[Federal Register Volume 88, Number 174 (Monday, September 11, 2023)]
[Rules and Regulations]
[Pages 62285-62292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-19479]



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 Rules and Regulations
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 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
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 under 50 titles pursuant to 44 U.S.C. 1510.
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  Federal Register / Vol. 88, No. 174 / Monday, September 11, 2023 / 
Rules and Regulations  

[[Page 62285]]



DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 760

[Docket ID: FSA-2022-0016]
RIN 0560-AI64


Milk Loss Program and Emergency Relief Program

AGENCY: Farm Service Agency, USDA.

ACTION: Final rule.

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SUMMARY: This rule establishes provisions for providing agricultural 
disaster assistance as authorized by the Extending Government Funding 
and Delivering Emergency Assistance Act of 2021 and the Disaster Relief 
Supplemental Appropriations Act, 2023. The assistance will be for 2020, 
2021, and 2022 milk losses. The Milk Loss Program will provide payments 
to eligible dairy operations for milk that was dumped or removed 
without compensation from the commercial milk market due to disaster 
events including droughts, wildfires, hurricanes, floods, derechos, 
excessive heat, winter storms, freeze (including a polar vortex), and 
smoke exposure that occurred in the 2020, 2021, and 2022 calendar 
years. Additionally, the Disaster Relief Supplemental Appropriations 
Act, 2023, also authorizes assistance for eligible milk losses due to 
tornadoes that occurred in 2022. This rule specifies the administrative 
provisions, eligibility requirements, application procedures, and 
payment calculations for the Milk Loss Program. This rule also makes 
corrections to Phase 2 of the Emergency Relief Program (ERP).

DATES: 
    Effective date: September 11, 2023.
    Comment date: We will consider comments on the information 
collection requirements under the Paperwork Reduction Act that we 
receive by: November 13, 2023.
    Milk Loss Program application deadline: October 16, 2023.

ADDRESSES: We invite you to submit comments on the information 
collection requirements. You may submit comments by any of the 
following methods:
     Federal eRulemaking Portal: Go to: www.regulations.gov and 
search for docket ID FSA-2022-0016. Follow the instructions for 
submitting comments.
     Mail: Director, PSD, FSA, USDA, 1400 Independence Avenue 
SW, Stop 0512, Washington, DC 20250-0522.
    Comments will be available for viewing online at 
www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For the Milk Loss Program: Douglas E. 
Kilgore; telephone: (202) 720-9011; or email: 
[email protected]. For ERP: Kathy Sayers; telephone: (202) 
720-7649; or email: [email protected]. Persons with disabilities 
who require alternative means for communication should contact the U.S. 
Department of Agriculture (USDA) Target Center at (202) 720-2600 (voice 
and text telephone (TTY)) or dial 711 for Telecommunications Relay 
service (both voice and text telephone users can initiate this call 
from any telephone).

SUPPLEMENTARY INFORMATION: 

Background

    This rule establishes the Milk Loss Program to provide disaster 
assistance for certain milk losses. The Extending Government Funding 
and Delivering Emergency Assistance Act of 2021 (Pub. L. 117-43) 
provides $10 billion for crop losses, including milk losses, that 
occurred in calendar years 2020 and 2021 due to qualifying disaster 
events. The Disaster Relief Supplemental Appropriations Act, 2023, 
Division N of the Consolidated Appropriations Act, 2023 (Pub. L. 117-
328) provides approximately $3.7 billion for disaster assistance for 
similar crop losses that occurred in calendar year 2022. The disaster 
assistance outlined in both laws is for necessary expenses related to 
losses of crops, including milk and on-farm stored commodities, as a 
consequence of droughts, wildfires, hurricanes, floods, derechos, 
excessive heat, winter storms, freeze (including a polar vortex), and 
smoke exposure. In addition, the Disaster Relief Supplemental 
Appropriations Act, 2023 authorized assistance for losses as a 
consequence of tornadoes occurring in 2022.
    This rule establishes the Milk Loss Program to provide assistance 
for qualifying milk losses.
    The Milk Loss Program allows eligible dairy operations to receive 
payments for milk that was dumped or removed without compensation from 
the commercial milk market due to qualifying weather events that 
inhibited the delivery of milk or the storage of milk due to weather-
related issues, such as power outages or impassable roads, for the 
2020, 2021, and 2022 calendar years.
    This rule also makes minor corrections to the ERP Phase 2 payment 
calculation and the producer eligibility requirements.

Milk Loss Program

    The Milk Loss Program will provide payments to dairy operations for 
milk that was dumped or removed without compensation from the 
commercial milk market due to qualifying disaster events.
    The milk loss base period is the first full month of milk 
production before the dumping or removal of milk first occurred due to 
a qualifying disaster event. The base period milk production is used to 
determine the average daily milk production from the cows in the dairy 
operation. The average daily milk production calculation includes the 
number of cows, the pounds of milk marketed for the month, and the 
number of days in the month.
    The claim period for milk loss is each calendar month that milk was 
dumped or removed from the commercial market due to a qualifying 
disaster event. Each milk loss application covers the loss in a single 
calendar month. Milk loss that occurs in more than one calendar month 
due to the same qualifying disaster event requires a separate 
application for each month. The days that are eligible for 
indemnification begin on the date the milk was removed or dumped and 
continue for the concurrent days milk was removed or dumped. Once the 
dairy operation returns to the normal marketing of milk, the dairy 
operation is no longer eligible for assistance for milk removed or 
dumped due to that qualifying disaster unless after restarting 
commercial marketing of milk, additional milk is removed or dumped due 
to the same qualifying disaster even. The dairy operation will provide 
the milk marketing statement for the

[[Page 62286]]

month prior to the month milk was removed or dumped and for the month 
that the milk dumping occurred and will verify the days the dairy 
operation did not commercially market milk. For the Milk Loss Program, 
the duration of yearly claims is limited to 30 days per year for 2020, 
2021, and 2022.
    The fair market value of removed or dumped milk represents the 
dollar value the dairy operation would have received if it had 
commercially marketed such milk for that month. The dairy operation's 
milk marketing statement from the claim period will be used to verify 
the days milk was not marketed.
    The Milk Loss Program payment calculation is as follows:

(Base period per cow average daily milk production x number of 
milking cows in claim period x number of days milk was removed or 
dumped in claim period) / 100 \1\) x per hundredweight pay price.
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    \1\ Divided by 100 to convert to hundredweight.

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    The per hundredweight pay price is calculated as follows:

Gross pay price from claim period milk marketing statement - the 
hauling rate - $0.15 promotion fee = per hundredweight pay price.

    The final Milk Loss Program payment is determined by factoring the 
Milk Loss Program payment calculation by a:
     90 percent payment factor for affected farmers who meet 
the definition of beginning farmer or rancher, limited resource farmer 
or rancher, socially disadvantaged farmer or rancher, or veteran farmer 
or rancher; \2\ or
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    \2\ FSA calculates payments based on a higher payment factor for 
underserved farmers and ranchers (or specific groups included in 
that term) in several programs, such as the Emergency Conservation 
Program; the Emergency Assistance for Livestock, Honeybees, and 
Farm-raised Fish Program; and the Tree Assistance Program. FSA has 
also used higher payment factors for these producers in several 
recently announced programs: the Food Safety Certification for 
Specialty Crops Program, the Organic and Transitional Education and 
Certification Program, the Pandemic Assistance Revenue Program, the 
Emergency Livestock Relief Program, and the Emergency Relief 
Program. In addition, the Noninsured Crop Disaster Assistance 
Program provides a reduced service fee and premium for underserved 
farmers and ranchers. This approach supports the equitable 
administration of FSA programs, as underserved farmers and ranchers 
are more likely to lack financial reserves and access to capital 
that would allow them to cope with losses due to unexpected events 
outside of their control.
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     75 percent payment factor for all other affected farmers.
    Dairy operations that apply for the Milk Loss Program will provide, 
at the time of application, the milk marketing statement for the month 
prior to the month that the milk was removed or dumped, the milk 
marketing statement for the affected month and a detailed written 
statement of the circumstances of the milk removal, including the type 
and geographic scope of the weather event, what transportation 
limitations occurred, and any information on what was done with the 
removed milk production. Any other pertinent information that further 
describes the reason why milk was removed or dumped should be included 
to provide FSA the necessary information to determine eligibility for 
the Milk Loss Program, as well as all other information required to be 
furnished in the regulation. FSA county offices can assist dairy 
operations in completing the Milk Loss Program application.
    Payments for the Milk Loss Program will be issued to eligible 
applicants as applications are received and approved. The deadline to 
apply for the Milk Loss Program will be October 16, 2023.

Milk Loss Program Application Process

    USDA will accept Milk Loss Program applications beginning September 
11, 2023.
    To apply for the Milk Loss Program, affected farmers must submit a 
complete FSA-376, Milk Loss Program Application with applicable milk 
marketing statements, as well as all other information required to be 
furnished under the regulation at time of application, in person, by 
mail, email, facsimile, or other method announced by FSA to any FSA 
county office by the application deadline.
    Applicants must also submit all of the following items within 60 
days of the Milk Loss Program application deadline, if not previously 
filed with FSA:
    (1) Form AD-2047, Customer Data Worksheet, for new customers or 
existing customers who need to update their customer profile;
    (2) Form CCC-860, Socially Disadvantaged, Limited Resource, 
Beginning and Veteran Farmer or Rancher Certification, applicable for 
the program year or years for which the affected farmer is applying for 
the Milk Loss Program, if the applicant is an underserved farmer or 
rancher;
    (3) Form CCC-901, Member Information for Legal Entities, if 
applicable;
    (4) Form CCC-902, Farm Operating Plan for an individual or legal 
entity as provided in 7 CFR part 1400;
    (5) Form FSA-510, Request for an Exception to the $125,000 Payment 
Limitation for Certain Programs, accompanied by a certification from a 
certified public accountant or attorney as to that person or legal 
entity's certification, for a legal entity and all members of that 
entity, for each applicable program year, including the legal entity's 
members, partners, or shareholders, as provided in 7 CFR part 1400; and
    (6) Form AD-1026, Highly Erodible Land Conservation (HELC) and 
Wetland Conservation (WC) Certification, for the Milk Loss Program 
applicant and applicable affiliates as provided in 7 CFR part 12.
    If requested by FSA, the affected farmer must provide additional 
documentation that establishes the affected farmer's eligibility for 
the Milk Loss Program. If supporting documentation is requested, the 
documentation must be submitted to FSA within 60 calendar days from the 
request or the application will be disapproved by FSA.

ERP Phase 2

    FSA announced ERP Phase 2 in the final rule published on January 
11, 2023 (88 FR 1862-1892). This document corrects an error in the ERP 
Phase 2 payment calculation in 7 CFR 760.1905(b)(3), which should 
specify that a producer's gross (not net) calculated ERP Phase 1 
payments will be subtracted from the difference in a producer's 
benchmark year allowable gross revenue and disaster year allowable 
gross revenue.\3\ The ERP Phase 2 payment uses a producer's gross ERP 
Phase 1 payment in order to prevent paying a producer for the same loss 
under both phases of the program or applying different payment 
limitations to the same loss (for example, a 2022 crop year loss paid 
under ERP Phase 1 that also resulted in a reduction in allowable gross 
revenue for the 2021 disaster year under ERP Phase 2). A producer who 
received an ERP Phase 1 payment has already been paid the maximum 
amount they are eligible to receive for the loss for which the gross 
ERP Phase 1 payment amount was calculated.
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    \3\ The gross ERP Phase 1 calculated payment is the calculated 
payment amount prior to any payment reductions for reasons 
including, but not limited to, sequestration and payment limitation.
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    This document also corrects the ERP Phase 2 producer eligibility 
requirements in Sec.  760.1902(b)(3) and (4). ERP is a single program, 
and FSA's intent is to apply consistent producer eligibility 
requirements to both phases. As indicated in the ERP Phase 1 
notification of funding availability (87 FR 30164-30172), partnerships, 
corporations, limited liability companies, and other organizational 
structures organized under State law must consist solely of citizens of 
the United States or resident aliens to be eligible for ERP. FSA is 
correcting the

[[Page 62287]]

ERP Phase 2 eligibility requirements to add that criteria, which was 
inadvertently omitted from the regulation.
    These changes are consistent with how FSA has implemented ERP Phase 
2 and do not affect any payments that have been issued; they are being 
corrected in this document to reflect how ERP Phase 2 has been 
administered.

Notice and Comment, Effective Date, and Exemptions

    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 a matter relating to agency management 
or personnel or to public property, loans, grants, benefits, or 
contracts. This rule involves a program for payments to certain 
agricultural commodity producers and thus falls within the exemption 
for rules related to benefits.
    This rule is exempt from the regulatory analysis requirements of 
the Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by the 
Small Business Regulatory Enforcement Fairness Act of 1996.
    For major rules, the Congressional Review Act requires a delay in 
the effective date for 60 days from the date of publication to allow 
for Congressional review. This rule is not a major rule under the 
Congressional Review Act, as defined by 5 U.S.C. 804(2). Therefore, 
this rule is effective upon publication in the Federal Register.

Executive Orders 12866 and 13563

    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.
    The Office of Management and Budget (OMB) designated this rule as 
not significant under Executive Order 12866, ``Regulatory Planning and 
Review,'' and therefore, OMB has not reviewed this rule.

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). The Milk 
Loss Program is mandated by Extending Government Funding and Delivering 
Emergency Assistance Act and the Consolidated Appropriations Act, 2023. 
The Milk Loss Program provides payments to eligible dairy operations 
for milk that was dumped or removed without compensation from the 
commercial milk market.
    The intent of the Milk Loss Program is to compensate affected 
farmers who have suffered post- or pre-production market losses due to 
qualifying disaster events. Compensation is for actions that do not 
have ground disturbing impacts below the level of previous disturbance 
nor negative impacts to any other protected natural or cultural 
resource. The limited discretionary aspects of the programs (for 
example, determining AGI and payment limitations) were designed to be 
consistent with established FSA disaster programs. As such, the FSA 
categorical exclusions found in 7 CFR 799.31 apply, specifically 7 CFR 
799.31(b)(6)(iii) and (iv). See Sec.  799.31(b)(6)(iii) (``Financial 
assistance to supplement income, manage the supply of agricultural 
commodities, or influence the cost or supply of such commodities or 
programs of a similar nature or intent (that is, price support 
programs)''); and Sec.  799.31(b)(6)(iv) (``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'').
    Through this review, FSA has determined that the implementation of 
the program and the participation in the program does not constitute 
major Federal actions that would significantly affect the quality of 
the human environment, individually or cumulatively. Therefore, FSA 
will not prepare an environmental assessment or environmental impact 
statement for this rule; this rule serves as documentation of the 
programmatic environmental compliance decision for this Federal action.

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 13175

    This rule has been reviewed in accordance with the requirements of 
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 or 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 has assessed the impact of this rule on Indian Tribes and 
determined that this rule does not, to our knowledge, have significant 
Tribal implications that require ongoing adherence to Executive Order 
13175 at this time. If a Tribe requests consultation, the USDA Office 
of Tribal Relations will ensure meaningful consultation is provided 
where changes, additions, and modifications are not expressly mandated 
by law. Outside of Tribal consultation, USDA is working with Tribes to 
provide information about pandemic assistance, agricultural disaster 
assistance, and other issues.

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

[[Page 62288]]

private sector. Therefore, this rule is not subject to the requirements 
of sections 202 and 205 of UMRA.

Federal Assistance Programs

    The titles and numbers of the Federal assistance programs, as found 
in the Assistance Listing \4\ to which this rule applies are No. 
10.965--Milk Loss Program, and 10.964--Emergency Relief Program.
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    \4\ See https://sam.gov/content/assistance-listings.
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Paperwork Reduction Act

    In compliance with the provisions of the Paperwork Reduction Act 
(44 U.S.C. chapter 35), the information collection request has been 
approved by OMB under the control number of 0503-0028. FSA will collect 
the information from the dairy operations for milk to qualify for the 
payment. FSA provides one-time federal financial assistance program (or 
payment) to the dairy operations for milk as described in this 
document. Also, there are no changes to the burden hours for the ERP 
Phase 2 under the OMB control number of 0560-0312.

USDA Non-Discrimination Policy

    In accordance with Federal civil rights law and U.S. Department of 
Agriculture (USDA) civil rights regulations and policies, USDA, its 
Agencies, offices, and employees, and institutions participating in or 
administering USDA programs are prohibited from discriminating based on 
race, color, national origin, religion, sex, gender identity (including 
gender expression), sexual orientation, disability, age, marital 
status, family or parental status, income derived from a public 
assistance program, political beliefs, or reprisal or retaliation for 
prior civil rights activity, in any program or activity conducted or 
funded by USDA (not all bases apply to all programs). Remedies and 
complaint filing deadlines vary by program or incident.
    Persons with disabilities who require alternative means of 
communication for program information (for example, braille, large 
print, audiotape, American Sign Language, etc.) should contact the 
responsible Agency or USDA TARGET Center at (202) 720-2600 or (844) 
433-2774 (toll-free nationwide). Additionally, program information may 
be made available in languages other than English.
    To file a program discrimination complaint, complete the USDA 
Program Discrimination Complaint Form, AD-3027, found online at https://www.usda.gov/oascr/how-to-file-a-program-discrimination-complaint and 
at any USDA office or write a letter addressed to USDA and provide in 
the letter all the information requested in the form. To request a copy 
of the complaint form, call (866) 632-9992. Submit your completed form 
or letter to USDA by mail to: U.S. Department of Agriculture, Office of 
the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW, 
Washington, DC 20250-9410 or email: [email protected].
    USDA is an equal opportunity provider, employer, and lender.

List of Subjects in 7 CFR Part 760

    Acreage allotments, Dairy products, Indemnity payments, Pesticides 
and pests, Reporting and recordkeeping requirements.

    For the reasons discussed above FSA amends 7 CFR part 760 as 
follows:

PART 760--INDEMNITY PAYMENT PROGRAMS

0
1. The authority citation for part 760 is revised to read as follows:

    Authority: 7 U.S.C. 4501 and 1531; 16 U.S.C. 3801, note; 19 
U.S.C. 2497; Title III, Pub. L. 109-234, 120 Stat. 474; Title IX, 
Pub. L. 110-28, 121 Stat. 211; Sec. 748, Pub. L. 111-80, 123 Stat. 
2131; Title I, Pub. L. 115-123, 132 Stat. 65; Title I, Pub. L. 116-
20, 133 Stat. 871; Division B, Title VII, Pub. L. 116-94, 133 Stat. 
2658; Title I, Pub. L. 117-43, 135 Stat. 356; and Division N, Title 
I, Pub. L. 117-328.

Subpart Q--Milk Loss Program

0
2. Revise Sec.  760.1700 to read as follows:


Sec.  760.1700  Applicability.

    This subpart specifies the terms and conditions for the Milk Loss 
Program. The Milk Loss Program will provide payments to eligible dairy 
operations for milk that was dumped or removed without compensation 
from the commercial milk market due to the results of droughts, 
wildfires, hurricanes, floods, derechos, excessive heat, winter storms, 
freeze (including polar vortex), and smoke exposure that occurred in 
the 2020, 2021, and 2022 calendar year. The Milk Loss Program will also 
provide payments to eligible dairy operations for milk that was dumped 
or removed without compensation from the commercial milk market due to 
the results of tornadoes that occurred in the 2022 calendar year.


0
3. Amend Sec.  760.1702 as follows:
0
a. Revise the definitions of ``Affected farmer'' and ``Application 
period'';
0
b. Add the definitions of ``Average adjusted gross farm income'' and 
``Average adjusted gross income'' in alphabetical order;
0
c. Revise the definition of ``Base period'';
0
d. Add the definition of ``Beginning farmer or rancher'' in 
alphabetical order;
0
e. Revise the definition of ``Commercial market'';
0
f. Add the definitions of ``Income derived from farming, ranching, and 
forestry operations'' and ``Limited resource farmer or rancher'' in 
alphabetical order;
0
g. Remove the definition of ``Milk handler'';
0
h. Add the definitions of ``Milk marketing organization'' and 
``Ownership interest'' in alphabetical order;
0
i. Amend the definition of ``Pay period'' in paragraph (1) by removing 
the words ``his whole'' both times it appears, and removing the word 
``handler'' and adding ``marketing organization'' in its place both 
times they appear;
0
j. Amend the definition of ``Payment subject to a refund'' by removing 
the word ``handler'' and adding ``marketing organization'' in its place 
both times it appears;
0
k. Revise the definition of ``Qualifying disaster event'';
0
l. Amend the definition of ``Removed from the commercial market'' in 
paragraph (2) by removing the word ``handler'' and ``milk marketing 
organization'' in its place, and removing the parenthetical phrase 
``(such as separating whole milk, destroying the fat, and drying the 
skim milk)'';
0
m. Add definitions of ``Socially disadvantaged farmer or rancher'', 
``Underserved farmer or rancher'', and ``Veteran farmer or rancher'' in 
alphabetical order; and
0
n. Remove the definition of ``Whole milk''.
    The additions and revisions read as follows:


Sec.  760.1702  Definitions.

* * * * *
    Affected farmer means an individual person or legal entity who 
produces milk which is removed from the commercial market any time or 
who produces but was unable to deliver milk to a commercial market as a 
result of a qualifying event, which is limited to either a:
    (1) Weather-related event preventing transportation of the milk; or
    (2) Weather-related event causing a power outage or structural 
damage causing milk to be unmerchantable.
    Application period means any period during calendar year 2020, 
2021, and 2022 which an affected farmer's milk is dumped or removed 
without compensation from the commercial

[[Page 62289]]

market due to a qualifying disaster event for which application for 
payment is made.
    Average adjusted gross farm income means the average of the person 
or legal entity's adjusted gross income derived from farming, ranching, 
and forestry operations for the 3 taxable years preceding the most 
immediately preceding complete taxable year.
    (1) If the resulting average adjusted gross farm income derived 
from items 1 through 12 of the definition of ``income derived from 
farming, ranching, and forestry operations'' is at least 66.66 percent 
of the average adjusted gross income of the person or legal entity, 
then the average adjusted gross farm income may also take into 
consideration income or benefits derived from the following:
    (i) The sale of equipment to conduct farm, ranch, or forestry 
operations; and
    (ii) The provision of production inputs and services to farmers, 
ranchers, foresters, and farm operations.
    (2) The relevant tax years are:
    (i) For the 2020 program year, 2016, 2017, and 2018; and
    (ii) For the 2021 program year, 2017, 2018, and 2019; and
    (iii) For the 2022 program year, 2018, 2019, and 2020.
    Average adjusted gross income means the average of the adjusted 
gross income as defined under 26 U.S.C. 62 or comparable measure of the 
person or legal entity. The relevant tax years are:
    (1) For the 2020 program year, 2016, 2017, and 2018;
    (2) For the 2021 program year, 2017, 2018, and 2019; and
    (3) For the 2022 program year, 2018, 2019, and 2020.
    Base period means the first full calendar month prior to the claim 
period in which no qualifying disaster event occurred. If the claim 
period is multiple consecutive months, the base period remains the same 
calendar month preceding the start of the claim period.
    Beginning farmer or rancher means a farmer or rancher who has not 
operated a farm or ranch for more than 10 years and who materially and 
substantially participates in the operation. For a legal entity to be 
considered a beginning farmer or rancher, at least 50 percent of the 
interest must be beginning farmers or ranchers.
* * * * *
    Commercial market means the market to which the affected farmer 
normally delivers milk and from which it was removed.
* * * * *
    Income derived from farming, ranching, and forestry operations 
means income of an individual or entity derived from:
    (1) Production of crops, specialty crops, and unfinished raw 
forestry products;
    (2) Production of livestock, aquaculture products used for food, 
honeybees, and products derived from livestock;
    (3) Production of farm-based renewable energy;
    (4) Selling (including the sale of easements and development 
rights) of farm, ranch, and forestry land, water or hunting rights, or 
environmental benefits;
    (5) Rental or lease of land or equipment used for farming, 
ranching, or forestry operations, including water or hunting rights;
    (6) Processing, packing, storing, and transportation of farm, 
ranch, forestry commodities including renewable energy;
    (7) Feeding, rearing, or finishing of livestock;
    (8) Payments of benefits, including benefits from risk management 
practices, crop insurance indemnities, and catastrophic risk protection 
plans;
    (9) Sale of land that has been used for agricultural purposes;
    (10) Payments and benefits authorized under any program made 
available and applicable to payment eligibility and payment limitation 
rules;
    (11) Income reported on Internal Revenue Service (IRS) Schedule F 
or other schedule used by the person or legal entity to report income 
from such operations to the IRS;
    (12) Wages or dividends received from a closely held corporation, 
and IC-DISC or legal entity comprised entirely of family members when 
more than 50 percent of the legal entity's gross receipts for each tax 
year are derived from farming, ranching, or forestry activities as 
defined in this subpart; and
    (13) Any other activity related to farming, ranching, and forestry, 
as determined by the Deputy Administrator for Farm Programs.
    Limited resource farmer or rancher means a farmer or rancher:
    (1) Who is a person whose:
    (i) Direct or indirect gross farm sales did not exceed:
    (A) $180,300 in each calendar year for 2017 and 2018 (the relevant 
years for the 2020 program year); or
    (B) $179,000 in each of the 2018 and 2019 calendar years for the 
2021 program year;
    (C) $189,200 in each of the 2019 and 2020 calendar years for the 
2022 program year; and,
    (ii) Total household income was at or below the national poverty 
level for a family of four in each of the same two previous years 
referenced in paragraph (1)(i) of this definition; \1\ or
---------------------------------------------------------------------------

    \1\ Limited resource farmer or rancher status can be determined 
using a website available through the Limited Resource Farmer and 
Rancher Online Self Determination Tool through Natural Resources 
Conservation Service at https://lrftool.sc.egov.usda.gov.
---------------------------------------------------------------------------

    (2) That is an entity and all members who hold an ownership 
interest in the entity meet the criteria in paragraph (1) of this 
definition.
    Milk marketing organization means the marketing agency to or 
through which the affected dairy farmer marketed milk at the time the 
milk was either dumped or unable to be delivered to the commercial 
market due to a qualifying weather related event.
    Ownership interest means to have either a legal ownership interest 
or a beneficial ownership interest in a legal entity. For the purposes 
of administering this subpart, a person or legal entity that owns a 
share or stock in a legal entity that is a corporation, limited 
liability company, limited partnership, or similar type entity where 
members hold a legal ownership interest and shares in the profits or 
losses of such entity is considered to have an ownership interest in 
such legal entity. A person or legal entity that is a beneficiary of a 
trust or heir of an estate who benefits from the profits or losses of 
such entity is considered to have a beneficial ownership interest in 
such legal entity.
* * * * *
    Qualifying disaster event means droughts, wildfires, hurricanes, 
floods, derechos, excessive heat, winter storms, freeze (including a 
polar vortex), and smoke exposure, occurring in the 2020, 2021, and 
2022 calendar years. Qualifying disaster event also includes tornadoes 
occurring in the 2022 calendar year. Losses due to drought are only 
eligible if any area within the county in which the loss occurs was 
rated by the U.S. Drought Monitor as having a D2 (Severe Drought) for 
eight consecutive weeks or a D3 (Extreme Drought) or higher level of 
drought intensity during the applicable calendar years.
* * * * *
    Socially disadvantaged farmer or rancher means a farmer or rancher 
who is a member of a group whose members have been subjected to racial, 
ethnic, or gender prejudice because of their identity as members of a 
group without regard to their individual qualities. For entities, at 
least 50 percent of the ownership interest must be held by individuals 
who are members of such a

[[Page 62290]]

group. Socially disadvantaged groups include the following and no 
others unless approved in writing by the FSA Deputy Administrator for 
Farm Programs (Deputy Administrator):
    (1) American Indians or Alaskan Natives;
    (2) Asians or Asian-Americans;
    (3) Blacks or African Americans;
    (4) Hispanics or Hispanic Americans;
    (5) Native Hawaiians or other Pacific Islanders; and
    (6) Women.
* * * * *
    Underserved farmer or rancher means a beginning farmer or rancher, 
limited resource farmer or rancher, socially disadvantaged farmer or 
rancher, or veteran farmer or rancher.
    Veteran farmer or rancher means a farmer or rancher:
    (1) Who has served in the Armed Forces (as defined in 38 U.S.C. 
101(10) \2\) and:
---------------------------------------------------------------------------

    \2\ The term ``Armed Forces'' means the United States Army, 
Navy, Marine Corps, Air Force, Space Force, and Coast Guard, 
including the reserve components.
---------------------------------------------------------------------------

    (i) Has not operated a farm or ranch for more than 10 years; or
    (ii) Has obtained status as a veteran (as defined in 38 U.S.C. 
101(2) \3\) during the most recent 10-year period; or
---------------------------------------------------------------------------

    \3\ The term ``veteran'' means a person who served in the active 
military, naval, air, or space service, and who was discharged or 
released under conditions other than dishonorable.
---------------------------------------------------------------------------

    (2) That is an entity, and at least 50 percent of the ownership 
interest is held by members who meet the criteria in paragraph (1) of 
this definition.
* * * * *


Sec. Sec.  760.1709 through 760.1718  [Redesignated as Sec. Sec.  
760.1711 through 760.1720].

0
4. Redesignate Sec. Sec.  760.1709 through 760.1718 as Sec. Sec.  
760.1711 through 760.1720


Sec. Sec.  760.1703 through 760.1708  [Redesignated as Sec. Sec.  
760.1704 through 760.1709]

0
5. Redesignate Sec. Sec.  760.1703 through 760.1708 as Sec. Sec.  
760.1704 through 760.1709.

0
6. Add new Sec.  760.1703 to read as follows:


Sec.  760.1703  Eligible affected farmers.

    (a) To be eligible, an affected farmer, the farmer must be a:
    (1) Citizen of the United States;
    (2) Resident alien, which for purposes of this subpart means 
``lawful alien'' as defined in 7 CFR 1400.3;
    (3) Partnership organized under state law consisting solely of 
citizens of the United States or resident aliens;
    (4) Corporation, limited liability company, or other organizational 
structure organized under State law consisting solely of citizens of 
the United States or resident aliens; or
    (5) Indian Tribe or Tribal organization, as defined in section 4(b) 
of the Indian Self-Determination and Education Assistance Act (25 
U.S.C. 5304).
    (b) In addition to the requirements in paragraph (a) of this 
section, to be eligible, an affected farmer must comply with all 
provisions of this subpart and, as applicable:
    (1) 7 CFR part 12--Highly Erodible Land and Wetland Conservation;
    (2) 7 CFR part 707--Payments Due Persons Who Have Died, 
Disappeared, or Have Been Declared Incompetent;
    (3) 7 CFR part 718--Provisions Applicable to Multiple Programs; and
    (4) 7 CFR part 1403--Debt Settlement Policies and Procedures.


0
7. Revise newly redesignated Sec.  760.1704 to read as follows:


Sec.  760.1704  Payments to dairy farmers for milk.

    (a) A milk loss payment will be made to an affected farmer who is 
determined by the FSA county committee to be in compliance with all the 
terms and conditions of this subpart in the amount equal to 90 percent 
for affected farmers who meet the definition of underserved farmer or 
rancher or 75 percent for all other affected farmers of the fair market 
value of the farmer's normal marketings for the application period, 
less:
    (1) Any amount the affected farmer received for milk marketed 
during the application period; and
    (2) Any payment not subject to refund that the affected farmer 
received from a milk handler with respect to milk removed from the 
commercial market during the application period.
    (b) [Reserved]


0
8. Amend newly redesignated Sec.  760.1705 by:
0
a. In paragraph (a):
0
i. Removing ``dumped milk normal marketings'' and adding its place 
``normal marketings of milk'';
0
ii. Removing the word ``his'' and adding ``the affected farmer's'' in 
its place;
0
iii. Removing the word ``whole'' both times it appears; and
0
b. Add paragraph (e).
    The addition reads as follows:


Sec.  760.1705  Normal marketings of milk.

* * * * *
    (e) The days eligible for indemnification begin on the date milk 
was removed or dumped and continue for the concurrent days milk was 
removed or dumped. Once the dairy operation returns to the normal 
marketing of milk, the dairy operation is no longer eligible for 
assistance for milk removed or dumped due to that qualifying disaster 
event unless after restarting commercial marketing of milk, additional 
milk is removed or dumped due to the same qualifying disaster event.


0
9. Amend newly redesignated Sec.  760.1706 by:
0
a. In paragraph (a):
0
i. Removing the words ``milk normal marketings'' and adding ``milk'' in 
its place;
0
ii. Removing the word ``his''; and
0
b. Revising paragraphs (b) and (c).
    The revisions read as follows:


Sec.  760.1706  Fair market value of milk.

* * * * *
    (b) The base period per cow average daily milk production is 
determined by dividing the full month of milk marketings by the average 
number of cows in milk production for that month and the number of days 
in that month. To determine the milk loss payment, the base period per 
cow average daily milk production is multiplied by the number of 
milking cows in production for the claim period and by the number of 
days milk was removed or dumped in the claim period with the result 
divided by 100 to determine the applicable hundredweight and then 
multiplied by the hundredweight pay price.
    (c) To determine the hundredweight pay price for milk, the FSA 
county committee will deduct from the gross pay price from the claim 
period milk marketing statement the per hundredweight hauling rate for 
the applicable month and the per hundredweight $0.15 promotion fee 
which it determines are normally incurred by the affected farmer but 
which were not incurred because of the removal of the farmer's milk 
from the commercial market.


0
10. Revise newly redesignated Sec.  760.1707 to read as follows:


Sec.  760.1707  Information to be furnished.

    (a) The affected farmer must furnish to the FSA county committee 
complete and accurate information sufficient to enable the FSA county 
committee or the Deputy Administrator to make the determinations 
required in this subpart. Such information must include, but is not 
limited to:
    (1) A copy of the notice from, or other evidence of action by, the 
public agency which resulted in the dumping or removal of the affected 
farmer's milk from the commercial market.

[[Page 62291]]

    (2) The specific weather or disaster event and its results on milk 
marketing for the claim period.
    (3) The quantity and butterfat test of milk produced and marketed 
during the base period. This information must be a certified statement 
from the affected farmer's milk marketing organization or any other 
evidence the FSA county committee accepts as an accurate record of milk 
production and butterfat tests during the base period.
    (4) The average number of dry cows, bred heifers, and cows milked 
during the base period and during each pay period in the application.
    (5) The affected farmer will provide two milk marketing statements, 
one for the base period and one for the claim period.
    (6) On the milk marketing statement the per hundredweight hauling 
rate and the per hundredweight $0.15 promotion fee, which are normally 
incurred by affected farmers who market through the milk marketing 
organization, that the affected farmer did not incur because of the 
dumping or removal of the milk from the commercial market, then the 
average price stated by the milk marketing organization will be the 
average gross price paid less these costs. If the milk marketing 
organization does not have this information, the affected farmer will 
furnish a statement specifying these costs, if any.
    (7) The amount of proceeds, if any, received by the affected farmer 
from the marketing of milk produced during the application period.
    (8) The amount of any payments not subject to refund made to the 
affected farmer by the milk marketing organization with respect to the 
milk produced during the application period and removed from the 
commercial market.
    (9) A detailed written statement from the affected farmer regarding 
the circumstances of the milk removal or dumping, the type and 
geographic scope of the weather event, what transportation limitations 
occurred in addition to how and where the removed or dumped milk was 
discarded.
    (b) If requested by FSA, the affected farmer must provide 
additional documentation that establishes the affected farmer's 
eligibility for a Milk Loss Program payment.


0
11. Revise newly redesignated Sec.  760.1708 to read as follows.


Sec.  760.1708  Application for payments for milk loss.

    The affected farmer or the affected farmer's legal representative 
must sign and file an application for payment on a form which is 
approved for that purpose by the Deputy Administrator. The form must be 
filed with the county FSA office for the county where the farm 
headquarters are located no later than close of business of the 
designated deadline announced by the Secretary for 2020, 2021, and 2022 
losses.


0
12. Revise newly redesignated Sec.  760.1709 to read as follows.


Sec.  760.1709  Payment limitation and AGI.

    (a) Per calendar year, a person or legal entity, other than a joint 
venture or general partnership, is eligible to receive, directly or 
indirectly payments of not more than $125,000 according to the 
provisions in Sec.  760.1507(b)(1); or not more than $250,000 according 
to the provisions in Sec.  760.1507(b)(2) if at least 75 percent of the 
person's or legal entity's average adjusted gross income is average 
adjusted gross farm income and the applicant provides the required 
certification(s) and documentation. Payments made to a joint venture or 
general partnership cannot exceed an amount determined by multiplying 
the maximum payment limitation by the number of persons and legal 
entities that comprise the first-level ownership of the joint venture 
or general partnership.
    (b) To certify the average adjusted gross farm income, a person or 
legal entity, including all members with an ownership interest in a 
legal entity, general partnership, or joint venture, must provide the 
following:
    (1) A certification in the manner prescribed by FSA from the person 
or legal entity that the average adjusted gross farm income of the 
person or legal entity is at least 75 percent of the average adjusted 
gross income; and
    (2) A certification in the manner prescribed by FSA from a licensed 
certified public accountant or attorney that the average adjusted gross 
farm income of the person or legal entity is at least 75 percent of the 
average adjusted gross income.
    (c) A new legal entity will have its adjusted gross farm income 
averaged only for those years for which it was in business; however, a 
new legal entity will not be considered ``new'' to the extent it takes 
over an existing operation and has any elements of common ownership 
interest and land with the preceding person or legal entity, or with 
persons or legal entities with an interest in the ``old'' legal entity. 
When there is such commonality, income of the previous person or legal 
entity will be averaged with that of the ``new'' legal entity for the 
base period.
    (d) For a person filing a joint federal tax return, the 
certification of average adjusted gross farm income will be reported as 
if the person had filed a separate federal tax return and the 
calculation is consistent with the information supporting the filed 
joint return.
    (e) All persons and legal entities are subject to an audit by FSA 
of any information submitted for the purpose of increasing the 
program's payment limitation. As a part of this audit, income tax 
returns may be requested, and if requested, must be supplied by all 
related persons and legal entities. In addition to any other 
requirement under any Federal statute, relevant Federal income tax 
returns and documentation must be retained a minimum of 2 years after 
the end of the calendar year corresponding to the year for which 
payments or benefits are requested. Failure to provide necessary and 
accurate information to verify compliance will result in ineligibility 
for Milk Loss Program benefits.
    (f) The direct attribution provisions in Sec.  760.1507 apply for 
both payment limitation as well as in determining average adjusted 
gross farm income as defined and used in this subpart.


0
13. Add new Sec.  760.1710 to read as follows.


Sec.  760.1710  Time and method of application.

    (a) A completed FSA-376, Milk Loss Program Application, must be 
submitted at the time of application along with the information listed 
in Sec.  760.1707 to the affected farmer's recording county office by 
the close of business on the Milk Loss Program application deadline. 
Applications may be submitted in person or by mail, email, facsimile, 
or other methods announced by FSA. The Deputy Administrator has the 
discretion and authority to waive or modify deadlines and other 
requirements or program provisions in cases where the Deputy 
Administrator determines it is equitable to do so and where the Deputy 
Administrator finds that the lateness or failure to meet such other 
requirements or program provisions do not adversely affect Milk Loss 
Program operation.
    (b) Failure of an individual, entity, or a member of an entity to 
submit the following payment limitation and payment eligibility forms 
within 60 days from the date of the Milk Loss Program application 
deadline, may result in no payment or a reduced payment:
    (1) Form AD-2047, Customer Data Worksheet, for new customers or 
existing customers who need to update their customer profile;
    (2) Form CCC-860, Socially Disadvantaged, Limited Resource,

[[Page 62292]]

Beginning and Veteran Farmer or Rancher Certification, if applicable 
for the program year or years for which the affected farmer is applying 
for the Milk Loss Program and if the affected farmer chooses to provide 
that certification;
    (3) Form CCC-901, Member Information for Legal Entities, if 
applicable;
    (4) Form CCC-902, Farm Operating Plan for an individual or legal 
entity as provided in 7 CFR part 1400;
    (5) Form FSA-510, Request for an Exception to the $125,000 Payment 
Limitation for Certain Programs, accompanied by a certification from a 
certified public accountant or attorney as to that person or legal 
entity's certification, for a legal entity and all members of that 
entity, for each applicable program year, including the legal entity's 
members, partners, or shareholders, as provided in 7 CFR part 1400; and
    (6) Form AD-1026, Highly Erodible Land Conservation (HELC) and 
Wetland Conservation (WC) Certification, for the Milk Loss Program and 
applicable affiliates as provided in 7 CFR part 12.
    (c) If supporting documentation is requested under Sec.  
760.1707(b), the documentation must be submitted to FSA within 60 
calendar days from the request or the application will be disapproved 
by FSA.
    (d) Milk Loss Program payments are limited to 30 days per year for 
each of 2020, 2021, and 2022.
    (e) Each Milk Loss Program application is limited to the milk loss 
for one calendar month due to a qualifying disaster event or multiple 
qualifying disaster events. Milk loss that occurs in a subsequent month 
for the same qualifying disaster event will require a separate 
application.


Sec.  760.1711  [Amended]

0
14. In newly redesignated Sec.  760.1711, amend paragraph (c) by 
removing the word ``his''.


0
15. Revise newly redesignated Sec.  760.1712 to read as follows:


Sec.  760.1712  Estates and trusts; minors.

    (a) A receiver of an insolvent debtor's estate and the trustee of a 
trust estate will, for the purpose of this subpart, be considered to 
represent an insolvent affected farmer and the beneficiaries of a 
trust, respectively, and the production of the receiver or trustee will 
be considered to be the production of the represented person. Program 
documents executed by any such person will be accepted only if they are 
legally valid and such person has the authority to sign the applicable 
documents.
    (b) An affected dairy farmer who is a minor will be eligible for 
milk loss payments only if at least one of the following requirements 
is true:
    (1) The right of majority has been conferred on him by court 
proceedings or by law;
    (2) A guardian has been appointed to manage the property and the 
applicable program documents are signed by the guardian; or
    (3) A bond is furnished under which the surety guarantees any loss 
incurred for which the minor would be liable had the person been an 
adult.


Sec.  760.1713  [Amended]

0
16. Amend newly redesignated Sec.  760.1713 by:
0
a. In paragraph (a) removing the words ``or manufacturer''; and
0
b. In paragraph (b) removing the words ``he would otherwise have'' and 
adding ``that would otherwise be available'' in their place.


Sec.  760.1714  [Amended]

0
17. Amend newly redesignated Sec.  760.1714 by removing the words ``or 
manufacturer''.


Sec.  760.1716  [Amended]

0
18. Amend newly redesignated Sec.  760.1716 as follows:
0
a. In paragraph (a), remove the words ``as well as his milk handler 
and'' and add ``milk marketing organization, and'' in their place.
0
b. In paragraph (b) remove the words ``his milk handler'' and add 
``milk marketing organization'' in their place.


0
19. Amend newly redesignated Sec.  760.1720 by:
0
a. In paragraph (a)(2), removing the word ``whole'' and;
0
b. In paragraph (a)(3), removing the word ``handler'' and adding in its 
place ``marketing organization'' and removing the word ``whole''; and
0
c. Revise paragraph (a)(4).
    The revision reads as follows:


Sec.  760.1720  Calculating payments for milk losses.

    (a) * * *
    (4) Multiplied by a program factor of 90 percent for underserved 
farmers or ranchers, or 75 percent for all other farmers or ranchers.
* * * * *

Subpart S--Emergency Relief Program


Sec.  760.1902  [Amended]

0
20. Amend Sec.  760.1902 as follows:
0
a. In paragraph (b)(3), remove the word ``Law'' and add ``law 
consisting solely of citizens of the United States or resident 
aliens''; and
0
b. In paragraph (b)(4), remove the word ``law'' and add ``law 
consisting solely of citizens of the United States or resident 
aliens''.


Sec.  760.1905  [Amended]

0
21. In Sec.  760.1905, in paragraph (b)(3) remove the word ``net'' and 
add ``gross'' in its place.

John Berge,
Acting Administrator, Farm Service Agency.
[FR Doc. 2023-19479 Filed 9-6-23; 4:15 pm]
BILLING CODE 3411-E2-P