[Federal Register Volume 67, Number 167 (Wednesday, August 28, 2002)]
[Proposed Rules]
[Pages 55171-55175]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-21835]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 67, No. 167 / Wednesday, August 28, 2002 / 
Proposed Rules  

[[Page 55171]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1465

RIN 0578-AA31


Agricultural Management Assistance Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Proposed rule with request for comments.

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SUMMARY: The Commodity Credit Corporation is issuing a proposed rule 
with request for comments for the Agricultural Management Assistance 
(AMA) Program. Section 524(b) of the Federal Crop Insurance Act, as 
amended by Section 133 of the Agricultural Risk Protection Act of 2000, 
authorized the AMA Program. This proposed rule sets forth the 
procedures for how producers would apply and participate in the AMA 
Program.

DATES: Comments must be received by September 27, 2002.

ADDRESSES: Send comments by mail to Conservation Operations Division, 
Natural Resources Conservation Service, P.O. Box 2890 or by e-mail to 
[email protected]; attention: Agricultural Management Assistance.

FOR FURTHER INFORMATION CONTACT: Mark W. Berkland, Director, 
Conservation Operations Division, NRCS, P.O. Box 2890, Washington, DC 
20013-2890, telephone: (202) 720-1845; fax: (202) 720-4265; e-mail: 
[email protected], Attention: Agricultural Management Assistance.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    Pursuant to Executive Order 12866 (58 FR 51735, October 4, 1993), 
the Office of Management and Budget determined that this proposed rule 
is not a significant regulatory action.

Regulatory Flexibility Act

    The Regulatory Flexibility Act is not applicable to this rule 
because the Commodity Credit Corporation (CCC) is not required by 5 
U.S.C. 533 or by any other provision of law to publish a notice of 
proposed rulemaking with respect to the subject matter of this rule.

Environmental Analysis

    A draft Environmental Assessment (EA) has been prepared to assist 
in determining whether this proposed rule, if implemented, would have a 
significant impact on the quality of the human environment such that an 
Environmental Impact Statement should be prepared. Based on the results 
of the draft EA, NRCS proposes issuing a finding of no significant 
impact (FONSI) before a final rule is published. Copies of the draft EA 
and FONSI may be obtained from Walley Turner, Conservation Operations 
Division, Natural Resources Conservation Service, P.O. Box 2890, 
Washington, DC 20013-2890 or at http://www.nrcs.usda.gov/programs/Env 
Assess/AMA/AMA.html. Provide comments on the draft EA and FONSI to 
[email protected], Attention: Agricultural Management Assistance, 
or to the National Environmental Coordinator, Ecological Sciences 
Division, Natural Resources Conservation Service, P.O. Box 2890, 
Washington, DC, 20013-2890.

Civil Rights Impact Analysis

    CCC has determined through a Civil Rights Impact Analysis that the 
issuance of this proposed rule will not have a significant effect on 
minorities. Copies of the Civil Rights Impact Analysis and Finding of 
No Significant Impact may be obtained from Walley Turner, Conservation 
Operations Division, Natural Resources Conservation Service, P.O. Box 
2890, Washington, DC 20013-2890.

Paperwork Reduction Act

    This proposed rule sets forth procedures for implementing AMA. CCC 
needs certain information from potential applicants in order to carry 
out the requirements of the program. CCC submitted the information 
collection requirements in this proposed rule to the Office of 
Management and Budget (OMB) for approval under the Paperwork Reduction 
Act, 44 U.S.C. 3501 et seq., and CCC prepared an Information Collection 
Request (ICR) document. The public may obtain a copy of this request 
from Walley Turner, Conservation Operations Division, Natural Resources 
Conservation Service, P.O. Box 2890, Washington, DC 20013-2890.
    NRCS is committed to compliance with the Government Paperwork 
Elimination Act (GPEA) and the Freedom to E-File Act, which require 
Government agencies in general and NRCS in particular to provide the 
public the option of submitting information or transacting business 
electronically to the maximum extent possible. The forms and other 
information collection activities required for participation in the 
program proposed under this rule are not yet fully implemented for the 
public to conduct business with NRCS electronically. However, the 
application form will be available electronically through the USDA 
eForms Web site at http://www.sc.egov.usda.gov for downloading. 
Applications may be submitted at the local USDA service centers, by 
mail or by FAX. At this time, electronic submission is not available 
because signatures from multiple produces with shares in agricultural 
operations are required. Still, full implementation of electronic 
submission is underway.

Executive Order 12988

    This proposed rule has been reviewed in accordance with Executive 
Order 12988. The provisions of this proposed rule are not retroactive. 
Furthermore, the provisions of this proposed rule preempt State and 
local laws to the extent such laws are inconsistent with this proposed 
rule. Before an action may be brought in a Federal court of competent 
jurisdiction, the administrative appeal rights afforded persons at 7 
CFR parts 614, 780 and 11 must be exhausted.

Unfunded Mandates Reform Act of 1995

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995, 
Public Law 104-4, CCC assessed the effects of this rulemaking action on 
State, local, and Tribal governments, and the public. This action does 
not compel the expenditure of $100 million or more by any State, local, 
or Tribal government, or anyone in the private sector; therefore a 
statement under section 202 of the

[[Page 55172]]

Unfunded Mandates Reform Act of 1995 is not required.

Federal Crop Insurance Reform and Department of Agriculture 
Reorganization Act of 1994

    Because USDA classified this proposed rule as ``not major'' under 
section 304 of the Department of Agriculture Reorganization Act of 
1994, Pub. L. 104-354, a risk assessment is not required.

List of Subjects in 7 CFR Part 1465

    Conservation contract, Conservation plan, Conservation practices, 
Soil and water conservation.

    Accordingly, Title 7 of the Code of Federal Regulations is proposed 
to be amended by adding a new part 1465 to read as follows:

PART 1465--AGRICULTURAL MANAGEMENT ASSISTANCE

Subpart A--General Provisions

Sec.

1465.1   Applicability.
1465.2   Administration.
1465.3   Definitions.
1465.4   Program requirements.
1465.5   Conservation practices.
Subpart B--Contracts
1465.20   Applications for participation and selecting applications 
for contracting.
1465.21   Contract requirements.
1465.22   Conservation practice operation and maintenance.
1465.23   Cost-share payments.
1465.24   Contract modification, extension, and transfer of land.
1465.25   Contract violations and termination.
Subpart C--General Administration
1465.30   Appeals
1465.31   Compliance with regulatory measures.
1465.32   Access to operating unit.
1465.33   Performance based upon advice or action of CCC 
representative.
1465.34   Offsets and assignments.
1465.35   Misrepresentation and scheme or device.

    Authority: 7 U.S.C. 1524(b), 16 U.S.C. 3801.

Subpart A--General Provisions


Sec. 1465.1  Applicability.

    Through the Agricultural Management Assistance (AMA) program, the 
Commodity Credit Corporation (CCC) provides financial assistance funds 
annually to producers in 15 statutorily designated States to construct 
or improve water management structures or irrigation structures; to 
plant trees to form windbreaks or to improve water quality; and to 
mitigate risk through production diversification or resource 
conservation practices, including soil erosion control, integrated pest 
management, or transition to organic farming. The AMA Program is 
applicable in Connecticut, Delaware, Maryland, Massachusetts, Maine, 
Nevada, New Hampshire, New Jersey, New York, Pennsylvania, Rhode 
Island, Utah, Vermont, West Virginia, and Wyoming.


Sec. 1465.2  Administration.

    (a) Administration and implementation of the conservation 
provisions of AMA Program for the CCC is assigned to the Natural 
Resources Conservation Service (NRCS). The Farm Service Agency (FSA) is 
responsible for ``person'' determinations under Sec. 1465.23(c) and 
making cost-share payments.
    (b) NRCS shall:
    (1) Provide overall management and implementation leadership for 
the AMA Program;
    (2) Establish policies, procedures, priorities, and guidance for 
implementation;
    (3) Establish cost-share payment limits;
    (4) Determine eligible practices;
    (5) Develop and approve conservation plans and contracts with 
selected participants;
    (6) Provide technical leadership for implementation, quality 
assurance, and evaluation of performance; and
    (7) Make funding decisions and determine allocations of AMA funds.
    (c) FSA shall:
    (1) Determine `person' and producer eligibility; and
    (2) Make cost-share payments for practices completed.


Sec. 1465.3  Definitions.

    The following definitions shall apply to this part and all 
documents issued in accordance with this part, unless specified 
otherwise:
    Agricultural land means cropland, hayland, pastureland, rangeland, 
land used for subsistence purposes, and other land, such as forestland, 
on which crops or livestock are produced.
    Applicant means an agricultural producer who has requested in 
writing to participate in the AMA Program. Producers who are members of 
a joint operation shall be considered one applicant.
    Chief means the Chief of NRCS, or designee.
    Conservation district means a political subdivision of a State, 
Indian tribe, or territory, organized pursuant to the State or 
territorial soil conservation district law, or tribal law. The 
subdivision may be a conservation district, soil conservation district, 
soil and water conservation district, resource conservation district, 
natural resource district, land conservation committee, or similar 
legally constituted body.
    Conservation practice means a specified treatment, such as a 
structural or vegetative practice or a land management practice, which 
is planned and applied according to NRCS standards and specifications.
    Contract means a legal document that specifies the rights and 
obligations of any person who has been accepted for participation in 
the AMA Program.
    Cost-share payment means the financial assistance from CCC to the 
participant to share the cost of installing eligible practices.
    Designated conservationist means an NRCS employee whom the State 
conservationist has designated as responsible for administration of the 
AMA Program.
    Indian Tribe means any Indian Tribe, band, nation, or other 
organized group or community that is recognized as eligible for the 
special assistance and services provided by the United States to 
Indians because of their status as Indians.
    Indian trust lands means real property in which:
    (1) The United States holds title as trustee for an Indian or 
tribal beneficiary, or
    (2) An Indian or Tribal beneficiary holds title and the United 
States maintains a trust relationship.
    Lifespan means the minimum time period in which the conservation 
practices are to be maintained and used for their intended purpose.
    Liquidated damages means a sum of money stipulated in the contract 
that the participant agrees to pay if the participant breaches the 
contract. The sum represents an estimate of the anticipated or actual 
harm caused by the breach, and reflects the difficulties of proof of 
loss and the inconvenience or non-feasibility of otherwise obtaining an 
adequate remedy.
    Operation and maintenance means work that shall be performed by the 
participant to keep the applied conservation practice functioning for 
the intended purpose during its life span. Operation includes the 
administration, management, and performance of non-maintenance actions 
needed to keep the completed practice safe and functioning as intended. 
Maintenance includes work to prevent deterioration of the practice, 
repairing damage, or replacement of the practice to its original 
condition if one or more components fail.

[[Page 55173]]

    Participant means an applicant who is a party to an AMA contract.
    Producer means a person who is engaged in agricultural production.
    Secretary means the Secretary of the U.S. Department of 
Agriculture.
    State Conservationist means the NRCS employee authorized to direct 
and supervise NRCS activities in a State, the Caribbean Area, or the 
Pacific Basin Area.
    State Technical Committee means a committee established by the 
Secretary in a State pursuant to 16 U.S.C. 3861.
    Technical assistance means the personnel and support resources 
needed to conduct conservation practice survey, layout, design, 
installation, and certification; training and providing quality 
assurance for professional conservationists; and evaluation and 
assessment of the AMA Program.
    Unit of concern means a parcel of agricultural land that has 
natural resource conditions that are of concern to the participant.


Sec. 1465.4  Program requirements.

    (a) Participation in the AMA Program is voluntary. The participant, 
in cooperation with the local conservation district, applies for 
practice installation for the farm or ranching unit of concern. The CCC 
provides cost-share payments through contracts to apply needed 
conservation practices within a time schedule specified in the 
contract.
    (b) The Chief determines the funds available for financial 
assistance according to the purpose and projected cost for which the 
financial assistance is provided in a fiscal year. The Chief allocates 
the funds available to carry out the AMA Program. Funding obligations 
shall not exceed the financial assistance provided in a fiscal year.
    (c) To be eligible to participate in the AMA Program, an applicant 
must:
    (1) Meet the Food Security Act ``person'' definition and be an 
agricultural producer;
    (2) Have control of the land for the life of the proposed contract 
period, except that--
    (i) An exception may be made by the Chief in the case of land 
allotted by the Bureau of Indian Affairs (BIA), Tribal land, or other 
instances in which the Chief determines that there is sufficient 
assurance of control; or
    (ii) If the applicant is a tenant of the land involved in 
agricultural production, the applicant shall provide CCC with the 
written concurrence of the landowner in order to apply an eligible 
practice;
    (3) Submit an application that is acceptable to CCC and is in 
compliance with the terms and conditions of the AMA Program, and
    (4) Supply information as required by CCC to determine eligibility 
for the AMA Program.
    (5) States, political subdivisions, and entities thereof will not 
be persons eligible for payment.
    (6) Any cooperative association of producers that markets 
commodities for producers shall not be considered to be a person 
eligible for payment.
    (d) Land used as agricultural land that NRCS determines poses a 
threat to watershed or irrigation management, water quality, or 
financial risk due to soil erosion, pest infestation, or cultural 
practices including the existing agricultural management practices of 
the applicant may be eligible for enrollment in the AMA Program. Land 
may only be considered for enrollment in the AMA program if NRCS 
determines that the land is:
    (1) Privately owned land;
    (2) Publicly owned land where:
    (i) The land is under private control for the contract period and 
is included in the participant's operating unit;
    (ii) Conservation practices will contribute to improving the 
identified natural resource concern; and
    (iii) The participant has provided CCC with written authorization 
from the government landowner to apply the conservation practices; or
    (3) Federally recognized Tribal, BIA-allotted, or Indian trust 
land.


Sec. 1465.5  Conservation practices.

    (a) The State Conservationist, with advice from the State Technical 
Committee, shall determine the conservation practices eligible for AMA 
Program payments. To be considered eligible conservation practices, the 
practices must improve soil or water management or water quality, or 
mitigate financial risk through resource conservation.
    (b) The State Conservationist, with advice from the State Technical 
Committee, shall determine the conservation practices eligible for AMA 
Program payments using a locally led process and guidance in paragraph 
(a) of this section.

Subpart B--Contracts


Sec. 1465.20  Applications for participation and selecting applications 
for contracting.

    (a) Any producer who has eligible land may submit an application 
for participation in the AMA Program at a USDA service center. 
Producers who are members of a joint operation shall file a single 
application for the joint operation.
    (b) CCC will accept applications throughout the year. The State 
Conservationist, with advice from the State Technical Committee, will 
distribute information on the availability of assistance and the state-
specific goals. Information will be provided that explains the process 
and how to request assistance.
    (c) The State Conservationist, with advice from the State Technical 
Committee, will develop ranking criteria and a ranking process to 
select applications taking into account local and State priorities.
    (d) The State Conservationist, with advice from the State Technical 
Committee, will rank and select applications for contracting based on 
the State-developed ranking criteria and ranking process.
    (e) The designated conservationist will work with the applicant to 
collect the information necessary to evaluate the application using the 
ranking criteria.
    (f) FSA shall determine ``person'' and producer eligibility and 
make contract payments.


Sec. 1465.21  Contract requirements.

    (a) In order for a participant to receive cost-share payments, the 
participant shall enter into a contract agreeing to implement eligible 
conservation practices.
    (b) An AMA contract shall:
    (1) Incorporate by reference all portions of a unit applicable to 
the AMA Program;
    (2) Be for a duration of 3 to 10 years;
    (3) Incorporate all provisions as required by law or statute, 
including participant requirements to:
    (i) Not conduct any practices on the farm or ranch unit of concern 
that would tend to defeat the purposes of the contract according to 
Sec. 1465.25;
    (ii) Refund any AMA Program payments received with interest, and 
forfeit any future payments under the AMA Program, on the violation of 
a term or condition of the contract, consistent with the provisions of 
Sec. 1465.25;
    (iii) Refund all AMA Program payments received on the transfer of 
the right and interest of the producer in land subject to the contract 
unless the transferee of the right and interest agrees to assume all 
obligations of the contract, consistent with the provisions of 
Sec. 1465.24; and
    (iv) Supply information as required by CCC to determine compliance 
with the contract and requirements of the AMA Program.
    (4) Specify the participant's requirements for operation and 
maintenance of the applied conservation practices consistent with the 
provisions of Sec. 1465.22; and

[[Page 55174]]

    (5) Incorporate any other provision determined necessary or 
appropriate by CCC.
    (c) The participant must apply the practice(s) within 10 years of 
signing a contract.


Sec. 1465.22  Conservation practice operation and maintenance.

    The contract shall incorporate the operation and maintenance of the 
conservation practice(s) applied under the contract. The participant 
shall operate and maintain the conservation practice(s) for its 
intended purpose for the lifespan of the conservation practice, as 
identified in the contract or conservation plan, as determined by CCC. 
CCC may periodically inspect the conservation practices during the 
lifespan of the practices as specified in the contract to ensure that 
operation and maintenance are occurring.


Sec. 1465.23  Cost-share payments.

    (a)(1) The Federal share of cost-share payments to a participant 
shall be 75 percent of the actual cost of an eligible practice. In no 
instance shall the total financial contributions for an eligible 
practice from all public- and private-entity sources exceed 100 percent 
of the actual cost of the practice.
    (2) Participants may contribute their portion of the costs of 
practices through in-kind contributions, including labor and materials, 
providing the materials contributed meet the NRCS standards and 
specifications for the practice being installed.
    (3) Cost-share payments will not be made to a participant who has 
applied or initiated the application of a conservation practice prior 
to approval of the contract.
    (b) The total amount of cost-share payments paid to a person under 
this part may not exceed $50,000 for any fiscal year.
    (c) For purposes of applying the payment limitations provided for 
in this section, CCC shall use the provisions in 7 CFR part 1400 
related to the definition of a ``person'' and the limitation of 
payments, except that:
    (1) The provisions in part 1400, subpart C for determining whether 
persons are actively engaged in farming, subpart E for limiting 
payments to certain cash rent tenants, and subpart F as the provisions 
apply to determining whether foreign persons are eligible for payment, 
will not apply.
    (2) With respect to land under an AMA Program contract which is 
inherited during the contract period, the $50,000 fiscal year 
limitation shall not apply to the extent that the payments from any 
contracts on the inherited land cause an heir who was party to an AMA 
Program contract on other lands prior to the inheritance to exceed the 
annual limit.
    (3) With regard to contracts on Tribal land, Indian trust land, or 
BIA allotted land, payments exceeding one limitation may be made to the 
Tribal venture if an official of the BIA or tribal official certifies 
in writing that no one person directly or indirectly will receive more 
than the limitation.
    (4) The status of an individual or entity on the date of the 
application shall be the basis on which the determination of the number 
of persons involved in the farming operation is made.
    (d) The participant and NRCS must certify that a conservation 
practice is completed in accordance with the contract before CCC will 
approve the payment of any cost-share payment.


Sec. 1465.24  Contract modifications, extensions, and transfers of 
land.

    (a) The participant and CCC may modify a contract if the 
participant and CCC agree to the contract modification.
    (b) Contracts that run less than 10 years may be extended for up to 
the 10-year limit in order for the participant to complete the 
practices scheduled in the contract if such extension is requested by 
the participant before the contract expires.
    (c) The parties may agree to transfer a contract with the agreement 
of all parties to the contract. The transferee must be determined by 
CCC to be eligible to participate in the AMA Program and shall assume 
full responsibility under the contract, including operation and 
maintenance of those conservation practices already installed and to be 
installed as a condition of the contract.
    (d) CCC may require a participant to refund all or a portion of any 
assistance earned under the AMA Program if the participant sells or 
loses control of the land under an AMA Program contract and the new 
owner or controller is not eligible to participate in the AMA Program 
or refuses to assume responsibility under the contract.


Sec. 1465.25  Contract violations and termination.

    (a)(1) If CCC determines that a participant is in violation of the 
terms of a contract or documents incorporated by reference into the 
contract, CCC shall give the participant a reasonable time, as 
determined by the State Conservationist, to correct the violation and 
comply with the terms of the contract and attachments thereto. If a 
participant continues in violation, the State Conservationist may 
terminate the AMA Program contract.
    (2) Notwithstanding the provisions of paragraph (a)(1) of this 
section, a contract termination shall be effective immediately upon a 
determination by the State Conservationist that the participant has 
submitted false information or filed a false claim, or engaged in any 
act for which a finding of ineligibility for payments is permitted 
under the provisions of Sec. 1465.35, or in a case in which the actions 
of the party involved are deemed to be sufficiently purposeful or 
negligent to warrant a termination without delay.
    (b)(1) If CCC terminates a contract, the participant shall forfeit 
all rights for future payments under the contract and shall refund all 
or part of the payments received, plus interest determined in 
accordance with part 1403 of this chapter. The State Conservationist 
has the option of requiring only partial refund of the payments 
received if the State Conservationist determines that a previously 
installed conservation practice can function independently, is not 
affected by the violation or other conservation practices that would 
have been installed under the contract, and the participant agrees to 
operate and maintain the installed conservation practice for the 
lifespan of the practice.
    (2) If CCC terminates a contract due to breach of contract or the 
participant voluntarily terminates the contract before any contractual 
payments have been made, the participant shall forfeit all rights for 
further payments under the contract and shall pay such liquidated 
damages as are prescribed in the contract. The State Conservationist 
will have the option to waive the liquidated damages depending upon the 
circumstances of the case.
    (3) When making all contract termination decisions, CCC may reduce 
the amount of money owed by the participant by a proportion that 
reflects the good faith effort of the participant to comply with the 
contract, or the hardships beyond the participant's control that have 
prevented compliance with the contract.
    (4) The participant may voluntarily terminate a contract if CCC 
agrees, based on CCC's determination that termination is in the public 
interest.
    (5) In carrying out CCC's role in this section, NRCS may consult 
with the local conservation district.

Subpart C--General Administration


Sec. 1465.30  Appeals.

    (a) A participant may obtain administrative review of an adverse 
decision under the AMA Program in

[[Page 55175]]

accordance with parts 11 and 614 of this title, except as provided in 
paragraph (b) of this section.
    (b) The following decisions are not appealable:
    (1) Payment rates, payment limits, and cost-share percentages;
    (2) Funding allocations;
    (3) Eligible conservation practices; and
    (4) Other matters of general applicability, including--
    (i) Technical standards and formulas;
    (ii) Denial of assistance due to lack of funds or authority; or
    (iii) Science-based formulas and criteria.


Sec. 1465.31  Compliance with regulatory measures.

    Participants who carry out conservation practices shall be 
responsible for obtaining the authorities, rights, easements, or other 
approvals necessary for the implementation, operation, and maintenance 
of the conservation practices in keeping with applicable laws and 
regulations. Participants shall be responsible for compliance with all 
laws and for all effects or actions resulting from the participant's 
performance under the contract.


Sec. 1465.32  Access to operating unit.

    Any authorized CCC representative shall have the right to enter an 
operating unit or tract to ascertain the accuracy of any 
representations made in a contract, in anticipation of entering a 
contract, or as to the performance of the terms and conditions of the 
contract. Access shall include the right to provide technical 
assistance and inspect any work undertaken under the contract. The CCC 
representative shall make a reasonable effort to contact the 
participant prior to the exercise of this provision.


Sec. 1465.33  Performance based upon advice or action of CCC 
representative.

    If a participant relied upon the advice or action of any authorized 
representative of CCC and did not know or have reason to know that the 
action or advice was improper or erroneous, the State Conservationist 
may accept the advice or action as meeting the requirements of the AMA 
Program and may grant relief, to the extent it is deemed desirable by 
CCC, to provide a fair and equitable treatment because of the good-
faith reliance on the part of the participant.


Sec. 1465.34  Offsets and assignments.

    (a) Except as provided in paragraph (b) of this section, 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, in favor of the owner or 
any other creditor except agencies of the United States Government. The 
regulations governing offsets and withholdings found in part 1403 of 
this chapter shall be applicable to contract payments.
    (b) Any producer entitled to any payment may assign any payments in 
accordance with regulations governing assignment of payment found at 
part 1404 of this chapter.


Sec. 1465.35  Misrepresentation and scheme or device.

    (a) A producer who is determined to have erroneously represented 
any fact affecting an AMA Program determination made in accordance with 
this part shall not be entitled to contract payments and must refund to 
CCC all payments, plus interest determined in accordance with part 1403 
of this chapter.
    (b) A producer who is determined to have knowingly:
    (1) Adopted any scheme or device that tends to defeat the purpose 
of the AMA Program;
    (2) Made any fraudulent representation; or
    (3) Misrepresented any fact affecting an AMA Program determination, 
shall refund to CCC all payments, plus interest determined in 
accordance with part 1403 of this chapter, received by such producer 
with respect to all contracts. The producer's interest in all contracts 
shall be terminated.

    Signed in Washington, DC, on August 19, 2002.
Bruce I. Knight,
Vice President, Commodity Credit Corporation and Chief, Natural 
Resources Conservation Service.
[FR Doc. 02-21835 Filed 8-27-02; 8:45 am]
BILLING CODE 3410-16-P