[Federal Register Volume 68, Number 123 (Thursday, June 26, 2003)]
[Rules and Regulations]
[Pages 37936-37952]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-16161]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR 1412, 1421, 1439, 1480

RIN 0560-AG95


2003 Agricultural Assistance Act--Crop Disaster Program and 
Livestock Assistance Program

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

ACTION: Final Rule.

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SUMMARY: This rule implements portions of the Agricultural Assistance 
Act of 2003 to provide crop-loss disaster assistance for producers who 
suffered 2001 or 2002 crop losses and to establish a Livestock 
Assistance Program. This rule also implements provisions of the 
Consolidated Appropriations Resolution, 2003 (2003 Appropriations Act) 
that add the commodities crambe and sesame seed to the list of 
commodities eligible for CCC direct and counter-cyclical payments and 
marketing assistance loans and that provide that popcorn planted 
acreage is to be considered corn for determining corn crop acreage 
bases and yields. Other provisions of these Acts will be implemented 
under separate rules.

EFFECTIVE DATE: June 23, 2003.

FOR FURTHER INFORMATION CONTACT: Crop disaster: Eloise Taylor, 
(202)720-9882, or [email protected].
    Livestock Assistance Program and Direct and Counter Cyclical 
Payment Program: Lynn Tjeerdsma, 202-720-6602, e-mail: [email protected].
    Oilseeds: Raellen Erickson at (202) 720-6689, or via electronic 
mail at [email protected].

SUPPLEMENTARY INFORMATION:

Notice and Comment

    Section 217(b) of the Agricultural Assistance Act of 2003 requires 
that the regulations to implement it shall be promulgated without 
regard to the notice and comment provisions of 5 U.S.C. 553, or the 
Statement of Policy of the Secretary of Agriculture relating to notices 
of proposed rulemaking and public participation in rulemaking (36 FR 
13804, July 24, 1971). The crop disaster program and livestock 
assistance program are covered by section 765(c) of the 2003 Act. The 
2003 Act did not provide a similar requirement for the addition of 
crambe and sesame seed to the oilseeds eligible for CCC direct and 
counter-cyclical payments and market assistance loans. However, the 
2003 Act amended the Farm Security and Rural Investment Act of 2002 
(the 2002 Act) to require those crops' inclusion and section 1601 of 
the 2002 Act provides the exemption. Thus, this rule is published as 
final.

Executive Order 12866

    This final rule has been determined to be economically significant 
under Executive Order 12866 and has been reviewed by the Office of 
Management and Budget (OMB). A cost-benefit assessment of this rule was 
completed and is summarized after the Background section.

Federal Assistance Programs

    This final rule applies to the following Federal assistance 
programs, as found in the Catalog of Federal Domestic Assistance:
    10.051--Commodity Loans and Loan Deficiency Payments.
    10.066--Livestock Assistance Program.
    10.073--Crop Disaster Program.

Regulatory Flexibility Act

    The Regulatory Flexibility Act does not apply to this rule because 
the agencies are not required by 5 U.S.C. 553 or any other law to 
publish a notice of proposed rulemaking with respect to the subject of 
this rule.

Environmental Assessment

    The environmental impacts of this rule have been considered in 
accordance with the provisions of the national Environmental Policy Act 
of 1969 (NEPA), 42 U.S.C. 4321 et seq., the regulations of the Council 
on Environmental Quality (40 CFR parts 1500-1508), and FSA's 
regulations for compliance with NEPA, 7 CFR part 799. To the extent 
these authorities may apply, CCC and FSA have concluded that this rule 
is categorically excluded from further environmental review as 
evidenced by the completion of an environmental evaluation. No 
extraordinary circumstances or other unforeseeable factors exist which 
would require preparation of an environmental assessment or 
environmental impact statement. A copy of the environmental evaluation 
is available for inspection and review upon request.

Executive Order 12778

    The final rule has been reviewed in accordance with Executive Order 
12778. This final rule preempts State laws to the extent such laws are 
inconsistent with it. This rule is not retroactive. Before judicial 
action may be brought concerning this rule, all administrative remedies 
must be exhausted.

Executive Order 12372

    This program is not subject to Executive Order 12372, which 
requires intergovernmental consultation with State and local officials. 
See the notice related to 7 CFR part 3015, subpart V, published at 48 
FR 29115 (June 24, 1983).

Unfunded Mandates

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) does 
not apply to this rule because CCC is not required by 5 U.S.C. 553 or 
any other law to publish a notice of proposed rulemaking for the 
subject of this rule. Further, this rule contains no unfunded mandates 
as defined in sections 202 and 205 of UMRA.

[[Page 37937]]

Small Business Regulatory Enforcement Fairness Act of 1996

    Section 765(c) of the 2003 Act and section 1601 of the 2002 Act 
require CCC, in promulgating the regulations and administering the 
programs of the Act, to use the authority in section 808 of the Small 
Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-
121 (SBREFA), to forgo the usual 60-day delay in the effective date of 
major final rules required by SBREFA (5 U.S.C. 801(a)(3)(A)(ii)) for 
Congressional review. This rule affects a number of agricultural 
producers who are in urgent need of the payments to be provided under 
it. Thus, in accordance with 5 U.S.C. 808(2), CCC has determined that 
delay is contrary to public interest and this rule is effective upon 
the date of filing for public inspection by the Office of the Federal 
Register.

Paperwork Reduction Act

    Section 765(c) of the Agricultural Assistance Act of 2003 and 
section 1601 of the 2002 Act require that these regulations be 
promulgated and the programs administered without regard to 44 U.S.C. 
35, the Paperwork Reduction Act. This means that the information to be 
collected from the public to implement these programs and the burden, 
in time and money, the collection of the information would have on the 
public do not have to be approved by the Office of Management and 
Budget or be subject to the 60-day public comment period required by 5 
CFR 1320.8(d)(1).

Government Paperwork Elimination Act

    FSA 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 FSA 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 by participation in the 
programs covered under this rule are not yet fully implemented for the 
public to conduct business with FSA electronically. Although 
applications for all programs may be submitted at the FSA county 
offices by mail or FAX, electronic submission is not available. Still, 
implementation of electronic submission and receipt is underway.

Background

Addition of Crambe and Sesame as Eligible Oilseeds

    Section 763, Division A of the 2003 Act amended sections 1001 and 
1202 of the 2002 Act to add crambe and sesame seed to the list of 
oilseeds eligible for direct and counter-cyclical payments and 
marketing assistance loans. The 2002 Act did not specifically include 
crambe and sesame seed but it did provide the Secretary the authority 
to include additional oilseeds in these programs. Crambe and sesame 
seed were not included initially but will be included now as required 
by the 2003 Act.

Popcorn Acreage as Eligible Corn Acreage

    This rule allows producers with a farm with acreage planted to, or 
prevented from being planted to, popcorn in any year from 1998 through 
2001 to have popcorn acreage considered as regular corn acreage for the 
purposes of establishing corn base acres on the farm. Section 767 of 
the 2003 Act requires this change. It also provides that a farm program 
payment yield established before adding popcorn acreage shall be the 
same yield as established for corn. If the yields are not established 
for corn before adding popcorn acreage, the corn yield to be attributed 
to popcorn acreage shall be the Direct and Counter Cyclical Program 
(DCP) corn yield for similar farms. This change is effective fewer than 
60 days before the deadline for producers to establish base acres for 
all covered commodities on a farm. Therefore, this rule extends this 
deadline for popcorn farms to July 28, 2003. Applicable direct and 
counter-cyclical payments for corn base acres added to a farm under 
this rule will be paid after October 1, 2003.

2002 Livestock Assistance Program (2002 LAP)

    Section 203(b) of the Agricultural Assistance Act of 2003 requires 
the Secretary of Agriculture to use $250 million to pay livestock 
producers for losses in a disaster county in either of calendar years 
2001 or 2002, but not both. The program will use the same basic 
criteria established for the 1999 Livestock Assistance Program (1999 
LAP) except that, in lieu of the maximum gross revenue eligibility 
limitation used for the 1999 LAP, the Secretary shall use the adjusted 
gross income limitation contained in section 1001D of the Food Security 
Act of 1985 (7 U.S.C. 1308-3a).
    Livestock producers who suffered livestock feed losses as a result 
of natural disaster may apply for compensation for losses incurred in 
calendar year 2001 or 2002. If the livestock operation is in a county 
declared to be a disaster county for both calendar year 2001 and 
calendar year 2002, the producers must elect the year for which they 
wish to receive LAP payments. An operation may receive 2002 LAP for 
losses in either one of the affected calendar years, but not both. If 
the livestock operation is in a county that was declared to be a 
disaster county in just one of those calendar years, the producers may 
elect to receive payments for losses in either calendar year, but not 
both. Benefits will be provided to eligible livestock producers only in 
those counties declared under a Secretarial or Presidential disaster 
declaration and that meet LAP eligibility requirements and are 
subsequently approved for participation in LAP. A county must have 
suffered a 40-percent or greater grazing loss for 3 consecutive months 
during the selected calendar year as a result of damage due to a 
natural disaster in order to be eligible. Livestock producers in 
counties contiguous to an approved county are not eligible. A livestock 
producer in an approved county must have suffered at least a 40-percent 
loss of normal grazing for the producer's eligible livestock for a 
minimum of 3 consecutive months. Losses will be compensable only up to 
80 percent of the total grazing available and the compensable loss may 
not exceed the county maximum set by the local FSA county committee.
    Payments will be made according to a formula and will be subject to 
funding and other limitations, including a $40,000 per person payment 
limitation. In the event that the total amount of claims submitted 
under this subpart exceeds the $250 million available for 2002 LAP, 
each payment shall be reduced by a uniform national percentage. The 
amount of assistance that producers would otherwise receive under 2002 
LAP shall be reduced by the assistance producers receive under the 2002 
Cattle Feed Program announced on September 3, 2002, the 2002 Livestock 
Compensation Program announced on October 10, 2002, and the Livestock 
Compensation Program II announced on May 5, 2003.

Disaster Assistance to Crop Producers

    The 2003 Act authorizes the Secretary to provide assistance to crop 
producers for losses due to damaging weather and related conditions in 
2001 or 2002 crops. Generally, the statute requires the Crop Disaster 
Program (CDP) program to be administered using similar requirements as 
used for 2000-crop

[[Page 37938]]

losses under the Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies Appropriation Act, 2001 (2001 Act) 
(Public Law 106-387). Special approved yields based on actual 
production are prohibited unless production reports were submitted 
before enactment of the 2003 Act. The statute provides that total 
assistance under the CDP, crop insurance program and Noninsured Crop 
Disaster Assistance Program (NAP), plus the value of the crop that was 
not lost, may not exceed 95 percent of the value of the crop had there 
been no loss.
    The loss thresholds used with respect to the 2000 program are 
applicable to insured, uninsured and non-insurable 2001 or 2002 crops. 
For uninsured crops for which 2001 or 2002 CDP assistance is requested, 
applicants must purchase crop insurance coverage at a level greater 
than the level available under catastrophic risk protection, if 
available, for 2003 and 2004 crop years. Also, for 2001 or 2002 CDP 
benefits for a non-insurable crop for which NAP coverage was not 
obtained, the producer must submit required documents and pay the 
administrative fee for 2003 and 2004 for such crops. However, if the 
sales closing date for purchasing NAP or crop insurance has passed, a 
producer must meet the linkage requirements for the two subsequent 
years. Producers who do not purchase crop insurance or NAP as required 
will be required to refund assistance received, plus interest. 
Applicants must apply for benefits during the sign-up period announced 
by the Deputy Administrator.
    False certifications by producers carry strict penalties and FSA 
will validate applications with random spot-checks. Like earlier 
programs, gross revenue and per-person payment limits apply. A 
``person'' may receive no more than $80,000 in Crop Disaster payments, 
nor receive benefits if their gross revenue exceeds $2.5 million in the 
tax year preceding the year for which benefits are requested. The 1997 
Census of Agriculture indicates that less than 2.4 percent of the farms 
in the U.S. have sales greater than $500,000, and farms with gross 
incomes of $2.5 million or more only represent a small fraction of one 
percent. Thus, the gross revenue limitation only limits eligibility of 
the nation's largest farm and ranch operations.

Corrections to Direct and Counter-cyclical Program regulations

    This rule makes corrections to 7 CFR part 1412 where the need has 
become evident since this program was begun in October 2002. First, 
section 1412.401 is revised to provide that payments may be issued to a 
successor to a contract only after payments issued to the predecessor 
are refunded to CCC, or a debt for any amount not refunded to CCC has 
been established. Before, in such cases, payments could be issued to 
the successor only after payments were refunded. Second, in section 
1412.407(e), the names of two county names that were misspelled are 
corrected. Third, section 1412.408 is added to provide for 
redistribution of base acreage under certain circumstances. And 
finally, section 1412.703 is revised to delete an incorrect cross 
reference.

Cost-Benefit Analysis Summary

    Crop disaster: General payments for insured and non-insurable crops 
will be made at 50 percent of market price, and uninsured crops will be 
made at 45 percent of market price. Payments for insured crops will be 
made at the slightly higher rate to provide an incentive to purchase 
crop insurance. Payments for non-insurable crops will be made at the 
higher rate because insurance is not available for these crops. Claims 
for losses under the 1999- and 2000-crop disaster programs were about 
$1.7 billion and 1.9 billion, respectively, before pro-rationing. Based 
on similar weather conditions, crop losses under the 2001 or 2002 
program are expected to be about $2 billion. The $80,000 payment 
limitation and the limitation of $2.5 million gross income will 
distribute payments more toward relatively smaller farms. Nonetheless, 
large farms would account for a disproportionate share of crop-loss 
payments if there was no income limitation.
    2002 Livestock Assistance Program (LAP 2002): It is estimated that 
over 31 million head of cattle, 3 million horses, and 2 million sheep 
are located within the affected states. The potential cost of the LAP 
2002 before application of a national factor is estimated to be about 
$750 million. Because projected claims exceed the $250 million expected 
to be available for the program, each producer's payment will be 
prorated based on the ratio of the maximum allowed benefits to total 
claims. Payments will assist producers affected by disasters in meeting 
their financial obligations for income lost due to poor grazing 
conditions. It is assumed, in part as a result of the LAP, that 
producers affected by the disaster will remain in business. The impact 
of the payments on livestock prices and feed prices is expected to be 
small. For those producers who actually suffered the losses, the impact 
on their equity and cash flow positions is significant. In the absence 
of this program, some producers would have been forced to liquidate 
their herds, increasing livestock supplies and lowering prices in the 
short term. Changes are likely to be small and temporary. The projected 
impact on consumers is negligible. Aggregate farm income in 2002 is 
expected to be about $250 million higher.
    Loan Rate Changes: The 2003 Act mandates that the same loan rate be 
set for each kind of other oilseed. This single loan rate must be 
$0.0960 per pound for the 2003 crop of each type of oilseed and $0.0930 
per pound for the 2004 through 2007 crops of each type of oilseeds. 
Under the 2003 Act, loan rates increase for oil-type sunseed, rapeseed, 
canola, and flaxseed, but decrease for other-type sunseed mustard seed, 
and safflower comparted with the differentiated loan rates. CCC outlays 
for 2002 Act other oilseeds is expected to increase $20 million on 
average for the 2003 through 2007 crops as a result of the mandated 
single loan rate. Outlays for oil-type sunseed, other-type sunseed, 
canola, flaxseed, and rapeseed are expected to increase $22 million on 
average. The outlay increases will be partially offset by lower outlays 
for safflower and mustard seed compared with loan rates under the 2002 
Farm Act, reducing CCC outlays by $1.9 million.
    Adding Crambe and Sesame Seed to the List of Other Oilseeds: Annual 
crambe direct payments for the 2003 through 2007 crops are projected at 
$216,000, for a total $1.1 million over the 5-year period. Annual 
sesame seed direct payments are projected at $35,000, for a total of 
$175,000 for the remaining 5 years of the 2002 Act. No counter-cyclical 
payments are projected for crambe or sesame. Crambe is expected to 
generate loan program outlays of $166,000 during the 2003 and 2004 crop 
years. Sesame is not projected to generate any loan program outlays.
    Treatment of Popcorn: It is estimated that direct and counter 
cyclical payments will increase $69 million for crop years 2002-2007 
because corn payment acres will increase an estimated 239,000 acres. 
Outlays for the changes made by this rule are projected to be as 
follows.

                           Summary of Outlays
------------------------------------------------------------------------
                                                                Outlays
                           Program                                ($
                                                               Million)
------------------------------------------------------------------------
2002 Livestock Assistance Program (2002 LAP)................      250
Crop Disaster Program.......................................    2,000

[[Page 37939]]

 
Crambe and sesame seed eligibility..........................        1.4
Loan Rate Changes...........................................      210
Treatment of Popcorn........................................       69
                                                             -----------
    Total...................................................    2,530
------------------------------------------------------------------------

List of Subjects

7 CFR Part 1412

    Direct and counter-cyclical payments, Grains, Peanuts, Oilseeds, 
Reporting and recordkeeping requirements.

7 CFR part 1421

    Agricultural commodities, Feed grains, Grains, Loan programs--
agriculture, Oilseeds, Price support programs.

7 CFR part 1439

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

7 CFR Part 1480

    Agricultural commodities, Disaster assistance, Emergency 
assistance, Reporting and recordkeeping requirements.

0
For the reasons set out in the preamble, Title 7, Chapter XIV, of the 
Code of Federal Regulations is amended as set forth below.

PART 1412--DIRECT AND COUNTER-CYCLICAL PROGRAM AND PEANUT QUOTA 
BUYOUT PROGRAM

0
1. The authority citation for part 1412 continues to read as follows:

    Authority: 7 U.S.C. 7911-7918, 7951-7956; 15 U.S.C. 714b and 
714c.


0
2. Revise Sec.  1412.101 to read as follows:


Sec.  1412.101  Applicability.

    This part governs:
    (a) How crop acreage bases and farm program payment yields are 
established or updated by owners of a farm for the purpose of 
calculating direct and counter-cyclical payments for wheat, corn, grain 
sorghum, barley, oats, upland cotton, rice, peanuts, soybeans, 
sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, 
crambe, sesame seed, and other oilseeds, as determined and announced by 
the Commodity Credit Corporation (CCC), for the years 2002 through 
2007;
    (b) The month in which producers on a farm may enter into annual 
Direct and Counter-cyclical Program (DCP) contracts with CCC for each 
of the years 2002 through 2007;
    (c) The month in which peanut producers may establish such bases 
and yields in order to receive 2002 direct and counter-cyclical 
payments; and
    (d) The month in which peanut producers may assign such bases and 
yields to a farm for each of the years 2003 through 2007.

0
3. Amend Sec.  1412.103 by revising the definitions of ``Covered 
commodity'' and ``Other oilseeds'' to read as follows:


Sec.  1412.103  Definitions.

* * * * *
    Covered commodity means wheat, corn, grain sorghum, barley, oats, 
upland cotton, rice, soybeans, sunflower seed, rapeseed, canola, 
safflower, flaxseed, mustard seed, crambe, sesame seed, and other 
oilseeds as determined by the Secretary.
* * * * *
    Other oilseeds means a crop of sunflower seed, rapeseed, canola, 
safflower, flaxseed, mustard seed, crambe, sesame seed, or, if 
determined and announced by CCC, another oilseed.
* * * * *

0
4. Amend Sec.  1412.201 by adding paragraph (f) to read as follows:


Sec.  1412.201  Election of base acres.

* * * * *
    (f) For the purposes of this section, acreage planted, or prevented 
from being planted, to popcorn shall be considered as acreage planted 
to corn.

0
5. Amend Sec.  1412.301 by adding paragraph (b) to read as follows:


Sec.  1412.301  Direct payment yields for covered commodities, except 
soybeans and other oilseeds.

* * * * *
    (b) For the purposes of this section popcorn shall be considered as 
corn.

0
6. Amend Sec.  1412.401 by revising paragraph (d) to read as follows:


Sec.  1412.401  Direct and counter-cyclical program contract.

* * * * *
    (d) A transfer or change in the interest of a producer in base 
acres on the farm subject to a contract shall result in the termination 
of the contract with respect to such interest, and a refund of 
applicable direct and counter-cyclical payments issued for the farm. 
The contract termination shall be effective on the date of the transfer 
or change. Successors-in-interest on a farm subject to a contract may 
assume all obligations under the contract no later than September 30 of 
the contract year, and receive payment under the contract only after 
applicable direct and counter-cyclical payments previously issued to 
the predecessor for the farm have been refunded to CCC, or a debt for 
any amount not refunded to CCC has been established for the 
predecessor.
* * * * *

0
7. Amend Sec.  1412.406 by revising paragraph (e)(1) to read as 
follows:


Sec.  1412.406  Succession-in-interest to a direct and counter-cyclical 
program contract.

* * * * *
    (e)(1) In any case in which either a direct or counter-cyclical 
payment has previously been made to a predecessor, such payment shall 
not be paid to the successor unless payment has been refunded by the 
predecessor, or a debt for any amount not refunded to CCC has been 
established for the predecessor.
* * * * *

0
8. In Sec.  1412.407(e), revise the counties listed under Mississippi 
to read as follows:


Sec.  1412.407  Planting flexibility.

* * * * *

Mississippi

    Calhoun, Carroll, Coahoma, Covington, DeSoto, George, Humphreys, 
Jefferson Davis, Lowndes, Madison, Marshall, Monroe, Montgomery, 
Prentiss and Rankin.
* * * * *

0
9. Add Sec.  1412.408 to read as follows:


Sec.  1412.408  Redistributing base acreage.

    (a)(1) Subject to the limitation in paragraph (a)(3) of this 
section, the redistribution of a farm's base acreage shall be allowed 
when all owners of the farm execute and submit a written request on a 
CCC-approved form for such redistribution to the FSA county office 
where the records for the farm are administratively maintained.
    (2) If the land of the farm is subject to a deed of trust, lien, or 
mortgage, the holder of the deed of trust, lien, or mortgage must agree 
to the redistribution of base acreage.
    (3) Redistribution of a farm's base acreage to negate or reduce a 
program violation is prohibited.

0
10. Amend Sec.  1412.703 by revising paragraph (f) to read as follows:


Sec.  1412.703  Assignment of average peanut yields and average peanut 
acreages to farms.

* * * * *
    (f) The total number of acres assigned by historic peanut producers 
under paragraph (b) of this section to a farm shall be considered to be 
the farm's base acres for peanuts for the purpose of making direct 
payments and counter-cyclical payments under this part, beginning with 
crop year 2003.

[[Page 37940]]

PART 1421--GRAINS AND SIMILARLY HANDLED COMMODITIES--MARKETING 
ASSISTANCE LOANS AND LOAN DEFICIENCY PAYMENTS FOR THE 2002 THROUGH 
2007 CROP YEARS

0
11. The authority citation for part 1421 continues to read as follows:

    Authority: 7 U.S.C. 7231-7237 and 7931 et seq.; 15 U.S.C. 714b, 
714c.


0
12. Amend Sec.  1421.3 by revising the definition of ``Oilseeds'' to 
read as follows:


Sec.  1421.3  Definitions.

* * * * *
    Oilseeds means any crop of sunflower seed, canola, rapeseed, 
safflower, flaxseed, mustard seed, crambe, sesame seed, and other 
oilseeds as determined and announced by CCC.
* * * * *

PART 1439--EMERGENCY LIVESTOCK ASSISTANCE

0
13. The authority citation for part 1439 is revised to read as follows:

    Authority: 7 U.S.C. 1427a; 15 U.S.C. 714 et seq.; Sec. 1103 Pub. 
L. 105-277, 112 Stat. 2681-42-44; Pub. L. 106-31, 113 Stat. 57; Pub. 
L. 106-78, 113 Stat. 1135; Pub. L. 106-113, 113 Stat. 1501; Sec. 257 
Pub. L. 106-224, 114 Stat. 358; Secs. 802, 806, & 813; Pub. L. 106-
387, 114 Stat. 1549; Pub. L. 108-7, 117 Stat. 11.

Subpart B--Livestock Assistance Program

0
14. Subpart B is revised to read as follows:

Subpart B--Livestock Assistance Program

Sec.
1439.100 Administration.
1439.101 Applicability.
1439.102 Definitions.
1439.103 Application process.
1439.104 County committee determinations of general applicability.
1439.105 Loss criteria.
1439.106 Livestock producer eligibility.
1439.107 Calculation of assistance.
1439.108 Availability of funds.
1439.109 Financial considerations.
1439.110 Appeals.
1439.111 Refunds to CCC; joint and several liability.
1439.112 Miscellaneous.

Subpart B--Livestock Assistance Program


Sec.  1439.100  Administration.

    (a) The regulations in this part will be administered under the 
general supervision and direction of the Executive Vice President, 
Commodity Credit Corporation (CCC), and the Deputy Administrator, for 
Farm Programs, Farm Service Agency (FSA). In the field, the regulations 
in this part will be administered by the FSA State and county 
committees.
    (b) State executive directors, county executive directors, and 
State and county committees do not have the authority to modify or 
waive any of the provisions in this part unless specifically authorized 
by the Deputy Administrator.
    (c) The State committee may take any action authorized or required 
by this part to be taken by the county committee that has not been 
taken by such committee, such as:
    (1) Correct or require a county committee to correct any action 
taken by such county committee that is not in accordance with this 
part; or
    (2) Require a county committee to withhold taking any action that 
is not in accordance with this part.
    (d) No delegation herein to a State or county committee shall 
preclude the Executive Vice President, CCC, or a designee, or the 
Deputy Administrator from determining any question arising under this 
part or from reversing or modifying any determination made by a State 
or county committee.
    (e) Data furnished by the applicants will be used to determine 
eligibility for program benefits. Although participation in the 2002 
Livestock Assistance Program (2002 LAP) is voluntary, program benefits 
will not be provided unless the participant furnishes all requested 
data.


Sec.  1439.101  Applicability.

    (a) This subpart sets forth the terms and conditions applicable to 
the 2002 LAP authorized by Public Law 108-7. Program regulations for 
prior livestock assistance programs can be found at 7 CFR part 1439 as 
it was published in 7 CFR chapet XIV revised as of January 1, 2001. 
Benefits will be provided to eligible livestock producers in the United 
States under this subpart in declared disaster counties that were 
subsequently approved for relief under this part by the Deputy 
Administrator.
    (b) During the 2001 or 2002 calendar years, for 2002 LAP, a 
producer must be in a disaster county that was also approved and 
determined by the Deputy Administrator as having suffered losses during 
calendar year 2001 or 2002. Contiguous counties that were not 
designated as a disaster county in their own right will not be eligible 
for participation in 2002 LAP under this subpart. Grazing losses must 
have occurred on native and improved pasture with permanent vegetative 
cover and other crops planted specifically for the sole purpose of 
providing grazing for livestock, but such losses do not include losses 
on, or with respect to, seeded small grain forage crops.
    (c) To be eligible for assistance under this subpart, a livestock 
producer's pastures must have suffered at least a 40-percent loss of 
normal carrying capacity for a minimum of 3 consecutive months during 
the relevant calendar year. The percent of loss eligible for 
compensation shall not exceed the maximum percentage of grazing loss 
for the county as determined by the county committee. In addition, the 
producer will not be compensated for that part of any loss that would 
represent payment of a loss greater than 80 percent.


Sec.  1439.102  Definitions.

    The definitions set forth in this section shall be applicable for 
all purposes of administering this subpart. The definitions in Sec.  
1439.3 shall also be applicable, except where those definitions 
conflict with the definitions set forth in this subpart, in which case 
the definitions in this section will apply.
    Application means the Livestock Assistance Program Application. The 
Application is available at county FSA offices.
    Disaster county means a county included in the geographic area 
covered by a qualifying natural disaster declaration for calendar year 
2001 or calendar year 2002 for which the request for such declaration 
was submitted during the period beginning on January 1, 2001, and 
ending February 20, 2003, and subsequently approved. The term disaster 
county means the county where the disaster occurred and does not 
include a contiguous county.
    Qualifying natural disaster declaration means:
    (1) A natural disaster declared by the Secretary under section 
321(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 
1961(a)); or
    (2) A major disaster or emergency designated by the President under 
the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5121 et seq.).
    Livestock means beef and dairy cattle, buffalo and beefalo (when 
maintained on the same basis as beef cattle), sheep, goats, swine, and 
equine animals where such equine animals are used commercially for 
human food or kept for the production of food or fiber on the owner's 
farm.

[[Page 37941]]

Sec.  1439.103  Application process.

    (a) Livestock producers must submit a completed application prior 
to the close of business on the date established and announced by the 
Deputy Administrator. The application and any other supporting 
documentation shall be submitted to the county FSA office with 
administrative authority over a producer's eligible grazing land or to 
the county FSA office that maintains the farm records for the livestock 
producer.
    (b) Livestock producers shall certify as to the accuracy of all the 
information contained in the application, and provide any other 
information that CCC determines to be necessary to determine the 
livestock producer's eligibility.


Sec.  1439.104  County committee determinations of general 
applicability.

    (a) County committees shall determine whether due to natural 
disasters their county has suffered a 40-percent loss affecting pasture 
and normal grazing crops for at least 3 consecutive months during 
calendar year 2001 for 2001 eligibility and during calendar year 2002 
for 2002 eligibility. In making this determination, county committees, 
using the best information available from sources including but not 
limited to: the Extension Service, the Natural Resources Conservation 
Service; the Drought Monitor; the Palmer Drought Index; and general 
knowledge of local rainfall data, pasture losses, grazing livestock 
movement out of county, abnormal supplemental feeding practices for 
livestock on pasture and liquidation of grazing livestock, shall 
determine the percentage of grazing losses for pastures on a county-
wide basis. The county committee shall submit rainfall data, percentage 
of grazing losses for each general type of pasture, and the weighted 
average percentage of grazing loss for the county, with State committee 
concurrence, to the Deputy Administrator. The maximum grazing losses 
the county committees shall submit is 80 percent. These determinations 
shall be subject to review and approval of the Deputy Administrator. 
For purposes of this subpart, such counties are called ``eligible 
counties.''
    (b) In each eligible county, the county committee shall determine 
an LAP crop year. The LAP crop year shall be that period of time in a 
calendar year that begins with the date grazing of new growth pasture 
normally begins and ends on the date grazing without supplemental 
feeding normally ends in the county.
    (c) In and for each eligible county, the county committee shall 
determine normal carrying capacities for each type of grazing or 
pasture during the LAP crop year. The normal carrying capacity for the 
LAP crop year shall be the normal carrying capacity the county 
committee determines could be expected from pasture and normal grazing 
crops for livestock for the LAP crop year if a natural disaster had not 
diminished the production of these grazing crops.
    (d) In each eligible county, the county committee shall determine 
the payment period for the county. The payment period for the county 
shall be the period of time during the county's LAP crop year where for 
3 consecutive months during 2001 or 2002, the carrying capacity for 
grazing land or pasture was reduced by 40 percent or more from the 
normal carrying capacity.


Sec.  1439.105  Loss criteria.

    (a) Grazing land for which a livestock producer requests benefits 
must be within the physical boundary of a disaster county. Livestock 
producers in unapproved counties contiguous to an eligible county will 
not receive benefits under this subpart.
    (b) To be eligible for benefits under this subpart, a livestock 
producer in an eligible county must have suffered a loss of grazing 
production equivalent to at least a 40-percent loss of normal carrying 
capacity for a minimum of 3 consecutive months.
    (c) A producer shall specify each type of pasture and percentage of 
loss suffered by each type on the application. In establishing the 
percentage of grazing loss, producers shall consider the amount of 
available grazing production during the LAP crop year, whether more 
than the normal acreage of grazing land was required to support 
livestock during the LAP crop year, and whether supplemental feeding of 
livestock began earlier or later than normal.
    (d) The county committee shall determine the producer's grazing 
loss and shall consider the amount of available grazing production 
during the LAP crop year, whether more than the normal acreage of 
grazing land was required to support livestock during the LAP crop 
year, and whether supplemental feeding of livestock began earlier or 
later than normal. The county committee shall request the producer to 
provide proof of loss of grazing production if the county committee 
determines the producer's certified loss exceeds other similarly 
situated livestock producers.
    (e) The percentage of loss claimed by a livestock producer shall 
not exceed the maximum allowable percentage of grazing loss for the 
county as determined by the county committee in accordance with Sec.  
1439.104(a). Livestock producers will not receive benefits under this 
subpart for any portion of their loss that exceeds 80 percent of normal 
carrying capacity.
    (f) Conservation Reserve Program acres released for haying or 
grazing and seeded small grain forage crops shall not be used to 
calculate losses under this subpart.


Sec.  1439.106  Livestock producer eligibility.

    (a) Only one livestock producer will be eligible for benefits under 
this subpart with respect to an individual animal.
    (b) Only owners, cash lessees, or share lessees of livestock who 
themselves provide the pasture or grazing land, including cash leased 
pasture or grazing land, for the livestock may be considered as 
livestock producers eligible to apply for benefits under this subpart.
    (c) An owner, or cash or share lessee of livestock who uses another 
person to provide pasture or grazing land on a rate-of-gain basis is 
not considered to be the livestock producer eligible to apply for 
benefits under this subpart.
    (d) An owner who pledges livestock as security for a loan shall be 
considered as the person eligible to apply for benefits under this 
subpart if all other requirements of this part are met. Livestock 
leased or being purchased under a contractual agreement that has been 
in effect at least 3 months and establishes an interest for the lessee 
in such livestock shall be considered as being owned by the lessee.
    (e) Livestock must have been owned or leased for at least 3 months 
before becoming eligible for payment.
    (f) The following entities are not eligible for benefits under this 
subpart:
    (1) State or local governments or subdivisions thereof; or
    (2) Any individual or entity who is a foreign person as determined 
in accordance with the provisions of Sec. Sec.  1400.501 and 1400.502 
of this chapter.


Sec.  1439.107  Calculation of assistance.

    (a) The value of LAP assistance determined with respect to a 
livestock producer for each type and weight class of livestock owned or 
leased by such producer shall be the lesser of the amount calculated 
under paragraph (b) of this section (the total value of lost feed needs 
for eligible livestock) or calculated under paragraph (c) of this 
section (the total value of lost eligible pasture).

[[Page 37942]]

    (b) The total value of lost feed needs shall be the amount obtained 
by multiplying:
    (1) The number of days in the payment period the livestock are 
owned or, in the case of purchased livestock, meet the 3-month 
ownership requirement; by
    (2) The number of pounds of corn-equivalent per day, as established 
by CCC, that is determined necessary to provide the energy requirements 
established for the weight class and type of livestock; by
    (3) The 5-year national average market price for corn, as 
determined ($1.92 bushel or $0.0342857 per pound); by
    (4) The number of eligible animals of each type and weight range of 
livestock owned or leased by the person; by
    (5) The percent of the producer's grazing loss during the relevant 
period as certified by the producer and approved by the county 
committee in accordance with Sec.  1439.105.
    (c) The total value of lost eligible pasture shall be the amounts 
for each type of pasture calculated by:
    (1) Dividing the number of acres of each pasture type by the 
carrying capacity established for the pasture, and multiplying the 
result by:
    (2) The 5-year national average market price for corn, as 
determined ($1.92 bushel or $0.0342857 per pound); by
    (3) the daily feed grain equivalent per animal (15.7 pounds of corn 
necessary for a beef cow, factored for the weight class and type of 
livestock, as determined by CCC), by
    (4) The applicable number of days in the LAP payment period; by
    (5) The percent of the producer's grazing loss during the relevant 
period as certified by the producer and approved by the county 
committee in accordance with Sec.  1439.105.
    (d) The final payment shall be the smaller of paragraph (b) or (c) 
of this section and from the final payment amount shall be subtracted 
the sum of the amounts received by the producer under the Livestock 
Compensation Program, as published in the Federal Register on October 
10, 2002 (67 FR 63070), and the 2002 Cattle Feed Program, as published 
on September 3, 2002 (67 FR 56260). The final payment shall not exceed 
50 percent of the smaller of paragraph (b) or (c) of this section 
determined prior to subtracting the amounts received by the producer 
under the Livestock Compensation Program, as published in the Federal 
Register on October 10, 2002 (67 FR 63070), the 2002 Cattle Feed 
Program, as published on September 3, 2002 (67 FR 56260), and the 
Livestock Compensation Program II, as published on May 5, 2003 (68 FR 
23688).
    (e) The final payment calculated in paragraph (d) of this section 
shall be multiplied by the national factor if required under Sec.  
1439.108.
    (f) Seeded small grain forage crops shall not be counted as grazing 
land under paragraph (c) of this section with respect to supporting 
eligible livestock.
    (g) The number of equine animals that are used to calculate 
benefits under this subpart and in paragraph (a) of this section are 
limited to the number actually needed to produce food and fiber on the 
producer's farm or to breed horses and mules to be used to produce food 
and fiber on the owner's farm, and shall not include animals that are 
used for recreational purposes or are running wild or uncontrolled on 
land owned or leased by the owner.


Sec.  1439.108  Availability of funds.

    In the event that the total amount of claims submitted under this 
subpart exceed $250 million, each payment shall be reduced by a uniform 
national percentage. Such payment reductions shall be made after the 
imposition of applicable payment limitation provisions.


Sec.  1439.109  Financial considerations.

    The provisions of Sec. Sec.  1439.10 and 1439.11 apply to 2002 LAP.


Sec.  1439.110  Appeals.

    Determinations made under this subpart are subject to 
reconsideration or appeal in accordance with parts 780 and 11 of this 
title.


Sec.  1439.111  Refunds to CCC; joint and several liability.

    (a) In the event there is a failure to comply with any term, 
requirement, or condition for payment or assistance arising under this 
part, and if any refund of a payment to CCC shall otherwise become due 
in connection with this part, all payments made in regard to such 
matter shall be refunded to CCC, together with interest as determined 
in accordance with paragraph (b) of this section and late-payment 
charges as provided for in part 1403 of this chapter.
    (b) All persons with a financial interest in the operation or in an 
application for payment shall be jointly and severally liable for any 
refund, including related charges, that is determined to be due CCC for 
any reason under this part.
    (c) Interest shall be applicable to refunds required of the 
livestock owner or other party receiving assistance or a payment if CCC 
determines that payments or other assistance were provided to the owner 
and the owner was not eligible for such assistance. Such interest shall 
be charged at the rate of interest that the United States Treasury 
charges CCC for funds, as of the date CCC made such benefits. Such 
interest that is determined to be due CCC shall accrue from the date 
such benefits were made available by CCC to the date of repayment or 
the date interest increases in accordance with part 1403 of this 
chapter. 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 livestock owner or other individual or entity receiving benefits.
    (d) Interest otherwise determined due in accordance with paragraph 
(c) of this section may be waived with respect to refunds required of 
the owner or other program recipient because of unintentional misaction 
on the part of the owner or other individual or entity, 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) Individuals or entities who are a party to any program operated 
under this part must refund to CCC any excess payments made by CCC with 
respect to such program.
    (g) In the event that any request for assistance or payment under 
this part was established as a result of erroneous information or a 
miscalculation, the assistance or payment shall be recomputed and any 
excess refunded with applicable interest.


Sec.  1439.112  Miscellaneous.

    (a) Any remedies permitted CCC under this part shall be in addition 
to any other remedy, including, but not limited to criminal remedies, 
or actions for damages in favor of CCC, or the United States, as may be 
permitted by law.
    (b) Absent a scheme or device to defeat the purpose of the program, 
CCC may waive the demand that could otherwise be made for refunds.
    (c) Payments under this subpart are subject to provisions contained 
in subpart A of this part including, but not limited to, provisions 
concerning misrepresentations, payment limitations, and refunds to CCC, 
liens, assignment of payments, and appeals, and maintenance of books 
and records. In addition, other parts of this chapter and of chapter 
VII of this Title relating to payments in event of death, the handling 
of claims, and other matters

[[Page 37943]]

may apply, as may other provisions of law and regulation.
    (d) Any payments not earned that have been paid must be returned 
with interest subject to such other remedies as may be allowed by law.
    (e) No interest will be paid or accrue on benefits under this 
subpart that are delayed or otherwise not timely issued unless 
otherwise mandated by law.
    (f) Nothing in this subpart shall require a commitment of funds to 
this subpart in excess of that determined to be appropriate by the 
Deputy Administrator and/or CCC.
    (g) In no instance may the amount expended under this subpart 
exceed $250 million.
    (h) Payments under this subpart shall be made without regard to 
questions of title under State law and without regard to any claim or 
lien against the livestock, or proceeds thereof, in favor of the owner 
or any other creditor except agencies of the U.S. Government.
    (i) 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.
    (j) In those instances in which, prior to the issuance of this 
regulation, a producer has signed a power of attorney for a person or 
entity indicating that such power shall extend to ``all above 
programs'', without limitation, such power will be considered to extend 
to this program unless by July 10, 2003 the person granting the power 
notifies the local FSA office for the control county that the grantee 
of the power is not authorized to handle transactions for this program 
for the grantor.
    (k) Livestock producers or any other individual or entity seeking 
or receiving assistance under this part shall maintain and retain 
records that will permit verification of livestock and grazing for at 
least 3 years following the end of the calendar year in which payment 
was made, or for such additional period as CCC may request. An 
examination of such records by a duly authorized representative of the 
United States Government shall be permitted at any time during business 
hours.
    (l) A person shall be ineligible to receive assistance under 2002 
LAP and be subject to such other remedies as may be allowed by law, if, 
with respect to the 2002 LAP, it is determined by the State committee 
or the county committee or an official of FSA that such person has:
    (1) Adopted any scheme or other device that tends to defeat the 
purpose of a program operated under this part;
    (2) Made any fraudulent representation with respect to such 
program; or
    (3) Misrepresented any fact affecting a program determination.
0
15. Part 1480 is revised to read as follows:

PART 1480--2001 AND 2002-CROP DISASTER PROGRAM

Sec.
1480.1 Applicability.
1480.2 Administration.
1480.3 Definitions.
1480.4 Producer eligibility.
1480.5 Time for filing application.
1480.6 Limitations on payments and other benefits.
1480.7 Requirement to purchase crop insurance and non-insurable 
coverage.
1480.8 Miscellaneous provisions.
1480.9 Matters of general applicability.
1480.10 Eligible disaster conditions.
1480.11 Qualifying 2001 or 2002-crop losses.
1480.12 Rates and yields; calculating payments.
1480.13 Production losses, producer responsibility.
1480.14 Determination of production.
1480.15 Calculation of acreage for crop losses other than prevented 
planted.
1480.16 Calculation of prevented planted acreage.
1480.17 Quantity adjustments for diminished quality for certain 
crops.
1480.18 Value loss crops.
1480.19 Other provisions for specialty crops.
1480.20 Misrepresentation and scheme or device.
1480.21 Offsets, assignments, and debt settlement.
1480.22 Compliance with highly erodible land and wetland 
conservation provisions.

    Authority: Pub. L. 106-387, 114 Stat: 1549, Pub. L. 108-7 117 
Stat. 11 (15 U.S.C. 714 et seq.).


Sec.  1480.1  Applicability.

    This part sets forth the terms and conditions of the 2001 and 2002-
Crop Disaster Program (CDP). The CDP makes disaster payments to 
producers who have incurred losses in quantity or quality to eligible 
2001 or 2002 crops due to disasters as determined by the Commodity 
Credit Corporation (CCC) under the Agricultural Assistance Act of 2003 
(Pub. L. 108-007).


Sec.  1480.2  Administration.

    (a) The program will be administered under the general supervision 
of the executive Vice President, CCC, and shall be carried out in the 
field by Farm Service Agency (FSA) State and county committees.
    (b) State and county committees and representatives do not have the 
authority to modify or waive any of the provisions of this part.
    (c) The State committee shall take any action required by this part 
that has not been taken by an county committee. The State committee 
shall also:
    (1) Correct or require an county committee to correct any action 
taken by such FSA county committee that is not in accordance with this 
part; and
    (2) Require an county committee to withhold taking or reverse any 
action that is not in accordance with this part.
    (d) No delegation in this part to an State or county committee 
shall prevent the Deputy Administrator from determining any question 
arising under the program or from reversing or modifying any 
determination made by an State or county committee.
    (e) The Deputy Administrator may authorize State and county 
committees to waive or modify non-statutory deadlines or other program 
requirements in cases where lateness or failure to meet such other 
requirements does not adversely affect the operation of the program.


Sec.  1480.3  Definitions.

    The definitions in this section apply to all determinations made 
under this part. The terms defined in part 718 of this title and 1400 
and 1437 of this chapter shall also be applicable, except where those 
definitions conflict with the definitions set forth in this section. 
The definitions follow:
    Actual production means the total quantity of the crop appraised, 
harvested or that could have been harvested as determined by the FSA 
State or county committee in accordance with instructions issued by the 
Deputy Administrator.
    Additional coverage means a plan of crop insurance coverage 
providing a level of coverage greater than the level available under 
catastrophic risk protection.
    Administrative fee means an amount the producer must pay for NAP 
for non-insurable crops.
    Appraised production means production determined by FSA, or a 
company reinsured by the Federal Crop Insurance Corporation (FCIC), 
that was unharvested but which was determined to reflect the crop's 
yield potential at the time of appraisal.
    Approved yield means the amount of production per acre, computed in 
accordance with FCIC's Actual Production History Program (7 CFR part 
400, subpart G) or for crops not included under 7 CFR part 400, subpart 
G, the yield used to determine the guarantee. For crops covered under 
the Noninsured Crop Disaster Assistance program, the approved yield is 
established according to part 1437 of

[[Page 37944]]

this chapter. Only the approved yields based on production evidence 
submitted to FSA prior to the 2003 Act will be used for purposes of the 
2001 or 2002 CDP. Other yields may be assigned when an eligible 
approved yield is not available.
    Aquaculture means the reproduction and rearing of aquatic species 
in controlled or selected environments, including, but not limited to, 
ocean ranching (except private ocean ranching of Pacific salmon for 
profit in those States where such ranching is prohibited by law).
    Aquaculture facility means any land or structure including, but not 
limited to, a laboratory, hatchery, rearing pond, raceway, pen, 
incubator, or other equipment used in aquaculture.
    Aquacultural species means any aquacultural species as defined in 
part 1437 of this chapter.
    Average market price means the price or dollar equivalent on an 
appropriate basis for an eligible crop established by CCC for 
determining payment amounts. Such price will be based on the harvest 
basis without the inclusion of transportation, storage, processing, 
packing, marketing, or other post-harvesting expenses and will be based 
on historical data.
    Catastrophic risk protection means the minimum level of coverage 
offered by FCIC.
    CCC means the Commodity Credit Corporation.
    Control county means for a producer with farming interests in only 
one county, the county FSA office in which the producer's farm(s) is 
administratively located; or for a producer with farming interests that 
are administratively located in more than one county FSA office, the 
county FSA office designated by FSA to control the payments received by 
the producer.
    County committee means the county FSA committee.
    Crop insurance means an insurance policy reinsured by the Federal 
Crop Insurance Corporation under the provisions of the Federal Crop 
Insurance Act, as amended.
    Crop year means: for insured and uninsured crops, the crop year as 
defined according to the applicable crop insurance policy; and for non-
insurable crops, the year harvest normally begins for the crop, except 
the crop year for all aquacultural species and nursery crops shall mean 
the period from October 1 through the following September 30, and the 
crop year for purposes of calculating honey losses shall be the period 
running from January 1 through the following December 31.
    Disaster means damaging weather, including drought, excessive 
moisture, hail, freeze, tornado, hurricane, typhoon, excessive wind, 
excessive heat, weather-related saltwater intrusion, weather-related 
irrigation water rationing, and earthquake and volcanic eruptions, or 
any combination thereof. Disaster includes a related condition that 
occurs as a result of the damaging weather and exacerbates the 
condition of the crop, such as disease and insect infestation.
    Eligible crop means a crop insured by FCIC as defined in part 400 
of this title, or included under the non-insured crop disaster 
assistance program (NAP) as defined under part 1437 of this chapter. 
Tobacco, sugar cane, and sugar beets are not eligible under this part. 
Losses of livestock and livestock related losses are not compensable 
under this part but may, depending on the circumstances, be compensable 
under part 1439 of this chapter.
    End use means the purpose for which the harvested crop is used, 
such as grain, hay or seed.
    Expected market price (price election) means the price per unit of 
production (or other basis as determined by FCIC) anticipated during 
the period the insured crop normally is marketed by producers. This 
price will be set by FCIC before the sales closing date for the crop. 
The expected market price may be less than the actual price paid by 
buyers if such price typically includes remuneration for significant 
amounts of post-production expenses such as conditioning, culling, 
sorting, packing, etc.
    Expected production means, for an agricultural unit, the historic 
yield multiplied by the number of planted or prevented acres of the 
crop for the unit.
    FCIC means the Federal Crop Insurance Corporation, a wholly owned 
Government Corporation within USDA.
    Final planting date means the date established by RMA for insured 
and uninsured crops by which the crop must be initially planted in 
order to be insured for the full production guarantee or amount of 
insurance per acre. For non-insurable crops, the final planting date is 
the end of the planting period for the crop as determined by CCC.
    Flood prevention means with respect to aquacultural species, 
placing the aquacultural facility in an area not prone to flood; in the 
case of raceways, providing devices or structures designed for the 
control of water level; and for nursery crops, placing containerized 
stock in a raised area above expected flood level and providing 
draining facilities, such as drainage ditches or tile, gravel, cinder 
or sand base.
    FSA means the Farm Service Agency.
    Good nursery growing practices means utilizing flood prevention, 
growing media, fertilization to obtain expected production results, 
irrigation, insect and disease control, weed, rodent and wildlife 
control, and over winterization storage facilities.
    Growing media means for aquacultural species, media that provides 
nutrients necessary for the production of the aquacultural species and 
protects the aquacultural species from harmful species or chemicals; 
and for nursery crops, media designed to prevent root rot and other 
media-related problems through a well-drained media with a minimum 20 
percent air pore space and pH adjustment for the type of plant produced
    Harvested means:
    (1) For insured and uninsured crops, harvested as defined according 
to the applicable crop insurance policy;
    (2) For non-insurable single harvest crops, that a crop has been 
removed from the field, either by hand or mechanically, or by grazing 
of livestock;
    (3) For non-insurable crops with potential multiple harvests in 1 
year or harvested over multiple years, that the producer has, by hand 
or mechanically, removed at least one mature crop from the field during 
the crop year:
    (4) For mechanically harvested non-insurable crops, that the crop 
has been removed from the field and placed in a truck or other 
conveyance, except hay is considered harvested when in the bale, 
whether removed from the field or not. Grazed land will not be 
considered harvested for the purpose of determining an unharvested or 
prevented planting payment factor.
    Historic yield means, for a unit, the higher of the county average 
yield or the producer's approved yield. The COC may adjust the yield if 
the producer, practice, crop type or area is not capable of producing a 
crop at that level during the normal year. The yield may also be 
adjusted, or production assigned for ineligible causes of loss. The 
historic yield for:
    (1) An insured participant shall be the higher of the county 
average yield listed on the crop table or the approved federal crop 
insurance APH, for the disaster year.
    (2) NAP participants shall be the higher of the county average 
yield as listed on the crop table or approved NAP APH for the disaster 
year.
    (3) Participants without federal crop insurance or NAP coverage for 
the disaster year shall be assigned the county average listed on the 
crop table.

[[Page 37945]]

    Insurance is available means when crop information is contained in 
RMA's county actuarial documents for a particular crop and a policy can 
be obtained through the RMA system, except if the Group Risk Plan or 
Adjusted Gross Revenue Plan of crop insurance was the only plan of 
insurance available for the crop in the county in the applicable crop 
year, insurance is considered not available for that crop.
    Insured crops means those crops covered by crop insurance pursuant 
to 7 CFR chapter IV and for which the producer purchased either the 
catastrophic or buy-up level of crop insurance so available.
    Limited coverage means plans of crop insurance offering coverage 
that is equal to or greater than 50 percent of the approved yield 
indemnified at 100 percent of the expected market price, or a 
comparable coverage as established by FCIC, but less than 65 percent of 
the approved yield indemnified at 100 percent of the expected market 
price, or a comparable coverage as established by FCIC.
    Maximum loss level means the maximum level of crop loss to be 
applied to a producer without acceptable production records. Loss 
levels are expressed in either a percent of loss or yield per acre, and 
should reflect the amount of production that a producer should have 
made considering the eligible disaster conditions in the area or 
county, as determined by the county committee in accordance with 
instructions issued by the Deputy Administrator.
    Multi-use crop means a crop intended for more than one end use 
during the calendar year such as grass harvested for seed, hay, and/or 
grazing.
    Multiple cropping means the planting of two or more different crops 
on the same acreage for harvest within the same crop year.
    Multiple planting means the planting for harvest of the same crop 
in more than one planting period in a crop year on different acreage.
    NASS means the National Agricultural Statistics Service.
    Net Crop Insurance Indemnity means the indemnity minus the producer 
paid premium.
    Non-insurable crops means those crops for which crop insurance was 
not available.
    Normal mortality means the percentage of dead aquacultural species 
that would normally occur during the crop year.
    Pass-through funds means revenue that goes through, but does not 
remain in, a person's account, such as money collected by an auction 
house or consignment business that is subsequently paid to the sellers 
or consignors, less a commission withheld by the auction house.
    Person means person as defined in part 1400 of this chapter, and 
all rules with respect to the determination of a person found in that 
part shall be applicable to this part. However, the determinations made 
in this part in accordance with 7 CFR part 1400, subpart B, Person 
Determinations, shall also take into account any affiliation with any 
entity in which an individual or entity has an interest, irrespective 
of whether or not such entities are considered to be engaged in 
farming.
    Planted acreage means land in which seed, plants, or trees have 
been placed, appropriate for the crop and planting method, at a correct 
depth, into a seed bed that has been properly prepared for the planting 
method and production practice normal to the area as determined by the 
county committee.
    Prevented planting means the inability to plant an eligible crop 
with proper equipment during the planting period as a result of an 
eligible cause of loss, as determined by CCC. The eligible cause of 
loss must have:
    (1) Occurred after a previous planting period for the crop, and
    (2) Occurred before the final planting date for the crop in the 
applicable crop year or in the case of multiple plantings, the harvest 
date of the first planting in the applicable planting period, and
    (3) Generally affected other producers in the area, as determined 
by CCC.
    Production means quantity of the crop or commodity produced 
expressed in a specific unit of measure such as bushels, pounds, etc.
    Rate means price per unit of the crop or commodity.
    Related condition means with respect to disaster, a condition that 
causes deterioration of a crop such as insect infestation, plant 
disease, or aflatoxin that is accelerated or exacerbated as a result of 
damaging weather as determined in accordance with instructions issued 
by the Deputy Administrator.
    Reliable production records means evidence provided by the producer 
that is used to substantiate the amount of production reported when 
verifiable records are not available, including copies of receipts, 
ledgers of income, income statements of deposit slips, register tapes, 
invoices for custom harvesting, and records to verify production costs, 
contemporaneous measurements, truck scale tickets, and contemporaneous 
diaries that are determined acceptable by the county committee.
    Repeat crop means with respect to a producer's production, a 
commodity that is planted or prevented from being planted in more than 
one planting period on the same acreage in the same crop year.
    RMA means the Risk Management Agency.
    Salvage value means the dollar amount or equivalent for the 
quantity of the commodity that cannot be marketed or sold in any 
recognized market for the crop.
    Secondary use means the harvesting of a crop for a use other than 
the intended use, except for crops with intended use of grain, but 
harvested as silage, ensilage, cobbage, hay, cracked, rolled, or 
crimped.
    Secondary use value means the value determined by multiplying the 
quantity of secondary use times the CCC-established price for this use.
    State committee means the FSA State committee.
    Uninsured crops means those crops for which Federal crop insurance 
was available, but the producer did not purchase insurance.
    Unit means, unless otherwise determined by the Deputy 
Administrator, basic unit as described in part 457 of this title that, 
for ornamental nursery production, shall include all eligible plant 
species and sizes.
    Unit of measure means:
    (1) For all insured and uninsured crops, the FCIC-established unit 
of measure;
    (2) For all non-insurable crops, if available, the established unit 
of measure used for the 2002 Noninsured Crop Assistance Program price 
and yield;
    (3) For aquacultural species, a standard unit of measure such as 
gallons, pounds, inches or pieces, established by the State committee 
for all aquacultural species or varieties;
    (4) For turfgrass sod, a square yard;
    (5) For maple sap, a gallon; and
    (6) For all other crops, the smallest unit of measure that lends 
itself to the greatest level of accuracy with minimal use of fractions, 
as determined by the State committee.
    United States means all 50 States of the United States, the 
Commonwealth of Puerto Rico, the Virgin Islands of the United States, 
and to the extent the Deputy Administrator determines it to be feasible 
and appropriate Guam, American Samoa, the Commonwealth of the Northern 
Mariana Islands and the former Trust Territory of the Pacific Islands, 
which include Palau, Federated

[[Page 37946]]

States of Micronesia and the Marshall Islands.
    USDA means United States Department of Agriculture.
    Value loss crop will have the meaning assigned in part 1437 of this 
chapter.
    Verifiable production records means evidence that is used to 
substantiate the amount of production reported and that can be verified 
by CCC through an independent source.
    Yield means unit of production, measured in bushels, pounds, etc., 
per area of consideration, usually measured in acres.


Sec.  1480.4  Producer eligibility.

    (a) Producers in the United States will be eligible to receive 
disaster benefits under this part only if they have suffered losses of 
eligible crops in 2001 or 2002 as a result of a disaster or related 
condition, or as further specified in this part. Producers may not 
receive benefits with respect to volunteer stands of crops.
    (b) Payments may be made for losses suffered by an eligible 
producer who is now deceased or is a dissolved entity if a 
representative who currently has authority to enter into a contract for 
the producer signs the application for payment. Proof of authority to 
sign for the deceased producer or dissolved entity must be provided. If 
a producer is now a dissolved general partnership or joint venture, all 
members of the general partnership or joint venture at the time of 
dissolution or their duly authorized representatives must sign the 
application for payment.
    (c) As a condition to receive benefits under this part, a producer 
must have been in compliance with the Highly Erodible Land Conservation 
and Wetland Conservation provisions of 7 CFR part 12, for the 2001 or 
2002 crop year, as applicable, and must not otherwise be barred from 
receiving benefits under 7 CFR part 12 or any other law.


Sec.  1480.5  Time for filing application.

    Applications for benefits under the 2001 or 2002-Crop Disaster 
Program must be filed in the county FSA office serving the county where 
the producer's farm is located for administrative purposes before the 
close of business on August 25, 2003, or such other later date that may 
be announced by the Deputy Administrator.


Sec.  1480.6  Limitations on payments and other benefits.

    (a) A producer may receive disaster benefits on either 2001 or 2002 
crop losses as specified under this part.
    (b) Payments will not be made under this part for grazing losses.
    (c) CCC may divide and classify crops based on loss susceptibility, 
yield, and other factors.
    (d) No person shall receive more than a total of $80,000 in 
disaster benefits under this part, unless otherwise specified.
    (e) No person shall receive disaster benefits under this part in an 
amount that exceeds 95 percent of the value of the expected production 
for the relevant period as determined by CCC. The sum of the value of 
the crop not lost if any; the disaster payment; and the net crop 
insurance indemnity, cannot exceed 95 percent of what the crop's value 
would have been if there had been no loss.
    (f) A person whose gross revenue is in excess of $2.5 million for 
the preceding tax year shall not be eligible to receive disaster 
benefits under this part. Gross revenue includes the total income and 
total gross receipts of the person, before any reductions. Gross 
revenue shall not be adjusted, amended, discounted, netted or modified 
for any reason. No deductions for costs, expenses, or pass through 
funds will be deducted from any calculation of gross revenue. For 
purposes of making this determination, gross revenue means the total 
gross receipts received from farming, ranching and forestry operations 
if the person receives more than 50 percent of such person's gross 
income from farming or ranching; or the total gross receipts received 
from all sources if the person receives 50 percent or less of such 
person's gross receipts from farming, ranching and forestry.


Sec.  1480.7  Requirement to purchase crop insurance and non-insurable 
coverage.

    (a) Except as provided further in this section, any producer who 
elected not to purchase crop insurance on an insurable 2001 or 2002 
crop for which the producer receives crop loss assistance or for non-
insurable crops, elected not to participate in NAP for the year for 
which benefits are received must:
    (1) Purchase crop insurance with additional coverage on that crop 
for the 2003 and 2004 crop years for the insurable crops.
    (2) NAP coverage by paying the administrative fee by the applicable 
State filing deadline and complete all required program requirements 
including yearly acreage reports, for the non-insurable crop for both 
2003 and 2004 crop years
    (b) If, at the time the producer applies for the 2001 or 2002 CDP 
the sales closing date for 2003 insurable crops, or for 2003 non-
insurable crops for which the producer sought benefits under the 2001 
or 2002 CDP has passed, the producer must purchase crop insurance 
policy or obtain NAP coverage, as applicable, for the next available 2 
crops years.
    (c) If any producer fails to purchase crop insurance and/or NAP, as 
required in paragraph (a) or (b) of this section, the producer shall 
reimburse CCC for the full amount of the assistance, plus interest, 
provided to the producer under this part.


Sec.  1480.8  Miscellaneous provisions.

    (a) A person shall be ineligible to receive disaster assistance 
under this part if it is determined by the State or county committee or 
an official of FSA that such person has:
    (1) Adopted any scheme or other device that tends to defeat the 
purpose of a program operated under this part;
    (2) Made any fraudulent representation with respect to such 
program; or
    (3) Misrepresented any fact affecting a program determination.
    (b) All persons with a financial interest in the operation 
receiving benefits under this part shall be jointly and severally 
liable for any refund, including related charges, which is determined 
to be due CCC for any reason under this part.
    (c) In the event that any request for assistance or payment under 
this part was established as result of erroneous information or a 
miscalculation, the assistance or payment shall be recalculated and any 
excess refunded with applicable interest.
    (d) The liability of any person for any penalty under this part or 
for any refund to CCC or related charge arising in connection therewith 
shall be in addition to any other liability of such person under any 
civil or criminal fraud statute or any other provision of law 
including, but not limited to: 18 U.S.C. 286, 287, 371, 641, 651, 1001 
and 1014; 15 U.S.C. 714m; and 31 U.S.C. 3729.
    (e) Any person who is dissatisfied with a determination made with 
respect to this part may make a request for reconsideration or appeal 
of such determination in accordance with the regulations set forth in 
parts 11 and 780 of this title.
    (f) 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.
    (g) For the purposes of 28 U.S.C. 3201(e), CCC waives the 
restriction on receipt of funds or benefits under this program but only 
as to beneficiaries who as a condition of such waiver agree to apply 
the 2001 or 2002 CDP benefits

[[Page 37947]]

to reduce the amount of the judgment lien.


Sec.  1480.9  Matters of general applicability.

    (a) For calculations of loss made with respect to insured crops, 
the producer's existing unit structure will be used as the basis for 
the calculation and may include optional units established in 
accordance with part 457 of this title. Insured crops may have basic 
units established if the existing unit structure is based on enterprise 
units or whole county units or written agreements. For uninsured and 
non-insurable crops, basic units will be established for these 
purposes.
    (b) County average yield for loss calculations will be the average 
of the 1996 through 2000 official county yields established by CCC, 
excluding the years with the highest and lowest yields, respectively.
    (c) County committees will assign production when the county 
committee determines:
    (1) An acceptable appraisal or record of harvested production does 
not exist;
    (2) The loss is due to an ineligible cause of loss or practices, 
soil type, climate, or other environmental factors, that cause lower 
yields than those upon which the historic yield is based;
    (3) The producer has a contract providing a guaranteed payment for 
all or a portion of the crop; or
    (4) The crop is planted beyond the normal planting period for the 
crop.
    (d) The county committee shall establish a maximum loss level that 
should reflect the amount of production producers should have produced 
considering the eligible disaster conditions in the area or county for 
the same crop. The maximum loss level for the county shall be expressed 
as either a percent of loss or yield per acre. The maximum loss level 
will apply when:
    (1) Unharvested acreage has not been appraised by FSA, or a company 
reinsured by FCIC; or
    (2) Acceptable production records for harvested acres are not 
available from any source.
    (e) Assigned production or reduced yield for practices that result 
in lower yields than those for which the historic yield is based shall 
be established based on the acres found to have been subjected to those 
practices.
    (f) Assigned production for crops planted beyond the normal 
planting period for the crop shall be calculated according to the 
lateness of planting the crop. With the exception of replanted crops, 
if the crop is planted after the final planting date by:
    (1) Through 10 calendar days, the assigned production reduction 
will be based on one percent of the payment yield for each day 
involved;
    (2) Eleven (11) through 24 calendar days, the assigned production 
reduction will be based on 10 percent of the payment yield plus an 
additional two percent reduction of the payment yield for each day of 
days 11 through 24 that are involved; and
    (3) Twenty-five (25) or more calendar days or a date from which the 
crop would not reasonably be expected to mature by harvest, the 
assigned production reduction will be based on 50 percent of the 
payment yield or such greater amount determined by the county committee 
to be appropriate.
    (4) CCC may adjust items 1 through 3 to make a comparable 
assignment for short rotation crops such as vegetables which may have a 
30-day growing period.
    (g) Assigned production for producers with contracts to receive a 
guaranteed payment for production of an eligible crop will be 
established by the county committee by:
    (1) Determining the total amount of guaranteed payment for the 
unit;
    (2) Converting the guaranteed payment to guaranteed production by 
dividing the total amount of guaranteed payment by the approved county 
price for the crop or variety or such other factor deemed appropriate 
if otherwise the production would appear to be too high; and
    (3) Establishing the production for the unit as the greater of the 
actual net production for the unit or the guaranteed payment, or 
combination thereof if greater.


Sec.  1480.10  Eligible disaster conditions.

    (a) Except as provided in paragraph (b) of this section, this part 
applies to losses where the crop could not be planted or crop 
production, both in quantity and quality, was adversely affected by 
disasters as defined in 1480.3 or:
    (1) Insect infestation as a related condition to damaging weather 
if documented by COC with published data;
    (2) Disease as a related condition to damaging weather;
    (3) Plum pox virus;
    (4) Pierce's disease;
    (5) Watermelon sudden wilt;
    (6) Salt water intrusion of an irrigation supply;
    (7) Mexican fruit fly quarantine in San Diego and San Bernardino 
counties in California;
    (8) Irrigation water rationing if proof is provided that water was 
rationed by a Government entity or water district (unless the producer 
was compensated by the Government entity or water district);
    (9) Grasshoppers;
    (10) Lack of water supply due to drought conditions for irrigated 
crops;
    (11) Mormon crickets; or
    (12) Other causes or factors as determined by the Deputy 
Administrator.
    (b) Disaster benefits will not be available under this part if the 
crop could not be planted or crop production, both in quantity and 
quality, was adversely affected by:
    (1) Poor farming practices;
    (2) Poor management decisions; or
    (3) Drifting herbicides.


Sec.  1480.11  Qualifying 2001 or 2002-crop losses.

    (a) To receive disaster benefits under this part, the county 
committee must determine that because of a disaster, the producer with 
respect to the 2001 or 2002 crop year:
    (1) Was prevented from planting a crop;
    (2) Sustained a loss in excess of 35 percent of the expected 
production of a crop; or
    (3) Sustained a loss in excess of 35 percent of the value for value 
loss crops.
    (b) Calculation of benefits under this part shall not include 
losses:
    (1) That are the result of poor management decisions or poor 
farming practices as determined by the county committee on a case-by-
case basis;
    (2) That are the result of the failure of the producer to re-seed 
or replant to the same crop in the county where it is customary to re-
seed or replant after a loss;
    (3) That are not as a result of a natural disaster, unless 
otherwise specified in Sec.  1480.10;
    (4) To crops not intended for harvest in crop year 2002;
    (5) To losses of by-products resulting from processing or 
harvesting a crop, such as cotton seed, peanut shells, wheat or oat 
straw;
    (6) To home gardens;
    (7) That are a result of water contained or released by any 
governmental, public, or private dam or reservoir project if an 
easement exists on the acreage affected for the containment or release 
of the water; or
    (8) If losses could be attributed to conditions occurring outside 
of the applicable crop year growing season.
    (c) Calculation of benefits under this part for ornamental nursery 
stock shall not include losses:
    (1) Caused by a failure of power supply or brownouts;
    (2) Caused by the inability to market nursery stock as a result of 
quarantine,

[[Page 37948]]

boycott, or refusal of a buyer to accept production;
    (3) Caused by fire;
    (4) Affecting crops where weeds and other forms of undergrowth in 
the vicinity of the nursery stock that have not been controlled; or
    (5) Caused by the collapse or failure of buildings or structures.
    (d) Calculation of benefits under this part for honey where the 
honey production by colonies or bees was diminished, shall not include 
losses:
    (1) Where the inability to extract was due to the unavailability of 
equipment; the collapse or failure of equipment or apparatus used in 
the honey operation;
    (2) Resulting from improper storage of honey;
    (3) To honey production because of bee feeding;
    (4) Caused by the application of chemicals;
    (5) Caused by theft, fire, or vandalism;
    (6) Caused by the movement of bees by the producer or any other 
person;
    (7) Due to disease or pest infestation of the colonies; or
    (8) Loss calculations shall take into account other conditions and 
adjustments provided for in this part.


Sec.  1480.12  Rates and yields; calculating payments.

    (a)(1) Payments made under this part to a producer for a loss on a 
unit with respect to yield based crops are determined by multiplying 
the payment rate established for the crop by CCC, times the loss of 
production which exceeds 35 percent of the expected production, as 
determined by CCC, of the unit.
    (2) Payments made under this part to a producer for a loss on a 
unit with respect to value based crops are determined by multiplying: 
the payment rate established for the crop by CCC, times the loss of 
value which exceeds 35 percent of the expected production value, as 
determined by CCC, of the unit.
    (3) Payments made under this part may be adjusted by CCC to reflect 
losses due to quality factors adversely affected by a disaster. For FSA 
loan commodities, production to count may be reduced using the schedule 
of premiums and discounts for FSA commodity loans. Additional quality 
loss adjustments may be made for single market crops, using a 20 
percent quality loss threshold. The quality loss threshold may be 
determined by multiplying: 65 percent of the affected quantity, times 
65 percent of the result of subtracting: the value of the crop due to 
the effects of the disaster, as determined by CCC, from the value of 
the crop if it had not been affected by the disaster, as determined by 
CCC. Quality adjustments for multiple market crops sold to a lower 
priced market as a result of poor quality will be determined by using 
the difference between the average market price for the intended use 
and the average market price for the actual use, as determined by CCC.
    (b) Payment rates for 2001 or 2002 year crop losses shall be:
    (1) 50 percent of the maximum established RMA price for insured 
crops;
    (2) 50 percent of the State average price for non-insurable crops; 
and
    (3) 45 percent of the maximum established RMA price for uninsured 
crops.
    (c) Except as provided elsewhere in this part, disaster benefits 
under this part for losses to crops shall be paid in an amount 
determined by multiplying the loss of production in excess of 35 
percent of the expected production by the applicable payment rate 
established according to paragraph (a) of this section.
    (d) Up to three separate payment rates and yields for the same crop 
may be established by the county committee as authorized by the Deputy 
Administrator, when there is supporting data from NASS or other sources 
approved by CCC that show there is a significant difference in yield or 
value based on a distinct and separate end use of the crop. In spite of 
differences in yield or values, separate rates or yields shall not be 
established for crops with different cultural practices, such as 
organically or hydroponically grown.
    (e) Production from all end uses of a multi-use crop or all 
secondary uses for multiple market crops will be calculated separately 
and summarized together.
    (f) Each eligible producer's share of a disaster payment shall be 
based on the producer's share of the crop or crop proceeds, or, if no 
crop was produced, the share the producer would have received if the 
crop had been produced.
    (g) When calculating a payment for a unit loss:
    (1) An unharvested payment factor shall be applied to crop acreage 
planted but not harvested;
    (2) A prevented planting factor shall be applied to any prevented 
planted acreage eligible for payment; and
    (3) Unharvested payment factors may be adjusted if costs normally 
associated with growing the crop are not incurred.


Sec.  1480.13  Production losses, producer responsibility.

    (a) Where available and determined accurate, RMA loss records will 
be used for insured crops.
    (b) If RMA loss records are not available, or if the FSA county 
committee determines the RMA loss records are inaccurate or incomplete, 
or if the FSA county committee makes inquiry, producers are responsible 
for:
    (1) Retaining or providing, when required, the best verifiable or 
reliable production records available for the crop;
    (2) Summarizing all the production evidence;
    (3) Accounting for the total amount of unit production for the 
crop, whether or not records reflect this production;
    (4) Providing the information in a manner that can be easily 
understood by the county committee; and
    (5) Providing supporting documentation if the county committee has 
reason to question the disaster event or that all production has been 
accounted for.
    (c) In determining production under this section the producer must 
supply verifiable or reliable production records to substantiate 
production to the county committee. If the eligible crop was sold or 
otherwise disposed of through commercial channels, production records 
include: commercial receipts; settlement sheets; warehouse ledger 
sheets; or load summaries; appraisal information from a loss adjuster 
acceptable to CCC. If the eligible crop was farm-stored, sold, fed to 
livestock, or disposed of in means other than commercial channels, 
production records for these purposes include: truck scale tickets; 
appraisal information from a loss adjuster acceptable to CCC; 
contemporaneous diaries; or other documentary evidence, such as 
contemporaneous measurements.
    (d) Producers must provide all records for any production of a crop 
that is grown with an arrangement, agreement, or contract for 
guaranteed payment.


Sec.  1480.14  Determination of production.

    (a) Production under this part shall include all harvested 
production, unharvested appraised production and assigned production 
for the total planted acreage of the crop on the unit.
    (b) The harvested production of eligible crop acreage harvested 
more than once in a crop year shall include the total harvested 
production from all these harvests.
    (c) If a crop is appraised and subsequently harvested as the 
intended use, the actual harvested production shall be used to 
determine benefits.
    (d) For all crops eligible for loan deficiency payments or 
marketing assistance loans with an intended use of grain but harvested 
as silage, ensilage,

[[Page 37949]]

cobbage, hay, cracked, rolled, or crimped, production will be adjusted 
based on a whole grain equivalent as established by CCC.
    (e) For crops with an established yield and market price for 
multiple intended uses, a value will be calculated for each use with:
    (1) The intended use or uses for disaster purposes based on 
historical production and acreage evidence provided by the producer; 
and
    (2) The eligible acres for each use and the calculation of the 
disaster payment will be determined by the county committee according 
to instructions issued by the Deputy Administrator.
    (f) For crops sold in a market that is not a recognized market for 
the crop with no established county average yield and market price, 45 
percent of the salvage value received will be deducted from the 
disaster payment.
    (g) If a producer does not receive compensation based upon the 
quantity of the commodity delivered to a purchaser, but has an 
agreement or contract for guaranteed payment for production, for 
purposes of determination the production shall be the greater of the 
actual production or the guaranteed payment converted to production as 
determined by CCC.
    (h) Production that is commingled between units before it was a 
matter or combination of record and cannot be separated by using 
records or other means acceptable to CCC shall be prorated to each 
respective unit by CCC. Commingled production may be attributed to the 
applicable unit, if the producer made the unit production of a 
commodity a matter of record before commingling and does any of the 
following, as applicable:
    (1) Provides copies of verifiable documents showing that production 
of the commodity was purchased, acquired, or otherwise obtained from 
beyond the unit;
    (2) Had the production measured in a manner acceptable to the 
county committee; or
    (3) Had the current year's production appraised in a manner 
acceptable to the county committee.
    (i) The county committee shall assign production for the unit when 
the county committee determines that:
    (1) The producer has failed to provide adequate and acceptable 
production records;
    (2) The loss to the crop is because of a disaster condition not 
covered by this part, or circumstances other than natural disaster, and 
there has not otherwise been an accounting of this ineligible cause of 
loss;
    (3) The producer carries out a practice, such as multiple cropping, 
that generally results in lower yields than the established historic 
yields;
    (4) The producer has a contract to receive a guaranteed payment for 
all or a portion of the crop.
    (5) A crop is late-planted;
    (6) Unharvested acreage was not timely appraised; or
    (7) Other appropriate causes exist for such assignment as 
determined by the Deputy Administrator.
    (j) For peanuts, the actual production shall be all peanuts 
harvested for nuts regardless of their disposition or use as adjusted 
for low quality.


Sec.  1480.15  Calculation of acreage for crop losses other than 
prevented planted.

    (a) Acreage shall be calculated using the number of acres shown to 
have been planted to a crop.
    (b) In cases where there is a repeat crop or a multiple planted 
crop in more than one planting period, or if there is multiple cropped 
acreage meeting criteria established in paragraph (c) or (d) of this 
section, each of these crops may be considered separate crops for 2001 
or 2002 CDP if the county committee determines that all of the 
following conditions are met:
    (1) Both the initial and subsequent planted crops were planted with 
an intent to harvest;
    (2) Both the initial and subsequent planted crops were planted 
within the normal planting period for that crop;
    (3) Both the initial and subsequent planted crops meet all other 
eligibility provisions of this part including good farming practices; 
and
    (4) Each planting could reach maturity if each planting was 
harvested or would have been harvested.
    (c) In cases where there is multiple cropped acreage, each crop may 
be eligible for disaster assistance separately if both of the following 
conditions are met:
    (1) The specific crops are approved by the State Committee as 
eligible multiple-cropping practices in accordance with procedures 
approved by the Deputy Administrator; and
    (2) The farm containing the multiple cropped acreage has a history 
of multiple cropping based on timely filed crop acreage reports.
    (d) Producers with multiple cropped acreage not meeting the 
criteria in paragraph (c) of this section may be eligible for disaster 
assistance on more than one crop if the producer has verifiable records 
establishing a history of carrying out a successful multiple cropping 
practice on the specific crops for which assistance is requested. All 
required records acceptable to CCC as determined by the Deputy 
Administrator must be provided before payments are issued.
    (e) Producers with multiple cropped acreage not meeting the 
criteria in paragraphs (c) or (d) of this section must select the crop 
for which assistance will be requested. If more than one producer has 
an interest in the multiple cropped acreage, all producers must agree 
to the crop designated for payment by the end of the application period 
or no payment will be approved for any crop on the multiple cropped 
acreage.
    (f) Benefits under this part shall apply to irrigated crops where 
the acreage was affected by a lack of water or contamination by 
saltwater intrusion of an irrigation supply resulting from drought 
conditions.


Sec.  1480.16  Calculation of prevented planted acreage.

    (a) When determining losses under this part, prevented-planted 
acreage will be considered separately from planted acreage of the same 
crop.
    (b) Except as provided in paragraph (c) of this section, for 
insured crops, disaster payments under this part for prevented-planted 
acreage shall not be made unless RMA documentation indicates that the 
eligible producer received a prevented planting payment under the RMA-
administered program.
    (c) For insured crops, disaster payments under this part for 
prevented-planted acreage will be made available for the following 
crops for which prevented planting coverage was not available and for 
which the county committee will make an eligibility determination 
according to paragraph (d) of this section: peppers; sweet corn (fresh 
market); tomatoes (fresh market); tomatoes (processing).
    (d) The producer must prove, to the satisfaction of the county 
committee, an intent to plant the crop and that such crop could not be 
planted because of an eligible disaster. The county committee must be 
able to determine the producer was prevented from planting the crop by 
an eligible disaster that:
    (1) Prevented other producers from planting on acreage with similar 
characteristics in the surrounding area; and
    (2) Occurred after the previous planting period for the crop.
    (3) Unless otherwise approved by the Deputy Administrator, began no 
earlier than the planting season for that crop.
    (e) Prevented planted disaster benefits under this part shall not 
apply to:
    (1) Aquaculture, including ornamental fish; perennial forage crops 
grown for hay, seed, or grazing; honey;

[[Page 37950]]

maple sap; millet; mint; nursery crops; cultivated wild rice; fresh 
market beans; cabbage, pumpkins, sweet potatoes; winter squash, 
turfgrass sod, and vine crops;
    (2) Uninsured crop acreage that is unclassified for insurance 
purposes;
    (3) Acreage that is used for conservation purposes or intended to 
be left unplanted under any CCC or USDA program;
    (4) Any acreage on which a crop other than a cover crop was 
harvested, hayed, or grazed during the crop year;
    (5) Any acreage for which a cash lease payment is received for the 
use of the acreage the same crop year unless the county committee 
determines the lease was for haying and grazing rights only and was not 
a lease for use of the land;
    (6) Acreage for which planting history or conservation plans 
indicate that the acreage would have remained fallow for crop rotation 
purposes;
    (7) Acreage for which the producer or any other person received a 
prevented planted payment for any crop for the same acreage, excluding 
share arrangements;
    (8) Acreage for which the producer cannot provide proof to the 
county committee that inputs such as seed, chemicals, and fertilizer 
were available to plant and produce a crop with the expectation of at 
least producing a normal yield; and
    (9) Any other acreage for which, for whatever reason, there is 
cause to question whether the crop could have been planted for a 
successful and timely harvest, or for which prevented planting credit 
is not allowed under the provisions of this part.
    (f) Prevented planting payments are not provided on acreage that 
had either a previous or subsequent crop planted on the acreage, unless 
the county committee determines that all of the following conditions 
are met:
    (1) There is an established practice of planting two or more crops 
for harvest on the same acreage in the same crop year;
    (2) Both crops could have reached maturity if each planting was 
harvested or would have been harvested;
    (3) Both the initial and subsequent planted crops were planted or 
prevented-planting within the normal planting period for that crop;
    (4) Both the initial and subsequent planted crops meet all other 
eligibility provisions of this part including good farming practices; 
and
    (5) The specific crops meet the eligibility criteria for a separate 
crop designation as a repeat or approved multiple cropping practice set 
out in Sec.  1480.15.
    (g)(1) Disaster benefits under this part shall not apply to crops 
where the prevented-planted acreage was affected by a disaster that was 
caused by drought unless on the final planting date or the late 
planting period for non-irrigated acreage, the area that is prevented 
from being planted has insufficient soil moisture for germination of 
seed and progress toward crop maturity because of a prolonged period of 
dry weather;
    (2) Prolonged precipitation deficiencies must be at the D2 level or 
higher as determined by using the U.S. Drought Monitor; and
    (3) Verifiable information collected by sources whose business or 
purpose to record weather conditions, including but not limited to the 
local weather reporting stations of the U.S. National Weather Service.
    (h) Prevented planting benefits under this part shall apply to 
irrigated crops where the acreage was prevented from being planted due 
to a lack of water resulting from drought conditions or contamination 
by saltwater intrusion of an irrigation supply resulting from drought 
conditions.
    (i) For uninsured or non-insurable crops and the insured crops 
listed in paragraph (c) of this section, for prevented planting 
purposes:
    (1) The maximum prevented-planted acreage for all crops cannot 
exceed the number of acres of cropland in the unit for the crop year 
and will be reduced by the number of acres planted in the unit;
    (2) The maximum prevented planted acreage for a crop cannot exceed 
the number of acres planted by the producer, or that was prevented from 
being planted, to the crop in any 1 of the 4 crop years previous to the 
disaster year as determined by the county committee;
    (3) For crops grown under a contract specifying the number of acres 
contracted, the prevented-planted acreage is limited to the result of 
the number of acres specified in the contract minus planted acreage;
    (4) For each crop type or variety for which separate prices or 
yields are sought for prevented-planted acreage, the producer must 
provide evidence that the claimed prevented-planted acres were 
successfully planted in at least 1 of the most recent 4 crop years; and
    (5) The prevented planted acreage must be at least 20 acres or 20 
percent of the intended planted acreage in the unit, whichever is less.
    (j) Notwithstanding the provisions of part 718 of this chapter, 
late-filed crop acreage reports for previous years shall not be 
accepted for CDP purposes.


Sec.  1480.17  Quantity adjustments for diminished quality for certain 
crops.

    (a) For the crops identified in paragraph (b) of this section, 
subject to this part, the quantity of production of crops of the 
producer shall be adjusted to reflect diminished quality resulting from 
the disaster.
    (b) Crops eligible for quality adjustments to production are 
limited to:
    (1) Barley; canola; corn; cotton; crambe, flaxseed; grain sorghum; 
mustard seed; oats; peanuts; rapeseed; rice; safflower; soybeans; 
sunflower-oil; sunflower-seed; wheat; and
    (2) Crops with multiple market uses such as fresh, processed or 
juice, as supported by NASS data or other data as CCC determines 
acceptable.
    (3) Single market crops if the COC determines there is sufficient 
data to establish 5 quality loss levels.
    (c) The producer must submit documentation for determining the 
grade and other discount factors that were applied to the crop.
    (d) Quality adjustments will be applied to crops experiencing at 
least a 20 percent loss after production has been adjusted to standard 
moisture, when applicable.
    (e) For all crops listed in paragraph (b)(1) of this section, 
except for cotton, if a quality adjustment has been made for multi-
peril crop insurance purposes, an additional adjustment will not be 
made.
    (f) Quality adjustments for crops, other than cotton and peanuts 
listed in paragraph (b)(1) of this section may be made by applying an 
adjustment factor based on dividing the CCC marketing assistance loan 
rate applicable to the crop and producer determined according to part 
1421 of this chapter by the unadjusted county marketing assistance loan 
rate for the crop. For crops that receive a grade of ``sample'' and are 
marketed through normal channels, production will be adjusted as 
determined by CCC. County committees may, with state committee 
concurrence, establish county average quality adjustment factors.
    (g) Quality adjustments for cotton shall be based on the difference 
between:
    (1) The loan rate applicable to the crop and producer determined 
according to part 1427 of this chapter; and
    (2) The adjusted county loan rate. The adjusted county rate is the 
county loan rate adjusted for the 5-year county average historical 
quality premium or discount, as determined by CCC.
    (h) For 2001 quota and non-quota peanuts and 2002 peanuts, quality

[[Page 37951]]

adjustments shall be based on the difference between the actual sales 
price, or other proceeds, received and the National average support 
price by type of peanut for the applicable crop year.
    (i) Quality adjustments for crops with multiple market uses such as 
fresh, processed and juice, shall be applied based on the difference 
between the producer's historical marketing percentage of each market 
use compared to the actual percentage for the 2001 or 2002 crop year. 
These quality adjustments are built into the production loss 
determination. Production determinations from Federal crop insurance 
will not be used.
    (j) Except as determined by the Deputy Administrator, quality 
adjustments for aflatoxin shall be based on the aflatoxin level. The 
producer must provide the county committee with proof of a price 
reduction because of aflatoxin. The aflatoxin level must be 20 parts 
per billion or more before a quality adjustment will be made. The 
quality adjustment factor applied to affected production is .50 if the 
production is marketable. If the production is unmarketable due to 
aflatoxin levels of at least 20 parts per billion, production will be 
adjusted to zero. Any value received will be considered salvage.
    (k) Any quantity of the crop determined to be salvage will not be 
considered production. Salvage values shall be factored by 0.45 times 
the producer's share. This amount will be deducted from the disaster 
payment.
    (l) Quantity adjustments for diminished quality under this section 
will not be applied to crops that are, under Sec.  1480.18, value loss 
crops.
    (m) Quantity adjustments for diminished quality shall also not 
apply under this section to: hay, honey, maple sap, turfgrass sod, 
crops marketed for a use other than an intended use for which there is 
not an established county price or yield, or any other crop that the 
Deputy Administrator deems it appropriate to exclude.


Sec.  1480.18  Value loss crops.

    (a) Irrespective of any inconsistent provisions in other sections, 
this section shall apply to the following crops, which are considered 
``value loss crops'': ornamental nursery; Christmas trees; vegetable 
and root stock including ginseng root; aquaculture, including 
ornamental fish, and such other crops as may be determined appropriate 
for treatment as ``value loss crops''.
    (b) For crops specified in paragraph (a) of this section, disaster 
benefits under this part are calculated based on the loss of value at 
the time of disaster, as determined by CCC.
    (c) For aquaculture, disaster benefits under this part for 
aquacultural species are limited to those aquacultural species that 
were placed in the aquacultural facility by the producer. CDP benefits 
shall not be available for aquacultural species that are growing 
naturally in the aquaculture facility. Benefits under this part are 
limited to aquacultural species that were planted or seeded on property 
owned or leased by the producer where that land has readily 
identifiable boundaries, and over which the producer has total control 
of the waterbed and the ground under the waterbed. Producers who only 
have control of the waterbed or the ground under the waterbed but not 
both will not be eligible for disaster benefits under this part.
    (d) For ornamental nursery crops, disaster benefits under this part 
are limited to ornamental nursery crops that were grown in a container 
or controlled environment for commercial sale on property owned or 
leased by the producer, and cared for and managed using good nursery 
growing practices. Indigenous crops are not eligible for benefits under 
this part. Producers who participated in the previous Florida Nursery 
Program are eligible for either of the following:
    (1) 2001 losses that occurred between January 1, 2001 and September 
30, 2001.
    (2) 2002 losses that occurred between October 1, 2001 and September 
30, 2002.
    (e) For vegetable and root stock, disaster benefits under this part 
are limited to plants grown in a container or controlled environment 
for use as transplants or root stock by the producer for commercial 
sale on property owned or leased by the producer and managed using good 
rootstock or fruit and vegetable plant growing practices.
    (f) For ginseng, only ginseng that meets all the requirements of 
cultivated ginseng shall be considered as eligible for benefits under 
this part. Ginseng is defined as cultivated ginseng roots and seeds 
that meet the following requirements:
    (1) Grown in raised beds above and away from wet and low areas 
protected from flood;
    (2) Grown under man-made canopies that provide 75 to 80 percent 
shade coverage;
    (3) Grown in well drained media with a pH adjustment of at least 
5.5 and which protects plants from disease; and
    (4) Grown with sufficient fertility and weed control to obtain 
expected production results of ginseng root and seed.
    (g) Evidence of the above ginseng practice requirements must be 
provided by the producer if requested by the county committee. Any 
ginseng that is grown under cultivated practices or simulated wild or 
woodland conditions that do not meet these requirements are not 
eligible for disaster assistance under this part.
    (h) Because ginseng is a perennial crop, the producer must provide 
annual crop history to establish when the loss occurred and the extent 
of such loss. If the producer does not or is unable to provide annual 
records to establish the beginning inventory, before the loss, and 
ending inventory, after the loss, production shall be assigned by the 
county committee.
    (i) Aside from differences provided for in this section, all other 
conditions for eligibility contained in this part shall be applied to 
value loss crops.


Sec.  1480.19  Other provisions for specialty crops.

    (a) For turfgrass sod, disaster benefits under this part are 
limited to turfgrass sod that would have matured and been harvested 
during 2001 or 2002, when a disaster caused in excess of 35 percent of 
the expected production to die.
    (b) For honey, disaster benefits under this part are limited to 
table and non-table honey produced commercially for human consumption. 
For calculating benefits, all honey is considered a single crop, 
regardless of type or variety of floral source or intended use.
    (c) For maple sap, disaster benefits under this part are limited to 
maple sap produced on private property in a controlled environment by a 
commercial operator for sale as sap or syrup. The maple sap must be 
produced from trees that are: located on land the producer controls by 
ownership or lease; managed for production of maple sap; and are at 
least 30 years old and 12 inches in diameter.


Sec.  1480.20  Misrepresentation and scheme or device.

    (a) A producer who is determined to have erroneously represented 
any fact affecting a program determination made in accordance with this 
part shall not be entitled to disaster payments and must refund all 
such payments received, plus interest as determined in accordance with 
part 1403 of this chapter.
    (b) A producer shall refund to CCC all disaster payments, plus 
interest as determined in accordance with part 1403 of this chapter, 
received by such producer with respect to all contracts if the producer 
is determined to have knowingly done any of the following.

[[Page 37952]]

    (1) Adopted any scheme or device that tends to defeat the purpose 
of the program;
    (2) Made any fraudulent representation; or
    (3) Misrepresented any fact affecting a program determination.


Sec.  1480.21  Offsets, assignments and debt settlement.

    (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 U.S. Government. The 
regulations governing offsets and withholdings found at part 1403 of 
this chapter apply to payments.
    (b) Any producer entitled to any payment may assign any payments in 
accordance with regulations governing the assignment of payments found 
at part 1404 of this chapter.
    (c) A debt or claim may be settled according to part 1403 of this 
chapter.


Sec.  1480.22  Compliance with highly erodible land and wetland 
conservation provisions.

    Part 12 of this title applies to this part.

    Signed in Washington, DC, on June 20, 2003.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 03-16161 Filed 6-23-03; 4:13 pm]
BILLING CODE 3410-05-P