[Federal Register Volume 66, Number 46 (Thursday, March 8, 2001)]
[Rules and Regulations]
[Pages 13839-13846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5491]



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  Federal Register / Vol. 66, No. 46 / Thursday, March 8, 2001 / Rules 
and Regulations  

[[Page 13839]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Parts 1469 and 1470

RIN 0560-AG35


Wool and Mohair Market Loss Assistance Program and Apple Market 
Loss Assistance Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Final rule.

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

SUMMARY: This rule implements provisions of the Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies 
Appropriations Act, 2001 (the 2001 Act), related to the Wool and Mohair 
Market Loss Assistance Payment Program and the Apple Market Loss 
Assistance Payment Program. Other provisions of the 2001 Act will be 
implemented under separate rules.

DATES: Effective March 5, 2001.

FOR FURTHER INFORMATION CONTACT: Danielle Cooke, (202) 720-1919.

SUPPLEMENTARY INFORMATION:

Notice and Comment

    Section 840 of the Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies Appropriations Act, 2001 (Pub. L. 
106-387) requires that the regulations necessary to implement these 
provisions be issued as soon as practicable and without regard to the 
notice and comment provisions of 5 U.S.C. 553 or the Statement of 
Policy of the Secretary of Agriculture (the Secretary) effective July 
24, 1971 (36 FR 13804) relating to notices of proposed rulemaking and 
public participation in rulemaking. These provisions are thus issued as 
final and are effective immediately.

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.

Regulatory Flexibility Act

    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).

Executive Order 12988

    This rule has been reviewed in accordance with Executive Order 
12988. The provisions of this rule preempt State laws to the extent 
such laws are inconsistent with the provisions of this rule. Before any 
judicial action may be brought concerning the provisions of this rule, 
the administrative remedies must be exhausted.

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. 
Further, in any case, these provisions do not impose any mandates on 
State, local or tribal governments, or the private sector.

Small Business Regulatory Enforcement Fairness Act of 1996

    Section 840 of Pub. L. 106-387 requires that the regulations 
necessary to implement these provisions be issued as soon as 
practicable and without regard to the notice and comment provisions of 
5 U.S.C. 553 or the Statement of Policy of the Secretary of Agriculture 
effective July 24, 1971 (36 FR 13804) relating to notices of proposed 
rulemaking and public participation in rulemaking. It also requires 
that the Secretary use the provisions of 5 U.S.C. 808 (the Small 
Business Regulatory Enforcement Fairness Act (SBREFA)), 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, and thus does not have 
to meet the requirements of Sec. 801 of SBREFA requiring a 60-day delay 
for Congressional review of a major regulation before the regulation 
can go into effect. This rule is considered a major rule for the 
purposes of SBREFA. However, the rule affects the incomes of a 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 those provisions of this rule, 
as expressed in Pub. L. 106-387, they are issued as final and are 
effective immediately.

Paperwork Reduction Act

    Section 824 of Pub. L. 106-78 requires that the regulations 
implementing these provisions be promulgated without regard to the 
Paperwork Reduction Act. This means that the normal 60-day public 
comment period and OMB approval of the information collections required 
by this rule are not required before the regulations may be made 
effective. However, the 60-day public comment period and OMB approval 
under the provisions of 44 U.S.C. chapter 35 are still required after 
the rule is published, and Information Collection Packages and requests 
for approval will be submitted to OMB.

Background

    This rule will implement requirements of Pub. L. 106-387 related to 
the Wool and Mohair and Apple Market Loss Assistance Programs.

[[Page 13840]]

    Descriptions of this rule's provisions follow.

(1) 7 CFR Part 1469--Wool and Mohair Market Loss Assistance Payment 
Program

    This rule implements the requirements of Sec. 814 of Pub. L. 106-
387 related to the Wool and Mohair Market Loss Assistance Payment 
Program. Section 814 provides that the Secretary shall use no more than 
$20 million of CCC funds to make payments directly to producers of 
wool, and producers of mohair, for the 2000 marketing year. Pub. L. 
106-554 mandated a Government-wide rescission of 0.22 percent of 
appropriated funds, reducing the funding for the Wool and Mohair Market 
Loss Assistance Payment Program to $19.956 million. The 2001 Act 
requires the Secretary of Agriculture to make direct payments equal to 
40 cents per pound for wool and mohair. Producers wanting to 
participate in the program must file an application for payment by 
April 13, 2001, or such other date as may be set by the Deputy 
Administrator for Farm Programs, CCC. Applications will be spot-checked 
and validated by FSA. Payment will be made only for wool and mohair 
shorn in the United States in 2000 from live domestic animals owned by 
the producer for 30 days or more. These restrictions are intended to 
insure that coverage is limited to actual wool producers, as opposed to 
meat producers, for wool actually produced as wool, not a by-product, 
during the relevant time period allowed for by the statute. Other 
restrictions will also apply.

(2) 7 CFR Part 1470--Apple Market Loss Assistance Payment Program

    This rule implements Sec. 811 of Pub. L. 106-387, which directs the 
Secretary of Agriculture to use $100 million of the Commodity Credit 
Corporation (CCC) funds to provide assistance to producers for their 
1998 and 1999 apple production. The Government-wide 0.22% rescission of 
appropriated funds reduces that amount to $99.78 million.
    During the past few years a number of factors have produced a 
serious economic crisis that threatens the existence of apple producers 
throughout the United States. Apples are grown in every State in the 
continental United States, and are grown commercially in 36 States. 
Twenty years of increasing world production, stagnant domestic 
consumption, natural disasters and low-priced imports converged 2 years 
ago, resulting in apple growers receiving the lowest prices since the 
late 1980's for 1998 and 1999 apples bound for fresh market sale. At 
the same time, a flood of cheap apple juice concentrate imports from 
the People's Republic of China dramatically reduced the demand for 
processing apples and caused juice apple prices to plummet, further 
eroding the industry's overall price structure. The revenue of apple 
producers plummeted in 1998 and recovered in 1999, but failed to reach 
revenue earned in previous years. U.S. apple growers received an 
average of 21.2 cents per pound for fresh market apples from the 1999 
crop, up from 17.3 cents per pound in 1998, a historical low. Apple 
growers receive about 80 percent of their gross income by providing 
fresh fruit and 20 percent by providing fruit for juice, applesauce and 
other processed products. Without a significant improvement in the 
market price on sales of apples, many apple producers will not be able 
to remain in business.
    This rule addresses that situation by providing for a new program 
to be administered by FSA utilizing the foregoing authority. Payments 
to apple operations under the program provided for by this rule will 
offset a portion of the per-bushel losses producers have incurred 
marketing apples in the U.S. Payments under this new program will 
provide those eligible for the payments with an immediate infusion of 
funds to help pay operating expenses and meet other financial 
obligations.
    Producers of apples can receive a payment per pound for the higher 
of either 1998 or 1999 apple production from a qualifying apple 
operation. Producers will only be paid on a maximum quantity of 
1,600,000 pounds per separate apple operation. Payments will not be 
subject to administrative offset or withholding, as provided by 
Sec. 842 of Pub. L. 106-387.
    To receive cash payments, eligible apple producers must: (1) have 
produced and harvested apples during the 1998 and/or 1999 crop year, 
(2) not have received a payment from any other Federal program, other 
that crop insurance, for the same market loss, and (3) apply for cash 
payments during the application period for each apple operation. Pub. 
L. 106-387, also specified that benefits under the program would not be 
subject, to the extent practicable, to the gross income means test and 
payment limitations, other than those provided in this part.
    To participate in the program, eligible apple producers must: (1) 
self-certify to the gross pounds of production that were produced and 
harvested during the higher of their 1998 and 1999 crop year apple 
production, and (2) apply for payments during the sign-up period set by 
the CCC pursuant to these regulations. At the close of the sign-up 
period, a national per pound payment rate will be determined based on 
the factoring of the available $99.78 million divided by the total 
pounds of eligible apple production from each applying apple operation, 
with no operation exceeding 1,600,000 pounds of apple production. 
Because outlays for this program are a fixed amount, the national 
average payment rate and individual payments can only be calculated 
after the total eligible quantity of apple production has been 
determined from approved applications. Apple producers will be subject 
to random spot checks performed by local FSA personnel. Penalties for 
inaccurate certifications by producers can be easily assessed and will 
inhibit false reports.
    Apple operations may, during the applicable period, apply in person 
at county FSA offices during regular business hours. Alternatively, 
program applications may be obtained by mail, telephone, and facsimile 
from their designated county FSA office or obtained via the Internet. 
The Internet website is located at www.fsa.usda.gov/dafp/psd/.

Cost-Benefit Assessment Summary

Wool and Mohair Market Loss Assistance (MLA) Payment Program

    Payments of 40 cents per pound on 2000 wool production could amount 
to about $18 million, assuming wool production does not fall from 1999 
levels, and could potentially double proceeds from wool production. 
Continuing low market prices for wool will likely further reduce wool 
production in 2001. However, some additional production may be 
stimulated in 2001 for producers who otherwise lack financing. 
Continued heavy textile imports likely will mean stagnant mill demand 
for wool. MLA payments may contribute to continued depressed prices in 
the future to the extent that they stimulate additional production.
    Mohair producers will also receive 40 cents per pound, totaling 
about $2 million. The income impact of this program on mohair producers 
is not as significant as it is on wool producers, since prices are much 
higher for mohair than for wool. Consequently, its impact on the 
supply/use situation for mohair should be even less than its impact on 
the wool situation.

[[Page 13841]]

Apple Market Loss Assistance Payment Program

    The principal benefit of the market loss assistance program will be 
the approximately $100 million in financial assistance that apple 
growers receive, which could determine if some of them remain in 
business. The per-pound payment hinges on the total eligible production 
reported by applicants, so FSA will be unable to calculate the final 
rate until around April 2001.
    Using 2001 projected farm numbers, FSA's preliminary payment rate 
projection is about 2 cents per pound of eligible production. Payments 
to growers with the smallest apple acreages would be inconsequential--
with those having less than an acre receiving average payments under 
$20. Many of those growers will be among those whose fruit is for home 
use only, or certainly is not expected to provide an important part of 
family income.
    Given the input-intensive nature of apple production, many growers 
may need annual loans to cover operating expenses such as labor and 
pesticides. However, recent poor returns may make lenders wary of 
assuming the risk of loaning to apple growers. This program could 
improve the financial position of some producers enough to allow them 
to acquire the loans they need to continue operating
    The Apple Market Loss Assistance Program could aid some producers 
on the brink of insolvency to remain in business but the effect of this 
program on the long-run viability of the industry will be minimal. In 
fact, if the program encourages overproduction it will slow structural 
changes needed to enhance industry viability.

List of Subjects

Part 1469

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

Part 1470

    Apple, Reporting and recordkeeping requirements.

    For the reasons set out in the preamble, 7 CFR Chapter XIV is 
amended as set forth below.

PART 1469--WOOL AND MOHAIR PRICE SUPPORT PROGRAMS

    1. 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; Sec. 204(d), Pub. L. 106-224; Sec. 814, Pub. 
L. 106-387 (114 Stat. 1549A-55).


    2. Add subpart C to part 1469 to read as follows:

Subpart C--Wool and Mohair Market Loss Assistance Program II

Sec.
1469.201  Applicability.
1469.202  Administration.
1469.203  Definitions.
1469.204  Time and method of application.
1469.205  Eligibility.
1469.206  Availability of funds.
1469.207  Payment rate and amount.
1469.208  Offsets.
1469.209  Appeals.
1469.210  Misrepresentation.
1469.211  Maintaining records.
1469.212  Estates, trust and minors.
1469.213  Death, incompetency, or disappearance.
1469.214  Refunds; joint and several liability.

Subpart C--Wool and Mohair Market Loss Assistance Program II


Sec. 1469.201  Applicability.

    The regulations of this subpart provide the terms and conditions 
under which the Commodity Credit Corporation (CCC) shall make payments 
directly to producers of wool, and producers of mohair, for the 2000 
marketing year.


Sec. 1469.202  Administration.

    (a) The Wool and Mohair Market Loss Assistance Program shall be 
administered under the general supervision of the Executive Vice 
President, CCC, or designee and shall be carried out in the field by 
State and county Farm Service Agency committees (State and county 
committees) and FSA employees.
    (b) State and county committees, and FSA employees, do not have the 
authority to modify or waive any of the provisions of the regulations 
of this subpart.
    (c) The State committee shall take any action required by these 
regulations that has not been taken by the county committee. The State 
committee shall also:
    (1) Correct, or require the county committee to correct, any action 
taken by such county committee that is not in accordance with the 
regulations of this subpart; and
    (2) Require a county committee to withhold taking any action that 
is not in accordance with the regulations of this subpart.
    (d) No provision or delegation herein to a State or county 
committee shall preclude the Executive Vice President, CCC, or a 
designee, from determining any question arising under the program or 
from reversing or modifying any determination made by the State or 
county committee.
    (e) The Deputy Administrator, Farm Programs, FSA, may authorize 
State and county committees to waive or modify deadlines and other 
program requirements in cases where lateness or failure to meet such 
other requirements does not adversely affect the operation of the Wool 
and Mohair Market Loss Assistance Program II and does not violate 
statutory limitations on the program.


Sec. 1469.203  Definitions.

    The definitions set forth in this section shall be applicable for 
all purposes of administering the Wool and Mohair Market Loss 
Assistance Program II established by this subpart.
    Application means Form CCC-1155, the Wool and Mohair Market Loss 
Assistance Program II Application.
    Application period means March 5, 2001 through April 13, 2001.
    CCC means the Commodity Credit Corporation.
    County committee means the FSA county committee.
    County office is the local FSA office.
    Farm Service Agency or FSA means the Farm Service Agency of the 
United States Department of Agriculture.
    Goat means an adult Angora goat or the kid of an Angora goat.
    Grease mohair means mohair as it comes from the Angora goat or the 
kid of an Angora goat before applying any process to remove the natural 
oils or fats.
    Grease wool means wool as it comes from the sheep or lambs before 
applying any process to remove the natural oils or fats.
    Hide means thick tough skin of the animal.
    Lamb means a young ovine animal that has not cut the second pair of 
permanent teeth. The term includes animals referred to in the livestock 
trade as lambs, yearlings, or yearling lambs.
    Marketing year means a period beginning January 1, and ending the 
following December 31, both dates inclusive.
    Mohair means the hair sheared from a live Angora goat before 
applying any process that removes the natural oils or fats or produces 
a mohair product. Mohair does not include grease mohair shorn from 
pelts or hides.
    Pelt means the skin of the animal with wool still attached to the 
skin.
    Person means any individual, group of individuals, partnership, 
corporation, estate, trust, association, cooperative, or other business 
enterprise or other legal entity who is, or whose members are, a 
citizen or citizens of, or legal resident alien or aliens, in the 
United States.

[[Page 13842]]

    Producer means any person or group of persons who as a single unit 
produce wool or mohair and whose production and facilities are located 
in the United States.
    Pulled mohair means mohair obtained from the pelts or hides of dead 
goat.
    Pulled wool means wool obtained from the pelts or hides of dead 
sheep.
    Shorn mohair means grease mohair sheared from a live Angora goat or 
the kid of an Angora goat. Shorn mohair does not include pelts, hides, 
or pulled mohair.
    Shorn wool means grease wool sheared from live sheep or lambs. 
Shorn wool does not include pelts, hides, or pulled wool.
    State committee is the FSA committee so designated for the 
applicable State.
    United States means the 50 United States of America, the District 
of Columbia, and the Commonwealth of Puerto Rico.
    Wool means the hair sheared from a live sheep before applying any 
process that removes the natural oils or fats or produces a wool 
product. Wool does not include grease wool shorn from pelts or hides.


Sec. 1469.204  Time and method of application.

    (a) Wool and mohair producers may obtain an application, Form CCC-
1155 (Wool and Mohair Market Loss Assistance Program II Application), 
in person, by mail, by telephone, or by facsimile from any county FSA 
office. In addition, applicants may download a copy of Form CCC-1155 at 
http://www.sc.egov.usda.gov
    (b) A request for payments under this subpart must be submitted on 
a completed Form CCC-1155. Form CCC-1155 should be submitted to the FSA 
county office servicing the county where the producer is located but, 
in any case, must be received by the FSA county office by the close of 
business on April 13, 2001. Applications not received by the close of 
business on April 13, 2001, will be returned as not having been timely 
filed and the producer will not be eligible for payments under this 
program.
    (c) The wool and mohair producer requesting payments under this 
subpart must certify with respect to the accuracy and truthfulness of 
the information provided in their application for payments. All 
information provided is subject to a spot check by CCC. Refusal to 
allow CCC or any other agency of the Department of Agriculture to 
verify any information provided will result in a determination of 
ineligibility. Data furnished by the applicant will be used to 
determine eligibility for program payments. Furnishing the data is 
voluntary; however, without it program payments will not be approved. 
Providing a false certification to the Government is punishable by 
imprisonment, fines and other penalties.


Sec. 1469.205  Eligibility.

    (a) Producers. To be eligible to receive a payment under this 
subpart, a producer must:
    (1) Have produced domestic wool and/or domestic mohair during the 
period of January 1, 2000, through December 31, 2000.
    (2) Be engaged in the business of producing and marketing 
agricultural products at the time of filing the application; and
    (3) Apply for payment during the application period.
    (b) Eligible wool and mohair.
    (1) Wool and mohair is eligible to generate payments under this 
subpart only if the wool or mohair was produced by shearing live 
animals (not wool or mohair which is pulled or which is shorn from 
hides or pelts) and only if such shearing occurred in 2000 and in the 
United States.
    (2) The producer applying for payment must have owned the wool or 
mohair at the time of shearing and must have owned in the United States 
the sheep, lambs, or goats from which the wool or mohair was shorn for 
30 days or more at any time prior to shearing and actually owned the 
animal at the time of shearing.


Sec. 1469.206  Availability of funds.

    The total available program funds shall be $19.956 million as 
provided by section 814 of Public Law 106-387 and amended by section 
1403 of Public Law 106-554.


Sec. 1469.207  Payment rate and amount.

    (a) Benefits under this subpart may be made to producers of wool 
and mohair during the 2000 marketing year.
    (1) Payment rate.
    (i) The payment rate for wool is 40 cents per pound.
    (ii) The payment rate for mohair is 40 cents per pound.
    (2) Payment amount. The payment amount for wool or mohair will be 
calculated, after the conclusion of the sign-up period, by multiplying 
the certified pounds by the payment rate.
    (b) In the event that approval of all eligible applications would 
result in expenditures in excess of the $19.956 million appropriated, 
CCC will calculate payments by tabulating all eligible pounds of wool 
and mohair and dividing the sum by $19.956 million to get a national 
payment rate per pound for wool and mohair.


Sec. 1469.208  Offsets.

    (a) Any payment or portion thereof due any person under this 
subpart shall be allowed without regard to questions of title under 
State law, and without regard to any claim or lien against the wool, 
the sheep, the mohair or the angora goats thereof, or proceeds thereof, 
in favor of the producer or any other creditors except agencies of the 
U.S. Government.
    (b) Any payments received by a producer are not subject to 
assignments, administrative offsets or withholdings, including 
administrative offset under chapter 37 of title 31, United States Code, 
as provided by section 842 of Public Law 106-387.
    (c) The regulations governing offsets and withholdings found at 7 
CFR Part 1403 shall not be applicable to this subpart.


Sec. 1469.209  Appeals.

    Any producer who is dissatisfied with a determination made pursuant 
to this subpart may make a request for reconsideration or appeal of 
such determination in accordance with the appeal regulations set forth 
at 7 CFR parts 11 and 780.


Sec. 1469.210  Misrepresentation.

    (a) Whoever issues a false document or otherwise acts in violation 
of the provisions of this program so as to enable a producer to obtain 
a payment to which such producer is not entitled, shall become liable 
to CCC for any payment which CCC may have made in reliance on such 
sales document or as a result of such other action.
    (b) The issuance of a false document or the making of a false 
statement in an application for payment or other document, for the 
purpose of enabling the producer to obtain a payment to which such 
producer is not entitled, may subject the person issuing such document 
or making such statement to liability under applicable Federal civil 
and criminal statutes.


Sec. 1469.211  Maintaining records.

    Producers making application for a payment under this program must 
maintain accurate records and accounts that will document that they 
meet all eligibility requirements specified herein. Such records and 
accounts must be retained for 3 years after the date of payment to the 
producer under this subpart.


Sec. 1469.212  Estates, trust, and minors.

    (a) Program documents executed by persons legally authorized to 
represent estates or trusts will be accepted only if such person 
furnishes evidence of the authority to execute such documents.

[[Page 13843]]

    (b) A minor who is an otherwise eligible producer of wool or mohair 
shall be eligible for assistance under this subpart only if such 
producer meets one of the following requirements:
    (1) The minor establishes that the right of majority has been 
conferred on the minor by court proceedings or by statute;
    (2) A guardian has been appointed to manage the minor's property 
and has executed the applicable program documents; or
    (3) A bond is furnished under which the surety guarantees any loss 
incurred for which the minor would be liable had the minor been an 
adult.


Sec. 1469.213  Death, incompetency, or disappearance.

    In the case of death, incompetency, disappearance or dissolution of 
a wool or mohair producer that is eligible to receive benefits in 
accordance with this subpart, such person or persons specified in part 
707 of this title may receive such benefits, as determined appropriate 
by CCC.


Sec. 1469.214  Refunds; joint and several liability.

    (a) In the event there is a failure to comply with any term, 
requirement, or condition for payment arising under the application or 
this subpart, and if any refund of a payment to CCC shall otherwise 
become due in connection with the application or this subpart, all 
payments made under this subpart to any producer shall be refunded to 
CCC together with interest as determined in accordance with paragraph 
(c) of this section and late payment charges as provided in part 1403 
of this chapter.
    (b) All producers signing an application for payment as having an 
interest shall be jointly and severally liable for any refund, 
including related charges, that is determined to be due for any reason 
under the terms and conditions of the application or this subpart.
    (c) Interest shall be applicable to refunds required of any 
producer under this subpart if CCC determines that payments or other 
assistance were provided to a producer who was not eligible for such 
assistance. Such interest shall be charged at the rate of interest that 
the United States Treasury charges the CCC for funds, as of the date 
CCC made benefits available. Such interest shall accrue from the date 
of repayment or the date interest increases as determined in accordance 
with applicable regulations. CCC may waive the accrual of interest if 
CCC determines that the cause of the erroneous determination was not 
due to any action of the producer.
    (d) Interest determined in accordance with paragraph (c) of this 
section may not be waived on refunds required of the producer when 
there was intentional misaction on the part of the producer, as 
determined by CCC.
    (e) Late payment interest shall be assessed on all refunds in 
accordance with the provisions of, and subject to the rates prescribed 
in, part 1403 of this chapter.
    (f) Producers must refund to CCC any excess payments made by CCC 
with respect to such application.
    (g) In the event that a benefit under this subpart was provided as 
the result of erroneous information provided by any producer, the 
benefit must be repaid with any applicable interest.

    2. Amend 7 CFR Chapter VII by adding a new part 1470 to read as 
follows:

PART 1470--APPLE MARKET LOSS ASSISTANCE PAYMENT PROGRAM

Sec.
1470.1   Applicability.
1470.2   Administration.
1470.3   Definitions.
1470.4   Time and method of application.
1470.5   Eligibility.
1470.6   Proof of production.
1470.7   Availability of funds.
1470.8   Applicant payment quantity.
1470.9   Payment rate and apple operation payment.
1470.10   Offsets.
1470.11   Appeals.
1470.12   Misrepresentation and scheme or device.
1470.13   Estates, trusts, and minors.
1470.14   Death, incompetency, or disappearance.
1470.15   Maintaining records.
1470.16   Refunds; joint and several liability.

    Authority: Sec. 811, Pub. L. 106-387, 114 Stat 1549.


Sec. 1470.1  Applicability.

    (a) The regulations in this subpart are applicable to producers of 
1998 and 1999 crop of apple production. These regulations set forth the 
terms and conditions under which the Commodity Credit Corporation (CCC) 
shall provide payments to apple producers who have applied to 
participate in the Apple Market Loss Assistance Payment Program in 
accordance with section 811 of Public Law 106-387. Additional terms and 
conditions may be set forth in the payment application that must be 
executed by participants to receive a market loss payment for apples.
    (b) Payments shall be available only for apples produced and 
harvested in the United States.


Sec. 1470.2  Administration

    (a) The Apple Market Loss Payment Program shall be administered 
under the general supervision of the Executive Vice President, CCC, or 
a designee, and shall be carried out in the field by State and county 
Farm Service Agency committees (State and county committees) and FSA 
employees.
    (b) State and county committees, and representatives and employees 
thereof, do not have the authority to modify or waive any of the 
provisions of the regulations of this subpart.
    (c) The State committee shall take any action required by the 
regulations of this subpart that has not been taken by the county 
committee. The State committee shall also:
    (1) Correct, or require the county committee to correct, any action 
taken by such county committee that is not in accordance with the 
regulations of this subpart; and
    (2) Require a county committee to withhold taking any action that 
is not in accordance with the regulations of this subpart.
    (d) No provision or delegation of this subpart to a State or county 
committee shall preclude the Executive Vice President, CCC, or a 
designee, from determining any question arising under the program or 
from reversing or modifying any determination made by the State or 
county committee.
    (e) The Deputy Administrator, Farm Programs, FSA, may authorize 
State and county committees to waive or modify deadlines and other 
program requirements in cases where lateness or failure to meet such 
other requirements do not affect adversely the operation of the Apple 
Market Loss Assistance Payment program and does not violate statutory 
limitations on the program.
    (f) Payment applications and related documents not executed in 
accordance with the terms and conditions determined and announced by 
CCC, including any purported execution outside of the dates authorized 
by CCC, shall be null and void unless the Executive Vice President, 
CCC, shall otherwise allow.


Sec. 1470.3  Definitions.

    The definitions set forth in this section shall be applicable for 
all purposes of administering the Apple Market Loss Assistance Payment 
program established by this subpart.
    Apple Operation means any person or group of persons who as a 
single unit as determined by CCC, produce and market apples in the 
United States and which has elected to participate in the program 
authorized by the part.

[[Page 13844]]

    Application means Form CCC-891, the Apple Market Loss Assistance 
Payment Application.
    Application period means March 5, 2001 through April 13, 2001.
    Commodity Credit Corporation or CCC means the Commodity Credit 
Corporation.
    County committee means the FSA county committee.
    County office means the local FSA office.
    Department or USDA means the United States Department of 
Agriculture.
    Deputy Administrator means the Deputy Administrator for Farm 
Programs (DAFP), Farm Service Agency or a designee.
    Farm Service Agency or FSA means the Farm Service Agency of the 
Department.
    Eligible production means apples that had been produced in the 
United States anytime during the 1998 and or 1999 crop year, subject to 
a maximum of 1,600,000 pounds per apple operation.
    Higher production year means the crop year, either 1998 or 1999, as 
selected by the apple operation, during which apples were produced.
    Payment pounds means the pounds of apples for which an operation is 
eligible to be paid under this subpart.
    Person means any individual, group of individuals, partnership, 
corporation, estate, trust association, cooperative, or other business 
enterprise or other legal entity who is, or whose members are, a 
citizen of, or legal resident alien or aliens in the United States.
    United States means the 50 States of the United States of America, 
the District of Columbia, and the Commonwealth of Puerto Rico.
    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. 1470.4  Time and method of application.

    (a) Apple producers may obtain an application, Form CCC-891 (Apple 
Market Loss Assistance Payment Application), in person, by mail, by 
telephone, or by facsimile from any county FSA office. In addition, 
applicants may download a copy of the CCC-891 at http://www.sc.egov.usda.gov.
    (b) A request for benefits under this subpart must be submitted on 
a completed Form CCC-891. The Form CCC-891 should be submitted to the 
county FSA office serving the county where the apple operation is 
located but, in any case, must be received by the county FSA office by 
the close of business on April 13, 2001. Applications not received by 
the close of business on April 13, 2001, will be disapproved as not 
having been timely filed and the apple operation will not be eligible 
for benefits under this program.
    (c) All persons who share in an apple operation's total production 
must certify on the same CCC-891 in order to obtain the maximum 
eligible quantity of the higher crop year of 1998 and 1999 of the apple 
operation before the application is complete.
    (d) The apple operation requesting benefits under this subpart must 
certify with respect to the accuracy and truthfulness of the 
information provided in their application for benefits. All information 
provided is subject to verification and spot checks by CCC. Refusal to 
allow CCC or any other agency of the Department of Agriculture to 
verify any information provided will result in a determination of 
ineligibility. Data furnished by the applicant will be used to 
determine eligibility for program benefits. Furnishing the data is 
voluntary; however, without it program benefits will not be approved. 
Providing a false certification to the Government is punishable by 
imprisonment, fines and other penalties.


Sec. 1470.5  Eligibility.

    (a) To be eligible to receive cash payment under this subpart, an 
apple operation must:
    (1) Have produced apples in the United States anytime during the 
1998 and/or 1999 crop year;
    (2) Not have been compensated for the same market loss by any other 
Federal programs, except an indemnity provided under a policy or plan 
or insurance offered under the Federal Crop Insurance Act (7 U.S.C. 
1501).
    (3) Apply for payments during the application period.
    (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) An apple operation must submit a timely application and comply 
with all other terms and conditions of this subpart and instructions 
issued by CCC, as well as comply with those instructions that are 
otherwise contained in the application to be eligible for benefits 
under this subpart.


Sec. 1470.6  Proof of production.

    (a) Apple operations selected for spot-checks by CCC must, in 
accordance with instructions issued by the Deputy Administrator, 
provide adequate proof of the apples produced during the 1998 and/or 
1999 crop year to verify the higher year of production. The documentary 
evidence of apple production claimed for payment shall be reported to 
CCC together with any supporting documentation under paragraph (b) of 
this section. The pounds of 1998 or 1999 crop year production must be 
documented using actual records developed at the time of production.
    (b) All persons involved in an apple operation producing apples 
during the 1998 or 1999 crop year shall provide any available 
supporting documents to assist the county FSA office in verifying the 
operation's apple production indicated on Form CCC-891. Examples of 
supporting documentation include, but are not limited to: picking, 
packout, and payroll records, RMA records, sales documents, copies of 
receipts, ledgers of income, or any other documents available to 
confirm the production and production history of the apple operation. 
In the event that supporting documentation is not presented to the 
county FSA office requesting the information, the apple operation will 
be determined ineligible for benefits.


Sec. 1470.7  Availability of funds.

    The total available program funds shall be $99.78 million as 
provided by Section 811 of Public Law 106-387 and amended by Section 
1403 of Public Law 106-554.


Sec. 1470.8  Applicant payment quantity.

    (a) The applicant's payment quantity of apples will be determined 
by the CCC, based on the higher production of 1998 or 1999 crop of 
apples that was produced by each operation, as selected by the apple 
operation.
    (b) The maximum quantity of the 1998 or 1999 crop of apples for 
which producers are eligible for a payment for an operation under this 
subpart shall be 1,600,000 pounds.


Sec. 1470.9  Payment rate and apple operation payment.

    (a) Payments under this subpart may be made to apple operations 
only up to 1,600,000 pounds of apples produced in the United States 
during the higher production year of 1998 or 1999. A payment rate will 
be determined after the conclusion of the application period, and shall 
be calculated by:

[[Page 13845]]

    (1) Totaling the higher production of the eligible quantity (not to 
exceed 1,600,000 pounds) of apples produced from the 1998 or 1999 crop 
year from all approved applications; and
    (2) Dividing the amount available for the Apple Market Loss 
Assistance Payment program by the total pounds of eligible production 
submitted and approved for payment (the quantity determined under 
paragraph (a)(1) of this section).
    (b) Each apple operation payment will be calculated by multiplying 
the payment rate determined in paragraph (a) of this section by the 
apple operation's eligible production.
    (c) In the event that approval of all eligible applications would 
result in expenditures in excess of the amount available, CCC shall 
reduce the payment rate in such manner as CCC, in its sole discretion, 
finds fair and reasonable.


Sec. 1470.10  Offsets.

    (a) Any payment or portion thereof due any person under this part 
shall be allowed without regard to questions of title under State law, 
and without regard to any claim or lien against an operation, an 
operation's apple production, or proceeds thereof, in favor of the 
producer or any other creditors, including agencies of the U.S. 
Government.
    (b) Payments received by an apple operation under this part are not 
subject to administrative offsets or withholdings, including 
administrative offset under chapter 37 of title 31, United States Code, 
as provided by Public Law 106-387.
    (c) The regulations governing offsets and withholdings found at 7 
CFR Part 1403 shall not be applicable to this part.


Sec. 1470.11  Appeals.

    Any producer who is dissatisfied with a determination made pursuant 
to this part may make a request for reconsideration or appeal of such 
determination in accordance with the appeal regulations set forth at 7 
CFR parts 11 and 780.


Sec. 1470.12  Misrepresentation and scheme or device.

    (a) An apple operation shall be ineligible to receive assistance 
under this program if it is determined by the State committee or the 
county committee to have knowingly:
    (1) Adopted any scheme or device which tends to defeat the purpose 
of this program;
    (2) Made any fraudulent representation; or
    (3) Misrepresented any fact affecting a determination under this 
program. CCC will notify the appropriate investigating agencies of the 
United States and take steps deemed necessary to protect the interests 
of the government.
    (b) Any funds disbursed pursuant to this part to any person or 
operation engaged in a misrepresentation, scheme, or device, shall be 
refunded to CCC, with interest together with such other sums as may 
become due. Any apple operation or person engaged in acts prohibited by 
this section and any apple operation or person receiving payment under 
this part shall be jointly and severally liable with other persons or 
operations involved in such claim for benefits for any refund due under 
this section and for related charges. The remedies provided in this 
part shall be in addition to other civil, criminal, or administrative 
remedies which may apply.


Sec. 1470.13  Estates, trusts, and minors.

    (a) Program documents executed by persons legally authorized to 
represent estates or trusts will be accepted only if such person 
furnishes evidence of the authority to execute such documents.
    (b) A minor who is otherwise eligible for assistance under this 
part must also:
    (1) Establish that the right of majority has been conferred on the 
minor by court proceedings or by statute;
    (2) Show that a guardian has been appointed to manage the minor's 
property and the applicable program documents are executed by the 
guardian; or
    (3) Furnish a bond under which the surety guarantees any loss 
incurred for which the minor would be liable had the minor been an 
adult.


Sec. 1470.14  Death, incompetency, or disappearance.

    In the case of death, incompetency, disappearance or dissolution of 
a person that is eligible to receive benefits in accordance with this 
part, such person or persons specified in part 707 of this title may 
receive such benefits, as determined appropriate by CCC.


Sec. 1470.15  Maintaining records.

    Apple operations making application for benefits under this program 
must maintain accurate records and accounts that will document that 
they meet all eligibility requirements specified herein, as may be 
requested by CCC. Such records and accounts must be retained for 3 
years after the date of payment to the apple operation under this 
program. Such records shall be available at all reasonable times for an 
audit or inspection by authorized representatives of CCC, United States 
Department of Agriculture, or the Comptroller General of the United 
States. Failure to keep, or make available, such records may result in 
refund to CCC of all payments received plus interest thereon, as 
determined by CCC. Nothing in this section, shall, however, authorize 
the destruction of any records where there is an on-going dispute or 
where the party involved has reason to know that such records remain 
material to the operation of the program. Destruction of the records 
after such date shall be at the risk of the party undertaking the 
destruction.


Sec. 1470.16  Refunds; joint and several liability.

    (a) In the event there is a failure to comply with any term, 
requirement, or condition for payment arising under the application, or 
this part, and if any refund of a payment to CCC shall otherwise become 
due in connection with the application, or this part, all payments made 
under this part to any apple operation shall be refunded to CCC 
together with interest as determined in accordance with paragraph (c) 
of this section and late payment charges as provided in part 1403 of 
this title.
    (b) All persons signing an apple operation's application for 
payment as having an interest in the operation shall be jointly and 
severally liable for any refund, including related charges, that is 
determined to be due for any reason under the terms and conditions of 
the application or this part with respect to such operation.
    (c) Interest shall be applicable to refunds required of any person 
under this part if CCC determines that payments or other assistance was 
provided to a person who was not eligible for such assistance. Such 
interest shall be charged at the rate of interest that the United 
States Treasury charges the CCC for funds, from the date CCC made such 
benefits available to the date of repayment or the date interest 
increases as determined in accordance with applicable regulations. CCC 
may waive the accrual of interest if CCC determines that the cause of 
the erroneous determination was not due to any action of the person.
    (d) Interest determined in accordance with paragraph (c) of this 
section may be waived at the discretion of CCC alone for refunds 
resulting from those violations determined by CCC to have been beyond 
the control of the person committing the violation.
    (e) Late payment interest shall be assessed on all refunds in 
accordance with the provisions of, and subject to the rates prescribed 
in, 7 CFR part 1403.

[[Page 13846]]

    (f) Any excess payments made by CCC with respect to any application 
under this part must be refunded.
    (g) In the event that a benefit under this subpart was provided as 
the result of erroneous information provided by any person, the benefit 
must be repaid with any applicable interest.

    Signed in Washington, D.C., on March 1, 2001.
Diane Sharp,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. 01-5491 Filed 3-5-01; 4:58 pm]
BILLING CODE 3410-05-P