[Federal Register Volume 68, Number 68 (Wednesday, April 9, 2003)]
[Rules and Regulations]
[Pages 17272-17276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-8452]


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

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1465

RIN 0578-AA31


Agricultural Management Assistance Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Final rule.

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

SUMMARY: This final rule implements section 2501 of the Farm Security 
and Rural Investment Act of 2002 (the 2002 Act) which amended section 
524 of the Federal Crop Insurance Act which permits CCC to fund the 
Agricultural Management Assistance (AMA) program. This final rule 
describes how NRCS intends to implement AMA as authorized by the 
amendment in the 2002 Act.

EFFECTIVE DATE: May 9, 2003.

ADDRESSES: This rule may also be accessed via Internet. Users can 
access the Natural Resources Conservation Service (NRCS) homepage at 
http://www.nrcs.usda.gov; select Farm Bill 2002, and click on AMA Final 
rule.

FOR FURTHER INFORMATION CONTACT: Dave Mason, Program Manager, 
Conservation Operations Division, NRCS, P.O. Box 2890, Washington, DC 
20013-2890, telephone: (202) 720-1873; fax: (202) 720-4265; e-mail: 
[email protected], Attention: Agricultural Management Assistance.

SUPPLEMENTARY INFORMATION:

Discussion of Program

    Section 2501 of the Farm Security and Rural Investment Act of 2002 
(the 2002 Act) amended section 524 of the Federal Crop Insurance Act (7 
U.S.C. 1524) to permit CCC to fund the Agricultural Management 
Assistance (AMA) program at the amount of $20,000,000 for each of the 
fiscal years 2003 through 2007. Section 524(b) of the Federal Crop 
Insurance Act of 2000, as amended by section 133 of the Agricultural 
Risk Protection Act of 2000, authorized the AMA program.
    As provided by section 524 of the Federal Crop Insurance Act (7 
U.S.C. 1524), as amended by the 2002 Act, the funds, facilities, and 
authorities of the Commodity Credit Corporation (CCC) are available to 
NRCS for carrying out AMA. (The Chief of the NRCS is vice-president of 
the CCC.) Accordingly, where NRCS is mentioned in this rule, it also 
refers to the CCC's funds, facilities, and authorities where 
applicable.
    The Commodity Credit Corporation (CCC) administers the funds under 
the general supervision of a Vice President of the CCC who is the Chief 
of the Natural Resources Conservation Service (NRCS). These funds will 
be used annually for cost share assistance to producers in 15 States in 
which participation in the Federal Crop Insurance Program is 
historically low. The 15 States include Connecticut, Delaware, Maine, 
Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New York, 
Pennsylvania, Rhode Island, Utah, Vermont, West Virginia, and Wyoming. 
The cost share assistance will encourage and assist producers in the 
selected States to adopt natural resources conservation practices and 
investment strategies that will reduce or mitigate risks to their 
agricultural enterprises.
    NRCS will use an allocation formula to determine the amount of 
funds that each state will receive that have been weighted to meet 
National objectives for the AMA conservation program. The formula used 
to determine allocation of funds to states consists of ranking factors 
of natural resource concerns. The formula is similar in nature to ones 
that have been used for other NRCS conservation programs.
    However, this formula is primarily used to allocate funds to the 
states for practices that will mitigate a producer's risk of production 
through the implementation of resource conservation practices that 
reduce soil erosion, utilize integrated pest management principles and 
assist producers in transition to organic farming based operations. 
Production and marketing diversification is enhanced by utilizing 
integrated pest management principles by reducing and applying 
chemicals for production as needed. Producers who elect to eliminate 
chemical usage by converting to organic farming will be able to provide 
products to a growing sector of the American population whose daily 
diet consists partially or totally of organically produced food items. 
This allows producers to use marketing diversification as a tool to 
enhance their operations. AMA is targeted to 15 states that have been 
historically low in participation in programs that provide 
opportunities for producers to environmentally and financially 
implement conservation practices and marketing strategies to provide 
safeguards against the cyclic economic variances of the agricultural 
economy.
    Other practices that producers may elect to implement include the 
opportunity to construct or improve watershed management or irrigation 
structures and plant trees to form windbreaks or improve water quality.
    Based on national program objectives and state priorities and 
resource concerns, the State Conservationist in conjunction with advice 
from the State Technical Committee will determine which practices are 
eligible for program payments. The practices must meet the purposes set 
out in section 1465.1 of this rule.
    The State Conservationist or designated conservationist with advice 
from the State Technical Committee and using a locally led process will 
rank and select applications for contracting based on the state-
developed ranking criteria and ranking process. The NRCS representative 
will work with the applicant to collect the necessary information to 
evaluate the application using the ranking criteria.

[[Page 17273]]

Executive Order 12866

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

Regulatory Flexibility Act

    The Regulatory Flexibility Act is not applicable to this rule 
because NRCS 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 Analysis

    NRCS has determined through an Environmental Assessment (EA) for 
the Agricultural Management Assistance Program that the issuance of 
this final rule would not have a significant impact on the human 
environment. Copies of the Environmental Assessment and the Finding of 
No Significant Impact may be obtained from Dave Mason, Conservation 
Operations Division, Natural Resources Conservation Service, P.O. Box 
2890, Washington, DC 20013-2890.

Civil Rights Impact Analysis

    NRCS has determined through a Civil Rights Impact Analysis that the 
issuance of this final 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 Dave Mason, Conservation 
Operations Division, Natural Resources Conservation Service, P.O. Box 
2890, Washington, DC 20013-2890.

Paperwork Reduction Act

    Section 2702 (b)(1)(A) of the 2002 Act exempts the promulgation of 
regulations and the administration of the AMA from the requirements of 
the Paperwork Reduction Act.

Executive Order 12988

    This final rule has been reviewed in accordance with Executive 
Order 12988. The provisions of this final rule are not retroactive. 
Furthermore, the provisions of this final rule preempt State and local 
laws to the extent such laws are inconsistent with this final 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, NRCS 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 governments, or anyone in the private sector; 
therefore a statement under section 202 of the Unfunded Mandates Reform 
Act of 1995 is not required.

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

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

Discussion of Comments

    NRCS issued a proposed rule with request for comments on August 28, 
2002, in the Federal Register, Volume 67, Number 167, Pages 55171-
55175.
    One comment was received during the comment period on the proposed 
regulation. The commenter stated that they were interested in 
organizing a meeting with a group of farmers in Illinois. Since the 
state of Illinois is not eligible for participation in the program and 
the comment was not directed to any section of the proposed rule, no 
changes were made to the rule.

List of Subjects in 7 CFR Part 1465

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


0
Accordingly, Title 7 of the Code of Federal Regulations is amended by 
adding a new part 1465 to read as follows:

PART 1465--AGRICULTURAL MANAGEMENT ASSISTANCE

Subpart A--General Provisions
Sec.
1465.1 Purposes and 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 representatives 
of NRCS.
1465.34 Offsets and assignments.
1466.35 Misrepresentation and scheme or device.

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

Subpart A--General Provisions


Sec.  1465.1  Purposes and applicability.

    Through the Agricultural Management Assistance (AMA) program, the 
NRCS 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 will:
    (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 will:
    (1) Determine `person' and producer eligibility; and
    (2) Make cost-share payments for practices completed.


Sec.  1465.3  Definitions.

    The following definitions apply to this part and all documents 
issued in

[[Page 17274]]

accordance with this part, unless specified otherwise:
    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 plan means a record of the participant's decisions, 
and supporting information, for treatment of a unit of land or water, 
and includes the schedule of operations, activities, and estimated 
expenditures needed to solve identified natural resource concerns.
    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 NRCS 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 which 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 the United States 
holds title as trustee for an Indian or tribal beneficiary, or a Indian 
or tribal beneficiary holds title and the United States maintains a 
trust relationship.
    Life-span 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 is to 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.
    Participant means a producer who is a party to an AMA contract.
    Producer means a person who is engaged in agricultural production.
    Secretary means the Secretary of the United States 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 
NRCS 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.
    (c) To be eligible to participate in the AMA Program, an applicant 
must:
    (1) 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 NRCS with the 
written concurrence of the landowner in order to apply an eligible 
practice(s);
    (3) Submit an application form CCC-1200;
    (4) Supply information as required by NRCS to determine eligibility 
for the AMA Program; and
    (5) States, political subdivisions, and entities thereof will not 
be persons eligible for payment. Any cooperative association of 
producers that markets commodities for producers shall not be 
considered to be a person eligible for payment.
    (d) 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 an improvement in 
the identified natural resource concern; and
    (iii) The participant has provided NRCS with written authorization 
from the government landowner to apply the conservation practices; or
    (3) The land is 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, will determine the conservation practices eligible for AMA 
Program payments. To be considered eligible conservation practices, the 
practices must meet the purposes of the AMA as set out in Sec.  1465.1.
    (b) The conservation plan includes the schedule of operations, 
activities, and estimated expenditures of the practices needed to solve 
identified natural resource concerns.

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

[[Page 17275]]

a single application for the joint operation.
    (b) NRCS will accept applications throughout the year. The State 
Conservationist will distribute information on the availability of 
assistance and the state-specific goals. Information will be provided 
that explains the process 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 or designated conservationist with 
advice from the State Technical Committee and using a locally led 
process will rank and select applications for contracting based on the 
state-developed ranking criteria and ranking process.
    (e) The State Conservationist or designated conservationist will 
work with the applicant to collect the information necessary to 
evaluate the application using the ranking criteria.


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 will:
    (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 NRCS 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
    (5) Any other provision determined necessary or appropriate by 
NRCS.
    (c) The participant must apply the practice(s) according to the 
schedule set out in the contract or conservation plan.


Sec.  1465.22  Conservation practice operation and maintenance.

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


Sec.  1465.23  Cost-share payments.

    (a)(1) The Federal share of cost-share payments to a participant 
will 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, NRCS will use the provisions in 7 CFR part 1400 
related to the definition of a ``person''and the limitation of 
payments, except that:
    (i) 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.
    (ii) With respect to land under an AMA Program contract which is 
inherited during the contract period, the $50,000 fiscal year 
limitation will 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.
    (iii) 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.
    (iv) 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 NRCS will 
approve the payment of any cost-share payment.


Sec.  1465.24  Contract modification, extension, and transfer of land.

    (a) The participant and NRCS may modify a contract if the 
participant and NRCS agree to the contract modification.
    (b) Contracts that run less than ten 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 mutually agree to transfer a contract to a new 
participant. The transferee must be determined by NRCS 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) NRCS 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 NRCS determines that a participant is in violation of the 
terms of a contract or documents incorporated by reference into the 
contract, NRCS will 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

[[Page 17276]]

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 NRCS 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 life 
span of the practice.
    (2) If NRCS 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, NRCS may reduce 
the amount of money owed by the participant by a proportion which 
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 NRCS 
agrees based on NRCS's determination that termination is in the public 
interest.
    (5) In carrying out NRCS'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 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 will 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 will 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 NRCS representative shall have the right to enter an 
operating unit or tract for the purpose of ascertaining the accuracy of 
any representations made in a contract or in anticipation of entering a 
contract, as to the performance of the terms and conditions of the 
contract. Access shall include the right to provide technical 
assistance, inspect any work undertaken under the contract and collect 
information necessary to evaluate the performance of conservation 
practices in the contract. The NRCS representative will 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 
representatives of NRCS.

    If a participant relied upon the advice or action of any authorized 
representative of NRCS, 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 NRCS, 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 
NRCS all payments, plus interest determined in accordance with part 
1403 of this chapter.
    (b) A producer's interest in all contracts shall be terminated, and 
the producer shall refund to NRCS all payments, plus interest 
determined in accordance with part 1403 of this chapter, received by 
such producer with respect to all contracts if it is determined that 
the producer 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.

    Signed in Washington, DC, on March 28, 2003.
Bruce I. Knight,
Vice President, Commodity Credit Corporation, Chief, Natural Resources 
Conservation Service.
[FR Doc. 03-8452 Filed 4-8-03; 8:45 am]
BILLING CODE 3410-16-P