[Federal Register Volume 75, Number 116 (Thursday, June 17, 2010)]
[Rules and Regulations]
[Pages 34336-34343]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-14427]


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DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 755

RIN 0560-AI08


Reimbursement Transportation Cost Payment Program for 
Geographically Disadvantaged Farmers and Ranchers

AGENCY: Farm Service Agency, USDA.

ACTION: Final rule.

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SUMMARY: This rule specifies regulations to implement the new 
Reimbursement Transportation Cost Payment (RTCP) Program for 
geographically disadvantaged farmers and ranchers authorized by the 
Food, Conservation, and Energy Act of 2008 (the 2008 Farm Bill). The 
purpose of the RTCP Program is to assist farmers and ranchers in 
Hawaii, Alaska and insular areas who paid to transport either an 
agricultural commodity or an input used to produce an agricultural 
commodity. The payments provided by the RTCP Program are intended to 
offset a portion of the costs of transporting agricultural inputs and 
products over long distances. This rule specifies eligibility 
requirements, payment application procedures, and the method for 
calculating individual payments.

DATES: Effective Date: June 16, 2010.

FOR FURTHER INFORMATION CONTACT: Solomon Whitfield, Director, Price 
Support Division, Farm Service Agency (FSA), U.S. Department of 
Agriculture (USDA), Mail Stop 0512, 1400 Independence Avenue, SW., 
Washington, DC 20250-0512; telephone (202) 720-7901; fax (202) 690-
3307; e-mail, [email protected]. Persons with disabilities 
who require alternative means for communications (Braille, large print, 
audio tape, etc.) should contact the USDA Target Center at (202) 720-
2600 (voice and TDD).

[[Page 34337]]


SUPPLEMENTARY INFORMATION:

Background

    U.S. farmers and ranchers outside the continental United States 
(the 48 contiguous United States) operate at a competitive disadvantage 
relative to farmers and ranchers in the continental United States. This 
disadvantage is due to the high cost of transporting agricultural 
commodities from those areas to markets in the continental United 
States and in other countries, and the high cost of transporting 
agricultural inputs to those areas. Rising fuel costs have made this 
competitive disadvantage worse. Section 1621 of the 2008 Farm Bill 
(Pub. L. 110-246) authorizes the RTCP Program, subject to 
appropriations, to address this issue by providing payments to 
``geographically disadvantaged farmers or ranchers'' to compensate them 
for a portion of the costs of transporting agricultural inputs and 
commodities. The Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies Appropriations Act, 2010 (Pub. L. 
111-80, the 2010 Agriculture Appropriations Bill) provides $2.6 million 
for this program in Fiscal Year (FY) 2010 and this was the first time 
that monies were made available for RTCP.
    The 2008 Farm Bill specifies the general requirements for 
eligibility for the RTCP Program, and specifies that the term 
``geographically disadvantaged farmer or rancher'' will have the 
meaning given the term in section 10906(a) of the Farm Security and 
Rural Investment Act of 2002 (7 U.S.C. 2204 note). The Farm Security 
and Rural Investment Act of 2002, Public Law 107-171, is commonly known 
as the 2002 Farm Bill. Section 10906(a) of the 2002 Farm Bill provides 
that the term ``geographically disadvantaged farmer or rancher'' means 
a farmer or rancher in--(1) an insular area (as defined in section 1404 
of the National Agricultural Research, Extension, and Teaching Policy 
Act of 1977 (7 U.S.C. 3103) (as amended by section 7502(a)); or (2) a 
State other than 1 of the 48 contiguous States. Section 7502(a) of the 
2002 Farm Bill provides that that the term ``insular area'' means--(A) 
the Commonwealth of Puerto Rico; (B) Guam; (C) American Samoa; (D) the 
Commonwealth of the Northern Mariana Islands; (E) the Federated States 
of Micronesia; (F) the Republic of the Marshall Islands; (G) the 
Republic of Palau; and (H) the Virgin Islands of the United States. 
Thus, the 2002 Farm Bill definition of ``insular area'' includes 
Micronesia, Palau and the Marshall Islands despite their independent, 
though federated, status with respect to the United States. That 
independent status long preceded the 2002 legislation. By the terms of 
the 2008 Farm Bill, adopting the 2002 Farm Bill, those areas and the 
others mentioned in Section 7502 of the 2002 Farm Bill as insular 
areas, along with Hawaii and Alaska, are the areas that are covered by 
this program. That is, farmers and ranchers in those areas and States 
are the beneficiaries of this program as ``geographically disadvantaged 
farmers or ranchers.'' The regulations adopted in this rule reflect 
that geographical scope and provide other details of the program, 
including the general rate structure for payments, and the types of 
costs are eligible for payment. This rule details the application 
process, the rate calculation method, and acceptable documentation of 
the producer's actual cost that FSA is implementing. In addition, this 
rule specifies an $8,000 cap on payments per producer per fiscal year 
that FSA is establishing to ensure a fair and reasonable distribution 
of funds in this program. This program is not expected, at least with 
respect to the current appropriation, to be sufficient to pay all 
eligible claims for the fiscal year. Otherwise (without the cap), all 
or most of the funds would go, in terms of substantial amounts, to 
large producers only. However, the rule does adopt provisions for 
exceeding the $8,000 cap if the total funds available would otherwise 
not be fully expended. The figure of $8,000 was chosen because it 
provides a substantial level of benefits to those who might otherwise 
have large claims.
    The RTCP Program builds on efforts that Congress and USDA have made 
in the past to address the issue of high transportation costs for 
geographically disadvantaged farmers and ranchers. As required by 
section 10906 of the 2002 Farm Bill, the USDA Agricultural Marketing 
Service (AMS) conducted a study that analyzed barriers in agricultural 
transportation in non-contiguous U.S. States and Territories. The 
report on the case study revealed that inadequate port infrastructure, 
limited access to freight service, and the low priority often given by 
transportation providers to handling agricultural commodities often 
create physical and economic barriers that make it difficult for 
farmers and ranchers in geographically disadvantaged areas to compete 
successfully with continental United States producers. In all of the 
non-contiguous United States and insular areas except for some parts of 
Alaska, local farmers and ranchers must rely on sea or air 
transportation to ship their cargo to the continental United States and 
other markets. Limited transportation choices and the cost of fuel to 
transport agricultural commodities and inputs negatively impacts 
agricultural sustainability and viability in geographically 
disadvantaged areas.

Eligibility Requirements

    To be eligible for an RTCP, a producer must be a geographically 
disadvantaged farmer or rancher and that means a farmer or rancher in 
the areas noted above.
    To be eligible for RTCP Program benefits, the geographically 
disadvantaged farmer or rancher must be a producer of an eligible 
agricultural commodity and submit an application during the applicable 
period announced by the Deputy Administrator. For FY 2010, that period 
will begin within 45 days after this rule is published and end on 
September 10, 2010. That date is designed to expedite the making of 
payments but may be extended to September 30 as the need may arise. 
Funds under the current appropriation will be made only for 
transportation expenses incurred during fiscal year 2010--that being 
the period of October 1, 2009 through September 30, 2010. Applications 
may be for all expenses incurred during the period or to be incurred in 
the period. In the instance where the application precedes the actual 
occurrence, the producer will be allowed 30 days after the expenses 
were incurred to verify that the expenses actually did occur. Producers 
may apply for an RTCP using FSA fixed, set, or actual rates for 
transportation costs, as described below. After the RTCP application is 
submitted, those producers who request RTCP by using FSA fixed or set 
rates must submit supporting documentation within 30 days after the end 
of the FY to provide eligibility for a payment based on actual cost. No 
claims will be paid for applications not filed within the FY and all 
verifications and documentation must be completed within 30 days after 
the end of the FY.
    To be eligible for reimbursement, the transportation costs must 
have been incurred in the FY for which the application period applies. 
Further, there has been no appropriated funding for the RTCP Program in 
2008 or 2009 and therefore costs in those years are not eligible for 
reimbursement; only costs incurred in FY 2010 are eligible for FY 2010 
payments under the current appropriation. However, the rule is designed 
to allow for the administration of future appropriations should there 
be any.

[[Page 34338]]

    Government entities (State and local governments and their 
political subdivisions and related agencies) are not eligible for the 
RTCP Program. These eligibility restrictions are consistent with other 
CCC and FSA programs authorized by the 2008 Farm Bill.
    Any person who is not a U.S. citizen or legal resident alien of the 
United States is ineligible to receive any type of loan or payment 
under Title I of the 2008 Farm Bill, with respect to any commodity 
produced on a farm that is owned or operated by such person, unless 
that person provides land, capital, and a substantial amount of active 
personal labor in the production of crops on such farm. RTCP is in 
Title I of the 2008 Farm Bill, so the eligibility restrictions on 
foreign persons apply. There is a certain anomaly here applying the 
foreign person rule in light of the independent status of Micronesia, 
the Marshall Islands, and Palau, but this result is mandated by the 
terms of the statute and in any event the foreign person definition 
allows for payments, as indicated, to a foreign person if the specified 
conditions noted above are met. For all areas, however, the rule takes 
care to require that the farmers or ranchers be persons producing 
product for the market in substantial quantities and that the claim for 
compensation can only be made for that part of the person's or entity's 
production that is commercial in nature.
    Only the producer incurring transportation costs may be eligible 
for RTCP. In no case will the same transportation cost provide payment 
eligibility for both the buyer and seller of an agricultural commodity 
or input. To avoid duplication of benefits, any input transportation 
costs paid to a producer under other Federal government programs, such 
as, but not limited to, cost share programs or grants, will not be 
eligible costs under the RTCP Program.
    The 2008 Farm Bill specifies that to be eligible for the RTCP 
Program, geographically disadvantaged farmers or ranchers must 
demonstrate that they transported commodities or inputs over a distance 
of more than 30 miles. As specified in this rule, producers in 
geographically disadvantaged areas will not have to demonstrate the 
precise distance that commodities or inputs were transported to be 
eligible for RTCP. It is reasonable to assume that even if an 
agricultural producer on a remote island sells to the local market, or 
buys inputs locally, the price will reflect transportation costs of 
more than 30 miles that occurred at some point during production. For 
example, a locally produced commodity will typically require inputs 
such as fertilizer or machinery that were transported more than 30 
miles. Therefore, any producer in these areas may be eligible for 
payment, and the payment rate will be based on FSA's estimation of the 
typical transportation costs for that type of commodity or input to or 
from that area. As described below, producers will be required to 
provide supporting documentation of actual costs to receive more than 
FSA's estimated payment rate.

Payment Amount Calculation

    The 2008 Farm Bill specifies that the transportation reimbursement 
payment rates for geographically disadvantaged farmers and ranchers be 
based on the cost of living allowances (COLAs) for Federal employees in 
those areas. Those allowances currently range from 14 percent to 25 
percent of base pay, and 5 U.S.C. 5941 specifies that they cannot 
exceed 25 percent. The COLAs reflect the difference in cost of living 
between those areas and the cost of living in Washington, DC, and are 
expressed as a rate by which the cost of living exceeds the cost of 
living in Washington.
    FSA payment rates for this program will be calculated as the 
estimated or actual transportation costs times the relevant COLA for 
that area. So, for example, if the qualifying expense was $3,000 and 
the applicable COLA is 25 percent, then the payable benefits under this 
program would be $750. The estimated transportation cost will be a 
fixed rate or set rate established by FSA for eligible commodities and 
inputs. These rates will be on a per unit (bushel, pound, etc.) basis. 
The fixed rate is an estimated transportation cost for that item 
established by FSA based on the best available data on typical shipping 
rates for that item associated with the applicable area. The FSA set 
rate is an estimated transportation cost for an item, such as bags of 
fertilizer or equipment parts, where the transportation cost is not 
available, typically because it is included in the price for that item. 
If the producer can document actual transportation costs, the payment 
rate will be the COLA percentage times the actual cost. If there is an 
FSA fixed or set rate, the documentation of actual costs may be used to 
justify a rate other than the FSA fixed or set rate. In other words, 
the initial payment calculation will be done one of three ways:
    1. If the commodity or input transported is on the FSA fixed rate 
list, the payment will be the COLA percentage times the FSA fixed 
transportation rate times the number of units.
    2. In no case may the producer be paid any amount greater than the 
amount actually paid by the producer, but the producer can be paid 
higher than the fixed or set amount if the actual amount paid is a 
reasonable amount and is established by proper documentation.
    3. If the commodity or input is not on the FSA fixed rate list, and 
the producer cannot document actual transportation costs, the FSA State 
office for that area will set a rate. The payment will be the COLA 
times the set rate times the number of units.
    A producer who paid a combined transportation and other handling 
services fee for an assortment of items can use the FSA fixed rate list 
to report transportation costs for each type of item. Sources that FSA 
will use to determine the fixed transportation rates may include, but 
are not limited to, fares and rates posted by the Public Utilities 
Commission, transportation rates posted by shipping companies, surveys 
of plant nurseries, surveys of farm suppliers, National Agricultural 
Statistics Service (NASS) data, surveys from producers, State and 
National studies that examine increased costs in each applicable area, 
and comparison of average fuel prices within a particular area.
    The FSA set rate method will benefit farmers and ranchers who do 
business with companies that do not break out specific transportation 
costs but rather include the transportation cost in the price charged 
for the service or product. For example, if a producer buys fertilizer 
in bags at a local store and has a receipt for that input, but the 
store does not provide information on what percentage of the cost was 
transportation, FSA will provide a set rate to that producer for that 
input.
    The actual costs method will benefit farmers and ranchers who can 
document actual costs. FSA will accept and pro-rate documented actual 
transportation costs that were for both eligible and ineligible 
commodities and inputs. For example, FSA will pro-rate a transportation 
cost for agricultural commodities, equipment parts, and general 
supplies, where the general supplies are not eligible.
    The fixed and set rates will be determined by the State office. The 
State offices for the eligible areas are Alaska, Hawaii, Florida, and 
Puerto Rico. Final approval of the fixed and set rates will be made by 
the Deputy Administrator to ensure rates are established in a fair and 
equitable manner. FSA will post the fixed and set rates at the State 
and county offices for the applicable areas.

[[Page 34339]]

    The payment amount for a producer is the sum of the initial 
calculated payment amounts (applicable transportation rate times units 
times the COLA) for each input or commodity. The payment amount for a 
producer can reflect a combination of fixed, set, and actual cost 
rates. A producer can provide supporting documentation for one 
commodity's actual cost of transportation and report a fixed or set 
rate for another commodity or input.
    The sum of the initial calculated payments for a producer will be 
the actual payment amount for that producer, subject to an $8,000 cap 
per producer per FY, if applications exceed available funding, less a 
reserve. The administration of this program is made discretionary by 
the terms of the statute (the 2008 Farm Bill) and the statute does not 
specify the manner in which limited funds should be distributed. The 
$8,000 ``cap'' adopted here is not statutory but is being implemented 
so that the payments are not skewed in favor of large producers to the 
effective exclusion of small producers in a manner that is inconsistent 
with the general nature of farm programs and in particular past farm 
programs, such as various dairy programs, operating under capped 
amounts. If applications exceed available funding, all payments will be 
recalculated using a factor set by FSA to ensure that the payments do 
not exceed the available funding, less the reserve. For example, if 
applications are received for twice the available funding, payments 
will be half the initially calculated amount. The individual payments 
can only be calculated after total payment amounts have been determined 
from all eligible program applicants. If funds are adequate for all 
payment amounts, all eligible producers will be paid at the full 
calculated payment amount.
    The 2010 Agriculture Appropriations Bill provides $2.6 million for 
payments to geographically disadvantaged farmers and ranchers. We 
anticipate that the applications received will exceed the available 
funding, and that therefore reimbursement rates will be recalculated 
downward. Until all the applications are received, we do not know the 
extent to which rates will be recalculated.

AGI Limits

    A farmer or rancher must meet the AGI limitations in 7 CFR part 
1400 to be eligible for RTCP Program benefits. Any geographically 
disadvantaged farmer or rancher who had annual average adjusted gross 
nonfarm income in excess of $500,000 for calendar years 2006 through 
2008 is not eligible for RTCP Program benefits in FY 2010. The 2008 
Farm Bill does not specifically require the application of the AGI 
limits to the RTCP Program.

Application Process

    Producers must apply for RTCP payments during the application 
period announced by the Deputy Administrator. The application period 
will be announced through an FSA notice, press releases, and on the FSA 
Web site. The application period for FY 2010 will begin within 45 days 
after this rule is published, and end on September 10, 2010.
    To ensure all producers are provided an opportunity to submit 
actual reimbursable costs and potentially qualify for a payment other 
than at a fixed or set rate, applicants will also have until 30 days 
after the end of the FY to provide supporting documentation of actual 
costs to the FSA County Office.
    During the application period, and the period for submitting 
supporting documentation, RTCP applicants may apply or submit their 
supporting documentation in person at FSA county offices during regular 
business hours. Applications and supporting documentation may also be 
submitted to FSA by mail or FAX. Program applications may be obtained 
in person, by mail, and facsimile from farmers' and ranchers' 
designated FSA county office or via the Internet at http://www.fsa.usda.gov/pricesupport.
    Any applications received after the application period closes will 
not be eligible for payment. A specific application period with a 
cutoff date is needed because FSA will need to know the total 
reimbursements requested from all producers to calculate the total 
payment amounts. A limited amount of funds will be held in reserve for 
appeals and corrections.
    The period for submitting supporting documentation for previously 
submitted applications is not an extension to the application period. 
If supporting documentation is submitted, but there was no application 
filed during the application period, any such documentation will not be 
considered and will not provide eligibility.
    Applications for FY 2010 are due September 10, 2010. Supporting 
documentation for FY 2010 is due October 30, 2010. FSA plans to 
calculate payment rates and disburse payments for FY 2010 by November 
30, 2010.

Miscellaneous Requirements

    Producers must have been in compliance with the regulations in 7 
CFR part 12, ``Highly Erodible Land and Wetland Conservation,'' during 
the year for which the person is requesting benefits. If it is 
determined after a payment is issued for the RTCP Program that a 
violation occurred, then repayment of the benefit plus interest will be 
required.
    Information provided on applications and supporting documentation 
will be subject to verification by FSA. False certifications by 
producers carry strict penalties and FSA will verify applications with 
random compliance spot-checks. Producers determined to have, knowingly 
or inadvertently, made any false certifications or adopted any 
misrepresentation, scheme, or device that defeats the program's purpose 
will be required to refund all payments issued under this program with 
interest, and may be subject to other civil, criminal, or 
administrative remedies.
    If a producer in the RTCP Program who has a disputed claim succeeds 
through the appeal processes in 7 CFR parts 11 or 780 in obtaining a 
determination that additional payments are due to that producer, the 
producer will be paid only to the extent that funding under the RTCP 
Program remains available.

Notice and Comment

    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) of the 2008 Farm Bill, which requires that 
these 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. Therefore, these 
regulations are issued as final.

Executive Order 12866

    The Office of Management and Budget (OMB) designated this final 
rule as not significant under Executive Order 12866 and, therefore, OMB 
not reviewed this rule.

Regulatory Flexibility Act

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

Environmental Review

    FSA has determined that the participation in this program is solely 
intended to offset a portion of the costs of transporting agricultural 
inputs and products over long distances and does

[[Page 34340]]

not constitute a major Federal action that would significantly affect 
the quality of the human environment. Therefore, in accordance 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) no environment assessment or environmental impact 
statement will be prepared.

Executive Order 12372

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

Executive Order 12988

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

Executive Order 13132

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

Executive Order 13175

    The policies contained in this rule do not have tribal implications 
that preempt tribal law.

Unfunded Mandates

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA, Pub. L. 
104-4) requires Federal agencies to assess the effects of their 
regulatory actions on State, local, or tribal governments or the 
private sector. Agencies generally must prepare a written statement, 
including a cost benefit analysis, for proposed and final rules with 
Federal mandates that may result in expenditures of $100 million or 
more in any 1 year for State, local, or tribal governments, in the 
aggregate, or to the private sector. UMRA generally requires agencies 
to consider alternatives and adopt the more cost effective or least 
burdensome alternative that achieves the objectives of the rule. This 
rule contains no Federal mandates as defined by Title II of UMRA for 
State, local, or tribal governments or for the private sector. In 
addition, FSA was not required to publish a notice of proposed 
rulemaking for this rule. Therefore, this rule is not subject to the 
requirements of sections 202 and 205 of UMRA.

Paperwork Reduction Act

    The regulations in this rule are exempt from requirements of the 
Paperwork Reduction Act (44 U.S.C. Chapter 35), as specified in section 
1601 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 755

    Agricultural commodities, Reporting and recordkeeping requirements, 
Rural areas, Transportation.

0
For the reasons discussed above, the USDA Farm Service Agency adds 7 
CFR part 755 to read as follows:

PART 755--REIMBURSEMENT TRANSPORTATION COST PAYMENT PROGRAM FOR 
GEOGRAPHICALLY DISADVANTAGED FARMERS AND RANCHERS

Sec.
755.1 Administration.
755.2 Definitions.
755.3 Time and method of application.
755.4 Eligibility.
755.5 Proof of eligible reimbursement costs incurred.
755.6 Availability of funds.
755.7 Transportation rates.
755.8 Calculation of individual payments.
755.9 Misrepresentation and scheme or device.
755.10 Death, incompetence, or disappearance.
755.11 Maintaining records.
755.12 Refunds; joint and several liability.
755.13 Miscellaneous provisions and appeals.

    Authority: 7 U.S.C. 8792.


Sec.  755.1  Administration.

    (a) This part establishes the terms and conditions under which the 
Reimbursement Transportation Cost Payment (RTCP) Program for 
geographically disadvantaged farmers and ranchers will be administered.
    (b) The RTCP Program will be administered under the general 
supervision of the FSA Administrator, or a designee, and will be 
carried out in the field by FSA State and county committees and FSA 
employees.
    (c) FSA State and county committees, and representatives and 
employees thereof, do not have the authority to modify or waive any of 
the provisions of the regulations of this part, except as provided in 
paragraph (e) of this section.
    (d) The FSA State committee will take any action required by the 
provisions of this part that has not been taken by the FSA county 
committee. The FSA State committee will also:
    (1) Correct or require an FSA county committee to correct any 
action taken by the county committee that is not in compliance with the 
provisions of this part.
    (2) Require an FSA county committee to not take an action or 
implement a decision that is not in compliance with the provisions of 
this part.
    (e) No provision or delegation of this part to an FSA State 
committee or a county committee will preclude the FSA Administrator, or 
a designee, from determining any question arising under the program or 
from reversing or modifying any determination made by a State committee 
or a county committee.
    (f) The Deputy Administrator for Farm Programs, FSA, may waive or 
modify program requirements of this part in cases where failure to meet 
requirements does not adversely affect the operation of the program and 
where the requirement is not statutorily mandated.


Sec.  755.2  Definitions.

    The following definitions apply to this part. The definitions in 
parts 718 and 1400 of this title also apply, except where they may 
conflict with the definitions in this section.
    Actual transportation rate means the transportation rate that 
reflects the actual transportation costs incurred and can be determined 
by supporting documentation.
    Agricultural commodity means any agricultural commodity (including 
horticulture, aquaculture, and floriculture), food, feed, fiber, 
livestock (including elk, reindeer, bison, horses, or deer), or 
insects, and any product thereof.
    Agricultural operation means a parcel or parcels of land; or body 
of water applicable to aquaculture, whether contiguous or 
noncontiguous, constituting a cohesive management

[[Page 34341]]

unit for agricultural purposes. An agricultural operation will be 
regarded as located in the county in which the principal dwelling is 
situated, or if there is no dwelling thereon, it will be regarded to be 
in the county in which the major portion of the land or applicable body 
of water is located.
    Application period means the period established by the Deputy 
Administrator for geographically disadvantaged farmers and ranchers to 
apply for program benefits.
    County office or FSA county office means the FSA offices 
responsible for administering FSA programs in a specific area, 
sometimes encompassing more than one county, in a State.
    Department or USDA means the U.S. Department of Agriculture.
    Eligible reimbursement amount means the reported costs incurred to 
transport an agricultural commodity or input used to produce an 
agricultural commodity in an insular area, Alaska, or Hawaii, over a 
distance of more than 30 miles. The amount is calculated by multiplying 
the number of units of the reported transportation amount times the 
applicable transportation fixed, set, or actual rate times the 
applicable FY allowance (COLA).
    Farm Service Agency or FSA means the Farm Service Agency of the 
USDA.
    Fiscal year or FY means the year beginning October 1 and ending the 
following September 30. The fiscal year will be designated for this 
part by year reference to the calendar year in which it ends. For 
example, FY 2010 is from October 1, 2009, through September 30, 2010 
(inclusive).
    Fixed transportation rate means the per unit transportation rate 
determined by FSA to reflect the transportation cost applicable to an 
agricultural commodity or input used to produce an agricultural 
commodity in a particular region.
    FY allowance (COLA) means the nonforeign area cost of living 
allowance or post differential, as applicable, for that FY set by 
Office of Personnel Management for Federal employees stationed in 
Alaska, Hawaii, and other insular areas, as authorized by 5 U.S.C. 5941 
and E.O. 10000 and specified in 5 CFR part 591, subpart B, appendices A 
and B.
    Geographically disadvantaged farmer or rancher means a farmer or 
rancher in an insular area, Alaska, or Hawaii.
    Input transportation costs means those transportation costs of 
inputs used to produce an agricultural commodity including, but not 
limited to, air freight, ocean freight, and land freight of chemicals, 
feed, fertilizer, fuel, seeds, plants, supplies, equipment parts, and 
other inputs as determined by FSA.
    Insular area means the Commonwealth of Puerto Rico; Guam; American 
Samoa; the Commonwealth of the Northern Mariana Islands; the Federated 
States of Micronesia; the Republic of the Marshall Islands; the 
Republic of Palau; and the Virgin Islands of the United States.
    Payment amount means the amount due a producer that is the sum of 
all eligible reimbursement amounts, as calculated by FSA subject to the 
availability of funds, and subject to an $8,000 cap per producer per 
FY.
    Producer means any geographically disadvantaged farmer or rancher 
who is an individual, group of individuals, partnership, corporation, 
estate, trust, association, cooperative, or other business enterprise 
or other legal entity, as defined in Sec.  1400.3 of this title, who 
is, or whose members are, a citizen of or legal resident alien in the 
United States, and who, as determined by the Secretary, shares in the 
risk of producing an agricultural commodity in substantial commercial 
quantities, and who is entitled to a share of the agricultural 
commodity from the agricultural operation.
    Reported transportation amount means the reported number of units 
(such as pounds, bushels, pieces, or parts) applicable to an 
agricultural commodity or input used to produce an agricultural 
commodity, which is used in calculating the eligible reimbursement 
amount.
    Set transportation rate means the transportation rate established 
by FSA for a commodity or input for which there is not a fixed 
transportation rate or supporting documentation of the actual 
transportation rate.
    United States means the 50 States of the United States of America, 
the District of Columbia, the Commonwealths of Puerto Rico and the 
Northern Mariana Islands, and any other territory or possession of the 
United States.
    Verifiable records means evidence that is used to substantiate the 
amount of eligible reimbursements by geographically disadvantaged 
farmers and ranchers in an agricultural operation that can be verified 
by FSA through an independent source.


Sec.  755.3  Time and method of application.

    (a) To be eligible for payment, producers must obtain and submit a 
completed application for payment and meet other eligibility 
requirements specified in this part. Producers may obtain an 
application in person, by mail, or by facsimile from any county FSA 
office. In addition, producers may download a copy of the application 
at http://www.sc.egov.usda.gov.
    (b) An application for payment must be submitted on a completed 
application form. Applications and any other supporting documentation 
must be submitted to the FSA county office serving the county where the 
agricultural operation is located, but, in any case, must be received 
by the FSA county office by the close of business on the last day of 
the application period established by the Deputy Administrator.
    (c) All producers who incurred transportation costs for eligible 
reimbursements and who share in the risk of an agricultural operation 
must certify to the information on the application before the 
application will be considered complete. FSA may require the producer 
to provide documentation to support all verifiable records.
    (d) Each producer requesting payment under this part must certify 
to the accuracy and truthfulness of the information provided in their 
application and any supporting documentation. All information provided 
is subject to verification by FSA. Refusal to allow FSA or any other 
agency of the Department of Agriculture to verify any information 
provided will result in a denial of eligibility. Furnishing the 
information is voluntary; however, without it program benefits will not 
be approved. Providing a false certification to the Federal Government 
may be punishable by imprisonment, fines and other penalties or 
sanctions.
    (e) To ensure all producers are provided an opportunity to submit 
actual costs for reimbursement at the actual cost rate, applicants will 
have 30 days after the end of the FY to provide supporting 
documentation of actual transportation costs to the FSA County Office. 
The actual costs documented in supporting documentation will override 
previously reported costs of eligible reimbursable costs at the fixed 
or set rate made during the application period.
    (f) If verifiable records are not provided to FSA, the producer 
will be ineligible for payment.
    (g) If supporting documentation is provided within 30 days after 
the end of the FY, but an application was not submitted to the 
applicable FSA County Office before the end of the application period, 
the producer is not eligible for payment.
    (h) Producers who submit applications after the application period 
are not entitled to any payment consideration or determination of 
eligibility. Regardless of the reason why an application is not 
submitted to or

[[Page 34342]]

received by FSA, any application received after the close of business 
on such date will not be eligible for benefits under this program.


Sec.  755.4  Eligibility.

    (a) To be eligible to receive payments under this part, a 
geographically disadvantaged farmer or rancher must:
    (1) Be a producer of an eligible agricultural commodity in 
substantial commercial quantities;
    (2) Incur transportation costs for the transportation of the 
agricultural commodity or input used to produce the agricultural 
commodity;
    (3) Submit an accurate and complete application for payment as 
specified in Sec.  755.3; and
    (4) Be in compliance with the wetland and highly erodible 
conservation requirements in part 12 of this title and meet the 
adjusted gross income and pay limit eligibility requirements in part 
1400 of this title, as applicable, except that the $8,000 cap provided 
for in this rule is a per producer cap, not a per person cap. For 
example, a partnership of four individuals would be considered one 
producer, not four persons, for the purposes of this cap and thus the 
partnership could only generate a single $8,000 payment under this 
program if the cap holds because of full subscription of the program.
    (b) Individual producers in an agricultural operation that is an 
entity are only eligible for a payment based on their share of the 
operation. A producer is not eligible for payment based on the share of 
production of any other producer.
    (c) Multiple producers, such as the buyer and seller of a commodity 
(for example, a producer of hay and a livestock operation that buys the 
hay), are not eligible for payments for the same eligible 
transportation cost. Unless the multiple producers agree otherwise, 
only the last buyer will be eligible for the payment.
    (d) A person or entity determined to be a ``foreign person'' under 
part 1400 of this title is not eligible to receive benefits under this 
part, unless that person provides land, capital, and a substantial 
amount of active personal labor in the production of crops on such 
farm.
    (e) State and local governments and their political subdivisions 
and related agencies are not eligible for RTCP payments.


Sec.  755.5  Proof of eligible reimbursement costs incurred.

    (a) To be eligible for reimbursement based on FSA fixed or set 
rates as specified in Sec.  755.7, the requirements specified in 
paragraphs (b) and (c) of this section must be met at the time of the 
application. To be eligible for reimbursement of actual costs, the 
requirements of paragraph (d) must also be met, within 30 days after 
the end of the applicable fiscal year.
    (b) Eligible verifiable records to support eligible reimbursement 
costs include, but are not limited to:
    (1) Invoices;
    (2) Account statements;
    (3) Contractual Agreements; or
    (4) Bill of Lading.
    (c) Verifiable records must show:
    (1) Name of producer(s);
    (2) Commodity and unit of measure;
    (3) Type of input(s) associated with transportation costs;
    (4) Date(s) of service;
    (5) Name of person or entity providing the service, as applicable, 
and;
    (6) Retail sales receipts with verifiable records handwritten as 
applicable.
    (d) To be eligible for reimbursement based on actual costs, the 
producer must provide supporting documentation that documents the 
specific costs incurred for transportation of each commodity or input. 
Such documentation must:
    (1) Show transportation costs for each specific commodity or input, 
and
    (2) Show the units of measure for each commodity or input, such 
that FSA can determine the transportation cost per unit.


Sec.  755.6  Availability of funds.

    (a) Payments under this part are subject to the availability of 
funds.
    (b) A reserve will be created to handle appeals and errors.


Sec.  755.7  Transportation rates.

    (a) Payments may be based on fixed, set, or actual transportation 
rates. Fixed and set transportation rates will be established by FSA, 
based on available data for transportation costs for that commodity or 
input in the applicable State or insular region.
    (b) Fixed transportation rates will establish per unit 
transportation costs for each eligible commodity or input used to 
produce the eligible commodity.
    (c) Set transportation rates will be established for those 
transportation costs that are not on the FSA list of fixed rates and 
for which an actual rate cannot be documented. The set transportation 
rate will be set by FSA, based on available data of transportation 
costs for similar commodities and inputs.
    (d) Actual transportation rates will be determined based on 
supporting documentation.


Sec.  755.8  Calculation of individual payments.

    (a) Transportation cost for each commodity or input will be 
calculated by multiplying the number of reported eligible units (the 
reported transportation amount) times the fixed, set, or actual 
transportation rate, as applicable.
    (b) Eligible reimbursement amounts will be calculated by 
multiplying the result of paragraph (a) of this section times the 
appropriate FY COLA percentage, as provided in this part.
    (c) If transported inputs are used for both eligible and ineligible 
commodities, the eligible reimbursable costs will be determined on a 
revenue share of eligible commodities times input cost, as determined 
by FSA, and transportation may be allowed only for those commodities 
which were produced for the commercial market.
    (d) The total payment amount for a producer is the sum of all 
eligible reimbursable amounts determined in paragraph (b) of this 
section for all commodities and inputs used to produce the eligible 
commodities listed on the application.
    (e) Payment amounts are subject to $8,000 cap per FY per producer 
as defined in this part, not per ``person'' or ``legal entity'' as 
those terms might be defined in part 1400 of this title.
    (f) In the event that approval of all calculated payment amounts 
would result in expenditures in excess of the amount available, FSA 
will recalculate the payment amounts in a manner that FSA determines to 
be fair and reasonable.


Sec.  755.9  Misrepresentation and scheme or device.

    (a) In addition to other penalties, sanctions or remedies as may 
apply, a producer will be ineligible to receive payments under this 
part if the producer is determined by FSA to have:
    (1) Adopted any scheme or device that tends to defeat the purpose 
of this part;
    (2) Made any fraudulent representation; or
    (3) Misrepresented any fact affecting a program determination.
    (b) Any payment to any producer engaged in a misrepresentation, 
scheme, or device, must be refunded with interest together with such 
other sums as may become due. Any producer engaged in acts prohibited 
by this section and receiving payment under this part will be jointly 
and severally liable with other producers involved in such claim for 
benefits for any refund due under this section and for related charges. 
The remedies provided in this part will be in addition to other civil, 
criminal, or administrative remedies that may apply.

[[Page 34343]]

Sec.  755.10  Death, incompetence, or disappearance.

    (a) In the case of the death, incompetency, or disappearance of a 
person or the dissolution of an entity that is eligible to receive a 
payment in accordance with this part, such alternate person or persons 
specified in part 707 of this chapter may receive such payment, as 
determined appropriate by FSA.
    (b) Payments may be made to an otherwise eligible producer who is 
now deceased or to a dissolved entity if a representative who currently 
has authority to enter into an application for the producer or the 
producer's estate signs the application for payment. Proof of authority 
over the deceased producer's estate or a dissolved entity must be 
provided.
    (c) If a producer is now a dissolved general partnership or joint 
venture, all members of the general partnership or joint venture at the 
time of dissolution or their duly authorized representatives must be 
identified in the application for payment.


Sec.  755.11  Maintaining records.

    Persons applying for payment under this part must maintain records 
and accounts to document all eligibility requirements specified in this 
part. Such records and accounts must be retained for 3 years after the 
date of payment to the producer under this part.


Sec.  755.12  Refunds; joint and several liability.

    (a) Any producer that receives excess payment, payment as the 
result of erroneous information provided by any person, or payment 
resulting from a failure to comply with any requirement or condition 
for payment under this part, must refund the amount of that payment to 
FSA.
    (b) Any refund required will be due from the date of the 
disbursement by the agency with interest determined in accordance with 
paragraph (d) of this section and late payment charges as provided in 
part 1403 of this title.
    (c) Each producer that has an interest in the agricultural 
operation will be jointly and severally liable for any refund and 
related charges found to be due to FSA.
    (d) Interest will be applicable to any refunds to FSA required in 
accordance with parts 792 and 1403 of this title except as otherwise 
specified in this part. Such interest will be charged at the rate that 
the U.S. Department of the Treasury charges FSA for funds, and will 
accrue from the date FSA made the payment to the date the refund is 
repaid.
    (e) FSA may waive the accrual of interest if it determines that the 
cause of the erroneous payment was not due to any action of the person 
or entity, or was beyond the control of the person or entity committing 
the violation. Any waiver is at the discretion of FSA alone.


Sec.  755.13  Miscellaneous provisions and appeals.

    (a) Offset. FSA may offset or withhold any amount due to FSA from 
any benefit provided under this part in accordance with the provisions 
of part 1403 of this title.
    (b) Claims. Claims or debts will be settled in accordance with the 
provisions of part 1403 of this title.
    (c) Other interests. Payments or any portion thereof due under this 
part will be made without regard to questions of title under State law 
and without regard to any claim or lien against the eligible 
reimbursable costs thereof, in favor of the owner or any other creditor 
except agencies and instrumentalities of the U.S. Government.
    (d) Assignments. Any producer entitled to any payment under this 
part may assign any payments in accordance with the provisions of part 
1404 of this title.
    (e) Violations regarding controlled substances. The provisions of 
Sec.  718.6 of this chapter, which generally limit program payment 
eligibility for persons who have engaged in certain offenses with 
respect to controlled substances, will apply to this part.
    (f) Appeals. The appeal regulations specified in parts 11 and 780 
of this chapter apply to determinations made under this part.

    Signed in Washington, DC on June 9, 2010.
Jonathan W. Koppess,
Administrator, Farm Service Agency.
[FR Doc. 2010-14427 Filed 6-16-10; 8:45 am]
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