[Federal Register Volume 74, Number 126 (Thursday, July 2, 2009)]
[Rules and Regulations]
[Pages 31567-31578]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-15537]



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  Federal Register / Vol. 74, No. 126 / Thursday, July 2, 2009 / Rules 
and Regulations  

[[Page 31567]]



DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 760

Commodity Credit Corporation

7 CFR Parts 1400 and 1439

RIN 0560-AH95


Livestock Indemnity Program and General Provisions for 
Supplemental Agricultural Disaster Assistance Programs

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

ACTION: Final rule.

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

SUMMARY: This rule implements the general eligibility provisions for 
all the supplemental agricultural disaster assistance programs 
authorized by the Food, Conservation, and Energy Act of 2008 (2008 Farm 
Bill) and the specific requirements for the Livestock Indemnity Program 
(LIP). LIP provides disaster assistance for livestock losses. LIP 
applies only to livestock owners and contract growers that had losses 
due to livestock deaths in excess of normal mortality due to adverse 
weather during the calendar year, including losses due to hurricanes, 
floods, blizzards, disease, wildfires, extreme heat, and extreme cold. 
Eligible LIP losses must have occurred on or after January 1, 2008, and 
before October 1, 2011. This rule specifies how the LIP payments are 
calculated and when producers may apply for benefits. This rule also 
removes some outdated rules from the Code of Federal Regulations (CFR).

DATES: Effective Date: July 13, 2009.

FOR FURTHER INFORMATION CONTACT: Scotty Abbott, 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) 720-7997; e-mail 
[email protected]. Persons with disabilities who require 
alternative means for communication (Braille, large print, audio tape, 
etc.) should contact the USDA Target Center at (202) 720 2600 (voice 
and TDD).

SUPPLEMENTARY INFORMATION:

Background

    This rule implements the general eligibility provisions for the 
supplemental agricultural disaster assistance programs authorized by 
the 2008 Farm Bill (Pub. L. 110-246). Sections 12033 and 15101 of the 
2008 Farm Bill authorize the Secretary of Agriculture (Secretary) to 
assist producers who have had crop and livestock losses due to adverse 
weather. FSA will provide assistance through five different programs:
     Livestock Indemnity Program (referred to as Livestock 
Indemnity Payments in the Farm Bill),
     Livestock Forage Disaster Program (LFP),
     Emergency Assistance for Livestock, Honey Bees, and Farm-
Raised Fish (ELAP),
     Supplemental Revenue Assistance Payments Program (SURE) 
(which covers general crop production losses, but not those covered by 
LFP), and
     Tree Assistance Program (TAP).
    This rule implements the first of these programs, LIP, in 7 CFR 
part 760, subpart E. The 2008 Farm Bill sets, however, common 
eligibility requirements for the programs. The general provisions for 
supplemental agricultural disaster assistance programs will be 
implemented in regulations in 7 CFR part 760, subpart B. Specific 
provisions for the other programs, LFP, SURE, ELAP, and TAP, will be 
implemented through separate rulemakings. Where practical, these 
programs will be implemented to be similar to previous ad hoc disaster 
assistance programs. For example, LIP will be similar to the previous 
LIP regulations that were in 7 CFR part 760, subpart E.
    Currently, for LIP, the 2008 Farm Bill authorizes the Secretary to 
assist eligible livestock producers on farms that have had livestock 
death losses in excess of the normal mortality due to adverse weather.
    The supplemental agricultural disaster assistance programs will be 
administered by FSA using funds from the Agricultural Disaster Relief 
Trust Fund established under section 902 of the Trade Act of 1974 (19 
U.S.C. 2497a). The disaster assistance programs authorized by the 2008 
Farm Bill are permanent or ``standing'' programs that have similar 
scope to the previous ad hoc programs. The programs are provided for in 
two separate places in the 2008 Farm Bill. First, there is section 
12033, which adds a new section 531 to the Federal Crop Insurance Act 
(7 U.S.C. 1501-1524). Second, there is section 15101, which adds 
section 902 of the Trade Act of 1974. The provisions of the two 
sections as enacted were identical except that the Trade Act of 1974 
provisions contained the trust fund provisions. Since then, there have 
been some amendments, but the two sections of the 2008 Farm bill are 
considered to be interchangeable for the purposes of this rule.

General Eligibility Requirements

Payment Limits

    The 2008 Farm Bill limits how much a producer may receive from FSA 
disaster assistance programs.
    In applying payment limitation for 2008, no person, as defined and 
determined by the regulations in 7 CFR part 1400 in effect for 2008, 
may receive more than $100,000:
     Total per crop year under ELAP, LFP, LIP and SURE
     Per program years under TAP.
    For 2009 through 2011, no person or legal entity (excluding a joint 
venture or general partnership), as defined and determined by the 
regulations in 7 CFR part 1400 may receive, directly or indirectly, 
more than $100,000:
     Total per crop year under ELAP, LFP, LIP and SURE
     Per program years under TAP.
    For this purpose, both indirect and direct benefits are counted by 
attribution. In the case of a legal entity, the same payment is 
attributed to the direct payee in the full amount and those that have 
an indirect interest to the amount of the interest. For example, under 
the attribution rules that applies to these programs, assume:
     Corporation A is in line to receive a $100,000 SURE 
payment,
     Corporation A is owned 50 percent by Individual A and 50 
percent by Corporation B, and
     Corporation B is owned by Individual B with a 30 percent 
interest

[[Page 31568]]

and by Individual C with a 70 percent interest.
    If so, Corporation A, for payment limitation purposes would be 
considered to have received $100,000 and Individual C (who owns 70 
percent of Corporation B, which owns half of Corporation A) would be 
considered to have indirectly benefitted by the amount of $35,000 (50 
percent times 70 percent of the $100,000). Even though no part of the 
$100,000 was actually paid to Individual C, the amount of $35,000 would 
count against individual C's overall payment limitation from all 
sources and farms. Assume Individual C was already at the maximum 
payment limit, Individual C would not have been eligible to receive 
$35,000; as a result, the payment to Corporation A would be reduced by 
$35,000.
    The amount of any payment for which a participant may be eligible 
under any of these programs may be reduced by any amount received by 
the participant for the same or any similar loss from any Federal 
disaster assistance program.
    In applying the limitation on average adjusted gross income (AGI) 
for 2008, an individual or entity is ineligible for payment under ELAP, 
LFP, LIP, SURE, and TAP if the individual's or entity's average AGI 
exceeds $2.5 million for 2007, 2006, and 2005 under the provisions in 7 
CFR part 1400 in effect for 2008. For 2009 through 2011, the average 
AGI limitation provisions in 7 CFR part 1400 applicable to Commodity 
Credit Corporation (CCC) commodity programs also apply to ELAP, LFP, 
LIP, SURE, and TAP. Specifically, as specified in the 2008 Farm Bill, 
for 2009 through 2011, a person or legal entity with an average 
adjusted gross nonfarm income, as defined in 7 CFR 1400.3, that exceeds 
$500,000 for the relevant period will not be eligible to receive 
payments under these programs. Likewise, if a person with an indirect 
interest in a legal entity has an average nonfarm AGI over $500,000, 
then the payment to the legal entity will be reduced as calculated 
based on the percent of interest in the legal entity receiving the 
payment. For example, continuing with the assumptions in the example 
above, if Individual B had an average AGI that was over the limit, then 
the payment to Corporation A will be reduced by 15 percent (Individual 
B's 30 percent interest in Corporation B times Corporation B's 50 
percent interest in Corporation A).
    Payment and average AGI limits will be determined under regulations 
specified in 7 CFR part 1400 for Commodity Credit Corporation (CCC) 
commodity programs. The programs covered in this final rule are not CCC 
programs, but the CCC regulations in 7 CFR part 1400 are adopted for 
these programs.
    The relevant AGI period for these programs is the 3 calendar years 
that precede the program year involved. For livestock losses, the 
program year is the calendar year of the loss of the livestock. For 
SURE, the program year is the year that corresponds to the relevant 
crop year. The crop year concept in some limited cases can involve a 
loss that occurs in a different calendar year than the calendar year 
whose number corresponds to the crop year. For example, wheat for the 
2009 crop year can be planted in the fall of 2008 and be lost during 
2008. SURE payments related to such a loss would be made in calendar 
year 2009.
    The regulations in 7 CFR 1400.105 specify how payments will be 
attributed and how far the attribution will go. Attribution will be 
tracked through four levels of ownership in legal entities. The 2008 
Farm Bill removed the previous ``3 entity rule,'' so a person can now 
receive benefits attributed through an unlimited number of entities, 
subject to the payment limits and the rules of attribution described in 
this final rule and in 7 CFR part 1400. In addition to these limits, 
the 2008 Farm Bill imposes limitations of payments to foreign persons. 
Those limits are specified in the regulations in Sec.  760.103.

Risk Management Purchase Requirement

    To be eligible for program payments under ELAP, SURE, and TAP, 
eligible producers on a farm, as specified by the 2008 Farm Bill, must 
have purchased insurance for each insurable commodity, excluding 
grazing land; a few exceptions allowed by the 2008 Farm Bill are 
discussed later in this section. ``Insurable commodities'' are those 
for which a plan of insurance can be obtained from the USDA's Risk 
Management Agency (RMA) that makes coverage for crops available under 
the Federal Crop Insurance Act (FCIA). Benefits for ``noninsurable'' 
commodities are generally available through the Noninsured Crop 
Disaster Assistance Program (NAP) run by FSA. Except for grazing land, 
producers for ELAP, SURE, and TAP must have obtained an RMA policy or 
plan of insurance or NAP coverage for all of their crops. For LFP, 
producers must have obtained an RMA policy or plan of insurance or NAP 
coverage for those grazing lands for which they seek benefits.
    LIP does not have a risk management purchase requirement. The risk 
management purchase requirement regulations are included in this rule 
because they have multi-program application. As noted, this final rule 
contains general provisions for multiple programs and specific 
provisions for LIP. Additional provisions to cover the other programs 
will be issued later.
    Producers who did not purchase required coverage are not eligible 
for benefits unless an exception applies. ``Socially disadvantaged 
farmers and ranchers,'' as well as ``limited resource farmers and 
ranchers,'' or ``beginning farmers or ranchers,'' are exempt. For the 
2008 crop, persons who paid a certain buy-in fee were exempt from the 
purchase requirement if the buy-in fee was paid by September 16, 2008. 
By an amendment to the 2008 Farm Bill, Congress allowed a second buy-in 
enabling producers to buy in from February 17, 2009 up to May 18, 2009; 
however, if the buy-in occurred after the first deadline, or was not 
granted administratively through some form of equitable relief the 
producer had to agree to buy crop insurance or NAP for the next year 
for the crops to which the buy-in applied. Also, there were special 
benefit calculation provisions for producers who made use of the second 
deadline. The buy-in fee was equal to the cost of the insurance or NAP 
coverage, but did not entitle the producer to insurance or NAP 
coverage. Also, an amendment allowed a 2009 crop buy-in for crops if 
the 2009 Federal Crop Insurance Corporation (FCIC) sales closing date 
was prior to August 14, 2008. The deadline for the 2009 crop buy-in was 
January 12, 2009. In addition to these provisions, section 531(g)(5) of 
the FCIA (and the corresponding provisions of the Trade Act of 1974) 
have some more general provisions allowing the Secretary discretion to 
grant equitable relief to persons with a lack of coverage. The buy-in 
concept has no application to LIP since LIP has no purchase 
requirement. The buy-in fees were different for 2008 and 2009.

Miscellaneous

    Under this rule, participants receiving disaster assistance 
payments under any of the these programs must keep records and 
supporting documentation for 3 years following the end of the year in 
which the application for payment was filed. This discretionary 
recordkeeping requirement is consistent with other FSA rules and 
programs, as well as with previous similar disaster assistance 
programs.
    Restrictions apply to these programs including, but not limited to, 
those pertaining to highly erodible land and wetland conservation 
provisions in 7 CFR part 12.

[[Page 31569]]

    This rule amends subpart B by adding Sec.  760.110 to clarify that 
appeal regulations specified in 7 CFR parts 11 and 780 apply. It also 
specifies that for all the new standing disaster programs, matters 
requiring FSA determinations that are not in response to, or result 
from, an individual disputable set of facts in a specific individual 
participant's application, are not matters that can be appealed under 7 
CFR parts 11 or 780. These include, but are not limited to, general 
statutory or regulatory provisions that apply to similarly situated 
participants, national average payment prices, regions, crop 
definition, average yields, or similar items.

Specific Provisions for LIP

Overview

    The 2008 Farm Bill provisions require LIP payments to be made at a 
rate of 75 percent of the market value of the livestock on the day 
before the date of the death of the livestock. Payments are to be made 
to eligible producers on farms that have incurred livestock death 
losses for the calendar year in excess of the normal mortality. The 
eligible livestock death losses must have occurred on or after January 
1, 2008, but before October 1, 2011, due to adverse weather, as 
determined by the Secretary, during the calendar year for which 
benefits are requested, including losses due to hurricanes, floods, 
blizzards, disease, wildfires, extreme heat, and extreme cold. All the 
provisions described in this paragraph, which are implemented in this 
rule, are statutory provisions over which FSA has little or no 
discretion.
    The details in this rule on what kinds of livestock are eligible, 
acceptable documentation of loss, and the application process for 
payment, are discretionary provisions. Generally, FSA has based the 
discretionary provisions of the program as specified in this rule on 
the rules and policies used for the 2005-2007 LIP because they are 
known to the public and to Congress and because they have worked well 
to apportion benefits for the type of loss involved in this program.
    Unlike some previous livestock-related programs, LIP does not cover 
crawfish, catfish, or other aquaculture because losses of that kind are 
covered by SURE and the general direction of the 2008 Farm bill is that 
there will not be duplicative payments.

Eligibility Requirements; Livestock Covered by LIP

    LIP payments and eligibilities will be calculated on the type of 
eligible livestock and the actual losses and the calculations will be 
made by FSA-approved categories. Eligible livestock for payment to 
livestock owners include beef cattle, dairy cattle, buffalo, beefalo, 
equine, sheep, goats, deer, swine, poultry, reindeer, elk, emus, 
alpacas, and llamas that died as a direct result of an eligible adverse 
weather event. The list of eligible livestock includes all the types 
from the previous ad hoc disaster program for livestock, except for 
catfish and crawfish as described above. Regulations for that program 
are in 7 CFR part 760, subpart J. This final rule adds alpacas, emus, 
and llamas to the list of eligible livestock. FSA added these types of 
livestock based on concerns expressed with respect to previous 
programs.
    Benefits are only available for the owners of livestock or for 
``contract growers''--persons who produce livestock owned by someone 
else, but have a risk in the livestock (such as a farmer who raises 
chickens owned by a company that produces chicken products, but does 
not receive payment for livestock that die before the livestock is 
mature and returned to the owner). The contract grower provisions only 
cover swine and poultry because those are the only known examples of 
that kind of production arrangement. To be eligible livestock for LIP, 
as of the day they died the livestock must have been both of the 
following:
     Owned by an eligible owner or in the possession of an 
eligible contract grower and
     Maintained for commercial use as part of a farming 
operation of the participant on the day they died.
    In addition, to be eligible, the livestock must have died as a 
direct result of an eligible adverse weather event in the calendar year 
for which benefits are requested. Participants must provide verifiable 
documentation of livestock deaths claimed.
    Animals kept for recreational purposes, such as hunting animals, 
animals used for roping practice, pets, and show animals, are not 
eligible. Wild, free roaming animals are not eligible to generate 
payments.
    Eligibility for payments to poultry and swine contract growers will 
be limited based on the amount of their contractual risk and other 
payments received. Payments will not exceed their contractual risk, as 
determined by FSA. Any compensation received by the contract grower 
from the contractor for loss of income for the dead livestock will be 
deducted from the contract grower's payment.
    Determination of LIP payment eligibility will be based on actual 
losses in excess of normal mortality for the calendar year for the 
relevant animal type and approved category by an individual producer or 
contract grower due to adverse weather. There is not a State or 
National ``trigger'' such as an emergency declaration that provides 
automatic eligibility for all producers in a particular State, county, 
or region. Adverse weather includes, but is not limited to, events such 
as hurricanes, floods, blizzards, wildfires, extreme heat, and extreme 
cold. FSA has the authority to determine eligibility of livestock 
losses caused by other adverse weather types, including disease caused 
by such weather.

Applying for LIP Payment; LIP Payment Calculations

    There are two basic steps for a producer to obtain LIP payments. 
One step is to file a notice of loss when there is an event that does 
or could generate a claim because of the death of an animal due to 
adverse weather. Because the eligible losses are only those above 
normal mortality that are calculated on a yearly basis, a loss 
occurring in, for example, July, will not necessarily generate a claim 
depending on how great the losses are, natural or otherwise, for the 
rest of the year. It could be, however, that a loss in July is so great 
that the producer is already beyond normal mortality for the year, in 
which case there could already be a claim for benefits. The second step 
is to file the application for payment.
    For the first step, after this final rule is published, producers 
must provide a notice of loss to the FSA county office within 30 days 
of when the loss of livestock was apparent, or within 30 days after the 
end of the calendar year in which the loss occurred, whichever comes 
first. Producers who suffered a potentially eligible loss of livestock 
prior to July 13, 2009 (prior to this rule being effective), must 
provide a notice of loss to the FSA county office by September 13, 2009 
(within 60 calendar days after this rule is effective). As indicated, 
however, a notice of loss is one part of the application process; other 
documentation is required for a complete application for payment, as 
described in this rule. The completed application must be submitted to 
the FSA county office no later than 30 calendar days after the end of 
the calendar year in which the loss of livestock occurred or, for 2008 
losses, by September 13, 2009 (60 calendar days after this rule is 
effective). Producers that suffer multiple livestock losses during the 
calendar year may file multiple notices of loss and multiple 
applications for payment. This rule

[[Page 31570]]

specifies the documents that are required to show loss, such as 
inventory records and grower contracts. The 30-day deadline is a change 
from the previous programs that had an application period determined by 
the Deputy Administrator for Farm Programs for FSA. Putting a specific 
deadline in the rules should make it clear when applications are due.
    As specified in the 2008 Farm Bill, the payment for livestock 
owners will be calculated based on 75 percent of the average fair 
market value of the applicable livestock on the day before the date of 
death of the livestock, as determined by the Agency. This program is 
not a program funded by CCC. Rather, it is funded by the trust fund as 
provided for in section 902 of the Trade Act of 1974, as added by the 
2008 Farm Bill. For contract growers, the payment will be based on 75 
percent of the average income loss sustained by the grower with respect 
to the dead livestock. Where there is a contract grower holding the 
livestock at the time of death, only the contract grower will be 
eligible for the payment; the owner is not eligible. When determining 
the market value of applicable livestock in order to determine payment 
rates for LIP, FSA will establish market values for each type and 
category of livestock using data from credible livestock markets. 
Credible livestock markets will include sale barns and local sales as 
well as sales at terminal market centers or slaughtering facilities.
    FSA, through the State FSA offices, will obtain recommendations 
from applicable State livestock organizations, State Cooperative 
Extension Service, and other knowledgeable and credible sources, to 
establish the normal mortality rate for each type of livestock on a 
State-by-State basis. Payments are only available for losses over 
normal mortality over the course of the year and those rates will be 
established on a State-by-State basis.

Miscellaneous LIP Provisions

    All owners, contract growers, livestock, and losses must meet the 
eligibility requirements provided in this rule. False certifications 
carry serious consequences. FSA will validate applications with random 
spot-checks.
    Livestock losses that are not weather-related are not eligible for 
LIP.

Structure of the Regulations

    The regulations in 7 CFR part 760, ``Indemnity Payment Programs,'' 
currently contain subparts A through M, which generally cover previous 
ad hoc disaster assistance programs. This rule revises subparts B and E 
and removes and reserves subparts C, D, and F through H. The current 
subpart B specifies general provisions for the 2005 Hurricane Disaster 
Programs; this rule revises subpart B to specify general provisions for 
the new standing disaster programs from the 2008 Farm Bill. The current 
subpart E provides the regulations for the 2005 Livestock Indemnity 
Program; this rule revises Subpart E to establish the regulations for 
the new LIP established by the 2008 Farm Bill. This rule removes the 
existing provisions for previous ad hoc disaster programs in subparts 
C, D, F, G, and H because the authority for the programs has expired. 
For housekeeping purposes, this rule also removes 7 CFR part 1439, 
which contains some related CCC programs. For questions on the former 
regulations, interested parties can refer to the appropriate regulation 
in the January 1, 2009 edition of the Code of Federal Regulations.
    Subpart A of part 760 covers the Dairy Indemnity Program and is not 
impacted by this rule. Subparts I through M, which provide the rules 
for the 2005-2007 ad hoc disaster programs, are left intact and not 
removed because of the status of potential claims under those subparts. 
In all cases, however, to the extent of lingering or new disputes, the 
rules governing these older programs apply as they existed at the time 
the programs were administered.
    When all of the supplemental agricultural disaster assistance 
programs are implemented, 7 CFR part 760 will have been revised as 
described in the table below:

------------------------------------------------------------------------
          Current subpart                        New subpart
------------------------------------------------------------------------
Subpart A--Dairy Indemnity Payment   Subpart A--Dairy Indemnity Payment
 Program.                             Program [unchanged].
Subpart B--General Provisions for    760 Subpart B--General Provisions
 the 2005 Section 32 Hurricane        for Supplemental Agricultural
 Disaster Programs.                   Disaster Assistance Programs.
Subpart C--Hurricane Indemnity       760 Subpart C--Emergency Assistance
 Program.                             for Livestock, Honey Bees, and
                                      Farm-Raised Fish.
Subpart D--Feed Indemnity Program..  760 Subpart D--Livestock Forage
                                      Disaster Program.
Subpart E--Livestock Indemnity       760 Subpart E--Livestock Indemnity
 Program.                             Program [revised].
Subpart F--Tree Indemnity Program..  760 Subpart F--Tree Assistance
                                      Program.
Subpart G--Aquaculture Program.....  760 Subpart G--Supplemental Revenue
                                      Assistance Payments Program.
Subpart H--2006 Livestock            None--removed.
 Assistance Grant Program.
Subparts I through M...............  Subparts I through M [unchanged].
------------------------------------------------------------------------

Miscellaneous Conforming Amendments

    We are updating the references in 7 CFR 1400.1 to refer to 7 CFR 
part 760 for the LIP, ELAP, LFP, SURE, and TAP programs.
    In addition, as indicated we are removing in its entirety 7 CFR 
part 1439, ``Emergency Livestock Assistance,'' as the programs there 
are outdated even though there may be some lingering claims. The times 
for filing claims under all of those programs has long since passed and 
in any event all involve rules that were published in the Federal 
Register and can be found in the 2009 edition of the Code of Federal 
Regulations.

Notice and Comment

    The 2008 Consolidated Security, Disaster Assistance, and Continuing 
Appropriations Act (Pub. L. 110-329) made section 1601(c)(2) of the 
2008 Farm Bill applicable in implementing section 12033 of the 2008 
Farm Bill. To the extent relevant, the exemption applies, we believe to 
the corresponding provision enacted in section 15101 since they are 
identical except for the provisions for funding in section 15101, which 
do not appear at all in section 12033. Otherwise, the provisions of 
Public Law 110-329 would have no meaning. Therefore, these regulations 
are exempt from the notice and comment requirements of the 
Administrative Procedures Act (5 U.S.C. 553), as specified in section 
1601(c)(2) of the 2008 Farm Bill, which requires that the regulations 
be promulgated and administered without regard to the notice and 
comment provisions of section 553 of title 5 of the United States Code 
or the Statement of Policy of the Secretary of Agriculture effective 
July

[[Page 31571]]

24, 1971, (36 FR 13804) relating to notices of proposed rulemaking and 
public participation in rulemaking.

Effective Date

    In making this final rule exempt from notice and comment through 
section 1601(c)(2) of the 2008 Farm Bill, using the administrative 
procedure provisions in 5 U.S.C. 553, FSA finds that there is good 
cause for making this rule effective less than 30 days after 
publication in the Federal Register. This rule allows FSA to provide 
benefits to producers who suffered losses due to livestock deaths 
caused by adverse weather. Therefore, to begin providing benefits to 
producers as soon as possible, this final rule is effective 13 days 
after publication in the Federal Register.

Executive Order 12866

    The Office of Management and Budget (OMB) designated this rule as 
not significant under Executive Order 12866 and, therefore, OMB was not 
required to review this rule.

Regulatory Flexibility Act

    This rule is not subject to the Regulatory Flexibility Act since 
FSA is not required to publish a notice of proposed rulemaking for this 
rule.

Environmental Review

    The environmental impacts of this rule have been considered in a 
manner consistent with the provisions of the National Environmental 
Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations of the Council 
on Environmental Quality (40 CFR parts 1500-1508), and FSA regulations 
for compliance with NEPA (7 CFR part 799). The LIP provisions required 
by the 2008 Farm Bill that are identified in this rule are non-
discretionary in nature, solely providing financial assistance. 
Therefore, FSA has determined that provisions for further NEPA review 
do not apply to this rule. Therefore, no environmental assessment or 
environmental impact statement will be prepared.

Executive Order 12372

    This program is not subject to Executive Order 12372, which 
requires consultation with State and local officials. See the notice 
related to 7 CFR part 3015, subpart V, published in the Federal 
Register on June 24, 1983 (48 FR 29115).

Executive Order 12988

    This rule has been reviewed under Executive Order 12988. This rule 
is not retroactive and it does not preempt State or local laws, 
regulations, or policies unless they present an irreconcilable conflict 
with this rule. Before any judicial action may be brought regarding the 
provisions of this rule the administrative appeal provisions of 7 CFR 
parts 11 and 780 must be exhausted.

Executive Order 13132

    The policies contained in this rule do not have any substantial 
direct effect on States, on the relationship between the national 
government and States, or on the distribution of power and 
responsibilities among various levels of government. Nor does this rule 
impose substantial direct compliance costs on State and local 
governments. Therefore, consultation with States was not required.

Executive Order 13175

    The policies contained in this rule do not impose substantial 
unreimbursed direct compliance costs on Indian tribal governments or 
have tribal implications that preempt tribal law.

Unfunded Mandates

    This rule contains no Federal mandates under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995 
(UMRA) for State, local, and tribal government or the private sector. 
In addition, FSA was not required to publish a notice of proposed rule 
making for this rule. Therefore, this rule is not subject to the 
requirements of sections 202 and 205 of the UMRA.

Federal Assistance Programs

    This rule applies to the following Federal assistance program that 
is not in the Catalog of Federal Domestic Assistance: LIP.

Paperwork Reduction Act

    The regulations in this rule are exempt from the requirements of 
the Paperwork Reduction Act (44 U.S.C. Chapter 35), as specified in 
section 1601(c)(2) of the 2008 Farm Bill, which provides that these 
regulations be promulgated and administered without regard to the 
Paperwork Reduction Act.

E-Government Act Compliance

    FSA is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.

List of Subjects

7 CFR Part 760

    Dairy products, Indemnity payments, Pesticide and pests, Reporting 
and recordkeeping requirements.

7 CFR Part 1400

    Agriculture, Grant programs--agriculture, Loan programs--
agriculture, Price support programs, Reporting and recordkeeping 
requirements.

7 CFR Part 1439

    Animal feeds, Disaster assistance, Grant programs--agriculture, 
Indians, Livestock, Reporting and recordkeeping requirements.


0
For the reasons discussed above, under the authority of 15 U. S.C. 
714b, this rule amends 7 CFR parts 760, 1400, and 1439 as follows:

PART 760--INDEMNITY PAYMENT PROGRAMS

0
1. Revise the authority citation for part 760 to read as follows:

    Authority:  7 U.S.C. 4501, 7 U.S.C. 1531, 16 U.S.C. 3801, note, 
and 19 U.S.C. 2497; Title III, Public Law 109-234, 120 Stat. 474; 
and Title IX, Public Law 110-28, 121 Stat. 211.

0
2. Revise Subpart B to read as follows:

Subpart B--General Provisions for Supplemental Agricultural Disaster 
Assistance Programs
Sec.
760.101 Applicability.
760.102 Administration of ELAP, LFP, LIP, SURE, and TAP.
760.103 Eligible producer.
760.104 Risk management purchase requirements.
760.105 Waiver for certain crop years; buy-in.
760.106 Equitable relief.
760.107 Socially disadvantaged, limited resource, or beginning 
farmer or rancher.
760.108 Payment limitation.
760.109 Misrepresentation and scheme or device.
760.110 Appeals.
760.111 Offsets, assignments, and debt settlement.
760.112 Records and inspections.
760.113 Refunds; joint and several liability.
760.114 Minors.
760.115 Deceased individuals or dissolved entities.
760.116 Miscellaneous.

Subpart B--General Provisions for Supplemental Agricultural 
Disaster Assistance Programs


Sec.  760.101  Applicability.

    (a) This subpart establishes general conditions for this subpart 
and subparts C through H of this part and applies

[[Page 31572]]

only to those subparts. Subparts C through H cover the following 
programs provided for in the ``2008 Farm Bill'' (Pub. L. 110-246):
    (1) Emergency Assistance for Livestock, Honey Bees, and Farm-Raised 
Fish Program (ELAP);
    (2) Livestock Forage Disaster Program (LFP);
    (3) Livestock Indemnity Payments Program (LIP);
    (4) Supplemental Revenue Assistance Payments Program (SURE); and
    (5) Tree Assistance Program (TAP).
    (b) To be eligible for payments under these programs, participants 
must comply with all provisions under this subpart and the relevant 
particular subpart for that program. All other provisions of law also 
apply.


Sec.  760.102  Administration of ELAP, LFP, LIP, SURE, and TAP.

    (a) The programs in subparts C through H of this part will be 
administered under the general supervision and direction of the 
Administrator, Farm Service Agency (FSA), and the Deputy Administrator 
for Farm Programs, FSA (who is referred to as the ``Deputy 
Administrator'' in this part).
    (b) FSA representatives do not have authority to modify or waive 
any of the provisions of the regulations of this part as amended or 
supplemented, except as specified in paragraph (e) of this section.
    (c) The State FSA committee will take any action required by the 
regulations of this part that the county FSA committee has not taken. 
The State FSA committee will also:
    (1) Correct, or require a county FSA committee to correct, any 
action taken by such county FSA committee that is not in accordance 
with the regulations of this part or
    (2) Require a county FSA committee to withhold taking any action 
that is not in accordance with this part.
    (d) No provision or delegation to a State or county FSA committee 
will preclude the Administrator, the Deputy Administrator for Farm 
Programs, or a designee or other such person, from determining any 
question arising under the programs of this part, or from reversing or 
modifying any determination made by a State or county FSA committee.
    (e) The Deputy Administrator for Farm Programs may authorize State 
and county FSA committees to waive or modify non-statutory deadlines, 
or other program requirements of this part in cases where lateness or 
failure to meet such requirements does not adversely affect operation 
of the programs in this part. Participants have no right to seek an 
exception under this provision. The Deputy Administrator's refusal to 
consider cases or circumstances or decision not to exercise this 
discretionary authority under this provision will not be considered an 
adverse decision and is not appealable.


Sec.  760.103  Eligible producer.

    (a) In general, the term ``eligible producer'' means, in addition 
to other requirements as may apply, an individual or entity described 
in paragraph (b) of this section that, as determined by the Secretary, 
assumes the production and market risks associated with the 
agricultural production of crops or livestock on a farm either as the 
owner of the farm, when there is no contract grower, or a contract 
grower of the livestock when there is a contract grower.
    (b) To be eligible for benefits, an individual or entity must be a:
    (1) Citizen of the United States;
    (2) Resident alien; for purposes of this part, resident alien means 
``lawful alien'' as defined in 7 CFR part 1400;
    (3) Partnership of citizens of the United States; or
    (4) Corporation, limited liability corporation, or other farm 
organizational structure organized under State law.


Sec.  760.104  Risk management purchase requirements.

    (a) To be eligible for program payments under:
    (1) ELAP, SURE, and TAP, eligible producers for any commodity at 
any location for which the producer seeks benefits must have for every 
commodity on every farm in which the producer has an interest for the 
relevant program year:
    (i) In the case of an ``insurable commodity,'' (which for this part 
means a commodity for which the Deputy Administrator determines 
catastrophic coverage is available from the USDA Risk Management Agency 
(RMA)) obtained catastrophic coverage or better under a policy or plan 
of insurance administered by RMA under the Federal Crop Insurance Act 
(FCIA) (7 U.S.C. 1501-1524), except that this obligation will not 
include crop insurance pilot programs so designated by RMA or to forage 
crops, and
    (ii) In the case of a ``noninsurable commodity,'' (which is any 
commodity for which, as to the particular production in question, is 
not an ``insurable commodity,'' but for which coverage is available 
under the Noninsured Crop Disaster Assistance Program (NAP) operated 
under 7 CFR part 1437), have obtained NAP coverage by filing the proper 
paperwork and fee within the relevant deadlines, except that this 
requirement will not include forage on grazing land.
    (2) LFP, with respect to those grazing lands incurring losses for 
which assistance is being requested, eligible livestock producers must 
have:
    (i) Obtained a policy or plan of insurance for the forage crop 
under FCIA, or
    (ii) Filed the required paperwork and paid the administrative fee 
by the applicable State filing deadline for NAP coverage for that 
grazing land.
    (b) Producers who did not purchase a policy or plan of insurance 
administered by RMA in accordance with FCIA (7 U.S.C. 1501-1524), or 
NAP coverage for their applicable crops, will not be eligible for 
assistance under ELAP, LFP, SURE, and TAP, as provided in paragraph (a) 
of this section unless the producer is one of the classes of farmers 
for which an exemption under Sec.  760.107 apply, is exempt under the 
``buy-in'' provisions of this subpart, or is granted relief from that 
requirement by the Deputy Administrator under some other provision of 
this part.
    (c) Producers who have obtained insurance by a written agreement as 
specified in Sec.  400.652(d) of this title even though that production 
would not normally be considered an ``insurable commodity'' under the 
rules of this subpart, will be considered to have met the risk 
management purchase requirement of this subpart with respect to such 
production. The commodity to which the agreement applies will be 
considered for purposes of this subpart to be an ``insurable 
commodity.''
    (d) Producers by an administrative process who were granted NAP 
coverage for the relevant period as a form of relief in an 
administrative proceeding, or who were awarded NAP coverage for the 
relevant period through an appeal through the National Appeals Division 
(NAD), will be considered as having met the NAP eligibility criteria of 
this section for that crop as long as the applicable NAP service fee 
has been paid.
    (e) The risk management purchase requirement for programs specified 
under this part will be determined based on the initial intended use of 
a crop at the time a policy or plan of insurance or NAP coverage was 
purchased and as reported on the acreage report.

[[Page 31573]]

Sec.  760.105  Waiver for certain crop years; buy-in.

    (a) For the 2008 crop year, the insurance or NAP purchase 
requirements of Sec.  760.104 (this is referred to as the ``purchase'' 
requirement) will be waived for eligible producers for losses during 
the 2008 crop year if the eligible producer paid a fee (buy-in fee) 
equal to the applicable NAP service fee or catastrophic risk protection 
plan fee to the Secretary by September 16, 2008. Payment of a buy-in 
fee under this section is for the sole purpose of becoming eligible for 
participation in ELAP, LFP, SURE, and TAP. Payment of a buy-in fee does 
not provide any actual insurance or NAP coverage or assistance.
    (b) For the 2009 crop year, the purchase requirement will be waived 
for purchases where the closing date for coverage occurred prior to 
August 14, 2008, so long as the buy-in fee set by the Secretary of 
Agriculture was paid by January 12, 2009.
    (c) Any producer of 2008 commodities who is otherwise ineligible 
because of the purchase requirement and who did not meet the conditions 
of paragraph (a) of this section may still be covered for ELAP, SURE, 
or TAP assistance if the producer paid the applicable fee described in 
paragraph (d) of this section no later than May 18, 2009, provided that 
in the case of each:
    (1) Insurable commodity, excluding grazing land, the eligible 
producers on the farm agree to obtain a policy or plan of insurance 
under FCIA (7 U.S.C. 1501-1524), excluding a crop insurance pilot 
program under that subtitle, for the next insurance year for which crop 
insurance is available to the eligible producers on the farm at a level 
of coverage equal to 70 percent or more of the recorded or appraised 
average yield indemnified at 100 percent of the expected market price, 
or an equivalent coverage, and
    (2) Noninsurable commodity, the eligible producers on the farm must 
agree to file the required paperwork, and pay the administrative fee by 
the applicable State filing deadline, for NAP for the next year for 
which a policy is available.
    (d) For producers seeking eligibility under paragraph (c) of this 
section, the applicable buy-in fee for the 2008 crop year was the 
catastrophic risk protection plan fee or the applicable NAP service fee 
in effect prior to NAP service fee adjustments specified in the 2008 
Farm Bill.


Sec.  760.106  Equitable relief.

    (a) The Secretary may provide equitable relief on a case-by-case 
basis for the purchase requirement to eligible participants that:
    (1) Are otherwise ineligible or unintentionally fail to meet the 
requirements of Sec.  760.104 for one or more eligible crops on the 
farm, as determined by the Secretary, or
    (2) Failed to meet the requirements of Sec.  760.104 due to the 
enactment of the 2008 Farm Bill after the:
    (i) Applicable sales closing date for a policy or plan of insurance 
in accordance with the FCIA (7 U.S.C. 1501-1524) or
    (ii) Application closing date for NAP.
    (b) Equitable relief will not be granted to participants in 
instances of:
    (1) A scheme or device that had the effect or intent of defeating 
the purposes of a program of insurance, NAP, or any other program 
administered under this part or elsewhere in this title,
    (2) An intentional decision to not meet the purchase or buy-in 
requirements,
    (3) Producers against whom sanctions have been imposed by RMA or 
FSA prohibiting the purchase of coverage or prohibiting the receipt of 
payments otherwise payable under this part,
    (4) Violations of highly erodible land and wetland conservation 
provisions of 7 CFR part 12,
    (5) Producers who are ineligible under any provisions of law, 
including regulations, relating to controlled substances (see for 
example 7 CFR 718.6), or
    (6) A producer's debarment by a federal agency from receiving any 
federal government payment if such debarment included payments of the 
type involved in this matter.
    (c) In general, no relief that is discretionary will be allowed 
except upon a finding by the Deputy Administrator or the Deputy 
Administrator's designee that the person seeking the relief acted in 
good faith as determined in accordance with such rules and procedures 
as may be set by the Deputy Administrator.


Sec.  760.107  Socially disadvantaged, limited resource, or beginning 
farmer or rancher.

    (a) Risk management purchase requirements, as provided in Sec.  
760.104, will be waived for a participant who, as specified in 
paragraphs (b)(1) through (3) of this section, is eligible to be 
considered a ``socially disadvantaged farmer or rancher,'' a ``limited 
resource farmer or rancher,'' or a ``beginning farmer or rancher.''
    (b) To qualify for this section as a ``socially disadvantaged 
farmer or rancher,'' ``limited resource farmer or rancher,'' or 
``beginning farmer or rancher,'' participants must meet eligibility 
criteria as follows:
    (1) A ``socially disadvantaged farmer or rancher'' is, for this 
section, a farmer or rancher who is a member of a socially 
disadvantaged group whose members have been subjected to racial or 
ethnic prejudice because of their identity as members of a group 
without regard to their individual qualities. Gender is not included as 
a covered group. Socially disadvantaged groups include the following 
and no others unless approved in writing by the Deputy Administrator:
    (i) American Indians or Alaskan Natives,
    (ii) Asians or Asian-Americans,
    (iii) Blacks or African Americans,
    (iv) Native Hawaiians or other Pacific Islanders, and
    (v) Hispanics.
    (2) A ``limited resource farmer or rancher'' means for this section 
a producer who is both:
    (i) A producer whose direct or indirect gross farm sales do not 
exceed $100,000 in both of the two calendar years that precede the 
calendar year that corresponds to the relevant program year, adjusted 
upwards for any general inflation since fiscal year 2004, inflation as 
measured using the Prices Paid by Farmer Index compiled by the National 
Agricultural Statistics Service (NASS), and
    (ii) A producer whose total household income is at or below the 
national poverty level for a family of four, or less than 50 percent of 
the county median household income for the same two calendar years 
referenced in paragraph (a) of this section, as determined annually 
using Commerce Department data. (Limited resource farmer or rancher 
status can be determined using a Web site available through the Limited 
Resource Farmer and Rancher Online Self Determination Tool through the 
National Resource and Conservation Service at http://www.lrftool.sc.egov.usda.gov/tool.asp.)
    (3) A ``beginning farmer or rancher'' means for this section a 
person or legal entity who for a program year both:
    (i) Has never previously operated a farm or ranch, or who has not 
operated a farm or ranch in the previous 10 years, applicable to all 
members (shareholders, partners, beneficiaries, etc., as fits the 
circumstances) of an entity, and
    (ii) Will have or has had for the relevant period materially and 
substantially participated in the operation of a farm or ranch.
    (c) If a legal entity requests to be considered a ``socially 
disadvantaged,'' ``limited resource,'' or ``beginning'' farmer or 
rancher, at least 50 percent of the persons in the entity must in their 
individual capacities meet the

[[Page 31574]]

definition as provided in paragraphs (b)(1) through (3) of this section 
and it must be clearly demonstrated that the entity was not formed for 
the purposes of avoiding the purchase requirements or formed after the 
deadline for the purchase requirement.


Sec.  760.108  Payment limitation.

    (a) For 2008, no person, as defined and determined under the 
provisions in part 1400 of this title in effect for 2008 may receive 
more than:
    (1) $100,000 total for the 2008 program year under ELAP, LFP, LIP, 
and SURE combined or
    (2) $100,000 for the 2008 program year under TAP.
    (b) For 2009 and subsequent program years, no person or legal 
entity, excluding a joint venture or general partnership, as determined 
by the rules in part 1400 of this title may receive, directly or 
indirectly, more than:
    (1) $100,000 per program year total under ELAP, LFP, LIP, and SURE 
combined; or
    (2) $100,000 per program year under TAP.
    (c) The Deputy Administrator may take such actions as needed, 
whether or not specifically provided for, to avoid a duplication of 
benefits under the multiple programs provided for in this part, or 
duplication of benefits received in other programs, and may impose such 
cross-program payment limitations as may be consistent with the intent 
of this part.
    (d) In applying the limitation on average adjusted gross income 
(AGI) for 2008, an individual or entity is ineligible for payment under 
ELAP, LFP, LIP, SURE, and TAP if the individual's or entity's average 
adjusted gross income (AGI) exceeds $2.5 million for 2007, 2006, and 
2005 under the provisions in part 1400 of this title in effect for 
2008.
    (e) For 2009 through 2011, the average AGI limitation provisions in 
part 1400 of this title relating to limits on payments for persons or 
legal entities, excluding joint ventures and general partnerships, with 
certain levels of average adjusted gross income (AGI) will apply under 
this subpart and will apply to each applicant for ELAP, LFP, LIP, SURE, 
and TAP. Specifically, for 2009 through 2011, a person or legal entity 
with an average adjusted gross nonfarm income, as defined in Sec.  
1404.3 of this title, that exceeds $500,000 will not be eligible to 
receive benefits under this part.
    (f) The direct attribution provisions in part 1400 of this title 
apply to ELAP, LFP, LIP, SURE, and TAP for 2009 and subsequent years. 
Under those rules, any payment to any legal entity will also be 
considered for payment limitation purposes to be a payment to persons 
or legal entities with an interest in the legal entity or in a sub-
entity. If any such interested person or legal entity is over the 
payment limitation because of direct payment or their indirect 
interests or a combination thereof, then the payment to the actual 
payee will be reduced commensurate with the amount of the interest of 
the interested person in the payee. Likewise, by the same method, if 
anyone with a direct or indirect interest in a legal entity or sub-
entity of a payee entity exceeds the AGI levels that would allow a 
participant to directly receive a payment under this part, then the 
payment to the actual payee will be reduced commensurately with that 
interest. For all purposes under this section, unless otherwise 
specified in part 1400 of this title, the AGI figure that will be 
relevant for a person or legal entity will be an average AGI for the 
three taxable years that precede the most immediately preceding 
complete taxable year, as determined by CCC.


Sec.  760.109  Misrepresentation and scheme or device.

    (a) A participant who is determined to have deliberately 
misrepresented any fact affecting a program determination made in 
accordance with this part, or otherwise used a scheme or device with 
the intent to receive benefits for which the participant would not 
otherwise be entitled, will not be entitled to program payments and 
must refund all such payments received, plus interest as determined in 
accordance with part 792 of this chapter. The participant will also be 
denied program benefits for the immediately subsequent period of at 
least 2 crop years, and up to 5 crop years. Interest will run from the 
date of the original disbursement by FSA.
    (b) A participant will refund to FSA all program payments, plus 
interest, as determined in accordance with part 792 of this chapter, 
provided however, that in any case it will run from the date of the 
original disbursement, received by such participant with respect to all 
contracts or applications, as may be applicable, if the participant is 
determined to have knowingly done any of the following:
    (1) Adopted any scheme or device that tends to defeat the purpose 
of the program,
    (2) Made any fraudulent representation, or
    (3) Misrepresented any fact affecting a program determination.


Sec.  760.110  Appeals.

    (a) Appeals. Appeal regulations set forth at parts 11 and 780 of 
this title apply to this part.
    (b) Determinations not eligible for administrative review or 
appeal. FSA determinations that are not in response to a specific 
individual participant's application are not to be construed to be 
individual program eligibility determinations or adverse decisions and 
are, therefore, not subject to administrative review or appeal under 
parts 11 or 780 of this title. Such determinations include, but are not 
limited to, application periods, deadlines, coverage periods, crop 
years, fees, prices, general statutory or regulatory provisions that 
apply to similarly situated participants, national average payment 
prices, regions, crop definition, average yields, and payment factors 
established by FSA for any of the programs for which this subpart 
applies or similar matters requiring FSA determinations.


Sec.  760.111  Offsets, assignments, and debt settlement.

    (a) Any payment to any participant under this part will be made 
without regard to questions of title under State law, and without 
regard to any claim or lien against the commodity, or proceeds, in 
favor of the owner or any other creditor except agencies of the U.S. 
Government. The regulations governing offsets and withholdings in part 
792 of this title apply to payments made under this part.
    (b) Any participant entitled to any payment may assign any 
payment(s) in accordance with regulations governing the assignment of 
payments in part 1404 of this title.


Sec.  760.112  Records and inspections.

    (a) Any participant receiving payments under any program in ELAP, 
LFP, LIP, SURE, or TAP, or any other legal entity or person who 
provides information for the purposes of enabling a participant to 
receive a payment under ELAP, LFP, LIP, SURE, or TAP, must:
    (1) Maintain any books, records, and accounts supporting the 
information for 3 years following the end of the year during which the 
request for payment was submitted, and
    (2) Allow authorized representatives of USDA and the Government 
Accountability Office, during regular business hours, to inspect, 
examine, and make copies of such books or records, and to enter the 
farm and to inspect and verify all applicable livestock and acreage in 
which the participant has an interest for the purpose of confirming

[[Page 31575]]

the accuracy of information provided by or for the participant.
    (b) [Reserved]


Sec.  760.113  Refunds; joint and several liability.

    (a) In the event that the participant fails to comply with any 
term, requirement, or condition for payment or assistance arising under 
ELAP, LFP, LIP, SURE, or TAP and if any refund of a payment to FSA will 
otherwise become due in connection with this part, the participant must 
refund to FSA all payments made in regard to such matter, together with 
interest and late-payment charges as provided for in part 792 of this 
chapter provided that interest will in all cases run from the date of 
the original disbursement.
    (b) All persons with a financial interest in an operation or in an 
application for payment will be jointly and severally liable for any 
refund, including related charges, that is determined to be due FSA for 
any reason under this part.


Sec.  760.114  Minors.

    A minor child is eligible to apply for program benefits under ELAP, 
LFP, LIP, SURE, or TAP if all the eligibility requirements are met and 
the provision for minor children in part 1400 of this title are met.


Sec.  760.115  Deceased individuals or dissolved entities.

    (a) Payments may be made for eligible losses suffered by an 
eligible participant who is now a deceased individual or is a dissolved 
entity if a representative, who currently has authority to enter into a 
contract, on behalf of the participant, signs the application for 
payment.
    (b) Legal documents showing proof of authority to sign for the 
deceased individual or dissolved entity must be provided.
    (c) If a participant is now a dissolved general partnership or 
joint venture, all members of the general partnership or joint venture 
at the time of dissolution or their duly authorized representatives 
must sign the application for payment.


Sec.  760.116  Miscellaneous.

    (a) As a condition to receive benefits under ELAP, LFP, LIP, SURE, 
or TAP, a participant must have been in compliance with the provisions 
of parts 12 and 718 of this title, and must not otherwise be precluded 
from receiving benefits under those provisions or under any law.
    (b) Rules of the Commodity Credit Corporation that are cited in 
this part will be applied to this subpart in the same manner as if the 
programs covered in this subpart were programs funded by the Commodity 
Credit Corporation.

Subpart C [Removed and Reserved]

0
3. Remove and reserve subpart C.

Subpart D [Removed and Reserved]

0
4. Remove and reserve subpart D.

0
5. Revise subpart E to read as follows:
Subpart E--Livestock Indemnity Program
Sec.
760.401 Applicability.
760.402 Definitions.
760.403 Eligible owners and contract growers.
760.404 Eligible livestock.
760.405 Application process.
760.406 Payment calculation.

Subpart E--Livestock Indemnity Program


Sec.  760.401  Applicability.

    (a) This subpart establishes the terms and conditions under which 
the Livestock Indemnity Program (LIP) will be administered under Titles 
XII and XV of the 2008 Farm Bill (Pub. L. 110-246).
    (b) Eligible livestock owners and contract growers will be 
compensated in accordance with Sec.  760.406 for eligible livestock 
deaths in excess of normal mortality that occurred in the calendar year 
for which benefits are being requested as a direct result of an 
eligible adverse weather event. An ``eligible adverse weather event'' 
is one, as determined by the Secretary, occurring in the program year 
that could and did, even when normal preventative or corrective 
measures were taken and good farming practices were followed, directly 
result in the death of livestock. Because feed can be purchased or 
otherwise obtained in the event of a drought, drought is not an 
eligible adverse weather event except when anthrax, resulting from 
drought, causes the death of eligible livestock.


Sec.  760.402  Definitions.

    The following definitions apply to this subpart. The definitions in 
parts 718 and 1400 of this title also apply, except where they conflict 
with the definitions in this section.
    Adult beef bull means a male beef breed bovine animal that was at 
least 2 years old and used for breeding purposes before it died.
    Adult beef cow means a female beef breed bovine animal that had 
delivered one or more offspring before dying. A first-time bred beef 
heifer is also considered an adult beef cow if it was pregnant at the 
time it died.
    Adult buffalo and beefalo bull means a male animal of those breeds 
that was at least 2 years old and used for breeding purposes before it 
died.
    Adult buffalo and beefalo cow means a female animal of those breeds 
that had delivered one or more offspring before dying. A first-time 
bred buffalo or beefalo heifer is also considered an adult buffalo or 
beefalo cow if it was pregnant at the time it died.
    Adult dairy bull means a male dairy breed bovine animal at least 2 
years old used primarily for breeding dairy cows before it died.
    Adult dairy cow means a female bovine dairy breed animal used for 
the purpose of providing milk for human consumption that had delivered 
one or more offspring before dying. A first-time bred dairy heifer is 
also considered an adult dairy cow if it was pregnant at the time it 
died.
    Adverse weather means damaging weather events, including, but not 
limited to, hurricanes, floods, blizzards, disease, wildfires, extreme 
heat, and extreme cold.
    Agricultural operation means a farming operation.
    Application means the ``Livestock Indemnity Program'' form.
    Buck means a male goat.
    Commercial use means used in the operation of a business activity 
engaged in as a means of livelihood for profit by the eligible 
producer.
    Contract means, with respect to contracts for the handling of 
livestock, a written agreement between a livestock owner and another 
individual or entity setting the specific terms, conditions, and 
obligations of the parties involved regarding the production of 
livestock or livestock products.
    Deputy Administrator or DAFP means the Deputy Administrator for 
Farm Programs, Farm Service Agency, U.S. Department of Agriculture or 
the designee.
    Equine animal means a domesticated horse, mule, or donkey.
    Ewe means a female sheep.
    Farming operation means a business enterprise engaged in producing 
agricultural products.
    FSA means the Farm Service Agency.
    Goat means a domesticated, ruminant mammal of the genus Capra, 
including Angora goats. Goats are further defined by sex (bucks and 
nannies) and age (kids).
    Kid means a goat less than 1 year old.
    Lamb means a sheep less than 1 year old.
    Livestock owner means one having legal ownership of the livestock 
for which benefits are being requested on the day such livestock died.
    Nanny means a female goat.
    Non-adult beef cattle means a beef breed bovine animal that does 
not meet

[[Page 31576]]

the definition of adult beef cow or bull. Non-adult beef cattle are 
further delineated by weight categories of either less than 400 pounds 
or 400 pounds or more at the time they died.
    Non-adult buffalo or beefalo means an animal of those breeds that 
does not meet the definition of adult buffalo or beefalo cow or bull. 
Non-adult buffalo or beefalo are further delineated by weight 
categories of either less than 400 pounds or 400 pounds or more at the 
time of death.
    Non-adult dairy cattle means a dairy breed bovine animal, of a 
breed used for the purpose of providing milk for human consumption, 
that does not meet the definition of adult dairy cow or bull. Non-adult 
dairy cattle are further delineated by weight categories of either less 
than 400 pounds or 400 pounds or more at the time they died.
    Normal mortality means the numerical amount, computed by a 
percentage, as established for the area by the FSA State Committee, of 
expected livestock deaths, by category, that normally occur during a 
calendar year for a producer.
    Poultry means domesticated chickens, turkeys, ducks, and geese. 
Poultry are further delineated by sex, age, and purpose of production 
as determined by FSA.
    Ram means a male sheep.
    Secretary means the Secretary of Agriculture or a designee of the 
Secretary.
    Sheep means a domesticated, ruminant mammal of the genus Ovis. 
Sheep are further defined by sex (rams and ewes) and age (lambs) for 
purposes of dividing into categories for loss calculations.
    State committee, State office, county committee, or county office 
means the respective FSA committee or office.
    Swine means a domesticated omnivorous pig, hog, or boar. Swine for 
purposes of dividing into categories for loss calculations are further 
delineated by sex and weight as determined by FSA.
    United States means all fifty States of the United States, the 
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and the District 
of Columbia.


Sec.  760.403  Eligible owners and contract growers.

    (a) In addition to other eligibility rules that may apply, to be 
eligible as a:
    (1) Livestock owner for benefits with respect to the death of an 
animal under this subpart, the applicant must have had legal ownership 
of the eligible livestock on the day the livestock died and under 
conditions in which no contract grower could have been eligible for 
benefits with respect to the animal. Eligible types of animal 
categories for which losses can be calculated for an owner are 
specified in Sec.  760.404(a).
    (2) Contract grower for benefits with respect to the death of an 
animal, the animal must be in one of the categories specified on Sec.  
760.404(b), and the contract grower must have had
    (i) A written agreement with the owner of eligible livestock 
setting the specific terms, conditions, and obligations of the parties 
involved regarding the production of livestock;
    (ii) Control of the eligible livestock on the day the livestock 
died; and
    (iii) A risk of loss in the animal.
    (b) A producer seeking payment must not be ineligible under the 
restrictions applicable to foreign persons contained in Sec.  
760.103(b) and must meet all other requirements of subpart B and other 
applicable USDA regulations.


Sec.  760.404  Eligible livestock.

    (a) To be considered eligible livestock for livestock owners, the 
kind of livestock must be alpacas, adult or non-adult dairy cattle, 
beef cattle, buffalo, beefalo, elk, emus, equine, llamas, sheep, goats, 
swine, poultry, deer, or reindeer and meet all the conditions in 
paragraph (c) of this section.
    (b) To be considered eligible livestock for contract growers, the 
kind of livestock must be poultry or swine as defined in Sec.  760.402 
and meet all the conditions in paragraph (c) of this section.
    (c) To be considered eligible livestock for the purpose of 
generating payments under this subpart, livestock must meet all of the 
following conditions:
    (1) Died as a direct result of an eligible adverse weather event:
    (i) On or after January 1, 2008, but before October 1, 2011,
    (ii) No later than 60 calendar days from the ending date of the 
applicable adverse weather event, but before October 1, 2011, and
    (iii) In the calendar year for which benefits are being requested;
    (2) Been maintained for commercial use as part of a farming 
operation on the day they died; and
    (3) Before dying, not have been produced or maintained for reasons 
other than commercial use as part of a farming operation, such non-
eligible uses being understood to include, but not be limited to, any 
uses of wild free roaming animals or use of the animals for 
recreational purposes, such as pleasure, hunting, roping, pets, or for 
show.
    (d) The following categories of animals owned by a livestock owner 
are eligible livestock and calculations of eligibility for payments 
will be calculated separately for each producer with respect to each 
category:
    (1) Adult beef bulls;
    (2) Adult beef cows;
    (3) Adult buffalo or beefalo bulls;
    (4) Adult buffalo or beefalo cows;
    (5) Adult dairy bulls;
    (6) Adult dairy cows;
    (7) Alpacas;
    (8) Chickens, broilers, pullets;
    (9) Chickens, chicks;
    (10) Chickens, layers, roasters;
    (11) Deer;
    (12) Ducks;
    (13) Ducks, ducklings;
    (14) Elk;
    (15) Emus;
    (16) Equine;
    (17) Geese, goose;
    (18) Geese, gosling;
    (19) Goats, bucks;
    (20) Goats, nannies;
    (21) Goats, kids;
    (22) Llamas;
    (23) Non-adult beef cattle;
    (24) Non-adult buffalo or beefalo;
    (25) Non-adult dairy cattle;
    (26) Reindeer;
    (27) Sheep, ewes;
    (28) Sheep, lambs;
    (29) Sheep, rams;
    (30) Swine, feeder pigs under 50 pounds;
    (31) Swine, sows, boars, barrows, gilts 50 to 150 pounds;
    (32) Swine, sows, boars, barrows, gilts over 150 pounds;
    (33) Turkeys, poults; and
    (34) Turkeys, toms, fryers, and roasters.
    (e) The following categories of animals are eligible livestock for 
contract growers and calculations of eligibility for payments will be 
calculated separately for each producer with respect to each category:
    (1) Chickens, broilers, pullets;
    (2) Chickens, layers, roasters;
    (3) Geese, goose;
    (4) Swine, boars, sows;
    (5) Swine, feeder pigs;
    (6) Swine, lightweight barrows, gilts;
    (7) Swine, sows, boars, barrows, gilts; and
    (8) Turkeys, toms, fryers, and roasters.


Sec.  760.405  Application process.

    (a) In addition to submitting an application for payment at the 
appropriate time, a producer or contract grower that suffered livestock 
losses that create or could create a claim for benefits must:
    (1) For losses during 2008 and losses in 2009, prior to July 13, 
2009, provide a notice of loss to FSA no later than September 13, 2009.
    (2) For losses on or after July 13, 2009, provide a notice of loss 
to FSA within the earlier of:

[[Page 31577]]

    (i) 30 calendar days of when the loss of livestock is apparent to 
the participant or
    (ii) 30 calendar days after the end of the calendar year in which 
the loss of livestock occurred.
    (3) The participant must submit the notice of loss required in 
paragraphs (a)(1) and (a)(2) to the FSA administrative county office 
that maintains the participant's farm records for the agricultural 
operation.
    (b) In addition to the notices of loss required in paragraph (a) of 
this section, a participant must also submit a completed application 
for payment no later than
    (1) 30 calendar days after the end of the calendar year in which 
the loss of livestock occurred or
    (2) September 13, 2009 for losses during 2008.
    (c) Applicants must submit supporting documentation with their 
application. For contract growers, the information must include a copy 
of the grower contract and other documents establishing their status. 
In addition, for all applicants, including contract growers, supporting 
documents must show:
    (1) Evidence of loss,
    (2) Current physical location of livestock in inventory,
    (3) Physical location of claimed livestock at the time of death, 
and
    (4) Inventory numbers and other inventory information necessary to 
establish actual mortality as required by FSA.
    (d) The participant must provide adequate proof that the death of 
the eligible livestock occurred as a direct result of an eligible 
adverse weather event in the calendar year for which benefits are 
requested. The quantity and kind of livestock that died as a direct 
result of the eligible adverse weather event during the calendar year 
for which benefits are being requested may be documented by: purchase 
records; veterinarian records; bank or other loan papers; rendering-
plant truck receipts; Federal Emergency Management Agency records; 
National Guard records; written contracts; production records; Internal 
Revenue Service records; property tax records; private insurance 
documents; and other similar verifiable documents as determined by FSA.
    (e) If adequate verifiable proof of death documentation is not 
available, the participant may provide reliable records, in conjunction 
with verifiable beginning and ending inventory records, as proof of 
death. Reliable records may include contemporaneous producer records, 
dairy herd improvement records, brand inspection records, vaccination 
records, pictures, and other similar reliable documents as determined 
by FSA.
    (f) Certification of livestock deaths by third parties may be 
accepted only if verifiable proof of death records or reliable proof of 
death records in conjunction with verifiable beginning and ending 
inventory records are not available and both of the following 
conditions are met:
    (1) The livestock owner or livestock contract grower, as 
applicable, certifies in writing:
    (i) That there is no other verifiable or reliable documentation of 
death available;
    (ii) The number of livestock, by category identified in this 
subpart and by FSA were in inventory at the time the applicable adverse 
weather event occurred;
    (iii) The physical location of the livestock, by category, in 
inventory when the deaths occurred; and
    (iv) Other details required for FSA to determine the certification 
acceptable; and
    (2) The third party is an independent source who is not affiliated 
with the farming operation such as a hired hand and is not a ``family 
member,'' defined as a person whom a member in the farming operation or 
their spouse is related as lineal ancestor, lineal descendant, sibling, 
spouse, and provides their telephone number, address, and a written 
statement containing specific details about:
    (i) Their knowledge of the livestock deaths;
    (ii) Their affiliation with the livestock owner;
    (iii) The accuracy of the deaths claimed by the livestock owner or 
contract grower including, but not limited to, the number and kind or 
type of the participant's livestock that died because of the eligible 
adverse weather event; and
    (iv) Other information required by FSA to determine the 
certification acceptable.
    (g) Data furnished by the participant and the third party will be 
used to determine eligibility for program benefits. Furnishing the data 
is voluntary; however, without all required data program benefits will 
not be approved or provided.


Sec.  760.406  Payment calculation.

    (a) Under this subpart, separate payment rates for eligible 
livestock owners and eligible livestock contract growers are specified 
in paragraphs (b) and (c) of this section, respectively. Payments for 
LIP are calculated by multiplying the national payment rate for each 
livestock category by the number of eligible livestock in excess of 
normal mortality in each category that died as a result of an eligible 
adverse weather event. Normal mortality for each livestock category 
will be determined by FSA on a State-by-State basis using local data 
sources including, but not limited to, State livestock organizations 
and the Cooperative Extension Service for the State. Adjustments will 
be applied as specified in paragraph (d) of this section.
    (b) The LIP national payment rate for eligible livestock owners is 
based on 75 percent of the average fair market value of the applicable 
livestock as computed using nationwide prices for the previous calendar 
year unless some other price is approved by the Deputy Administrator.
    (c) The LIP national payment rate for eligible livestock contract 
growers is based on 75 percent of the average income loss sustained by 
the contract grower with respect to the dead livestock.
    (d) The LIP payment calculated for eligible livestock contract 
growers will be reduced by the amount the participant received from the 
party who contracted with the producer to raise the livestock for the 
loss of income from the dead livestock.

Subpart F [Removed and Reserved]

0
6. Remove and reserve subpart F.

Subpart G [Removed and Reserved]

0
7. Remove and reserve subpart G.

Subpart H [Removed and Reserved]

0
8. Remove and reserve subpart H.

PART 1400--PAYMENT LIMITATION AND PAYMENT ELIGIBILITY FOR 2009 AND 
SUBSEQUENT CROP, PROGRAM, OR FISCAL YEARS

0
9. The authority citation for part 1400 continues to read as follows:

    Authority: 7 U.S.C. 1308, 1308-1, 1308-2, 1308-3, 1308-3a, 1308-
4, and 1308-5.


Sec.  1400.1  [Amended]

0
10. Amend Sec.  1400.1 as follows:
0
a. In paragraph (a)(4), remove the reference ``part 1480 of this 
chapter'' and add, in its place, the reference ``part 760 of this 
title'';
0
b. In paragraph (a)(5), remove the reference ``part 1439 of this 
chapter'' and add, in its place, the reference ``part 760 of this 
title''; and
0
c. In paragraph (a)(6), remove the reference ``part 783'' and add, in 
its place, the reference ``part 760''.

[[Page 31578]]

PART 1439--EMERGENCY LIVESTOCK ASSISTANCE

0
11. Remove part 1439.

    Signed in Washington, DC, June 25, 2009.
Carolyn B. Cooksie,
Acting Administrator, Farm Service Agency, and Acting Executive Vice 
President, Commodity Credit Corporation.
[FR Doc. E9-15537 Filed 7-1-09; 8:45 am]
BILLING CODE 3410-05-P