[Federal Register Volume 71, Number 103 (Tuesday, May 30, 2006)]
[Rules and Regulations]
[Pages 30568-30574]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-8221]


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DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 780

RIN 0560-AG88


Appeal Procedures

AGENCY: Farm Service Agency, USDA.

ACTION: Final rule.

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SUMMARY: In an interim rule that was published on July 27, 2005, and 
made effective on August 26, 2005, the Farm Service Agency (FSA) 
amended the regulations for informal agency appeals to make conforming 
and clarifying changes. This rule adopts the interim rule with some 
minor clarifying amendments.

DATES: Effective Date: This rule is effective June 29, 2006.

FOR FURTHER INFORMATION CONTACT: H. Talmage Day, Appeals and Litigation 
Staff, Farm Service Agency, United States Department of Agriculture, 
1400 Independence Avenue, SW., AG STOP 0570, Washington, DC 20250-0570. 
Telephone: 202-690-3297. E-mail: [email protected].

SUPPLEMENTARY INFORMATION:

Background

    On July 27, 2005, the Farm Service Agency (FSA) published an 
interim final rule amending the FSA appeal regulations at 7 CFR part 
780 (70 FR 43262-43270). The interim final rule became effective on 
August 26, 2005.

Public Comment

    FSA received 20 comments from the public concerning the interim 
final rule: one comment from the lead plaintiff in class action 
litigation pending against FSA, one comment from class counsel in that 
litigation, one comment from a minority advocacy organization, one 
comment from a farm advocacy organization, two comments from farm 
advocates, one comment from an organization of recipients of grants 
under FSA's Certified Agricultural Mediation Program, 7 CFR part 785, 
and 13 comments from recipients of grants under that program. These 
comments and FSA's responses are as follows:

[[Page 30569]]

Regulatory Definitions

    Four respondents made suggestions or questioned certain regulatory 
definitions. One respondent suggested that the regulation should define 
``interested parties'' and ``third parties.'' The substance of this 
respondent's concern is that all interested and third parties uniformly 
be given notice and opportunity to participate in mediation. Current 
rules allow for sufficient and appropriate flexibility in introducing 
other parties to the mediation. No change to the regulations was found 
to be warranted.
    Two respondents who have served as advocates in appeals suggested 
that the definition of ``appellant'' should include an appellant's 
authorized representative, noting a reference to authorized 
representatives in NAD rules. FSA believes that the change is 
unnecessary. This comment goes to the authority of authorized 
representatives to act for appellants, a point not addressed in the 
rule. NAD's regulatory definition encompassing appellants' 
representatives has significance in its rules because the NAD Procedure 
specifically preclude appellants' representatives from submitting 
requests for NAD hearings or for reviews of NAD hearing officers' 
determinations by the NAD Director that are ``not personally signed by 
the named appellant.'' See 7 CFR 11.6(b) and 11.9(a)(2). The procedures 
for agency informal appeals specify no circumstances where an 
``authorized representative'' as defined in the interim final rule 
cannot act for an appellant. Unless the representative's authority is 
limited in writing by the participant, FSA does not intend to restrict 
a representative's ability to represent the participant in proceedings 
governed by part 780.
    Two respondents expressed concern that the definition of ``agency 
record'' in the interim final rule conflicts with the definition of 
``agency record'' in the NAD rules. FSA reviewed the corresponding 
definitions in the two rules and does not perceive a conflict. The 
definition of ``agency record'' in the NAD rules refers not to ``all 
records'' as suggested by one respondent, but only to records related 
``to the adverse decision at issue.'' In any event, part 780 provides 
for excluding irrelevant matters. No change in the regulations is 
needed.
    One respondent complained that use of the term ``covered programs'' 
in 7 CFR 780.6(a) and of ``covered'' in 7 CFR 780.6(c) of the interim 
final rule was ``cryptic'' and proposed that FSA list examples of such 
programs. FSA believes that the scope of the interim final rule and 
programs covered is adequately addressed in section 780.4 of the 
interim final rule. Section 780.4(a)(1) describes programs to which 
part 780 applies and section 780.4(a)(3) describes those programs as 
``covered programs.''

Appeal Options

    Five respondents expressed concern that the interim final rule 
effected a change in prior rules to require that participants in 
agricultural credit programs appeal to county and State committees. The 
respondents' concerns are unfounded. As set forth in section 780.6(b), 
appeals to county and State committees are not options available to 
participants in agricultural credit programs.
    One respondent expressed concern that the interim final rule can be 
read as requiring that all agency appeal procedures be exhausted before 
an appeal to NAD. NAD rules cover NAD jurisdiction. Hence, this comment 
goes beyond the scope of the current rulemaking. NAD rules do require 
that decisions by subordinates of county committees must first be 
appealed to the county committee before any other appeal options are 
available. Also of note, FSA directives call for incorporating language 
in decision letters that specifies in detail how participants must be 
given notice of their options at each stage of decision-making in a 
covered program.
    One respondent expressed concern that the rule will attenuate the 
appeals process, causing delay and adverse economic impact. For the 
reasons noted above, FSA also regards that concern as unfounded. Apart 
from the limitation precluding appeals directly to NAD from decisions 
of subordinates of county committees, the rule imposes no limitation on 
participants' option to appeal adverse decisions directly to NAD.
    Three respondents from advocacy organizations, a coalition of 
recipients of certified mediation program grants under 7 CFR part 785, 
and five State recipients of certified mediation program grants under 
that part expressed concern that the respective listings of agency 
informal appeal procedures available in section 780.6 of the interim 
final rule implied that the options mentioned must be pursued in a 
particular order. FSA believes that the concerns are misplaced. As 
noted, pursuant to agency directives, FSA decision letters furnish 
notice of available appeal or review options that must be incorporated 
substantially verbatim in all decision letters to participants. The 
language identifies the options available to participants, but does not 
presume to advocate which, if any, option a participant should choose. 
The listings of options available in section 780.6 merely reflect the 
organization of the interim final rule.

Time Limitation for Filing of Appeal Requests

    Two respondents affiliated with advocacy organizations and four 
State recipients of grants under the certified agricultural mediation 
program objected that the interim final rule reduces time for 
participants to request appeals from 30 to 23 days. FSA believes that 
this concern arises from a misreading of the ``mailing rule'' in Sec.  
780.15(e)(2) of the interim final rule. The interim final rule changed 
prior procedure, which required a participant to appeal within 30 days 
from the date of an adverse decision letter, so the time limitation to 
exercise appeal options would be the same for agency informal appeals 
and appeals to NAD, and would run from receipt of the decision. The 
rule allows 7 days for receipt. If actual receipt was earlier, the 30-
day period runs from that date. No change in the regulation was made.

Non-Appealability of Determinations Under FSA State Executive Directors 
(SEDs) Special Relief Authority

    Two respondents questioned why decisions on equitable relief under 
the special relief authority granted SEDs under section 1613(e) of the 
Farm Security and Rural Investment Act of 2002 (2002 Act) (Pub. L. 107-
171; 7 U.S.C. 7996) are administratively final and not appealable to 
NAD. This is statutory. Section 1613(e) specifically vests this 
statutory authority in the SED and, by statute, it may not be exercised 
by other agency officials. An SED determination is subject to reversal 
only by the Secretary, who may not delegate that authority. NAD decides 
the proper extent of its own authority, however, as neither the NAD 
Director nor any agency reviewing authority may exercise or reverse the 
decision of an SED under this special relief authority, such a decision 
must be administratively final. Also, in contrast to NAD 
determinations, which are subject to judicial review, see 7 U.S.C. 
6999, judicial review of SED exercises of the special relief authority 
granted in section 1613(e) is specifically precluded in section 
1613(f). Any appeal to NAD from an SED's denial of relief under the 
special relief authority granted in section 1613(e) would, therefore, 
create a statutory conflict. However, denials of equitable relief under 
other authority in

[[Page 30570]]

programs where equitable relief is available are appealable to NAD.
    Similarly, an SED's denial of equitable relief under the special 
relief authority provided in section 1613(e) does not preclude a 
participant from appealing the underlying adverse decision to NAD if 
the matter involves disputed issues of fact and is otherwise appealable 
to NAD.

Appealability of Farm Loan Requests Not Granted Solely Because of Lack 
of Funding

    One respondent questioned the provision in section 780.5(a)(7) that 
denials because of lack of funding are not appealable. The respondent 
correctly observed that under the provisions of the Consolidated Farm 
and Rural Development Act (CONACT), as amended, requests for farm loans 
that are denied because of lack of funding are not final administrative 
decisions. Section 331A(a)(4)(A) (7 U.S.C. 1983a(a)(4)(A)) of the 
CONACT provides that loan requests that are to be disapproved only 
because of a lack of funding shall not be disapproved but shall be 
placed in pending status. The lack of finality is also grounds for 
denying the appeal. However, section 780.5(a)(7) covers other programs, 
too. Appeals where no relief is possible would include advisory rulings 
which go beyond the intended scope of these regulations.

Notice of Appeal Rights When Corrections Are Made

    One respondent objected to use of the term ``appropriate notice'' 
in section 780.3(a), contending that participants must be given appeal 
rights when corrections are made. FSA agrees that certain corrections 
could be appealable as adverse decisions; however, that is unlikely to 
be the case as a general rule because corrections, when made, generally 
have the effect of bringing matters into accord with rules generally 
applicable in administration of a program. Appropriate notice in such 
cases may be notice of the correction that has been made. If the change 
involves no ``new'' decision, advising participants of appeal or review 
rights could merely create confusion when there could be no possibility 
for dispute of an issue of fact. FSA, therefore, believes that the term 
``appropriate notice'' accurately reflects that circumstances may 
differ.

Timetable for Notice of an Adverse Decision

    One respondent questioned whether the interim final rule requires 
FSA to give participants notice of their appeal rights along with a 
notice of an adverse decision and also questioned, as did one other 
respondent, whether FSA has any discretion to exceed the 10-working day 
goal for furnishing notice of an adverse decision. The respondent 
asserts no additional time is permitted because the statutory source of 
the 10-day provision. FSA agrees that appellants must be given notice 
of their appeal and review rights in a decision. As a matter of agency 
policy, mandatory forms for notice of appeal rights available under 
agency and NAD rules are set forth in agency directives. Accordingly, 
``may'' in section 780.7(a) is changed to ``will.''
    As for the 10-working day provision, the rule is consistent with 
the statutory provision but reflects that in certain cases more time 
may be required to issue an adverse decision that will be accurate and 
clear. Moreover, the operative date of the decision might be changed to 
restart the 10-day period. Delay does not shorten the time for a NAD 
appeal as that time runs from receipt of the notice as determined under 
NAD regulations.

Reviews of Non-Appealability Determinations by SEDs

    Two respondents questioned whether the provision in section 
780.5(b) for reviews of appealability determinations by the SED is an 
``additional safeguard.'' The provision for appealability reviews by 
SED's is without prejudice to a participant's right to request an 
appealability review by NAD and is optional for participants. In 
addition, as protection for a participant's right to request an 
appealability review by NAD, the rule provides in section 780.5(c) that 
an SED's appealability determination is considered a new agency 
decision. The effect of this provision is to afford a participant a 
full 30 days from receipt of an SED's appealability determination to 
request an appealability review from NAD. As FSA's guidelines for 
determining whether decisions are appealable reflect the same standards 
as apply in NAD appeals, the main effect of the provision for 
appealability reviews by SED's is to increase the availability of 
agency appeals procedures to those who may wish to take advantage of 
those procedures.

Notice of Appeal Options

    One respondent expressed concern that the rule make clear that 
agency appeals procedures are optional for participants and that 
participants are not required to request reconsideration of adverse 
decisions. FSA does not believe any changes to the rule are necessary 
to address this concern. Options are covered in the determination 
letters and can vary based on the circumstances. Nothing in the 
regulations improperly misclassifies an optional procedure as 
mandatory. Hence, no adjustment was made.

Availability of Agency Directives on the Internet

    Two respondents observed that agency directives setting forth 
generally applicable interpretations of regulations should be available 
to the public on the Internet. FSA agrees that wide distribution of 
agency views is beneficial. FSA notices and handbooks are available at 
http://www.fsa.usda.gov/pas. However, no change in the appeal 
regulations is needed with respect to this comment on information 
policy.

Appealability of Decisions Based on Rules of General Applicability

    One respondent contended that participants should be able to appeal 
decisions that rely on generally applicable interpretations of 
regulations. FSA believes that this comment misconstrues the function 
of the current part 780 administrative appeal process. Neither NAD's 
appeal process nor FSA's routine appeal process are means available to 
participants to dispute the validity of agency regulations or their 
generally applicable interpretations. These limitations do not preclude 
challenges to the validity of agency regulations and their 
interpretation in the courts. Nor do they prohibit petitioning policy 
making officials for a change in general instructions to be acted upon 
with such additional procedures and modifications as may be warranted.

Implementation of Decisions That Are Administratively Final

    Two comments from advocacy organizations contend that all steps 
necessary to implement a decision must be taken within 30 calendar days 
after an agency decision becomes a final administrative decision, 
questioning the term ``to the extent practicable'' in the interim rule. 
FSA believes that the qualification is an appropriate recognition of 
what may be feasible depending upon the program that a decision 
concerns. In cases where a decision involves only a payment of money or 
a revised determination on program eligibility, implementation can 
ordinarily occur within 30 calendar days after the decision becomes 
final. However, if additional information is required from a 
participant before action can be taken or if other steps are required 
that cannot feasibly be accomplished within 30 calendar days,

[[Page 30571]]

additional time is required. FSA, therefore believes the text of 
section 780.16 accurately reflect what is statutorily required and is 
qualified appropriately so as not to be misleading to participants.

Prohibition on Personal Electronic Recordings of Agency Hearings or 
Other Administrative Review Proceedings

    Commenters questioned the prohibition on personal recordings of 
appeal proceedings in Sec.  780.13 of the interim final rule. The 
prohibition was inadvertently omitted in the interim final rule that 
was previously published in 1995. FSA regards this provision as 
technical and necessary to assure that any record of a proceeding is 
reliable and made under circumstances that will afford all parties 
equal access to the appeal record.

Duration of Mediation

    The interim final rule incorporated into regulations the guidelines 
for mediation of program disputes that had been operative under the 
prior interim rule. In States without a certified agricultural 
mediation program that is a recipient of a grant under 7 CFR part 785, 
requests for mediation must be submitted to the SED. When a certified 
agricultural mediation program is operating in a State, mediation is 
made available through that program.
    FSA received comments from 12 of the 34 State mediation programs 
receiving grants under part 785 and from an organization representing 
those grant recipients. The comments from each of these program 
recipients raised a number of issues stated, for the most part, in 
substantially identical language. FSA also received comments on the 
mediation provisions from two advocacy organizations.

Duration of Mediation

    Seven of the commenting mediation programs stated that FSA should 
clarify section 780.9(b) to indicate that a single mediation may 
involve more than one session. The interim final rule does not preclude 
multiple sessions or other services as part of a mediation. Therefore, 
no change in the rule is necessary to accommodate this concern.

Confidentiality in Mediations

    One advocacy organization commented that Sec.  780.9(e), providing 
that mediations shall be confidential consistent with the purposes of 
the mediation, appeared to conflict with the definition of 
``confidential'' in Sec.  780.2. FSA does not believe that the 
provisions are in conflict. A similar provision for confidentiality in 
7 CFR part 785 provides an exception in Sec.  785.9 for purposes of 
evaluation, audit, and monitoring of certified agricultural mediation 
programs. FSA agrees with the respondents' observations regarding the 
importance of confidentiality in mediations. The provision for 
confidentiality in Sec.  780.9(e) accordingly reflects that 
confidentiality as appropriate to effect the purposes of the mediation 
will be protected. Also, the suggestion of four other certified 
mediation programs that these regulations should be amended to make 
State law on confidentiality in mediation applicable is not adopted. 
The standards should be the same nationwide and these regulations 
reflect that desire.
    One mediation program commented that, in the interest of 
confidentiality, notes by an agency representative during mediation 
should not be made part of the record that would be submitted to a 
higher reviewing authority if the mediation is followed by an appeal. 
FSA agrees with the substance of this comment and believes it is 
appropriate to incorporate this guideline into agency directives 
concerning mediation of agricultural program disputes. However, no 
change in the regulations is needed.
    Two other mediation programs questioned procedures for 
communication by an agency representative in mediation with other FSA 
officials, one proposing that the consent of other parties should be 
required as a condition for such communications, the second disputing 
that any communications among agency officials could be valid and 
consistent with due process. Such communications are not, as such, 
addressed in the regulations. The absolute prohibition sought would be 
inappropriate as communication with other officials may be necessary to 
the agency conduct of the mediation and other business. Such a 
limitation would also be impracticable without providing a material 
benefit. Presumably, all intra-governmental communication will be 
relevant to the conduct of agency business.

Stay of Time Limitations During Mediation

    Five respondents, including three certified agricultural mediation 
programs, objected that no provision in the interim final rule 
specifies the effect of mediation on time deadlines for appeals. 
Accordingly, Sec.  780.15 is amended in this rule to provide that the 
time period for requesting appeal is tolled by mediation. Likewise, the 
amendment specifies that the time deadline for payment limitations in 7 
CFR 1400.9 are extended. If following mediation there should be a new 
decision modifying the adverse decision that was mediated, the interim 
final rule provides a full 30-day period for a participant to exercise 
any remaining appeal options with respect to the modified decision. An 
adverse decision that is not modified as a result of mediation is not a 
new decision.

Waiver of Appeal Options and Withdrawal of Appeals

    Six respondents, using substantially identical language, requested 
that FSA clarify the distinctions between waiver and withdrawal in 
Sec. Sec.  780.7(b) and (d) concerning reconsideration, and Sec. Sec.  
780.10(b) and (c) concerning State committee appeals. Section 780.7(b) 
provides for waiver of reconsideration because reconsideration is 
available as an alternative to mediation. The rule is sufficiently 
descriptive. ``Waiver'' properly describes a pre-request 
disqualification. ``Withdrawal'' properly describes a post-request 
correction or removal. However, Sec.  780.10(c) is amended to provide 
that deemed withdrawal of a request for a State committee hearing as a 
result of a mediation request will not preclude a subsequent request 
for a State committee hearing.

Contact Information for Certified Agricultural Mediation Programs in 
Adverse Decisions

    One commenting recipient of a grant under part 785 proposed that 
Sec.  780.9(f) concerning notice of the opportunity for mediation 
should be amended to include notice of a toll-free telephone number, e-
mail address, and Web address for a certified agricultural mediation 
program, if available. Providing notice of a toll-free number and other 
means for communicating electronically with a mediation program will, 
as the respondent noted, facilitate participants' inquires about 
mediation services that may be available. Three other recipients of 
grants under part 785 proposed that participants be given notice of the 
toll-free telephone number for a certified agricultural mediation 
program, if available.
    FSA notes that the rule requires that any request for mediation in 
an appeal under this rule must be submitted in writing on or before 30 
days from the date an adverse decision is received. Contacts with a 
certified agricultural mediation program by means of a toll-free number 
are not effective to document when a request is submitted so as to 
monitor the 30-day limitation for a participant to exercise other 
appeal rights because that 30-day clock is

[[Page 30572]]

stayed from the time mediation begins until it closes. With regard to 
other means for participants to contact certified agricultural 
mediation programs, the rule provides sufficient flexibility to enable 
programs and States to work out procedures without need for revisions 
to the rule.
    This respondent, and four other recipients of grants under part 
785, also proposed that mediation programs should consistently be the 
designated contact to receive mediation requests in states using a 
certified mediation program. FSA believes that it is appropriate to 
provide in the rule for variations to meet local circumstances but also 
anticipates that a certified program will ordinarily be the designated 
point of contact in a State with a certified agricultural mediation 
program. As the rule anticipates that a certified agricultural 
mediation program will ordinarily be the point of contact, but provides 
for flexibility to accommodate unanticipated circumstances, no change 
in the rule is necessary.
    The recipient of notice will be expected to maintain records of the 
date when a participant's written request for mediation is received. 
The records should include a date-stamped original of the participant's 
written request and a record of the date when a mediation is closed so 
that the running of or compliance with applicable limitation periods is 
supported by documentary evidence that may be reliably monitored by 
FSA, NAD, or others with the authority to monitor appeal procedures.

Participant's Submission of Copy of Adverse Decision With Mediation 
Request

    Six recipients of agricultural mediation program grants under part 
785 and an organization of agricultural mediation program grant 
recipients commented that requiring participants to furnish a copy of 
the subject adverse decision with a request for mediation is a hardship 
for participants. FSA notes that the NAD rules require participants 
requesting NAD hearings to include a copy of the adverse decision with 
their written request. FSA also notes the concern of many of these same 
respondents that participants in States with certified agricultural 
mediation programs should be uniformly instructed to contact the 
mediation program to request mediation. Requiring a participant to 
include a copy of the adverse decision seems particularly appropriate 
in that circumstance to minimize confusion, to provide a reliable check 
on the timeliness of the participant's request for mediation, and to 
ensure proper tracking of the request in relation to other appeal 
processes that a participant may have initiated. Accordingly, no change 
in the regulation was made.

Mediation as an Alternative Dispute Resolution Technique

    As a matter of procedure, the interim final rule is neutral 
regarding mediation and other participant options for dispute 
resolution. FSA believes that options should be presented clearly so 
that participants understand their options and how they may be 
exercised. In this regard, two respondents questioned the emphasis in 
the preamble on the requirement that resolutions in mediation must 
conform to the statutes, regulations, and FSA's generally applicable 
interpretations of statutes and regulations governing a program as a 
distinctive feature of mediation of program disputes. FSA agrees with 
the respondents that mediators, as a general matter, may assist parties 
in exploring their interests, but does not agree that parties' 
interests may preempt regulatory or statutory constraints enabling a 
participant to obtain in mediation a result not legally obtainable by 
other means. These comments address only text in the preamble to the 
interim final rule and no amendment to the rule needs to be considered. 
Any change which would allow local override of national policy are not 
warranted and contrary to the public interest.

Authority of Agency Representative in Mediation

    Two advocacy groups, four recipients of certified agricultural 
mediation program grants, and an organization of mediation program 
grant recipients commented that the rule should require that the 
decision-maker, rather than a designated agency representative, 
participate in the mediation. One of the respondents indicated that 
having members of a county committee attend mediation had been workable 
in some circumstances. FSA believes that it may be appropriate in some 
circumstances for the official who has issued a decision to attend a 
mediation session, but for decisions on matters that are delegated only 
to an SED, State Committees, or county committees, it is an 
impracticable commitment of resources to require as a general rule that 
the decision-maker attend a mediation. Also, such participation in 
mediation would conflict with a decision maker's decision-making role. 
The rule instead provides that proposed resolutions in mediation will 
be forwarded to the decision-maker for approval or implementation.
    A concern was expressed in comments, in substantially identical 
language, by two advocacy groups, an organization of agricultural 
mediation program grantees, and nine recipients of agricultural 
mediation programs that approval of proposed agreements in mediation by 
officials with properly delegated authority is contrary to due process 
and arbitrary. FSA believes that the concern is misplaced. Contrary to 
the impression of one of these respondents, generally applicable 
interpretations of program regulations are established by National 
Office program managers in consultations with other officials and with 
counsel when appropriate, not by others.
    As defined in the rule, mediation is a means to explore parameters 
for resolution consistent with program requirements in a setting where 
the mediator has no decision-making power. Under these circumstances, 
it is unreasonable to suggest that due process is compromised by a 
review of proposed dispute resolutions by officials with delegated 
authority who are accountable for administration of the subject 
programs consistent with national policy. FSA believes that mediation 
programs and mediators may need to clarify the purpose of mediation, 
including its limitations, when mediation occurs as an option in the 
FSA appeals process. The re-delegations of authority within FSA that 
these comments imply would create substantial risks of inconsistent 
results and compromised program integrity. Accordingly, the regulation 
is not changed in response to the comments. Any change that overrides 
national policy or standards would be fiscally irresponsible and 
contrary to the public interest.

Termination of Mediation by an SED

    Two advocacy organizations questioned the provision in section 
780.9(h) authorizing a State Executive Director to determine mediation 
to be at an impasse. The respondents argue that problems of mediation 
program mismanagement should be addressed with mediation program 
managers. FSA concurs that any problems arising in management of 
agricultural mediation programs must be addressed with the responsible 
program managers. The authority granted in the rule merely affords a 
means to deal with such problems as they affect specific mediations 
that could not otherwise be resolved under regulations to bring the 
mediations to closure. FSA believes the authority provided is necessary 
in the

[[Page 30573]]

rule, but does not anticipate that the authority granted to an SED 
under section 780.9(h) is authority that an SED would need to invoke 
routinely. Accordingly, the regulations are not changed.

Mediation in Advance of an Adverse Decision

    In the preamble to the interim final rule, FSA noted that the rule 
does not establish guidelines for mediations that may occur in advance 
of any decision that is appealable under the rule. The preamble noted 
that in certain limited cases where only one issue would be in dispute 
and some resolution would seem feasible, mediation in advance of an 
adverse decision could be appropriate. An example would be mediation of 
a dispute among successors-in-interest with respect to an existing 
Conservation Reserve Program contract regarding their respective 
successor shares--an entirely private dispute in which all parties 
should have a mutual interest to resolve to continue receiving 
payments.
    Seven recipients of agricultural mediation program grants and an 
organization of mediation program grant recipients commented that the 
rule should be amended to provide expressly for mediation in advance of 
an adverse decision. FSA believes that such an amendment is 
inappropriate because the rule concerns appeals from adverse decisions 
and rules and procedures for determining what decisions may be 
appealable. Mediation in advance of an adverse decision may be 
appropriate in certain cases. This rule, in Sec.  780.9(a), clarifies 
when a party may request mediation of an adverse decision, but it does 
not preclude mediation in advance of an adverse decision in appropriate 
cases. Accordingly, the rule is not changed.

Miscellaneous

    Also, these regulations have been amend to correct a reference to 
an Internet address.

Executive Order 12866

    The Office of Management and Budget (OMB) has determined this rule 
is not significant for the purposes of Executive Order 12866; 
therefore, this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    This rule does not change the information collection requirements 
of any programs of FSA approved by OMB under the Paperwork Reduction 
Act of 1995 (44 U.S.C. chapter 35).

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
establishes requirements for Federal agencies to assess the effects of 
their regulatory actions on State, local, and tribal governments and 
the private sector. This rule contains no Federal mandates (under the 
regulatory provisions of title II of the UMRA) for State, local, and 
tribal governments or the private sector. Therefore, this rule is not 
subject to the requirements of sections 202 and 205 of the UMRA.

Executive Order 12612

    It has been determined under section 6(a) of Executive Order 12612, 
Federalism, that this rule does not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment. The 
provisions contained in this rule will not have a substantial direct 
effect on States or their political subdivisions or on the distribution 
of power and responsibilities among the various levels of government.

Regulatory Flexibility Act

    As stated in the interim final rule, FSA has determined that there 
will not be a significant economic impact on a substantial number of 
small entities pursuant to section 605(b) of the Regulatory Flexibility 
Act, 5 U.S.C. 605 (b).

Executive Order 12372

    These regulations are 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.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. The provisions of this rule are not retroactive. The 
provisions of this rule preempt State and local laws to the extent such 
State and local laws are inconsistent. Generally, all administrative 
appeal provisions, including those published at 7 CFR part 11, must be 
exhausted before any action for judicial review may be brought in 
connection with the matters that are the subject of this rule.

Environmental Evaluation

    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 the FSA 
regulations for compliance with NEPA, 7 CFR parts 799 and 1940, subpart 
G. Due to this rule's administrative nature, no extraordinary 
circumstances or other unforeseeable factors exist which would require 
preparation of an environmental assessment or environmental impact 
statement.

List of Subjects in 7 CFR Part 780

    Administrative practice and procedure, Agricultural commodities, 
Agriculture, Farmers, Federal aid programs, Loan programs, Price 
support programs, Soil conservation, Wetlands.

0
Accordingly, the interim rule amending 7 CFR part 780 which was 
published at 70 FR 43262 on July 27, 2005, is adopted as final with the 
following changes:
0
1. The authority citation for part 780 continues to read as follows:

    Authority: 5 U.S.C. 301 and 574; 7 U.S.C. 6995; 15 U.S.C. 714b 
and 714c; 16 U.S.C. 590h.

0
2. Amend Sec.  780.7(a) to read as follows:


Sec.  780.7  Reconsideration.

    (a) A request for reconsideration must be submitted in writing by a 
participant or by a participant's authorized representative and 
addressed to the FSA decision maker as will be instructed in the 
adverse decision notification.
* * * * *
0
3. Amend Sec.  780.9 by revising paragraph (f)(3) to read as follows:


Sec.  780.9  Mediation.

* * * * *
    (f) * * *
    (3) A listing of certified State mediation programs and means for 
contact may be found on the FSA Web site at http://www.usda.gov/fsa/disputemediation.htm.
* * * * *
0
4. Revise Sec.  780.10(c) to read as follows:


Sec.  780.10  State committee appeals.

* * * * *
    (c) If a participant requests mediation or requests an appeal to 
NAD before a request for an appeal to the State Committee has been 
acted upon, the appeal to the State Committee will be deemed withdrawn. 
The deemed withdrawal of a participant's appeal to the State Committee 
will not preclude a subsequent request for a State Committee hearing on 
appealable matters not resolved in mediation.
* * * * *

[[Page 30574]]


0
5. Amend Sec.  780.15 by revising paragraph (c) and correcting the 
second sentence in paragraph (d) to read as follows:


Sec.  780.15  Time limitations.

* * * * *
    (c) A participant requesting reconsideration, mediation or appeal 
must submit a written request as instructed in the notice of decision 
that is received no later than 30 calendar days from the date a 
participant receives written notice of the decision. A participant that 
receives a determination made under part 1400 of this title will be 
deemed to have consented to an extension of the time limitation for a 
final determination as provided in part 1400 of this title if the 
participant requests mediation.
    (d) * * *A participant does not have the right to seek an exception 
under this paragraph.* * *
* * * * *

    Signed at Washington, DC, on May 10, 2006.
Teresa C. Lasseter,
Administrator, Farm Service Agency.
 [FR Doc. E6-8221 Filed 5-26-06; 8:45 am]
BILLING CODE 3410-05-P