[Federal Register Volume 74, Number 247 (Monday, December 28, 2009)]
[Rules and Regulations]
[Pages 68480-68498]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-30632]


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DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 760

RIN 0560-AH90


Supplemental Revenue Assistance Payments Program

AGENCY: Farm Service Agency, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements specific requirements for the new 
Supplemental Revenue Assistance Payments Program (SURE) authorized by 
the Food, Conservation, and Energy Act of 2008 (the 2008 Farm Bill). 
SURE provides disaster assistance to eligible participants who have 
experienced qualifying crop production losses, or crop quality losses, 
or both, occurring in crop year 2008 through September 30, 2011. All 
crops for which crop insurance or noninsured crop disaster assistance 
program (NAP) coverage is available are eligible crops for SURE. To be 
eligible for SURE payments, participants must meet a risk management 
purchase requirement, with some exceptions, and have suffered a 
qualifying loss due to disaster. A qualifying loss is a loss of at 
least 10 percent of a crop of economic significance on a participant's 
farm in a disaster county (a county for which a Secretarial disaster 
declaration has been issued or a county contiguous to such a county), 
or on a participant's farm with an overall loss greater than 50 percent 
of normal production (expected revenue for all crops on the farm) due 
to disaster. This rule specifies how a qualifying loss is determined, 
how SURE payments are calculated, and how and when participants may 
apply for payment.

DATES: Effective Date: December 22, 2009.

FOR FURTHER INFORMATION CONTACT: Steven J. Peterson, Branch Chief, 
Disaster Assistance Branch, Production, Emergencies, and Compliance 
Division; Farm Service Agency; United States Department of Agriculture, 
STOP 0517, 1400 Independence Avenue, SW., Washington, DC 20250-0517; 
telephone (202) 720-5172; e-mail [email protected]. Persons 
with disabilities who require alternative means of 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 specific requirements for the SURE program 
authorized by the 2008 Farm Bill (Pub. L. 110-246) and amendments to 
the 2008 Farm Bill contained in the Consolidated Security, Disaster 
Assistance, and Continuing Appropriations Act, 2009 (Pub. L. 110-329), 
an Act to Amend the Commodity Provisions of the Food, Conservation, and 
Energy Act of 2008 and for other purposes (Pub. L. 110-398), and the 
American Recovery and Reinvestment Act of 2009 (Pub. L. 111-005, the 
Recovery Act). The basic core of the SURE program is specified in the 
2008 Farm Bill. With the exception of the Recovery Act, the subsequent 
amendments were technical in nature; the amendments are discussed 
below.
    Sections 12033 and 15101 of the 2008 Farm Bill authorize the 
Secretary of Agriculture (Secretary) to provide assistance to eligible 
participants with certain crop losses. Under this authority, FSA is 
establishing SURE, a new permanent disaster assistance program, 
providing payments to eligible participants who suffered a qualifying 
loss and who met the risk management purchase requirement.
    FSA will administer SURE using funds from the Agricultural Disaster

[[Page 68481]]

Relief Trust Fund established under section 902 of the Trade Act of 
1974 (19 U.S.C. 2497a), as specified in the 2008 Farm Bill. The 
disaster assistance programs authorized by the 2008 Farm Bill are 
permanent or ``standing'' disaster assistance programs, some of which 
have similar scope to previous ad hoc programs. The programs are 
provided for in two separate places in the 2008 Farm Bill. First, 
section 12033 adds a new section 531 to the Federal Crop Insurance Act 
(7 U.S.C. 1501-1524). Second, section 15101 adds sections 901, 902, and 
903 to the Trade Act of 1974. The provisions of the two sections as 
enacted are identical except that the Trade Act of 1974 provisions 
contain the Trust Fund provisions. The two sections of the 2008 Farm 
Bill are considered to be interchangeable for the purposes of this 
rule.
    SURE is one of five new standing disaster programs authorized by 
the 2008 Farm Bill. The five new programs are:
     Livestock Indemnity Program (LIP);
     Livestock Forage Disaster Program (LFP);
     Emergency Assistance for Livestock, Honey Bees, and Farm-
Raised Fish (ELAP);
     Supplemental Revenue Assistance Payments Program (SURE); 
and
     Tree Assistance Program (TAP).
    The programs are being implemented through separate rulemakings; 
regulations for each of the programs will be implemented in separate 
subparts of 7 CFR part 760. This rule implements SURE in 7 CFR part 
760, subpart G. The LIP final rule, which was published in the Federal 
Register on July 2, 2009 (74 FR 31567-31578) implemented LIP in 7 CFR 
part 760, subpart E, and implemented general provisions applicable to 
more than one program in 7 CFR part 760, subpart B. The ELAP and LFP 
final rule, which was published in the Federal Register on September 
11, 2009 (74 FR 46665-46683) implemented ELAP in 7 CFR part 760, 
subpart C, and implemented LFP in 7 CFR part 760, subpart D.
    SURE covers some expected revenue or production losses not covered 
under other Supplemental Agricultural Disaster Assistance programs 
established by the 2008 Farm Bill. For example, losses to catfish, 
crawfish, and other aquaculture species are not covered by LIP, but are 
covered under SURE because they are eligible for NAP coverage. In other 
cases, losses are covered by the other programs but not by SURE. For 
example, losses to honey bees due to colony collapse disorder are 
covered by ELAP but not by SURE. Livestock, feed emergency, and grazing 
losses are not covered by SURE but are covered by LIP, ELAP, and LFP. 
Losses to tree crops (apples, citrus) are covered by SURE, while losses 
to trees that produce crops are covered by TAP.

Legislative Amendments to the SURE Program

    Technical amendments made by legislation enacted after the 2008 
Farm Bill included a clarification of terms and some newly defined 
terms, added the 10 percent actual production loss minimum of an 
economically significant crop to be a qualifying loss, excluded 
subsequently planted crops in most cases, specified that regional 
variations should be considered consistent with crop insurance and NAP 
in establishing average market prices, and allowed additional waivers 
or exceptions to the risk management purchase requirement for certain 
years.
    The Recovery Act amendments allowed an additional waiver for the 
2008 crop year only under certain situations and increased the amount 
of assistance for 2008 qualifying losses. It also authorized the 
Secretary discretion to provide equitable treatment for participants 
suffering multi-year losses and for participants who lacked access to 
insurance or NAP.

Terms Used in This Rule

    This final rule uses the words ``producers'' and ``participants.'' 
Producers may apply for SURE. Participants are those producers that 
meet the requirements to be eligible producers to receive SURE 
payments.
    Sections 12033 and 15101 of the 2008 Farm Bill include the words 
assistance, benefits, compensation, relief, and payments. The form of 
SURE assistance, benefit, relief, or compensation for eligible 
participants is a payment calculated as specified in this rule. 
Therefore, this rule uses the word payment to represent the assistance, 
benefit, relief, and compensation that participants will receive.
    One part of the payment calculation is the guarantee or ``SURE 
guarantee'', which is a ``guaranteed'' level of revenue for the farm 
based on the planted or prevented planted acres, the yield, past 
production history, and the level of crop insurance selected, among 
other things. The SURE payment is based on 60 percent of the difference 
between this guarantee and the total revenue on the farm as calculated 
in accordance with the 2008 Farm Bill.
    In general, the word ``production'' represents the quantity or 
amount of a crop produced (or harvested). In some terms that include 
the word ``production'' it represents the dollar value or the price of 
the crop, such as ``normal production on the farm'' which is defined in 
this rule. Because the production for the farm is the total of all the 
crops produced on the farm, which may be measured in different physical 
units, the total production of multiple crops on a farm is most 
sensibly represented in terms of dollar value rather than (for example) 
using bushels as the unit of measure for production on a farm that 
produces corn, hay, and catfish.
    This rule defines ``salvage value'' as the dollar amount or 
equivalent value when the commodity cannot be sold in any recognized 
market for that crop. For example, popcorn that does not meet the 
standards for popcorn would have ``salvage value'' as livestock feed.
    The word ``crop'' and ``commodity'' were used in the 2008 Farm 
Bill. This rule generally uses ``crop,'' except in cases where 
``commodity'' must be used to be consistent with other regulations and 
programs.

Definitions

    This rule includes terms defined or otherwise used in the 2008 Farm 
Bill as required to implement the SURE program. In some instances, 
terms defined in the 2008 Farm Bill have been modified based on agency 
interpretation and to add further clarity. For example, the term 
``disaster county'' appears in the 2008 Farm Bill and specifies that a 
disaster county, in addition to meaning a county included in a 
Secretarial natural disaster declaration, or a county contiguous to 
such county, is any farm having actual production less than 50 percent 
of normal during a crop year. These regulations make clear that one 
farm having a loss of 50 percent or more does not make the farm or the 
county or counties in which the farm is or are located an actual 
disaster county. Rather, the disaster county term is defined to only 
include those counties that have a Secretarial natural disaster 
declaration or a county contiguous to such county (without regard to 
participant or farm losses).
    Other clarifications to definitions in the 2008 Farm Bill include 
using consistent words and terms as specified in this rule, adding 
information such as citations, or otherwise clarifying the definition. 
For example, this involves using the word ``crop'' instead of the word 
``commodity'' where appropriate, consistent references to ``crop 
insurance'' and ``crop insurance indemnity,'' and ``participant'' 
instead of ``producer.''
    The definition of the term ``actual production history yield'' in 
the 2008 Farm Bill uses the term ``weighted.'' The

[[Page 68482]]

definition in this rule refers to an average instead of a weighted 
average. We did this to clarify that the weighting is done as part of 
the calculation of the SURE yield; the actual production history yield 
data from the NAP or RMA program is actual yield data, not weighted.
    The definition of ``actual production on the farm'' was expanded to 
specifically include the calculation information, which was referred to 
in the definition in the 2008 Farm Bill. The definition deleted the 
term ``value of all crops produced on the farm'' as it would have been 
redundant because the calculations specify a component is the price of 
the crop or the value of inventory. The definition was also expanded to 
specify how value loss crops would be included in the calculation.
    The definition of ``adjusted actual production history yield'' was 
expanded to specify the minimum amount, and specify that it is the 
``average of the production history'' instead of the ``actual 
production history,'' to clarify that since the Farm Bill also 
specified that 4 years of production history are taken into account, 
that clearly should be an average rather than a sum.
    The definition of ``adjusted NAP yield'' was expanded to specify 
the minimum amount, and specifying that it is the ``average of the 
production history'', rather than the NAP yield, to be consistent with 
the ways ``yield'' and ``production history'' are used in other terms 
in this rule.
    The definition of ``counter-cyclical program payment yield'' was 
clarified to cite FSA implementing regulations instead of citing 
various sections of legislation.
    ``Crop of economic significance'' is defined in the 2008 Farm Bill 
as having a uniform meaning given it by the Secretary for certain 
purposes as specifically required by the 2008 Farm Bill. In this rule, 
a crop of economic significance means one that has contributed at least 
5 percent of the total expected revenue of all of the participant's 
crops on the farm. That would appear to be a fair level at which a 
farmer might forego risk management measures because of the relative 
size of the crop. At this time, however, no dollar expectation has been 
set so as to require that the farm have expected marketings of a 
certain level to qualify a crop for SURE. However, the crop must be one 
which is the subject of normal marketings.
    The definition of ``farm'' was clarified such that ``for sale'' 
means ``for normal commercial sale'' and was revised for aquaculture 
based on the requirements for the Aquaculture Grant Program, as 
specified in the Recovery Act. ``Normal'' commercial sale in this 
regard would mean sales in the normal channels of commerce and would 
not include, for example, ``sales'' to family members or sales from 
hobby farms.
    The definition of ``noninsurable crop'' specifies that the crop is 
a ``commercially produced crop'' because NAP covered crops are 
commercially produced crops for which crop insurance is not available.
    Some terms defined in this rule are terms used in the 2008 Farm 
Bill, but are not defined in the 2008 Farm Bill. For example, the term 
``actual crop acreage'' is not defined in the 2008 Farm Bill; however, 
for the purpose of SURE, the term ``actual crop acreage'' is defined to 
mean that it includes all acreage of each crop planted or intended to 
be planted on a farm. As is explained below, the term ``farm'' is 
generally defined expansively in SURE to include all farming interests 
in which a producer has an interest, no matter where located. Another 
example is ``appraised production,'' which, when applicable, will be 
used in determining a farm's production or revenue. The term is defined 
in this rule as production determined by FSA, or an insurance provider 
approved by FCIC, that was unharvested, but which was determined to 
reflect the crop's yield potential at the time of appraisal. 
``Aquaculture'' is defined to mean the reproduction and rearing of 
aquatic species in controlled or selected environments as specified in 
part 1437 of this title.

SURE Compared to Previous Disaster Programs

    Some important differences between SURE and previous programs are 
that SURE payments are based on multi-crop farm revenue, rather than 
losses to a single crop, and that SURE is a ``permanent'' or 
``standing'' program, for losses in the time period covered in the 2008 
Farm Bill (coverage begins with the 2008 crop, and losses after 
September 30, 2011 are not covered). Previous ad hoc crop disaster 
programs were typically limited to specific crops damaged or destroyed 
during a specific period of time in specific locations. In contrast to 
previous programs that addressed losses to particular crops, SURE is an 
umbrella type of farm revenue program that compliments and augments 
protections that participants have from various risk management 
purchases. Under previous crop disaster programs, producers typically 
requested assistance for particular farm numbers, or units. Under SURE, 
a participant's assistance will be based on a ``whole farm,'' which 
means the aggregation of all crops in all counties in which the 
participant has an interest that were planted or intended to be planted 
for harvest. Participants must have been entitled to an ownership share 
of the crop; contract growers are not eligible participants for SURE 
unless they had an ownership share and meet all other eligibility 
criteria.
    Payments will not be based on losses to individual crops, although 
a loss of a crop of economic significance is an eligibility 
requirement.
    Funding for the previous ad hoc crop disaster programs was limited 
and subject to a specific appropriation. Funding for SURE is provided 
through the Agricultural Disaster Relief Trust Fund and payments will 
be distributed to eligible participants as they qualify for assistance.
    Unlike some FSA and Commodity Credit Corporation (CCC) programs, 
participants do not need to pre-enroll or sign up in advance (prior to 
the loss) for SURE coverage in order to be eligible. Participants who 
believe they may be eligible for a SURE payment who satisfy all 
eligibility criteria can submit an application for payment. Such 
application will be reviewed to determine if the participant meets such 
eligibility criteria.

Qualifying Loss

    To receive SURE payments, participants must have had a qualifying 
loss. That means eligible participants must have at least a 10 percent 
loss of one crop of economic significance due to disaster on either:
    (1) A farm in a disaster county (a county for which a Secretarial 
disaster designation has been issued or in a county contiguous to a 
county with a Secretarial disaster designation), or
    (2) A farm not located in a disaster county or a county contiguous 
to such a designated disaster county, that has an overall production 
loss greater than or equal to 50 percent of the normal production on 
the farm (expected revenue for all crops on the farm) due to disaster.
    A ``crop of economic significance'' is one that generates or was 
expected to generate at least 5 percent of the total expected revenue 
of all of the crops on the participant's farm for the current year. 
While other FSA programs may use a higher percentage threshold in order 
to determine whether a crop is economically significant, SURE defines 
crop of economic significance as having at least 5 percent or more of 
the total expected revenue from all of the participant's crops on the 
farm and

[[Page 68483]]

thereby increases the likelihood that participants will have 
economically significant crops and be eligible for SURE.
    A ``disaster county'' is one where there has been a Secretarial 
disaster declaration; it includes counties contiguous to such counties 
declared a disaster. Other kinds of disaster declarations or 
designations, such as a Presidential disaster declaration, are not 
relevant to SURE, according to the terms of the 2008 Farm Bill.
    A farm includes all the crop acreage in all the counties where a 
participant has planted crops or intended to plant crops for harvest 
for commercial sale or on-farm livestock feeding. For aquaculture and 
honey, a farm includes all the acreage used for all aquaculture 
species, bees, and beehives intended to be harvested for sale by the 
eligible participant in all counties.
    A farm not located in a ``disaster county'' may still be eligible 
for SURE if it incurs, during a crop year, a qualifying loss of 
production in which the actual production on the farm is less than 50 
percent of the normal production of the farm. Such loss threshold is 
per farm, not per crop on a farm. The actual total production for the 
participant's farm, as measured by revenue from all crops and 
locations, must be less than 50 percent of the normal expected 
production to be a qualifying loss. A loss of 50 percent of one crop, 
or losses on one part of a farm where the farm has crops in several 
locations, will not necessarily be a qualifying loss if the other crops 
or locations or both had a less severe loss. For this category of 
qualifying loss, there is no requirement for a disaster declaration.

Risk Management Purchase Requirement

    To be eligible for SURE payments, producers must meet certain risk 
management purchase requirements, with some exceptions. Those 
requirements are specified in 7 CFR part 760 subpart B, and apply to 
SURE.
    The risk management purchase requirements specify that eligible 
participants must have purchased insurance for each insurable crop; a 
few exceptions allowed by the 2008 Farm Bill are discussed later in 
this section. An ``insurable commodity'' means an agricultural 
commodity for which the producer on the farm is eligible to obtain a 
policy or plan of insurance under the Federal Crop Insurance Act (FCIA) 
from the USDA's Risk Management Agency (RMA). A ``noninsurable 
commodity'' means a crop for which the eligible producers on a farm are 
eligible to obtain assistance through FSA's noninsured crop disaster 
assistance program (NAP). In general, to be eligible for SURE payments, 
participants must have obtained crop insurance or NAP coverage, as may 
be applicable, for all of their crops.
    Producers who did not purchase required coverage are not eligible 
for benefits unless an exception applies. Certain waivers for 
``socially disadvantaged farmers and ranchers,'' as well as ``limited 
resource farmers and ranchers,'' and ``beginning farmers or ranchers'' 
are provided by the 2008 Farm Bill.
    For the 2008 crop year, otherwise eligible producers who paid a 
certain buy-in fee were provided an exemption from the risk management 
purchase requirement that would otherwise apply if the buy-in fee was 
paid by September 16, 2008. By an amendment to the 2008 Farm Bill, a 
second buy-in permitted participants to buy in for the 2008 crop year 
from February 17, 2009, up to May 18, 2009 to meet the risk management 
purchase requirement; however, the participant had to agree to buy crop 
insurance or NAP for the next crop year for the crops to which the buy-
in applied. The buy-in fee was equal to the cost of the minimal 
catastrophic insurance coverage or NAP coverage, but did not, as with 
other buy-in exemptions in SURE, entitle the participant to such 
insurance or NAP coverage. Also, an amendment to the 2008 Farm Bill 
allows a 2009 crop buy-in if the 2009 Federal Crop Insurance 
Corporation (FCIC) sales closing date for a crop 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; 7 U.S.C. 1531(g) and 
19 U.S.C. 2497(g), respectively) have some more general provisions 
allowing the Secretary discretion to grant equitable relief to certain 
persons who lack coverage. The buy-in fees were different for 2008 and 
2009.
    Specifically for SURE, and not for the other disaster programs, 
there are also the following ``de minimis'' exceptions to the risk 
management purchase requirement:
    (1) Where a portion of the total acreage of a farm of the eligible 
producer is used to produce a crop that is not of economic significance 
on the farm, and
    (2) Crops for which the required administrative fee to purchase NAP 
coverage for that crop on a particular farm exceeds 10 percent of the 
value of that coverage.
    If a participant elects not to purchase risk management coverage 
for the crop because of one of the de minimis exceptions, such crop 
will not be included in the SURE guarantee and revenue calculations. 
The participant must elect the de minimis exception as part of the 
application for SURE payment.
    If a producer is ineligible or otherwise barred from the risk 
management insurance program or NAP because of past violations and 
those insurance programs would otherwise be available to that producer 
absent such violations, that producer will also be ineligible for SURE.
    Other circumstances preventing a producer from obtaining risk 
management coverage may be addressed on a case-by-case basis, and the 
Secretary or designee may determine a participant eligible for SURE 
even if FCIA or NAP coverage was not timely obtained. Section 760.106 
``Equitable Relief'' provides for such relief. For example, equitable 
relief may, at FSA's discretion, be considered for participants who 
failed to meet the requirements of this rule because the 2008 Farm Bill 
was enacted after the closing date for purchasing the applicable 
insurance. Another example may be relief for a participant who made a 
late planting decision due to weather-related causes. Relief will not 
be considered or granted for producers who are in the RMA ineligibility 
tracking system. In connection with equitable relief, however, 
producers have no entitlement to relief that is discretionary in nature 
and FSA's refusal to consider such relief or to grant a particular form 
of relief that is not particularly mandated by the 2008 Farm Bill or 
the program regulations will not be construed to be an adverse decision 
under either part 11 or 780 of this title.
    If an RMA pilot or Adjusted Gross Revenue insurance program was the 
only insurance available in that area for that crop, buying that 
insurance program for that crop will ``count'' as meeting the risk 
management purchase requirement for that crop. However, producers are 
not required to purchase pilot or AGR insurance program coverage in 
order to meet the risk management purchase requirement. Rather, 
producers can elect not to obtain pilot or AGR insurance program 
coverage and meet the risk management purchase requirement by obtaining 
either NAP coverage or by paying the buy-in fee, as may be applicable.

Eligible Crops

    Eligible crops include FCIC insured commodities and crops covered 
by

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NAP, excluding acreage intended for grazing. (Grazing losses are 
covered by LFP, in regulations codified in 7 CFR part 760 subpart D.) 
SURE does not cover crops covered under LFP or ELAP. NAP is available 
for crops that are commercially produced for which the catastrophic 
level of crop insurance coverage is not available. Crops that are not 
grown commercially are not eligible for either crop insurance or NAP 
and therefore are not eligible for SURE. All crops for which a policy 
or plan of crop insurance or NAP coverage is available are eligible for 
production losses. Most crops are also eligible for quality losses 
except for value loss crops \1\ and some specialty crops \2\ because of 
the way normal losses are measured for those crops.
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    \1\ Value loss crops ineligible for quality losses include 
aquaculture, floriculture, mushrooms, ginseng root, ornamental 
nursery, Christmas trees, and turfgrass sod.
    \2\ Specialty crops ineligible for quality losses include honey 
and maple sap.
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    Producers who did not obtain risk management coverage for all 
eligible crops on a farm are ineligible for payment under SURE even if 
some crops had risk management coverage, unless an exception or waiver 
applies. For example, if a producer's farm produces insured corn and 
insured soybeans, and also hay, to be eligible for SURE payment, it is 
necessary for the producer to either buy insurance or NAP coverage on 
the hay or have made a ``buy-in,'' when such option was available as 
specified in subpart B of part 760. Producers who meet all the 
statutory conditions of eligibility, including risk management 
coverage, will qualify for payment. A producer who does not meet the 
risk management purchase requirement will not be eligible. A lack of 
eligibility is not a compliance issue; rather, such producer has merely 
failed to satisfy a statutory condition of eligibility.
    In the case of a participant who met the risk management purchase 
requirement by purchasing crop insurance or NAP, the calculation of the 
SURE farm revenue and guarantee is based on the insured or NAP crops. 
For participants who are eligible through waivers and buy-ins, the 
calculation will explicitly exclude crops that would not be eligible 
for insurance or NAP. Therefore, there are provisions in this rule that 
exclude, for example, volunteer crops from the revenue or guarantee 
calculation. For participants who purchased crop insurance or NAP, 
those crops would clearly not be included because they were not insured 
(and cannot be insured). However, these provisions are in the rule to 
address the situation of calculating the farm revenue or guarantee of a 
participant who is eligible through a waiver or buy-in. Similarly, this 
rule excludes from the SURE guarantee and revenue calculation crops 
grown on land that is not eligible for crop insurance or NAP. For a 
participant who purchased crop insurance or NAP, those crops would 
clearly not be included because they were not insured (and cannot be 
insured). However, these provisions are in the rule to address the 
situation of calculating the farm revenue or guarantee of a participant 
who is eligible through a waiver or buy-in.
    Independent of risk management purchase requirements and de minimis 
exceptions, certain items or losses are not covered for any participant 
and will not be included in payment calculation. These include home 
gardens, losses to crops that were not intended to be harvested in the 
applicable crop year, and losses to biomass byproducts of the crop such 
as corn stover or wheat straw.

Payment Limitations and Other General Requirements

    All counties, owners, contract growers, lessees, crops, and losses 
must meet the eligibility criteria provided in this rule. False 
certifications will result in a denial of program eligibility and 
payments. General eligibility requirements, as specified in Sec. Sec.  
760.101 through 760.117, including recordkeeping requirements and 
required compliance with Highly Erodible Land Conservation and Wetland 
Conservation provisions, are similar to those for the previous ad hoc 
crop disaster programs and are applicable to SURE.
    The 2008 Farm Bill limits how much a participant may receive from 
FSA disaster assistance programs.
     In applying payment limitations 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 combined.
     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 combined.
    For the payment limits, both indirect and direct benefits are 
counted by attribution such that the total amount of payments is 
attributed to a person by taking into account the direct and indirect 
ownership interests of the person in a legal entity that is eligible to 
receive payments. 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 that indirect interest. For 
example, under the attribution rules that apply 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 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 50 percent 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 $35,000 would count 
against Individual C's overall payment limitation from all sources and 
farms. Assume now that Individual C was already at the maximum payment 
limit. If so, 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 
from the SURE program will be commensurately reduced by any amount 
received by the participant for the same or any similar loss from any 
Federal disaster assistance program. Such disaster programs include 
USDA conservation programs that pay for replanting or replacing plants 
damaged by disaster. Aquaculture producers who received assistance 
under the Aquaculture Grant Program \3\ will not be eligible for SURE 
assistance on those species of aquaculture for which a grant payment 
was received. Indemnities or NAP payments issued for losses of the 
species will, however, count on the revenue side of the SURE payment 
calculation. Participants cannot receive SURE assistance for the same 
loss under ELAP, LIP, LFP or TAP.
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    \3\ The Aquaculture Grant Program was authorized by the Recovery 
Act and implemented through a notice of Funds Availability published 
in the Federal Register on June 2, 2009 (74 FR 26363-26365).
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    Provisions for both pay limits and for limits related to an 
individual's or entity's adjusted gross income were contained in the 
administrative subparts of part 760 (discussed above, previously

[[Page 68485]]

issued to implement other Farm Bill disaster assistance programs) and 
generally the administration of those limitations will follow general 
regulations in 7 CFR part 1400. In applying the limitation on average 
adjusted gross income (AGI) for 2008, an individual or entity is 
ineligible for SURE payment if the individual's or entity's average 
annual AGI for 2005, 2006, and 2007 exceeded $2.5 million, 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 CCC commodity programs also apply to SURE. 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, which is the 3 
taxable years preceding the most immediately preceding complete taxable 
year, as determined by CCC, 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 commensurately 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 CCC commodity programs. The SURE 
program is not a CCC program, but the CCC regulations in 7 CFR part 
1400 are adopted for this program.
    The relevant AGI period for SURE and the other disaster assistance 
programs for 2008 is the 3 calendar years that precede the program year 
involved which are 2005, 2006 and 2007. However, beginning with 2009, 
the AGI period is the 3 taxable years preceding the most immediately 
preceding complete taxable year, as determined by CCC. For SURE, the 
program year is the year that corresponds to the relevant crop year. 
This program will be administered by crop year and most times the crop 
year for all crops is easily indentified because both the year of the 
planting and the year of the harvesting are the same or at least the 
calendar year of the harvesting is the same nationwide. The Deputy 
Administrator will be the ultimate arbiter of which production fits in 
which ``crop year'' for purposes of SURE calculations. 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 damaged or lost during 2008. SURE 
payments related to such a loss would be made for the 2009 crop year 
wheat, because the intent was to harvest this wheat in 2009.
    Production losses are, in general, determined by calendar year of 
harvest, but the payment limitation is for a crop year. Also, the 
national average market price (NAMP) for a marketing year may not be 
available until the fall of the following crop year, so the SURE 
payment may often be calculated and paid in a different (later) 
calendar year than the actual year of loss or losses.
    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, the 2008 Farm Bill imposes limitations of payments to 
foreign persons. Those limits are specified in the regulations in Sec.  
760.103.

Payment Calculation--Overview

    The SURE guarantee cannot exceed 90 percent of the total expected 
revenue for the crops on the farm. Depending on the level of insurance 
coverage the participant elects, the SURE guarantee for a specific 
participant may be less than 90 percent of the expected revenue. In 
general, the higher the level of insurance coverage purchased, the 
higher the SURE guarantee. A participant who purchases the minimum 
insurance required by this part and meets all other eligibility 
requirements will be eligible for SURE, but the SURE guarantee will 
reflect that minimal level of coverage.
BILLING CODE 3410-05-P

[[Page 68486]]

[GRAPHIC] [TIFF OMITTED] TR28DE09.001

BILLING CODE 3410-05-C
    The following is an example of how a SURE payment is calculated for 
a participant with two crops; corn insured with FCIC crop insurance and 
alfalfa with NAP coverage. After the example, the general SURE payment 
calculation formula is discussed.

SURE Guarantee Calculation Example for 2009 Through 2011 Crop Years

    The SURE program guarantee calculation for insured corn in this 
example is as follows: Assume 100 payment acres times an assumed 100 
bushels per acre (SURE yield) times $4.00 per bushel (price election) 
times 70 percent (coverage level) times 115 percent (SURE multiplier) 
equals $32,200.
    The program guarantee calculation for alfalfa with NAP coverage in 
this example is as follows: assume 100 payment acres times an assumed 
4.0 tons per acre (SURE yield) times an assumed $70 per ton (NAP 
established price) times 50 percent times 120 percent (SURE multiplier) 
equals $16,800.
    The SURE guarantee is: $32,200 (corn) plus $16,800 (alfalfa) equals 
$49,000.
    The SURE guarantee is limited to 90 percent of the sum of the 
expected revenue for each crop on the farm. Expected revenue for corn 
is: 100 payment acres times 100 bushels per acre (SURE yield) times 
$4.00 (price) equals $40,000. For alfalfa: 100 payment acres times 4.0 
tons per acre (SURE yield) times $70 (NAP established price) equals 
$28,000.
    The expected revenue is: $40,000 (corn) plus $28,000 (alfalfa) 
equals $68,000.

[[Page 68487]]

    Total expected revenue $68,000 times 90 percent equals $61,200 
(SURE guarantee cap).

Total Farm Revenue Calculation Example for 2008 Through 2011 Crop Years

    Revenue for the insured corn in this example is based on a 60 
percent loss in production that the participant experienced for this 
crop, which in the example resulted in a 40 bushel yield. For the 
purpose of the example, NAMP for insured corn in the State is $4.00 per 
bushel. Assume, too, a freeze also affected this corn, which resulted 
in a quality adjustment of 90 percent to account for extra moisture, 
which is applied to the price. Therefore, the estimated actual value 
for this crop is $4.00 (NAMP) times 90 percent (quality adjustment) 
equals $3.60 times 4,000 bushels (actual production of the payment 
acres) equals $14,400.
    Revenue for the alfalfa in this example is based on a 25 percent 
loss in production that the participant experienced for this crop, 
which resulted in a 3 ton yield. For the purpose of the example, NAMP 
for alfalfa in the State is $70. There is no quality adjustment for the 
alfalfa crop. Therefore, estimated actual value for the alfalfa crop is 
$70 (NAMP capped at 100 percent of the NAP established price) x 300 
tons (actual production of the payment acres) equals $21,000.
    Total farm revenue for this participant is $14,400 (corn) + $21,000 
(alfalfa) equals $35,400.
    The SURE payment for this participant would be: $49,000 (SURE 
guarantee) - $35,400 (total farm revenue) = $13,600 times 60 percent 
equals $8,160.

SURE Payment Example for 2008 Through 2011 Crop Years

    The SURE payment will be calculated based on the difference between 
a program guarantee and farm revenue as determined for a participant's 
farm. The SURE program guarantee for a specific participant is based on 
the participant's risk management purchases. The SURE calculation of 
revenue is based on an applicant's actual production and NAMP for the 
commodities produced, as well as a number of other revenue sources such 
as farm program or NAP payments and insurance indemnities. In general, 
because SURE is intended to enhance or augment risk management 
purchases, participants who elect higher amounts of coverage will see 
greater SURE benefits, compared to those who elect lesser amounts of 
coverage. Under SURE, the crop insurance indemnity that is counted in 
the SURE revenue calculation is after subtracting producer-paid 
premiums for crop insurance in an amount not to exceed the crop 
insurance indemnity paymenton a per unit basis.
    The SURE payment is 60 percent of the difference between the SURE 
guarantee and the total farm revenue. If total farm revenue is below 
the SURE guarantee, the participant will be eligible for a payment 
based on the amount of the shortfall. In general, except for additional 
2008 assistance made available by the Recovery Act, the SURE guarantee 
for insurable crops is determined by multiplying:
     The number of planted and prevented planted acres, times
     The higher of either the adjusted actual production 
history yield or counter-cyclical yield, times
     The coverage level, times
     The price determined by the percentage of the crop 
insurance price elected by the participant, times
     115 percent (1.15).
    In general, except for additional 2008 assistance made available by 
the Recovery Act, the SURE guarantee for noninsurable crops is 
determined by multiplying:
     The number of planted and prevented planted acres, times
     the higher of either the actual production history yield 
or the counter-cyclical yield, times
     50 percent (yield coverage under NAP), times
     the NAP price, times
     120 percent (1.20).
    This rule specifies how the basic formula will be adjusted to 
address a number of specific situations. Those situations include, but 
are not limited to, adjustments for situations such as:
     If a participant was exempt from the risk management 
purchase requirement, the participant's SURE yield will be determined 
by the FSA county committee using 65 percent of the higher of the 
counter-cyclical program yield or the FCIC or county expected yield for 
the crop as established by the Deputy Administrator.
     If a participant's policy or plan of insurance provides 
for an adjustment in the liability, such as in the case of prevented or 
late planting, that adjustment will be used in calculating the SURE 
guarantee.
     If a participant's NAP coverage provides for an adjustment 
in the level of assistance, such as for unharvested crops or prevented 
or late planting, that adjustment will be used in calculating the SURE 
guarantee.
     If the farm is in an approved multiple cropping or double-
cropping area and both crops suffer losses, both crops may be eligible 
for the calculation of disaster assistance if appropriate documentation 
is provided. In most cases, only the first or initial crop is eligible 
and will be used in calculating the SURE guarantee and revenue.
     For 2008 only, and only under certain situations where the 
producer met certain requirements, the Recovery Act provides for 
changes to the percentages used to calculate the guarantee, such that 
the multiplier is changed from 115 percent to 120 percent and from 120 
percent to 125 percent, respectively. These percentages are used in the 
comparison calculation to determine the amount of the SURE payment; the 
Recovery Act specifies the two calculations for the comparison and 
requires that the greater amount be used. Using the NAP calculation 
with the 125 percent will never result in being the greater amount; 
therefore, the calculation in the regulation uses the other calculation 
in the comparison, which uses 120 percent.
    Socially disadvantaged producers, limited resource producers, and 
beginning farmers and ranchers who did not purchase risk management 
coverage will be eligible for the same level of assistance as 
participants who satisfied the purchase requirement by obtaining the 
minimum level of coverage available, which is generally catastrophic or 
``CAT'' coverage for insured crops or the standard NAP level of 
coverage for noninsured crops. Equitable consideration will be provided 
for instances involving non-yield based crop insurance policies. For 
RMA ``pilot'' insured crops, having either pilot or NAP coverage on 
applicable crops would meet the risk management purchase requirement. 
The payment formulas in this rule are intended to treat similarly 
situated participants consistently and equitably. However, participants 
having similar losses on the same or similar crops may not necessarily 
receive the same payment.

National Average Market Price (NAMP)

    The Deputy Administrator will determine NAMP for each crop in a 
marketing year, taking into account the best information available that 
the Deputy Administrator believes is relevant to such decision. The 
2008 Farm Bill specifies that the Secretary will adjust NAMP to reflect 
average quality discounts applied to the local or regional market price 
of a crop. Adjustments will be made at the State and county levels to 
account for crop value that is affected by quality or is reduced due to 
excessive high moisture content resulting from a disaster-related

[[Page 68488]]

condition. Quality adjustments will require participants to provide 
verifiable evidence of production that details the extent of the 
quality loss for a specific quantity. Test evidence to support the need 
for quality adjustments, in addition to meeting all the requirements of 
Sec.  760.641, must have been completed by January 1 of the year 
following harvest.
    For a crop for which an eligible participant on a farm receives 
assistance under NAP, NAMP will be not more than the price of the crop 
established under NAP. As determined by the Deputy Administrator, NAMP 
will be derived using data from the National Agricultural Statistics 
Service and other sources, and will consist of only one nationwide NAMP 
for the crop. NAMP may be adjusted, as determined by the Deputy 
Administrator, to reflect regional variations in a manner consistent 
with FCIA or NAP. NAMPs may be adjusted by FSA State committees, in 
accordance with procedures set out by the Deputy Administrator to 
recognize average quality loss factors that are reflected in market by 
region. In general, adjustments will be made at the State level for 
counties or portions of counties. The NAMP will be established on a 
harvested basis, not including costs of transportation, storage, 
processing, marketing, or other post-harvest expenses, as determined by 
FSA.
    In all cases, matters such as NAMPs and other program provisions 
that apply generally, which are not established or determined in 
response to individual participant applications, are not and will not 
be individually appealable or contestable. Participants have the right 
to challenge administrative decisions made in response to their 
particular applications; however, they cannot appeal general program 
provisions such as average prices, average yields, NAMPs, or factors 
used for similarly situated participants, as specified in 7 CFR 
760.110.

Treatment of Value Loss Crops

    Production methods and risk management of value loss crops, such as 
ornamental nursery and aquaculture, are significantly different than 
for yield-based crops. Where a yield-based crop is harvested and 
marketed in a single crop year or marketing year, the participant's 
inventory of the typical value loss crop fluctuates, sometimes rapidly, 
in the course of normal business operations. The total value of the 
inventory fluctuates for reasons that may be unrelated to a disaster or 
to a farm's expected annual revenue or production.
    SURE payment eligibility for value loss crops will be determined 
based on inventory and losses at the time of the disaster and only for 
the losses due to that disaster. This is in contrast to other types of 
crops, where the SURE guarantee will typically be based on several 
years of production history. The guarantee for value loss crops will be 
based on the inventory on hand immediately before the disaster and the 
revenue used for the payment calculation will be based on the inventory 
immediately after the disaster. Daily inventory records required for 
NAP or crop insurance will typically be sufficient for documenting 
losses for SURE payment eligibility. All other inventory not marketed 
immediately prior to and after the disaster event are not relevant for 
SURE purposes and will not be counted as part of the guarantee or as 
farm revenue. Further, farm revenue will not be adjusted for market 
price declines due to the complexity in determining average market 
prices by species for value loss crops. Quality will also not be 
further considered in determining revenue. These provisions are 
consistent with insurance policies and NAP for value loss crops.
    For value loss crops, the SURE guarantee will be based on the level 
of insurance coverage selected, as with other crops. For example, if a 
participant had $100,000 value of value loss crop inventory immediately 
before the disaster or event and had elected an insurance coverage 
level of 70 percent, the SURE payment would be calculated on 60 percent 
of the difference between the dollar value of inventory immediately 
after disaster ($0 in this example for a total loss) and the SURE 
guarantee of $80,500 ($100,000 times 70 percent coverage level times 
115 percent). If the participant was already paid $70,000 in crop 
insurance indemnity over the cost of the producer-paid premiums for the 
farm, as specified in this rule (which counts as revenue), then SURE 
would pay 60 percent of the difference between the SURE guarantee for 
the participant ($80,500) and the $70,000 indemnity. In this case, 60 
percent of $10,500 equals $6,300.

Application and Certification of Interests Deadline

    There is no pre-sign-up or pre-enrollment required for SURE, but 
participants must submit a complete application in order to be eligible 
to receive payment. The application for payment will serve as the 
participant's certification of eligibility and interests. FSA will use 
these certifications to determine payment eligibility. Participants 
must submit an application by March 1 of the calendar year two years 
after the crop year of the loss. For example, for the 2009 crop year, 
the SURE application including certification of interests must be 
submitted to the FSA county office by March 1, 2011.

Lack of Access

    The 2008 Farm Bill, as amended by the Recovery Act, contains a lack 
of access provision that authorizes discretion to the Secretary to 
provide assistance to participants who suffered a 2008 production loss 
due to a natural cause, except as specified in the Recovery Act. Under 
that provision, assistance may be provided to producers that did not 
have access to a policy or plan of insurance or did not qualify for a 
written agreement because one or more farming practices, which the 
Secretary has determined are good farming practices, differ 
significantly from practices of producers of the same crop in other 
regions of the United States, and were not eligible for NAP coverage. 
The Deputy Administrator has the authority to exercise this discretion 
as needed, but it is understood that the scope of this provision is 
very limited. Whether the Deputy Administrator exercises this authority 
or not is not a relief determination for an individual program 
participant based on particular facts but a discretionary determination 
of general effect. Accordingly, it is FSA's position that such 
determinations are not subject to administrative appeal either within 
FSA or before the National Appeal Division of the Department.

Multi-Year Losses

    The 2008 Farm Bill, as amended by the Recovery Act, authorized the 
Secretary to provide equitable treatment as the Secretary considers 
appropriate for eligible participants on a farm that suffered 
production losses in the 2008 crop year that result in multi-year 
production losses. In order to be consistent with policies or plans of 
risk management coverage available to the majority of crops that are 
likely to be included in the SURE farm, and due to the complexity and 
potential problems of calculating multi-year losses on both the farm 
guarantee and revenue sides, as well as the difficulty in determining 
whether events in any one crop year were significant enough to result 
in multi-year losses, the Secretary has elected not to implement any 
discretionary provisions for multi-year losses under SURE at this time.

Notice and Comment

    The 2008 Consolidated Security, Disaster Assistance, and Continuing

[[Page 68489]]

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 exemptions granted by section 
1601(c)(2) of the 2008 Farm Bill apply, 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 24, 1971, (36 FR 13804) relating to notices of proposed rulemaking 
and public participation in rulemaking.

Executive Order 12866

    The Office of Management and Budget (OMB) designated this rule as 
economically significant under Executive Order 12866 and, therefore, 
OMB reviewed this final rule. A cost-benefit assessment of this rule is 
summarized below and is available from the contact information above.

Summary of Economic Impacts

    SURE payments for 2008 through 2011 are expected to total $3.4 
billion, an average of $0.85 billion per crop year, which represents 
both the cost of the program and the benefit to participants. This is 
less than the average of $1.14 billion per year for previous ad hoc 
crop disaster programs from 1998 to 2007. This estimate for SURE was 
estimated by taking the cost of ad hoc crop disaster programs from 1998 
to 2007 and adjusting that cost for predicted cash value of crop 
production for 2008 through 2011 and for the specific eligibility 
requirements for SURE.
    Although crop prices are expected to continue rising, potentially 
resulting in greater costs for SURE than for previous programs, the 
overall costs for SURE are expected to be less than to the cost of 
previous ad hoc disaster programs because, unlike ad hoc disaster 
programs, SURE, in general, is additional compensation for established 
losses under crop insurance or NAP. SURE is not a benefit that replaces 
or duplicates previously received crop insurance or NAP payments, 
although the crop insurance indemnity that is counted in the SURE 
revenue calculation is after subtracting producer-paid premiums for 
crop insurance in an amount not to exceed the crop insurance indemnity 
payment. This provision has been included in the rule because the 2008 
Farm Bill exempts program indemnities from the calculation of the 
farm's revenue for purposes of comparing that revenue with the program 
guarantee. Often, the premium is simply deducted from the indemnity 
rather than paid outright and it is FSA's view that the 2008 Farm Bill 
contemplated the ``indemnity'' to mean the net revenue paid to the 
farmer as that would reflect the actual positive effect of that 
recovery on revenue. This does not suggest in any way that premiums 
that do not result in a indemnity payment or other farm costs should be 
deducted, but rather is an accommodation of what it believed to be the 
perceived intent of this specific provision in the 2008 Farm Bill 
addressing indemnities.
    Also, SURE payments are based on farm revenue losses, rather than 
losses in particular crops or individual units, so participants with 
losses in one crop but not others may or may not qualify for a SURE 
payment.
    The SURE guarantee cap is 90 percent of expected revenue, while 
previous programs had a cap of 95 percent of normal crop value.

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). FSA has determined that the 
combination of discretionary and non-discretionary provisions of this 
Rule would not constitute a major Federal action that would 
significantly affect the quality of the human environment, and 
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

    The rule has been reviewed in accordance with Executive Order 
12988. The provisions of this rule preempt State laws to the extent 
such laws are inconsistent with the provisions of this rule. Before any 
judicial action may be brought concerning the provisions of this rule, 
the administrative remedies 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 governments 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 UMRA.

Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)

    This rule has been determined to be Major under SBREFA (Pub. L. 
104-121). SBREFA normally requires that an agency delay the effective 
date of a major rule for 60 days from the date of publication to allow 
for Congressional review. Section 808 of SBREFA allows an agency to 
make a major regulation effective immediately if the agency finds there 
is good cause to do so. FSA finds that it would be contrary to the 
public interest to delay implementation of this rule because it would 
significantly delay assistance to the many people affected by the 
disasters addressed by this rule. Therefore, this rule is effective 
immediately.

[[Page 68490]]

Federal Assistance Programs

    This rule applies to the following Federal assistance program that 
is not listed in the Catalog of Federal Domestic Assistance: 10.090-
SURE.

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 in 7 CFR Part 760

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


0
For the reasons discussed above, the Farm Service Agency, USDA, amends 
7 CFR part 760 as follows:

PART 760--INDEMNITY PAYMENT PROGRAMS

0
1. The authority citation for part 760 continues 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, Pub. L. 109-234, 120 Stat. 474; and 
Title IX, Pub. L. 110-28, 121 Stat. 211.


0
2. Add subpart G to read as follows:

Subpart G--Supplemental Revenue Assistance Payments Program

Sec.
760.601 Applicability.
760.602 Definitions.
760.610 Participant eligibility.
760.611 Qualifying losses, eligible causes and types of loss.
760.613 De minimis exception.
760.614 Lack of access.
760.620 Time and method of application and certification of 
interests.
760.621 Requirement to report acreage and production.
760.622 Incorrect or false producer certification evidence.
760.631 SURE guarantee calculation.
760.632 Payment acres.
760.633 2008 SURE guarantee calculation.
760.634 SURE guarantee for value loss crops.
760.635 Total farm revenue.
760.636 Expected revenue.
760.637 Determination of production.
760.638 Determination of SURE yield.
760.640 National average market price.
760.641 Adjustments made to NAMP to reflect loss of quality.
760.650 Calculating SURE.

Subpart G--Supplemental Revenue Assistance Payments Program


Sec.  760.601  Applicability.

    (a) This subpart specifies the terms and conditions of the 
Supplemental Revenue Assistance Payments Program (SURE).
    (b) Assistance in the form of SURE payments is available for crop 
losses occurring in the crop year 2008 through September 30, 2011, 
caused by disaster as determined by the Secretary.
    (c) SURE provides disaster assistance to eligible participants on 
farms in:
    (1) Disaster counties designated by the Secretary, which also 
includes counties contiguous to such declared disaster counties, if the 
participant incurred actual production losses of at least 10 percent to 
at least one crop of economic significance on the farm; and
    (2) Any county, if the participant incurred eligible total crop 
losses of greater than or equal to 50 percent of the normal production 
on the farm, as measured by revenue, including a loss of at least 10 
percent to at least one crop of economic significance on the farm.
    (d) Subject to the provisions in subpart B of this part, SURE 
payments will be issued on 60 percent of the difference between the 
SURE guarantee and total farm revenue, calculated using the National 
Average Market Price as specified in this subpart.


Sec.  760.602  Definitions.

    (a) The following definitions apply to all determinations made 
under this subpart.
    (b) The terms defined in parts 718, 1400, and 1437 of this title 
and subpart B of this part will be applicable, except where those 
definitions conflict with the definitions set forth in this section In 
the event that a definition in any of those parts conflicts with the 
definitions set forth in this subpart, the definitions in this subpart 
apply. Any additional conflicts will be resolved by the Deputy 
Administrator.
    Actual crop acreage means all acreage for each crop planted or 
intended to be planted on the farm.
    Actual production history yield means the average of the actual 
production history yields for each insurable or noninsurable crop as 
calculated under the Federal Crop Insurance Act (FCIA) (7 U.S.C. 1501-
1524) or Noninsured Crop Disaster Assistance Program (NAP) as set forth 
in part 1437 of this title, respectively. FSA will use the actual 
production history yield data provided for crop insurance or NAP, if 
available, in the SURE payment calculation.
    Actual production on the farm means, unless the Deputy 
Administrator determines that the context requires otherwise, the sum 
obtained by adding:
    (1) For each insurable crop on the farm, excluding value loss 
crops, the product obtained by multiplying:
    (i) 100 percent of the per unit price for the crop used to 
calculate a crop insurance indemnity for the applicable crop insurance 
if a crop insurance indemnity is triggered. If a price is not 
available, then the price is 100 percent of the NAP established price 
for the crop, times
    (ii) The relevant per unit quantity of the crop produced on the 
farm, adjusted for quality losses, plus
    (2) For each noninsurable crop on the farm, excluding value loss 
crops, the product obtained by multiplying:
    (i) 100 percent of the per unit NAP established price for the crop, 
times
    (ii) The relevant per unit quantity of the crop produced on the 
farm, adjusted for quality losses, plus
    (3) For value loss crops, the value of inventory immediately after 
the disaster.
    Adjusted actual production history yield means a yield that will 
not be less than the participant's actual production history yield for 
a year and:
    (1) In the case of an eligible participant on a farm that has at 
least 4 years of actual production history for an insurable crop that 
are established other than pursuant to section 508(g)(4)(B) of FCIA, 
the average of the production history for the eligible participant 
without regard to any yields established under that section;
    (2) In the case of an eligible participant on a farm that has less 
than 4 years of actual production history for an insurable crop, of 
which one or more were established pursuant to section 508(g)(4)(B) of 
FCIA, the average of the production history for the eligible 
participant as calculated without including the lowest of the yields 
established pursuant to section 508(g)(4)(B) of FCIA; or
    (3) In all other cases, the actual production history yield of the 
eligible participant on a farm.
    Adjusted NAP yield means a yield that will not be less than the 
participant's actual production history yield for NAP for a year and:
    (1) In the case of an eligible participant on a farm that has at 
least 4 years of actual production history under NAP that are not 
replacement yields, the average of the production history without 
regard to any replacement yields;

[[Page 68491]]

    (2) In the case of an eligible participant on a farm that has less 
than 4 years of actual production history under NAP that are not 
replacement yields, the average of the production history without 
including the lowest of replacement yields; or
    (3) In all other cases, the actual production history yield of the 
eligible participant on the farm under NAP.
    Administrative fee means a fixed fee payable by a participant for 
NAP or crop insurance coverage, including buy-in fees, based on the 
number of covered crops under NAP or insurance under FCIA.
    Appraised production means production determined by FSA, or an 
insurance provider approved by FCIC, that was unharvested, but which 
was determined to reflect the crop's yield potential at the time of 
appraisal. An appraisal may be provided in terms of a potential value 
of the crop.
    Aquaculture means the reproduction and rearing of aquatic species 
as specified in part 1437 of this title in controlled or selected 
environments.
    Brownout means a disruption of electrical or other similar power 
source for any reason. A brownout, although it may indirectly have an 
adverse effect on crops, is not a disaster for the purposes of this 
subpart and losses caused by a brownout will not be considered a 
qualifying loss.
    Catastrophic risk protection (CAT) means the minimum level of 
coverage offered by the Risk Management Agency (RMA) for crop 
insurance. CAT is further specified in parts 402 and 1437 of this 
title.
    Counter-cyclical program payment yield means the weighted average 
payment yield established under part 1412, subpart C of this title.
    County expected yield means an estimated yield, expressed in a 
specific unit of measure equal to the average of the most recent five 
years of official county yields established by FSA, excluding the years 
with the highest and lowest yields, respectively.
    Crop insurance indemnity means, for the purpose of this subpart, 
the net payment to a participant excluding the value of the premium for 
crop losses covered under crop insurance administered in accordance 
with FCIA by RMA.
    Crop of economic significance means any crop, as defined in this 
subpart that contributed, or, if the crop is not successfully produced, 
would have contributed or is expected to contribute, 5 percent or more 
of the total expected revenue from all of a participant's crops on a 
farm.
    Crop year means as determined by the Deputy Administrator for a 
commodity on a nationwide basis the calendar year in which the crop is 
normally harvested or, where more than one calendar year is involved, 
the calendar year in which the majority of the crop would have been 
harvested. For crops on which catastrophic risk protection, as defined 
in this section, is available, the crop year will be as defined as in 
such coverage. Crop year determinations by the Deputy Administrator 
will be final in all cases and, because these are matters of general 
applicability, will not considered by the Farm Service Agency to be 
subject to administrative appeal.
    Determined acreage or determined production means the amount of 
acres or production for a farm established by a representative of FSA 
by use of appropriate means such as official acreage, digitizing and 
planimetering areas on the photograph or other photographic image, or 
computations from scaled dimensions or ground measurements. In the case 
of production, any production established by a representative of FSA 
through audit, review, measurement, appraisal, or other acceptable 
means of determining production, as determined by FSA.
    Disaster means damaging weather, including drought, excessive 
moisture, hail, freeze, tornado, hurricane, typhoon, excessive wind, 
excessive heat, weather-related saltwater intrusion, weather-related 
irrigation water rationing, or any combination thereof and adverse 
natural occurrences such as earthquakes or volcanic eruptions. Disaster 
includes a related condition that occurs as a result of the damaging 
weather or adverse natural occurrence and exacerbates the condition of 
the crop, such as disease and insect infestation. It does not include 
brownouts or power failures.
    Disaster county means a county included in the geographic area 
covered by a qualifying natural disaster designation under section 
321(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 
1961(a)) and for SURE, the term ``disaster county'' also includes a 
county contiguous to a county declared a disaster by the Secretary; 
however, farms not in a disaster county may qualify under SURE where 
for the relevant period, as determined under this subpart, the actual 
production on a farm is less than 50 percent of the normal production 
on the farm.
    Double-cropping means, as determined by the Deputy Administrator on 
a regional basis, planting for harvest a crop of a different commodity 
on the same acres in cycle with another crop in a 12-month period in an 
area where such double-cropping is considered normal, or could be 
considered to be normal, for all growers and under normal growing 
conditions and normal agricultural practices for the region and being 
able to repeat the same cycle in the following 12-month period.
    Farm means, for the purposes of determining SURE eligibility, the 
entirety of all crop acreage in all counties that a producer planted or 
intended to be planted for harvest for normal commercial sale or on-
farm livestock feeding, including native and improved grassland 
intended for haying. In the case of aquaculture, except for species for 
which an Aquaculture Grant Program payment was received, the term 
``farm'' includes all acreage used for all aquatic species being 
produced in all counties that the producer intended to harvest for 
normal commercial sale. In the case of honey, the term ``farm'' means 
all bees and beehives in all counties that the participant intended to 
be harvested for a honey crop for normal commercial sale.
    FCIC means the Federal Crop Insurance Corporation, a wholly owned 
Government Corporation operated and managed by USDA RMA.
    FSA means the Farm Service Agency.
    Harvested means:
    (1) For insurable crops, harvested is as defined according to the 
applicable crop insurance policy administered in accordance with FCIA 
by RMA;
    (2) For NAP-covered single harvest crops, a mature crop that has 
been removed from the field, either by hand or mechanically;
    (3) For noninsurable crops with potential multiple harvests in one 
year or one crop harvested over multiple years, that the participant 
has, by hand or mechanically, removed at least one mature crop from the 
field during the crop year; or
    (4) For mechanically harvested noninsurable crops, that the mature 
crop has been removed from the field and placed in or on a truck or 
other conveyance, except hay is considered harvested when in the bale, 
whether removed from the field or not. Grazing of land will not be 
considered harvested for the purpose of determining an unharvested or 
prevented planting payment factor.
    Initial crop means a first crop planted for which assistance is 
provided under this subpart.
    Insurable crop means an agricultural commodity (excluding 
livestock) for which the participant on a farm is eligible to obtain a 
policy or plan of crop insurance administered in

[[Page 68492]]

accordance with FCIA by RMA. Such a crop for which the participant 
purchased insurance from RMA is referred to as an insured crop.
    Insurance is available means when crop information is contained in 
RMA's county actuarial documents for a particular crop and a policy or 
plan of insurance administered in accordance with FCIA by RMA. If the 
Adjusted Gross Revenue Plan of crop insurance was the only plan of 
insurance available for the crop in the county in the applicable crop 
year, insurance is considered not available for that crop. If an AGR 
plan or a pilot plan was the only plan available, producers are not 
required to purchase it to meet the risk management purchase 
requirement, but it will satisfy the risk management purchase 
requirement. In that case, the other ways to meet the requirement would 
be, if all the requirements of this subpart are met, a buy-in or NAP.
    Intended use means the original use for which a crop or a commodity 
is grown and produced.
    Marketing year means the 12 months immediately following the 
established final harvest date of the crop of a commodity, as 
determined by the Deputy Administrator, and not an individual 
participant's final harvest date. FSA will use the marketing year 
determined by NASS, when available.
    Maximum average loss level means the maximum level of crop loss 
that will be used in calculating SURE payments for a participant 
without reliable or verifiable production records as defined in this 
section. Loss levels are expressed in either a percent of loss or a 
yield per acre, and reflect the amount of production that a participant 
should have produced considering the eligible disaster conditions in 
the area or county, as determined by the FSA county committee in 
accordance with instructions issued by the Deputy Administrator.
    Multi-use crop means a crop intended for more than one use during 
the calendar year such as grass harvested for seed, hay, or grazing.
    Multiple planting means the planting for harvest of the same crop 
in more than one planting period in a crop year on the same or 
different acreage. This is also sometimes referred in this rule as 
multiple cropping.
    NAMP means the national average market price determined in 
accordance with Sec. Sec.  760.640 and 760.641.
    NASS is the USDA National Agricultural Statistics Service.
    Noninsurable crop means a commercially produced crop for which the 
eligible participants on a farm may obtain coverage under NAP.
    Noninsured Crop Disaster Assistance Program or NAP means the FSA 
program carried out under 7 U.S.C. 7333, as specified in part 1437 of 
this title.
    Normal production on the farm means, for purposes of the revenue 
calculations of this subpart, the sum of the expected revenue for all 
crops on the farm. It is stated in terms of revenue, because different 
crops may have different units of measure.
    Planted acreage means land in which seed, plants, or trees have 
been placed, appropriate for the crop and planting method, at a correct 
depth, into a seed bed that has been properly prepared for the planting 
method and production practice normal to the area, as determined by the 
FSA county committee.
    Prevented planting means the inability to plant an eligible crop 
with proper equipment during the planting period as a result of a 
disaster, as determined by FSA. All prevented planted cropland must 
meet conditions provided in Sec.  718.103 of this chapter. 
Additionally, all insured crops must satisfy the provisions of 
prevented planting provided in Sec.  457.8 of this title.
    Price election means, for an insured crop, the crop insurance price 
elected by the participant multiplied by the percentage of price 
elected by the participant.
    Production means quantity of a crop or commodity produced on the 
farm expressed in a specific unit of measure including, but not limited 
to, bushels or pounds and used to determine the normal production on a 
farm. Normal production for the whole farm is stated in terms of 
revenue, because different crops may have different units of measure.
    Qualifying loss means a 10 percent loss of at least one crop of 
economic significance due to disaster and on a farm that is either:
    (1) Located in a disaster county (a county for which a Secretarial 
disaster designation has been issued or in a county contiguous to a 
county that has received a Secretarial disaster designation), or
    (2) If not located in any disaster county or county contiguous to 
such a county, but has an overall loss greater than or equal to 50 
percent of normal production on the farm (expected revenue for all 
crops on the farm) due to disaster.
    Qualifying natural disaster designation means a natural disaster 
designated by the Secretary for production losses under section 321(a) 
of the Consolidated Farm and Rural Development Act (7 U.S.C. 1961(a)).
    Related condition means, with respect to a disaster, a condition 
that causes deterioration of a crop such as insect infestation, plant 
disease, or aflatoxin that is accelerated or exacerbated as a result of 
damaging weather, as determined by the Deputy Administrator.
    Reliable production records means evidence provided by the 
participant to the FSA county office that FSA determines is adequate to 
substantiate the amount of production reported when verifiable records 
are not available, including copies of receipts, ledgers of income, 
income statements, deposit slips, register tapes, invoices for custom 
harvesting, records to verify production costs, contemporaneous 
measurements, truck scale tickets, and contemporaneous diaries. When 
the term ``acceptable production records'' is used in this rule, it may 
be either reliable or verifiable production records, as defined in this 
section.
    Reported acreage or production means information obtained from the 
participant or the participant's agent, on a form prescribed by FSA or 
through insurance records.
    RMA means the Risk Management Agency.
    Salvage value means the dollar amount or equivalent for the 
quantity of the commodity that cannot be marketed or sold in any 
recognized market for the crop.
    Secretary means the Secretary of Agriculture.
    State means a State; the District of Columbia, the Commonwealth of 
Puerto Rico, and any other territory or possession of the United 
States.
    Subsequent crop means any crop planted after an initial crop, on 
the same land, during the same crop year.
    SURE means the Supplemental Revenue Assistance Payments Program.
    Unit of measure means:
    (1) For all insurable crops, the FCIC established unit of measure;
    (2) For all noninsurable crops, if available, the established unit 
of measure used for the NAP price and yield;
    (3) For aquatic species, a standard unit of measure such as 
gallons, pounds, inches or pieces, established by the FSA State 
committee for all aquatic species or varieties;
    (4) For turfgrass sod, a square yard;
    (5) For maple sap, a gallon; and
    (6) For all other crops, the smallest unit of measure that lends 
itself to the greatest level of accuracy, as determined by the FSA 
State committee.
    USDA means United States Department of Agriculture.
    Value loss crop has the meaning specified in part 1437, subpart D 
of this

[[Page 68493]]

title. Unless otherwise announced by FSA, value loss crops for SURE 
include aquaculture, floriculture, ornamental nursery, Christmas trees, 
mushrooms, ginseng, and turfgrass sod.
    Verifiable production records mean evidence that is used to 
substantiate the amount of production reported and that can be verified 
by FSA through an independent source.
    Volunteer stand means plants that grow from seed residue or are 
indigenous or are not planted. Volunteer plants may sprout from seeds 
left behind during a harvest of a previous crop; be unintentionally 
introduced to land by wind, birds, or fish; or be inadvertently mixed 
into a crop's growing medium.


Sec.  760.610  Participant eligibility.

    (a) In addition to meeting the eligibility requirements of Sec.  
760.103, a participant must meet all of the following conditions:
    (1) All insurable crops on the participant's farm must be covered 
by crop insurance administered by RMA in accordance with FCIA, and all 
noninsured crops must be covered under NAP, as specified in Sec.  
760.104, unless the participant meets the requirements in either Sec.  
760.105 or Sec.  760.107. At the discretion of FSA, the equitable 
relief provisions in Sec.  760.106 may apply.
    (2) Crop losses must have occurred in crop year 2008 and subsequent 
crop years through September 30, 2011, as a result of disaster as 
defined in Sec.  760.602, and must have occurred in the particular crop 
year for which benefits are sought under this subpart.
    (3) A qualifying loss as defined in Sec.  760.602 must have 
occurred.
    (4) The participant must have been in compliance with the Highly 
Erodible Land Conservation and Wetland Conservation provisions of part 
12 of this title, for 2008 and subsequent crop years through September 
30, 2011, as applicable, and must not otherwise be barred from 
receiving benefits or payments under part 12 of this title or any other 
law.
    (5) The participant must not be ineligible or otherwise barred from 
the requisite risk management insurance programs or NAP because of past 
violations where those insurance programs or NAP would otherwise be 
available absent such violations.
    (6) The participant must have an entitlement to an ownership share 
of the crop and also assume production and market risks associated with 
the production of the crop. In the event the crop was planted but not 
produced, participants must have an ownership share of the crop that 
would have been produced.
    (i) Any verbal or written contract that precludes the grower from 
having an ownership share renders the grower ineligible for payments 
under this subpart.
    (ii) Growers growing eligible crops under contract are not eligible 
participants under this subpart unless the grower has an ownership 
share of the crop.
    (b) In the event that a producer is determined not to be an 
eligible producer of a crop in accordance with this section, such crop 
will be disregarded in determining the producer's production or 
eligibility for payments under this subpart. However, any insurance, 
farm program, or NAP payments received by the producer on such crop 
will count as farm revenue if that producer is an eligible participant 
as a producer of other crops.
    (c) Participants may not receive payments with respect to volunteer 
stands of crops. Volunteer stands will not be considered in either the 
calculation of revenue or of the SURE guarantee.
    (d) A deceased applicant or an applicant that is a dissolved entity 
that suffered losses prior to the death or the dissolution that met all 
eligibility criteria prior to death or dissolution may be eligible for 
payments for such losses if an authorized representative signs the 
application for payment. Proof of authority to sign for the deceased 
participant or dissolved entity must be provided. 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. Eligibility of such participant will be determined, as it is 
for other participants, based upon ownership share and risk in 
producing the crop.
    (e) Participants receiving payments under the Emergency Assistance 
for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP) as 
specified in subpart C of this part are not eligible to receive 
payments under SURE for the same loss.
    (f) Participants with a farming interest in multiple counties who 
apply for SURE payment based on a Secretarial disaster designation must 
have a 10 percent loss of a crop of economic significance located in at 
least one disaster county, as defined in this subpart, to be eligible 
for SURE.


Sec.  760.611  Qualifying losses, eligible causes and types of loss.

    (a) Eligible causes of loss are disasters which cause types of 
losses where the crop could not be planted or where crop production was 
adversely affected in quantity, quality, or both. A qualifying loss, as 
defined in this subpart, must be the result of a disaster.
    (b) A loss will not be considered a qualifying loss if any of the 
following apply:
    (1) The cause of the loss was not the result of disaster;
    (2) The cause of loss was due to poor management decisions or poor 
farming practices, as determined by the FSA county committee on a case-
by-case basis;
    (3) The cause of loss was due to failure of the participant to re-
seed or replant to the same crop in a county where it is customary to 
re-seed or replant after a loss before the final planting date;
    (4) The cause of loss was due to water contained or released by any 
governmental, public, or private dam or reservoir project if an 
easement exists on the acreage affected by the containment or release 
of the water;
    (5) The cause of loss was due to conditions or events occurring 
outside of the applicable crop year growing season; or
    (6) The cause of loss was due to a brownout.
    (c) The following types of loss, regardless of whether they were 
the result of a disaster, are not qualifying losses:
    (1) Losses to crops not intended for harvest in the applicable crop 
year;
    (2) Losses of by-products resulting from processing or harvesting a 
crop, such as, but not limited to, cotton seed, peanut shells, wheat or 
oat straw, or corn stalks or stovers;
    (3) Losses to home gardens; or to a crop subject to a de minimis 
election according to Sec.  760.613;
    (4) Losses of crops that were grazed or, if prevented from being 
planted, had the intended use of grazing; or
    (5) Losses of first year seeding for forage production, or immature 
fruit crops.
    (d) The following losses of ornamental nursery stock are not a 
qualifying loss:
    (1) Losses caused by a failure of power supply or brownout as 
defined in Sec.  760.602;
    (2) Losses caused by the inability to market nursery stock as a 
result of quarantine, boycott, or refusal of a buyer to accept 
production;
    (3) Losses caused by fires that are not the result of disaster;
    (4) Losses affecting crops where weeds and other forms of 
undergrowth

[[Page 68494]]

in the vicinity of nursery stock have not been controlled; or
    (5) Losses caused by the collapse or failure of buildings or 
structures.
    (e) The following losses for honey, where the honey production by 
colonies or bees was diminished, are not a qualifying loss:
    (1) Losses caused by the unavailability of equipment or the 
collapse or failure of equipment or apparatus used in the honey 
operation;
    (2) Losses caused by improper storage of honey;
    (3) Losses caused by bee feeding;
    (4) Losses caused by the application of chemicals;
    (5) Losses caused by theft or fire not caused by a natural 
condition including, but not limited to, arson or vandalism;
    (6) Losses caused by the movement of bees by the participant or any 
other legal entity or person;
    (7) Losses caused by disease or pest infestation of the colonies, 
unless approved by the Secretary;
    (8) Losses of income from pollinators; or
    (9) Losses of equipment or facilities.


Sec.  760.613  De minimis exception.

    (a) Participants seeking the de minimis exception to the risk 
management purchase requirements of this subpart, must certify:
    (1) That a specific crop on the farm is not a crop of economic 
significance on the farm; or
    (2) That the administrative fee required for the purchase of NAP 
coverage for a crop exceeds 10 percent of the value of that coverage.
    (b) To be eligible for a de minimis exception to the risk 
management purchase requirement in Sec.  760.104, the participant must 
elect such exception at the same time the participant files the 
application for payment and the certification of interests, as 
specified in Sec.  760.620, and specify the crop or crops for which the 
participant is requesting such exception.
    (c) FSA will not consider the value of any crop elected under 
paragraph (b) of this section in calculating both the SURE guarantee 
and the total farm revenue.
    (d) All provisions of this subpart apply in the event a participant 
does not obtain an exception according to this section.


Sec.  760.614  Lack of Access.

    In addition to other provisions for eligibility provided for in 
this part, the Deputy Administrator may provide assistance to 
participants who suffered 2008 production losses that meet the lack of 
access provisions in 19 U.S.C. 2497(g)(7)(F), where deemed appropriate, 
and consistent with the statutory provision. Such a determination to 
exercise that authority, and the terms on which to exercise that 
authority, will be considered to be a determination of general effect, 
not a ``relief'' determination, and will not be considered by the Farm 
Service Agency to be appealable administratively either within FSA or 
before the National Appeals Division.


Sec.  760.620  Time and method of application and certification of 
interests.

    (a) Each producer interested in obtaining a SURE payment must file 
an application for payment and provide an accurate certification of 
interests. The application will be on a form prescribed by FSA and will 
require information or certifications from the producer regarding any 
other assistance, payment, or grant benefit the producer has received 
for any of the producer's crops or interests on a farm as defined in 
this subpart; regardless of whether the crop or interest is covered in 
the farm's SURE guarantee according to Sec.  760.631. The producer's 
certification of interests will help FSA establish whether the producer 
is an eligible participant.
    (b) Eligible participants with a qualifying loss as defined in this 
subpart must submit an application for payment and certification of 
interests by March 1 of the calendar year that is two years after the 
relevant corresponding calendar year for the crop year which benefits 
are sought to be eligible for payment (for example, the final date to 
submit an application for a SURE payment for the 2009 crop year will be 
March 1, 2011). Producers who do not submit the application by that 
date will not be eligible for payment.
    (c) To the extent available and practicable, FSA will assist 
participants with information regarding their interests in a farm, as 
of the date of certification, based on information already available to 
FSA from various sources. However, the participant is solely 
responsible for providing an accurate certification from which FSA can 
determine the participant's farm interests for the purposes of this 
program. As determined appropriate by FSA, failure of a participant to 
provide an accurate certification of interests as part of the 
application may render the participant ineligible for any assistance 
under SURE.
    (d) To elect a de minimis exception to the risk management purchase 
requirement for a crop or crops, the participant must meet the 
requirements specified in Sec.  760.613. When electing a de minimis 
exception, the participant must specify the crops for which the 
exception is requested and provide the certification and supporting 
documentation for that exception at the time the application and 
certification of interests is filed with FSA.


Sec.  760.621  Requirement to report acreage and production.

    (a) As a condition of eligibility for payment under this subpart, 
participants must submit an accurate and timely report of all cropland, 
non-cropland, prevented planting, and subsequent crop acreage and 
production for the farm in all counties.
    (b) Acreage and production reports that have been submitted to FSA 
for NAP or to RMA for crop insurance purposes may satisfy the 
requirement of paragraph (a) of this section provided that the 
participant's certification of interests submitted as required by Sec.  
760.620 corresponds to the report requirements in paragraph (a) of this 
section, as determined by the FSA county committee.
    (c) Reports of production submitted for NAP or FCIA purposes must 
satisfy the requirements of NAP or FCIA, as applicable. In all other 
cases, in order for production reports or appraisals to be considered 
acceptable for SURE, production reports and appraisals must meet the 
requirements set forth in part 1437 of this title.
    (d) In any case where production reports or an appraisal is not 
acceptable, maximum loss provisions apply as specified in Sec.  
760.637.


Sec.  760.622  Incorrect or false producer production evidence.

    (a) If production evidence, including but not limited to acreage 
and production reports, provided by a participant is false or 
incorrect, as determined by the FSA county committee at any time after 
an application for payment is made, the FSA county committee will 
determine whether:
    (1) The participant submitting the production evidence acted in 
good faith or took action to defeat the purposes of the program, such 
that the information provided was intentionally false or incorrect.
    (2) The same false, incorrect, or unacceptable production evidence 
was submitted for payment(s) under crop insurance or NAP, and if so, 
for NAP covered crops, make any NAP program adjustments according to 
Sec.  1437.15 of this title.
    (b) If the FSA county committee determines that the production 
evidence submitted is false, incorrect, or unacceptable, and the 
participant who

[[Page 68495]]

submitted the evidence did not act in good faith or took action to 
defeat the purposes of the program, the provisions of Sec.  760.109, 
including a denial of future program benefits, will apply. The Deputy 
Administrator may take further action, including, but not limited to, 
making further payment reductions or requiring refunds or taking other 
legal action.
    (c) If the FSA county committee determines that the production 
evidence is false, incorrect, or unacceptable, but the participant who 
submitted the evidence acted in good faith, payment may be adjusted and 
a refund may be required.


Sec.  760.631  SURE guarantee calculation.

    (a) Except as otherwise provided in this part, the SURE guarantee 
for a farm is the sum obtained by adding the dollar amounts calculated 
in paragraphs (a)(1) through (a)(3) of this section.
    (1) For each insurable crop on the farm except for value loss 
crops, 115 percent of the product obtained by multiplying together:
    (i) The price election. If a price election was not made or a 
participant is eligible as specified in Sec. Sec.  760.105, 760.106, or 
760.107, then the percentage of price will be 55 percent of the NAP 
established price;
    (ii) The payment acres determined according to Sec.  760.632;
    (iii) The SURE yield as calculated according to Sec.  760.638; and
    (iv) The coverage level elected by the participant. If a coverage 
level was not elected or a participant is eligible as specified in 
Sec. Sec.  760.105, 760.106, or 760.107, a coverage level of 50 percent 
will be used in the calculation.
    (2) For each noninsurable crop on a farm except for value loss 
crops, 120 percent of the product obtained by multiplying:
    (i) 100 percent of the NAP established price for the crop;
    (ii) The payment acres determined according to Sec.  760.632;
    (iii) The SURE yield calculated according to Sec.  760.638; and
    (iv) 50 percent.
    (3) The guarantee for value loss crops as calculated according to 
Sec.  760.634.
    (4) In the case of an insurable crop for which crop insurance 
provides for an adjustment in the guarantee liability, or indemnity, 
such as in the case of prevented planting, that adjustment will be used 
in determining the guarantee for the insurable crop.
    (5) In the case of a noninsurable crop for which NAP provides for 
an adjustment in the level of assistance, such as in the case of 
unharvested crops, that adjustment will be used for determining the 
guarantee for the noninsurable crop.
    (b) Those participants who are eligible according to Sec. Sec.  
760.105, 760.106, or 760.107 who do not have crop insurance or NAP 
coverage will have their SURE guarantee calculated based on 
catastrophic risk protection or NAP coverage available for those crops.
    (c) FSA will not include in the SURE guarantee the value of any 
crop that has a de minimis exception, according to Sec.  760.613.
    (d) For crops where coverage may exist under both crop insurance 
and NAP, such as for pasture, rangeland, and forage, adjustments to the 
guarantee will be the product obtained by multiplying the county 
expected yield for that crop times:
    (1) 115 percent;
    (2) 100 percent of the NAP established price;
    (3) The payment acres determined according to Sec.  760.632;
    (4) The SURE yield calculated according to Sec.  760.638; and
    (5) The coverage level elected by the participant.
    (e) Participants who do not have a SURE yield as specified in Sec.  
760.638 will have a yield determined for them by the Deputy 
Administrator.
    (f) The SURE guarantee may not be greater than 90 percent of the 
sum of the expected revenue for each of the crops on a farm, as 
determined by the Deputy Administrator.


Sec.  760.632  Payment acres.

    (a) Payment acres as calculated in this section are used in 
determining both total farm revenue and the SURE guarantee for a farm. 
Payment acreage will be calculated using the lesser of the reported or 
determined acres shown to have been planted or prevented from being 
planted to a crop.
    (b) Initial crop acreage will be the payment acreage for SURE, 
unless the provisions for subsequent crops in this section are met. 
Subsequently planted or prevented planted acre acreage is considered 
acreage for SURE only if the provisions of this section are met. All 
plantings of an annual or biennial crop are considered the same as a 
planting of an initial crop in tropical regions as defined in part 
1437, subpart F, of this title.
    (c) In cases where there is double cropped acreage, each crop may 
be included in the acreage for SURE only if the specific crops are 
either insured crops eligible for double cropping according to RMA or 
approved by the FSA State committee as eligible double cropping 
practices in accordance with procedures approved by the Deputy 
Administrator.
    (d) Except for insured crops, participants with double cropped 
acreage not meeting the criteria in paragraph (c) of this section may 
have such acreage included in the acreage for SURE on more than one 
crop only if the participant submits verifiable records establishing a 
history of carrying out a successful double cropping practice on the 
specific crops for which payment is requested.
    (e) Participants having multiple plantings may have each planting 
included in the SURE guarantee only if the planting meets the 
requirements of part 1437 of this title and all other provisions of 
this subpart are satisfied.
    (f) Provisions of part 718 of this title specifying what is 
considered prevented planting and how it must be documented and 
reported will apply to this payment acreage for SURE.
    (g) Subject to the provisions of this subpart, the FSA county 
committee will:
    (1) Use the most accurate data available when determining planted 
and prevented planted acres; and
    (2) Disregard acreage of a crop produced on land that is not 
eligible for crop insurance or NAP.
    (h) For any crop acreage for which crop insurance or NAP coverage 
is canceled, those acres will no longer be considered the initial crop 
and will, therefore, no longer be eligible for SURE.
    (i) Notwithstanding any other provisions of these or other 
applicable regulations that relate to tolerance in part 718 of this 
title, if a farm has a crop that has both FSA and RMA acreage for 
insured crops, payment acres for the SURE guarantee calculation will be 
based on acres for which an indemnity was received if RMA acres do not 
differ from FSA acres by more than the larger of 5 percent or 10 acres 
not to exceed 50 acres. If the difference between FSA and RMA acres is 
more than the larger of 5 percent or 10 acres not to exceed 50 acres, 
then the payment acres for the SURE guarantee will be calculated using 
RMA acres. In that case, the participant will be notified of the 
discrepancy and that refunds of unearned payments may be required after 
FSA and RMA reconcile acreage data.


Sec.  760.633  2008 SURE guarantee calculation.

    (a) For a participant who is eligible due to the 2008 buy-in waiver 
for risk management purchase under the provisions of Sec.  760.105(c), 
the SURE guarantee for their farm for the 2008 crop will be calculated 
according to Sec.  760.631, or according to Sec.  760.634 for value 
loss crops, with the exception that the:

[[Page 68496]]

    (1) Price election in Sec.  760.631(a)(1)(i) is 100 percent of the 
NAP established price for the crop;
    (2) Coverage level in Sec.  760.631(a)(1)(iv) is 70 percent; and
    (3) The percent specified in Sec.  760.631(a)(2)(iv) is 70 percent 
instead of 50 percent; and
    (4) Coverage level used in Sec.  760.634(a)(1)(ii) is 70 percent; 
and
    (5) The percent specified in Sec.  760.634(a)(2)(ii) is 70 percent 
instead of 50 percent.
    (b) For those 2008 crops that meet the requirements of Sec. Sec.  
760.104, 760.105(a), 760.106, or 760.107, the SURE guarantee will be 
the higher of:
    (1) The guarantee calculated according to Sec.  760.631, or 
according to Sec.  760.634 for value loss crops, with the exception 
that the percent specified in Sec. Sec.  760.631(a)(1) and 
760.634(a)(1) will be 120 percent instead of 115 percent;
    (2) The guarantee calculated according to Sec.  760.631, or 
according to Sec.  760.634 for value loss crops, will be used with the 
exception that the:
    (i) Price election in Sec.  760.631(a)(1)(i) is 100 percent of the 
NAP established price for the crop; and
    (ii) Coverage level in Sec. Sec.  760.631(a)(1)(iv) and 
760.634(a)(1)(ii) will be 70 percent; and
    (iii) The percent specified in Sec. Sec.  760.631(a)(2)(iv) and 
760.634(a)(2)(ii) will be 70 percent instead of 50 percent.


Sec.  760.634  SURE guarantee for value loss crops.

    (a) The SURE guarantee for value loss crops will be the sum of the 
amounts calculated in paragraphs (a)(1) and (a)(2) of this section, 
except as otherwise specified.
    (1) For each insurable crop on the farm, 115 percent of the product 
obtained by multiplying:
    (i) The value of inventory immediately prior to disaster, and
    (ii) The coverage level elected by the participant. If a coverage 
level was not elected or a participant is eligible as specified in 
Sec. Sec.  760.106 or 760.107, a coverage level of 27.5 percent will be 
used in the calculation.
    (2) For each noninsurable crop on the farm, 120 percent of the 
product obtained by multiplying:
    (i) The value of inventory immediately prior to a disaster, and
    (ii) 50 percent.
    (b) Aquaculture participants who received assistance under the 
Aquaculture Grant Program (Pub. L. 111-5) will not be eligible for SURE 
assistance on those species for which a grant benefit was received 
under the Aquaculture Grant Program for feed losses associated with 
that species.
    (c) In the case of an insurable value loss crop for which crop 
insurance provides for an adjustment in the guarantee, liability, or 
indemnity, such as in the case of inventory exceeding peak inventory 
value, the adjustment will be used in determining the SURE guarantee 
for the insurable crop.
    (d) In the case of a noninsurable value loss crop for which NAP 
provides for an adjustment in the level of assistance, such as in the 
case of unharvested field grown inventory, the adjustment will be used 
in determining the SURE guarantee for the noninsurable crop.


Sec.  760.635  Total farm revenue.

    (a) For the purpose of SURE payment calculation, total farm revenue 
will equal the sum obtained by adding the amounts calculated in 
paragraphs (a)(1) through (a)(12) of this section.
    (1) The estimated actual value for each crop produced on a farm, 
except for value loss crops, which equals the product obtained by 
multiplying:
    (i) The actual production of the payment acres for each crop on a 
farm for purposes of determining losses under FCIA or NAP; and
    (ii) NAMP, as calculated for the marketing year as specified in 
Sec.  760.640 and as adjusted if required as specified in Sec.  
760.641.
    (2) The estimated actual value for each value loss crop produced on 
a farm that equals the value of inventory immediately after disaster.
    (3) 15 percent of the amount of any direct payments made to the 
participant under part 1412 of this title.
    (4) The total amount of any counter-cyclical and average crop 
revenue election payments made to the participant under part 1412 of 
this title.
    (5) The total amount of any loan deficiency payments, marketing 
loan gains, and marketing certificate gains made to the participant 
under parts 1421 and 1434 of this title.
    (6) The amount of payments for prevented planting.
    (7) The amount of crop insurance indemnities.
    (8) The amount of NAP payments received.
    (9) The value of any guaranteed payments made to a participant in 
lieu of production pursuant to an agreement or contract, if the crop is 
included in the SURE guarantee.
    (10) Salvage value for any crops salvaged.
    (11) The value of any other disaster assistance payments provided 
by the Federal Government for the same loss for which the eligible 
participant applied for SURE.
    (12) For crops for which the eligible participant received a waiver 
under the provisions of Sec.  760.105(c) or obtained relief according 
to Sec.  760.106, the value determined by FSA based on what the 
participant would have received, irrespective of any other provision, 
if NAP or crop insurance coverage had been obtained.
    (b) Sale of plant parts or by-products, such as straw, will not be 
counted as farm revenue.
    (c) For value loss crops:
    (1) Other inventory on hand or marketed at some time other than 
immediately prior to and immediately after the disaster event are 
irrelevant for revenue purposes and will not be counted as revenue for 
SURE.
    (2) Revenue will not be adjusted for market loss.
    (3) Quality losses will not be considered in determining revenue.
    (4) In no case will market price declines in value loss crops, due 
to any cause, be considered in the calculation of payments for those 
crops.


Sec.  760.636  Expected revenue.

    The expected revenue for each crop on a farm is:
    (a) For each insurable crop, except value loss crops, the product 
obtained by multiplying:
    (1) The SURE yield as specified in Sec.  760.638;
    (2) The payment acres as specified in Sec.  760.632; and
    (3) 100 percent of the price for the crop used to calculate a crop 
insurance indemnity for an applicable policy of insurance if a crop 
insurance indemnity is triggered. If a price is not available, then the 
price is 100 percent of the NAP established price for the crop, and
    (b) For each noninsurable crop, except value loss crops, the 
product obtained by multiplying
    (1) The SURE yield as specified in Sec.  760.638;
    (2) The payment acres as specified in Sec.  760.632; and
    (3) 100 percent of the NAP price.
    (c) For each value loss crop, the value of inventory immediately 
prior to the disaster.


Sec.  760.637  Determination of production.

    (a) Except for value loss crops, production for the purposes of 
this part includes all harvested, appraised, and assigned production 
for the payment acres determined according to Sec.  760.632.
    (b) The FSA county committee will use the best available data to 
determine production, including RMA and NAP loss records and yields for 
insured and noninsured crops.
    (c) The production of any eligible crop harvested more than once in 
a crop

[[Page 68497]]

year will include the total harvested production from all harvests.
    (d) Crop production losses occurring in tropical regions, as 
defined in part 1437, subpart F of this chapter, will be based on a 
crop year beginning on January 1 and ending on December 31 of the same 
calendar year. All crop harvests in tropical regions that take place 
between those dates will be considered a single crop.
    (e) Any record of an appraisal of crop production conducted by RMA 
or FSA through a certified loss adjustor will be used if available. 
Unharvested appraised production will be included in the calculation of 
revenue under SURE. If the unharvested appraised crop is subsequently 
harvested for the original intended use, the larger of the actual or 
appraised production will be used to determine payment.
    (1) If no appraisal is available, the participant is required to 
submit verifiable or reliable production evidence.
    (2) If the participant does not have verifiable or reliable 
production evidence, the FSA county committee will use the higher of 
the participant's crop certification or the maximum average loss level 
to determine the participant's crop production losses.
    (f) Production will be adjusted based on a whole grain equivalent, 
as established by FSA, for all crops with an intended use of grain, but 
harvested as silage, cobbage, or hay, cracked, rolled, or crimped.
    (g) For crops sold in a market that is not a recognized market for 
that crop and has no established county expected yield and NAMP, the 
quantity of such crops will not be considered production; rather, 100 
percent of the salvage value will be included in the revenue 
calculation.
    (h) Production from different counties that is commingled on the 
farm before it was a matter of record and cannot be separated by using 
records or other means acceptable to FSA will have the NAMP prorated to 
each respective county by FSA. Commingled production may be attributed 
to the applicable county, if the participant made the location of 
production of a crop a matter of record before commingling, if the 
participant does either of the following:
    (1) Provides copies of verifiable documents showing that production 
of the crop was purchased, acquired, or otherwise obtained from the 
farm in that county; or
    (2) Had the farm's production in that county measured in a manner 
acceptable to the FSA county committee.
    (i) The FSA county committee will assign production for the purpose 
of NAMP for the farm if the FSA county committee determines that the 
participant failed to provide verifiable or reliable production 
records.
    (j) If RMA loss records are not available, or if the FSA county 
committee determines that the RMA loss records as reported by the 
insured participant appear to be questionable or incomplete, or if the 
FSA county committee makes inquiry, then participants are responsible 
for:
    (1) Retaining and providing, when required, the best available 
verifiable and reliable production records available for the crops;
    (2) Summarizing all the production evidence;
    (3) Accounting for the total amount of production for the crop on a 
farm, whether or not records reflect this production;
    (4) Providing the information in a manner that can be easily 
understood by the FSA county committee; and
    (5) Providing supporting documentation if the FSA county committee 
has reason to question the disaster event or that all production has 
been taken into account.
    (k) The participant must supply verifiable or reliable production 
records to substantiate production to the FSA county committee. If the 
eligible crop was sold or otherwise disposed of through commercial 
channels, acceptable production records include: Commercial receipts; 
settlement sheets; warehouse ledger sheets or load summaries; or 
appraisal information from a loss adjuster acceptable to FSA. If the 
eligible crop was farm-stored, sold, fed to livestock, or disposed of 
by means other than commercial channels, acceptable production records 
for these purposes include: Truck scale tickets; appraisal information 
from a loss adjuster acceptable to FSA; contemporaneous reliable 
diaries; or other documentary evidence, such as contemporaneous 
reliable measurements. Determinations of reliability with respect to 
this paragraph will take into account, as appropriate, the ability of 
the agency to verify the evidence as well as the similarity of the 
evidence to reports or data received by FSA for the crop or similar 
crops. Other factors deemed relevant may also be taken into account.
    (l) If no verifiable or reliable production records are available, 
the FSA county committee will use the higher of the participant's 
certification or the maximum average loss level to determine 
production.
    (m) Participants must provide all records for any production of a 
crop that is grown with an arrangement, agreement, or contract for 
guaranteed payment.
    (n) FSA may verify the production evidence submitted with records 
on file at the warehouse, gin, or other entity that received or may 
have received the reported production.


Sec.  760.638  Determination of SURE yield.

    (a) Except for value loss crops as specified in Sec.  760.634, a 
SURE yield will be determined for each crop, type, and intended use on 
a farm, using the higher of the participant's weighted:
    (1) Adjusted actual production history yield as determined in 
paragraph (b) of this section; or
    (2) Counter-cyclical yield as determined in paragraph (c) of this 
section.
    (b) The adjusted actual production history yield, as defined in 
Sec.  760.602, will be weighted by the applicable crop year total 
planted and prevented planted acres, by crop, type, and intended use 
for each county. RMA data will be used for calculating the SURE yield 
for insured crops.
    (c) The counter-cyclical yield for a crop on a farm will be 
weighted based on total planted and prevented planted acres in the 
county for the current crop year.
    (d) Participants who do not purchase crop insurance or NAP 
coverage, but who are otherwise eligible for payment, will have a SURE 
yield determined by the FSA county committee as follows:
    (1) A weighted yield, based on planted and prevented planted acres, 
the location county, crop type, and intended use, will be determined at 
65 percent of the county expected yield for each crop.
    (2) The SURE yield will be the higher of the yield calculated using 
the method in paragraph (d)(1) of this section or the weighted counter-
cyclical yield as determined in paragraph (c) of this section.
    (e) For those participants with crop insurance but without an 
adjusted actual production history yield, a SURE yield will be 
determined by the applicable FSA county committee. This paragraph will 
apply in the case where the insurance policy does not require an actual 
production history yield, or where a participant has no production 
history.


Sec.  760.640  National average market price.

    (a) The Deputy Administrator will establish the National Average 
Market Price (NAMP) using the best sources available, as determined by 
the Deputy

[[Page 68498]]

Administrator, which may include, but are not limited to, data from 
NASS, Cooperative Extension Service, Agricultural Marketing Service, 
crop insurance, and NAP.
    (b) NAMP may be adjusted by the FSA State committee, in accordance 
with instructions issued by the Deputy Administrator and as specified 
in Sec.  760.641, to recognize average quality loss factors that are 
reflected in the market by county or part of a county.
    (c) With respect to a crop for which an eligible participant on a 
farm receives assistance under NAP, the NAMP will not exceed the price 
of the crop established under NAP.
    (d) To the extent practicable, the NAMP will be established on a 
harvested basis without the inclusion of transportation, storage, 
processing, marketing, or other post-harvest expenses, as determined by 
FSA.
    (e) NAMP may be adjusted by the FSA State committee, as authorized 
by The Deputy Administrator, to reflect regional variations in price 
consistent with those prices established under the FCIA or NAP.


Sec.  760.641  Adjustments made to NAMP to reflect loss of quality.

    (a) The Deputy Administrator will authorize FSA county committees, 
with FSA State committee concurrence, to adjust NAMP for a county or 
part of a county:
    (1) To reflect the average quality discounts applied to the local 
or regional market price of a crop due to a reduction in the intrinsic 
characteristics of the production resulting from adverse weather, as 
determined annually by the State office of the FSA; or
    (2) To account for a crop for which the value is reduced due to 
excess moisture resulting from a disaster related condition.
    (3) For adjustments specified in paragraphs (a)(1) and (a)(2) of 
this section, an adjustment factor that represents the regional or 
local price received for the crop in the county will be calculated by 
the FSA State committee. The adjustment factor will be based on the 
average actual market price compared to NAMP.
    (b) For adjustments made under paragraph (a) of this section, 
participants must provide verifiable evidence of actual or appraised 
production, clearly indicating an average loss of value caused by poor 
quality or excessive moisture that meets or exceeds the quality 
adjustment for the county or part of a county established in paragraph 
(a)(3) of this section to be eligible to receive the quality-adjusted 
NAMP as part of their SURE payment calculation. In order to be 
considered at all for the purpose of quality adjustments, the 
verifiable evidence of production must itself detail the extent of the 
quality loss for a specific quantity. With regard to test evidence, in 
addition to meeting all the requirements of this section, tests must 
have been completed by January 1 of the year following harvest.


Sec.  760.650  Calculating SURE.

    (a) Subject to the provision of this subpart, SURE payments for 
crop losses in crop year 2008 and subsequent crop years will be 
calculated as the amount equal to 60 percent of the difference between:
    (1) The SURE guarantee, as specified in Sec.  760.631, 760.633 or 
760.634 of this subpart, and
    (2) The total farm revenue, as specified in Sec.  760.635.
    (b) In addition to the other provisions of this subpart and subpart 
B of this part, SURE payments may be adjusted downward as necessary to 
insure compliance with the payment limitations in subpart B and to 
insure that payments do not exceed the maximum amount specified in 
Sec.  760.108(a)(1) or (b)(1) or otherwise exceed the perceived intent 
of 19 U.S.C. 2497(j). Such adjustments can include, but are not limited 
to, adjustments to insure that there is no duplication of benefits as 
specified in Sec.  760.108(c).

    Signed in Washington, DC, December 18, 2009.
Jonathan W. Coppess,
Administrator, Farm Service Agency.
[FR Doc. E9-30632 Filed 12-22-09; 4:15 pm]
BILLING CODE 3410-05-P