[Federal Register Volume 71, Number 52 (Friday, March 17, 2006)]
[Rules and Regulations]
[Pages 13737-13747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-2548]



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  Federal Register / Vol. 71, No. 52 / Friday, March 17, 2006 / Rules 
and Regulations  

[[Page 13737]]



DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 718

Commodity Credit Corporation

7 CFR Part 1437

RIN 0560-AG20


Acreage Reports and Noninsured Crop Disaster Assistance Program

AGENCY: Commodity Credit Corporation and Farm Service Agency, USDA.

ACTION: Final rule.

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

SUMMARY: The Commodity Credit Corporation (CCC) adopts as final, with 
change, an interim final rule amending the regulations for the 
Noninsured Crop Disaster Assistance Program (NAP). Also, a 
clarification is made in the regulations regarding the submission of 
acreage reports, and obsolete program provisions are removed.

DATES: This rule is effective March 17, 2006.

FOR FURTHER INFORMATION CONTACT: Steve Peterson, Branch Chief, 
Noninsured Assistance Programs Branch; Production, Emergencies, and 
Compliance Division; Farm Service Agency (FSA); United States 
Department of Agriculture, STOP 0517, 1400 Independence Avenue, SW., 
Washington, DC 20250-0517; telephone (202) 720-5172; e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

NAP

    The Agricultural Risk Protection Act of 2000 (Pub. L. 106-224) 
(ARPA) amended the Federal Agriculture Improvement and Reform Act of 
1996 (Pub. L. 104-127) regarding NAP for the 2001 and subsequent crop 
years. The amendments made to NAP were significant and involved major 
changes in the way producers qualify and retain eligibility for NAP. 
Foremost, the NAP area crop loss requirement was eliminated, meaning 
that assistance is to be made available to individuals without first 
requiring that the area in which the individual is located experience a 
loss over a certain level, or threshold, as had been required in the 
past. The statute also was amended to require an application for 
coverage and collection of a service fee. Producers must apply for NAP 
coverage no later than the application closing date for the crop, 
announced by the Secretary. A service fee of $100 per crop per 
administrative county, or $300 per producer per administrative county, 
but not to exceed a total of $900 per producer, must be filed with the 
application for coverage. Limited-resource producers may request a 
waiver of the service fees. As a condition of eligibility, producers 
must continue to provide applicable crop year records of crop acreage, 
yields and production by the applicable reporting deadlines.

Public Comments

    The Agency published an interim final rule in the Federal Register 
on March 19, 2002 (67 FR 12447) amending the NAP regulations. The rule 
provided a 30-day public comment period. The comments received and 
Agency responses, by section, are as follows:

Section 1437.3 Definitions

    Comment: One comment received from a trade association suggested 
the definition of ``catastrophic loss'' was superfluous since the term 
appeared only in Sec.  1437.1 to summarize the types of qualifying 
losses.
    Response: The Agency agrees and the definition has been removed 
from Sec.  1437.3 and incorporated into Sec.  1437.9 without specific 
reference to ``catastrophic loss.''
    Comment: One comment received from a trade association suggested 
the substantive rule for quality losses, which is in the definition of 
``catastrophic coverage,'' should not remain buried among the 
definitions and should be moved to the discussion of loss calculations, 
as it was in the previous rule.
    Response: The provision regarding quality losses has been removed 
from Sec.  1437.3 and incorporated into Sec.  1437.9.
    Comment: One comment received from a trade association suggested 
that in the definition of ``good farming practice,'' ``alternative 
farming practices and innovations that are supported by data from the 
Cooperative State Research, Education, and Extension Service'' be 
explicitly acknowledged in the definition.
    Response: The existing definition allows alternative farming 
practices and innovations that are supported by data from the 
Cooperative State Research, Education, and Extension Service, and 
greater specificity is unnecessary. Therefore, no change was made.

Section 1437.4 Eligibility

    Comment: Three comments from three trade associations suggested 
unseeded forage on Federal- and State-owned land be eligible for the 
2001 crop year.
    Response: The Agency believes the inclusion of 2001 crop year 
unseeded Federal- and State-owned land would have required State and 
county committees to make decisions contrary to good business conduct 
and would have been seen as unfair to some, while excessively 
beneficial to others. Therefore, no change was made.
    Comment: One comment received from a producer stated that NAP was 
supposed to catch all crops that were not eligible for FCI coverage, 
but Perique tobacco is not eligible for FCI coverage and yet is also 
not eligible for NAP.
    Response: The statute (7 U.S.C. 7333) specifically states that 
eligible crops are commercial crops or other agricultural commodities 
produced for food or fiber. The statute also does not specifically 
include tobacco as an eligible crop, as it does some other specific 
crops. Since tobacco is not considered food or fiber, nor specifically 
included as an eligible crop, it was determined not to be an eligible 
crop for NAP. Therefore, no change was made.

Section 1437.6 Application for Coverage and Service Fee

    Comment: Two comments were received from producers regarding the 
service fee, one suggesting refunds of service fees be allowed under 
certain circumstances and one suggesting the service fee schedule be 
modified to

[[Page 13738]]

remove disparity between large and small acreage units.
    Response: The statute (7 U.S.C. 7333) specifically establishes the 
service fee provisions. As a matter of practicality, general refunds of 
minimal service fees would be cumbersome to administer and not cost 
effective. NAP coverage is without cost; however, the statute is clear 
that coverage must be obtained not later than 30 days before the risk 
period and that an application for coverage be accompanied by a set 
fee. The statute does not contemplate there being a need for refund 
either during the application or coverage periods. Accordingly, no 
change has been made.

Section 1437.8 Unit Division

    Comment: One comment from a trade association suggested the section 
be clarified and an example of units be included.
    Response: Sec.  1437.8 was amended for clarification.

Section 1437.9 Causes of Losses

    Comment: One comment from a trade association suggested that if the 
intention in paragraph (b)(1) is only to say that losses that are not 
the direct result of eligible causes of loss are ineligible losses, it 
should be deleted. If the subsection is intended to say more, it should 
be written more clearly.
    Response: The section was revised for clarity.
    Comment: One comment from a trade association suggests CCC appears 
to lack statutory authority for naming drought as an ineligible cause 
of loss for the types of operation named.
    Response: The statute allows CCC to determine the eligible causes 
of loss of noninsured commodities. A few eligible commodities, such as 
aquaculture, floriculture, and ornamental nursery, must be maintained 
in a controlled environment in which everything that can be practicably 
controlled with structures, facilities, growing media (including but 
not limited to, water, soil, or nutrients) by the producer is in fact 
controlled by the producer. In these cases, water, or specifically, 
lack of water (drought), cannot be a factor in the loss of commodity. 
Therefore, no change was made.

Section 1437.10 Notice of Loss and Application for Payment

    Comment: One comment from a producer suggested payments be made 
within 90 days of harvest.
    Response: Payments are made as soon as possible after losses occur 
and depend upon the submission of complex information from producers. 
In addition, CCC makes numerous payments and must prioritize when 
payments are made. Accordingly, this recommendation is not adopted.
    Comment: Ten comments from producers criticized the use of panels 
in establishing representative sample areas for appraisal of forage 
acreage intended to be mechanically harvested (hay or seed) that is 
abandoned or destroyed or also grazed. Producers complain that 
establishing representative sample areas using panels is expensive, 
aggravating, inconvenient, impractical, and presents a hardship to 
producers.
    Response: For NAP crop definition purposes ``forage,'' for service 
fee and production purposes, is defined according to the intended 
method of harvest, either mechanically or grazed. Mechanically 
harvested includes seed and hay. On that basis, establishing 
representative sample areas before abandonment or destruction or 
grazing occurs is a necessary requirement for completing a deferred 
appraisal of the potential crop (mechanically harvested) at the end of 
the growing season. However, for forage acreage intended to be 
mechanically harvested specifically and only for forage seed, the 
section has been amended.
    Effective with the 2005 crop year, the requirement that producers 
request a deferred appraisal of potential hay production and establish 
representative sample areas is discontinued when the producer provides 
CCC acceptable evidence of a contract to produce seed for the current 
crop year or acceptable records of acreage and seed production for 
three or more of the last five consecutive crop years. In this 
situation, producers must request on the appropriate FSA form an 
immediate appraisal of potential seed production if the crop acreage 
will not be harvested for seed. Otherwise, producers who do not have 
sufficient historical evidence of seed production or a contract to grow 
forage seed during the crop year must establish representative sample 
areas and request the appraisal of potential hay production be deferred 
until the end of the growing season.
    As clarification, FSA does not require producers who are required 
to establish representative sample areas to purchase manufactured or 
pre-assembled enclosures (panels). When establishing sample areas, 
producers are required to construct enclosures, by whatever means, 
sufficiently secure to prevent livestock and wildlife from destroying 
any evidence of potential production.

Section 1437.12 Crop Definition

    Comment: Eight comments, five from producers, two from trade 
associations, and one from a financial institution suggested that it is 
not beneficial to seed producers to combine types of grass intended for 
seed production for service fee and requisite loss purposes. Grass for 
seed includes a wide range of planting and harvesting times and there 
is a wide range of yields and prices. Furthermore, the various types of 
forage and turf crops produced have very different and specific 
agronomic characteristics, which means that under certain conditions 
some of the grass acreage will suffer losses while others will not. One 
respondent recommended that FSA State committees and local documented 
experts on seed crops have the authority to determine if seed crops 
should be considered a separate and distinct crop from other intended 
uses.
    Response: All eligible grass types and varieties intended for 
mechanical harvest (hay and seed) are defined as one crop for NAP 
service fee and requisite loss purposes because there is less than a 
twenty-five percent difference in the National average market prices of 
the various types and varieties for the most predominant intended use, 
which is hay. The Agency recognizes the various planting and harvesting 
times for the production of grass seed. However, grass seed is 
customarily an annual or biennial crop and, therefore, specific to a 
crop year. The Agency has sufficient rules and procedures in place for 
determining the specific crop year acreage and production. The Agency 
also considers the different yields and prices by calculating NAP 
assistance on the basis of actual production history and average market 
price of the specific type or variety of grass and the intended use. 
Defining the many types and varieties of grass intended for seed as 
separate crops according to the different and specific agronomic 
characteristics would place an onerous burden upon the Agency and fail 
to significantly increase benefits to the producers. Therefore, no 
change was made.
    Comment: Two comments from two producers suggested the inclusion of 
after-normal-harvest grazing (aftermath grazing) as an eligible crop 
or, as one producer suggested, a conversion of equivalent grazing to 
hay production to determine historic yields.
    Response: There is little agronomic commercial price and yield data 
available or captured from a broad enough spectrum to justify a 
modification of NAP's eligible or net production definitions. 
Accordingly, no change was made.

Section 1437.13 Multiple Benefits

    Comment: One comment from a producer recommended producers be

[[Page 13739]]

allowed to receive multiple benefits as long as total benefits do not 
exceed the producer's loss.
    Response: The multiple benefits provisions are set by statute. 
Therefore, no change was made.

Section 1437.15 Miscellaneous Provisions

    Comment: One comment from a trade association suggested the penalty 
of ineligibility for the current crop year plus two succeeding crop 
years is reasonable for intentional actions. However, the association 
recommends FSA State and county committees or FSA officials have the 
flexibility to find that a producer who has unintentionally 
misrepresented a fact affecting a program determination receive a 
lesser penalty.
    Response: The rule allows sufficient discretion to FSA reviewers to 
determine when an act of program malfeasance has occurred. As a general 
matter, a person cannot unwittingly or unknowingly perpetrate a scheme. 
However, persons can further program misrepresentations even when there 
is no apparent advantage. In order to remain consistent with how CCC 
conducts business with those found to have committed the most flagrant 
acts of abuse, we have decided to leave the provisions unchanged. The 
provisions as written already provide the flexibility the respondent 
believes is needed.
    Comment: One comment from a trade association suggested that one 
purpose of NAP is to partially offset lower farm income due to weather-
related crop losses. In order to ensure that this purpose is fulfilled 
to the greatest extent possible, the association recommended the NAP 
payment be exempt from administrative offset.
    Response: Debt collection actions of the United States are 
governed, generally, by the Debt Collection Improvement Act of 1996. 
That Act has no provision that would allow the recommendation to be 
adopted. Accordingly, no change in the regulation has been made.

Section 1437.102 Yield Determinations

    Comment: One comment from a trade association suggested the section 
be clarified and the discussion of ``approved yield'' be reformulated 
and moved to Sec.  1437.3, Definitions. The association also suggests 
adding subsections for each potential scenario for calculating approved 
yields.
    Response: The section has been amended to clarify the determination 
of yields. However, considering the number of possible scenarios for 
calculating approved yields, it would be impractical to add subsections 
for each potential scenario.
    Comment: One comment from a producer suggested the yield variations 
due to different farming practices also include the transitional-yield 
(T-yield) zones established by FCIC for crop insurance purposes and 
other practices recognized as good farming practices.
    Response: Currently, CCC reduces T-yields for individual producers 
when it is determined that an unadjusted T-yield does not accurately 
reflect the production capability of specific crop acreage. Enhanced 
instructions will be provided to State and county committees regarding 
establishing county expected yields (T-yields) when T-yield zones 
established by FCIC or other circumstances result in variations of 
yields in the county.

Section 1437.103 Determining Payments for Low Yield

    Comment: One comment from a trade association pointed out an error 
in determining payments for low yield.
    Response: The appropriate section has been amended to correct the 
typographical error in the explanation of payment calculations.

Section 1437.201 Prevented Planted Acreage

    Comment: One comment from a trade association suggested that there 
appears to be no authority for the requirement that an eligible cause 
of loss for prevented planting must have ``Generally affected other 
producers in the area, as determined by CCC.''
    Response: The section regarding general prevented planting 
provisions has been moved to 7 CFR 718.103. Prevented planting must 
have generally affected other producers in the area because an 
occurrence that prevents a crop from being planted will likely prevent 
others from planting. The phrase does not require a determination of a 
minimum area loss, which was removed by the ARPA. The phrase requires 
the Agency to determine if the claimed cause of loss generally affected 
other producers in the area.
    Comment: One comment from a producer suggested prevented planting 
provisions include the possibility that producers may choose not to 
plant because of the effects of long-term natural disaster, i.e. 
drought. Requiring producers to create intent under these circumstances 
is impracticable.
    Response: The section regarding prevented planting provisions has 
been moved to 7 CFR 718.103, beginning with the 2005 crop year. The 
rule is being amended to allow prevented planting assistance for non-
irrigated crop acreage when the area that is prevented from being 
planted has insufficient soil moisture for germination of seed and 
progress toward crop maturity because of a prolonged period of dry 
weather. In the case of irrigated crops, prevented planting shall apply 
where the acreage was prevented from being planted due to a lack of 
water resulting from drought conditions.

Section 1437.202 Determining Payments for Prevented Planting

    Comment: One comment from a trade association pointed out an error 
in determining payments for prevented planting.
    Response: The section has been amended to correct the typographical 
error in the explanation of payment calculations.

Section 1437.401 Forage

    Comment: One comment from a trade association expressed concern 
regarding policy that results in forage acreage that is intended to be 
mechanically harvested but that is both mechanically harvested and 
grazed having to be appraised before grazing even if the acreage is 
historically and customarily grazed following one cutting. Without an 
appraisal, legitimate hay or forage losses during a summer drought 
would not qualify as eligible losses. The respondent states that many 
producers of forage on improved pasture and native hay meadows get one 
crop and graze the second crop if there is water available to irrigate 
the pasture or meadow. The respondent suggests that if appraisals are 
to become necessary, they be paid as part of the program and the State 
and county Committees be allowed to select representative pasture or 
meadows, construct representative sample areas (enclosures) and use 
data collected from these areas to establish losses in the local area.
    Response: The current policy assures the proper accounting of all 
potential forage production. Production reporting is the producer's 
responsibility, including the responsibility to establish 
representative sample areas to facilitate the proper appraisal of crop 
acreage. Therefore, no change was made.
    Comment: Several comments from producers expressed concern that 
assistance is substantially reduced when acreage intended to be 
mechanically harvested is grazed and not mechanically harvested and the 
payment is based on the carrying capacity. One comment from a 
Congressional office states: ``It is entirely reasonable for the 
Federal Government to meet the allowed benefit

[[Page 13740]]

for hay crop loss without requiring a distinction between the hay being 
harvested and fed to cattle or directly consumed by grazing.''
    Response: The respondent may have misunderstood the intent of the 
formation of the forage policy. The intent of the provision is not to 
deprive participants of just compensation under NAP for legitimate 
losses; rather, recognizing the difficulty that participants had in 
submitting requisite production evidence for APH losses, regulations 
were revised to allow NAP payments to be computed and paid based on 
acceptable collective loss data for a particular geographical location. 
The adoption of this forage policy has enabled more NAP participants to 
satisfy eligibility requirements where, absent this policy, those 
participants would probably not be eligible. In light of the comments 
received, the section has been amended to clarify that for the 2005 and 
subsequent crop years, calculation of assistance may be based on actual 
production history when producers provide acceptable evidence of actual 
production. Further, in light of this amendment, language has been 
added to Sec.  1437.401 to clarify that while participants have the 
right to challenge, administratively, factual disputes related to their 
own applications, CCC's determination of regions or geographical 
locations for two independent assessments and the two independent 
assessments themselves, and results there from, are not appealable 
because they are not in response to any individual applicant or 
application. Rather, the collective loss established by two independent 
assessments, acceptable to CCC, are applicable to all similarly 
situated NAP grazed forage participants.

Section 1437.403 Determining Payments

    Comment: One comment from a trade association pointed out an error 
in the calculation for determining payments for forage.
    Response: The explanation of payment calculations for forage is 
correct. The amount of AUD assigned for ineligible causes of loss must 
be assigned according to the producer's share. The section is amended 
to clarify paragraph (f) and correct an error in paragraph (j).
    Also, the final rule adds paragraph 1437.2(f) regarding the 
authority to change agency determinations in administrative reviews. 
The addition is necessary because administrative reviews are being 
misused to redefine the extent of individual program eligibility 
determinations. With the exception of a few minor editorial or 
technical corrections, no other changes were made.

Acreage Reports

    To obtain benefits under certain programs, producers must submit 
reports containing accurate information as required by those programs. 
Depending on the program, these acreage reports document acreage 
planted, acreage enrolled in the program, acreage in which the producer 
has a share, or other land use. Producers must certify failed or 
prevented planted acreage for programs providing benefits for that 
acreage. Currently, 7 CFR part 718 has no provision regarding the 
filing of an acreage report for prevented planting or failed acreage 
that could be used for program purposes, including NAP. This rule adds 
such provisions to the regulations at 7 CFR 718.103.
    Producers who file a report of acreage that was prevented from 
being planted or failed because of a natural disaster must have the 
request acted on by CCC. To obtain approval for prevented planting 
credit, the producer must show there was the intent to plant the 
acreage by providing documentation of field preparation, seed purchase 
and any other information that shows the acreage would have been 
planted under normal weather conditions. For failed acreage, the 
producer must provide documentation that the crop was planted using 
farming practices consistent for the crop and area, but could not be 
brought to harvest because of disaster-related conditions. CCC will 
deny the failed or prevented planted acreage report if it is not 
satisfied that the documentation provided shows that the acreage failed 
or was prevented from being planted because of eligible weather-related 
conditions. CCC will disapprove requests for which documentation shows 
that it was a management decision to not plant or to not carry the crop 
to harvest.

Executive Order 12866

    This final rule was determined to be ``not significant'' under 
Executive Order 12866 and was not reviewed by the Office of Management 
and Budget (OMB).

Federal Assistance Programs

    The title and number of the Federal assistance program, as found in 
the Catalog of Federal Domestic Assistance, to which this final rule 
applies are: Noninsured Crop Disaster Assistance--10.451.

Regulatory Flexibility Act

    The Regulatory Flexibility Act is not applicable to this rule 
because neither the Secretary of Agriculture nor CCC are required by 5 
U.S.C. 553 or any other law to publish a notice of proposed rulemaking 
with respect to the subject matter of this rule.

Environmental Assessment

    The environmental impacts of this rule have been considered in 
accordance with the provisions of the National Environmental Policy Act 
of 1969 (NEPA), 42 U.S.C. 4321 et seq., the regulations of the Council 
on Environmental Quality (40 CFR parts 1500-1508), and FSA regulations 
for compliance with NEPA, 7 CFR part 799. FSA has concluded that this 
rule is categorically excluded from further environmental review and 
documentation. No extraordinary circumstances or other unforeseeable 
factors exist which would require preparation of an environmental 
assessment or environmental impact statement.

Executive Order 12778

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

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which require 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

    The provisions of Title II of the Unfunded Mandates Reform Act of 
1995 (UMRA) do not apply to this rule because CCC is required by 5 
U.S.C. 553 or any other law to publish a notice of proposed rulemaking 
with respect to the subject matter of this rule. Also, the rule imposes 
no mandates as defined in UMRA.

Paperwork Reduction Act

    Section 161 of the 1996 Act required that the regulations be issued 
without regard to the Paperwork Reduction Act. This means that the 
normal 60-day public comment period and OMB approval of the information 
collections

[[Page 13741]]

required by this rule are not necessary before the regulations are 
published and made effective; however, FSA did publish notices 
requesting public comment for NAP and the Acreage Reports, 
respectively, on May 12, 2003 (68 FR 25316) and March 31, 2005 (70 FR 
16476) and OMB approved the information collections required by this 
rule under OMB control numbers 0560-0175 and 0560-0004.

Government Paperwork Elimination Act

    CCC and FSA are committed to compliance with the Government 
Paperwork Elimination Act (GEPA) and the Freedom to E-File Act, which 
require Government agencies in general, and FSA in particular, to 
provide the public the option of submitting information or transacting 
business electronically to the maximum extent possible. The forms and 
other information collection activities required by participation in 
the Noninsured Crop Disaster Assistance Program are not yet fully 
implemented in a way that would allow the public to conduct business 
with FSA electronically. Accordingly, applications for this program may 
be submitted at FSA offices, by mail, or FAX.

List of Subjects

7 CFR Part 718

    Acreage reports.

7 CFR Part 1437

    Crop insurance, Disaster assistance, Nursery stock, Plants.


0
Accordingly, 7 CFR part 718 is amended and the interim rule amending 7 
CFR part 1437 that was published on March 19, 2002 (67 FR 12446) is 
adopted as final, with change, as follows:

PART 718--PROVISIONS APPLICABLE TO MULTIPLE PROGRAMS

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

    Authority: 7 U.S.C. 1311 et seq., 1501 et seq., 1921 et seq., 
7201 et seq., 15 U.S.C. 714b.

0
2. Section 718.102 is amended by adding paragraph (b)(7) to read as 
follows:


Sec.  718.102  Acreage reports.

* * * * *
    (b) * * *
    (7) All producers requesting to report acreage as prevented planted 
or failed must provide documentation to FSA where the farm is 
administered that meets the provisions of Sec.  718.103.
* * * * *

0
3. Section 718.103 is revised to read as follows:


Sec.  718.103  Prevented planted and failed acreage.

    (a) Prevented planting is the inability to plant an eligible crop 
with proper equipment during the planting period as a result of an 
eligible cause of loss, as determined by CCC. The eligible cause of 
loss that prevented the planting must have:
    (1) Occurred after a previous planting period for the crop;
    (2) Occurred before the final planting date for the crop in the 
applicable crop year or, in the case of multiple plantings, the harvest 
date of the first planting in the applicable planting period, and
    (3) Similarly affected other producers in the area, as determined 
by CCC.
    (b) To be approved by FSA as prevented planted acreage:
    (1) The acreage must have been reported within 15 calendar days 
after the latter of
    (i) The occurrence of prevented planting, or
    (ii) The end of the planting period;
    (2) The acreage must have been prevented from being planted as the 
result of a natural disaster and not a management decision; and
    (3) The prevented planted acreage report must be acted on by the 
COC. The COC will deny the acreage report if it is not satisfied with 
the documentation provided.
    (c) To receive prevented planted credit for acreage:
    (1) The producer must show there was the intent to plant the 
acreage by providing documentation of field preparation, seed purchase 
and any other information that shows the acreage could have been 
planted and harvested under normal weather conditions, and
    (2) The producer must show that the amount of the prevented planted 
acreage credit is consistent with prior years' planting history for the 
farm.
    (d) Eligible prevented planting acreage will be determined on the 
basis of the producer's intent to plant the crop acreage and possession 
of, or access to, resources to plant, grow, and harvest the crop, as 
applicable.
    (e) Prevented planting acreage credit is not provided on acreage 
that had either a previous or subsequent crop planted on the acreage, 
unless the COC determines that all of the following conditions are met:
    (1) There is an established practice of planting two or more crops 
for harvest on the same acreage in the same crop year;
    (2) Both crops could have reached maturity if each planting was 
harvested or would have been harvested;
    (3) Both the initial and subsequent planted crops were planted or 
prevented-planted within the normal planting period for that crop; and
    (4) Both the initial and subsequent planted crops meet all other 
eligibility provisions of this part including good farming practices.
    (f) Prevented planted acreage credit will not be given to crops 
where the prevented-planted acreage was affected by drought, unless:
    (1) On the final planting date for non-irrigated acreage, the area 
that is prevented from being planted has insufficient soil moisture for 
germination of seed and progress toward crop maturity because of a 
prolonged period of dry weather, as determined by CCC; and
    (2) Prolonged precipitation deficiencies exceeded the D2 level as 
determined using the U.S. Drought Monitor; and
    (3) Verifiable information is collected from sources whose business 
or purpose it is to record weather conditions, as determined by CCC, 
and including but not limited to the local weather reporting stations 
of the U.S. National Weather Service.
    (g) Prevented planted acreage credit under this part shall apply to 
irrigated crops where the acreage was prevented from being planted due 
to a lack of water resulting from drought conditions or contamination 
by saltwater intrusion of an irrigation supply resulting from drought 
conditions if there was not a reasonable probability of having adequate 
water to carry out an irrigation practice.
    (h) Acreage ineligible for prevented planting coverage includes, 
but is not limited to acreage:
    (1) Which planting history or conservation plans indicate would 
remain fallow for crop rotation purposes;
    (2) Used for conservation purposes or intended to be or considered 
to have been left unplanted under any program administered by USDA, 
including the Conservation Reserve and Wetland Reserve Programs; and
    (3) Not planted because of a management decision.
    (i) Failed acreage is acreage that was planted with the proper 
equipment during the planting period but failed as a result of an 
eligible cause of loss, as determined by CCC.

[[Page 13742]]

    (j) To be approved by CCC as failed acreage the acreage must have 
been reported as failed acreage before disposition of the crop, and the 
acreage must have been planted under normal conditions but failed as 
the result of a natural disaster and not a management decision. 
Producers who file a failed acreage report must have the request acted 
on by the COC. The COC will deny the acreage report if it is not 
satisfied with the documentation provided.
    (k) To receive failed acreage credit the producer must show all of 
the following:
    (1) That the acreage was planted under normal conditions using the 
proper equipment with the intent to harvest the acreage.
    (2) Provide documentation that the crop was planted using farming 
practices consistent for the crop and area, but could not be brought to 
harvest because of disaster-related conditions.
    (l) The eligible cause for failed acreage must have:
    (1) Occurred after the crop was planted, and
    (2) Before the normal harvest date for the crop in the applicable 
crop year or in the case of multiple plantings, the harvest date of the 
first planting in the applicable planting period, and
    (3) Other producers in the area were similarly affected as 
determined by CCC.
    (m) Eligible failed acreage will be determined on the basis of the 
producer planting the crop under normal conditions with the expectation 
to take the crop to harvest.
    (n) Acreage ineligible for failed acreage credit includes, but is 
not limited to acreage:
    (1) Which was planted using methods that could not be considered 
normal for the area and without the expectation of harvest;
    (2) Used for conservation purposes or intended to be or considered 
to have been un-harvested under any program administered by USDA, 
including the Conservation Reserve and Wetland Reserve Programs; and
    (3) That failed because of a management decision.
0
4. Section 718.104 is revised to read as follows:


Sec.  718.104  Late-filed and revised acreage reports.

    (a) Late-filed acreage reports may be accepted after the final 
reporting date, and be considered timely filed, if both of the 
following apply:
    (1) The crop or identifiable crop residue is in the field, and
    (2) The acreage has not already been determined by FSA.
    (b) The farm operator filing a report late shall pay the cost of a 
farm inspection unless FSA determines that failure to report in a 
timely manner was beyond the producer's control.
    (c) Revised acreage reports may be filed with respect to 2005 and 
subsequent years to change the acreage reported if:
    (1) The acreage has not already been determined by FSA; and
    (2) Actual crop or residue is present in the field.
    (d) Revised reports shall be filed and accepted:
    (1) At any time for all crops if the crop or residue still exists 
in the field for inspection to verify the existence and use made of the 
crop, the lack of the crop, or a disaster condition affecting the crop; 
and
    (2) If the producer was in compliance with all other program 
requirements at the reporting date.

PART 1437--NONINSURED CROP DISASTER ASSISTANCE PROGRAM

0
5. The authority citation continues to read as follows:

    Authority: 15 U.S.C. 714 et seq.; and 7 U.S.C. 7333.

Subpart A--General Provisions

0
6. Section 1437.2 is amended by adding paragraph (f) to read as 
follows:


Sec.  1437.2  Administration.

* * * * *
    (f) Items including, but not limited to, application periods, 
coverage periods, application deadlines, fees, prices, yields, and 
payment factors established for NAP in accordance with this part that 
are used for similarly situated participants and eligible crops are not 
to be construed to be individual program eligibility determinations or 
extent of eligibility determinations and are, therefore, not subject to 
administrative review.


Sec.  1437.3  [Amended]

0
7. Amend Sec.  1437.3 by removing the definitions ``Actual production 
history (APH)'' and ``Catastrophic loss.''

0
8. Amend Sec.  1437.4 by revising paragraph (a), removing paragraph 
(b), redesignating paragraph (c) as paragraph (b), and revising newly 
designated paragraph (b)(4)(vii) to read as follows:


Sec.  1437.4  Eligibility.

    (a) Noninsured crop disaster assistance is available for loss of 
production or prevented planting of eligible commercial crops or other 
agricultural commodities:
    (1) Planted during the planting period, which means the time during 
which a majority of the crop is normally planted in the area, as 
determined by CCC, and is considered timely-planted for NAP purposes;
    (2) Prevented from being planted during the planting period;
    (3) Planted during the late planting period, which means the time 
after the planting period, during which certain crops, as determined by 
CCC, may be planted and remain eligible for reduced NAP coverage; and
    (4) Determined by CCC to be eligible crops:
    (i) For which catastrophic coverage is not available; or
    (ii) For specific perils not included under available catastrophic 
coverage.
    (b) * * *
    (4) * * *
    (vii) Seed crops, including propagation stock such as non-
ornamental seedlings, sets, cuttings, rootstock, and others, as 
determined by CCC; and
* * * * *

0
9. Amend Sec.  1437.5 by revising paragraph (b) to read as follows:


Sec.  1437.5  Coverage period.

* * * * *
    (b) The coverage period for annual crops, including annual forage 
crops, begins the later of 30 calendar days after the date the 
application for coverage is filed; or the date the crop is planted, not 
to exceed the late planting period; and ends on the earlier of the date 
harvest is complete; the normal harvest date of the crop in the area; 
the date the crop is abandoned; or the date the crop is destroyed.
* * * * *

0
10. Amend Sec.  1437.6 by revising paragraph (a) and removing 
paragraphs (e) and (f), to read as follows:


Sec.  1437.6  Application for coverage and service fee.

    (a) With respect to each crop, commodity, or acreage, producers 
must file an application for coverage under this part in the 
administrative county FSA office no later than the application closing 
date.
* * * * *

0
11. Amend Sec.  1437.7 by revising the fifth, sixth, seventh, and 
eighth sentences in paragraph (a), introductory text, removing the 
second sentence in paragraph (a)(2), re-designating paragraphs (b) 
through (g) as paragraphs (c) through (h), and adding a new paragraph 
(b), to read as follows:

[[Page 13743]]

Sec.  1437.7  Records.

    (a) * * * For each harvested crop for which producers file an 
application for payment in accordance with Sec.  1437.10, producers 
must provide documentary evidence acceptable to CCC of production and 
the date harvest was completed, including production of crops planted 
after the planting period or late planting period. Such documentary 
evidence must be provided no later than the acreage reporting date for 
the crop in the subsequent crop year. Records of a previous crop year's 
production for inclusion in the actual production history database used 
to calculate an approved yield for the current crop year must be 
certified by the producer no later than the acreage reporting date for 
the crop in the current crop year. Production data provided after the 
acreage reporting date in the current crop year for the crop may be 
included in the actual production history data base for the calculation 
of subsequent approved yield calculations if accompanied by acceptable 
records of production as determined by CCC. * * *
* * * * *
    (b) During any crop year that a notice of loss is filed according 
to this part:
    (1) Producers of hand-harvested crops shall, in addition to 
providing acceptable production records according to this part, notify 
the administrative county office that harvest is complete. This 
notification must be made before deterioration or destruction of the 
crop residue and within 15 days after harvest is completed. If an 
appraisal of the crop acreage is determined necessary by CCC, the 
producer shall not destroy the crop residue until the crop acreage is 
released by an FCIC- or CCC-qualified loss adjustor. Producers may, at 
their expense, request that an appraisal by certified FCIC or CCC loss 
adjusters of hand-harvested crop acreage be completed during non-loss 
crop years in order to maintain accurate actual production history.
    (2) Producers shall not allow the gathering (gleaning) of any 
produce left in the field following normal harvest of the crop acreage 
until the crop acreage is released by a qualified CCC or FCIC loss 
adjustor, as determined by CCC. Except, crop acreage may be released by 
an authorized CCC representative for acceptable gleaning operations, as 
determined by CCC, when producers and gleaners agree to provide 
acceptable records, as determined by CCC, of the quantity of the crop 
gleaned.
* * * * *

0
12. Revise Sec.  1437.8 to read as follows:


Sec.  1437.8  Unit definition.

    (a) The unit identifies the interest of the producer in the 
administrative county on the basis of the unique relationship of the 
owner to one or more operators. The unit is the foundation for all 
determinations of acreage, production, value, AUD, approved yields, 
requisite losses, payments, and other program requirements.
    (b) Separate and distinct units are:
    (1) One-hundred percent interest as owner/operator;
    (2) Less than one-hundred percent interest as owner or operator; or
    (3) Less than one-hundred percent interest, as owner or operator in 
an inverse relationship.

0
13. Revise Sec.  1437.9 to read as follows:


Sec.  1437.9  Causes of loss.

    (a) To be eligible for benefits under this part, an eligible cause 
of loss must result in:
    (1) A loss of production greater than 50 percent of the approved 
yield in accordance with subpart B of this part;
    (2) Prevented planting of greater than 35 percent of the intended 
crop acreage according to subpart C of this part;
    (3) A value loss of greater than 50 percent of the pre-disaster 
value according to subpart D of this part, or
    (4) An AUD loss of greater than 50 percent of the expected AUD 
according to subpart E of this part.
    (b) The quantity of the crop or commodity will not be reduced for 
any quality consideration unless a zero value is established.
    (c) Eligible causes of loss include:
    (1) Damaging weather occurring before or during harvest, including 
but not limited to drought, hail, excessive moisture, freeze, tornado, 
hurricane, excessive wind, or any combination thereof;
    (2) Adverse natural occurrence before or during harvest, such as 
earthquake, flood, or volcanic eruption; and
    (3) A related condition, including but not limited to heat, insect 
infestation, or disease, which occurs as a result of an adverse natural 
occurrence or damaging weather occurring before or during harvest that 
directly causes, accelerates, or exacerbates the destruction or 
deterioration of an eligible crop, as determined by CCC.
    (d) Due to the unique requirements, such as controlled 
environments, necessary for successful production of some crops and 
commodities; not all eligible causes of loss will apply to all crops 
and commodities.
    (e) Ineligible causes of loss include but are not limited to:
    (1) Negligence or malfeasance of the producer;
    (2) Failure of the producer to reseed to the same crop during the 
same planting period in those areas and under such circumstances where 
it is customary;
    (3) Failure of the producer to follow good farming practices, as 
determined by CCC;
    (4) Water contained or released by any governmental, public, or 
private dam or reservoir project, if an easement exists on the acreage 
affected for the containment or release of the water;
    (5) Failure or breakdown of irrigation equipment or facilities;
    (6) Except for tree crops and perennials and as provided for in 
Sec.  1437.201, inadequate irrigation resources at the beginning of the 
crop year;
    (7) A loss of inventory or yield of aquaculture (including 
ornamental fish), floriculture or ornamental nursery stemming from 
drought or any failure to provide water, soil, or growing media to such 
crop for any reason; or
    (8) Any failure to provide a controlled environment or exercise 
good nursery practices when such controlled environment or practices 
are a condition of eligibility under this part.

0
14. Amend Sec.  1437.10 by revising the section heading, revising 
paragraph (a), introductory text, and paragraph (d), re-designating 
paragraph (e) as paragraph (g), and adding new paragraphs (e) and (f) 
to read as follows:


Sec.  1437.10  Notice of loss, appraisal requirements, and application 
for payment.

    (a) When an eligible crop is damaged by an eligible cause of loss, 
at least one producer having a share in the unit must provide a notice 
of loss to CCC in the administrative FSA county office for the unit, 
within:
* * * * *
    (d) Producers who file a notice of loss, using the appropriate CCC 
form, for crop acreage that will not be harvested as intended, such as 
abandoned, put to another use, replanted to the same or a different 
crop, or in the case of forage, acreage intended to be mechanically 
harvested that will be both mechanically harvested and grazed, must:
    (1) Not put the crop to another use or prepare the acreage for 
replanting or otherwise change any conditions of the crop or acreage 
until written notification of release of the crop or acreage is 
received from CCC;
    (2) Request, using the appropriate FSA form, an appraisal of the 
un-harvested acreage for potential production and release of the crop 
or acreage:

[[Page 13744]]

    (i) No less than 15 calendar days before replanting or in the case 
of forage intended to be mechanically harvested, grazing of the crop 
acreage.
    (ii) Within 15 calendar days after the acreage is abandoned, for 
example, discontinued care for the crop or provided care so 
insignificant as to provide no benefit to the crop, as determined by 
CCC.
    (iii) No later than the normal harvest date of the crop, as 
determined by CCC.
    (3) Request the loss adjustor on the day the initial appraisal is 
completed, or request in any manner of written correspondence received 
in the FSA administrative county office no later than 15 calendar days 
after the request for initial appraisal is submitted, that the 
appraisal be deferred until the end of the growing season, the producer 
be permitted to establish representative sample areas according to 
paragraph (d)(4) of this section, and that the acreage be released 
immediately when:
    (i) Time is critical for replanting, or other urgent reasons; and
    (ii) Producers and loss adjustors cannot resolve disagreement with 
the initial appraisal of the acreage to be released.
    (4) Establish representative sample areas of the acreage according 
to the loss adjustor's instructions received on the day the initial 
appraisal is completed or, if the loss adjustor is not available, 
according to the FCIC Loss Adjustment Manual (LAM) and applicable FCIC 
crop handbooks. Report the size, number, and location of the areas in 
any manner of written correspondence received in the FSA administrative 
county office, no later than 15 calendar days after requesting a 
deferred appraisal and before the acreage is put to another use or 
replanted. Representative sample areas must be of adequate construction 
and numbers to provide acceptable sampling results and maintained in 
sound condition, as determined by CCC, until released by CCC.
    (5) If possible, be present for the appraisal involving un-
harvested crop acreage and accept or contest the results of the loss 
adjustor's appraisal. Producers unable to be present for the appraisal 
may contest the results of the appraisal in the FSA administrative 
county office.
    (e) For the 2005 and subsequent crop years, crop acreage for which 
an application for coverage has been filed, that is intended for 
production of forage seed and for which a notice of loss is filed 
indicating the crop acreage will not be harvested as seed, will be 
appraised for potential production of seed when producers provide CCC 
acceptable evidence of a contract to produce seed for the current crop 
year or acceptable records of acreage and seed production for three or 
more of the last 5 consecutive crop years, as determined by CCC.
    (f) Forage acreage for which a notice of loss is filed that was 
intended to be mechanically harvested but will be grazed and not 
mechanically harvested, or that was intended to be grazed but will be 
mechanically harvested and not grazed, does not require an appraisal or 
release of crop acreage.
* * * * *

0
15. Revise Sec.  1437.11(a)(4) to read as follows:


Sec.  1437.11  Average market price and payment factors.

    (a) * * *
    (4) Determined, as practicable, for each intended use of a crop 
type within a State, as determined by CCC, for a crop year.
* * * * *

0
16. Revise Sec.  1437.101 to read as follows:


Sec.  1437.101  Actual production history.

    Actual production history (APH) is the unit's record of crop yield 
by crop year for the APH base period. The APH base period consists of 
ten crop years of actual yield, T-yield, assigned yield, and zero 
credited yield, immediately preceding the crop year for which an 
approved yield is calculated in accordance with this part. APH will be 
used, except as otherwise indicated in this part, as the basis for 
providing noninsured crop disaster assistance.

0
17. Amend Sec.  1437.102 by:
0
a. Revising paragraphs (a), (b) introductory text, and (b)(1);
0
b. Adding paragraphs (b)(4) through (b)(8);
0
c. Removing paragraphs (f), (g), (h), (i), and the introductory text of 
paragraph (j);
0
d. Redesignating paragraphs (j)(1), (j)(2), (j)(3), (k), (l), and (m) 
as paragraphs (f), (g), (h), (i), (j), and (k), respectively; and
0
e. Revising newly designated paragraph (j).
    The revisions and additions read as follows:


Sec.  1437.102  Yield determinations.

    (a) An actual yield is the total amount of harvested and appraised 
production from unit acreage for the crop year on a per-acre, or other 
basis, as applicable.
    (b) A T-yield (county expected yield):
    (1) Is the Olympic average (disregarding the high and low yields) 
of historical yields of the crop in the county for the five consecutive 
crop years immediately preceding the previous crop year. For example, 
for the 2005 crop year, the five consecutive crop years immediately 
preceding the previous crop year would be 1999 through 2003.
* * * * *
    (4) Will be based on the most representative available historical 
information, as determined by CCC, from such sources as, but not 
limited to, actual acreage and production data of participating 
producers in the county; or in similar areas; National Agricultural 
Statistics Service data; Cooperative State Research, Education, and 
Extension Service records, Federal Crop Insurance data, and credible 
non-government studies. Such data is based on the acreage intended for 
harvest.
    (5) May be adjusted on an administrative county-wide basis for:
    (i) Yield variations due to different farming practices in the 
administrative county such as irrigated, non-irrigated, and organic 
practices; and
    (ii) Cultural practices when such practices in the administrative 
county are different from those used on acreage to establish the yield.
    (6) Will, for all land for those producers who have land physically 
located in multiple counties and administered in one county office, be 
based on the administrative county's expected yield for the crop.
    (7) May be reduced, on a specific APH basis, when, as determined by 
CCC, it does not accurately reflect the productive capability of 
specific crop acreage.
    (8) Will be used in the actual production history base period when 
less than four consecutive crop years of actual, assigned, or zero-
credited yields, as applicable, are available.
    (c) An assigned yield is:
    (1) Equal to 75 percent of the approved yield calculated for the 
most recent crop year for which the producer did not certify a report 
of production.
    (2) Used, after the first crop year an approved yield for the crop 
is calculated, in the actual production history base period when the 
producer reports acreage for the crop but fails to certify a report of 
production. Producers may have only one assigned yield in the actual 
production history base period.
    (3) May be replaced with an actual yield when the producers provide 
a certification of production and acceptable production records for the 
applicable crop year in accordance with Sec.  1437.7.
    (4) May not be used if the acreage of a crop in the administrative 
county in

[[Page 13745]]

which the unit is located for the crop year increases by more than 100 
percent over any year in the preceding seven crop years, or 
significantly from the previous crop years, as determined by CCC, 
unless producers provide:
    (i) Detailed documentation of production costs, acres planted, and 
yield for the crop year for which the producer is requesting 
assistance, or
    (ii) If CCC determines the documentation is inadequate, proof that 
the eligible crop, had it been harvested, could have been marketed at a 
reasonable price.
    (5) May be used, notwithstanding paragraph (c)(4) of this section, 
if:
    (i) The planted acreage for the crop has been inspected by a third 
party acceptable to CCC, or
    (ii) The FSA county executive director, with the concurrence of the 
FSA state executive director, makes a recommendation for an exemption 
from the requirements and CCC approves such recommendation.
    (d) A zero-credited yield:
    (1) Will be used in the applicable crop year of the actual 
production history base period for each crop year following the crop 
year containing an assigned yield, for which producers do not certify a 
report of acreage or production, as determined by CCC.
    (2) May be replaced with an actual yield when the producer provides 
a certification of production and acceptable production records for the 
applicable crop year in accordance with Sec.  1437.7.
    (e) An approved yield:
    (1) Is used in the calculation of the requisite loss and payment.
    (2) Is a simple average of a minimum of four base period crop year 
yields, i.e., actual yield, T-yield, assigned yield, or zero-credited 
yield. The base period is 10 crop years, except 5 crop years for apples 
and peaches, immediately preceding the crop year for which an approved 
yield is calculated, not including any crop year the crop was out of 
rotation, not planted, or prevented from being planted.
    (3) Shall be calculated according to the following criteria when 
the producer does not have at least four consecutive crop years of 
actual, assigned, or zero credited yields beginning with the most 
recent crop year.
    (i) If there are no certified acceptable production records of 
actual production for the most recent crop year, or zero credited or 
assigned yields in the producer's APH base period, and no formula 
provided for the producer under paragraphs (e)(3)(ii) through (iv) of 
this section, then the approved yield for the current crop year will be 
calculated on the simple average of 65 percent of the applicable T-
yield for each of the minimum four APH crop years.
    (ii) If certified acceptable production records of actual 
production are available for only the most recent crop year and there 
are no zero credited or assigned yields in the producer's APH base 
period, the approved yield for the current crop year will be calculated 
on the simple average of the one actual yield plus 80 percent of the 
applicable T-yield for the remaining three of the minimum four APH crop 
years.
    (iii) If certified acceptable production records of actual 
production are available for only the two most recent crop years and 
there are no zero credited or assigned yields in the producer's APH 
base period, the approved yield for the current crop year will be 
calculated on the simple average of the two actual yields plus 90 
percent of the applicable T-yield for the remaining two of the minimum 
four APH crop years.
    (iv) If certified acceptable production records of actual 
production are available for only the three most recent crop years and 
there are no zero credited or assigned yields in the producer's APH 
base period, the approved yield for the current crop year will be 
calculated on the simple average of the three actual yields plus 100 
percent of the applicable T-yield for the remaining crop year of the 
minimum four APH crop years.
* * * * *
    (j) A producer who has not shared in the risk of the production of 
the crop for more than two crop years during the base period, as 
determined by CCC, will have an approved yield calculated based on a 
combination of 100 percent of the applicable T-yield and any actual 
yield for the minimum crop years of the producer's APH base period. 
Producers who have produced the crop for one or two crop years must 
provide CCC, at the administrative FSA office serving the area in which 
the crop is located, a certification of production and production 
records for the applicable crop years in accordance with Sec.  1437.7.
* * * * *

0
18. Redesignate Sec. Sec.  1437.103, 1437.104, and 1437.105 as 
Sec. Sec.  1437.105, 1437.106 and 1437.107, respectively.
0
19. Add new Sec. Sec.  1437.103 and 1437.104 to read as follows:


Sec.  1437.103  Late-planted acreage.

    (a) Producers planting crop acreage after the final planting date 
and during the late planting period, as determined by CCC, may be 
eligible for reduced coverage.
    (b) Multiple-planted crops, crops with a growing period of 60 
calendar days or less, value-loss crops, and fall season small grain 
crops intended only for grain are not eligible for reduced coverage 
under late planting provisions.
    (c) For crops with a growing period of:
    (1) 61 to 120 calendar days and planted:
    (i) One to five calendar days after the final planting date, 
production will be assigned equal to 5 percent of expected production 
of the applicable late-planted crop acreage regardless of the day 
planted.
    (ii) Six to twenty calendar days after the final planting date, 
production will be assigned equal to 5 percent of expected production 
of the applicable late-planted crop acreage plus an additional one 
percent of the expected production of the applicable late-planted crop 
acreage for each day beyond five days.
    (iii) 21 or more calendar days after the final planting date, 
production will be assigned equal to 50 percent of the producer's 
expected production of the applicable late-planted crop acreage.
    (2) 121 days and up and planted:
    (i) One to five calendar days after the final planting date, 
production will be assigned equal to 5 percent of expected production 
of the applicable late-planted crop acreage regardless of the day 
planted.
    (ii) Six to 25 days after the final planting date, production will 
be assigned equal to 5 percent of expected production of the applicable 
late-planted crop acreage plus an additional one percent of the 
applicable late-planted crop acreage for each day beyond five days.
    (iii) 26 or more calendar days after the final planting date, 
production will be assigned equal to 50 percent of the producer's 
expected production of the applicable late-planted crop acreage.


Sec.  1437.104  Assigned production.

    (a) When determining losses under this section, assigned production 
will be used to offset the loss of production when, as determined by 
CCC, any of the following has occurred:
    (1) The loss is a result of an ineligible cause of loss and the 
loss has not been otherwise accounted for.
    (2) The unit acreage was destroyed without consent notwithstanding 
Sec.  1437.10(d).
    (3) The producer has a contract to receive a guaranteed payment for 
all or a portion of the production, as opposed to or regardless of 
delivery of such production.

[[Page 13746]]

    (4) The crop is planted after the STC-established final planting 
date according to Sec.  1437.103.
    (5) Irrigation equipment is not capable of supplying adequate water 
to sustain the expected production of a normal irrigated crop.
    (6) For normal irrigated annual, biennial, and perennial crops, the 
irrigation practice is not used.
    (7) For normal irrigated annual and biennial crops, the supply of 
available water at the beginning of the crop year is not adequate.
    (8) For normal irrigated perennial crops, the supply of available 
water at the beginning of the crop year is not adequate as a result of 
an ineligible cause of loss.

0
20. Amend newly designated Sec.  1437.105 by revising paragraphs (a)(3) 
through (a)(5) and adding paragraph (a)(6), to read as follows:


Sec.  1437.105  Determining payments for low yield.

    (a) * * *
    (3) Multiplying the net production of the total eligible acreage by 
the producer's share;
    (4) Subtracting the product of paragraph (a)(3) of this section 
from the product of paragraph (a)(2) of this section;
    (5) Multiplying the difference calculated under paragraph (a)(4) of 
this section by the final payment price calculated under Sec.  1437.11; 
and
    (6) Multiplying the value of salvage and secondary use by the 
producer's share and subtracting the result from the result of 
paragraph (a)(5) of this section.
* * * * *

0
21. Revise Sec.  1437.201 to read as follows:


Sec.  1437.201  Prevented planting acreage.

    (a) In addition to the provisions of this section, the provisions 
of Sec.  718.103 of this title shall apply.
    (b) When determining losses under this section:
    (1) Producers must be prevented from planting more than 35 percent 
of the total eligible acreage intended for planting to the eligible 
crop and in the case of multiple planting, more than 35 percent of the 
total eligible acres intended to be planted within the applicable 
planting period.
    (2) Prevented planted acreage will be considered separately from 
low-yield losses of planted acreage of the same crop.
    (c) Acreage and units ineligible for prevented planting coverage 
includes, but is not limited to:
    (1) Value-loss crops, including, but not limited to, Christmas 
trees, aquaculture, and ornamental nursery;
    (2) Tree crops and other perennials, unless:
    (i) The producer can prove resources unique to the planting of tree 
crops and other perennials were available to plant, grow, and harvest 
the crop, as determined by CCC; and
    (ii) CCC has approved the planting period for the crop;
    (3) Uninsured crop acreage that is unclassified for insurance 
purposes;
    (4) Any acreage on which a crop was harvested, hayed, or grazed 
during the crop year;
    (5) Acreage of which the producer or any other person received a 
prevented planted payment for any crop for the same acreage, excluding 
share arrangements; and
    (6) Acreage planted during the late-planting period.

0
22. Amend Sec.  1437.202(a) to read as follows:


Sec.  1437.202  Determining payments for prevented planting.

    (a) Subject to limitations, availability of funds, and specific 
provisions dealing with specific crops, a payment for prevented 
planting will be determined by:
    (1) Adding the total planted and prevented-planted acres;
    (2) Multiplying the sum of paragraph (a)(1) of this section by .35;
    (3) Subtracting the product of paragraph (a)(2) of this section 
from the total prevented planted acres;
    (4) Multiplying the producer's share by the approved yield by the 
positive result of paragraph (a)(3) of this section;
    (5) Multiplying the producer's share by the assigned production;
    (6) Subtracting the product of paragraph (a)(5) of this section 
from the product of paragraph (a)(4) of this section; and
    (7) Multiplying the result of paragraph (a)(6) of this section by 
the final payment price calculated under Sec.  1437.11.
* * * * *

0
23. Amend Sec.  1437.401 by revising paragraphs (a), (d) and (f) to 
read as follows:


Sec.  1437.401  Forage.

    (a) Forage eligible for benefits under this part is limited to 
mature vegetation, as determined by CCC, produced in a commercial 
operation in three or more of the last five crop years, except 
producers who have not produced forage for the minimum period in order 
to preserve vegetation and prevent erosion, or otherwise mitigate the 
impact of disaster conditions, as determined by CCC, shall not be 
penalized. Benefits are not available for first-year seeding of alfalfa 
and similar vegetation when production is not produced in the seeding 
year, as determined by CCC. The commercial operation must use 
acceptable farming, pasture and range management practices for the 
location necessary to sustain sufficient quality and quantity of the 
vegetation so as to be suitable for grazing livestock or mechanical 
harvest as hay or seed. Forage to be mechanically harvested shall be 
treated under the rules for low-yield crops as calculated under Sec.  
1437.103, except claims on forage for grazing benefits will be 
determined according to paragraph (f) of this section. The provisions 
in this subpart, however, shall govern for all claims including forage 
for mechanical harvest.
* * * * *
    (d) Forage acreage reported to CCC as intended to be mechanically 
harvested, but which is, instead, subsequently grazed, will be 
considered, for crop definition purposes, as mechanically harvested. 
Expected production of the specific acreage will be calculated on the 
basis of carrying capacity. The loss of such grazed forage shall be 
determined according to paragraph (f) of this section. Except, 
beginning with the 2005 crop year, for acreage intended to be 
mechanically harvested which is instead, subsequently grazed, the loss 
of intended mechanically harvested forage may alternatively be 
determined based on a review of acceptable production evidence or 
appraisal of the specific crop acreage. As part of the payment 
computation for this loss, intended mechanically harvested forage crop 
acreage that is not mechanically harvested, but instead grazed, shall 
be deemed to be un-harvested for the purposes of determining a payment 
factor.
* * * * *
    (f) CCC will establish forage losses of acreage intended to be 
grazed including, in some cases, acreage intended to be mechanically 
harvested but instead subsequently grazed, on the basis of:
    (1) The percentages of loss of similar mechanically-harvested 
forage acreage on the farm, or on similar farms in the area when 
approved yields have been calculated to determine loss, or
    (2) Where there is no similar mechanically-harvested forage acreage 
on the farm or similar farms in the area, the collective percentage of 
loss as determined by CCC for the geographical region after 
consideration of at least two independent assessments of grazed

[[Page 13747]]

forage acreage conditions. The assessments shall be completed by forage 
or range specialists in Federal, State, and local government agencies, 
educational institutions, and private companies not having a financial 
interest in the outcome of the assessment. Neither the assessments 
themselves, nor collective loss percentages established pursuant 
thereto are subject to appeal. CCC's determinations of geographical 
area for assessments and collective grazing loss are generally 
applicable to all similarly situated participants farming in such 
defined geographical region.

0
24. Amend Sec.  1437.403 by revising paragraphs (f) and (j) to read as 
follows:


Sec.  1437.403  Determining payments.

* * * * *
    (f) Multiplying the amount of assigned AUD, as determined by CCC, 
by the producer's share;
* * * * *
    (j) Multiplying the result from paragraph (i) of this section by 
the final payment price established in accordance with Sec.  1437.11.

    Signed in Washington, DC, on March 3, 2006.
Teresa C. Lasseter,
Executive Vice-President, Commodity Credit Corporation, and 
Administrator, Farm Service Agency.
[FR Doc. 06-2548 Filed 3-16-06; 8:45 am]
BILLING CODE 3410-05-P