[Federal Register Volume 69, Number 87 (Wednesday, May 5, 2004)]
[Rules and Regulations]
[Pages 24909-24916]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-10195]



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  Federal Register / Vol. 69, No. 87 / Wednesday, May 5, 2004 / Rules 
and Regulations  

[[Page 24909]]



DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Part 301

[Docket No. 03-052-1]


Karnal Bunt; Compensation for Custom Harvesters in Northern Texas

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Interim rule and request for comments.

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SUMMARY: We are amending the Karnal bunt regulations to provide for the 
payment of compensation to custom harvesters for losses they incurred 
due to the requirement that their equipment be cleaned and disinfected 
after four counties in northern Texas were declared regulated areas for 
Karnal bunt during the 2000-2001 crop season. We are also amending the 
regulations to provide for the payment of compensation to owners or 
lessees of other equipment that came into contact with Karnal bunt-
positive host crops in those counties and was required to be cleaned 
and disinfected during the 2000-2001 crop season. The payment of 
compensation is necessary to reduce the economic burden imposed by the 
regulations and to encourage the participation of, and obtain 
cooperation from, affected individuals in our efforts to contain and 
reduce the presence of Karnal bunt in the United States.

DATES: This interim rule is effective May 5, 2004. We will consider all 
comments that we receive on or before July 6, 2004.

ADDRESSES: You may submit comments by any of the following methods:
     Postal Mail/Commercial Delivery: Please send four copies 
of your comment (an original and three copies) to Docket No. 03-052-1, 
Regulatory Analysis and Development, PPD, APHIS, Station 3C71, 4700 
River Road Unit 118, Riverdale, MD 20737-1238. Please state that your 
comment refers to Docket No. 03-052-1.
     E-mail: Address your comment to 
[email protected]. Your comment must be contained in the body 
of your message; do not send attached files. Please include your name 
and address in your message and ``Docket No. 03-052-1'' on the subject 
line.
     Agency Web site: Go to http://www.aphis.usda.gov/ppd/rad/cominst.html for a form you can use to submit an e-mail comment through 
the APHIS Web site.
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the instructions for locating this 
docket and submitting comments.
    Reading Room: You may read any comments that we receive on this 
docket in our reading room. The reading room is located in room 1141 of 
the USDA South Building, 14th Street and Independence Avenue SW., 
Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., 
Monday through Friday, except holidays. To be sure someone is there to 
help you, please call (202) 690-2817 before coming.
    Other Information: You may view APHIS documents published in the 
Federal Register and related information, including the names of groups 
and individuals who have commented on APHIS dockets, on the Internet at 
http://www.aphis.usda.gov/ppd/rad/webrepor.html.

FOR FURTHER INFORMATION CONTACT: Mr. Robert G. Spaide, Senior Program 
Advisor, Pest Detection and Management Programs, PPQ, APHIS, 4700 River 
Road Unit 98, Riverdale, MD 20737; (301) 734-3769.

SUPPLEMENTARY INFORMATION:

Background

    Karnal bunt is a fungal disease of wheat (Triticum aestivum), durum 
wheat (Triticum durum), and triticale (Triticum aestivum X Secale 
cereale), a hybrid of wheat and rye. Karnal bunt is caused by the smut 
fungus Tilletia indica (Mitra) Mundkur and is spread primarily through 
the movement of infected seed. In the absence of measures taken by the 
U.S. Department of Agriculture (USDA) to prevent its spread, the 
establishment of Karnal bunt in the United States could have 
significant consequences with regard to the export of wheat to 
international markets.
    The regulations regarding Karnal bunt are set forth in 7 CFR 
301.89-1 through 301.89-16 (referred to below as the regulations). 
Among other things, the regulations define areas regulated for Karnal 
bunt and restrict the movement of certain regulated articles, including 
wheat seed and grain, from the regulated areas. The regulations also 
provide for the payment of compensation for certain growers, handlers, 
seed companies, owners of grain storage facilities, flour millers, and 
participants in the National Karnal Bunt Survey who incurred losses and 
expenses because of Karnal bunt during certain years. These provisions 
are in Sec.  301.89-15, ``Compensation for growers, handlers, and seed 
companies in the 1999-2000 and subsequent crop seasons,'' and Sec.  
301.89-16, ``Compensation for grain storage facilities, flour millers, 
and National Survey participants for the 1999-2000 and subsequent crop 
seasons.''
    On August 6, 2001, the Animal and Plant Health Inspection Service 
(APHIS) published in the Federal Register a final rule (66 FR 40839-
40843, Docket No. 96-016-37) that established the compensation levels 
for the 1999-2000 crop season and subsequent years and made several 
other changes to the compensation regulations. One of these changes was 
that, after the 2000-2001 crop season, compensation would no longer be 
made available to persons growing or handling host crops that were 
knowingly planted in previously regulated areas.
    On May 1, 2002, APHIS published in the Federal Register an interim 
rule (67 FR 21561-21566, Docket No. 01-112-1) that amended the 
regulations governing compensation to address five particular 
situations in four counties in northern Texas that arose during the 
2000-2001 crop season. In Archer, Baylor, Throckmorton, and Young 
Counties, certain wheat growers, handlers, and other parties covered by 
the compensation regulations appeared to be ineligible to receive 
compensation for grain or seed affected by Karnal bunt due to 
restrictive language in the regulations that did not anticipate certain 
complications in the harvest and storage of grain that arose following

[[Page 24910]]

discovery of Karnal bunt in those counties. Due to the need to quickly 
declare these counties as regulated areas, we were unable to modify the 
compensation regulations at that time to address certain relevant 
aspects of the way seed and grain were moved, stored, and used in the 
newly regulated areas. The May 2002 interim rule amended the 
compensation provisions of the regulations to allow persons included in 
these five situations to apply for compensation.
    We solicited comments concerning the interim rule for 60 days 
ending July 1, 2002. We received 86 comments by that date. They were 
from producers, representatives of industry groups, and representatives 
of State and foreign governments. In this document, we address the 
comments we received regarding the payment of compensation to custom 
harvesters and owners or lessees of other equipment in the four Texas 
counties during the 2000-2001 crop season. The other comments we 
received in response to the interim rule will be addressed in a 
subsequent document.
    Seventy-eight commenters urged APHIS to provide for the payment of 
compensation to custom harvesters who operate in areas regulated for 
Karnal bunt, in addition to the compensation for growers, handlers, and 
other affected individuals provided by the interim rule. Some 
commenters stated that the cost of cleaning and disinfecting mechanized 
harvesting equipment after it has been used to harvest Karnal bunt-
positive host crops prior to movement from a regulated area, as 
required by Sec.  301.89-12(a), would either be absorbed by custom 
harvesters, causing them significant economic losses, or passed on to 
growers, already suffering losses from restrictions on the movement of 
their crops, in the form of higher rates.
    Some custom harvesters, other commenters argued, might choose to 
avoid harvesting in regulated areas altogether; this would increase the 
economic losses suffered by growers in regulated areas, since the 
demand for custom harvesting services in regulated areas would exceed 
the supply, and growers would likely have to pay higher fees to have 
their crop harvested. If custom harvesters that normally operate in 
regulated areas chose to avoid harvesting in such areas, this would 
also drive down the incomes of custom harvesters that normally harvest 
outside regulated areas, due to increased competition.
    Finally, many commenters noted that encouraging growers to 
participate in the Karnal bunt eradication program is a stated goal of 
the compensation program currently in place; without similar incentives 
for custom harvesters, they might not clean their mechanized harvesting 
equipment in accordance with the regulations when moving from a 
regulated area to an area not affected by Karnal bunt, possibly leading 
to further spread of Karnal bunt.
    Most commenters favored compensating custom harvesters for the cost 
of cleaning their equipment if it is used to harvest Karnal bunt-
positive host crops in a regulated area. The commenters also noted that 
custom harvesters typically set their schedules months in advance, 
meaning that custom harvesters could lose harvesting contracts due to 
the downtime (typically 8 hours) necessitated by cleaning and 
disinfecting mechanized harvesting equipment after it had been used to 
harvest Karnal bunt-positive host crops in a regulated area; 
compensation for contracts lost for this reason was also requested.
    We agree that custom harvesters who operated in the four affected 
Texas counties suffered economic losses due to the designation of these 
counties as areas quarantined for Karnal bunt during the 2000-2001 crop 
season. Furthermore, because these counties became regulated areas late 
in the crop season, custom harvesters operating in those counties could 
not have been aware that they were harvesting crops that may have 
tested positive for Karnal bunt. Therefore, in this interim rule, we 
are providing for the payment of compensation to custom harvesters who 
harvested Karnal bunt-positive host crops in Archer, Baylor, 
Throckmorton, and Young Counties, TX, during the 2000-2001 crop season. 
This compensation is intended to reimburse custom harvesters for the 
cost of cleaning and disinfecting their mechanized harvesting 
equipment. We are also providing for the payment of compensation 
equivalent to the value of one contract that an eligible custom 
harvester lost due to the downtime necessitated by cleaning and 
disinfection. If an eligible custom harvester did not lose a contract 
due to this downtime, we are providing compensation for the fixed costs 
he or she incurred during the time the machine was being cleaned and 
disinfected. We are also providing for the payment of compensation for 
the expenses associated with the cleaning and disinfection of other 
types of equipment used in the four affected counties. The specific 
provisions of these compensation provisions are discussed below.


    Note: Although the regulations in Sec.  301.89-12 at the time 
specifically required that mechanized harvesting equipment be 
cleaned and disinfected after it has been used to harvest Karnal 
bunt-positive host crops prior to movement from a regulated area, 
during the 2000-2001 crop season equipment was allowed to move out 
of the regulated counties without disinfection if the inspector who 
issued the PPQ-540 certificate allowing such movement determined 
that cleaning alone was sufficient to remove all Karnal bunt spores. 
We have since amended the regulations in Sec.  301.89-12 to require 
disinfection only if it is determined to be necessary by an 
inspector [see 69 FR 8091-8097, Docket No. 02-056-2, published 
February 23, 2004]. Therefore, custom harvesters seeking 
compensation under the regulations established by this interim rule 
will be required to present a copy of the PPQ-540 certificate 
allowing the movement of equipment from an area regulated for Karnal 
bunt, but they will not be required to present proof that their 
equipment was both cleaned and disinfected.


    In all cases, claims for the compensation provided for by this 
interim rule must be received by APHIS on or before September 2, 2004. 
The Administrator may extend this deadline upon written request in 
specific cases, when unusual and unforeseen circumstances occur that 
prevent or hinder a claimant from requesting compensation on or before 
this date. If comments we receive in response to this interim rule 
cause us to change the rule, we will provide an additional 120-day 
period after the effective date of the final rule during which affected 
persons may submit claims for compensation.

Cleaning and Disinfection of Mechanized Harvesting Equipment

    During the 2000-2001 crop season, the regulations in Sec.  301.89-
12(a) required that mechanized harvesting equipment that has been used 
to harvest host crops that test positive for Karnal bunt must be 
cleaned and disinfected in accordance with Sec.  301.89-13(a) prior to 
movement from a regulated area. (As noted previously, Sec.  301.89-12 
has since been amended.) In Sec.  301.89-13, paragraph (a) described 
four acceptable methods for cleaning and disinfection.
    APHIS has estimated that cleaning and disinfection costs for 
mechanized custom harvesting equipment are typically $750 per 
harvesting machine. Therefore, under this interim rule, custom 
harvesters who harvested Karnal bunt-positive host crops in Archer, 
Baylor, Throckmorton, or Young Counties during the 2000-2001 crop 
season and whose mechanized harvesting equipment was then required to 
be cleaned and disinfected will be eligible to receive either 
compensation for the actual cost of the cleaning and

[[Page 24911]]

disinfection or $750 per harvesting machine cleaned, whichever amount 
is lower.
    To receive compensation for the cost of cleaning and disinfecting 
mechanized harvesting equipment, custom harvesters must provide copies 
of a contract or other signed agreement for harvesting in Archer, 
Baylor, Throckmorton, or Young County during the 2000-2001 crop season, 
signed on a date prior to the designation of the county as a regulated 
area for Karnal bunt, or an affidavit stating that the custom harvester 
entered into an agreement to harvest in Archer, Baylor, Throckmorton, 
or Young County during the 2000-2001 crop season prior to the 
designation of the county as a regulated area for Karnal bunt; a copy 
of the PPQ-540 certificate issued to allow the movement of mechanized 
harvesting equipment from a regulated area after it had been used to 
harvest Karnal bunt-positive host crops and had been subsequently 
cleaned and disinfected; and a receipt showing the cost of the cleaning 
and disinfection. (Throckmorton and Young Counties, TX, were declared 
regulated areas in an interim rule effective on June 8, 2001 and 
published in the Federal Register on June 14, 2001 [66 FR 32209-32210, 
Docket No. 01-058-1]; Archer and Baylor Counties, TX, were declared 
regulated areas in an interim rule effective on July 13, 2001 and 
published in the Federal Register on July 19, 2001 [66 FR 37575-37576, 
Docket No. 01-063-1].)

Contracts Lost Due to Downtime Necessitated by Cleaning and 
Disinfection

    The process of cleaning and disinfecting mechanized harvesting 
equipment takes approximately 8 hours, meaning that the custom 
harvesting equipment is unusable for one workday while it is being 
cleaned and disinfected. Custom harvesters typically schedule their 
harvesting contracts months in advance. Therefore, the downtime 
necessitated by cleaning and disinfecting mechanized harvesting 
equipment after it was used to harvest Karnal bunt-positive host crops 
in Archer, Baylor, Throckmorton, and Young Counties during the 2000-
2001 crop season caused some custom harvesters to be unable to fulfill 
previously scheduled harvesting contracts.
    In this interim rule, we are providing for the payment of 
compensation to custom harvesters who operated in Archer, Baylor, 
Throckmorton, or Young Counties during the 2000-2001 crop season and 
whose mechanized harvesting equipment was required to be cleaned and 
disinfected for the full value of one contract that was lost due to 
downtime necessitated by cleaning and disinfection. Compensation will 
only be provided for one contract lost due to cleaning and 
disinfection. The maximum value of compensation for this contract is 
$23.48 per acre that was to be harvested. This figure is APHIS' 
calculation of the average cost per acre of harvesting wheat; it was 
derived from data provided by U.S. Custom Harvesters, an industry trade 
group. APHIS will pay $23.48 per acre that was to be harvested or the 
full value of the contract, whichever is less.
    To receive compensation for the value of a contract lost due to 
downtime necessitated by cleaning and disinfection, custom harvesters 
must provide copies of a contract or other signed agreement for 
harvesting in Archer, Baylor, Throckmorton, or Young County during the 
2000-2001 crop season, signed on a date prior to the designation of the 
county as a regulated area for Karnal bunt, or an affidavit stating 
that the custom harvester entered into an agreement to harvest in 
Archer, Baylor, Throckmorton, or Young County during the 2000-2001 crop 
season prior to the designation of the county as a regulated area for 
Karnal bunt; a copy of the PPQ-540 certificate issued to allow the 
movement of mechanized harvesting equipment from a regulated area after 
it had been used to harvest Karnal bunt-positive host crops and had 
been subsequently cleaned and disinfected; and the contract for 
harvesting in an area not regulated for Karnal bunt that was lost due 
to downtime necessitated by cleaning and disinfection of mechanized 
harvesting equipment, signed on a date prior to the designation of the 
relevant county as a regulated area for Karnal bunt, for which the 
custom harvester will receive compensation.

Compensation for Fixed Costs Incurred During Cleaning and Disinfection

    Custom harvesters who did not lose contracts due to downtime 
necessitated by cleaning and disinfection nevertheless had to pay fixed 
costs associated with custom harvesting while their equipment was being 
cleaned and disinfected; they could not recoup these costs by using 
their equipment during this time. Fixed costs associated with custom 
harvesting include labor costs, travel costs, insurance, telephone and 
utility costs, and interest. According to U.S. Custom Harvesters, such 
fixed costs typically total $250 per hour. Custom harvesters whose 
mechanized harvesting equipment was required to be cleaned and 
disinfected thus typically incurred $2,000 in unavoidable fixed costs 
because their equipment was idle for 8 hours. Therefore, we are 
providing for the payment of $2,000 in compensation to each custom 
harvester who harvested Karnal bunt-positive host crops in Archer, 
Baylor, Throckmorton, and Young Counties during the 2000-2001 crop 
season and who does not apply for compensation for a contract lost due 
to time lost to cleaning and disinfection. This compensation will 
ensure that all custom harvesters are compensated for economic losses 
associated with the cleaning and disinfection of their equipment.
    To receive compensation for fixed costs incurred during cleaning 
and disinfection, custom harvesters must provide copies of a contract 
or other signed agreement for harvesting in Archer, Baylor, 
Throckmorton, or Young County during the 2000-2001 crop season, signed 
on a date prior to the designation of the county as a regulated area 
for Karnal bunt, or an affidavit stating that the custom harvester 
entered into an agreement to harvest in Archer, Baylor, Throckmorton, 
or Young County during the 2000-2001 crop season prior to the 
designation of the county as a regulated area for Karnal bunt; and a 
copy of the PPQ-540 certificate issued to allow the movement of 
mechanized harvesting equipment from a regulated area after it had been 
used to harvest Karnal bunt-positive host crops and had been 
subsequently cleaned and disinfected.
    In the event that a custom harvester who harvested Karnal bunt-
positive host crops in Archer, Baylor, Throckmorton, or Young County 
during the 2000-2001 crop season had to cancel a contract due to time 
lost to cleaning and disinfection that was valued at less than $2,000, 
that custom harvester may request the compensation for fixed costs 
incurred during cleaning and disinfection and receive $2,000 under this 
interim rule. Because the compensation for fixed costs does not address 
the variable costs that must be accounted for in the total cost of a 
contract, we believe that this situation is extremely unlikely to have 
occurred; in fact, APHIS currently estimates the average value of 
contracts lost due to downtime necessitated by cleaning and 
disinfection at $25,000. However, we believe it would not encourage 
participation in the Karnal bunt eradication program if we required 
that a custom harvester with documented losses of under $2,000 due to 
cleaning and disinfection receive less compensation than a custom 
harvester without documented losses receives as

[[Page 24912]]

a generic valuation of his or her fixed costs.

Cleaning and Disinfection of Other Equipment

    During the 2000-2001 crop season, Sec.  301.89-12 of the 
regulations required that mechanized harvesting equipment that had been 
used to harvest host crops that test positive for Karnal bunt and seed 
conditioning equipment that had been used in the production of any host 
crops in a regulated area be cleaned and disinfected in accordance with 
Sec.  301.89-13(a) prior to movement from a regulated area. Mechanized 
harvesting equipment that has been used to harvest Karnal bunt-positive 
host crops and seed conditioning equipment that has been used in the 
production of host crops are the only types of equipment required to be 
treated prior to movement from a regulated area. However, Sec.  301.89-
6 allows an inspector or a person operating under a compliance 
agreement to issue a certificate or limited permit for the movement 
within or outside a regulated area of a regulated article if the 
inspector determines that the regulated article, among other 
possibilities, is to be moved in compliance with any additional 
conditions the Administrator may impose to prevent the artificial 
spread of Karnal bunt. These additional conditions may include cleaning 
and disinfection.
    In Archer, Baylor, Throckmorton, and Young Counties during the 
2000-2001 crop season, several pieces of equipment other than 
mechanized harvesting equipment and seed conditioning equipment that 
had come into contact with Karnal bunt-positive wheat were found by 
inspectors to require cleaning and disinfection so that they could be 
moved from the quarantined area without spreading Karnal bunt. The 
owners or lessees of these pieces of equipment had scheduled the 
movement of the equipment from the quarantined area prior to the 
declaration of these counties as regulated areas and needed to move the 
equipment out of the regulated areas to continue their harvesting. 
APHIS estimates that these pieces of equipment cost $100 each to clean 
and disinfect.
    Therefore, we are providing for the payment of compensation in the 
amount of $100 for each piece of equipment to owners or lessees of 
equipment that was required by an inspector to be cleaned and 
disinfected during the 2000-2001 crop season after the equipment came 
into contact with Karnal bunt-positive wheat in Archer, Baylor, 
Throckmorton, and Young Counties. To receive this compensation, owners 
or lessees must submit a copy of the PPQ-540 certificate issued to 
allow the movement of the equipment from a regulated area after it had 
been in contact with Karnal bunt-positive host crops and had been 
subsequently cleaned and disinfected.
    We are adding the provisions described above as a new paragraph 
Sec.  301.89-16(d), ``Special allowances for custom harvesters and 
equipment owners or lessees for costs related to cleaning and 
disinfection of mechanized harvesting and other equipment in Archer, 
Baylor, Throckmorton, and Young Counties, TX, in the 2000-2001 crop 
season.'' This new paragraph describes the circumstances under which 
custom harvesters and owners or lessees of equipment that were required 
to be cleaned and disinfected may receive compensation and the process 
by which they may apply for compensation.

Related Regulatory Action

    We plan to initiate rulemaking to amend the regulations to provide 
for the payment of similar compensation to custom harvesters who 
harvest host crops that test positive for Karnal bunt and owners or 
lessees of other equipment that is exposed to host crops that test 
positive for Karnal bunt in any areas not previously regulated for 
Karnal bunt. That proposed rule, which would apply to the 2002-2003 
through 2005-2006 crop seasons, is being prepared, in part, in response 
to other comments we received on our May 2002 interim rule.

Immediate Action

    Immediate action is necessary to relieve the economic burden placed 
on small entities by the domestic quarantine regulations for Karnal 
bunt. Under these circumstances, the Administrator has determined that 
prior notice and opportunity for public comment are contrary to the 
public interest and that there is good cause under 5 U.S.C. 553 for 
making this action effective less than 30 days after publication in the 
Federal Register.
    We will consider comments we receive during the comment period for 
this interim rule (see DATES above). After the comment period closes, 
we will publish another document in the Federal Register. The document 
will include a discussion of any comments we receive and any amendments 
we are making to the rule.

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been reviewed under Executive Order 12866. The rule 
has been determined to be not significant for the purposes of Executive 
Order 12866 and, therefore, has not been reviewed by the Office of 
Management and Budget.
    Karnal bunt is a fungal disease of wheat, durum wheat, and 
triticale (a hybrid of wheat and rye). Upon detection of Karnal bunt in 
Arizona in March 1996, Federal quarantine and emergency actions were 
imposed to prevent the interstate spread of the disease to other wheat 
producing areas in the United States. The spread of the disease in the 
United States would have significant adverse economic consequences, 
since many U.S. wheat export markets require that wheat from the United 
States be from areas where Karnal bunt is not known to occur. By 
certifying that U.S. wheat is from such areas, APHIS facilitates 
exports to some markets that otherwise would likely be closed. It has 
been estimated that termination of the certification program would 
result in a cumulative reduction of national net farm income of $5.3 
billion from 2003 to 2007.
    The unexpected discovery of Karnal bunt and subsequent Federal 
emergency actions have disrupted the production and marketing flows of 
wheat in the quarantined areas, causing economic hardship for a number 
of persons.\1\ In order to mitigate that hardship, and to help ensure 
full and effective compliance with the quarantine program, the USDA has 
offered compensation to certain growers, handlers and others. 
Compensation has been offered to mitigate losses incurred in the 1995-
1996, 1996-1997, 1997-1998, and 1999-2000 and subsequent crop seasons.
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    \1\ As an example, it was estimated that the impact of Karnal 
bunt and subsequent Federal actions on the wheat industry totaled 
$44 million in the 1995-1996 crop season, comprised primarily of 
losses in the value of wheat and seed.
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    This interim rule provides for custom harvesters and other 
equipment owners or lessees in Archer, Baylor, Throckmorton, and Young 
counties in northern Texas to receive compensation for certain disease-
related losses and expenses that they had not been eligible for under 
the previous regulations. Specifically, custom harvesters are offered 
compensation for: (1) The cost of required cleaning and disinfection of 
mechanized harvesting equipment; and (2) lost harvesting contracts due 
to downtime necessitated by cleaning and disinfection of mechanized 
harvesting equipment or fixed costs incurred when mechanized harvesting 
equipment is idled for required cleaning and disinfection. Compensation 
is also offered, in specific cases, for the cost of required cleaning 
and disinfection of equipment other than mechanized

[[Page 24913]]

harvesting equipment. Compensation would be offered only in connection 
with APHIS-required cleaning and disinfection stemming from the use of 
equipment in those four counties in northern Texas during the 2000-2001 
crop season.
    The four counties named above became regulated for Karnal bunt late 
in the 2000-2001 crop season, after much of the wheat in those counties 
had already been harvested. Because they had no prior knowledge that 
their equipment would be used in a Karnal bunt-infested area, custom 
harvesters operating in the four counties during the 2000-2001 crop 
season did not have an opportunity to avoid the area.
    The compensation provided by this interim rule is designed to 
reduce the economic impact of the Karnal bunt regulations on custom 
harvesters and other equipment owners and to help obtain cooperation 
from affected individuals in efforts to contain and reduce the 
prevalence of Karnal bunt. As an alternative, APHIS could elect to make 
no changes to the regulations, but that alternative would not encourage 
cooperation by custom harvesters and others subject to the cleaning and 
disinfection requirements of the regulations and other efforts designed 
to prevent the spread of the disease.

Cleaning and Disinfection of Mechanized Harvesting Equipment

    The regulations for Karnal bunt in place during the 2000-2001 crop 
season required that mechanized harvesting equipment be cleaned and 
disinfected prior to being moved from a regulated area if it was used 
to harvest Karnal bunt-positive host crops.
    This interim rule offers harvesters compensation for the actual 
cost of cleaning and disinfection, up to a maximum of $750 per cleaning 
and disinfection.\2\
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    \2\ The $750 figure is based on data provided by U.S. Custom 
Harvesters, a trade group. Harvesters would be eligible to receive 
compensation more than once, assuming they otherwise qualify.
---------------------------------------------------------------------------

    USDA's compensation liability under this aspect of the interim rule 
is estimated at $37,500. This estimate assumes 50 machine cleanings (50 
combines and associated equipment) at $750 per cleaning.\3\ Although 
the estimate is based on 50 combines, fewer than 40 harvesters are 
expected to be affected by the interim rule, as some harvesters own 
more than one combine.
---------------------------------------------------------------------------

    \3\ It is estimated that 130 pieces of harvesting equipment 
required cleaning--50 combines and 80 pieces of harvesting equipment 
other than combines. The 80 pieces of equipment other than combines 
were cleaned along with, and at the same time as, the 50 combines.
---------------------------------------------------------------------------

Contracts Lost Due to Downtime Necessitated by Cleaning and 
Disinfection

    Custom harvesters typically negotiate their combining contracts 
well in advance of the harvest season. In addition, they set rigorous 
schedules for harvesting, so as to get maximum utilization from their 
equipment. Contracts are specific for reporting dates at a given 
location.
    Because cleaning and disinfection delays the movement of their 
equipment to a subsequent location under contract, cleaning and 
disinfection may cause custom harvesters to default on contracts or to 
subcontract with other harvesters to fulfill the contracts. This 
interim rule offers custom harvesters compensation for the full value 
of one contract lost due to downtime necessitated by cleaning and 
disinfection, up to a maximum of $23.48 per acre of land to be 
harvested under the contract.\4\ (Custom harvesters would be able to 
apply for this compensation or the compensation for downtime costs 
discussed above, but not both.)
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    \4\ The $23.48 per acre figure represents average harvesting 
costs; it is based on data provided by U.S. Custom Harvesters, a 
trade group.
---------------------------------------------------------------------------

    USDA's compensation liability under this aspect of the interim rule 
is estimated at $250,000, assuming 10 lost contracts at an average of 
$25,000 per contract. No more than 10 harvesters are likely to be 
affected.

Compensation for Fixed Costs Incurred During Cleaning and Disinfection

    In addition to the cost of cleaning and disinfection itself, 
harvesters incur other costs during the time their machines are cleaned 
and disinfected. These fixed costs (e.g., for labor, travel, insurance, 
telephone, utilities, and interest) are distinct from variable costs 
(e.g., for fuel and lubrication). This rule will provide custom 
harvesters compensation for fixed costs incurred during cleaning and 
disinfection at a rate of $2,000 per machine cleaning. The rate of 
$2,000 assumes fixed costs of $250 per hour for 8 hours, the typical 
time required for cleaning and disinfection of a combine.\5\
---------------------------------------------------------------------------

    \5\ Harvesters would be eligible to receive compensation more 
than once, assuming they otherwise qualify.
---------------------------------------------------------------------------

    USDA's compensation liability under this aspect of the interim rule 
is estimated at $80,000. This estimate assumes 40 combine cleanings for 
which the combines' owners are compensated at $2,000 per cleaning. 
Fewer than 30 harvesters are expected to be affected by this aspect of 
the interim rule, since some harvesters own more than one combine.
    Harvesters would be able to apply for this compensation or the 
compensation for lost harvesting contracts discussed above, but not 
both. This is why the compensation estimate of $80,000 is based on only 
40 combines, 10 fewer than the 50 combines assumed to require cleaning 
earlier in this analysis under the heading ``Cleaning and Disinfection 
of Mechanized Harvesting Equipment.''

Cleaning and Disinfection of Other Equipment

    Under the regulations, owners or lessees of equipment other than 
mechanized harvesting equipment may be required to clean and disinfect 
their equipment (e.g., hay wagons, balers, grain carts, and trailers) 
prior to moving it from a regulated area. This rule offers equipment 
owners or lessees compensation for the cost of cleaning and 
disinfection, at a rate of $100 per cleaning.\6\
---------------------------------------------------------------------------

    \6\ Equipment owners or lessees would be eligible to receive 
compensation more than once, assuming they otherwise qualify.
---------------------------------------------------------------------------

    USDA's compensation liability under this aspect of the interim rule 
is estimated at $1,000. This estimate assumes compensation for 10 
pieces of equipment (10 x $100). No more than 10 owners or lessees are 
likely to be affected.

Impact on Small Entities

    The Regulatory Flexibility Act requires that agencies consider the 
economic effects of their rules on small businesses, organizations, and 
governmental jurisdictions. This interim rule affects certain wheat 
harvesters and other equipment owners or lessees in northern Texas. 
Affected entities will benefit, because the interim rule will allow 
them to receive compensation for certain disease-related losses and 
expenses that they are not now eligible for under the current 
regulations.
    Most entities that are affected are likely to be small in size, 
when judged by the U.S. Small Business Administration's (SBA) 
standards.\7\ Composite data for wheat growers offers an example. In 
1997, there were a total of 50,176 U.S. farms in North American 
Industry Classification System (NAICS) category 11114, a classification 
category comprised of establishments primarily engaged in growing wheat 
and/or producing wheat seeds. The per-farm average sales for those 
farms that year was $78,260, well below the SBA's small entity 
threshold of $750,000 in annual sales for farms in that NAICS

[[Page 24914]]

category.\8\ Affected harvesters are also likely to be small in size. 
In 2000, there were 338 firms in NAICS category 115113, classification 
comprised of establishments primarily engaged in mechanical harvesting, 
picking, and combining of crops. Of the 338 firms, 306, or 91 percent, 
had fewer than 20 employees, thus falling below the SBA's small entity 
threshold.\9\
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    \7\ The overwhelming majority of business entities, in general, 
are small under the SBA's standards.
    \8\ Source: SBA and 1997 Census of Agriculture (NASS).
    \9\ Source: SBA. The SBA's size standard for firms in NAICS 
115113 is based on annual sales, not the number of employees. 
However, composite sales data for firms in that NAICS category are 
not available.
---------------------------------------------------------------------------

    The interim rule is not expected to have a significant economic 
impact on a substantial number of entities, large or small. This is 
because no more than about 40 harvesters and equipment owners or 
lessees are likely to be affected by the rule. For some harvesters, 
especially those whose profit margins are small, the receipt of $25,000 
in compensation for a contract lost due to downtime necessitated by 
cleaning and disinfection could be considered significant. It is 
possible that a small number of harvesters, no more than about 10, 
could experience substantial economic benefits from compensation for 
lost harvesting contracts, assuming average per-contract compensation 
of $25,000.
    Under these circumstances, the Administrator of the Animal and 
Plant Health Inspection Service has determined that this action will 
not have a significant economic impact on a substantial number of small 
entities.

Executive Order 12372

    This program/activity is listed in the Catalog of Federal Domestic 
Assistance under No. 10.025 and is subject to Executive Order 12372, 
which requires intergovernmental consultation with State and local 
officials. (See 7 CFR part 3015, subpart V.)

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule: (1) Preempts all State and local laws and 
regulations that are inconsistent with this rule; (2) has no 
retroactive effect; and (3) does not require administrative proceedings 
before parties may file suit in court challenging this rule.

Paperwork Reduction Act

    In accordance with section 3507(j) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the information collection and 
recordkeeping requirements included in this interim rule have been 
submitted for emergency approval to the Office of Management and Budget 
(OMB). OMB has assigned control number 0579-0248 to the information 
collection and recordkeeping requirements.
    We plan to request continuation of that approval for 3 years. 
Please send written comments on the 3-year approval request to the 
following addresses: (1) Office of Information and Regulatory Affairs, 
OMB, Attention: Desk Officer for APHIS, Washington, DC 20503; and (2) 
Docket No. 03-052-1, Regulatory Analysis and Development, PPD, APHIS, 
Station 3C71, 4700 River Road Unit 118, Riverdale, MD 20737-1238. 
Please state that your comments refer to Docket No. 03-052-1 and send 
your comments within 60 days of publication of this rule.
    This interim rule provides for the payment of compensation to 
custom harvesters for losses they incurred due to the requirement that 
their equipment be cleaned and disinfected after four counties in 
northern Texas were declared regulated areas for Karnal bunt during the 
2000-2001 crop season and for the payment of compensation to owners of 
other equipment that came into contact with Karnal bunt-positive host 
crops in those counties and was required to be cleaned and disinfected 
during the 2000-2001 crop season. In order to receive compensation for 
the cost of cleaning and disinfection of mechanized harvesting 
equipment and for fixed costs incurred during cleaning and 
disinfection, custom harvesters must provide copies of a contract or 
other signed agreement for harvesting in Archer, Baylor, Throckmorton, 
or Young County during the 2000-2001 crop season, signed on a date 
prior to the designation of the county as a regulated area for Karnal 
bunt, or an affidavit stating that the custom harvester entered into an 
agreement to harvest in Archer, Baylor, Throckmorton, or Young County 
during the 2000-2001 crop season prior to the designation of the county 
as a regulated area for Karnal bunt; a copy of the PPQ-540 certificate 
issued to allow the movement of mechanized harvesting equipment from a 
regulated area after it had been used to harvest Karnal bunt-positive 
host crops and had been subsequently cleaned and disinfected; and a 
receipt showing the cost of the cleaning and disinfection. Custom 
harvesters seeking compensation for a lost contract must additionally 
provide a copy of the contract for which they are seeking compensation. 
Owners of other equipment seeking compensation must provide a copy of 
the PPQ-540 certificate allowing the movement of the equipment. We are 
soliciting comments from the public ( as well as affected agencies) 
concerning our information collection and recordkeeping requirements. 
These comments will help us:
    (1) Evaluate whether the information collection is necessary for 
the proper performance of our agency's functions, including whether the 
information will have practical utility;
    (2) Evaluate the accuracy of our estimate of the burden of the 
information collection, including the validity of the methodology and 
assumptions used;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the information collection on those who 
are to respond (such as through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology; e.g., permitting electronic 
submission of responses).
    Estimate of burden: Public reporting burden for this collection of 
information is estimated to average 0.2 hours per response.
    Respondents: Custom harvesters, owners of other equipment, lessees 
of other equipment.
    Estimated annual number of respondents: 40.
    Estimated annual number of responses per respondent: 1.
    Estimated annual number of responses: 40.
    Estimated total annual burden on respondents: 8 hours. (Due to 
averaging, the total annual burden hours may not equal the product of 
the annual number of responses multiplied by the reporting burden per 
response.)
    Copies of this information collection can be obtained from Mrs. 
Celeste Sickles, APHIS' Information Collection Coordinator, at (301) 
734-7477.

Government Paperwork Elimination Act Compliance

    The Animal and Plant Health Inspection Service is committed to 
compliance with the Government Paperwork Elimination Act (GPEA), which 
requires Government agencies in general to provide the public the 
option of submitting information or transacting business electronically 
to the maximum extent possible. For information pertinent to GPEA 
compliance related to this interim rule, please contact Mrs. Celeste 
Sickles, APHIS' Information Collection Coordinator, at (301) 734-7477.

List of Subjects in 7 CFR Part 301

    Agricultural commodities, Plant diseases and pests, Quarantine,

[[Page 24915]]

Reporting and recordkeeping requirements, Transportation.


0
Accordingly, we are amending 7 CFR part 301 as follows:

PART 301--DOMESTIC QUARANTINE NOTICES

0
1. The authority citation for part 301 continues to read as follows:

    Authority: 7 U.S.C. 7701-7772; 7 CFR 2.22, 2.80, and 371.3.
    Section 301.75-15 also issued under Sec. 204, Title II, Pub. L. 
106-113, 113 Stat. 1501A-293; sections 301.75-15 and 301.75-16 also 
issued under Sec. 203, Title II, Pub. L. 106-224, 114 Stat. 400 (7 
U.S.C. 1421 note).


0
2. Section 301.89-16 is amended by revising the section title and 
adding a new paragraph (d) and an OMB control number citation to read 
as follows:


Sec.  301.89-16  Compensation for grain storage facilities, flour 
millers, National Survey participants, and certain custom harvesters 
and equipment owners or lessees for the 1999-2000 and subsequent crop 
seasons.

* * * * *
    (d) Special allowances for custom harvesters and equipment owners 
or lessees for costs related to cleaning and disinfection of mechanized 
harvesting and other equipment in Archer, Baylor, Throckmorton, and 
Young Counties, TX, in the 2000-2001 crop season. All claims for 
compensation under this paragraph Sec.  301.89-16(d) must be received 
by APHIS on or before September 2, 2004. The Administrator may extend 
this deadline upon written request in specific cases, when unusual and 
unforeseen circumstances occur that prevent or hinder a claimant from 
requesting compensation on or before this date. All compensation 
payments made under this paragraph Sec.  301.89-16(d) will be issued by 
APHIS. Claims for compensation should be sent to Plant Protection and 
Quarantine, APHIS, USDA, 304 West Main Street, Olney, TX 76374.
    (1) Custom harvesters. (i) Cleaning and disinfection of mechanized 
harvesting equipment. Custom harvesters who harvested host crops that 
tested positive for Karnal bunt and that were grown in Archer, Baylor, 
Throckmorton, or Young Counties, TX, during the 2000-2001 crop season 
are eligible to receive compensation for the cost of cleaning and 
disinfecting their mechanized harvesting equipment as required by Sec.  
301.89-12(a). Compensation for the cost of cleaning and disinfection 
mechanized harvesting equipment used to harvest Karnal bunt-positive 
host crops will be either the actual cost or $750 per cleaned machine, 
whichever is less. To claim compensation, a custom harvester must 
provide copies of a contract or other signed agreement for harvesting 
in Archer, Baylor, Throckmorton, or Young County during the 2000-2001 
crop season, signed on a date prior to the designation of the county as 
a regulated area for Karnal bunt, or an affidavit stating that the 
custom harvester entered into an agreement to harvest in Archer, 
Baylor, Throckmorton, or Young County during the 2000-2001 crop season 
prior to the designation of the county as a regulated area for Karnal 
bunt; a copy of the PPQ-540 certificate issued to allow the movement of 
mechanized harvesting equipment from a regulated area after it had been 
used to harvest Karnal bunt-positive host crops and had been 
subsequently cleaned and disinfected; and a receipt showing the cost of 
the cleaning and disinfection.
    (ii) Contracts lost due to cleaning and disinfection. Custom 
harvesters who harvested host crops that tested positive for Karnal 
bunt and that were grown in Archer, Baylor, Throckmorton, or Young 
Counties, TX, during the 2000-2001 crop season are also eligible to be 
compensated for the revenue lost if they lost one contract due to 
downtime necessitated by cleaning and disinfection, if the contract to 
harvest Karnal bunt-positive host crops in a previously nonregulated 
area was signed before the area was declared a regulated area for 
Karnal bunt. Compensation will only be provided for one contract lost 
due to cleaning and disinfection. Compensation for any contract that 
was lost due to cleaning and disinfection will be either the full value 
of the contract or $23.48 for each acre that was to have been harvested 
under the contract, whichever is less. To claim compensation, a custom 
harvester must provide copies of a contract or other signed agreement 
for harvesting in Archer, Baylor, Throckmorton, or Young County during 
the 2000-2001 crop season, signed on a date prior to the designation of 
the county as a regulated area for Karnal bunt, or an affidavit stating 
that the custom harvester entered into an agreement to harvest in 
Archer, Baylor, Throckmorton, or Young County during the 2000-2001 crop 
season prior to the designation of the county as a regulated area for 
Karnal bunt; a copy of the PPQ-540 certificate issued to allow the 
movement of mechanized harvesting equipment from a regulated area after 
it had been used to harvest Karnal bunt-positive host crops and had 
been subsequently cleaned and disinfected; and the contract for 
harvesting in an area not regulated for Karnal bunt that had been lost 
due to time lost to cleaning and disinfecting harvesting equipment, 
signed on a date prior to the designation of the relevant county as a 
regulated area for Karnal bunt, for which the custom harvester will 
receive compensation.
    (iii) Fixed costs incurred during cleaning and disinfection. Custom 
harvesters who harvested host crops that tested positive for Karnal 
bunt and that were grown in Archer, Baylor, Throckmorton, or Young 
Counties, TX, during the 2000-2001 crop season who do not apply for 
compensation for a contract lost due to cleaning and disinfection as 
described in paragraph (d)(1)(ii) of this section are eligible for 
compensation for fixed costs incurred during cleaning and disinfection. 
Compensation for fixed costs incurred during cleaning and disinfection 
will be $2,000. To claim compensation, a custom harvester must provide 
copies of a contract or other signed agreement for harvesting in 
Archer, Baylor, Throckmorton, or Young County during the 2000-2001 crop 
season, signed on a date prior to the designation of the county as a 
regulated area for Karnal bunt, or an affidavit stating that the custom 
harvester entered into an agreement to harvest in Archer, Baylor, 
Throckmorton, or Young County during the 2000-2001 crop season prior to 
the designation of the county as a regulated area for Karnal bunt; and 
a copy of the PPQ-540 certificate issued to allow the movement of 
mechanized harvesting equipment from a regulated area after it has been 
used to harvest Karnal bunt-positive host crops and has been 
subsequently cleaned and disinfected.
    (2) Other equipment; cleaning and disinfection. Owners or lessees 
of equipment other than mechanized harvesting equipment and seed 
conditioning equipment that came into contact with host crops that 
tested positive for Karnal bunt in Archer, Baylor, Throckmorton, or 
Young Counties, TX, during the 2000-2001 crop season and that was 
required by an inspector to be cleaned and disinfected are eligible for 
compensation for the cost of cleaning and disinfection. Compensation 
for the cleaning and disinfection of such equipment will be $100. To 
receive this compensation, owners or lessees must submit a copy of the 
PPQ-540 certificate issued to allow the movement of the equipment from 
a regulated area after it had been in contact with Karnal bunt-positive 
host crops and had been subsequently cleaned and disinfected.


[[Page 24916]]


(Approved by the Office of Management and Budget under control 
number 0579-0248.)

    Done in Washington, DC, this 29th day of April 2004.
Peter Fernandez,
Acting Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 04-10195 Filed 5-4-04; 8:45 am]
BILLING CODE 3410-34-P