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###### Department of Agriculture

###### Farm Service Agency 

          - 7 CFR Part 784 
          - RIN 0560-AG17 

# AGENCY:

Farm Service Agency, USDA. 

# ACTION:

Interim rule with request for comments. 

# SUMMARY:

                        This interim rule sets forth the regulations for the Lamb Meat Adjustment Assistance Program as authorized by clause (3) of section 32 of the Act of August 24, 1935, as amended. Producers of sheep and lambs may receive up to $30 million total, with a target of $10 million per year, in direct cash payments to help improve their production efficiencies and the marketability of lamb meat during the 3 year period from July 22, 1999, through                               ( print page 38410)                            July 31, 2002. This action is designed to provide immediate financial assistance to sheep and lamb producers who have recently experienced low prices and poor market conditions.                     

# DATES:

Effective June 19, 2000. Comments on this rule must be received on or before July 21, 2000 in order to be assured of consideration. Comments on the information collections in this rule must be received by August 21, 2000, in order to be assured of consideration. 

# ADDRESSES:

Comments should be mailed to Grady Bilberry, Director, Price Support Division (PSD), Farm Service Agency (FSA), United States Department of Agriculture (USDA), STOP 0512, 1400 Independence Avenue, SW., Washington, DC 20250-0512; telephone (202) 720-7901 or e-mail: danielle_cooke@wdc.fsa.usda.gov. Comments may be inspected in the Office of the Director, PSD, FSA, USDA, Room 4095 South Building, Washington, DC, between 8 a.m. and 4:30 p.m., Monday through Friday, except holidays. A copy of this interim rule is available on the PSD home page at http://www.fsa.usda.gov/​dafp/​psd/​. 

# FOR FURTHER INFORMATION CONTACT: 

Danielle Cooke, (202) 720-1919. 

# SUPPLEMENTARY INFORMATION:

## Executive Order 12866

This interim rule is issued in conformance with Executive Order 12866 and has been determined to be significant and has been reviewed by the Office of Management and Budget. 

## Regulatory Flexibility Act 

It has been determined that the Regulatory Flexibility Act is not applicable to this rule because the Farm Service Agency (FSA) is not required by 5 U.S.C. 533 or any other provision of law to publish a notice of proposed rulemaking with respect to the subject matter of this rule. 

## Environmental Evaluation 

It has been determined by an environmental evaluation that this action will have no significant impact on the quality of the human environment. Therefore, neither an environmental assessment nor an Environmental Impact Statement is needed. 

## Executive Order 12988

This rule has been reviewed in accordance with Executive Order 12988. The provisions of this rule preempt State laws to the extent such laws are inconsistent with the provisions of this rule. Before any legal action may be brought regarding determinations of this rule, the administrative appeal provisions set forth at 7 CFR part 780 must be exhausted. 

## Executive Order 12372

This program is not subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. See the notice related to 7 CFR part 3014, subpart V, published at 48 FR 29115 (June 24, 1983). 

## Unfunded Mandates Reform Act of 1995 

This rule contains no Federal mandates under the regulatory provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of the UMRA. 

## Paperwork Reduction Act of 1995 

In accordance with the Paperwork Reduction Act of 1995, FSA has submitted an emergency information collection request (ICR) to OMB for the approval of the Lamb Meat Adjustment Assistance Program report as necessary for the proper functioning of the program. 

*Title:*                     Lamb Meat Adjustment Assistance Program.                 

*OMB Control Number:*                     0560—New.                 

*Type of Request:*                     Request for a New Information Collection Package .                

*Abstract:*                     Sheep and lamb operations are eligible to receive direct payments provided they make certifications that attest to their eligibility to receive such payments. These operations must certify, as appropriate, with respect to: (1) The number of eligible rams purchased; (2) the number of sheep enrolled in an eligible sheep improvement program; (3) sheep and lamb facility improvements; (4) the number and condition of eligible slaughter and feeder lambs marketed; and (5) that the operation is still in the business of agricultural production. The information collection will be used by FSA to determine the program eligibility of the sheep and lamb operation in accordance with this subpart. FSA considers the information collected essential to prudent eligibility determinations and payment calculations. Additionally, without accurate information on sheep and lamb operations, the national payment rate would be inaccurate resulting in payments being made to ineligible recipients, and compromising the integrity and accuracy of the program.                 

*Estimate of Burden:*                     Public reporting burden for this collection of information is estimated to average 5 minutes per response.                 

*Respondents:*                     Sheep and Lamb Operations.                 

*Estimated Number of Respondents:*                     60,000.                 

*Estimated Number of Responses per Respondent:*                    5                 

*Estimated Total Annual Burden on Respondents:*                     24,000 hours.                 

*Proposed topics for comment include:*                     (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information collected; or (d) ways to minimize the burden of the collection of the information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. Comments should be sent to the Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503 and to Grady Bilberry, Director, Price Support Division, Farm Service Agency, United States Department of Agriculture, STOP 0512, 1400 Independence Avenue, SW, Washington, DC 20250-0512 or telephone (202) 720-7901.                 

## Executive Order 12612

It has been determined that this rule does not have sufficient Federalism implications to warrant the preparation of a Federalism Assessment. The provisions contained in this rule will not have a substantial direct effect on States or their political subdivisions, or on the distribution of power and responsibilities among the various levels of government. 

## Immediate Effectiveness of This Rule 

                    It has been determined that this rule should be issued as an interim rule, effective immediately, but subject to modification on the consideration of comments that are timely received. Delaying the implementation of the rule pending comment would be impracticable and contrary to the public interest, based on consideration of the provisions of Section 32 of the Act of August 24, 1935, as amended, the current market situation for lamb meat, and the lack of material adverse effect on other parties.                           ( print page 38411)    

On July 7, 1999, the President issued a declaration concerning lamb meat that directed the Secretary of Agriculture to implement adjustment assistance programs based on authorized programs to facilitate efforts of the domestic lamb industry to make a positive adjustment to import competition. Market conditions have deteriorated since July 1997. Lamb producers have been some of the hardest hit, suffering major losses during 1997 and 1998 due to record high imports of low-priced lamb meat, so there is a critical need for action. Furthermore, while the need for immediate assistance is critical, potential harm to other parties, resulting from the issuance of this rule as an interim rule is expected to be minimal. 

## The Small Business Regulatory Enforcement Fairness Act 

The finding made above, that this rule should be made effective immediately, applies for all purposes including, but not limited, to the provisions of section 808 of the Small Business Regulatory Enforcement Fairness Act (SBREFA) (5 U.S.C. 808), which provides that a rule may, without regard to certain special Congressional oversight measures provided for in SBREFA, take effect at such time as the agency may determine if the agency finds for good cause that public notice is impracticable, unnecessary, or contrary to the public interest. For the reasons set out, it has been determined that delay would be contrary to public interest and that the rule should be made effective immediately. 

## Background 

Clause (3) of section 32 of the Act of August 24, 1935, as amended, authorizes the Secretary of Agriculture to “reestablish farmers’ purchasing power by making payments in connection with the normal production of any agricultural commodity for domestic consumption.” 

During the past few years a number of factors have produced a serious economic crisis that threatens the existence of sheep and lamb producers throughout the United States. There are an estimated 66,800 sheep and lamb operations in the United States that account for about 1 percent of the value of all U.S. farm production. Sheep and lamb prices, marketings, and production have declined steadily since July 1997. Lamb producers were one of the hardest hit segments of the sheep industry, suffering major losses during 1997 and 1998, when lamb meat imports reached record highs. Threatened by a surge of low-priced, imported lamb meat, many producers have lost the ability to remain competitive in the domestic marketplace. 

This rule addresses that situation by providing for a new program to be administered by FSA utilizing the foregoing authority. Payments to sheep and lamb operations under the program provided for by this rule will offset a portion of the per-head losses producers have incurred marketing their lambs and will help the U.S. lamb industry achieve sustained competitiveness, while respecting international trade obligations. The program will be administered in two parts, one part covering activities occurring in what is referred to in the rule as “Year 1” ( the period running from July 22, 1999, and ending September 30, 2000) and the second part covering activities occurring in what are called “Year 2” and “Year 3” in the rules—those being respectively, the periods from August 1, 2000 through July 31, 2001, and August 1, 2001, through July 31, 2002. The rule contemplates that $30 million will be available for the program and limits expenditures to that amount with a provision for pro-rating payments in any program year in which the funds will be exhausted. 

Payments under this new program will provide those eligible for the payments with an immediate infusion of funds to help pay operating expenses and meet other financial obligations. “Year 1” payments will be available to sheep and lamb operations that: (1) Between July 22, 1999, through September 30, 2000, purchased 90 day-old or older rams intended for breeding purposes which the operation held for at least 90 days continuously thereafter and continue to hold or use for breeding purposes, when the payments are to be made; (2) made lamb or feedlot facility improvements during the same period; or (3) in that period, enrolled sheep in an eligible sheep improvement program. The improvement program can be the National Sheep Improvement Program operated by the American Sheep Industry Association, or a similar program, if approved by FSA, to assist sheep and lamb producers by genetically evaluating animals in a flock for maternal, growth, and wool traits or to otherwise provide equivalent benefits to the producer's herd. 

“Year 1” facility improvement payments will be made to sheep and lamb facilities only with respect to improvements that will be maintained and used in the sheep and lamb operation for at least the next 3 consecutive years from the date of the completion of the improvements. Eligible facility improvements may include, but are not limited to new and improved feedlots, lambing sheds, and shearing sheds. Eligible sheep and lamb operations in “Year 1” can receive up to $100 per eligible ram purchased, not to exceed $2,500 per operation; $.50 per head of eligible sheep enrolled in a sheep improvement program, not to exceed $500 per operation; and 20 percent of the sheep and lamb operation's eligible facility improvement costs, not to exceed $2,500 per operation. Accordingly, maximum payments to any operation during “Year 1” will be limited to $5,500 for the three parts of the “Year 1” program. The rule also makes provision for limiting payments for rams to the extent that such purchases would produce a ratio of rams to ewes of less than 1 to 15. In addition, eligible lamb producers must have in 1999 gross annual revenue of $2.5 million or less. The purpose of this and other limitations on payments is to help target limited financial resources to individual producers who are relatively less able to finance lamb improvements. 

For “Year 2” and “Year 3”, payments will be made, subject to the availability of funds, with respect to marketings of (1) slaughter lambs and (2) feeder lambs. “Year 2” payments will be made for such marketings during “Year 2” and “Year 3” payments will be made for corresponding marketings in that year. “Year 2” and “Year 3” have been separated so that separate sign-ups can be held, separate payments can be made, and to ease proration problems in the event that the claims under the program should eventually exceed the amount of the available funds. 

First, as to “Year 2” and “Year 3” marketings of slaughter lambs, the lambs must have been owned by the lamb-raising operation in the normal course of business for 30 days prior to the qualifying marketing and must produce a carcass which: (1) Grades “USDA Yield Grade 2”; (2) has “USDA Choice or Prime” quality; (3) has a muscling confirmation score of “Average Choice” or better; and (4) has a 55 to 75 pound dressed hot carcass weight. 

                    With respect to the other category of marketings for which “Year 2” and “Year 3” payments can be made, “feeder lambs” are defined in this rule to be either ewes or wethers of less than 1 year of age that when sold are intended to be further fed a grain concentrate diet to reach an acceptable slaughter market weight. Payments for feeder lamb marketings will be made only if the lambs are, at the time of marketing, thick-muscled and large-framed lambs, as described in USDA Standards and were owned by the                           ( print page 38412)                        operation for 30 days, continuously immediately prior to the qualifying marketing. In addition, lamb producers eligible for payments must have in 1999 and subsequent years, an applicable gross annual revenue of $2.5 million or less.                 

Subject to the availability of funds, the per-head “Year 2” and “Year 3” payment rate is set by the rule to be $5 for each eligible slaughter lamb marketing and $3 for each eligible feeder lamb marketing. An additional $3 per slaughter lamb payment will be made for slaughter lambs marketed from June 1 through July 31 of the program year. For slaughter lambs, an Agricultural Marketing Service (AMS) agent or an assigned representative of AMS must verify that lamb carcasses meet the payment criteria. The condition of qualifying feeder lambs must also be certified to by the AMS agent or an assigned AMS representative. 

Payments for parts of this program (Years 1-3) are available to all eligible U.S. operations without herd or per operation or per person payment limitations, except as noted. 

Eligible sheep and lamb operations making application for payments under this part must self-certify, as applicable: (1) The number of eligible rams purchased, as well as, information establishing the ratio of rams to ewes on the operation for all relevant times during the program year to which such information applies; (2) the number of sheep enrolled in a sheep improvement program; (3) the lamb or feedlot facility improvements during “Year 1”; (4) the intent to use the improvement for sheep production activities for the next 3 consecutive years; (5) the number of slaughter lamb and feeder lamb marketings that meet the specified criteria; and (6) the operation must also certify that it is still engaged in the business of producing and marketing agricultural products at the time of application for payment. Eligible operations must apply for payments during the sign-up period set by the FSA pursuant to these regulations. 

Sheep and lamb operations may, during the applicable period, apply in person at county FSA offices during regular business hours. Alternatively, program applications may be obtained by mail, telephone, and facsimile from their designated county FSA office or obtained via the Internet. The Internet website is located at www.fsa.usda.gov/​dafp/​psd/​. 

# List of Subjects in 7 CFR Part 784

      - Price support programs
      - Reporting and recordkeeping requirements
      - Sheep

Accordingly, Title 7 of the Code of Federal Regulations is amended to add a new part, 7 CFR part 784, to read as follows: 

# PART 784—LAMB MEAT ADJUSTMENT ASSISTANCE PROGRAM 

        - 784.1 
        - Applicability; available payments. 
        - 784.2 
        - Administration. 
        - 784.3 
        - Definitions. 
        - 784.4 
        - Year 1 time and method for application. 
        - 784.5 
        - Year 1 eligibility. 
        - 784.6 
        - Year 1 rate of payment and limitations on funding. 
        - 784.7 
        - Year 2 and Year 3 time and method for application. 
        - 784.8 
        - Year 2 and Year 3 eligibility. 
        - 784.9 
        - Year 2 and Year 3 rate of payment. 
        - 784.10 
        - Availability of funds for Year 1 through Year 3. 
        - 784.11 
        - Appeals. 
        - 784.12 
        - Misrepresentation and scheme or device. 
        - 784.13 
        - Estates, trusts, and minors. 
        - 784.14 
        - Death, incompetency, or disappearance. 
        - 784.15 
        - Maintaining records. 
        - 784.16 
        - Refunds; joint and several liability. 

Authority:Clause (3) of section 32 of the Act of August 24, 1935, as amended; 7 U.S.C. 612c. 

§ 784.1 

(a) This part establishes the Lamb Meat Adjustment Assistance Program. The purpose of this program is to provide benefits to sheep and lamb operations pursuant to clause (3) of section 32 of the Act of August 24, 1935, as amended (7 U.S.C. 612c) in order to reestablish their purchasing power in connection with the normal production of sheep and lambs for domestic consumption and boost the long-term development and growth of sheep and lamb farming in the United States. 

(b) Under and subject to this part, FSA will provide with respect to sheep and lamb operations: “Year 1” payments in which sheep and lamb operations will receive payments for, during the time period encompassing “Year 1” as defined in these regulations, purchasing eligible rams for breeding, enrolling their herd in a sheep improvement program, and for making improvements to their production facilities; and “Year 2” and “Year 3” payments for marketings of eligible slaughter lambs or feeder lambs during the period encompassing those time periods. Unless otherwise determined by the agency in accordance with the provisions of this part, the amount that may be expended under this part shall not exceed $30 million. Claims that exceed that amount will be prorated in accordance with the provisions for proration that are contained in this part. 

§ 784.2 

(a) This part shall be administered by the Farm Service Agency (FSA) under the general direction and supervision of the Deputy Administrator for Farm Programs, FSA. The program shall be carried out in the field by FSA State and county committees (State and county committees). 

(b) State and county committees, and representatives and employees thereof, do not have the authority to modify or waive any of the provisions of the regulations in this part. 

(c) The State committee shall take any action required by this part which has not been taken by the county committee. The State committee shall also: 

(1) Correct, or require a county committee to correct, any action taken by such county committee which is not in accordance with the regulations of this part; or 

(2) Require a county committee to withhold taking any action which is not in accordance with the regulations of this part. 

(d) No delegation herein to a State or county committee shall preclude the Deputy Administrator for Farm Programs, FSA, or a designee, from determining any question arising under the program or from reversing or modifying any determination made by a State or county committee. 

(e) The Deputy Administrator for Farm Programs, FSA, may authorize State and county committees to waive or modify deadlines and other program requirements in cases where timeliness or failure to meet such other requirements does not adversely affect the operation of the program. 

§ 784.3 

The definitions set forth in this section shall be applicable for all purposes of administering the Lamb Meat Adjustment Assistance Program established by this part. 

*Agricultural Marketing Service or AMS*                                 means the Agricultural Marketing Service of the Department.                             

*Application*                                 means the Lamb Meat Adjustment Assistance Program Application, Forms FSA-382 and FSA-383.                             

*Department*                                 means the United States Department of Agriculture.                             

*Eligible lambs*                                 means feeder lambs and slaughter lambs.                             

*Farm Service Agency or FSA*                                 means the Farm Service Agency of the Department.                             

*Feeder lamb*                                 means a ewe or wether of less than 1 year of age that when sold                                       ( print page 38413)                                    is intended to be further fed a grain concentrate diet to reach an acceptable slaughter market weight.                             

*Muscling confirmation score of “Average Choice”*                                 means a muscling confirmation score of that designation assigned in accordance with official USDA standards and procedures.                             

*Person*                                 means any individual, group of individuals, partnership, corporation, estate, trust, association, cooperative, or other business enterprise or other legal entity who is, or whose members are, a citizen or citizens of, or legal resident alien or aliens in the United States.                             

*Secretary*                                 means the Secretary of the United States Department of Agriculture or any other officer or employee of the Department who has been delegated the authority to act in the Secretary's stead with respect to the program established in this part.                             

*Sheep and lamb operation*                                 means any self-contained, separate enterprise operated as an independent unit exclusively within the United States in which a person or group of persons raise sheep and/or lambs.                             

*Sheep improvement program*                                 means the “National Sheep Improvement Program” operated by the American Sheep Industry Association or other similar program for herd improvement approved by the FSA with respect to payments under this part.                             

*Slaughter lamb*                                 means a lamb that is sold for immediate slaughter.                             

*United States*                                 means the 50 States of the United States of America, the District of Columbia, and the Commonwealth of Puerto Rico.                             

*USDA Choice, USDA Prime, USDA Yield Grade 2*                                 means, respectively, the classifications so designated under the Official United States Standards for Grades of Lamb, Yearling, Mutton, and Mutton Carcasses promulgated by the Secretary of Agriculture under the Agricultural Marketing Act of 1946, as amended (60 Stat. 1087; 7 U.S.C. 1621-1627) and related authorities.                             

*Year 1*                                 means the period of time beginning July 22, 1999, and ending September 30, 2000.                             

*Year 2*                                 means the period of time beginning August 1, 2000, and ending July 31, 2001.                             

*Year 3*                                 means the period of time beginning August 1, 2001, and ending July 31, 2002.                             

§ 784.4 

(a) Sheep and lamb producers may obtain a “Year 1” application, Form FSA-382 (Lamb Meat Adjustment Assistance Program Payment Application), in person, by mail, by telephone, or by facsimile from any county FSA office. In addition, applicants may download a copy of the Form FSA-382 at http://www.usda.gov/​dafp/​psd/​. 

(b) A request for “Year 1” benefits under this part must be submitted on a completed Form FSA-382. The Form FSA-382 should be submitted to the FSA county office serving the county where the sheep and lamb operation is located but, in any case, must be received by the FSA county office by the close of business on October 13, 2000. Applications not received by the close of business on October 13, 2000, will be returned as not having been timely filed and the sheep and lamb operation filing the application will not be eligible for benefits under this program. 

(c) The sheep and lamb operation requesting “Year 1” benefits under this part must certify to the accuracy of the information provided in their application for benefits. All information provided is subject to verification and spot checks by FSA. Refusal to allow FSA or any other agency of the Department of Agriculture to verify any information provided will result in a determination of ineligibility. Data furnished by the applicant will be used to determine eligibility for program benefits. Furnishing the data is voluntary; however, without it program benefits will not be approved. Providing a false certification may be subject to additional civil and criminal sanctions. 

(d) Not withstanding any other provisions of this section, payments will not be made under this section for the acquisition of rams to the extent that any such purchase, at any time during “Year 1”, created, or help create, a ratio of rams to ewes for the operation that was less than 1 ram to 15 ewes. However, the limitation on payments provided for in the preceding sentence shall not apply to the extent that the operation establishes to the satisfaction of the COC that a lower ratio of rams to ewes is customary for the operation. 

§ 784.5

(a) To be eligible to receive the “Year 1” payments under this part, as described in § 784.1, at the rates provided in § 784.6, a sheep and lamb operation must be engaged in the business of producing and marketing agricultural products at the time of filing the application, must have in 1999 gross annual revenue of $2.5 million or less, and must have done at least one of the following during “Year 1”: 

(1) Purchased rams for breeding purposes within that operation, provided that such rams must have been at least 90 days of age when purchased and must have been, or will be, maintained by the operation for at least 90 days continuously after the date of purchase; 

(2) Enrolled sheep in an eligible sheep improvement program; or 

(3) Made sheep and lamb operation facility improvements with respect to their operation. 

(b) With respect to paragraph (a)(3) of this section, in order to receive payments, the sheep and lamb operation must submit supporting documentation of the cost of the improvements made to the facility during program “Year 1” and must use facility improvements for sheep and lamb production activities continuously for at least the next 3 consecutive years. Upon a failure to maintain the facility for the full three years, the operation must refund the “Year 1” facility payment immediately and with interest. 

(c) With respect to payments made for activities addressed in paragraph (a)(1) of this section, upon any failure to maintain a ram after payment for the full required 90-day period, unless that period has already expired, the operation must immediately refund the payment made and with interest. 

§ 784.6

Subject to the availability of funds and to the proration rules of § 784.10, “Year 1” payments for qualifying operations shall be at the following rates: 

(a) Up to $100 for each eligible ram purchased, up to $2,500 per sheep and lamb operation; 

(b) $.50 for each qualifying sheep enrolled in a qualifying sheep improvement program, up to $500 per sheep and lamb operation; plus 

(c) 20% of the cost of the qualifying facility improvements up to $2,500 per sheep and lamb operation. 

§ 784.7

                                (a) To receive “Year 2” and “Year 3” benefits, as described in § 784.1, at rates set out in § 784.9, sheep and lamb operations may obtain an application, Form FSA-383 (Lamb Meat Adjustment Assistance Program Payment Application), in person, by mail, by telephone, or by facsimile from any county FSA office. In addition, applicants may download a copy of the Form FSA-383 at                                 *http://www.fsa.usda.gov/​dafp/​psd/​.*

(b) Sheep and lamb operations must have the certification section of the application Form FSA-383 completed prior to submission of the form to the county office. 

                                (c) A request for “Year 2” and “Year 3” benefits under this part must be                                       ( print page 38414)                                    submitted on a completed Form FSA-383. The Form FSA-383 should be submitted to the FSA county office serving the county where the sheep and lamb operation is located but, in any case, must be received by the FSA county office by the close of business on August 15, 2001, if applying for “Year 2” benefits, and by the close of business on August 15, 2002, if applying for “Year 3” benefits. Applications not received by the respective deadlines will be returned as not having been timely filed and the sheep and lamb operation will not be eligible for the benefits which were the subject of the failed application.                             

(d) The sheep and lamb operation requesting benefits under this part must certify to the accuracy of the information provided in their application for benefits. All information provided is subject to verification and spot checks by FSA. Refusal to allow FSA or any other agency of the Department of Agriculture to verify any information provided will result in a determination of ineligibility. Data furnished by the applicant will be used to determine eligibility for program benefits. Furnishing the data is voluntary; however, without it program benefits will not be approved. Providing a false certification to the Government is punishable by imprisonment, fines and other penalties. 

§ 784.8 

(a) Subject to the availability of funds, “Year 2” and “Year 3” payments will, as described to in § 784.1, be made for eligible marketings of slaughter lambs for slaughter. (Criteria for feeder lamb payments appear elsewhere in this section). Such payments for slaughter lambs, as opposed to feeder lambs, can be received by an operation, at the rates described in § 784.9, for those eligible lambs slaughtered in the respective time periods comprising “Year 2” and “Year 3” if the lambs were owned, by the operation, in the normal course of raising lambs for slaughter, continuously for 30 days prior to the marketing for slaughter and if the carcasses produced by the slaughter of the lamb meets the criteria set out in paragraph (b) of this section. Other criteria, as set out in this part, may also apply as a condition for, or limitation on, payment. 

(b) In order for a marketing of a slaughter lamb to qualify for payment under paragraph (a) of this section, the carcass produced by the slaughter must be evaluated and certified by an AMS agent or their assigned representative that such carcass meets the following criteria: 

(1) Meet the requirements of USDA Quality Grade Choice or Prime; 

(2) Meet the requirements of USDA Yield Grade 2; 

(3) Have a muscling confirmation score of “Average Choice” or better; and 

(4) Have a 55-75 pound dressed hot carcass weight; 

(c) Subject to the availability of funds, in order to be eligible for the “Year 2” and “Year 3” feeder lamb payments referred to in § 784.1, at the rates specified in § 784.9, sheep operations must have in the preceding year of which payment is sought had a gross annual revenue of $2.5 million or less, and must for the year in which the payment is sought marketed qualifying feeder lambs. In order for a feeder lamb to be a qualifying feeder lamb it must have been: 

(1) Owned by the operation, as part of its normal raising of lambs for slaughter, continuously for 30 days prior to the time of the qualifying marketing; and 

(2) At the time of the marketing must have been, as determined and certified by AMS, thick-muscled and large-framed. 

(d) To be eligible for any payments under this section, the sheep and lamb operation must be engaged in the business of producing and marketing agricultural products at the time of filing the application. 

(e) In addition, to be eligible for “Year 2” and “Year 3” payments, a sheep and lamb operation must submit a timely application during the application period for “Year 2” and “Year 3” benefits and comply with all other terms and conditions of this part or are contained in the application to be eligible for such benefits. 

§ 784.9 

Subject to the availability of funds, and the proration rules set out in § 784.10, “Year 2” and “Year 3” payments may be made to sheep and lamb operations at the following rates: 

(a) $3 for each qualifying feeder lamb; plus 

(b) $5 for each eligible qualifying slaughter lamb, except those slaughter lambs marketed during the period of June 1 through July 31 of the applicable program year for which the payment rate will be $8 per head. 

§ 784.10 

Total payments under this part, unless otherwise determined by the FSA, cannot exceed $30 million. In the event that funds should be insufficient to complete payments for a program year then the claims for that program year shall be prorated by a national factor so as to reduce the payments to be made to the amount available. Payments for preceding years will not be affected. 

§ 784.11 

Any sheep and lamb operation which is dissatisfied with a determination made pursuant to this part may make a request for reconsideration or appeal of such determination in accordance with the appeal regulations set forth at parts 11 and 780 of this title. 

§ 784.12 

(a) A sheep and lamb operation shall be ineligible to receive assistance under this program if it is determined by the State committee or the county committee to have: 

(1) Adopted any scheme or device which tends to defeat the purpose of this program; 

(2) Made any fraudulent representation; or 

(3) Misrepresented any fact affecting a program determination. 

(b) Any funds disbursed pursuant to this part to any person or operation engaged in a misrepresentation, scheme, or device, shall be refunded with interest together with such other sums as may become due. Any sheep and lamb operation or person engaged in acts prohibited by this section and any sheep and lamb operation or person receiving payment under this part shall be jointly and severally liable with other persons or operations involved in such claim for benefits for any refund due under this section and for related charges. The remedies provided in this part shall be in addition to other civil, criminal, or administrative remedies which may apply. 

§ 784.13 

(a) Program documents executed by persons legally authorized to represent estates or trusts will be accepted only if such person furnishes evidence of the authority to execute such documents. 

(b) A minor who is otherwise eligible for assistance under this part must, also: 

(1) Establish that the right of majority has been conferred on the minor by court proceedings or by statute; 

(2) Show a guardian has been appointed to manage the minor's property and the applicable program documents are executed by the guardian; or 

(3) Furnish a bond under which the surety guarantees any loss incurred for which the minor would be liable had the minor been an adult. 

      ( print page 38415)    
§ 784.14 

In the case of death, incompetency, disappearance or dissolution of a person that is eligible to receive benefits in accordance with this part, such person or persons specified in part 707 of this chapter may receive such benefits, as determined appropriate by FSA. 

§ 784.15 

Persons making application for benefits under this program must maintain accurate records and accounts that will document that they meet all eligibility requirements specified herein. Such records and accounts must be retained for 3 years after the date of payment to the sheep and lamb operations under this program. Destruction of the records after such date shall be the risk of the party undertaking the destruction. 

§ 784.16 

(a) In the event there is a failure to comply with any term, requirement, or condition for payment arising under the application, or this part, and if any refund of a payment to FSA shall otherwise become due in connection with the application, or this part, all payments made under this part to any sheep and lamb operation shall be refunded to FSA together with interest as determined in accordance with paragraph (c) of this section and late payment charges as provided in part 1403 of this title. 

(b) All persons signing a sheep and lamb operation's application for payment as having an interest in the operation shall be jointly and severally liable for any refund, including related charges, which is determined to be due for any reason under the terms and conditions of the application or this part with respect to such operation. 

(c) Interest shall be applicable to refunds required of any person under this part if FSA determines that payments or other assistance was provided to a person who was not eligible for such assistance. Such interest shall be charged at the rate of interest which the United States Treasury charges the Commodity Credit Corporation (CCC) for funds, from the date FSA made such benefits available to the date of repayment or the date interest increases as determined in accordance with applicable regulations. FSA may waive the accrual of interest if FSA determines that the cause of the erroneous determination was not due to any action of the person. 

(d) Interest determined in accordance with paragraph (c) of this section may be waived at the discretion of FSA alone for refunds resulting from those violations determined by FSA to have been beyond the control of the person committing the violation. 

(e) Late payment interest shall be assessed on all refunds in accordance with the provisions of, and subject to the rates prescribed in 7 CFR part 792. 

(f) Any excess payments made by FSA with respect to any application under this part must be refunded. 

(g) In the event that a benefit under this subpart was provided as the result of erroneous information provided by any person, the benefit must be repaid with any applicable interest. 

Signed at Washington, DC, on June 16, 2000.

George Arredondo, 

Acting Administrator, Farm Service Agency. 

[FR Doc. 00-15724 Filed 6-19-00; 11:19 am] 

BILLING CODE 3410-05-P