[Federal Register Volume 83, Number 169 (Thursday, August 30, 2018)]
[Rules and Regulations]
[Pages 44173-44178]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-18842]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 
 ========================================================================
 

  Federal Register / Vol. 83, No. 169 / Thursday, August 30, 2018 / 
Rules and Regulations  

[[Page 44173]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1409

RIN 0560-AI42


Market Facilitation Program

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

ACTION: Final rule.

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

SUMMARY: The Commodity Credit Corporation (CCC) is issuing a new 
regulation to implement the Market Facilitation Program (MFP). MFP 
provides payments to producers with commodities that have been 
significantly impacted by actions of foreign governments resulting in 
the loss of traditional exports. This rule specifies the eligibility 
requirements, payment calculations, and application procedures for MFP. 
The details for specific commodities and the relevant application start 
dates will be announced in subsequent notices of funds availability 
(NOFAs).

DATES: Effective: August 30, 2018.

FOR FURTHER INFORMATION CONTACT: Bradley Karmen, Acting Deputy 
Administrator for Farm Programs, telephone: (202) 720-3175. Persons 
with disabilities who require alternative means for communication 
should contact the USDA Target Center at (202) 720-2600 (voice).

SUPPLEMENTARY INFORMATION: 

Background

    The imposition of tariffs by other countries on U.S. agricultural 
products, among other actions, are disrupting marketing of agricultural 
commodities and are outside of the control of the agricultural 
producers who are being negatively impacted. In response to the actions 
of foreign governments, the President has pledged that up to $12 
billion in financial assistance will be made available for certain 
agricultural commodities under section 5 of the CCC Charter Act (15 
U.S.C. 714c). This section authorizes CCC to assist in the disposition 
of surplus commodities and to increase the domestic consumption of 
agricultural commodities by expanding or aiding in the expansion of 
domestic markets or by developing or aiding in the development of new 
and additional markets, marketing facilities, and uses for such 
commodities.
    MFP payments constitute one portion of up to $12 billion in 
financial assistance to farmers. The MFP payments will aid producers in 
the disposition of surplus commodities and aid in the expansion of 
domestic markets or aid in the development of new and additional 
markets and uses for the specific crops or commodities that are 
negatively impacted by actions of foreign governments. The MFP payments 
will provide producers with financial assistance that gives them the 
ability to absorb some of the additional costs from having to delay or 
reorient marketing of the new crop due to the tariff retaliation. The 
determination of commodities that are included in MFP and specific 
program requirements applicable to the commodities, such as enrollment 
periods, will be announced in the applicable NOFAs published in the 
Federal Register.
    The Farm Service Agency (FSA) will administer MFP on behalf of CCC.

MFP Description

    MFP is a temporary assistance program to producers of covered 
agricultural commodities. MFP will be available to producers of those 
commodities determined by the Secretary to have been adversely affected 
by the actions of foreign governments.
    MFP payment rates and units of measure will be in effect beginning 
September 4, 2018. The payment rate under this rule will apply to the 
first 50 percent of the producer's total production of the selected 
commodity. On or about December 3, 2018, CCC may announce a second 
payment rate, if applicable, that will apply to the remaining 50 
percent of the producer's production for the selected commodity. USDA 
will continue to monitor the situation with respect to adverse effects 
felt by American commodity producers as a result of trade disruptions 
and will determine whether additional assistance is necessary at a 
later date, considering additional available data and updated 
methodologies. The MFP payment under this announcement is expected to 
total about $5 billion.

Producer Eligibility Requirements

    Under MFP, CCC will provide payments to producers of those 
commodities determined by the Secretary to have been adversely affected 
by the retaliatory actions of foreign governments. Participation in 
other CCC programs is not a prerequisite to participate in MFP.
    MFP payments will be available to those producers who had an 
ownership interest in the crop on acres that were planted and reported 
to FSA for the 2018 crop year. Producers who reported such an interest 
are eligible for MFP payments, provided all other eligibility 
requirements are met. A verbal or written agreement that precludes a 
producer from having such an interest may disqualify the producer for 
MFP.
    Crop producers must meet all of the following requirements to be 
eligible for an MFP payment:
    (1) The producer must have submitted to FSA a form FSA-578, 
``Report of Acreage'' (referred to as ``acreage report''), representing 
the applicable crop year acreage of the eligible crop as planted, and 
provide FSA with supporting documentation, as required by the 
applicable NOFA. For any producer who is not participating in another 
FSA-administered CCC program, the producer must provide the required 
crop planting information on the acreage report. If the acreage report 
deadline for the eligible crop has passed, the producer will follow the 
established ``late-filed'' acreage reports process;
    (2) The producer's acreage report must specify the producer's 
ownership share of both the eligible crop and the number of acres 
planted to that crop; and
    (3) The producer must apply for an MFP payment as announced by CCC.
    Payments for commodities other than crops, such as livestock and 
dairy, will be based on information submitted by producers to FSA as 
specified in the applicable NOFA. MFP payments will be available to 
those producers who had an ownership interest in the commodity during 
the applicable time period, provided all other eligibility requirements 
are met.

[[Page 44174]]

    Producers of commodities other than crops must meet all of the 
following requirements to be eligible for an MFP payment:
    (1) The producer must complete an MFP application form and provide 
FSA with supporting documentation, as required by the applicable NOFA, 
which must specify the producer's ownership interest in the eligible 
commodity and the amount of the commodity for the applicable time 
period; and
    (2) The producer must have ownership in the commodity as described 
in the applicable NOFA.

Adjusted Gross Income and Payment Limitation Requirements

    The average adjusted gross income (AGI) limitations as specified in 
7 CFR part 1400 apply to MFP. No person or legal entity (excluding a 
joint venture or general partnership), as defined and determined under 
7 CFR part 1400 may receive, directly or indirectly, more than $125,000 
in MFP payments for the 2018 crop year as specified in the relevant 
NOFA. The application of the payment limitation will be specified in 
the NOFA. For example, certain commodities announced at the same time 
may have a combined payment limitation.
    For the $125,000 annual payment limit, both indirect and direct 
benefits are counted by attribution. The regulations in 7 CFR 1400.105 
specify how payments are attributed; 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 to those that 
have an indirect interest to the amount of that indirect interest.
    A person or legal entity is ineligible for payments if the person's 
or legal entity's AGI for the applicable program year is more than 
$900,000. If a person with an indirect interest in a legal entity has 
an average AGI of more than $900,000, the MFP payments subject to 
average AGI compliance provisions to the legal entity will be reduced 
as calculated based on the percent interest of the person in the legal 
entity receiving the payment. The relevant years used to calculate 
average AGI are the 3 consecutive tax years immediately preceding the 
year before the payment year, which will be the crop year, or the 
marketing year for livestock or dairy). For example, for 2018, the 
relevant years to calculate AGI are the 2014, 2015 and 2016 tax years.
    In addition to having a share in the commodity, to be eligible for 
an MFP payment for crops that are ``covered commodities'' as defined in 
7 CFR 1412.3, each applicant is required to be a person or legal entity 
who was actively engaged in farming, as provided in 7 CFR part 1400, in 
the crop year for which the crop is included in MFP.

Payment Calculations

    Subject to any unique circumstance applicable to a specific 
commodity as specified in the applicable NOFA, the MFP payment for a 
commodity will be calculated as follows:

Production x Share x MFP Payment Rate

    The share is the applicant's share of the commodity.
    The MFP payment rate will be calculated for the specific commodity 
when it becomes eligible for MFP and will be announced in the 
applicable NOFA.
    The amount of production is the applicant's actual production for 
the commodity. Specific production requirements for any commodity will 
be identified in the relevant NOFA. For example, for livestock, 
production may be the number of head of livestock during specified 
dates.

MFP General Requirements

    General requirements that apply to other CCC programs also apply to 
MFP including compliance with the provisions of 7 CFR part 12, ``Highly 
Erodible Land and Wetland Conservation,'' during the year for which 
assistance is made available.
    Foreign persons are not eligible for MFP payments. Federal, State, 
and local governments are not eligible for MFP payments.
    There is no requirement to have crop insurance coverage or coverage 
under the Noninsured Crop Disaster Assistance Program (NAP) to be 
eligible for participation in MFP.
    Appeal regulations specified in 7 CFR parts 11 and 780 apply. MFP 
commodity eligibility and other matters of general applicability that 
are not in response to, or result from, an individual set of facts in 
an individual participant's application for payment are not matters 
that can be appealed.

Eligible Crop Acreage

    Most eligible crop producers will have already submitted the 
required acreage report to FSA as part of their participation in 
various FSA and CCC programs. The regulation in 7 CFR part 718 requires 
producers to report to FSA their acreage for various crops and 
commodities, including the number of acres that were planted in the 
United States for the crop or commodity and their percentage share of 
the crop for the reported acreage for the crop year. Therefore, FSA 
already has some of the information relevant to MFP as previously 
reported to FSA for many producers; as noted above other producers who 
apply for MFP will also need to submit their information on the acreage 
report.
    If there were any errors in the previously submitted acreage 
report, the producer may go through the established FSA process to 
correct the reported information. Any such requests for correction must 
be made by the date specified in the relevant NOFA and require approval 
by FSA.

Application Process

    To apply for MFP, each applicant must submit a complete valid MFP 
application either in person, by mail, email, or facsimile to an FSA 
county office. For many crops, FSA possesses the producer share data 
from the applicable crop year's acreage report for producers who 
participate in other FSA-administered CCC programs. For crops, the 
applicant's crop share interest on an MFP application cannot be greater 
than the crop share interest as reported on the acreage report. FSA 
will verify and confirm the applicant's crop share interest reported on 
the MFP application by comparing it to the applicant's crop share 
interest as reported on that farm's acreage report for the applicable 
crop year.
    For livestock, the application will include number of head 
(production) and ownership share information as provided in the 
applicable NOFA. For dairy, the application will include the amount of 
historical production as provided in the applicable NOFA.
    If FSA decides it is necessary to confirm the applicant's interest 
in the commodity, the applicant will be required to submit evidence 
upon request, such as seed receipts, custom harvesting receipts, bale 
gin lists, or purchase or sales receipts. In addition, the applicant 
will need to provide supporting documentation for the amount of 
production as specified in the relevant NOFA.

Process for Evaluation of MFP Applications and Approval of Payments

    FSA will require producer specific documentation of the amount of 
production, as applicable.
    When there are multiple eligible applicants for a farm, FSA will 
approve each application that is filed for MFP when all the following 
have occurred:

[[Page 44175]]

    (1) The landlord, tenant, and sharecropper have signed and 
submitted their own MFP application with the correct share interest in 
the crop, livestock, or dairy production on the farm; and
    (2) The applicant provided a copy of the lease agreement, if 
determined necessary and requested by the FSA county committee.

Provisions Requiring Refund to CCC

    In the event that any application for an MFP payment resulted from 
erroneous information reported by the producer, the payment will be 
recalculated, and the participant must refund any excess payment to 
CCC; if the error was the applicant's error, the refund must include 
interest to be calculated from the date of the disbursement to the MFP 
participant. If, for whatever reason, FSA determines that the applicant 
misrepresented either the total amount or producer's share of the crop, 
head of livestock, or production, or if the MFP payment would exceed 
the participant's payment based on correct amount of production and 
share, the application will be disapproved and the full MFP payment for 
that crop or livestock for that participant will be required to be 
refunded to CCC with interest from the date of disbursement. If any 
corrections to the ownership interest in the crop are made to the 
acreage report after the MFP application deadline, and would have 
resulted in a lower MFP payment, the applicant will be required to 
refund the difference with interest from date of disbursement.

Effective Date and Notice and Comment

    The Administrative Procedure Act (5 U.S.C. 553) provides that the 
notice and comment and 30-day delay in the effective date provisions do 
not apply when the rule involves specified actions, including matters 
relating to grants or benefits. This rule governs the program for 
payments to certain commodity producers and thus falls within that 
exemption. Accordingly, this rule is effective upon publication in the 
Federal Register. Further, the opportunity for notice and comment 
provided in this document is limited to the PRA requirements for the 
information collection activities.

Executive Orders 12866, 13563, 13771 and 13777

    Executive Order 12866, ``Regulatory Planning and Review,'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review,'' 
direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 13563 emphasized the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility. Executive Order 13777, 
``Enforcing the Regulatory Reform Agenda,'' established a federal 
policy to alleviate unnecessary regulatory burdens on the American 
people.
    The Office of Management and Budget (OMB) designated this rule as 
economically significant under Executive Order 12866, ``Regulatory 
Planning and Review,'' and therefore, OMB has reviewed this rule. The 
costs and benefits of this rule are summarized below. The full cost 
benefit analysis is available on regulations.gov.
    Executive Order 13771, ``Reducing Regulation and Controlling 
Regulatory Costs,'' requires that in order to manage the private costs 
required to comply with Federal regulations that for every new 
significant or economically significant regulation issued, the new 
costs must be offset by the elimination of at least two prior 
regulations. The OMB guidance in M-17-21, dated April 5, 2017, 
specifies that ``transfer rules'' are not covered by Executive Order 
13771. Transfer rules are Federal spending regulatory actions that 
cause only income transfers between taxpayers and program 
beneficiaries. Therefore, this is considered a transfer rule by OMB and 
is not covered by Executive Order 13771.

Cost Benefit Analysis Summary

    The amount of MFP payments for each commodity is intended to offset 
some of the adverse impact of losing market demand due to trade issues, 
for example, retaliatory tariffs imposed by other countries. The 
payment rate per unit (for example, bushel, pound, hundredweight, or 
animal) for each commodity will reflect the severity of the impact of 
trade disruptions to that commodity and the commodity-specific period 
of adjustment to new trade patterns. For example, the payment rate for 
a commodity that is heavily dependent on export markets, such as 
soybeans, will be higher than a commodity for which most production is 
marketed domestically. USDA forecasted those impacts based on the 
percentage of 2017 U.S. production of each commodity that was exported 
in 2017, the share of exports affected by trade disruptions, and other 
variables such as current stocks-to-use ratio for crop commodities.
    The expected cost of initial MFP payments is approximately $5 
billion. The majority of payments will go to soybean producers, because 
USDA has determined that soybeans have been most severely impacted by 
recent trade actions based on analysis of exports as a share of total 
production, the time it will take to adjust to new trade patterns, the 
observed price impact, and the current stocks-to-use ratio. The 
payments represent the total benefits (payments) to producers, which is 
the total cost to the government for MFP.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA, 
Pub. L. 104-121), generally requires an agency to prepare a regulatory 
flexibility analysis of any rule whenever an agency is required by the 
Administrative Procedure Act or any other law to publish a proposed 
rule, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
This rule is not subject to the Regulatory Flexibility Act because CCC 
is not required by Administrative Procedure Act or any law to publish a 
proposed rule for this rulemaking.

Environmental Review

    The environmental impacts of this final 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 
the FSA regulation for compliance with NEPA (7 CFR part 799).
    While OMB has designated this rule as ``economically significant'' 
under Executive Order 12866, ``. . . economic or social effects are not 
intended by themselves to require preparation of an environmental 
impact statement'' (40 CFR 1508.14), when not interrelated to natural 
or physical environmental effects. As previously stated, the intent of 
MFP is to compensate producers who have suffered post-production market 
losses. The limited discretionary aspects of MFP (for example, 
determining AGI and payment limitations) were designed to be consistent 
with established FSA and CCC programs. These discretionary aspects do 
not have the potential to impact the human environment as they are 
administrative, and MFP only takes effect after the commodity has been 
produced, harvested, and sold.

[[Page 44176]]

Accordingly, the following Categorical Exclusions in 7 CFR part 799.31 
apply: Sec.  799.31(b)(6)(iii) applies to financial assistance to 
supplement income, manage the supply of agricultural commodities, or 
influence the cost and supply of such commodities; Sec.  
799.31(b)(6)(iv) applies to individual farm participation in FSA 
programs where no ground disturbance or change in land use occurs as a 
result of the proposed action or participation; and Sec.  
799.31(b)(6)(vi) applies to ``safety net'' programs administered by 
FSA. No Extraordinary Circumstances (Sec.  799.33) exist. As such, the 
implementation of MFP and the participation in MFP do not constitute 
major Federal actions that would significantly affect the quality of 
the human environment, individually or cumulatively. Therefore, CCC 
will not prepare an environmental assessment or environmental impact 
statement for this regulatory action and this rule serves as 
documentation of the programmatic environmental compliance decision for 
this federal action.

Executive Order 12372

    Executive Order 12372, ``Intergovernmental Review of Federal 
Programs,'' requires consultation with State and local officials that 
would be directly affect by proposed Federal financial assistance. The 
objectives of the Executive Order are to foster an intergovernmental 
partnership and a strengthened Federalism, by relying on State and 
local processes for State and local government coordination and review 
of proposed Federal Financial assistance and direct Federal 
development. For reasons specified in the final rule related notice to 
7 CFR part 3015, subpart V (48 FR 29115, June 24, 1983), the programs 
and activities within this rule are excluded from the scope of 
Executive Order 12372 which requires intergovernmental consultation 
with State and local officials.

Executive Order 12988

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

Executive Order 13132

    This rule has been reviewed under Executive Order 13132, 
``Federalism.'' 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, except as 
required by law. 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

    This rule has been reviewed for compliance with Executive Order 
13175, ``Consultation and Coordination with Indian Tribal 
Governments.'' Executive Order 13175 requires Federal agencies to 
consult and coordinate with tribes on a government-to-government basis 
on policies that have tribal implications, including regulations, 
legislative comments proposed legislation, and other policy statements 
or actions that have substantial direct effects on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes or on the distribution of power and responsibilities between the 
Federal government and Indian tribes.
    FSA and CCC have assessed the impact of this rule on Indian tribes 
and determined that this rule does not, to our knowledge, have tribal 
implications that required tribal consultation under Executive Order 
13175. If a tribe requests consultation, FSA and CCC will work with 
USDA Office of Tribal Relations to ensure meaningful consultation is 
provided where changes, additions, and modifications are not expressly 
mandated by Congress.

The Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Pub. L. 
104-4) requires Federal agencies to assess the effects of their 
regulatory actions on State local, and 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 in Title II of UMRA, for 
State, local, and Tribal governments or the private sector. Therefore, 
this rule is not subject to the requirements of sections 202 and 205 of 
UMRA.

SBREFA

    This rule is a major rule under SBREFA. 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. The 
beneficiaries of this rule have been significantly impacted by actions 
of foreign governments resulting in the loss of traditional exports. 
Therefore, FSA and CCC find that it would be contrary to the public 
interest to delay the effective date of this rule because it would 
delay implementation of MFP. The regulation needs to be effective to 
provide adequate time for producers to submit applications to request 
payments. Therefore, this rule is effective on the August 30, 2018.

Federal Assistance Programs

    The title and number of the Federal Domestic Assistance Program 
found in the Catalog of Federal Domestic Assistance to which this rule 
applies is TBD--Market Facilitation Program and number.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995, the 
following new information collection request that supports MFP was 
submitted to OMB for emergency approval. OMB approved the 6-month 
emergency information collection.

List of Subjects in 7 CFR Part 1409

    Agriculture, Agricultural commodities, Crops, Reporting and 
recordkeeping requirements.

    For the reasons discussed in the preamble, CCC adds 7 CFR part 1409 
to read as follows:

PART 1409--MARKET FACILITATION PROGRAM

Sec.
1409.1 Applicability.
1409.2 Definitions.
1409.3 Producer eligibility requirements.
1409.4 Time and method of application.
1409.5 Calculation of payments.
1409.6 Eligibility subject to verification.
1409.7 Miscellaneous provisions.

    Authority: 15 U.S.C. 714b and 714c.


Sec.  1409.1  Applicability.

    This part specifies the eligibility requirements and payment 
calculations for the Market Facilitation Program (MFP). MFP will 
provide payments with

[[Page 44177]]

respect to commodities which have been significantly impacted by 
actions of foreign governments resulting in the loss of traditional 
exports. The determination of eligible commodities and any specific 
program requirements for a commodity will be specified in a notice of 
funding availability published by CCC in the Federal Register.


Sec.  1409.2  Definitions.

    The following definitions apply to MFP. The definitions in part 718 
of this title and parts 1400, and 1421 of this section apply, except 
where they conflict with the definitions in this section.
    Application means the MFP application form.
    Commodity means an agricultural commodity produced in the United 
States intended to be marketed for commercial production that has been 
designated as eligible for payments under MFP.
    Crop means the harvested production of a commodity.
    Crop year means:
    (1) For insurable crops, the crop year as defined according to the 
applicable crop insurance policy; and
    (2) For NAP covered crops, the crop year as provided in part 1437 
of this chapter.
    NOFA means a notice of funds availability published by CCC in the 
Federal Register that specifies terms and conditions of MFP that are 
applicable to a specific commodity.
    Producer means a livestock producer, dairy producer, or a producer 
of a crop as defined in Sec.  718.2 of this title.


Sec.  1409.3  Producer eligibility requirements.

    (a) To be eligible for an MFP payment, a producer must:
    (1) Meet all of the requirements in this part and the NOFA that is 
applicable to the commodity;
    (2) Be a:
    (i) Citizen of the United States;
    (ii) Resident alien, which for purposes of this part means ``lawful 
alien'' as defined in part 1400 of this chapter;
    (iii) Partnership of citizens of the United States; or
    (iv) Corporation, limited liability corporation, or other 
organizational structure organized under State law;
    (3) Have an ownership interest in the commodity.
    (b) For eligible crops, a producer's share in the crop must be 
reported for the applicable crop year on form FSA-578, Report of 
Acreage, on file in the FSA county office as of the acreage reporting 
deadline, or no later than the date specified in the relevant NOFA. For 
crops that are covered commodities under Sec.  1412.3 of this chapter, 
each applicant must be a person or legal entity who was actively 
engaged in farming, as provided in part 1400 of this chapter, in the 
crop year for which the crop is included in MFP.
    (c) For livestock and dairy, a producer must have had an ownership 
interest in livestock or dairy production during the applicable time 
period established by CCC in the applicable NOFA.


Sec.  1409.4  Method of application.

    (a) To apply for an MFP payment, the producer must submit an MFP 
application on the form designated by CCC to an FSA county office.
    (b) In the event that the producer does not submit documentation in 
response to any request of FSA to support the producer's application or 
documentation furnished does not show the producer had ownership in the 
commodity as claimed, the application for that commodity will be 
disapproved.
    (c) A request for an MFP payment will not be approved by CCC until 
all the applicable eligibility provisions have been met and the 
producer has submitted all required forms and supporting documentation. 
In addition to the completed application form, if the following forms 
and documentation are not on file in the FSA county office or are not 
current for the applicable crop year of the crop or applicable year for 
the commodity for which MFP has been announced as available, the 
producer must also submit:
    (1) A farm operating plan for an individual or legal entity as 
provided in part 1400 of this chapter;
    (2) An average adjusted gross income statement for the applicable 
year entity as provided in part 1400 of this chapter;
    (3) A highly erodible land conservation (sometimes referred to 
elsewhere as HELC) and wetland conservation certification as provided 
in part 12 of this title;
    (4) For crops, an acreage report for the applicable crop year as 
provided in part 718 of this title; and
    (5) Verifiable records that substantiate the amount of production 
as specified in the relevant NOFA.


Sec.  1409.5   Calculation of payments.

    The payment under this rule will be calculated by multiplying fifty 
percent of the total production of the commodity times the MFP payment 
rate for that commodity that is in effect when the payment is made 
times the producer's eligible share of the commodity. On or about 
December 3, 2018, CCC may announce a second payment rate, if 
applicable, that will apply to the remaining 50 percent of the 
producer's production for the selected commodity.


Sec.  1409.6  Eligibility subject to verification.

    (a) Producers who are approved for participation in MFP are 
required to retain documentation in support of their application for 3 
years after the date of approval.
    (b) Producers must submit documentation to CCC as requested to 
substantiate an application.
    (c) Producers receiving payments or any other person who furnishes 
such information to CCC must permit authorized representatives of USDA 
or the General Accounting Office during regular business hours to 
inspect, examine, and to allow such representatives to make copies of 
such books, records or other items for the purpose of confirming the 
accuracy of the information provided by the producer.


Sec.  1409.7  Miscellaneous provisions.

    (a) If an MFP payment resulted from erroneous information provided 
by a producer, or any person acting on their behalf, the payment will 
be recalculated and the producer must refund any excess payment to CCC 
with interest calculated from the date of the disbursement of the 
payment.
    (b) The refund of any payment to CCC is in addition to liability 
under any other provision of law including, but not limited to: 18 
U.S.C. 286, 287, 371, 641, 651, 1001, and 1014; 15 U.S.C. 714; and 31 
U.S.C. 3729.
    (c) The regulations in parts 11 and 780 of this title apply to 
determinations under this part.
    (d) Any payment under this part will be made without regard to 
questions of title under State law and without regard to any claim or 
lien against the commodity or proceeds from the sale of the commodity.
    (e) The $900,000 average AGI limitation provisions in part 1400 of 
this chapter relating to limits on payments for persons or legal 
entities, excluding joint ventures and general partnerships, apply to 
each applicant for MFP. The average AGI will be calculated for a person 
or legal entity based on the 3 complete tax years that precede the year 
for which the payment is made (for the 2018 crop year or marketing year 
for livestock and dairy the tax years are 2014, 2015, and 2016).
    (f) No person or legal entity, excluding a joint venture or general 
partnership, as determined by the rules in part 1400 of this chapter 
may receive, directly or indirectly, more than $125,000 in payments as 
specified in the relevant NOFA.

[[Page 44178]]

    (g) The direct attribution provisions in part 1400 of this chapter 
apply to MFP. Under those rules, any payment to any legal entity will 
also be considered for payment limitation purposes to be a payment to 
persons or legal entities with an interest in the legal entity or in a 
sub-entity. If any such interested person or legal entity is over the 
payment limitation because of direct payment or their indirect 
interests or a combination thereof, then the payment to the actual 
payee will be reduced commensurate with the amount of the interest of 
the interested person in the payee. If anyone with a direct or indirect 
interest in a legal entity or sub-entity of a payee entity exceeds the 
AGI levels that would allow a producer to directly receive an MFP 
payment, then the MFP payment to the actual payee will be reduced 
commensurately with that interest.
    (h) For the purposes of the effect of lien on eligibility for 
Federal programs (28 U.S.C. 3201(e)), CCC waives the restriction on 
receipt of funds under MFP but only as to beneficiaries who, as a 
condition of such waiver, agree to apply the MFP payments to reduce the 
amount of the judgment lien.
    (i) The provisions of Sec.  718.304 of this title, ``Failure to 
Fully Comply,'' do not apply to this part.

Richard Fordyce,
Administrator, Farm Service Agency.
Robert Stephenson,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 2018-18842 Filed 8-28-18; 8:45 am]
 BILLING CODE 3410-05-P