[Federal Register Volume 70, Number 100 (Wednesday, May 25, 2005)]
[Proposed Rules]
[Pages 30009-30015]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-10444]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1430

RIN 0560-AH28


2004 Dairy Disaster Assistance Payment Program

AGENCIES: Commodity Credit Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule invites comments on a new program, the 2004 
Dairy Disaster Assistance Payment Program, as authorized by the 
Military Construction Appropriations and Emergency Hurricane 
Supplemental Appropriations Act of 2005. The proposed program will 
provide up to $10 million in assistance for producers in counties 
declared a disaster by the President in 2004 due to hurricanes. 
Payments would be made for losses in the three month period, August-
October 2004, only. This action is designed to provide financial 
assistance to producers who suffered dairy production and milk spoilage 
losses due to hurricanes in 2004.

DATES: Comments on this rule must be received on or before June 24, 
2005, in order to be assured consideration.

ADDRESSES: The agencies invite interested persons to submit comments on 
this proposed rule. Comments may be submitted by any of the following 
methods:
     E-Mail: Send comments to [email protected].
     Fax: Submit comments by facsimile transmission to: (202) 
690-1536.
     Mail: Submit comments to Grady Bilberry, Director, Price 
Support Division (PSD), Farm Service Agency (FSA), United States 
Department of Agriculture (USDA), STOP 0512, Room 4095-S, 1400 
Independence Avenue, SW., Washington, DC 20250-0512.
     Hand Delivery or Courier: Deliver comments to the above 
address.
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
    Comments may be inspected in the Office of the Director, PSD, FSA, 
USDA, Room 4095 South Building, Washington, DC, between 8 a.m. and 4:30 
p.m., Monday through Friday, except holidays. A copy of this proposed 
rule is available on the PSD home page at http://www.fsa.usda.gov/dafp/psd/.

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

[[Page 30010]]

e-mail: [email protected].

SUPPLEMENTARY INFORMATION:

Background

    Section 103 of Division B of the Military Construction 
Appropriations and Emergency Hurricane Supplemental Appropriations Act 
of 2005 (Pub. L. 108-324, 118 Stat. 1220) (the 2004 Act), enacted 
October 13, 2004, requires the Secretary of Agriculture to use $10 
million to make payments to dairy producers for losses in a county 
declared a disaster by the President in 2004 due to hurricanes. 
Hurricanes Charley, Frances, Ivan, and Jeanne severely impacted dairy 
producers in certain areas of the southeastern portion of the United 
States during the months of August and September of 2004. As a result, 
many dairy producers may have incurred decreases in production due to 
cattle losses and milk that had to be dumped because of lack of 
electricity, closed milk plants, and damaged containment equipment.
    Pursuant to the legislation, this rule sets out proposed 
regulations for the new program. As proposed, dairy producers who 
suffered production losses and dairy spoilage losses as a result of 
2004 hurricanes may apply for compensation for losses incurred during 
the period of August through October of 2004 only. Benefits will be 
provided to eligible dairy producers in those counties declared 
disasters under a Presidential disaster declaration issued because of a 
hurricane that meet all program eligibility requirements and are 
subsequently approved for participation in the 2004 Dairy Disaster 
Assistance Payment Program. Dairy producers in counties contiguous to 
an approved county are not eligible.
    To be eligible under the proposed program, dairy producers must 
have produced milk in the United States during the 2004 calendar year 
in a dairy operation located in a county declared a disaster by the 
President due to hurricanes in 2004. As a result of the hurricanes, the 
operation must have suffered dairy production losses or dairy spoilage 
losses in the eligible months. In addition, adequate evidence of dairy 
production losses or spoilage losses must be provided to FSA to 
substantiate the losses suffered and certified by each producer. 
Subject to comment and further consideration, payments will not be 
reduced as a result of payments from a milk buyer or marketing 
cooperative for dumped or spoiled milk.
    Applicants must apply for benefits during the sign-up period 
announced by the Deputy Administrator for Farm Programs. At the close 
of the sign-up period, the total production and spoilage losses from 
all eligible applicants will be determined. Payment eligibilities will 
be separately calculated on an operation by operation basis. An 
individual may be involved in more than one operation. Payments to 
eligible producers will be calculated by multiplying the eligible 
pounds by the average price received for commercial milk production in 
the affected areas during the eligible months. If the total amount of 
available funding ($10 million, less any reserve established to account 
for disputed claims) is insufficient to compensate eligible producers 
for eligible losses, then CCC will pay losses at two levels in an 
effort to more equitably distribute the limited funds and maximize the 
effectiveness of the program. Thus, in case of inadequate funds for all 
eligible losses, CCC will calculate each operation's percentage overall 
quarterly percentage reduction for the full August-October period from 
the calculated base for the operation for the full quarter (August 
through October). Calculated losses over the period from August to 
October 2004 of greater than 20 percent of their normal production 
would be paid at the maximum per-pound payment rate. A loss of over 20 
percent in one or two of the eligible months will not qualify for the 
maximum per-pound payment. Payments for eligible losses below the 20-
percent threshold would be made at a rate that will exhaust the 
available funds that remain following payment of eligible losses at the 
higher level. CCC decided to establish the minimum loss level at 20 
percent for this purpose in order to be consistent with other FSA and 
CCC disaster programs. For example, the minimum loss that a producer 
must have suffered to be eligible for the 2003 Hurricane Assistance 
Program for 2002-crop sugarcane was 20 percent, for the CCC Tree 
Assistance Program it is 15 percent of normal production, for the Crop 
Disaster Program the minimum production loss is 35 percent and the 
required quality loss is 20 percent, for the Livestock Assistance 
Program losses must exceed 40 percent, for the 2002 Cattle Feed Program 
the minimum was 5 percent, and for the 2001/2002-crop Sugar Beet 
Disaster Program the minimum was a 35 percent. Different payments for 
differing degrees of losses will distribute the limited funds provided 
under this program in a manner that provides greater assistance to 
producers who suffered greater losses from the subject hurricanes. An 
example is below. If funds are adequate for all eligible losses, all 
eligible producers will be paid at the average price received for 
commercial milk production in their area during the months of August 
through October of 2004. CCC encourages comments on these provisions 
and the appropriate loss-level percentage.
    Example:

----------------------------------------------------------------------------------------------------------------
                                  Producer A  (South      Producer B          Producer C          Producer D
                                       Carolina)           (Florida)           (Alabama)           (Georgia)
----------------------------------------------------------------------------------------------------------------
Total Base Production...........             800,000           2,000,000           1,500,000             600,000
Actual Production...............             485,000           1,820,000           1,070,000             490,000
Pounds Dumped or Spoiled........               5,000              20,000              20,000              10,000
Total Eligible Loss.............             320,000             200,000             450,000             120,000
20% of Base Production..........             160,000             400,000             300,000             120,000
Pounds of loss above 20% loss                160,000                   0             150,000                   0
 level..........................
Payment Rate....................         \1\ $0.1559         \1\ $0.1762         \1\ $0.1626         \1\ $0.1626
DDAP for loss above 20%.........             $24,944                  $0             $24,390                  $0
DDAP for under 20% loss @ $0.12/             $19,200             $24,000             $36,000             $14,400
 lb. (example only).............
                                 ---------------------
    Total DDAP..................             $44,144             $24,000             $60,390             $14,400
Eligible Losses x average price.             $49,888             $35,240             $73,100             $19,512
Percent production loss suffered                  40                  10                  30                  20
Percent financial losses                          88                  68                  83                 74
 recovered from DDAP............
----------------------------------------------------------------------------------------------------------------
\1\ Lb.


[[Page 30011]]

    CCC considered two additional provisions that were not included in 
the proposed rule, but which are discussed here to obtain public 
comment. First, the agency considered adding an adjustment to the 
producer's calculated production losses in the eligible months for cows 
that were added to the milking herd in order to make up for per-cow 
production decreases as a result of the hurricane. It was determined 
that basing the payments in this program on the dairy operation's 
production during the eligible months, less the production from cows 
that were added after the base production calculation month would be 
administratively difficult, and the additional step in the eligible 
production calculations would make the process less reliable. Further, 
the additional recordkeeping and reporting requirements imposed on 
producers to report the number of cows added during each eligible 
month, the corresponding dates of purchase, and per-cow production 
based on the number of days of ownership during each eligible month, 
was felt to be too burdensome for program participation and would 
likely have a negligible effect on payments. Second, the agency 
considered paying the dairy operation's milk marketing cooperative 
directly for milk that was dumped. Instead, this rule proposes that 
payments will be based on the reduction in the amount of production 
marketed, including any dumped production, that can be verified. 
Payments for eligible losses will be made directly by FSA to producers. 
To segregate payments into two payment schemes, one for producers' 
production losses, and one for cooperatives' losses from dumped milk, 
would greatly add to the administrative burden of carrying out this 
program. Further, the statute provides that these payments will be made 
``* * * to dairy producers * * *'' Thus, this rule provides for making 
payments only to producers. Nevertheless, the agency invites comments 
on these two variations that were considered, and specifically requests 
suggestions for how these options could be added to the program 
regulations in a simple, straightforward way.
    Producers who have received a payment under the Dairy Indemnity 
Payment Program (7 CFR part 760) shall be ineligible for payments under 
this rule. Gross revenue and per-person payment limits do not apply. 
Information provided on applications and supporting documentation will 
be subject to verification by FSA. False certifications by producers 
carry strict penalties and FSA will validate applications with random 
spot-checks. Dairy producers determined to have made any false 
certifications or adopted any misrepresentation, scheme, or device that 
defeats the program's purpose will be required to refund any payments 
issued under this program with interest, and may be subject to other 
civil, criminal, or administrative remedies. During the application 
period, dairy producers may apply in person at FSA county offices 
during regular business hours. Applications may also be submitted to 
CCC by mail or FAX. Program applications may be obtained in person, by 
mail, telephone, and facsimile from producers' designated FSA county 
office or via the Internet at http://www.fsa.usda.gov/dafp/psd/. In 
order to expedite the availability of funds it has been determined to 
be in the public interest to limit the comment period to 30 days.

Executive Order 12866

    This proposed rule has been determined to be ``significant'' under 
Executive Order 12866 and was reviewed by the Office of Management and 
Budget (OMB). A cost-benefit assessment of this rule was completed and 
is available from Ms. Cooke using the contact information above.

Regulatory Flexibility Act

    The Regulatory Flexibility Act 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 with respect to the subject of this rule.

Environmental Assessment

    The environmental impacts of this proposed rule have been 
considered consistent 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 has 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 12988

    This rule has been reviewed in accordance with Executive Order 
12998. 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 
set forth at 7 CFR parts 11 and 780 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.

Paperwork Reduction Act of 1995

    In accordance with the Paperwork Reduction Act of 1995, FSA has 
submitted a request for approval to the Office of Management and Budget 
(OMB) of an information collection required to support this proposed 
rule for the 2004 Dairy Disaster Assistance Payment Program. A notice 
was published in the Federal Register on February 16, 2005, (70 FR 
7923) with estimates of the information collection burden required to 
implement this program and requesting comments on those requirements as 
required by 5 CFR 1320.8(d)(1). Copies of the information collection 
may be obtained from Danielle Cooke, phone: (202) 720-1919; e-mail: 
[email protected].

Government Paperwork Elimination Act

    CCC 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 to be utilized by a person 
subject to this rule are not yet fully implemented in a way that would 
allow the public to conduct business with CCC electronically. 
Accordingly, at

[[Page 30012]]

this time, all forms required to be submitted under this rule may be 
submitted to CCC by mail or FAX.

List of Subjects in 7 CFR Part 1430

    Dairy, Disaster assistance, Reporting and recordkeeping 
requirements.

    For the reasons set out in the preamble, 7 CFR part 1430 is 
proposed to be amended as follows:

PART 1430--DAIRY PRODUCTS

    1. The authority citation for part 1430 is revised to read as 
follows:

    Authority: 7 U.S.C. 7981 and 7982; 15 U.S.C. 714b and 714c; Pub. 
L. 108-324, 118 Stat. 1220.

    2. Subpart C is added to read as follows:
Subpart C--2004 Dairy Disaster Assistance Payment Program
Sec.
1430.300 Applicability.
1430.301 Administration.
1430.302 Definitions.
1430.303 Time and method of application.
1430.304 Eligibility.
1430.305 Proof of production.
1430.306 Determination of losses incurred.
1430.307 Rate of payment and limitations on funding.
1430.308 Availability of funds.
1430.309 Appeals.
1430.310 Misrepresentation and scheme or device.
1430.311 Death, incompetence, or disappearance.
1430.312 Maintaining records.
1430.313 Refunds; joint and several liability.
1430.314 Miscellaneous provisions.
1430.315 Termination of program.

Subpart C--2004 Dairy Disaster Assistance Payment Program


Sec.  1430.300  Applicability.

    (a) Subject to the availability of funds, this subpart sets forth 
the terms and conditions applicable to the 2004 Dairy Disaster 
Assistance Payment Program authorized by section 103 of Division B of 
Public Law 108-324. Benefits will be provided to eligible United States 
producers who have suffered dairy production losses and dairy spoilage 
losses in eligible counties as a result of a hurricane disaster in 
2004.
    (b) To be eligible for this program, a producer must have been a 
milk producer in 2004 in a county declared a disaster by the President 
of the United States due to a 2004 hurricane. Only losses occurring in 
those counties are eligible for payment in this program. Producers in 
contiguous counties that were not designated by the President as a 
disaster county due to a hurricane in 2004 are not eligible.
    (c) Subject to the availability of funds, benefits shall be 
provided by the Commodity Credit Corporation (CCC) to eligible dairy 
producers. Additional terms and conditions may be set forth in the 
payment application that must be executed by participants to receive a 
disaster assistance payment for dairy production losses and dairy 
spoilage losses.
    (d) To be eligible for payments, producers must comply with the 
provisions of, and their losses must meet the conditions of, this 
subpart and any other conditions imposed by CCC.


Sec.  1430.301  Administration.

    (a) The 2004 Dairy Disaster Assistance Payment Program shall be 
administered under the general supervision of the Executive Vice 
President, CCC (Administrator, FSA), or a designee, and shall be 
carried out in the field by FSA State and county committees (State and 
county committees) and FSA employees.
    (b) State and county committees, and representatives and employees 
thereof, do not have the authority to modify or waive any of the 
provisions of the regulations of this subpart.
    (c) The State committee shall take any action required by the 
regulations of this subpart that has not been taken by the county 
committee. The State committee shall also:
    (1) Correct, or require the county committee to correct, any action 
taken by such county committee that is not in accordance with the 
regulations of this subpart; and
    (2) Require a county committee to withhold taking any action that 
is not in accordance with the regulations of this subpart.
    (d) No delegation in this subpart to a State or county committee 
shall preclude the Executive Vice President, CCC, or a designee, from 
determining any question arising under the program or from reversing or 
modifying any determination made by the State or county committee.
    (e) The Deputy Administrator for Farm Programs, FSA, may authorize 
State and county committees to waive or modify deadlines in cases where 
lateness or failure to meet such requirements do not adversely affect 
the operation of the 2004 Dairy Disaster Assistance Payment Program and 
does not violate statutory limitations on the program.
    (f) Data furnished by the applicants will be used to determine 
eligibility for program benefits. Although participation in the 2004 
Dairy Disaster Assistance Payment Program is voluntary, program 
benefits will not be provided unless the participant furnishes all 
requested data.


Sec.  1430.302  Definitions.

    The definitions set forth in this section shall be applicable for 
all purposes of administering the 2004 Dairy Disaster Assistance 
Payment Program established by this subpart.
    Application means the 2004 Dairy Disaster Assistance Payment 
Program Application.
    Application period means the time period established by the Deputy 
Administrator for producers to apply for program benefits.
    CCC means the Commodity Credit Corporation of the Department.
    County committee means the FSA county committee.
    County office means the FSA office responsible for administering 
FSA programs for farms located in a specific area in a State.
    Dairy operation means any person or group of persons who, as a 
single unit, as determined by CCC, produces and markets milk 
commercially from cows and whose production facilities are located in 
the United States.
    Department or USDA means the United States Department of 
Agriculture.
    Deputy Administrator means the Deputy Administrator for Farm 
Programs (DAFP), FSA, or a designee.
    Disaster county means a county declared a disaster by the President 
of the United States due to a hurricane in 2004, and is only the county 
so declared, not a contiguous county.
    Farm Service Agency or FSA means the Farm Service Agency of the 
Department.
    Hundredweight or cwt. means 100 pounds.
    Milk handler or cooperative means the marketing agency to, or 
through which, the producer commercially markets whole milk.
    Milk marketings means a marketing of milk for which there is a 
verifiable sales or delivery record of milk marketed for commercial 
use.
    Payment pounds means the pounds of milk production from a dairy 
operation for which the dairy producer is eligible to be paid under 
this subpart.
    Producer means any individual, group of individuals, partnership, 
corporation, estate, trust association, cooperative, or other business 
enterprise or other legal entity who is, or whose members are, a 
citizen of, or legal resident alien in the United States, and who 
directly or indirectly, as determined by the Secretary, shares in the 
risk of producing milk, and makes contributions (including land, labor,

[[Page 30013]]

management, equipment, or capital) to the dairy farming operation of 
the individual or entity of the proceeds of this operation.
    Starting base production means actual commercial production 
marketed by the dairy operation during the month of July 2004, or 
alternative period established by the Deputy Administrator.
    Verifiable production records means evidence that is used to 
substantiate the amount of production marketed, including any dumped 
production, and that can be verified by CCC through an independent 
source.


Sec.  1430.303  Time and method of application.

    (a) Dairy producers may obtain an Application, in person, by mail, 
by telephone, or by facsimile from any county FSA office. In addition, 
applicants may download a copy of the Application at http://www.sc.egov.usda.gov.
    (b) A request for benefits under this subpart must be submitted on 
a completed Application as defined in Sec.  1430.302. Applications and 
any other supporting documentation shall be submitted to the FSA county 
office serving the county where the dairy operation is located but, in 
any case, must be received by the FSA county office by the close of 
business on the date established by the Deputy Administrator. 
Applications not received by the close of business on such date will be 
disapproved as not having been timely filed and the dairy producer will 
not be eligible for benefits under this program.
    (c) All persons who share in the risk of a dairy operation's total 
production must certify to the information on the Application before 
the Application will be considered complete.
    (d) Each dairy producer requesting benefits under this subpart must 
certify to the accuracy and truthfulness of the information provided in 
their application and any supporting documentation. All information 
provided is subject to verification by CCC. Refusal to allow CCC or any 
other agency of the Department of Agriculture to verify any information 
provided will result in a denial of eligibility. Furnishing the 
information is voluntary; however, without it program benefits will not 
be approved. Providing a false certification to the Government may be 
punishable by imprisonment, fines and other penalties or sanctions.


Sec.  1430.304  Eligibility.

    (a) Producers in the United States will be eligible to receive 
hurricane-related dairy disaster benefits under this part only if they 
have suffered dairy production or dairy spoilage losses in counties 
declared a disaster by the President due to any hurricane in 2004. To 
be eligible to receive payments under this subpart, producers in a 
dairy operation must:
    (1) Have produced and commercially marketed milk in the United 
States and commercially marketed the milk produced during the 2004 
calendar year;
    (2) Be a producer on a dairy farm operation physically located in a 
disaster county where production and milk spoilage losses were incurred 
as a result of 2004 hurricanes, and limiting their claims to losses 
occurring in those counties;
    (3) Provide proof of monthly milk production dumped and 
commercially marketed by all persons in the eligible dairy operation 
during the third quarter of the 2004 milk marketing year, or other 
period as determined by FSA, to determine the total pounds of eligible 
losses that will be used for payment; and
    (4) Apply for payments during the application period established by 
the Deputy Administrator.
    (b) Payments may be made for losses suffered by an otherwise 
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 or the producer's estate signs the application for 
payment. Proof of authority to sign for the deceased producer's estate 
or a 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) Producers associated with a dairy operation must submit a 
timely application and comply with all other terms and conditions of 
this subpart and instructions issued by CCC, as well as comply with 
those instructions that are otherwise contained in the application to 
be eligible for benefits under this subpart.
    (d) 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 2004 
calendar year, as applicable, and must not otherwise be barred from 
receiving benefits under 7 CFR part 12 or any other law or regulation.
    (e) Payments will be limited to losses in eligible counties in 
eligible months.
    (f) All payments under this part are subject to the availability of 
funds.


Sec.  1430.305  Proof of production.

    (a) A dairy producer must, based on the instructions issued by the 
Deputy Administrator, provide adequate proof of the dairy operation's 
commercial production, including any dumped production, for each month 
for July 2004 through October 2004, and must specifically identify any 
dumped production for August through October 2004. If a month other 
than July 2004 is used records for that month must be provided.
    (1) A producer must certify and provide such proof as requested 
that losses for which compensation is claimed were hurricane-related 
and occurred in an eligible county in an eligible month.
    (2) Additional supporting documentation may be requested by FSA as 
necessary to verify production or spoilage losses to the satisfaction 
of FSA.
    (b) Adequate proof under paragraph (a) of this section must be 
based on milk marketing statements obtained from the dairy operation's 
milk handler or marketing cooperative. Supporting documents may 
include, but are not limited to: tank records, milk handler records, 
daily milk marketings, copies of any payments received from other 
sources for production or spoilage losses, or any other documents 
available to confirm the production history of the dairy operation and 
determine losses incurred by the dairy operation. All information 
provided is subject to verification, spot check, and audit by FSA. 
Also, FSA or another CCC representative may examine the dairy 
operation's production or spoilage claims.
    (c) If adequate proof of commercially-marketed production and 
supporting documentation is not presented to the satisfaction of CCC or 
FSA, the request for benefits will be rejected. In the case of a new 
producer that had no verifiable, actual, commercial production marketed 
by the dairy operation during the month of July 2004, but which 
suffered eligible losses, an alternate period may be established by the 
Deputy Administrator.
    (d) Evidence of production will be used to establish the commercial 
marketing and production history of the dairy operation so that 
production and spoilage losses can be computed in accordance with Sec.  
1430.306.


Sec.  1430.306  Determination of losses incurred.

    (a) Eligible payable losses will be calculated on a dairy operation 
by dairy operation basis and will be limited to those occurring in 
August to October

[[Page 30014]]

2004. Specifically, dairy production and spoilage losses incurred by 
producers under this subpart will be determined on the established 
history of the dairy operation's actual commercial production marketed 
from August through October 2004, and actual production dumped or 
otherwise not marketed from August through October 2004, as provided by 
the dairy operation consistent with Sec.  1430.305. Except as otherwise 
provided in these regulations, the starting base production, as defined 
in Sec.  1430.302, will be adjusted downward by a percentage determined 
by CCC to determine the base production for the months of August 
through October 2004. These adjustments are made to account for the 
seasonal declines that can occur during those months. The base 
production for each of the months August through October 2004, will be 
calculated by reducing the starting base production (July 2004, or 
approved alternate month) as follows:
    (1) August 2004 base production will be the starting base 
production reduced by 9 percent;
    (2) September 2004 base production will be the starting base 
production reduced by 15 percent;
    (3) October 2004 base production will be the starting base 
production reduced by 11 percent.
    (b) The eligible dairy production losses for a dairy operation 
will, for each of the months of August through October 2004, will be:
    (1) The new base production for the dairy operation calculated 
under paragraph (a) of this section less, (2) For each such month for 
each dairy operation, the total of:
    (i) Actual commercially-marketed production; plus
    (ii) The pounds of production dumped (whether related to the 
hurricane or not), or otherwise not commercially marketed (whether 
related to the hurricane or not). For dumping losses to be eligible, 
they must be hurricane related, as described under paragraphs (c) and 
(d) of this section.
    (c) Actual production losses may be adjusted to the extent the 
reduction in production is not certified by the producer to be the 
result of the hurricane or is determined by FSA not to be hurricane-
related. Actual production, as adjusted, that exceeds the adjusted base 
production will indicate that the dairy operation incurred no 
production losses for the corresponding month as a result of the 
hurricane disaster, and production for that month will not qualify as a 
production loss for the purposes of this program.
    (d) Eligible dairy spoilage losses incurred by producers under this 
subpart for each of the months August through October 2004 will be 
determined based on actual milk produced and dumped on the farm as a 
result of the 2004 hurricanes. Proper documentation of milk dumped on 
the farm as a result of spoilage due to a hurricane must be provided to 
CCC as provided in Sec.  1430.305.
    (e) Eligible production and spoilage losses as otherwise determined 
under paragraphs (a) through (d) of this section will be added together 
to determine total eligible losses incurred by the dairy operation 
subject to all other eligibility requirements as may be included in 
this part or elsewhere.
    (f) Payment on eligible dairy operation losses will be calculated 
using whole pounds of milk. No double counting is permitted, and only 
one payment will be made for each pound of milk calculated as an 
eligible loss after the distribution of the operation's eligible 
production loss among the producers of the dairy operation according to 
Sec.  1430.307(b). Payments under this part will not be affected by any 
payments for dumped or spoiled milk that the dairy operation may have 
received from its milk handler, or marketing cooperative, or any other 
private party.
    (g) If a producer is eligible to receive payments under this part 
and benefits under any other program administered by the Secretary for 
the same losses, the producer must choose whether to receive the other 
program benefits or payments under this part, but shall not be eligible 
for both. The limitation on multiple benefits prohibits a producer from 
being compensated more than once for the same losses. If the other USDA 
program benefits are not available until after an application for 
benefits has been filed under this part, the producer may, to avoid 
this restriction on such other benefits, refund the total amount of the 
payment to the administrative FSA office from which the payment was 
received.


Sec.  1430.307  Rate of payment and limitations on funding.

    (a) Subject to the availability of funds, the payment rate for 
eligible production and spoilage losses determined according to Sec.  
1430.306 will be, depending on the State, the average monthly Mailbox 
milk price for the Florida, the Southeast, or the Appalachian States 
Marketing Orders as reported by the Agricultural Marketing Service 
during the months of August, September, and October of 2004. Maximum 
payment rates for eligible losses for dairy operations located in 
specific states will be as follows:
    (1) Florida--$17.62 per hundredweight ($0.1762 per pound).
    (2) Alabama, Georgia, and Louisiana--$16.26 per hundredweight 
($0.1626 per pound).
    (3) North Carolina and South Carolina--$15.59 per hundredweight 
($0.1559 per pound).
    (b) Subject to the availability of funds, each eligible dairy 
operation's payment will be calculated by multiplying the applicable 
payment rate under paragraph (a) of this section by the operation's 
total eligible losses. Where there are multiple producers in the dairy 
operation, individual producers' payments will be disbursed according 
to each producer's share of the dairy operation's production as 
specified in the Application.
    (c) If the total value of losses claimed under paragraph (b) of 
this section exceeds the $10 million available for the 2004 Dairy 
Disaster Assistance Payment Program, less any reserve that may be 
created under paragraph (e) of this section, total eligible losses of 
individual dairy operations that, as calculated as an overall 
percentage for the full three month period, August-October 2004 (not a 
monthly average for any one month), are greater than 20 percent of the 
total base production for those three months will be paid at the 
maximum rate under paragraph (a) of this section to the extent 
available funding allows. A loss of over 20 percent in only one or two 
of the eligible months will not of itself qualify for the maximum per-
pound payment. Total eligible losses for a producer, as calculated 
under Sec.  1430.306, of less than or equal to 20 percent during the 
eligibility period of August to October 2004 will be paid at a rate 
determined by dividing the eligible losses of less than 20 percent by 
the funds remaining after making payments for all eligible losses above 
the 20-percent threshold.
    (d) In no event shall the payment exceed the value determined by 
multiplying the producer's total eligible loss times the average price 
received for commercial milk production in their area as defined in 
paragraph (a) of this section.
    (e) A reserve may be created to handle claims that extend beyond 
the conclusion of the application period, but claims shall not be 
payable once the available funding is expended.


Sec.  1430.308  Availability of funds.

    The total available program funds shall be $10 million as provided 
by section 103 of Division B of Public Law 108-324.

[[Page 30015]]

Sec.  1430.309  Appeals.

    Any producer who is dissatisfied with a determination made pursuant 
to this subpart may request reconsideration or appeal of such 
determination in accordance with the appeal regulations set forth at 7 
CFR parts 11 and 780. Appeals of determinations of ineligibility or 
payment amounts are subject to the limitations in Sec. Sec.  1430.307 
and 1430.308.


Sec.  1430.310  Misrepresentation and scheme or device.

    (a) In addition to other penalties, sanctions or remedies as may 
apply, a dairy producer shall be ineligible to receive assistance under 
this program if the producer is determined by FSA or CCC to have:
    (1) Adopted any scheme or device that tends to defeat the purpose 
of this program;
    (2) Made any fraudulent representation; or
    (3) Misrepresented any fact affecting a program determination.
    (b) Any funds disbursed pursuant to this part to any person or 
operation engaged in a misrepresentation, scheme, or device, shall be 
refunded with interest together with such other sums as may become due. 
Any dairy operation or person engaged in acts prohibited by this 
section and any dairy operation or person receiving payment under this 
subpart shall be jointly and severally liable with other persons or 
operations involved in such claim for benefits for any refund due under 
this section and for related charges. The remedies provided in this 
subpart shall be in addition to other civil, criminal, or 
administrative remedies that may apply.


Sec.  1430.311  Death, incompetence, or disappearance.

    In the case of death, incompetency, disappearance, or dissolution 
of a person that is eligible to receive benefits in accordance with 
this subpart, such alternate person or persons specified in 7 CFR part 
707 may receive such benefits, as determined appropriate by FSA.


Sec.  1430.312  Maintaining records.

    Persons applying for benefits under this program must maintain 
records and accounts to document all eligibility requirements specified 
herein. Such records and accounts must be retained for 3 years after 
the date of payment to the dairy operations under this program. 
Destruction of the records after such date shall be at the risk of the 
party undertaking the destruction.


Sec.  1430.313  Refunds; joint and several liability.

    (a) Excess payments, payments provided as the result of erroneous 
information provided by any person, or payments resulting from a 
failure to comply with any requirement or condition for payment under 
the application or this subpart, must be refunded to CCC.
    (b) A refund required under this section shall be due with interest 
determined in accordance with paragraph (d) of this section and late 
payment charges as provided in 7 CFR part 1403.
    (c) Persons signing a dairy operation's application as having an 
interest in the operation shall be jointly and severally liable for any 
refund and related charges found to be due under this section.
    (d) Interest shall be applicable to any refunds required in 
accordance with 7 CFR parts 792 and 1403. Such interest shall be 
charged at the rate that the United States Department of the Treasury 
charges CCC for funds, and shall accrue from the date FSA or CCC made 
the erroneous payment to the date of repayment.
    (e) FSA may waive the accrual of interest if it determines that the 
cause of the erroneous determination was not due to any action of the 
person, or was beyond the control of the person committing the 
violation. Any waiver is at the discretion of FSA alone.


Sec.  1430.314  Miscellaneous provisions.

    (a) Offset. CCC may offset or withhold any amount due CCC under 
this subpart in accordance with the provisions of 7 CFR part 1403.
    (b) Claims. Claims or debts will be settled in accordance with the 
provisions of 7 CFR part 1403.
    (c) Other interests. Payments or any portion thereof due 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 and instrumentalities of the U.S. Government.
    (d) Assignments. Any producer entitled to any payment under this 
part may assign any payments in accordance with the provisions of 7 CFR 
part 1404.


Sec.  1430.315  Termination of program.

    This program will be terminated after payment has been made to 
those applicants certified as eligible pursuant to the application 
period established in Sec.  1430.304. All eligibility determinations 
shall be final except as otherwise determined by the Deputy 
Administrator.

    Signed in Washington, DC, on May 19, 2005.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 05-10444 Filed 5-24-05; 8:45 am]
BILLING CODE 3410-05-P