratively located in the same county as the transferring farm. 
However, for 1991 and subsequent crops, burley tobacco producers in the 
State of Tennessee shall be permitted to lease and transfer burley 
tobacco quota to any other farm in the State. In addition, such 
transfers outside the county but within the same state may be allowed 
for burley tobacco producers in Virginia, Kentucky, Ohio, or Indiana, 
if the burley tobacco producers in that state approve such transfers in 
a referendum conducted by the Secretary.
* * * * *
    (f) * * *
    (1) Location of buying and selling farms. Marketing quota for flue 
cured tobacco transferred by sale must be to a farm administratively 
located within the same county, except that if 25 percent of the active 
flue-cured tobacco producers within a State petition the Secretary and 
the Secretary determines that a majority of the active flue-cured 
tobacco producers voting in the referendum approve, the sale of a flue-
cured tobacco allotment or quota from a farm in the State to any other 
farm in the State shall be permitted if all other conditions for such 
transfers are met. Further, the Secretary may permit flue-cured farms 
with the same owner that are located in contiguous counties to be 
combined for administrative purposes as one farm, notwithstanding 
provisions in part 718 of this chapter that might not otherwise permit 
that kind of combination.
* * * * *

    6. In Sec. 723.220 remove and reserve paragraphs (c) and (d).

PART 1400--PAYMENT LIMITATION AND PAYMENT ELIGIBILITY

    7. The authority citation for Part 1400 is revised to read as 
follows:

    Authority: 7 U.S.C. 1308, 1308-1, 1308-2; 16 U.S.C. 3834; Pub. 
L. 106-78, 113 Stat. 1135.


    8. Amend Sec. 1400.1 by revising Footnote 3 in the table in 
paragraph (g) to read as follows:

Subpart A--General Provisions


Sec. 1400.1  Applicability.

* * * * *
    (g) * * *

    3. The total of marketing loan gains and loan deficiency 
payments cannot exceed $75,000 per crop year, except for the 1999 
crop year for which the limit shall be $150,000 of which all or part 
may consist of marketing loan gains.

PART 1410--CONSERVATION RESERVE PROGRAM

    9. The authority citation for 7 CFR part 1410 continues to read as 
follows:

    Authority: 15 U.S.C. 714b and 714c; 16 U.S.C. 3801-3847.


    10. Amend Sec. 1410.20 by removing paragraph (a)(5) and 
redesignating paragraphs (a)(6) through (11) as paragraphs (a)(5) 
through (10), respectively.

PART 1412--PRODUCTION FLEXIBILITY CONTRACTS FOR WHEAT, FEED GRAINS, 
RICE, AND UPLAND COTTON

    11. The authority citation for part 1412 is revised to read as 
follows:

    Authority: 7 U.S.C. 7201 et seq.; 15 U.S.C. 714b, 714c; Sec. 
734, Pub. L. 105-86; Pub. L. 105-228; Sec. 727, Pub. L. 105-277; 
Secs. 727, 811, Pub. L. 106-78, 113 Stat. 1181.


    12. Revise Sec. 1412.201(c) to read as follows:


Sec. 1412.201  Production flexibility contract.

* * * * *
    (c) All producers sharing in the contract payments on a farm whose 
payment shares have not been designated for a fiscal year must sign the 
contract designating payment shares and provide supporting 
documentation as specified in parts 12, 1400, and 1412 of this title no 
later than August 1 of the fiscal year to be eligible to earn a 
contract payment for that fiscal year. If all producers have not signed 
the contract by August 1, no producers on the contract will be eligible 
for a payment for that farm for that fiscal year. Notwithstanding the 
August 1 deadline, in the event a farm reconstitution is completed in 
accordance with part 718 of this title, all producers must sign the 
contract and provide supporting documentation as specified in parts 12, 
1400 and 1412 of this title within 30 days after written notification 
by the county committee indicating the reconstitution is completed. If 
all producers have not signed the contract within 30 days, no producers 
on the contract will be eligible for a payment for that farm for that 
fiscal year.

    13. Revise Sec. 1412.206(a) to read as follows:


Sec. 1412.206  Planting flexibility.

    (a) For the 1996 through 2002 crop years, any crop may be planted 
on contract acreage on a farm, except as limited elsewhere in this 
section. For fiscal years 1998 through 2002, for each

[[Page 7954]]

contract acre on which a producer plants wild rice, 1 acre will not be 
used in determining the contract payment. Any crop may be planted on 
cropland in excess of the contract acreage.
* * * * *

    14. Amend Sec. 1412.302 by adding paragraph (e) to read as follows:


Sec. 1412.302  Contract payment provisions.

* * * * *
    (e) Notwithstanding any other provision of this section, 1999 
fiscal year production flexibility contract payments may be made at any 
time as may be determined to be permitted by the Emergency Farm 
Financial Relief Act, Public Law 105-228.

    15. Amend Sec. 1412.501 by revising paragraph (d) to read as set 
forth below and removing paragraph (e).


Sec. 1412.501  Timing for enrollment and termination of production 
flexibility contracts.

* * * * *
    (d)(1) Subject to the provisions of paragraphs (d)(2) and (3) of 
this section, land that could not previously have been enrolled in a 
production flexibility contract because of participation in the 
Conservation Reserve Contract but which becomes available for 
enrollment because of the expiration of a Conservation Reserve Program 
contract may be enrolled in a production flexibility contract.
    (2) Land qualifying for a production flexibility contract under 
paragraph (d)(1) of this section may be enrolled in a production 
flexibility contract no later than November 30 of the fiscal year 
following the final fiscal year of the Conservation Reserve Program 
contract unless the Conservation Reserve Program contract terminated 
after August 1, 1998, in which case the land shall be enrolled in a 
production flexibility contract no later than April 1 of the fiscal 
year following the final fiscal year of the Conservation Reserve 
Program contract.
    (3) In fiscal years 1997 through 2002, if a conservation reserve 
contract is terminated, and the land that was subject to the 
conservation reserve contract is enrolled in a production flexibility 
contract, the owner or producer may elect to receive either the 
production flexibility contract payment or a prorated Conservation 
Reserve Program payment for the fiscal year, but not both.

PART 1421--GRAINS AND SIMILARLY HANDLED COMMODITIES

    16. The authority citation for part 1421 is revised to read as 
follows:

    Authority: 7 U.S.C. 7213-7235, 7237; 15 U.S.C. 714b, 714c; Sec. 
813, Pub. L. 106-78, 113 Stat. 1182.

    17. Revise the Subpart title of the subpart containing Sec. 1421.1 
to read as follows: ``Subpart--Loan and Loan Deficiency Payment 
Regulations for the 1996 Through 2002 Crops of Wheat, Feed Grains, 
Rice, Oilseeds, (Canola, Crambe, Flaxseed, Mustard Seed, Rapeseed, 
Safflower, Soybeans, and Sunflower Seed), and Farm-Stored Peanuts''

    18. Amend Sec. 1421.1 by adding paragraphs (e) and (f) to read as 
follows:


Sec. 1421.1  Applicability.

* * * * *
    (e) For commodities produced during the 1999 crop year, the total 
amount of loan deficiency payments and marketing loan gains made under 
this part or part 1427 of this chapter shall be $150,000 per person, as 
defined in part 1400 of this chapter.
    (f) Loan deficiency payments or marketing loan gains for loan 
commodities produced in the 1999 crop year for which a loan deficiency 
payment or marketing loan gain was not requested prior to February 16, 
2000 will be calculated:
    (1) For marketing loan gains, based on the date the commodity was 
redeemed; and
    (2) For loan deficiency payments, based on the date the commodity 
was marketed, as determined by CCC.
* * * * *

PART 1427--COTTON

    19. The authority citation for 7 CFR part 1427 is revised to read 
as follows:

    Authority: 7 U.S.C. 7231, 7235, 7237; 15 U.S.C. 714b, 714c; Sec. 
813, Pub.L. 106-78, 113 Stat. 1182.

    20. Amend Sec. 1427.1 by adding paragraphs (d) and (e) to read as 
follows:


Sec. 1427.1  Applicability.

* * * * *
    (d) For commodities produced during the 1999 crop year, the total 
amount of loan deficiency payments and marketing loan gains made under 
this part or part 1427 of this chapter shall be $150,000 per person, as 
defined in part 1400 of this chapter.
    (e) Loan deficiency payments or marketing loan gains for loan 
commodities produced in the 1999 crop year for which a loan deficiency 
payment or marketing loan gain was not requested prior to February 16, 
2000 will be calculated:
    (1) For marketing loan gains, based on the date the commodity was 
redeemed; and
    (2) For loan deficiency payments, based on the date the commodity 
was marketed, as determined by CCC.
    21. Revise Sec. 1427.100(b) to read as follows:


Sec. 1427.100  Applicability.

    (b) During the period beginning August 1, 1991, and ending July 31, 
2003, subject to the availability of funds, CCC shall issue marketing 
certificates or cash payments to domestic users and exporters in 
accordance with this subpart in a week following a consecutive 4-week 
period in which--
    (1) The Friday through Thursday average price quotation for the 
lowest-priced United States growth, as quoted for Middling one and 
three thirty-seconds inch (``M 1\3/32\ inch'') cotton, delivered C.I.F. 
(cost, insurance and freight) northern Europe, (``U.S. Northern Europe 
(USNE) price'') exceeds the Friday through Thursday average price 
quotation for the five lowest-priced growths, as quoted for M 1\3/32\ 
inch cotton, delivered C.I.F. northern Europe, (``Northern Europe (NE) 
price'') by more than 1.25 cents per pound; and
    (2) The adjusted world price (AWP) for upland cotton, determined in 
accordance with Sec. 1427.25, does not exceed 134 percent of the 
current crop loan level for the base quality of upland cotton.

    22. Amend Sec. 1427.102 by removing the definition of ``optional 
origin export contract.''

    23. Revise Sec. 1427.103(a) to read as follows:


Sec. 1427.103  Eligible upland cotton.

    (a) For purposes of this subpart, eligible upland cotton is 
domestically produced baled upland cotton which bale is opened by an 
eligible domestic user on or after August 1, 1991, and on or before 
July 31, 2003, or exported by an eligible exporter on or after July 18, 
1996, and on or before July 31, 2003, during a Friday through Thursday 
period in which a payment rate, determined in accordance with 
Sec. 1427.107, is in effect and which meets the requirements of 
paragraphs (b) and (c) of this section.

    24. Revise Sec. 1427.105(b) to read as follows:


Sec. 1427.105  Upland Cotton Domestic User/Exporter Agreement.

* * * * *
    (b) Upland Cotton Domestic User/Exporter Agreements may be obtained 
from Cotton and Rice Branch, Warehouse Contract Division, Kansas City 
Commodity Office, P.O. Box 419205, Kansas City, Missouri 64141-

[[Page 7955]]

6205. Telephone requests for copies of the agreement will be accepted 
at (816) 926-6662. In order to participate in the program authorized by 
this subpart, domestic users and exporters must execute the Upland 
Cotton Domestic User/Exporter Agreement and forward the original and 
one copy to KCCO.

    25. Revise Sec. 1427.107 to read as follows:


Sec. 1427.107  Payment rate.

    (a) Beginning July 18, 1996, and ending July 31, 2003, the payment 
rate for purposes of calculating the payments made in accordance with 
this subpart shall be determined as follows for exporters for cotton 
shipped on or after July 18, 1996, and for domestic users:
    (1) Beginning the Friday following August 1 and ending the week in 
which the Northern Europe current (NEc) price, the Northern Europe 
forward (NEf) price, the U.S. Northern Europe current (USNEc) price, 
and the U.S. Northern Europe forward (USNEf) price first become 
available, the payment rate shall be the difference between the USNE 
price, minus 1.25 cents per pound, and the NE price in the fourth week 
of a consecutive 4-week period in which the USNE price exceeded the NE 
price each week by more than 1.25 cents per pound, and the AWP did not 
exceed the current crop-year loan level for the base quality of upland 
cotton by more than 134 percent in any week of the 4-week period; and
    (2) Beginning the Friday through Thursday week after the week in 
which the NEc, the NEf, the USNEc, and the USNEf prices first become 
available and ending the Thursday following July 31, the payment rate 
shall be the difference between the USNEc price, minus 1.25 cents per 
pound, and the NEc price in the fourth week of a consecutive 4-week 
period in which the USNEc price exceeded the NEc price each week by 
more than 1.25 cents per pound, and the AWP did not exceed the current 
crop-year loan level for the base quality of upland cotton by more than 
134 percent in any week of the 4-week period. If either or both the 
USNEc price and the NEc price are not available, the payment rate may 
be the difference between the USNEf price, minus 1.25 cents per pound, 
and the NEf price.
    (b) Whenever a 4-week period under paragraph (a) of this section 
contains a combination of NE prices only for one to three weeks and NEc 
prices and NEf prices only for one to three weeks, such as occurs in 
the spring when the NE price is succeeded by the NEc price and the NEf 
price (``Spring transition'') and at the start of a new marketing year 
when the NEc price and the NEf price are succeeded by the NE price 
(``marketing year transition''), under paragraphs (a)(1) and (a)(2) of 
this section, during both the spring transition and the marketing year 
transition periods, to the extent practicable, the NEc price and the 
USNEc price in combination with the NE price and the USNE price shall 
be taken into consideration during such 4-week periods to determine 
whether a payment is to be issued. During both the spring transition 
and the marketing year transition periods, if either or both the USNEc 
price and the NEc price are not available, the USNEf price and the NEf 
price in combination with the USNE price and the NE price shall be 
taken into consideration during such 4-week periods to determine 
whether a payment is to be issued.
    (c) For purposes of this subpart--
    (1) With respect to the determination of the USNE price, the USNEc 
price, the USNEf price, the NE price, the NEc price, and the NEf price:
    (i) If daily quotations are not available for one or more days of 
the 5-day period, the available quotations during the period will be 
used;
    (ii) CCC will not take into consideration a week in which no daily 
quotes are available for the entire 5-day period for either or both the 
USNE price and the NE price during the period when only one daily price 
quotation is available for each growth quoted for M 1\3/32\ inch 
cotton, delivered C.I.F. northern Europe, or the USNEc price and the 
NEc price, or the USNEf price and the NEf price. In that case, CCC may 
establish a payment rate at a level it determines to be appropriate, 
taking into consideration the payment rate determined in accordance 
with paragraph (a) of this section for the most recent available week; 
and
    (iii) Beginning July 18, 1996, if no daily quotes are available for 
the entire 5-day period for either or both the USNEc and the NEc price, 
the marketing year transition shall be implemented immediately.
    (2) With respect to the determination of the USNE price, the USNEc 
price, and the USNEf price, if a quotation for either the U.S. Memphis 
territory or the California/Arizona territory as quoted for M 1\3/32\ 
inch cotton, delivered C.I.F. northern Europe, is not available for 
each day or any day of the 5-day period, the available quotation(s) 
will be used.
    (d) Payment rates for loose, reginned motes and semi-processed 
motes that are of a quality suitable, without further processing, for 
spinning, papermaking or bleaching shall be based on a percentage of 
the basic rate for baled lint, as specified in the Upland Cotton 
Domestic User/Exporter Agreement.

    26. Amend Sec. 1427.108 by revising paragraph (c)(2), and removing 
paragraph (c)(3), to read as follows:


Sec. 1427.108  Payment.

* * * * *
    (c) * * *
    (2) Through July 31, 2003, exported by the exporter on the date CCC 
determines is the date on which the cotton is shipped.
* * * * *


Sec. 1427.109  [Removed]

    27. Remove Sec. 1427.109.

PART 1430--DAIRY PRODUCTS

    28. The authority citation for part 1430 continues to read as 
follows:

    Authority: 7 U.S.C. 7251 and 7252; and 15 U.S.C. 714b and 714c.


    29. Revise Sec. 1430.2 (a)(1) to read as follows:


Sec. 1430.2  Price support levels and purchase conditions.

    (a)(1) The levels of price support provided to farmers marketing 
milk containing 3.67 percent milkfat from dairy cows are: $10.35 per 
hundredweight for calendar year 1996, $10.20 per hundredweight for 
calendar year 1997, $10.05 per hundredweight for calendar year 1998, 
and $9.90 per hundredweight for calendar years 1999 and 2000.
* * * * *

    30. Revise Sec. 1430.401 (a) to read as follows:


Sec. 1430.401  Applicability.

    (a) The regulations in this subpart are applicable to eligible 
dairy products produced after December 31, 2000. These regulations set 
forth the terms and conditions under which CCC will make recourse loans 
to eligible processors. Additional terms and conditions shall be those 
set forth in the loan application and the note and security agreement 
that a processor must execute in order to receive such a loan.
* * * * *

    31. Revise Sec. 1430.403 (a) to read as follows:


Sec. 1430.403  Loan rates.

    (a) The Secretary will announce before January 1, 2001, and 
thereafter, before October 1 of each year, that a recourse loan program 
is available under this subpart, and loan rates for Cheddar cheese, 
butter, and nonfat dry milk based on a milk equivalent value

[[Page 7956]]

of $9.90 per hundredweight of milk containing 3.67 percent butterfat.
* * * * *

    32. Revise Sec. 1430.407 (a)(2) to read as follows:


Sec. 1430.407  Availability, disbursement, and maturity of loans.

    (a) * * *
    (2) A request for an initial loan must be filed no later than 
September 30 of the fiscal year in which the product was produced, but 
no earlier than January 1, 2001.
* * * * *

    33. The authority citation for part 1430 subpart D is revised to 
read as follows:

    Authority: Pub. L. 105-277, 112 Stat. 2681; Pub. L. 106-78, 113 
Stat. 1135.


    34. In Sec. 1430.500 revise the phrase ``under Pub. L. 105-277, 112 
Stat. 2681'' to read ``under Pub. L. 105-277, 112 Stat. 2681 and 
Sections 805 and 825 of Pub. L. 106-78 only''.

    35. Amend Sec. 1430.502 and Sec. 1430.503 by revising the phrase 
``May 21, 1999'' wherever it appears to read ``February 28, 2000''.

    36. Add Sec. 1430.510 to read as follows:


Sec. 1430.510  New producers.

    Notwithstanding other provisions of this subpart, producers who 
were new producers in 1999 and not affiliated with other eligible 
producers may receive payments from sums made available after October 
2, 1999, based on their 1999 production levels.

PART 1434--RECOURSE LOAN REGULATIONS FOR HONEY

    37. The authority citation for part 1434 is revised to read as 
follows:

    Authority: Sec. 1122, Pub. L. 105-277, 112 Stat. 2681; Sec. 
3018, Pub. L. 106-31, 113 Stat. 57; Sec. 801(f), Pub. L. 106-78, 113 
Stat. 1175.


    38. Amend Sec. 1434.1 by revising the first sentence to read as 
follows:


Sec. 1434.1  Applicability .

    The regulations of this part provide the terms and conditions under 
which the Commodity Credit Corporation (CCC) may issue recourse loans 
for 1998-crop and 1999-crop honey that has remained continuously within 
the beneficial interest of the producer. * * *
    39. Amend Sec. 1434.6 by revising paragraphs (a) and (d) and adding 
paragraph (i) to read as follows:


Sec. 1434.6  Application, availability, disbursement, and maturity.

    (a) The deadline for requesting a loan under this part is May 7, 
1999, for 1998-crop honey loans and March 31, 2000, for 1999 crop-honey 
loans.
* * * * *
    (d) Subject to paragraph (a) of this section, loans for the 1998 
and 1999 crop of honey will be available to producers as soon as 
announced by CCC.
* * * * *
    (i) Subject to adjustments for quality and location as deemed 
appropriate by the Deputy Administrator, the average loan rate for 
loans made under this part shall be 85 percent of the average price of 
honey during the 5-crop years period preceding the crop year for which 
the loan is made, excluding the crop year in which the average price of 
honey was the highest and the crop year in which the average price of 
honey was the lowest in the period.


    40. Revise Sec. 1434.9(a) to read as follows:


Sec. 1434.9  Fees and interest.

    (a) A producer shall pay a nonrefundable loan service fee to CCC at 
a rate determined by CCC. The amount of such fees will be available in 
State and county offices and will be shown on the note and security 
agreement.
* * * * *

PART 1435--SUGAR PROGRAM

    41. The authority citation for part 1435 continues to read as 
follows:

    Authority: 7 U.S.C. 7272; and 15 U.S.C. 714b and 714c.


    42. In Sec. 1435.200, revise the introductory text of paragraph (b) 
to read as follows:


Sec. 1435.200  General statement.

    (a) * * *
    (b) Except as provided in Sec. 1435.205, the marketing assessment 
applies to:
* * * * *

    43. Revise Sec. 1435.202(d)(1) introductory text to read as 
follows:


Sec. 1435.202  Remittance.

* * * * *
    (d)(1) Except as provided in Sec. 1435.205, first processors shall 
prepare and submit a fully and accurately completed form CCC-80 each 
month that shows:
* * * * *

    44. Add Sec. 1435.205 to read as follows:


Sec. 1435.205  Special rules for fiscal years 2000 and 2001.

    (a) First processors are not required to pay the marketing 
assessments provided for in this subpart that would otherwise be due 
under this part during the period from October 22, 1999 through 
September 30, 2001;
    (b) First processors are not required to prepare and submit form 
CCC-80 pursuant to Sec. 1435.202(d)(1) during the period from October 
22, 1999 through September 30, 2001; and
    (c) Sugar in inventory at the end of fiscal year 2001 that is 
marketed thereafter will be subject to an assessment at the rate that 
is current at the time of marketing unless that sugar was the subject 
of a previously paid assessment.

PART 1439--EMERGENCY LIVESTOCK ASSISTANCE

    45. The authority citation for 7 CFR part 1439 is revised to read 
as follows:

    Authority: 15 U.S.C. 714b, 714c; Sec. 805, 825, Pub. L. 106-78, 
113 Stat. 1135.


    46. Revise the heading for the Subpart entitled ``Subpart--1998 
Livestock Assistance Program'' to read ``Subpart--1998-99 Livestock 
Assistance Program.''

    47. Revise Sec. 1439.101 to read as follows:


Sec. 1439.101  Applicability.

    (a) This subpart sets forth the terms and conditions applicable to 
the 1998 Livestock Assistance Program authorized by Public Law 105-277 
and the 1999 Livestock Assistance Program authorized by the Public Law 
106-78. Benefits will be provided to eligible livestock producers in 
the United States but only in counties where a natural disaster 
occurred, and that were subsequently approved by the Deputy 
Administrator for Farm Programs. For purposes of reference, the program 
authorized by Public Law 105-277 shall be referred to in this subpart 
as the ``1998 LAP'' and that administered under Public Law 106-78 shall 
be referred to in this subpart as the ``1999 LAP''.
    (b) The two LAP programs provided for in this part will be treated 
as separate programs for purposes of payment limitations and for other 
purposes relating to eligibility.
    (c) A county must have suffered a 40 percent or greater grazing 
loss for 3 consecutive months during the 1998 calendar year for 1998 
LAP or for 3 consecutive months during the 1999 calendar year for the 
1999 LAP, as a result of damage due to a natural disaster as determined 
by the Deputy

[[Page 7957]]

Administrator for Farm Programs, or a designee. Grazing losses must 
have occurred on native and improved pasture with permanent vegetative 
cover and other crops planted specifically for the sole purpose of 
providing grazing for livestock, but such losses do not include losses 
on seeded small grain forage crops.
    (d) To be eligible for assistance under this subpart, a livestock 
producer's pastures in an eligible county must have suffered at least a 
40-percent loss of normal carrying capacity for a minimum of 3 
consecutive months during the relevant calendar year. The percent of 
loss eligible for compensation shall not exceed the maximum percentage 
of grazing loss for the county as determined by the county committee. 
In addition, the producer will not be compensated for that part of any 
loss that would represent payment of a loss greater than 80 percent.
    (e) Unless otherwise specified or determined by the Deputy 
Administrator, a livestock producer is not eligible to receive payments 
for the same loss under both this subpart and another Federal program.

    48. Amend Sec. 1439.102 by revising the definition of ``LAP'' to 
read as follows:


Sec. 1439.102  Definitions.

* * * * *
    LAP means, depending on the context, either the 1998 Livestock 
Assistance Program provided for in this subpart, the 1999 Livestock 
Assistance Program provided for in this subpart, or the overall 1998-99 
Livestock Assistance Program provided for in this subpart.
* * * * *

    49. Amend Sec. 1439.103 by revising the first sentence in paragraph 
(a) to read as follows:


Sec. 1439.103  Application process.

    (a) Livestock producers must submit a completed application prior 
to the close of business on March 31, 1999 for the 1998 LAP or March 1, 
2000 for the 1999 LAP, or such other dates as established by the Deputy 
Administrator. * * *
* * * * *

    50. Amend Sec. 1439.104 by revising the first sentence of paragraph 
(a) and the second sentence of paragraph (d) to read as follows:


Sec. 1439.104  County committee determination of general applicability.

    (a) County Committees shall determine whether due to natural 
disasters their county has suffered a 40-percent loss affecting pasture 
and normal grazing crops for at least three consecutive months during 
the calendar year 1998 for the 1998 LAP or calendar year 1999 for the 
1999 LAP. * * *
* * * * *
    (d) * * * The payment period for the county shall be the period of 
time during the county's LAP crop year where for 3 consecutive months 
during 1998 for the 1998 LAP or during 1999 for the 1999 LAP, the 
carrying capacity for grazing land or pasture was reduced by 40 percent 
or more from the normal carrying capacity.

    51. Amend Sec. 1439.107 by revising paragraphs (b)(3) and (c)(3) to 
read as follows:


Sec. 1439.107  Calculation of assistance.

* * * * *
    (b) * * *
    (3) The 5-year national average market price for corn (1998 LAP 
$2.56 bushel or $.0457 per pound, 1999 LAP $2.46 bushel or $.0441071 
per pound); by
* * * * *
    (c) * * *
    (3) $0.71771 ($0.0457  x  15.7) for 1998 LAP or $0.69248 
($0.0441071  x  15.7) for 1999 LAP; by
* * * * *

    52. Revise Sec. 1439.108 to read as follows:


Sec. 1439.108  Availability of funds.

    In the event that the total amount of claims submitted under this 
subpart shall in the case of the 1998 LAP exceeds $270 million or in 
the case of the 1999 LAP, except as determined by the Deputy 
Administrator, exceeds the amount determined appropriate, then such 
payments under such program shall be reduced by a uniform national 
percentage. Such payment reductions shall be after the imposition of 
applicable payment limitation provisions. Total 1999 LAP payments shall 
be prorated with payments for the Livestock Indemnity Program, Phase II 
provided for in this part such that total payments under the two 
programs shall not exceed $200 million minus, as deemed appropriate, 
other assistance provided to livestock producers.

    53. Revise Sec. 1439.301 to read as follows:


Sec. 1439.301  Applicability.

    (a) This subpart sets forth the terms and conditions applicable to 
the original 1999 Livestock Indemnity Program (hereafter ``1999 
Livestock Indemnity Program, Phase I'') and 1999 Livestock Indemnity 
Program, Phase II. Benefits will be provided under this subpart only 
for losses (deaths) of livestock occurring as a result of natural 
disasters in counties included in the geographic area covered by a 
qualifying natural disaster declaration:
    (1) With respect to the 1999 Livestock Indemnity Program (``LIP''), 
Phase I, issued by the President of the United States or the Secretary 
of Agriculture of the United States in the period from May 2, 1998, 
through May 21, 1999, or
    (2) With respect to the 1999 Livestock Indemnity Program (``LIP''), 
Phase II, issued by the President of the United States or the Secretary 
of Agriculture which declaration was requested between May 22, 1999, 
through December 31, 1999, inclusive, and subsequently approved.
    (b) Losses in contiguous counties, or any other counties not the 
subject of the declaration, will not be compensable. Producers will be 
compensated by livestock category as established by CCC. The producer's 
loss must be the result of the declared disaster and in excess of the 
normal losses, established by CCC, for the producer's livestock 
operation. Losses to livestock due to drought conditions are deemed to 
have been avoidable and are not eligible for benefits under the 1999 
LIP, Phase II.

    54. Revise Sec. 1439.304 to read as follows:


Sec. 1439.304  Sign-up period.

    A request for benefits under this subpart must be submitted to the 
Commodity Credit Corporation (CCC) at the Farm Service Agency county 
office serving the county where the livestock loss occurred. All 
applications and supporting documentation must be filed in the county 
office prior to the close of business on:
    (a) November 1, 1999, or such other date as established by CCC for 
1999 LIP, Phase I, or
    (b) January 21, 2000, or such other date as established by CCC for 
1999 LIP, Phase II.

    55. Revise Sec. 1439.305 (a)(3) to read as follows:


Sec. 1439.305  Proof of loss.

    (a) * * *
    (3) The death of the livestock occurred:
    (i) Between May 2, 1998, and May 21, 1999 inclusive for 1999 LIP, 
or
    (ii) For 1999 LIP, Phase II, due to a disaster that was the subject 
of a Presidential or Secretarial disaster declaration, that was 
requested between May 22, 1999, and December 31, 1999, inclusive, and 
was subsequently approved.
* * * * *

    56. Revise Sec. 1439.307 to read as follows:

[[Page 7958]]

Sec. 1439.307  Availability of funds.

    (a) In the event that the total amount of eligible claims submitted 
under this subpart exceeds the amount available as specified in 
paragraph (b) of this section, then each payment shall be reduced by a 
uniform national percentage.
    (b) Amounts available for payments under this subpart shall be:
    (1) $3,000,000 for 1999 LIP, Phase I, or
    (2) The amount determined to be appropriate such that payments for 
LIP, Phase II and the 1999 Livestock Assistance Program provided for in 
this part do not exceed $200 million as specified in Sec. 1439.108.
    (c) Such payment reductions shall be applied after the imposition 
of applicable per person payment limitation provisions. Notwithstanding 
any other provision of law, the payment limits for Phase I and II shall 
be considered separate limits except to the extent, if any, that a 
producer's recovery under the two phases are for losses from the same 
disaster.

    57. Revise Sec. 1439.308 to read as follows:


Sec. 1439.308  Limitations on payments.

    (a) No person, as determined in accordance with part 1400 of this 
chapter, may receive benefits for livestock losses in excess of:
    (1) $50,000 for 1999 LIP, or
    (2) $40,000 for 1999 LIP, Phase II.
    (b) No person may receive payments under this subpart for the same 
losses that the producer has received or will receive compensation 
under any other program provided for in this part. Payments under this 
part for other losses shall not, however, reduce the amount payable 
under this part. As provided for in Sec. 1439.11, no person shall be 
eligible to receive any payment under this subpart if such person's 
annual gross revenue exceeds $2.5 million.
    (c) Disaster benefits under this part are not subject to 
administrative offset under Sec. 1403.8 of this chapter except as 
otherwise provided by the Deputy Administrator.
    (d) No interest will be paid or accrue on disaster benefits under 
this part that are delayed or are otherwise not timely issued unless 
otherwise mandated by law.

PART 1447--1999 PEANUT MARKETING ASSISTANCE PROGRAM

    58. Add part 1447 to subchapter B of 7 CFR Chapter XIV to read as 
follows:

PART 1447--1999 PEANUT MARKETING ASSISTANCE PROGRAM

Subpart A--General Provisioins

Sec.
1447.101  Applicability.
1447.102  Administration.
1447.103  Definitions.
1447.104  Producer eligibility.
1447.105  Time for filing application.
1447.106  Payment rate.
1447.107  Calculation of payment.
1447.108  [Reserved]
1447.109  Assignment of payments.
1447.110  Miscellaneous provisions.

    Authority: Pub. L. 106-78, 113 Stat. 1135; 15 U.S.C. 714b, 714c.

Subpart A--General Provisions


Sec. 1447.101  Applicability.

    This part sets out provisions related to the 1999 crop of peanuts 
as authorized and in accordance with the applicable provisions of 
Public Law 106-78, the Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies Appropriations Act, 2000 (2000 
Act). Under section 803 of the 2000 Act, the Secretary of Agriculture 
is required to make certain payments available to eligible producers of 
1999-crop quota and additional peanuts.


Sec. 1447.102  Administration.

    (a) Responsibility. The Farm Service Agency (FSA), will administer 
this part under the general direction and supervision of the 
Administrator, FSA, or the Executive Vice President, Commodity Credit 
Corporation (CCC), as applicable. In the field, these regulations shall 
be carried out by State and county Farm Service Agency committees.
    (b) Limitation of authority. A State or county committee or its 
employees or representatives, or any marketing association or its 
employees or representatives, may not modify or waive any of the 
provisions of this part or any amendment or supplement to it.
    (c) Supervisory authority. Delegation of authority contained in 
this part shall not preclude the Administrator, FSA, the Executive Vice 
President, CCC, or a designee of such person from determining any 
questions arising under the regulations or from reversing or modifying 
any determinations made pursuant to such delegation.


Sec. 1447.103  Definitions.

    For purposes of this part, the definitions and provisions of parts 
718, 719, 729, 780, 790, 791, 793, 1402, 1403, 1407, 1421, 1422, 1446 
and 1498 of this title are incorporated and shall apply except where 
the context or subject matter or provisions of the regulations in this 
part otherwise requires or provides. References contained in this 
subpart to other parts of this chapter or title include any subsequent 
amendments to those referenced parts. Unless the context indicates 
otherwise, any reference to the Executive Vice President of CCC shall 
also be read to mean any persons designated by the Executive Vice 
President. The definitions in this section shall be applicable for all 
purposes of administering the 1999 Peanut Marketing Assistance Program. 
Unless the context or subject matter otherwise requires, the following 
words and phrases as used in this part and in all related instructions 
and documents shall have the following meanings:
    CCC means the Commodity Credit Corporation, an agency and 
instrumentality of the United States within the United States 
Department of Agriculture.
    County committee means the local FSA county committee.
    Crop year means the calendar year in which a crop is planted.
    Deputy Administrator means the Deputy Administrator for Farm 
Programs, Farm Service Agency (FSA), or a designee.
    FSA means the Farm Service Agency, United States Department of 
Agriculture.
    Planted acres means land in which seed has 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 a producer as defined in part 718 of this title.
    Secretary means the Secretary of the United States Department of 
Agriculture.
    Total production means, for purposes of calculating assistance 
payments under this part, the total production eligible for payment, 
calculated as the sum of acres planted times the established farm yield 
or highest actual yield for the current crop year or the previous 3 
crop years, whichever is greater.
    United States means all 50 States of the United States, the 
Commonwealth of Puerto Rico, the Virgin Islands and Guam.
    USDA means the United States Department of Agriculture.


Sec. 1447.104  Producer eligibility.

    (a) Producers of quota and/or additional peanuts in the United 
States will be eligible to receive benefits under this part provided 
their share in the

[[Page 7959]]

planted acreage of such peanuts is greater than zero.
    (b) Payments may be made to an eligible producer who is now 
deceased or is a dissolved entity if a representative who currently has 
authority to enter into a contract for the producer signs the Peanut 
Marketing Assistance Program Payment Application and Summary (FSA-
1043). 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.


Sec. 1447.105  Time for filing application.

    (a) Applications for benefits under this part must be filed on or 
after December 22, 1999, but not later than the close of business on 
February 21, 2000, in the county FSA office serving the county where 
the producer's farm is located for administrative purposes.
    (b) The Deputy Administrator may grant general exceptions to these 
deadlines for filing applications.


Sec. 1447.106  Payment rate.

    (a) Payment rate for quota peanut production. The payment rate for 
quota peanuts under this part is $30.50 per ton (5 percent of $610, the 
national support level for the 1999 crop year).
    (b) Payment rate for additional peanut production. The payment rate 
for additional peanuts under this part is $8.75 per ton (5 percent of 
$175, the national support level for the 1999 crop year).


Sec. 1447.107  Calculation of Payment.

    (a) Calculating producer's share of peanuts produced or considered 
produced on a farm. The amount of peanuts produced or considered 
produced by a producer on a farm, for which the producer's share in the 
acreage planted to peanuts is greater than zero, is the product of:
    (1) The number of acres planted to peanuts on the farm, times
    (2) The producer's percent share in the acres planted, times
    (3) The highest yield from the following choices:
    (i) The established farm yield,
    (ii) The actual yield for any of the 1996, 1997 or 1998 crop years,
    (iii) The actual yield for the 1999 crop year.
    (b) Determination of quota or additional peanut payment rate. A 
producer's eligibility for payments at the quota rate and at the 
additional rate will be computed separately. A producer, within the 
quantity limit determined under paragraph (a) of this section, may 
claim payments at the quota payment rate to the extent that it is 
determined that the producer used a quota to market the peanuts or was 
prevented from doing so because of conditions beyond the producer's 
control. The producer's eligibility shall, otherwise, be only at the 
additional peanut payment rate.
    (c) Calculating producer's total assistance payment. (1) Assistance 
payment for quota peanuts. A producer's assistance payment for quota 
peanuts is the product of the assistance rate for quota peanuts set 
forth in Sec. 1447.106(a) times the sum of the amount of quota pounds 
eligible for payment for each farm as determined under paragraphs (a) 
and (b) of this section.
    (2) Assistance payment for additional peanuts. A producer's 
assistance payment for additional peanuts is the product of the 
assistance rate for additional peanuts set forth in Sec. 1447.106(b) 
times the sum of the amount of additional pounds eligible for payment 
for each farm as determined in paragraphs (a) and (b) of this section.


Sec. 1447.108  [Reserved].


Sec. 1447.109  Assignment of payments.

    Payments made under this part may be assigned in accordance with 
the provisions of part 1404 of this chapter.


Sec. 1447.110  Miscellaneous provisions.

    (a) A person may be denied payments 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 that 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.
    (b) 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 (c) of this section and late-payment 
charges as provided for in part 1403 of this chapter.
    (c) 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 1 percent greater than the rate of interest that 
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, or fault of, the producer.
    (d) 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.
    (e) 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 re-computed and any 
excess refunded with applicable interest.
    (f) 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.
    (g) 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 regulations set forth at 
parts 11 and 780 of this title.
    (h) 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 against the crop, or proceeds thereof.

PART 1464--TOBACCO

    59. The authority citation for part 1464 is revised to read as 
follows:

    Authority: 7 U.S.C. 1421, 1423, 1441, 1445, 1445-1; 1445-2; 15 
U.S.C. 714b, 714c; Pub. L. 106-78, 113 Stat. 1135.


    59a. Amend part 1464 by adding Subpart C to read as follows:

[[Page 7960]]

Subpart C--Tobacco Loss Assistance Program

Sec.
1464.201   Applicability and basic terms for payments to states.
1464.202   Administration.
1464.203   Eligibility.
1464.204   Appeals.
1464.205   Alternate distribution.


Sec. 1464.201  Applicability and basic terms for payments to states.

    (a) This subpart sets forth the terms and conditions of the Tobacco 
Loss Assistance Program (TLAP) authorized by Section 803 of the FY 2000 
Agriculture Appropriations Act (Public Law 106-78). That section 
provides that $328 million of funds of the Commodity Credit Corporation 
shall be made available to make payments to States for the benefit of 
certain persons for the reduction in quantity of tobacco quota.
    (b) States, in order to be eligible for payment under this part, 
must be States having farms to which, for ``eligible kinds of tobacco'' 
only, tobacco quotas or allotments were made available under 7 CFR part 
723 for the 1999 crop years. ``Eligible kinds of tobacco'' for purposes 
of this part will be any kind of tobacco for which the national 
marketing quota for 1999 was reduced from the 1998 level.
    (c) Except as provided in Sec. 1464.205, all payments under this 
part shall be made to States and only to those states with producers of 
eligible kinds of tobacco.
    (d) Such payments shall be made to the State as soon as practicable 
after the application for such payment by the State.
    (e) Payments from the $328 million allotted to this program for 
loss of quota shall be made to the qualifying States in proportion, as 
determined by the Executive Vice President of CCC, to the relative 
quantity of lost quota apportioned to the qualifying States for 
eligible kinds of tobacco.
    (f) In the case of a State that is a party to the National Tobacco 
Growers Settlement Trust, the State shall, to the extent practicable, 
distribute funds made available under this part (that is, under the 
TLAP) to eligible persons in the State in accordance with the formulas 
established pursuant to the Trust to the extent provided for in the 
authorizing statute. In the case of a State that is not party to the 
National Tobacco Growers Settlement Trust, the State shall distribute 
funds made available under TLAP to eligible persons in the State in a 
manner determined by the State and approved by the Executive Vice 
President, CCC. The National Tobacco Growers Settlement Trust referred 
to in this section is that private trust created by tobacco companies 
to make approximately $5 billion in payments available to parties 
involved in the production of tobacco, and which has distributed the 
monies through local, state trusts.


Sec. 1464.202  Administration.

    (a) This subpart shall be administered by CCC under the general 
supervision of the Executive Vice President of the CCC and the Deputy 
Administrator for Farm Programs of the Farm Service Agency of the 
Department of Agriculture (who shall be hereafter referred to in this 
part as the ``Deputy Administrator'').
    (b) The Deputy Administrator on behalf of the Executive Vice 
President will determine the allocation of funds available for 
apportionment to qualifying States.
    (c) Funds allocated to States will be distributed directly to the 
State or may, at the direction of the State, be transferred to a 
disbursing or other agent of the State's choice.


Sec. 1464.203  Eligibility.

    (a) Except as provided in paragraph (d) of this section, the 
State's receipt of funds or control of funds under this part shall be 
conditioned upon the promise, obligation and understanding that the 
funds will be distributed to eligible tobacco growers as that term is 
defined in this section, in accord with the provision of this part.
    (b) For a person to be considered an eligible ``tobacco grower'' 
for purposes of this part, such person must own or operate, or produce 
tobacco on a farm:
    (1) To which was assigned a poundage quota or acreage allotment for 
the 1999 crop year for an eligible kind of tobacco; and
    (2) That was used for the production of tobacco during the 1999 
crop year.
    (c) All disputes as to eligibility shall be the responsibility of 
the States and any terms in the authorizing statute that are contrary 
to the terms of this part shall be controlling.
    (d) Any interest earned by the States on sums distributed in this 
part shall be distributed in turn to eligible tobacco growers.
    (e) Of the sums made available to the States under this part, and 
interest earned on such sums, an amount may be deducted by the State 
for such reasonable amounts as may be needed to pay the cost of 
distributing the funds, including the cost of private agents who may be 
engaged to assist the State in that respect or provide service to the 
State in that respect.


Sec. 1464.204  Appeals.

    Any person who believes a determination made by the State 
government is in error should seek relief from the State government. 
Eligibility decisions and determinations made by the State government 
are not appealable to the Department of Agriculture under part 780 of 
this chapter and will not be considered to be determinations of the 
Department of Agriculture.


Sec. 1464.205  Alternate Distribution.

    Nothing in Secs. 1464.201 through 1464.204 shall prohibit the 
Executive Vice President from providing assistance to the States with 
respect to the distribution of the monies to eligible tobacco growers 
or prevent the Executive Vice President from making distributions 
directly to the eligible growers in lieu of the manner of distribution 
otherwise provided for in this part.

PART 1469--RECOURSE LOAN PROGRAM FOR MOHAIR

    61. The authority citation for part 1469 is revised to read as 
follows:

    Authority: Pub. L. 105-277, 112 Stat.2681; Sec. 801, Pub. L. 
106-78, 113 Stat. 1135.


    62. In Sec. 1469.1 remove the phrase ``fiscal year 1999'' and add 
the phrase ``FY 1999 and 2000'' in its place.

    63. Revise Sec. 1469.4 (a)(8) and (h)(3)(i) and add and reserve 
paragraph (h)(3)(ii) to read as follows:


Sec. 1469.4  Eligibility.

    (a) * * *
    (8) Not have received a loan or incentive payment under the 
previous mohair loan or payment program for a quantity of mohair 
pledged as loan collateral covered by this part, unless the full amount 
is repaid to CCC.
* * * * *
    (h) * * *
    (3) * * *
    (i) A producer may, before the final date for obtaining a loan for 
mohair, re-offer as loan mohair any mohair that has been previously 
pledged and redeemed as loan mohair.
    (ii) [Reserved]

    64. Revise Sec. 1469.5 (a) to read as follows:


Sec. 1469.5  Application, availability, disbursement, and maturity.

    (a) The deadline for requesting a loan offered under this part is 
September 30, 1999, for FY 1999 and September 30, 2000, for FY 2000.
* * * * *

    65. Amend Sec. 1469.11 as follows:
    a. In paragraphs (d) and (e), revising the phrase ``For Liquidated 
damages'' to read ``When Liquidated damages are''.
    b. In paragraph (e), revising the phrase ``The entirety of the 
loan'' to read ``The loan in its entirety''.

[[Page 7961]]

    c. Removing paragraph (i)(1)(iv), and redesignating paragraphs 
(i)(1)(v) and (i)(1)(vi) as paragraphs (i)(1)(iv) and (i)(1)(v).

    66. Revise Sec. 1469.13 to read as follows:


Sec. 1469.13  Liquidation of loans.

    (a)(1) For loans made in FY 1999, the producer is require to repay 
the loan on or before maturity by payment of the amount of loan, plus 
any charges.
    (2) For loans made in FY 2000, the producer is required to repay 
the loan on or before maturity by payment of the amount of loan plus 
interest, as applicable, and any charges.
    (b) If a producer fails to settle the loan in accordance with 
paragraph (a) of this section within 30 calendar days from the maturity 
date of such loan, or other reasonable time period as established by 
CCC, a claim shall be established for the loan amount plus interest and 
any charges. CCC shall inform the producer before the maturity date of 
the loan of the date by which the loan must be settled or a claim will 
be established in accordance with part 1403 of this title. A failure to 
pay the loan in a timely manner will start the accrual of late payment 
interest, and costs.

    67. Add Sec. 1469.17 to read as follows:


Sec. 1469.17  Interest.

    For loans made on or after October 1, 1999, through September 30, 
2000, interest will accrue as provided in 7 CFR part 1405.

PART 1478--1999 CROP DISASTER PROGRAM

    68. Add part 1478 to subchapter B of 7 CFR Chapter XIV to read as 
follows:

PART 1478--1999 CROP DISASTER PROGRAM

Sec.
1478.1   Applicability.
1478.2   Administration.
1478.3   Definitions.
1478.4   Producer eligibility.
1478.5   Time for filing application.
1478.6   Limitation on payments and other benefits.
1478.7   Requirement to purchase crop insurance.
1478.8   Miscellaneous provisions.
1478.9   Matters of general applicability.
1478.10   [Reserved]
1478.11   Qualifying 1999 crop losses.
1478.12   Calculating rates and yields.
1478.13   Production losses, producer responsibility.
1478.14   Determination of production.
1478.15   Calculation of acreage for crop losses other than 
prevented planted.
1478.16   Calculation of prevented planted acreage.
1478.17   Quality adjustments to production.
1478.18   Value loss crops.
1478.19   Other specialty crops.

    Authority: Sec. 801, Pub. L. 106-78, 113 stat. 1135; Pub. L. 
106-113, 113 stat. 1501; 15 U.S.C. 714 et seq.


Sec. 1478.1  Applicability.

    This part sets forth the terms and conditions applicable to the 
1999 Crop Disaster Program. Under section 801 of the Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies 
Appropriation Act, 2000 (``2000 Act'') (Public Law 106-78, 113 Stat. 
1135), and the Omnibus Consolidated Appropriations Act, 2000 (Public 
Law 106-113, 113, Stat. 1501), 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 eligible 1999 crops as determined by the Secretary. Producers cannot 
receive compensation under this part and another part for the same loss 
except as provided for in Sec. 1478.6, and except as allowed by the 
Deputy Administrator who shall resolve any such conflicts.


Sec. 1478.2  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 that 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 that is not in accordance with this 
part; and
    (2) Require a county FSA committee to withhold taking or reverse 
any action that is not in accordance with this part.
    (d) No delegation in this part 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 or 
her 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. 1478.3  Definitions.

    The definitions in this section shall be applicable for all 
purposes of administering the 1999 Crop Disaster Program provided for 
in this part.
    Actual production means the total quantity of the crop appraised, 
harvested or that 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.
    Administrative fee means an amount the producer must pay for 
catastrophic risk protection, limited, and additional coverage crop 
insurance policies for each crop and crop year.
    Appraised production means production determined by FSA, RMA, 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.
    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. Only the approved 
yields based on production evidence submitted to the Agency prior to 
the 2000 Act will be used for purposes of the 1999 CDP.
    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.

[[Page 7962]]

    Aquacultural species means aquacultural species as defined in part 
1437 of this chapter.
    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.
    CCC means the Commodity Credit Corporation.
    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 that 
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 insurance means an insurance policy reinsured by the Federal 
Crop Insurance Corporation under the provisions of the Federal Crop 
Insurance Act, as amended.
    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.
    Cropland means cropland as defined in part 718 of this title.
    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 1999 crop 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.
    Eligible crop means a 1999-crop agricultural commodity commercially 
produced for food or fiber; floriculture, ornamental nursery, Christmas 
tree, turf grass sod, seed and industrial crops including tobacco; and 
aquaculture including ornamental fish. Losses of livestock and 
livestock related losses are not compensable under this part but may, 
depending on the circumstances be compensable under part 1439 of this 
chapter.
    End use means the purpose for which the harvested crop is used, 
such as fresh, processed or juice.
    Entity means any legal organization 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 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 1999 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.
    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

[[Page 7963]]

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.
    Maximum loss level means the maximum level of crop loss in the 
county, expressed in either a percent of loss or yield per acre, based 
on other losses in the county for the same crop as determined by the 
county committee in accordance with instructions issued by the Deputy 
Administrator.
    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.
    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 that 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 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.
    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 that 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. 1478.4  Producer eligibility.

    (a) Producers in the United States will be eligible to receive 
disaster benefits under this part only if they have suffered 1999 crop 
losses of eligible crops as a result of a disaster as further specified 
in this part.
    (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 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 7 CFR part 12, for the 1999 crop 
year and must not otherwise be barred from receiving benefits under 
part 12 or any other provision of law.
    (d) Except as otherwise required by law, the provisions of 
paragraph (c) of this section shall not apply to producers receiving 
benefits under this part for value loss crops unless otherwise 
determined by the Deputy Administrator.


Sec. 1478.5  Time for filing application.

    Applications for benefits under the 1999 Crop Disaster Program must 
be filed before the close of business on February 25, 2000, or such 
other date that may be announced by the Deputy Administrator, in the 
county FSA office serving the county where the producer's farm is 
located for administrative purposes.

[[Page 7964]]

Sec. 1478.6  Limitations on payments and other benefits.

    (a) A producer may receive disaster benefits under this part on 
1999 crop year losses only.
    (b) Payments will not be made under this part for grazing losses. 
Further, the Deputy Administrator may divide and classify crops based 
on loss susceptibility, yield, and other factors.
    (c) No person shall receive more than a total of $80,000 in 
disaster benefits under this part.
    (d) 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.
    (e) A person who has a gross revenue in excess of $2.5 million for 
the 1998 tax year shall not be eligible to receive disaster benefits 
under this part. 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 purposes of making 
this determination, gross revenue means the total gross receipts 
received from farming, ranching and forestry 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, ranching and forestry.
    (f) 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. Available funds will not include 
funds made available under other parts for honey loans, mohair loans, 
and payments to livestock producers.


Sec. 1478.7  Requirement to purchase crop insurance.

    (a) Any producer who elected not to purchase crop insurance on a 
crop in 1999 for which the producer receives crop loss assistance under 
this part must purchase crop insurance on that crop for the 2000 and 
2001 crop years.
    (b) If, at the time the producer is advised that he or she is 
eligible for crop loss assistance under this part, and the sales 
closing date for the 2000 crop year has passed for any crop for which 
crop insurance is required as specified in paragraph (a) of this 
section, the producer must purchase crop insurance for the 2001 crop 
year for any such crop.
    (c) If any producer fails to purchase crop insurance as required in 
paragraph (a) or (b) of this section, the producer will be required to 
refund the benefits received or pay a lesser amount as may be specified 
by the Deputy Administrator.


Sec. 1478.8  Miscellaneous provisions.

    (a) Disaster benefits under this part are not subject to 
administrative offset under Sec. 1403.8 of this chapter except as 
determined appropriate by the Deputy Administrator who may, among other 
offsets, deduct from the benefits accrued any reductions appropriate 
for a producer's failure to obtain crop insurance as required in 
connection with benefits for crop losses in prior years.
    (b) 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 that 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.
    (c) 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 (d) of this section and late-payment 
charges as provided for in part 1403 of this chapter.
    (d) 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 
that 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.
    (e) 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.
    (f) 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 recalculated and any 
excess refunded with applicable interest.
    (g) 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.
    (h) 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 regulations set forth at 
parts 11 and 780 of this title.
    (i) 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 against the crop, or proceeds thereof.
    (j) Payments that 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.
    (k) For the purposes of 28 U.S.C. 3201(e), the restriction on 
receipt of funds or benefits under this program is waived; however, 
this waiver shall not preclude withholding or offsetting where it is 
deemed appropriate by the Deputy Administrator.


Sec. 1478.9  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 in 
accordance with 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

[[Page 7965]]

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; or
    (4) The crop is planted beyond the normal planting period for the 
crop.
    (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, 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;
    (3) Acceptable production records for harvested acres are not 
available from any source; or
    (4) Any other good reason for such a limit shall present itself.
    (f) Assigned production for practices that result in lower yields 
than those for which the historic yield is based shall be established 
based on the acres found to have been subjected to those practices.
    (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 reduction 
will be based on one percent of the payment yield for each day 
involved.
    (2) 11 through 24 calendar days, the assigned production reduction 
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 that are involved.
    (3) 25 or more calendar days or a date from which the crop would 
not reasonably be expected to mature by harvest, the assigned 
production reduction 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.


Sec. 1478.10  [Reserved]


Sec. 1478.11  Qualifying 1999 crop losses.

    (a) To receive disaster benefits under this part, which covers 
single-year 1999 crop losses, the county committee must determine that 
because of a disaster, the producer with respect to the 1999 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.
    (b) Calculation of benefits under this part 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;
    (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 1999;
    (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;
    (7) That are 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; or
    (8) To losses of trees that are a result of normal mortality or 
would have been lost to normal mortality but for the disaster.
    (c) Calculation of benefits under this part 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 part 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;
    (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. 1478.12  Calculating rates and yields.

    (a) Payment rates for 1999 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 part 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 part 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 as 
authorized 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 by the county committee as authorized by the Deputy 
Administrator, when there is supporting data from NASS or other sources 
approved by CCC that show

[[Page 7966]]

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. 1478.13  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 
that 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. 1478.14  Determination of production.

    (a) Production under this part 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 as 
established by CCC.
    (e) For crops with an established yield and market price for 
multiple intended uses, a value will be calculated for each use; with
    (1) The intended use or uses for disaster purposes based on 
historical production and acreage evidence provided by the producer; 
and
    (2) The eligible acres for each use and the calculation of the 
disaster payment will be determined by the county committee according 
to instruction issued by the Deputy Administrator.
    (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 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 as 
determined by CCC.
    (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 by CCC. 
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 part, 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 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. 1478.15  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 part.
    (b) In cases where there is a repeat crop, double crop or a 
multiple planting, each of these crops may be

[[Page 7967]]

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. 1478.16  Calculation of prevented planted acreage.

    (a) When determining losses under this part, 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 part 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 part 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: peppers; 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 approved by the Deputy Administrator, began no 
earlier than the planting season for the 1999 crop.
    (e) Prevented planted disaster benefits under this part 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 that 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 Sec. 1478.6(f);
    (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 part shall not apply to uninsured 
and noninsurable crops 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 planting period time specified by the producer and prior to 
the final planting date for the crop.
    (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 that was prevented from 
being planted, to the crop in any 1 of the 1995 through 1998 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
    (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. 1478.17  Quality adjustments to production.

    (a) For the crops identified in paragraph (b) of this section, 
subject to the provisions of this section and part, the quantity of 
production of crops of the producer shall be adjusted to reflect 
diminished quality resulting from the disaster.
    (b) Crops eligible for quality adjustments to production are 
limited to:
    (1) Barley; canola; corn; cotton; crambe , 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.
    (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

[[Page 7968]]

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 as determined by CCC. County committees may, with state 
committee concurrence, establish county average quality adjustment 
factors.
    (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 5-year county average historical 
quality premium or discount, as determined by CCC.
    (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 
non-quota peanuts may also be made to reflect diminished quality as 
determined by CCC.
    (i) Quality adjustments for sugar beets shall be based on sugar 
content. The 1999 actual production for the producer shall be adjusted 
upward or downward to account for sugar content as determined by CCC.
    (j) Quality adjustments for tobacco shall be based on the 
difference between the sales price and the support price except that 
the market price may be used instead of the support price where market 
prices for the tobacco are normally in excess of 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 1999.
    (l) Quality adjustments for aflatoxin shall be based on the 
aflatoxin level. The producer must provide the county committee 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 0.60.
    (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. 1478.18  Value loss crops.

    (a) Special provisions to assess losses and calculate disaster 
assistance under this part apply to the following crops and such other 
crops as determined by CCC: ornamental nursery; Christmas trees; 
vegetable and root stock including ginseng root; and aquaculture, 
including ornamental fish.
    (b) Disaster benefits under this part are calculated based on the 
loss of value at the time of disaster, as determined by CCC.
    (c) For aquaculture, disaster benefits under this part for 
aquacultural species are limited to those aquacultural species that 
were placed in the aquacultural facility by the producer. Disaster 
benefits under this part shall not be made available for aquacultural 
species that are growing naturally in the aquaculture facility. 
Disaster benefits under this part 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 part.
    (d) For ornamental nursery crops, disaster benefits under this part 
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 part.
    (e) For Christmas trees, disaster benefits under this part are 
limited to losses that 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 part must provide acreage data, 
dates of plantings and the quantity of trees planted on each date.
    (f) For vegetable and root stock, disaster benefits under this part 
are limited to plants grown in a container or controlled environment 
for use as transplants or root stock by the producer for commercial 
sale or property owned or leased by the producer and managed using good 
rootstock or fruit and vegetable plant growing practices.


Sec. 1478.19  Other specialty crops.

    (a) For turfgrass sod, disaster benefits under this subpart are 
limited to turfgrass sod that would have matured and been harvested 
during 1999, when a disaster caused in excess of 35 percent of the 
expected production to die.
    (b) For honey, disaster benefits under this part are limited to 
table and non-table 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.
    (c) For maple sap, disaster benefits under this part 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.

    Signed at Washington, DC, on February 9, 2000.
Parks Shackelford,
Acting Administrator, Farm Service Agency, and Executive Vice 
President, Commodity Credit Corporation.
[FR Doc. 00-3406 Filed 2-11-00; 3:18 pm]
BILLING CODE 3410-05-P