[Federal Register Volume 70, Number 185 (Monday, September 26, 2005)]
[Rules and Regulations]
[Pages 56113-56119]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-19127]


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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: Final rule.

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SUMMARY: This rule sets forth the regulations for the 2004 Dairy 
Disaster Assistance Payment Program. This program will assist dairy 
producers by providing payments to those who suffered dairy production 
and milk spoilage losses due to hurricanes in 2004.

DATES: This rule is effective on September 26, 2005.

FOR FURTHER INFORMATION CONTACT: Danielle Cooke, Price Support 
Division, Farm Service Agency, United States Department of Agriculture, 
STOP 0512, 1400 Independence Avenue, SW., Washington, DC 20250-0512. 
Telephone: (202) 720-1919; e-mail: [email protected].

SUPPLEMENTARY INFORMATION:

Discussion of Final Rule

    This rule finalizes the proposed rule published in the Federal 
Register May 25, 2005 (70 FR 30009). The 30-day comment period for the 
proposed 2004 Dairy Disaster Assistance Payment Program (DDAP) rule 
closed on June 24, 2005. The proposed rule provided that the DDAP 
program would be based on hurricane related dairy production and dairy 
spoilage losses suffered during the months of August through October 
2004 in counties declared a disaster by the President in 2004 due to 
hurricane. The program will end at the conclusion of the application 
period and disbursement of allotted funds. The DDAP program will 
operate under regulations codified in 7 CFR part 1430.
    Among other provisions, the proposed rule provided that in cases 
where the producers had been paid for qualified dumped milk the 
producer would still qualify for payments related to that milk. Also, 
the rule did not provide for adjustments in payments based on cow herd 
size. Rather, the rule provided for payments to be made based on 
changes in milk production from a set base amount. Also, among other 
provisions, the rule provided that in the case the limited program 
funds were not sufficient to pay all claims for lost production and for 
dumped milk, then priority would be given in making payments to those 
persons whose losses over the whole period were greater than 20 
percent. It was provided additionally in the proposed rule that the 
prices at which payments would be made would be amounts set out in the 
rule which were derived from a series of reported ``mailbox'' prices. 
On these aspects and all others, comment was invited.

Comments and Changes to Final Rule

    During the 30-day comment period the Agency received public 
comments from two U.S. Senators, ten U.S. congressmen, one dairy 
cooperative, one advocacy group and two private citizens. Some 
responses contained multiple comments.
    Of the total comments received during the public comment period, 
two respondents opposed the program indicating that private insurance 
should adequately compensate dairy producers monetarily for losses 
rather than the taxpayers or Government. One of those respondents also 
believed that the assistance being provided by the Agency was 
duplicative to that of Federal Emergency Management Agency (FEMA) and 
that it was misleading for Congress to insert a statute for agriculture 
in a non-related military spending bill. No changes have been made in 
the rule based on these comments. The agency is charged with 
implementing statutory provisions as written and has done so in the 
final rule. It is not understood to be the case that the relief in the 
rule duplicates that provided elsewhere, but provision is made in the 
rule to address that possibility.
    Public comments and suggestions were sought for paying milk 
marketing cooperatives directly for milk that was dumped. Several 
public comments were received in support of direct payment of DDAP 
benefits to a milk handler or dairy marketing cooperative rather than 
directly to the producer for spoiled milk that was dumped as a result 
of the hurricanes for which the dairy marketing cooperative or milk 
handler compensated the dairy producer. Respondents indicated that 
marketing cooperatives have adequate records to verify dumped 
production and confirm payment to producers made by the dairy

[[Page 56114]]

marketing cooperative or milk handler. Respondents also believed that 
the precedent of direct payments to marketing cooperatives has been 
established in past USDA programs. Also, one respondent suggested that 
producers would be compensated twice for the same loss if payment is 
made directly to a producer in a dairy operation for dumped milk that 
was paid for by the dairy marketing cooperative or milk handler. The 
Agency determined that no change was warranted. The statute provides 
for payments to producers. The proposed rule set out a fair plan for 
all losses and does not prohibit private readjustments.
    Several comments were received from the public regarding payment 
rates being based on the average monthly ``mailbox'' milk price as 
provided by the applicable State Marketing Order as reported by the 
USDA, Agricultural Marketing Service (AMS) during the eligible months. 
The ``mailbox'' milk price, the pricing basis incorporated into the 
proposed rule, is defined by AMS as: ``The net pay price received by 
dairy farmers for milk and includes all payments received for milk sold 
and all costs associated with marketing the milk. Price is a weighted 
average for the reporting area and is reported at the average butterfat 
test.'' The respondents suggested using, instead of the mailbox milk 
price, the Federal Milk Marketing Order blend prices during the 
eligible months. Respondents suggested that the Federal Milk Marketing 
Order blend prices are more accurate because they adjust for location 
differences and recognize the regional costs of production. The payment 
plan proposed provides fair compensation and sufficient 
differentiation. No change was found to be warranted.
    Many respondents requested clarification regarding the limitation 
on multiple benefits that prohibit a producer from being compensated 
more than once for the same loss. Specifically, respondents wanted to 
ensure that benefits received from the Emergency Conservation Program 
(ECP) did not preclude a DDAP program applicant from receiving DDAP 
benefits. The Agency does not believe that this point requires a change 
in the rule, but notes that ECP benefits are understood to be different 
from those provided for in this program.
    Comments were requested on the method of payment at two levels in 
the event of inadequate funds for all eligible losses and the 
appropriate loss level percentage. No comments on this issue were 
received and no change in that provision was needed.
    One comment received requested expeditious implementation of the 
program. We have endeavored to provide for such implementation with a 
due concern for assuring a certain and efficient administration of the 
program benefits.
    One respondent commented on the use of plain language and 
consistency throughout the proposed rule and provided editorial 
recommendations to improve the clarity of the rule and better comply 
with Executive Order requirements. The respondent's suggested 
recommendations are editorial and do not affect the substantive 
requirements of the proposed rule. Recommendations have been adopted 
where practical and incorporated throughout. Clarifications have been 
made where needed.
    Most of the comments received indicated that the loss calculation 
was not equitable to dairy operations that added cows to the milking 
herd to offset production losses during the eligible months following 
the 2004 hurricanes. These respondents were in support of an adjustment 
to the loss calculation that is reflective of cows added to the milking 
herd to compensate for loss production as a result of the hurricanes. 
After careful consideration of the recommendations proposed by the 
respondents, the Agency will provide a production credit to the dairy 
operation's calculated losses for the addition of cows to the milking 
herd as a result of the hurricanes, provided adequate proof of purchase 
containing the date of purchase and number of head purchased is 
provided to CCC to substantiate the dairy operations claim of dairy cow 
purchases during the eligible months. In addition, dairy operations 
must report any decreases to the milking herd as a result of sale or 
death. The production credit will be calculated using the July 2004 
per-cow production average and based on dairy cow increases or 
decreases to the milking herd and the corresponding days of ownership 
during each eligible month.

Executive Order 12866

    This rule has been determined to be not significant under Executive 
Order 12866 and therefore has not been reviewed by the Office of 
Management and Budget.

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 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

    The 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, the Office 
of Management and Budget (OMB) has approved the information collection 
required to support this program and assigned it OMB control number 
0560. Copies of the information collection may be obtained from 
Danielle Cooke, phone: (202) 720-1919; e-mail: 
[email protected].

[[Page 56115]]

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 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.


0
For the reasons set out in the preamble, 7 CFR part 1430 is amended as 
follows:

PART 1430--DAIRY PRODUCTS

0
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.


0
2. Add Subpart C 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 are available 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 provision of 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, 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 is used to determine 
eligibility for program benefits. Although participation in the 2004 
Dairy Disaster Assistance Payment Program is voluntary, program 
benefits are not to 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. In counting milk toward production amounts, dumped

[[Page 56116]]

milk will not be considered as marketed for commercial use. Such dumped 
milk shall be counted toward production but will be accounted for 
separately from milk that is marketed for normal commercial use as 
determined by the Deputy Administrator. All production in the months 
for which loss coverage is available will be counted in making 
determinations under this part, as determined by the Deputy 
Administrator, with care to avoid double counting, and with care to 
avoid a calculated loss that overstates the actual losses.
    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, 
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. The 
closing date shall be no sooner than October 11, 2005. 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 is 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 are 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 terms and conditions of this 
subpart, instructions issued by CCC and instructions 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 are 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) Evidence of production is required 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.
    (b) 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 and dairy cow 
purchases, for each month of the period 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 for base creation 
purposes 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 and dairy herd 
increases or decreases to the satisfaction of FSA.
    (c) Adequate proof of production history of the dairy operation 
under paragraph (b) 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

[[Page 56117]]

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 and losses 
incurred by the dairy operation.
    (d) Adequate proof of dairy cow additions to the milking herd 
during the eligible months can include, but are not limited to sales 
receipts, invoices, State health certificates, or any other documents 
available to confirm the cow purchases.
    (e) All information provided to FSA by a producer 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.
    (f) 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 base period may be established 
by the Deputy Administrator.


Sec.  1430.306  Determination of losses incurred.

    (a) Eligible payable losses are calculated on a dairy operation by 
dairy operation basis and are limited to those occurring in August 
through October 2004. Specifically, dairy production and spoilage 
losses incurred by producers under this subpart are 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, is 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 is calculated by reducing the starting base 
production (July 2004, or alternate month approved by the Deputy 
Administrator for new producers) as follows:
    (1) August 2004 base production is the starting base production 
reduced by 9 percent;
    (2) September 2004 base production is the starting base production 
reduced by 15 percent;
    (3) October 2004 base production is the starting base production 
reduced by 11 percent.
    (b) The eligible dairy production losses for a dairy operation 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 (not counting dumped 
production counted under paragraph (b)(1)(ii) of this section); plus
    (ii) The pounds of milk 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, as with other program losses, 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 mean that the dairy operation incurred no eligible 
production losses for the corresponding month as a result of the 
hurricane disaster, and that the production level for that month does 
not qualify for a payment under 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 in those months that was 
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) Calculated production losses may be adjusted by FSA based on 
the monthly average of daily dairy cow additions or reductions to the 
milking herd during the period of July 1, 2004 through October 31, 
2004, to account for production adjustments as a result of dairy cow 
purchases, sales, or death losses. Production adjustments can be 
calculated using the average number of dairy cows in a dairy 
operation's milking herd and the average production per cow during each 
applicable month. Per-cow production averages during the months of 
August through October will be determined based on the actual per-cow 
production average during the month of July 2004 and reduced downward 
according to the seasonal decline percentages provided in paragraph (a) 
of this section, to determine the total production that may be credited 
back to the dairy operation's total production losses. To qualify for 
the production adjustment:
    (1) Producers in eligible dairy operations must report any 
increases or decreases to the dairy cow milking herd during the period 
of July 1, 2004 through October 31, 2004.
    (2) Adequate supporting documentation according to Sec.  1430.305 
must be provided to the satisfaction of the COC to verify any claims of 
herd increases or decreases during the eligible period.
    (3) Any cows purchased during the eligible period that would 
increase the dairy cow milking herd must have been to offset production 
losses as a result of the 2004 hurricanes.
    (f) Eligible production and spoilage losses as otherwise determined 
under paragraphs (a) through (e) of this section are 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.
    (g) Payment on eligible dairy operation losses is 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.  
1420.307(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.
    (h) 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

[[Page 56118]]

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 is, 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 are as follows:
    (1) Florida--$17.62 per hundredweight ($0.1762 per pound).
    (2) Alabama, Georgia, Louisiana, and Mississippi--$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 is 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 are 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 does not 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.


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 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 7 CFR part 1403.
    (b) Claims. Claims or debts are settled in accordance with 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

[[Page 56119]]

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 ends 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 at Washington, DC, on September 13, 2005.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 05-19127 Filed 9-23-05; 8:45 am]
BILLING CODE 3410-05-P