[Federal Register Volume 88, Number 209 (Tuesday, October 31, 2023)]
[Notices]
[Pages 74404-74419]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-24009]


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

DEPARTMENT OF AGRICULTURE

Farm Service Agency

[Docket ID FSA-2023-0020]


Notice of Funds Availability; Emergency Relief Program 2022 (ERP 
2022)

AGENCY: Farm Service Agency, USDA.

ACTION: Notice of funds availability.

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

SUMMARY: The Farm Service Agency (FSA) is issuing this notice 
announcing ERP 2022, which will provide payments to eligible crop 
producers for losses due to qualifying disaster events including 
wildfires, hurricanes, floods, derechos, excessive heat, tornadoes, 
winter storms, freeze (including a polar vortex), smoke exposure, 
excessive moisture, qualifying drought, and related conditions that 
occurred in calendar year 2022. ERP 2022 will be administered through 2 
tracks (referred to as Track 1 and Track 2). Track 1 will

[[Page 74405]]

assist eligible crop producers who received indemnities for eligible 
crop or tree losses through certain Federal crop insurance policies or 
payments for crop losses through the Noninsured Crop Disaster 
Assistance Program (NAP). Track 2 will assist eligible crop producers 
for other eligible crop and tree losses through a revenue-based 
approach.

DATES: 
    Funding availability: Application period for Track 1 will begin 
October 31, 2023. Application period for Track 2 will begin October 31, 
2023.
    Comments: We will consider comments we receive by January 2, 2024.

ADDRESSES: You may submit comments by the following method: Federal 
eRulemaking Portal: Go to https://www.regulations.gov and search for 
Docket ID FSA-2023-0020. You may also send comments to the Desk Officer 
for Agriculture, Office of the Information and Regulatory Affairs, 
Office of Management and Budget, Washington, DC 20503. Comments will be 
available for public inspection online at https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Kathy Sayers; telephone: (202) 720-
6825; email: [email protected]. Individuals who require alternative 
means for communication should contact the 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

    Title I of the Disaster Relief Supplemental Appropriations Act, 
2023 (Division N of the Consolidated Appropriations Act, 2023; Pub. L. 
117-328) provides approximately $3.74 billion, to remain available 
until expended, for necessary expenses related to losses of revenue, 
quality, or production losses of crops (including milk, on-farm stored 
commodities, crops prevented from planting in 2022, and harvested 
adulterated wine grapes), trees, bushes, and vines, as a consequence of 
droughts, wildfires, hurricanes, floods, derechos, excessive heat, 
tornadoes, winter storms, freeze, including a polar vortex, smoke 
exposure, and excessive moisture occurring in calendar year 2022. 
Losses due to drought are only eligible for assistance if any area 
within the county in which the loss occurred was rated by the U.S. 
Drought Monitor as having a D2 (severe drought) for 8 consecutive weeks 
or a D3 (extreme drought) or higher level of drought intensity.
    FSA is using the funding to assist eligible producers who suffered 
eligible losses through several programs.\1\ In this document, FSA is 
announcing ERP 2022, which will assist eligible crop producers who 
suffered eligible losses due to qualifying disaster events as defined 
in this document. These producers have been significantly impacted by 
qualifying disaster events occurring in 2022, which have resulted in 
significant losses. FSA has designed ERP 2022 consistent with the 
public interest in streamlining and expediting disaster assistance 
payments to agricultural producers to the greatest extent possible. ERP 
2022 will be administered through 2 tracks:
---------------------------------------------------------------------------

    \1\ FSA previously announced Emergency Livestock Relief Program 
2022 (ELRP 2022) on September 27, 2023 (88 FR 66361-66366) and the 
Milk Loss Program on September 11, 2023 (88 FR 62285-62292). ELRP 
2022 and Milk Loss Program payments for 2022 losses have the same 
funding source as ERP 2022.
---------------------------------------------------------------------------

     Track 1 will use a streamlined process with pre-filled 
application forms, as discussed in this document. It will provide 
payments for eligible crop losses and tree losses, described below, 
where data are already on file with FSA or the Risk Management Agency 
(RMA), as a result of the producer previously receiving a NAP payment 
or an indemnity under certain Federal crop insurance policies for a 
loss in the same year that could have been affected by a qualifying 
disaster event; and
     Track 2 will provide payments for eligible crop and tree 
losses through a revenue-based approach using data provided by eligible 
producers on application forms.
    Producers with losses that are eligible for Track 1 may apply for 
Track 1, Track 2, or both tracks; however, the Track 2 payment 
calculation will take into account any payments the producer receives 
under Track 1 to ensure a producer is not receiving duplicate benefits 
under both tracks.
    Both tracks cover the same eligible crops, as defined below. For 
payment limitation purposes, ERP 2022 classifies eligible crops into 
the following categories:
     specialty crops;
     non-specialty crops;
     high value crops; and
     other crops.
    The term ``non-specialty crop'' only applies to Track 1, the terms 
``high value crop'' and ``other crop'' only apply to Track 2, and the 
term ``specialty crop'' applies to both tracks; those terms are defined 
in this document and discussed below in the payment limitation section.

Definitions

    The definitions in 7 CFR parts 718 and 1400 apply to ERP 2022, 
except as otherwise provided in this document. The following 
definitions also apply.
    2017 WHIP means the 2017 Wildfires and Hurricanes Indemnity Program 
(7 CFR part 760, subpart O).
    Administrative fee means the amount an insured producer paid for 
catastrophic risk protection and any additional coverage for each crop 
year as specified in the applicable Federal crop insurance policy.
    Aquaculture means any species of aquatic organisms grown as food 
for human or livestock consumption or for industrial or biomass uses, 
fish raised as feed for fish that are consumed by humans, and 
ornamental fish propagated and reared in an aquatic medium. Eligible 
aquacultural species must be raised by a commercial operator and in 
water in a controlled environment.
    ARC means the Agriculture Risk Coverage program (7 CFR part 1412).
    Average adjusted gross farm income means the average of the person 
or legal entity's adjusted gross income (AGI) derived from farming, 
ranching, and forestry operations, including losses, for the base 
period consisting of the 2018, 2019, and 2020 tax years.
    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 AGI 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:
    (1) The sale of equipment to conduct farm, ranch, or forestry 
operations; and
    (2) The provision of production inputs and production services to 
farmers, ranchers, foresters, and farm operations.
    For legal entities not required to file a Federal income tax 
return, or a person or legal entity that did not have taxable income in 
one or more tax years during the base period, the average will be the 
adjusted gross farm income, including losses, averaged for the 2018, 
2019, and 2020 tax years, as determined by FSA. A new legal entity will 
have its adjusted gross farm income averaged only for those years of 
the base period 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

[[Page 74406]]

with the preceding person or legal entity from which it took over. 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. For a person filing a joint tax return, the certification of 
average adjusted farm income may 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.
    Average AGI means the average of the AGI as defined under 26 U.S.C. 
62 or comparable measure of the person or legal entity. The relevant 
tax years for the 2022 program year are 2018, 2019, and 2020.
    BCAP means the Biomass Crop Assistance Program (7 CFR part 1450).
    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.
    Buy-up NAP coverage means NAP coverage at a payment amount that is 
equal to an indemnity amount calculated for buy-up coverage computed 
under section 508(c)I or (h) of the Federal Crop Insurance Act and 
equal to the amount that the buy-up coverage yield for the crop exceeds 
the actual yield for the crop.
    Catastrophic coverage has the same meaning as for NAP (in 7 CFR 
1437.3), which is:
    (1) For insured crops, the coverage offered by the Federal Crop 
Insurance Corporation (FCIC) under section 508(b) of the Federal Crop 
Insurance Act.
    (2) For eligible NAP crops, coverage at the following levels due to 
an eligible cause of loss impacting the NAP covered crop during the 
coverage period:
    (i) Prevented planting in excess of 35 percent of the intended 
acres;
    (ii) A yield loss in excess of 50 percent of the approved yield;
    (iii) A value loss in excess of 50 percent; or
    (iv) An animal-unit-days (AUD) loss greater than 50 percent of 
expected AUD.
    CFAP means the Coronavirus Food Assistance Program 1 and 2 under 7 
CFR part 9, subparts A through C, excluding assistance for contract 
producers specified in Sec.  9.203(l) through (o).
    Certifying agent means a private or governmental entity accredited 
by the USDA Secretary for the purpose of certifying a production, 
processing, or handling operation as organic.
    Controlled environment means an environment in which everything 
that can practicably be controlled by the producer with structures, 
facilities, and growing media (including but not limited to water, 
soil, or nutrients), is in fact controlled by the producer, as 
determined by industry standards.
    Coverage level means the percentage determined by multiplying the 
elected yield percentage under a Federal crop insurance policy or NAP 
coverage by the elected price percentage.
    Crop year means:
    (1) For insured crops and trees, the crop year as defined according 
to the applicable Federal crop insurance policy; and
    (2) For NAP-covered crops, the crop year as defined in 7 CFR 
1437.3.
    Deputy Administrator means the FSA Deputy Administrator for Farm 
Programs.
    Direct market crop means a crop sold directly to consumers without 
the intervention of an intermediary such as a registered handler, 
wholesaler, retailer, packer, processor, shipper, or buyer (for 
example, a crop sold at a farmer's market or roadside stand), excluding 
crops sold for livestock consumption.
    Disaster year means the calendar year in which the qualifying 
disaster event occurred (that is, 2022).
    ELAP means the Emergency Assistance for Livestock, Honeybees, and 
Farm-Raised Fish Program (7 CFR part 1416, subpart B).
    Eligible crop means a crop, including eligible aquaculture, that is 
produced, or would have been produced if the qualifying disaster event 
had not occurred (for example, crops prevented from planting), in the 
United States as part of a farming operation. It excludes:
    (1) Crops for grazing;
    (2) Aquatic species that do not meet the definition of aquaculture;
    (3) Cannabis sativa L. and any part of that plant that does not 
meet the definition of hemp; and
    (4) Timber.
    Farming operation means a business enterprise engaged in the 
production of agricultural products, commodities, or livestock, 
operated by a person, legal entity, or joint operation. A person or 
legal entity may have more than one farming operation if the person or 
legal entity is a member of one or more legal entity or joint 
operation.
    FCIC means the Federal Crop Insurance Corporation, a wholly owned 
Government Corporation of USDA, administered by RMA.
    Federal crop insurance means an insurance policy reinsured by FCIC 
administered by RMA under the provisions of the Federal Crop Insurance 
Act (7 U.S.C. 1501-1524), as amended. It does not include private plans 
of insurance.
    Federal crop insurance indemnity means the payment to a participant 
for crop losses covered under Federal crop insurance administered by 
RMA in accordance with the Federal Crop Insurance Act.
    Feedstock means a crop including, but not limited to, grasses or 
legumes, algae, cotton, peanuts, coarse grains, small grains, oilseeds, 
or short rotation woody crops grown expressly for the purpose of 
producing a biobased material or product, and does not include residues 
and by-products of crops grown for any other purpose.
    Hemp means the plant species Cannabis sativa L. and any part of 
that plant, including the seeds and all derivatives, extracts, 
cannabinoids, isomers, acids, salts, and salts of isomers, whether 
growing or not, with a delta-9 tetrahydrocannabinol concentration of 
not more than 0.3 percent on a dry weight basis, that is grown under a 
license or other required authorization issued by the applicable 
governing authority that permits the production of the hemp.
    High value crop means, for Track 2:
    (1) Any eligible crop that is not specifically identified as a 
specialty crop or listed in the definition of ``other crop''; and
    (2) Any eligible crop, regardless of whether it is identified as a 
specialty crop or listed in the definition of ``other crop,'' if the 
crop is a direct market crop, organic crop, or a crop grown for a 
specific market in which specialized products can be sold resulting in 
an increased value compared to the typical market for the crops (for 
example, soybeans intended for tofu production), as determined by the 
Deputy Administrator.
    Note: The term ``high value crop'' does not apply to Track 1.
    Income derived from farming, ranching, and forestry operations 
means income of a person or legal entity derived from:
    (1) Production of 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;

[[Page 74407]]

    (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, or forestry commodities including for renewable energy;
    (7) Feeding, rearing, or finishing of livestock;
    (8) Payments of benefits, including benefits from risk management 
practices, Federal crop insurance indemnities, and catastrophic risk 
protection plans;
    (9) Sale of land that has been used for agricultural purposes;
    (10) Benefits (including, but not limited to, cost-share assistance 
and other payments) from any Federal program made available and 
applicable to payment eligibility and payment limitation rules, as 
provided in 7 CFR part 1400;
    (11) Income reported on 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, 
an Interest Charge Domestic International Sales Corporation (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, and forestry activities as defined in 
this document; and
    (13) Any other activity related to farming, ranching, or forestry, 
as determined by the Deputy Administrator.
    IRS means the Department of the Treasury, Internal Revenue Service.
    LDP means the Loan Deficiency Payment programs (7 CFR parts 1421, 
1425, 1427, 1434, and 1435).
    Legal entity means a corporation, joint stock company, association, 
limited partnership, limited liability company, irrevocable trust, 
estate, charitable organization, general partnership, joint venture, or 
other similar organization created under Federal or State law including 
any such organization participating in a business structure as a 
partner in a general partnership, a participant in a joint venture, a 
grantor of a revocable trust, or as a participant in a similar 
organization. A business operating as a sole proprietorship is 
considered a legal entity.
    Limited resource farmer or rancher means a farmer or rancher who is 
both of the following:
    (1) A person whose direct or indirect gross farm sales did not 
exceed $189,200 in each of the 2019 and 2020 calendar years (the 
relevant years for the 2022 program year); and
    (2) A person whose total household income was at or below the 
national poverty level for a family of four in each of the 2019 and 
2020 calendar years. 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 the Natural 
Resources Conservation Service at https://lrftool.sc.egov.usda.gov.
    For an entity to be considered a limited resource farmer or 
rancher, all members who hold an ownership interest in the entity must 
meet the criteria in paragraphs (1) and (2) of this definition.
    LFP means the Livestock Forage Disaster Program (7 CFR part 1416, 
subpart C).
    MLG means marketing loan gains from the Marketing Assistance Loan 
program (7 CFR parts 1421, 1425, 1427, 1434, and 1435).
    Minor child means a person who is under 18 years of age as of June 
1, 2022.
    MFP means the 2018 Market Facilitation Program (7 CFR part 1409, 
subpart A) and the 2019 Market Facilitation Program (7 CFR part 1409, 
subpart B).
    NAP means the Noninsured Crop Disaster Assistance Program (7 CFR 
part 1437).
    NAP service fee means the fee the producer paid to obtain NAP 
coverage specified in 7 CFR 1437.7.
    Non-specialty crop means a crop, under Track 1, that does not meet 
the definition of specialty crop. Note: The term ``non-specialty crop'' 
does not apply to Track 2.
    On-Farm Storage Loss Program means the On-Farm Storage Loss Program 
(7 CFR part 760, subpart P).
    Organic crop means a crop that is grown on acreage certified by a 
certifying agent as conforming to organic standards (7 CFR part 205) 
and organically produced consistent with section 2103 of the Organic 
Foods Production Act of 1990 (7 U.S.C. 6502).
    Other crop means, for Track 2, cotton, peanuts, rice, feedstock, 
and any crop grown with an intended use of grain, silage, or forage, 
unless the crop meets the requirements in paragraph (2) of the 
definition of ``high value crop.'' Note: The term ``other crop'' does 
not apply to Track 1.
    Ownership interest means to have either a legal ownership interest 
or a beneficial ownership interest in a legal entity. For the purposes 
of administering ERP 2022, 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 also considered to have a beneficial ownership interest in 
such legal entity.
    Person means an individual who is a natural person and does not 
include a legal entity.
    PLC means the Price Loss Coverage program (7 CFR part 1412).
    Premium means the premium paid by the producer for Federal crop 
insurance coverage or NAP buy-up coverage levels.
    Producer means a person or legal entity who was entitled to a share 
in the eligible crop or would have shared had the eligible crop been 
produced.
    Production inputs mean material to conduct farming operations, such 
as seeds, chemicals, and fencing supplies.
    Production services mean services provided to support a farming 
operation, such as custom farming, custom feeding, and custom fencing.
    Qualifying disaster event means wildfires, hurricanes, floods, 
derechos, excessive heat, tornadoes, winter storms, freeze (including a 
polar vortex), smoke exposure, excessive moisture, qualifying drought, 
and related conditions occurring in 2022.
    Qualifying drought means an area within the county was rated by the 
U.S. Drought Monitor as having a drought intensity of D2 (severe 
drought) for 8 consecutive weeks or D3 (extreme drought) or higher 
level for any period of time during the applicable calendar year.
    QLA Program means the Quality Loss Adjustment Program (7 CFR part 
760, subpart R).
    Related condition means damaging weather and adverse natural 
occurrences that occurred concurrently with and as a direct result of a 
specified qualifying disaster event. Related conditions include, but 
are not limited to:
    (1) Excessive wind that occurred as a direct result of a derecho;
    (2) Silt and debris that occurred as a direct and proximate result 
of flooding;
    (3) Excessive wind, storm surges, tropical storms, and tropical 
depressions that occurred as a direct result of a hurricane; and
    (4) Excessive wind and blizzards that occurred as a direct result 
of a winter storm.

[[Page 74408]]

    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 group. Socially disadvantaged groups include 
the following and no others unless approved in writing by the 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.
    Specialty crops means fruits, tree nuts, vegetables, culinary herbs 
and spices, medicinal plants, and nursery, floriculture, and 
horticulture crops. This includes common specialty crops identified by 
USDA's Agricultural Marketing Service at https://www.ams.usda.gov/services/grants/scbgp/specialty-crop and other crops as designated by 
the Deputy Administrator. This term also includes trees covered by 
Federal crop insurance policies included in Track 1.
    STRP means the Seafood Trade Relief Program (announced in the 
notice of funds availability published on September 14, 2020 (85 FR 
56572)).
    Substantial beneficial interest (SBI) has the same meaning as 
specified in 7 CFR 457.8. For the purposes of ERP 2022 Track 1, Federal 
crop insurance records for ``transfer of coverage, right to indemnity'' 
are considered the same as SBIs.
    Tree means a tall, woody plant having comparatively great height, 
and a single trunk from which an annual crop is produced for commercial 
market for human consumption, such as a maple tree for syrup, or papaya 
or orchard tree for fruit. It includes immature trees that are intended 
for commercial purposes. Nursery stock, banana and plantain plants, and 
trees used for pulp or timber are not considered eligible trees.
    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.
    Unit means the unit structure as defined under the applicable 
Federal crop insurance policy for insured crops or in 7 CFR 1437.9 for 
NAP-covered crops.
    United States means all 50 States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, and any other 
territory or possession of the United States.
    USDA means the U.S. Department of Agriculture.
    U.S. Drought Monitor means the system for classifying drought 
severity according to a range of abnormally dry to exceptional drought. 
It is a collaborative effort between Federal and academic partners, 
produced on a weekly basis, to synthesize multiple indices, outlooks, 
and drought impacts on a map and in narrative form. This synthesis of 
indices is reported by the National Drought Mitigation Center at http://droughtmonitor.unl.edu.
    Veteran farmer or rancher means a farmer or rancher 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.
---------------------------------------------------------------------------

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

    \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.
---------------------------------------------------------------------------

    For an entity to be considered a veteran farmer or rancher, at 
least 50 percent of the ownership interest must be held by members who 
have served in the Armed Forces and meet the criteria in paragraph (1) 
or (2) of this definition.
    WFRP means Whole-Farm Revenue Protection available through the 
FCIC, including coverage under the Micro Farm Program.
    WHIP+ means the Wildfires and Hurricanes Indemnity Program Plus (7 
CFR part 760, subpart O).

Producer Eligibility

    To be eligible for ERP 2022, a producer must meet all requirements 
described below for Track 1 or Track 2, as applicable, and be a:
    (1) Citizen of the United States;
    (2) Resident alien, which for purposes of ERP 2022 means ``lawful 
alien'' as defined in 7 CFR part 1400;
    (3) Partnership organized under State law;
    (4) Corporation, limited liability company, or other organizational 
structure organized under State law;
    (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); or
    (6) Foreign person or foreign entity who meets all requirements as 
described in 7 CFR part 1400.

Track 1 Overview

    Track 1 will provide a streamlined application process for eligible 
crop and tree losses during the 2022 or 2023 crop years \4\ for which a 
producer had:
---------------------------------------------------------------------------

    \4\ The 2023 crop year is included because a qualifying disaster 
event occurring in the 2022 calendar year may have caused a loss of 
a crop during the 2023 crop year, based on how ``crop year'' is 
defined in the applicable Federal crop insurance policy or NAP 
provisions.
---------------------------------------------------------------------------

     A Federal crop insurance policy that provided coverage for 
crop production losses or tree losses related to the qualifying 
disaster events and received an indemnity \5\ for a crop and unit, 
excluding:
---------------------------------------------------------------------------

    \5\ For purposes of Track 1, ``indemnity'' does not include 
cottonseed endorsement payments, downed rice endorsement payments, 
sugarcane crop replacement endorsement payments, replant payments, 
or raisin reconditioning payments.

--crops with an intended use of grazing,\6\
---------------------------------------------------------------------------

    \6\ Crops with an intended use of grazing are covered under ELRP 
2022.
---------------------------------------------------------------------------

--livestock policies,
--forage seeding,
--Margin Protection Plan policies purchased without a base policy,\7\
---------------------------------------------------------------------------

    \7\ While the majority of crop insurance policies cover an 
eligible crop loss, a small number do not and are not eligible for 
ERP, including livestock policies, forage seeding, and margin 
policies.
---------------------------------------------------------------------------

--banana plants insured under the Hawaii Tropical Trees provisions,\8\ 
and
---------------------------------------------------------------------------

    \8\ While bananas are covered under crops, the banana plants are 
not a tree, bush or a vine.
---------------------------------------------------------------------------

--policies issued in Puerto Rico; \9\ or
---------------------------------------------------------------------------

    \9\ Federal crop insurance policies issued in Puerto Rico are 
not transmitted through the standardized Policy Acceptance and 
Storage System. Therefore, pre-filled applications cannot be 
automatically generated under Track 1.

     NAP coverage and received a NAP payment for a crop and 
unit, excluding crops with an intended use of grazing.
    The applicable Federal crop insurance policies and NAP provide 
payments to producers for crop and tree losses due to eligible causes 
of loss, as defined in the producer's Federal crop insurance policy or 
NAP regulations and basic provisions. RMA and FSA are using data 
submitted by producers for Federal crop insurance or NAP purposes to 
calculate a producer's eligible loss under Track 1. The Track 1 payment 
calculation is intended to compensate eligible crop and tree producers 
for a percentage of that loss determined by the applicable ERP factor, 
which varies based on the producer's level of Federal crop insurance or 
NAP coverage, as described later in this document. To be eligible for 
payment under Track 1, a producer must have suffered a crop or tree 
loss that was caused, in whole or in part, by a qualifying disaster 
event. Because the amount of loss due to a

[[Page 74409]]

qualifying disaster event cannot be separated from the amount of loss 
caused by other causes of loss covered by some Federal crop insurance 
policies or NAP, the Track 1 payment will be based on the producer's 
loss as long as those losses were caused, in whole or in part, by a 
qualifying disaster event.
    Track 1 excludes losses to aquacultural species for which the 
producer received a payment under ELAP to avoid providing duplicate 
benefits for losses already at least partially compensated for by ELAP. 
It also excludes losses for which the producer received a Phase 1 
payment under the previous ERP.\10\
---------------------------------------------------------------------------

    \10\ The previous ERP provided assistance for eligible crop 
losses due to qualifying disaster events in calendar years 2020 and 
2021. Phase 1 of that program included 2022 crop year losses if the 
loss was due, in whole or in part, to a qualifying disaster event 
that occurred in the 2021 calendar year.
---------------------------------------------------------------------------

    In some situations, a producer may have received both a NAP payment 
for a crop loss and an indemnity under a Federal crop insurance policy 
that is included in Track 1 to address the same loss. Examples of these 
policies include Rainfall Index plans for Annual Forage; Pasture, 
Rangeland, and Forage; and Apiculture. In those situations, the 
producer must elect whether to receive the Track 1 payment based only 
on the data associated with their Federal crop insurance indemnity or 
their NAP payment, but they cannot receive a Track 1 payment based on 
both the crop insurance indemnity and NAP payment. This policy is 
necessary to avoid compensating producers twice for the same loss under 
Track 1.

Track 1 Applications

    FSA and RMA will identify the producers who meet the criteria 
described above to apply for Track 1. For each of those producers, FSA 
will generate an FSA-523, Emergency Relief Program (ERP) 2022 Track 1 
Application, with certain items pre-filled with information already on 
file with USDA, as listed below. Producers cannot alter the data in 
these pre-filled items; any alterations in the pre-filled data on the 
application will result in the producer's Track 1 application being 
considered incomplete and the application will not be processed by FSA. 
FSA will not calculate Track 1 payments using data manually submitted 
by producers. Track 1 payments will only be calculated using data 
already on file with RMA and FSA. If a producer believes that any 
information that has been pre-filled is incorrect, the producer should 
contact their Federal crop insurance agent for insured crops or their 
FSA county office for NAP-covered crops. Once the corrected data have 
been received and processed by RMA and FSA, an updated Track 1 
application may be generated for the producer.
    For producers who received a Federal crop insurance indemnity for 
eligible policies, the pre-filled application will include:
     the producer's physical State and county codes,
     unit numbers,
     crops, and
     crop years.
    For producers who received a NAP payment, the pre-filled 
applications will include:
     the producer's administrative State and county codes,
     unit numbers,
     crop years,
     pay crops, and
     pay groups.
    FSA will also pre-fill the calculated Track 1 payment amounts, 
prior to any payment reductions for reasons such as payment limitation 
and factoring of payments to stay within available funding.
    Receipt of a pre-filled application form is not a confirmation that 
the producer is eligible to receive a Track 1 payment. In order to 
receive a payment, the producer must certify that their Federal crop 
insurance indemnity or NAP payment on which the Track 1 payment will be 
based was due, in whole or in part, to a crop production loss or a tree 
loss caused by a qualifying disaster event. Producers are responsible 
for reviewing the list of qualifying disaster events, and if a loss was 
due to drought, producers must also ensure that the county where the 
crop and unit was located meets the definition of ``qualifying 
drought.'' FSA will provide a factsheet and other materials to provide 
examples and more details on the qualifying disaster events to assist 
producers (available through FSA county offices and at https://www.fsa.usda.gov/programs-and-services/emergency-relief/index). 
Producers who received a Federal crop insurance indemnity under a WFRP 
policy or for a whole-farm unit must also certify to the percentage of 
their expected revenue or total liability for the unit, respectively, 
from specialty crops for the purpose of administration of ERP 2022 
payment limitations.\11\
---------------------------------------------------------------------------

    \11\ WFRP provides risk management safety for specialty and non-
specialty crops under one Federal crop insurance policy. The 
producer certifies to the percentage of expected revenue or total 
liability for the unit for specialty crops, which results in the 
attribution of the specialty and non-specialty crop portions of the 
ERP 2022 payment to the separate payment limitations.
---------------------------------------------------------------------------

    Producers must also certify on FSA-523 that they will meet the 
requirement to purchase Federal crop insurance or NAP coverage for the 
next 2 available crop years, as described later in this document. If 
multiple crops and units are listed on an application and the producer 
only agrees to purchase Federal crop insurance or NAP coverage for only 
some of the crops and units, a Track 1 payment will be issued only for 
those crops and units for which the producer agrees to purchase Federal 
crop insurance or NAP coverage for the next 2 available crop years.
    The portion of the form for producers who had Federal crop 
insurance will list the primary policy holder and all producers with an 
SBI who have a record established with FSA. If one or more producers 
with an SBI had a share in a crop, the primary policy holder must 
update the application to show the share in the crop for each of those 
producers in addition to the primary policy holder. If the producer(s) 
are determined to be eligible, payments will be issued to the primary 
policy holder and to any eligible producers with an SBI based on their 
ownership share of the crop. To receive a payment, each person or 
entity that is listed as having a share of the Track 1 payment for a 
crop and unit must sign the application and agree to purchase Federal 
crop insurance or NAP coverage for that crop and unit.

Track 1 Payment Calculation

    FSA and RMA will calculate Track 1 payments using the loss data on 
file with FSA or RMA at the time of payment calculation or as later 
updated by FSA or RMA upon identification of an error in the data on 
file at time of payment calculation.\12\ The Track 1 payment 
calculation for a crop and unit will depend on the type and level of 
Federal crop insurance or NAP coverage obtained by the producer. Crops 
covered under a WFRP policy or included in a whole-farm unit will be 
treated as a single crop for payment calculation purposes. Separate 
payment limitations will apply to the portions of the payments that are 
attributed to specialty and to non-specialty crops, as described later 
in this document.
---------------------------------------------------------------------------

    \12\ Track 1 payments will be calculated using only data on file 
with RMA and FSA. FSA will not calculate Track 1 payments using data 
manually submitted by producers.
---------------------------------------------------------------------------

    Each payment calculation will use an ERP factor based on the 
producer's level of Federal crop insurance or NAP coverage for that 
eligible crop or tree, as specified in the following tables.

[[Page 74410]]



------------------------------------------------------------------------
                                                              ERP factor
           Federal crop insurance coverage level                 (%)
------------------------------------------------------------------------
Catastrophic coverage......................................         75.0
More than catastrophic coverage but less than 55 percent...         80.0
At least 55 percent but less than 60 percent...............         82.5
At least 60 percent but less than 65 percent...............         85.0
At least 65 percent but less than 70 percent...............         87.5
At least 70 percent but less than 75 percent...............         90.0
At least 75 percent but less than 80 percent...............         92.5
At least 80 percent........................................         95.0
------------------------------------------------------------------------


------------------------------------------------------------------------
                                                              ERP factor
                     NAP coverage level                          (%)
------------------------------------------------------------------------
Catastrophic coverage......................................         75.0
50 percent.................................................         80.0
55 percent.................................................         85.0
60 percent.................................................         90.0
65 percent.................................................         95.0
------------------------------------------------------------------------

    When determining the ERP factors, analysis was conducted to ensure 
that payments do not exceed available funding and, in aggregate across 
all eligible crop and tree producers, do not exceed 90 percent of 
losses, as required by Title I of the Disaster Relief Supplemental 
Appropriations Act, 2023. The difference between the ERP factors for 
Federal crop insurance and NAP is due to differences in the available 
coverage levels under Federal crop insurance and NAP. Federal crop 
insurance is available at the catastrophic coverage level (50 percent 
production coverage of 55 percent of the price) and buy-up coverage 
levels (50 percent to 85 percent of the production for 100 percent of 
the price). The coverage level for NAP is limited by law to a maximum 
of 65 percent buy-up coverage. For both NAP and Federal crop insurance, 
the ERP payment factor for the catastrophic and maximum buy-up levels 
are 75 percent and 95 percent, respectively, with the ERP factors 
stair-stepping for the buy-up options in-between as shown in the tables 
above. Title I of the Disaster Relief Supplemental Appropriations Act, 
2023, provides that payments to eligible crop and tree producers who 
did not have Federal crop insurance or NAP coverage cannot exceed 70 
percent of their loss. The lowest ERP factor for eligible crop and tree 
producers who had Federal crop insurance or NAP is set at 75 percent. 
Payment limits and other reductions will result in reducing ERP 2022 
payments, further lowering the percent of losses covered.
    For eligible crop producers who received Federal crop insurance 
indemnities, RMA will use the producer's data that are already on file, 
which provide the necessary information to determine the producer's 
amount of loss. Federal crop insurance provides financial assistance 
for crop losses due to specified natural disasters and uses a 
producer's data to calculate a payment based on the type of Federal 
crop insurance coverage elected by the producer. As previously 
discussed, Track 1 is intended to compensate eligible crop and tree 
producers for a percentage of their loss determined by the applicable 
ERP factor based on the level of Federal crop insurance coverage 
purchased; therefore, RMA will calculate each producer's loss 
consistent with the approved RMA loss procedures for the type of 
coverage purchased \13\ but using the ERP factor. This calculated 
amount will then be adjusted by subtracting the gross Federal crop 
insurance indemnity.
---------------------------------------------------------------------------

    \13\ For example, ERP 2022 for Area Risk Protection Insurance 
(ARPI) and Stacked Income Protection (STAX) is based on area-wide 
(for example, county) production losses.
---------------------------------------------------------------------------

    After calculating the producer's loss and subtracting the gross 
Federal crop insurance indemnity as described above for each crop and 
unit, progressive factoring \14\ will be applied. Progressive factoring 
will be applied by payment range, according to the table below, and FSA 
will calculate the sum of each of those calculations.
---------------------------------------------------------------------------

    \14\ Progressive factoring is a mechanism that ensures the 
limited available funding is distributed in a manner benefitting the 
majority of producers rather than a few. Additionally, progressive 
factoring increases emergency relief payments to most participants 
while reducing larger potential payments which increases the 
proportion of funding provided to smaller producers.

------------------------------------------------------------------------
                                                             Progressive
                       Payment range                          factor (%)
------------------------------------------------------------------------
Up to $2,000...............................................          100
$2,001 to $4,000...........................................           80
$4,001 to $6,000...........................................           60
$6,001 to $8,000...........................................           40
$8,001 to $10,000..........................................           20
Over $10,000...............................................           10
------------------------------------------------------------------------

    For example, to apply progressive factoring to a calculated loss 
(after subtraction of indemnities) of $5,000, FSA would multiply:
     the first $2,000 by a factor of 100 percent ($2,000 x 100% 
= $2,000),
     the second $2,000 by a factor of 80 percent ($2,000 x 80% 
= $1,600), and
     the remaining $1,000 by a factor of 60 percent ($1,000 x 
60% = $600).
    The sum of those calculations is $4,200, which is the calculated 
ERP 2022 payment after progressive factoring.
    For another example, to apply progressive factoring to a calculated 
loss (after subtraction of indemnities) of $430,000, FSA would 
multiply:
     the first $2,000 by a factor of 100 percent ($2,000 x 100% 
= $2,000),
     the second $2,000 by a factor of 80 percent ($2,000 x 80% 
= $1,600),
     the third $2,000 by a factor of 60 percent ($2,000 x 60% = 
$1,200),
     the fourth $2,000 by a factor of 40 percent ($2,000 x 40% 
= $800),
     the fifth $2,000 by a factor of 20% ($2,000 x 20% = $400), 
and
     the remaining $420,000 by a factor of 10 percent ($420,000 
x 10% = $42,000).
    The sum of those calculations is $48,000, which is the calculated 
ERP 2022 payment after progressive factoring.
    For underserved producers, the producer's share of the Federal crop 
insurance administrative fee and premium will be added to the resulting 
sum.\15\
---------------------------------------------------------------------------

    \15\ Providing a refund of underserved producers' premiums and 
fees supports the equitable administration of FSA programs by 
targeting limited resources to support underserved farmers and 
ranchers, who are more likely to lack financial reserves and access 
to capital to invest in future risk protection while coping with 
losses due to unexpected events outside of their control. The refund 
of premiums and fees for these more-often vulnerable and smaller 
operations who often lack financial resources supports access to 
higher levels of coverage available through Federal crop insurance 
or NAP. This approach is consistent with the intent to provide 
reduced service fees and premium reductions to underserved farmers 
and ranchers for other FSA programs as authorized by law. NAP 
provides a reduced service fee and premium for underserved farmers 
and ranchers (7 U.S.C. 7333(k)(2) and 7 U.S.C. 7333(l)(3)). In 
addition, Federal crop insurance provides an administrative fee 
waiver for limited resource farmers, beginning farmers or ranchers, 
and veteran farmers or ranchers; and offers a premium reduction for 
beginning farmers or ranchers and veteran farmers or ranchers (7 
U.S.C. 1508(b)(5)(E)(i) and 7 U.S.C. 1508(e)(8)).
---------------------------------------------------------------------------

    For all eligible crop producers, FSA will then apply a final 
payment factor of 75 percent, resulting in the producer's calculated 
Track 1 payment.
    For NAP-covered crops and trees, FSA will use the producer's crop 
production or inventory data that are already on file, which provides 
the necessary information to determine the producer's amount of loss. 
NAP provides financial assistance for crop losses due to specified 
natural disasters and uses a producer's crop production or inventory 
data to calculate a payment based on the level of NAP coverage elected 
by the producer. As previously discussed, ERP 2022 is intended to 
compensate eligible crop and tree producers for a percentage of loss 
determined by the applicable ERP factor based on their NAP coverage 
level;

[[Page 74411]]

therefore, FSA will perform a calculation that is consistent with the 
NAP payment calculation for the pay crop and unit, as provided in 7 CFR 
part 1437, but using the ERP factor in the table above applicable to 
the producer's NAP coverage level as the applicable guarantee in those 
calculations. For example, the guarantee for a producer that had 
purchased 60 percent NAP coverage would be adjusted and recalculated 
based on a 90 percent ERP factor. The calculated amount using the ERP 
factor would then be adjusted by subtracting the producer's gross NAP 
payment.\16\ For underserved producers, the producer's share of the NAP 
service fees and premium will be added to the result of that 
calculation.\17\
---------------------------------------------------------------------------

    \16\ The gross NAP payment is the amount calculated according to 
7 CFR part 1437, prior to any payment reductions for reasons 
including, but not limited to, sequestration, payment limitation, 
and average AGI limitations.
    \17\ See footnote 15. NAP service fees are waived for producers 
with a CCC-860 certification of underserved status on file; however, 
if an underserved producer did not previously file CCC-860 to 
receive a service fee waiver, but files one now, their service fee 
will be added in the Track 1 payment calculation.
---------------------------------------------------------------------------

    The calculated amount for NAP-covered crops will not be subject to 
the progressive factoring \18\ that applies to ERP 2022 payments based 
on Federal crop insurance indemnities; however, it will be multiplied 
by a final payment factor of 75 percent to ensure that total payments 
do not exceed the available funding.
---------------------------------------------------------------------------

    \18\ Progressive factoring will not apply to ERP Track 1 
payments calculated based on NAP payments as they traditionally 
support smaller producers and non-traditional crops. Non-traditional 
crops are not typically covered by Federal crop insurance products 
so the higher levels of coverage and risk protection under Federal 
crop insurance are not available to offset losses for producers of 
those crops in times of disaster.
---------------------------------------------------------------------------

    FSA will issue Track 1 payments as applications are processed and 
approved. All ERP 2022 payments are subject to the availability of 
funding. If additional funding is available after all eligible ERP 2022 
applications have been processed and payments have been issued, FSA may 
issue an additional payment, not to exceed the maximum amount allowed 
by law.

Track 2 Overview

    Track 2 will provide assistance for eligible revenue, production, 
and quality losses of eligible crops not included in Track 1. FSA has 
determined that the best estimation of such losses is a producer's 
decrease in disaster year revenue compared to a benchmark year revenue, 
where benchmark year revenue represents a producer's revenue prior to 
the impact of the qualifying disaster event. This difference in revenue 
will reflect losses in both production and quality due in whole or in 
part to qualifying disaster events without requiring the more extensive 
calculations and documentation required under some previous FSA 
programs addressing crop losses due to disaster events. Decreases in 
disaster year revenue compared to benchmark revenue also reflect a 
producer's loss due to a qualifying disaster event regardless of 
whether the loss occurs before harvest or after harvest while the crop 
is in storage, further streamlining the delivery of assistance.
    To be eligible for Track 2, a producer must certify that they 
suffered a loss in disaster year revenue, as compared to a benchmark 
year revenue, that was due to necessary expenses associated with losses 
of eligible crops due in whole or in part to a qualifying disaster 
event that occurred in the 2022 calendar year. Track 2 provides 2 
options for determining the benchmark and disaster year revenues:
     The tax year option, which allows producers to use certain 
information located in their tax records to apply for Track 2; \19\ or
---------------------------------------------------------------------------

    \19\ The tax year option is similar to the approach used in 
Phase 2 of the previous ERP, which provided assistance for crop 
losses due to disaster events in 2020 and 2021.
---------------------------------------------------------------------------

     The expected revenue option, which is intended to better 
address situations such as a change in operation capacity \20\ in the 
disaster year, as compared to the 2018 or 2019 benchmark year; the 2018 
and 2019 tax years not reasonably reflecting a normal year's revenue 
for reasons including losses due to disaster events in 2018 and 2019 or 
changes in crop prices; or production of crops that do not generate 
revenue for the producer directly from the sale of the crop (for 
example, forage fed to livestock or grapes used by the producer to make 
wine).
---------------------------------------------------------------------------

    \20\ Change in operation capacity does not include crop rotation 
from year to year, changes in farming practices such as converting 
from conventional tillage to no-till, or changing the amount of 
fertilizers or chemicals used.
---------------------------------------------------------------------------

    The following table summarizes benchmark and disaster year revenue 
for the 2 options. Sources of revenue to be included in allowable gross 
revenue, expected revenue, and actual revenue are explained below in 
greater detail.

------------------------------------------------------------------------
                                 Benchmark year         Disaster year
           Option                    revenue               revenue
------------------------------------------------------------------------
Tax Year....................  A producer's          A producer's
                               allowable gross       allowable gross
                               revenue for the       revenue for the
                               2018 or 2019 tax      2022 or 2023 tax
                               year, as elected by   year, as elected by
                               the producer.         the producer.
Expected Revenue............  A producer's          A producer's actual
                               expected revenue      revenue from all
                               from all eligible     eligible crops that
                               crops that could      were included in
                               have been affected    the producer's
                               by a qualifying       expected revenue.
                               disaster event in
                               calendar year 2022.
------------------------------------------------------------------------

    Although most producers may choose between the 2 options when 
applying for Track 2, there are two situations that require a producer 
to use a specific option:
     Situation 1: Producers who received a payment under the 
previous ERP for the 2021 disaster year and elected the 2022 tax year 
for their representative disaster year for Phase 2 can only apply for 
Track 2 using the tax year option, and they must select 2023 as their 
representative disaster year to ensure that they are not paid for the 
same loss under both programs, as those producers had previously 
certified that 2022 losses were the result of 2021 disaster events.\21\
---------------------------------------------------------------------------

    \21\ Producers applying for Phase 2 of the previous ERP for 
losses due to qualifying disaster events in the 2021 calendar year 
selected either the 2021 or 2022 tax year as the applicable disaster 
year. Producers who selected the 2022 tax year have already been 
compensated for their 2022 tax year losses, but may select the 2023 
tax year for the disaster year for Track 2.
---------------------------------------------------------------------------

     Situation 2: Producers, except those described in 
Situation 1, must use the expected revenue option if they had a 
decrease in operating capacity during their disaster year, as compared 
to the 2018 or 2019 benchmark year, were a new producer with no 
benchmark year revenue in 2018 or 2019, or produced any crop or crops 
that did not generate revenue directly from the sale of the crop and 
that the producer uses within their ordinary operation.
    Producers who had an increase in operation capacity may elect 
either the tax year option or the expected revenue option; however, 
they may not adjust benchmark year revenue under the tax year option to 
reflect the change, which

[[Page 74412]]

is likely to result in a lower Track 2 payment because the 2018 or 2019 
tax year would not accurately reflect their expected revenue at their 
2022 operating capacity.
    Producers must use the same option to calculate both the benchmark 
year revenue and disaster year revenue. For example, a producer who 
uses the expected revenue option for the benchmark year must also use 
the actual revenue option for the disaster year; they cannot use 2022 
or 2023 tax year revenue for the disaster year.

Track 2 Tax Year Option

    Producers who use the tax year option for Track 2 will select 2018 
or 2019 for their benchmark year revenue and 2022 or 2023 as their 
representative year for the disaster year revenue and will certify to 
their allowable gross revenue for those years. Allowable gross revenue 
is based on the year for which the revenue would be reported for the 
purpose of filing a tax return, except for the ERP 2022 Track 1 
payments specified below. Producers who file or would be eligible to 
file a joint tax return will certify their allowable gross revenue 
based on what it would have been had they filed taxes separately for 
the applicable year.
    Allowable gross revenue includes revenue from:
    (1) Sales of eligible crops produced by the producer, which 
includes sales resulting from value added through post-production 
activities (for example, sales of jam from the processing of 
strawberries) that were reportable on IRS Schedule F;
    (2) Sales of eligible crops a producer purchased for resale that 
had a change in characteristic due to the time held (for example, a 
plant purchased at a size of 2 inches and sold as an 18-inch plant 
after 4 months), less the cost or other basis of such eligible crops;
    (3) Cooperative distributions directly related to the sale of the 
eligible crops produced by the producer, such as patronage paid to 
producers for gross grain sales;
    (4) Benefits for eligible crops under the following agricultural 
programs: 2017 WHIP, ARC and PLC, BCAP, CFAP, ELAP (for aquaculture 
crops), ERP Phases 1 and 2, LDP, MLG, MFP, the On-Farm Storage Loss 
Program, Pandemic Assistance Revenue Program, QLA Program, STRP, and 
WHIP+;
    (5) Commodity Credit Corporation loans for eligible crops, if 
treated as income and reported to the IRS;
    (6) Federal crop insurance proceeds for eligible crops, minus the 
amount of administrative fees and premiums;
    (7) NAP payments for eligible crops, minus the amount of service 
fees and premiums;
    (8) Proceeds for eligible crops under private insurance policies;
    (9) Payments issued through grant agreements with FSA for losses of 
eligible crops;
    (10) Grants from the Department of Commerce, National Oceanic and 
Atmospheric Administration (NOAA) and State program funds providing 
direct payments for the loss of eligible crops or the loss of revenue 
from eligible crops;
    (11) Other revenue directly related to the production of eligible 
crops that the IRS requires the producer to report as income, such as 
commodity-specific income received from State or local governments and 
net gain from hedging; and
    (12) For the disaster year only, ERP 2022 Track 1 payments issued 
to another person or entity for the producer's share of an eligible 
crop, regardless of the tax year in which the payment would be reported 
to the IRS.\22\
---------------------------------------------------------------------------

    \22\ Track 1 allows producers who received pre-filled 
application forms to indicate shares in the crop. In some cases, 
payment for a producer's share of a crop may have been issued to a 
different person or entity than the producer applying for a related 
revenue loss under Track 2. Applications for Track 2 must include 
any Track 1 payments issued to another person or entity for the 
producer's share of an eligible crop in order to prevent duplicate 
benefits being issued for the same loss.
---------------------------------------------------------------------------

    Allowable gross revenue does not include revenue from sources other 
than those listed above, including but not limited to, revenue from:
    (1) Federal assistance programs not included above;
    (2) Sales of livestock, animal by-products, and any commodities 
that are excluded from ``eligible crops;''
    (3) Resale items not held for characteristic change;
    (4) Income from a pass-through entity such as an S Corp or limited 
liability company;
    (5) Conservation program payments;
    (6) Any pandemic assistance payments that were not for the loss of 
eligible crops or the loss of revenue from eligible crops including, 
but not limited to, the Pandemic Livestock Indemnity Program, Pandemic 
Assistance for Timber Harvesters and Haulers, and Spot Market Hog 
Pandemic Program;
    (7) Custom hire income;
    (8) Net gain from speculation;
    (9) Wages, salaries, tips, and cash rent;
    (10) Rental of equipment or supplies; and
    (11) Acting as a contract producer of an agricultural commodity.
    Form FSA-524-A, Emergency Relief Program (ERP) 2022 Track 2 Tax 
Year Revenue Worksheet, is an optional form that producers may use to 
assist in determining their allowable gross revenue. It is available at 
https://www.fsa.usda.gov/programs-and-services/emergency-relief/index.

Track 2 Tax Year Option Special Provisions for Certain Producers

    As stated above, producers who received a payment under the 
previous ERP for the 2021 program year and elected the 2022 tax year 
for their representative disaster year revenue are required to use the 
tax year option for Track 2, and they must use the 2023 tax year for 
disaster year revenue.
    Those producers must certify to an allowable gross revenue for the 
benchmark year that they adjusted if the producer had a decreased 
operation capacity in a disaster year for which they are applying for 
ERP Track 2, compared to the benchmark year. Those producers may 
certify to an allowable gross revenue that they adjusted for the 
benchmark year on FSA-524 if either of the following apply:
    (1) The producer did not have a full year of revenue for 2018 or 
2019; or
    (2) The producer had expanded their operation capacity in the 
disaster year compared to the benchmark year.
    Change in operation capacity does not include crop rotation from 
year to year, changes in farming practices such as converting from 
conventional tillage to no-till, or increasing the rate of fertilizers 
or chemicals.
    If requested by FSA, producers are required to submit documentation 
to FSA to support their adjustments within 30 calendar days of the 
request. The documentation to support an adjustment due to a change in 
operation capacity must show that the adjustment to the producer's 
benchmark year revenue is due to:
    (1) An addition or decrease in production capacity of the farming 
operation;
    (2) An increase or decrease in the use of existing production 
capacity; or
    (3) Physical alterations that were made to existing production 
capacity.
    If a producer did not have allowable gross revenue in a benchmark 
year because they began farming in 2020 or later, the producer may 
adjust benchmark year revenue on FSA-524 that represents the producer's 
reasonably expected disaster year revenue prior to the impact of the 
qualifying disaster event.
    If requested by FSA, documentation required to support a producer's 
certification must be provided within 30

[[Page 74413]]

calendar days of FSA's request, or the producer will be considered 
ineligible for ERP Track 2. Acceptable documentation must be generated 
in the ordinary course of business and dated prior to the impact of the 
qualifying disaster event and includes, but is not limited to:
    (1) Financial documents such as a business plan or cash flow 
statement that demonstrate an expected level of revenue;
    (2) Sales contracts or purchase agreements; and
    (3) Documentation supporting production capacity, use of existing 
production capacity, or physical alterations that demonstrate 
production capacity.
    Producers who received a payment under the previous ERP for the 
2021 program year and elected the 2022 tax year for their 
representative disaster year must also include in the allowable gross 
revenue a value for certain crops, when and as determined by the Deputy 
Administrator, that they produced that did not generate revenue 
directly from the sale of the crop and that the producer uses within 
their ordinary operation. This would include, for example, wine makers 
who grow their own wine grapes and process those grapes into wine and 
producers of forage crops who store the crop to feed to livestock on 
their farm. These producers would not have revenue from the sale of the 
portion of their crop used for these purposes. The determination that 
producers may include a crop's value is at the Deputy Administrator's 
discretion. Wine grapes used to process grapes into wine, forage crops 
that are stored and fed to livestock, and certain other crops, as 
listed on the FSA website at https://www.fsa.usda.gov/programs-and-services/emergency-relief/index, have been determined by the Deputy 
administrator to qualify for including the crop's value.
    The value of the eligible crop reported in the producer's allowable 
gross revenue will be based on the producer's actual production of the 
crop and a price for the crop based on the best available data for each 
crop, such as published price data for the crop \23\ or the average 
price obtained by other producers in the area, as determined by the 
Deputy Administrator and published through guidance on FSA's website. 
This provision is intended to address a gap in how crop losses in these 
situations may be accounted for in a producer's payment, and it does 
not cover crops that were sold by a producer.
---------------------------------------------------------------------------

    \23\ Published sources of price data that the Deputy 
Administrator may consider include, but are not limited to, FCIC-
established prices, FSA-established NCT prices, and National 
Agricultural Statistic Service prices.
---------------------------------------------------------------------------

    These adjustment provisions only apply to producers that received a 
payment under the previous ERP for the 2021 program year based on the 
2022 tax year for their representative disaster year revenue because 
those producers must use the tax year option. All other producers that 
would require such adjustments must use the expected revenue option, as 
previously explained in this document.

Track 2 Expected Revenue Option

    As mentioned above, for Track 2, as an alternative to using the tax 
year option, a producer may certify to a benchmark year revenue that 
represents the producer's reasonably expected revenue prior to the 
impact of the qualifying disaster event, as well as their actual 
disaster year revenue. The producer's total expected revenue must 
include all eligible crops that could have been affected by a 
qualifying disaster event in calendar year 2022, including crops 
prevented from being planted, planted crops (including annual, 
perennial, and inventory), and crops that were in storage. It does not 
include revenue from crop by-products, such as cotton seed and corn 
stalks. Expected revenue will be based on:
     For perennial, planted, and prevented planted yield-based 
crops, the producer's expected acres multiplied by their expected yield 
per acre, multiplied by the expected price;
     For inventory crops, the total inventory prior to the 
impact of the qualifying disaster event multiplied by the expected 
price; and
     For crops in storage, the producer's production in storage 
multiplied by the expected price.
    Expected revenue must be based on realistic projections that can be 
supported by acceptable documentation of expected inventory, acres, 
yield, and unit price, such as the following:
     sales contracts,
     purchase agreements,
     market agreements,
     settlement sheets,
     scale tickets,
     lease agreements,
     local market prices,
     FCIC established yield and prices,
     Federal crop insurance documents,
     historical yield data,
     appraisals,
     farm business plans,
     acreage reports,
     FSA National Crop Table (NCT) data,\24\
---------------------------------------------------------------------------

    \24\ NCT data are available at https://www.fsa.usda.gov/programs-and-services/disaster-assistance-program/noninsured-crop-disaster-assistance/index.
---------------------------------------------------------------------------

     ARC and PLC prices and yields \25\
---------------------------------------------------------------------------

    \25\ ARC and PLC information is available at https://www.fsa.usda.gov/programs-and-services/arcplc_program/arcplc-program-data/index.
---------------------------------------------------------------------------

     cooperative extension service and university data,
     financial institute documentation, and
     National Agricultural Statistics Service data.
    The producer must maintain sufficient documentation to support that 
their projection is reasonable and realistic; that documentation must 
be available if requested.
    Actual disaster year revenue for the expected revenue option is 
equal to the actual revenue from all crops that were included in the 
producer's expected revenue. Actual disaster year revenue includes:
     Revenue from sales of eligible crops;
     Federal crop insurance indemnities for eligible crops, 
minus premiums and administrative fees;
     NAP payments for eligible crops, minus premiums and 
service fees;
     Indemnities for eligible crops under private crop 
insurance policies;
     The value of eligible crops produced but not sold (such as 
crops in storage or inventory, or fed to the producer's livestock);
     FSA Payments issued for 2022 calendar year disaster 
losses, including but not limited to payments under:
    [cir] ELAP for aquaculture crops,
    [cir] ARC,
    [cir] LDP,
    [cir] MLG,
     Net gains from hedging from eligible crops produced;
     Grants from NOAA and State programs for the direct loss of 
eligible crops or the loss of revenue for eligible crops; and
     Other revenue directly related to the production of 
eligible crops that IRS requires the producer to report as income.
    For crops produced in the 2022 or 2023 crop years but not sold, the 
value included in actual disaster year revenue may differ from the 
expected revenue for the crops due to market price fluctuations between 
planting and time of marketing, quality losses, or production losses 
related to qualifying disaster events occurring in the 2022 calendar 
year. Crops in storage from 2021 or earlier must use the expected price 
to calculate the value included in actual disaster year revenue if the 
crop remains in storage at the time of application since ERP 2022 does 
not pay

[[Page 74414]]

for market fluctuations for prior year crops.
    Form FSA-524-B, Emergency Relief Program (ERP) 2022 Track 2 
Expected Revenue Worksheet, is an optional form that producers may use 
to assist in calculating their expected and actual revenue. It is 
available at https://www.fsa.usda.gov/programs-and-services/emergency-relief/index.

Track 2 Applications

    Producers applying for Track 2 must submit FSA-524, Emergency 
Relief Program (ERP) 2022 Track 2 Application, certifying their 
benchmark year revenue and disaster year revenue. The FSA-524 Appendix 
provides a guide for what should be included as applicable revenue for 
the option elected by the producer. In addition, all producers applying 
for Track 2 must submit FSA-525, Crop Insurance and/or NAP Coverage 
Agreement, by the application deadline to have a complete application 
on file.
    For the purpose of administration of the ERP 2022 payment 
limitations, producers applying for Track 2 must certify to the 
percentage of their disaster year revenue from specialty and high value 
crops combined, and from other crops on their application. The 
percentages certified must be equal to the percentages that the 
producer would have reasonably expected to receive for the disaster 
year if not for the qualifying disaster event. Producers must also 
certify to whether all acreage of all eligible crops (including crops 
grown, prevented from being planted, and in storage or inventory in the 
disaster year) were covered by Federal crop insurance or NAP, for the 
purpose of determining the applicable ERP factor, as explained below.
    If requested by FSA, documentation required to support a producer's 
certifications of revenue and other information provided on the 
application must be submitted within 30 calendar days of FSA's request, 
or the producer will be considered ineligible for Track 2.

Track 2 Payment Calculation

    To determine a producer's Track 2 payment amount, FSA will 
calculate:
    Step 1 The producer's benchmark year revenue, multiplied by the ERP 
factor of 90 percent if all acres of all eligible crops were covered by 
Federal crop insurance or NAP, or 70 percent if not all acres of all 
eligible crops were covered by Federal crop insurance or NAP; minus
    Step 2 The producer's disaster year revenue; minus
    Step 3 The sum of the producer's gross Track 1 payments.\26\
---------------------------------------------------------------------------

    \26\ The gross ERP Track 1 calculated payment is the calculated 
payment amount after all applicable factoring and prior to any 
payment reductions for reasons including, but not limited to, 
sequestration and payment limitation.
---------------------------------------------------------------------------

    After performing the calculation described above, progressive 
factoring \27\ will be applied to the calculated amount according to 
the table below.
---------------------------------------------------------------------------

    \27\ Track 2 applies progressive factoring in a manner 
consistent with the progressive factoring of Track 1 payments based 
on Federal crop insurance indemnified losses. Track 2 assistance is 
calculated based on a decrease in disaster year revenue for eligible 
revenue, production, and quality losses of eligible insured, non-
insurable, and uninsured crops not included in Track 1. While Track 
1 payments based on NAP payments are not subject to progressive 
factoring, Track 2 assistance is calculated based on the overall 
decrease in disaster year revenue and does not calculate assistance 
independently for insured crops and NAP crops in a manner similar to 
Track 1; therefore, progressive factoring is applied to all Track 2 
payments.

------------------------------------------------------------------------
                                                             Progressive
                       Payment range                          factor (%)
------------------------------------------------------------------------
Up to $2,000...............................................          100
$2,001 to $4,000...........................................           80
$4,001 to $6,000...........................................           60
$6,001 to $8,000...........................................           40
$8,001 to $10,000..........................................           20
Over $10,000...............................................           10
------------------------------------------------------------------------

    For example, to apply progressive factoring to a calculated loss of 
$5,000, FSA would multiply:
     the first $2,000 by a factor of 100 percent ($2,000 x 100% 
= $2,000),
     the second $2,000 by a factor of 80 percent ($2,000 x 80% 
= $1,600), and
     the remaining $1,000 by a factor of 60 percent ($1,000 x 
60% = $600).
     The sum of those calculations is $4,200.
    For another example, to apply progressive factoring to a calculated 
loss of $430,000, FSA would multiply:
     the first $2,000 by a factor of 100 percent ($2,000 x 100% 
= $2,000),
     the second $2,000 by a factor of 80 percent ($2,000 x 80% 
= $1,600),
     the third $2,000 by a factor of 60 percent ($2,000 x 60% = 
$1,200),
     the fourth $2,000 by a factor of 40 percent ($2,000 x 40% 
= $800),
     the fifth $2,000 by a factor of 20% ($2,000 x 20% = $400), 
and
     the remaining $420,000 by a factor of 10 percent ($420,000 
x 10% = $42,000).
    The sum of those calculations is $48,000, which is the gross ERP 
2022 payment after progressive factoring.
    FSA will calculate the total of the results for each range above. 
For underserved producers, the sum of the results will be multiplied by 
a factor of 115 percent, and the underserved producer's calculated 
Track 2 payment will be equal to the lesser of the resulting amount or 
the amount calculated after step 3 above.\28\ For all other eligible 
producers, the sum of the results for each range will be the calculated 
Track 2 payment. FSA will multiply that amount by the percentage of the 
expected disaster year revenue for specialty and high value crops or 
other crops, as applicable, to determine the amounts that will apply to 
the payment limitations for specialty and high value crops (combined) 
and other crops.
---------------------------------------------------------------------------

    \28\ Underserved producers will receive an increase to their 
Track 2 payment that is equal to 15 percent of the gross Track 2 
payment after progressive factoring not to exceed the calculated 
Track 2 payment before progressive factoring. 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 Emergency Conservation Program, ELAP, 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, Pandemic 
Assistance Revenue Program, and the previous ELRP and ERP programs 
for qualifying disaster events in calendar years 2020 and 2021. In 
addition, NAP 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.
---------------------------------------------------------------------------

    For example, the amount calculated after step 3 above is $430,000 
and is reduced to $48,000 after progressive factoring. For an 
underserved producer, FSA would multiply $48,000 times 115 percent 
which equals $55,200 which is less than the max payment amount of 
$430,000. The producer certified to 50 percent of expected revenue as 
being from specialty crops. FSA would multiply $55,200 times 50 percent 
which equals $27,600 gross payment attributed to specialty crops. FSA 
would subtract $27,600 from $55,200 which equals $27,600 gross payment 
attributed to other crops. The producer's total payment is $55,200 
($27,600 + $27,600 = $55,200). FSA will apply a final payment factor of 
75 percent to all calculated Track 2 payments, including payments to 
underserved producers, to ensure payments do not exceed available 
funding.
    If a producer receives a Track 1 payment after their Track 2 
payment is calculated, the producer's Track 2 payment will be 
recalculated and the producer must refund any resulting overpayment.
    FSA will issue Track 2 payments as applications are processed and 
approved. All ERP 2022 payments are subject to the availability of 
funding. If additional funding is available after ERP

[[Page 74415]]

2022 payments are issued, FSA may issue an additional payment, not to 
exceed the maximum amount allowed by law as explained below.

Applying for ERP 2022

    FSA expects to begin mailing Track 1 application forms on or around 
November 8, 2023, to producers who received Federal crop insurance 
indemnities, and to begin mailing forms to producers who received NAP 
payments on or around November 8, 2023. For Track 2, FSA will begin 
accepting applications on October 31, 2023, and producers may obtain an 
application form and FSA-525, Crop Insurance and/or Nap Coverage 
Agreement for ERP 2022, through their county office or online at 
https://www.fsa.usda.gov/programs-and-services/emergency-relief/index.
    Applications may be submitted in person or by mail, email, 
facsimile, or other methods announced by FSA. A complete application 
for each track a producer is applying for must be submitted to the 
producer's recording county office by the close of business on the 
deadline announced by FSA (the ERP 2022 deadline).
    To receive an ERP 2022 payment, producers, including any producers 
with an SBI who have a share in a crop as indicated on a Track 1 
application, must also have the following forms on file with FSA within 
60 days of the ERP 2022 deadline:
     Form AD-2047, Customer Data Worksheet;
     Form CCC-902, Farm Operating Plan for an individual or 
legal entity as provided in 7 CFR part 1400;
     Form CCC-901, Member Information for Legal Entities (if 
applicable); and
     A highly erodible land conservation (sometimes referred to 
as HELC) and wetland conservation certification as provided in 7 CFR 
part 12 (form AD-1026 Highly Erodible Land Conservation (HELC) and 
Wetland Conservation (WC) Certification) for the producer and 
applicable affiliates.
    Many producers, especially if they have participated in FSA 
programs recently, will already have these forms on file with FSA.
    In addition to the forms listed above, certain producers will also 
need to submit the following forms in order to have their payment 
calculated as described above for underserved producers or to qualify 
for an increased payment limitation, as described in the Payment 
Limitation section in this document:
     Form CCC-860, Socially Disadvantaged, Limited Resource, 
Beginning and Veteran Farmer or Rancher Certification, applicable for 
the 2022 program year; \29\ or
---------------------------------------------------------------------------

    \29\ A person who has filed CCC-860 certifying their status as a 
socially disadvantaged, beginning, or veteran farmer or rancher for 
a prior program year is not required to submit a subsequent CCC-860 
certifying their status for a later program year because a person's 
status as socially disadvantaged would not change in different 
years, and their certification as a beginning or veteran farmer or 
rancher includes the relevant date needed to determine for what 
program years the status would apply.
    An entity that has filed CCC-860 certifying its status as a 
socially disadvantaged, beginning, or veteran farmer or rancher for 
a prior program year is not required to submit a subsequent 
certification of its status for a later program year unless the 
entity's status has changed due to changes in membership.
    Because a producer's status as a limited resource farmer or 
rancher may change annually depending on the producer's direct and 
indirect gross farm sales and household income, those producers must 
submit CCC-860 for each applicable program year.
---------------------------------------------------------------------------

     Form FSA-510, Request for an Exception to the $125,000 
Payment Limitation for Certain Programs, including the certification 
from a certified public accountant or attorney that the person or legal 
entity has met the requirements to be eligible for the increased 
payment limitation, for a person or a legal entity and all members of 
that entity, for the 2022 program year.
    FSA will continue to accept forms CCC-860 and FSA-510 for ERP 2022 
until 60 days after the ERP 2022 deadline. If a producer files a CCC-
860 or FSA-510 and the accompanying certification after their ERP 2022 
payment is issued but before the deadline to submit these forms, FSA 
will process the form CCC-860 or FSA-510 and issue any resulting 
additional payment amount.

Payment Limitation

    As required by Title I of the Disaster Relief Supplemental 
Appropriations Act, 2023, the payment limitation for ERP 2022 is 
determined by the person's or legal entity's average adjusted gross 
farm income. Specifically, a person or legal entity, other than a joint 
venture or general partnership, cannot receive, directly or indirectly, 
more than $125,000 in payments for specialty and high value crops 
combined and $125,000 in payment for all non-specialty crops and other 
crops under ERP 2022 (for Track 1 and Track 2 combined) if their 
average adjusted gross farm income is less than 75 percent of their 
average AGI the 3 taxable years preceding the most immediately 
preceding complete tax year.
    If at least 75 percent of the person or legal entity's average AGI 
is income derived from farming, ranching, and forestry related 
activities and the participant provides the required certification and 
documentation, as discussed below, the person or legal entity, other 
than a joint venture or general partnership, is eligible to receive, 
directly or indirectly, up to:
     $900,000 for specialty crops under Tracks 1 and 2 and high 
value crops under Track 2 combined; and
     $250,000 for non-specialty crops under Track 1 and other 
crops under Track 2, combined.
    The relevant tax years for establishing a producer's AGI and 
percentage derived from farming, ranching, and forestry related 
activities are 2018, 2019, and 2020.
    To receive more than $125,000 in ERP 2022 payments, producers must 
submit form FSA-510, including the certification from a certified 
public accountant or attorney that the person or legal entity has met 
the requirements to be eligible for the increased payment limitation. 
If a producer requesting the increased payment limitation is a legal 
entity, all members of that entity must also complete form FSA-510 and 
provide the required certification according to the direct attribution 
provisions in 7 CFR 1400.105, ``Attribution of Payments.'' If a legal 
entity would be eligible for the increased payment limitation based on 
the legal entity's average AGI that is income derived from farming, 
ranching, and forestry related activities but a member of that legal 
entity either does not complete a form FSA-510 and provide the required 
certification or is not eligible for the increased payment limitation, 
the payment to the legal entity will be reduced for the payment 
limitation applicable to the share of the payment attributed to that 
member.
    A payment made to a legal entity will be attributed to those 
members who have a direct or indirect ownership interest in the legal 
entity, unless the payment of the legal entity has been reduced by the 
proportionate ownership interest of the member due to that member's 
ineligibility.
    Attribution of payments made to legal entities will be tracked 
through four levels of ownership in legal entities as follows:
     First level of ownership--any payment made to a legal 
entity that is owned in whole or in part by a person will be attributed 
to the person in an amount that represents the direct ownership 
interest in the first level or payment legal entity; \30\
---------------------------------------------------------------------------

    \30\ The ``first level or payment legal entity'' means that the 
payment entity will have a reduction applied, and if the payment 
entity happens to be a joint venture, that reduction is applied to 
the first level, or highest level, for payments. The ``first level 
or payment legal entity'' is the highest level of ownership of the 
applicant to whom payments can be attributed or limited. If the 
applicant is a business type that does not have a limitation or 
attribution, the reduction is applied to the first level, but if the 
business type can have the reduction applied directly to it, then 
the limitation applies.

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

[[Page 74416]]

     Second level of ownership--any payment made to a first-
level legal entity that is owned in whole or in part by another legal 
entity (referred to as a second-level legal entity) will be attributed 
to the second-level legal entity in proportion to the ownership of the 
second-level legal entity in the first- level legal entity; if the 
second-level legal entity is owned in whole or in part by a person, the 
amount of the payment made to the first-level legal entity will be 
attributed to the person in the amount that represents the indirect 
ownership in the first-level legal entity by the person;
     Third and fourth levels of ownership--except as provided 
in the second level of ownership bullet above and in the fourth level 
of ownership bullet below, any payments made to a legal entity at the 
third and fourth levels of ownership will be attributed in the same 
manner as specified in the second level of ownership bullet above; and
     Fourth-level of ownership--if the fourth level of 
ownership is that of a legal entity and not that of a person, a 
reduction in payment will be applied to the first-level or payment 
legal entity in the amount that represents the indirect ownership in 
the first level or payment legal entity by the fourth-level legal 
entity.
    Payments made directly or indirectly to a person who is a minor 
child will not be combined with the earnings of the minor's parent or 
legal guardian.
    A person or legal entity must provide the name, address, valid 
taxpayer identification number, and ownership share of each person, or 
the name, address, valid taxpayer identification number, and ownership 
share of each legal entity, that holds or acquires an ownership 
interest in the legal entity. ERP 2022 payments to a legal entity will 
be reduced in proportion to a member's ownership share when a valid 
taxpayer identification number for a person or legal entity that holds 
a direct or indirect ownership interest of less than 10 percent at or 
above the fourth level of ownership in the business structure is not 
provided to USDA. A legal entity will not be eligible to receive 
payment when a valid taxpayer identification number for a person or 
legal entity that holds a direct or indirect ownership interest of 10 
percent or greater at or above the fourth level of ownership in the 
business structure is not provided to USDA.
    If a person or legal entity is not eligible to receive ERP 2022 
payments due to the person or legal entity failing to satisfy payment 
eligibility provisions, the payment made either directly or indirectly 
to the person or legal entity will be reduced to zero. The amount of 
the reduction for the direct payment to the producer will be 
commensurate with the direct or indirect ownership interest of the 
ineligible person or ineligible legal entity.
    Like other programs administered by FSA, payments made to an 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), will 
not be subject to payment limitation.

Requirement To Purchase Federal Crop Insurance or NAP Coverage

    Title I of the Disaster Relief Supplemental Appropriations Act, 
2023, requires all producers who receive ERP 2022 payments, including 
those receiving a Track 1 payment for a tree loss under a Federal crop 
insurance policy, to purchase Federal crop insurance, or NAP coverage 
where Federal crop insurance is not available, for the next 2 available 
crop years, as determined by the Secretary. Participants must file an 
accurate acreage report and obtain Federal crop insurance or NAP 
coverage, as may be applicable:
     At a coverage level equal to or greater than 60 percent 
for insurable crops and trees; or
     At the catastrophic level or higher for NAP-eligible 
crops.
    Availability will be determined from the date a producer receives 
an ERP 2022 payment and may vary depending on the timing and 
availability of Federal crop insurance or NAP coverage for a producer's 
particular crops. The final crop year to purchase Federal crop 
insurance or NAP coverage to meet the second year of coverage for this 
requirement is the 2027 crop year.
    In situations where Federal crop insurance is unavailable for a 
crop, an ERP 2022 participant must obtain NAP coverage. Section 1001D 
of the Food Security Act of 1985 (1985 Farm Bill; Pub. L. 99-198) 
provides that a person or entity with an average AGI greater than 
$900,000 is not eligible to participate in NAP; however, producers with 
an average AGI greater than $900,000 are eligible to participate in ERP 
2022. To reconcile this restriction in the 1985 Farm Bill and the 
requirement to obtain NAP or Federal crop insurance coverage, ERP 2022 
participants may meet the purchase requirement by purchasing WFRP 
coverage, if eligible, or they may pay the applicable NAP service fee 
despite their ineligibility for a NAP payment. In other words, the 
service fee must be paid even though no NAP payment may be made because 
the average AGI of the person or entity exceeds the 1985 Farm Bill 
limitation.
    For Track 1, the Federal crop insurance and NAP coverage 
requirements are specific to the crop and county (which is the county 
where the crop is physically located for insured crops and the 
administrative county for NAP-covered crops) for which Track 1 payments 
are paid.
    Producers who receive a Track 1 payment that was calculated based 
on an indemnity under a Pasture, Rangeland, and Forage policy; Annual 
Forage policy; or WFRP policy must purchase the same type of policy or 
a combination of individual policies for the crops that had covered 
losses under ERP 2022 to meet the Federal crop insurance and NAP 
coverage requirement.
    Producers who receive a Track 1 payment on a crop in a county and 
who have the crop or crop acreage in subsequent years, as provided in 
this document, and who fail to obtain the 2 years of Federal crop 
insurance or NAP coverage required as specified in this document must 
refund all Track 1 payments for that crop in that county with interest 
from the date of disbursement.
    Producers who were paid under Track 1 for a crop in a county, but 
do not plant that crop in that county in a year for which the Federal 
crop insurance and NAP coverage requirement applies, are not subject to 
the Federal crop insurance or NAP purchase requirement for that year.
    For Track 2, producers must report all crops that suffered a 
revenue loss in whole or in part due to a qualifying disaster event on 
form FSA-525, Crop Insurance and/or NAP Coverage Agreement, and obtain 
the required level of Federal crop insurance or NAP coverage in all 
counties where the crop is grown for the applicable years. For all 
crops listed on form FSA-525, producers who have the crop or crop 
acreage in subsequent years and who fail to obtain the required 2 years 
of Federal crop insurance or NAP coverage must refund the ERP Track 2 
payment with interest from the date of disbursement.
    If both Federal crop insurance and NAP coverage are unavailable for 
a crop,

[[Page 74417]]

the producer must obtain WFRP Federal crop insurance coverage, if 
eligible.
    Producers who receive an ERP Track 1 payment for a crop are not 
required to obtain additional years of Federal crop insurance or NAP 
coverage for that crop if they also receive an ERP Track 2 payment for 
a loss associated with that crop.
    Producers who do not plant a crop listed on form FSA-525 in a year 
for which the Federal crop insurance and NAP coverage requirement 
applies are not subject to the Federal crop insurance or NAP purchase 
requirement for that crop for that year.

Provisions Requiring Refund to FSA

    In the event that any ERP 2022 payment resulted from erroneous 
information reported by the producer, or any person acting on their 
behalf, or if the producer's data are updated after RMA or FSA 
calculates a producer's Track 1 payment, the ERP 2022 payment for both 
Track 1 and Track 2, as applicable, will be recalculated and the 
producer must refund any excess payment to FSA, including interest to 
be calculated from the date of the disbursement to the producer. If FSA 
determines that the producer intentionally misrepresented information 
used to determine the producer's ERP 2022 payment amount, the 
application will be disapproved and the producer must refund the full 
payment to FSA with interest from the date of disbursement. All persons 
with a financial interest in a legal entity receiving payments are 
jointly and severally liable for any refund, including related charges, 
which is determined to be due to FSA for any reason. Any required 
refunds must be resolved in accordance with debt settlement regulations 
in 7 CFR part 3.

General Provisions

    Applicable general eligibility requirements, including 
recordkeeping requirements and required compliance with HELC and 
Wetland Conservation provisions, are similar to those for previous ad 
hoc crop disaster programs and current permanent disaster programs.
    General requirements that apply to other FSA-administered commodity 
programs also apply to ERP 2022. Accordingly, producers that receive 
ERP 2022 must be in compliance with the provisions of 7 CFR part 12, 
``Highly Erodible Land and Wetland Conservation,'' and the provisions 
of 7 CFR 718.6, which address ineligibility for benefits for offenses 
involving controlled substances. Appeal regulations in 7 CFR parts 11 
and 780 and equitable relief and finality provisions in 7 CFR part 718, 
subpart D, apply to determinations under ERP 2022. As described above, 
Track 1 payments are calculated using data on file with RMA and FSA at 
the time of payment calculation, unless that data are later updated. 
Producers who receive a Track 1 application and disagree with the 
calculated payment amount or data used in the calculation may apply for 
Track 2, which will allow them to provide their data to FSA through a 
traditional application process.
    Participants are required to retain documentation in support of 
their application for 3 years after the date of approval. All 
information provided to FSA for program eligibility and payment 
calculation purposes, including certification that a producer suffered 
a loss due to a qualifying disaster event, is subject to spot check. 
Participants receiving ERP 2022 payments or any other person who 
furnishes such information to USDA must permit authorized 
representatives of USDA or the Government Accountability Office, during 
regular business hours, to enter the agricultural operation and to 
inspect, examine, and to allow representatives to make copies of books, 
records, or other items for the purpose of confirming the accuracy of 
the information provided by the participant.
    If requested by FSA, the producer must provide additional 
documentation that establishes the producer's eligibility for ERP 2022. 
If supporting documentation is requested, the documentation must be 
submitted to FSA within 30 calendar days from the request or the 
application will be disapproved by FSA. FSA may request supporting 
documentation to verify information provided by the producer and the 
producer's eligibility including, but not limited to, the producer's 
ownership share in the crop or commodity, benchmark year revenue, 
disaster year revenue, and percentage of expected revenue from 
specialty and high value crops and other crops.
    ERP 2022 applicants filing an FSA-510 are subject to an FSA audit 
of information submitted for the purpose of increasing the program's 
payment limitation. As a part of this audit, FSA may request income tax 
returns, 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 3 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, or failure to comply with these requirements will result in 
ineligibility for ERP 2022 benefits and require refund of any ERP 2022 
payments, including interest to be calculated from the date of the 
disbursement to the producer.
    Applicants have a right to a decision in response to a timely-filed 
complete application.
    If an applicant files a late ERP 2022 application, the application 
will be considered a request to waive the deadline. Requests to waive 
or modify program provisions are at the discretion of the Deputy 
Administrator. The Deputy Administrator has the authority to waive or 
modify application deadlines and other requirements or program 
provisions not specified in law in cases where the Deputy Administrator 
determines it is equitable to do so and the lateness or failure to meet 
such other requirements or program provisions do not adversely affect 
the operation of ERP 2022. Applicants who request to waive or modify 
program provisions do not have a right to a decision on those requests. 
The Deputy Administrator's refusal to exercise discretion on requests 
to waive or modify ERP 2022 provisions will not be considered an 
adverse decision and is, by itself, not appealable.
    Any payment under ERP 2022 will be made without regard to questions 
of title under State law and without regard to any claim or lien. The 
regulations governing offsets in 7 CFR part 3 apply to ERP 2022 
payments.
    If any person who would otherwise be eligible to receive a payment 
dies before the payment is received, payment may be released as 
specified in 7 CFR 707.3. Similarly, if any person or legal entity who 
would otherwise have been eligible to apply for a payment dies or is 
dissolved, respectively, before the payment is applied for, payment may 
be released in accordance with this document if a timely application is 
filed by an authorized representative. Proof of authority to sign for 
the deceased producer or dissolved entity must be provided. If a 
participant is now a dissolved general partnership or joint venture, 
all members of the general partnership or joint venture at the time of 
dissolution or their duly authorized representatives must sign the 
application for payment. Eligibility of such participant will be 
determined, as it is for other participants, based on ownership share 
and risk in producing the crop.
    In either applying for or participating in ERP 2022, or both, the 
producer is

[[Page 74418]]

subject to laws against perjury (including, but not limited to, 18 
U.S.C. 1621). If the producer willfully makes and represents as true 
any verbal or written declaration, certification, statement, or 
verification that the producer knows or believes not to be true, in the 
course of either applying for or participating in ERP 2022, or both, 
then the producer may be found to be guilty of perjury. Except as 
otherwise provided by law, if guilty of perjury the applicant may be 
fined, imprisoned for not more than 5 years, or both, regardless of 
whether the producer makes such verbal or written declaration, 
certification, statement, or verification within or outside the United 
States.
    For the purposes of the effect of a lien on eligibility for Federal 
programs (28 U.S.C. 3201(e)), USDA waives the restriction on receipt of 
funds under ERP 2022 under the following condition: by applying for ERP 
2022, applicants agree, as a condition of the waiver, that the ERP 2022 
payments will be applied to reduce the amount of the judgment lien.
    In addition to any other Federal laws that apply to ERP 2022, the 
following laws apply: 15 U.S.C. 714; and 18 U.S.C. 286, 287, 371, and 
1001.

Paperwork Reduction Act Requirements

    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 an emergency request under control number 0560-
0316. FSA will collect the information from producers to qualify for an 
ERP 2022 payment. ERP 2022 is a one-time funding as described in this 
NOFA.
    In accordance with the Paperwork Reduction Act, FSA is requesting 
comments from all interested individuals and organizations on a new 
information collection request that supports ERP 2022.

Description of Information Collection

    Title: Emergency Relief Program 2022 (ERP 2022).
    OMB Control Number: 0560-0316.
    Type of Request: New.
    Abstract: FSA is providing assistance to eligible crop producers to 
cover the necessary expenses related losses of revenue, quality, or 
production of crops (including milk, on-farm stored commodities, crops 
prevented from planting in 2020 and 2021, and harvested adulterated 
wine grapes), trees, bushes, and vines, as a consequence of droughts, 
wildfires, hurricanes, tornadoes, floods, derechos, excessive heat, 
winter storms, freeze, including a polar vortex, smoke exposure, 
quality losses of crops, and excessive moisture occurring in calendar 
year 2022.
    FSA is administering ERP in two tracks (referred to as Track 1 and 
Track 2). ERP Track 1 will use a streamlined process with pre-filled 
application forms for losses where the data are already on file with 
FSA or the Risk Management Agency (RMA) as a result of the producers 
previously receiving a Noninsured Crop Disaster Assistance Program 
(NAP) payment or a Federal crop insurance indemnity under certain 
Federal crop insurance policies. ERP Track 2 will provide payments for 
other eligible losses through a revenue-based approach using a 
traditional application process during which producers will provide the 
information required to calculate a payment.
    For the following estimated total annual burden on respondents, the 
formula used to calculate the total burden hours is the estimated 
average time per response multiplied by the estimated total annual 
responses.
    Estimate of Average Time to Respond: Public reporting burden for 
collecting information under this notice is estimated to average 0.305 
hour per response, including the time for reviewing instructions, 
searching existing data sources, gathering and maintaining the data 
needed, and completing and reviewing the collections of information.
    Type of Respondents: Producers.
    Estimated Number of Respondents: 230,000.
    Estimated Average Number of Responses per Respondent: 1.43.
    Estimated Total Annual Responses: 327,855.
    Estimated Total Annual Burden on Respondents: 100,072 hours.
    The purpose of this notice is to request comments from the public 
(as well as affected agencies) concerning the information collection 
request.
    The comments will help us:
    (1) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of burden of the 
collection of information including the validity of the methodology and 
assumptions used;
    (3) Evaluate the quality, utility and clarity of the information 
technology; and
    (4) Minimize the burden of the information collection on those who 
respond through the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    All comments received in response to this notice, including names 
and addresses where provided, will be made a matter of public record. 
Comments will be summarized and included in the submission for Office 
of Management and Budget approval.

Environmental Review

    The environmental impacts 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). ERP 2022 is authorized by 
Title I of the Disaster Relief Supplemental Appropriations Act, 2023. 
The intent of ERP 2022 is to provide payments to eligible crop 
producers who suffered eligible crop and tree losses due to wildfires, 
hurricanes, floods, derechos, excessive heat, tornadoes, winter storms, 
freeze (including a polar vortex), smoke exposure, excessive moisture, 
and qualifying drought, and related conditions occurring in calendar 
year 2022.
    The limited discretionary aspects of the program were designed to 
be consistent with established FSA disaster programs. As such, the 
Categorical Exclusions in 7 CFR part 799.31 apply, specifically 7 CFR 
799.31(b)(6)(iv) and (vi) (that is, Sec.  799.31(b)(6)(iv) Individual 
farm participation in FSA programs where no ground disturbance or 
change in land use occurred as a result of the action or participation; 
and Sec.  799.31(b)(6)(vi) Safety net programs administered by FSA). No 
Extraordinary Circumstances (7 CFR 799.33) exist. As such, FSA has 
determined that the implementation of ERP 2022 and the participation in 
ERP 2022 do 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 regulatory 
action, and this notice serves as documentation of the programmatic 
environmental compliance decision.

Federal Assistance Programs

    The titles and numbers of the Federal assistance programs, as found 
in the Assistance Listings, to which this document applies are 10.964--

[[Page 74419]]

Emergency Relief Program and 10.979--Emergency Relief Program 2022.

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.
    Individuals 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 
the 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). 
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: (1) mail to: U.S. Department of Agriculture, 
Office of the Assistant Secretary for Civil Rights, 1400 Independence 
Avenue SW, Washington, DC 20250-9410; (2) fax: (202) 690-7442; or (3) 
email: [email protected].
    USDA is an equal opportunity provider, employer, and lender.

Zach Ducheneaux,
Administrator, Farm Service Agency.
[FR Doc. 2023-24009 Filed 10-30-23; 8:45 am]
BILLING CODE 3410-05-P