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[Federal Register Volume 79, Number 240 (Monday, December 15, 2014)]
[Rules and Regulations]
[Pages 74561-74583]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-29082]

[[Page 74561]]

Vol. 79

Monday,

No. 240

December 15, 2014

Part VI

Department of Agriculture

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Farm Service Agency

7 CFR Part 718

Commodity Credit Corporation

7 CFR Parts 1412, 1416, and 1437

Noninsured Crop Disaster Assistance Program; Interim Rule

Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / 
Rules and Regulations

[[Page 74562]]

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DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 718

Commodity Credit Corporation

7 CFR Parts 1412, 1416, and 1437

RIN 0560-AI20

Noninsured Crop Disaster Assistance Program

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

ACTION: Interim rule.

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SUMMARY: This rule implements changes to the Noninsured Crop Disaster 
Assistance Program (NAP) as required by the Agricultural Act of 2014 
(the 2014 Farm Bill), including changes to eligible crops, provisions 
governing eligibility of native sod acreage, additional coverage 
levels, and waivers of service fees and premium reductions for 
beginning, limited resource, and socially disadvantaged producers. This 
rule also clarifies requirements for eligible types and causes of loss 
and expands coverage for eligible mollusk and other aquaculture losses. 
This rule clarifies that the Farm Service Agency (FSA) may set separate 
market prices for organic crops and for direct to consumer sales. The 
changes are relatively minor and do not change the core purpose of NAP, 
which is to provide financial assistance to producers of non-insurable 
crops when low yield, loss of inventory, or prevented planting occurs 
due to a natural disaster.

DATES: Effective Date: December 15, 2014.
    Comment Date: We will consider comments that we receive by February 
13, 2015.

ADDRESSES: We invite you to submit comments on this interim rule. In 
your comment, include the Regulation Identifier Number (RIN) and the 
volume, date, and page number of this issue of the Federal Register. 
You may submit comments by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Mail, hand delivery, or courier: Steve Peterson, 
Production, Emergencies and Compliance Division, Farm Service Agency 
(FSA), United States Department of Agriculture (USDA), Stop 0517, 1400 
Independence Avenue SW., Washington, DC 20250-0517.
    Comments will be available online at http://www.regulations.gov. In 
addition, comments will be available for public inspection at the above 
address during business hours from 8 a.m. to 5 p.m., Monday through 
Friday, except holidays. A copy of this interim rule is available 
through the FSA home page at http://www.fsa.usda.gov/.

FOR FURTHER INFORMATION CONTACT: Steve Peterson, telephone: (202) 720-
7641. Persons with disabilities who require alternative means for 
communication (Braille, large print, audiotape, etc.) should contact 
the USDA Target Center at (202) 720-2600 (voice).

SUPPLEMENTARY INFORMATION:

Background

    FSA administers NAP for the Commodity Credit Corporation (CCC) as 
authorized by section 196 of the Federal Agriculture Improvement and 
Reform Act of 1996, as amended (7 U.S.C. 7333). The NAP regulations are 
in 7 CFR part 1437. NAP is administered under the general supervision 
of the FSA Administrator (who also serves as the CCC Executive Vice-
President) and is carried out by FSA State and county committees. NAP 
coverage is limited to crops other than livestock that are commercially 
produced for food and fiber, and to other specific crops for which 
catastrophic coverage under section 508(b) or additional coverage under 
sections 508(c) or 508(h) under the Federal Crop Insurance Act (7 
U.S.C. 1508(b), (c), and (h)) is not available. Qualifying losses to 
eligible NAP crops must be due to an eligible cause of loss as 
specified in 7 CFR part 1437, which includes damaging weather (drought, 
hurricane, freeze, etc.) or adverse natural occurrence (volcanic 
eruption, flood, etc.). NAP coverage is not automatic; producers must 
first apply for NAP coverage by an application closing date. That 
application is not filed unless it is accompanied by the service fee. 
The producer must file the application for coverage accompanied by the 
appropriate service fee (or service fee waiver) at their FSA county 
office in order to be eligible for NAP coverage. It is important 
producers understand that the law specifies that an application for 
coverage must be accompanied by the service fee and be filed no later 
than 30 days before the beginning of any coverage period. Therefore, 
the NAP application for coverage and payment of the service fee must be 
completed before any coverage can begin or attach. In addition, in the 
event a loss claim is filed for which premium fees are due premium fees 
will be first deducted from the NAP payment earned. Losses occurring 
outside a coverage period are not eligible for NAP coverage. Producers 
who choose not to obtain NAP coverage for a crop or commodity are not 
eligible for NAP assistance on the crop or commodity. The core 
provisions of NAP are not changing with this rule.
    The 2014 Farm Bill (Pub. L. 113-79) made a number of changes to 
NAP. This rule amends the NAP regulations to be consistent with those 
changes made by the 2014 Farm Bill. The changes include revised NAP 
eligibility requirements for tilled native sod, added coverage 
eligibility for sweet sorghum and biomass sorghum, and modified 
coverage for industrial crops. Beginning, limited resource, and 
socially disadvantaged farmers and ranchers will be eligible for 
service fee waivers. New ``buy up'' provisions will allow producers to 
buy additional NAP coverage for a premium, resulting in a risk 
management product that has equivalent coverage levels to some types of 
crop insurance offered by the Risk Management Agency (RMA).
    This rule makes discretionary changes to clarify eligible losses, 
and to redefine coverage for mollusks. Another discretionary change 
adds a requirement for NAP participants to notify FSA of losses within 
72 hours for certain crops, including hand-harvested crops, which 
require a timely assessment of loss before the damaged crop 
deteriorates. This rule clarifies that FSA may set separate market 
prices for the same crop in a state based on farming practices 
(conventional or organic) or sales to different markets (wholesale or 
direct to consumer).

NAP Assistance for 2012 Fruit Crop Losses

    The 2014 Farm Bill requires USDA to provide retroactive 2012 NAP 
assistance for losses to fruit crops grown on trees or bushes in 
counties that had Secretarial disaster designations due to frost or 
freeze. The eligibility provisions for that assistance were previously 
announced in a Notice of Funds Availability (79 FR 42493-42499) and are 
not addressed in this rule.

Definitions Added or Revised in This Rule

    The changes required by the 2014 Farm Bill and the clarifying 
discretionary changes require new definitions. This rule adds the 
following definitions to 7 CFR 1437.3, ``Definitions:'' ``acres devoted 
to the crop,'' ``agricultural experts,'' ``application for coverage,'' 
``bypass year,'' ``buffer zone,'' ``buy-up coverage,'' ``buy-up 
coverage yield,''

[[Page 74563]]

``certified organic acreage,'' ``certifying agent,'' ``conventional 
farming practice,'' ``feedstock,'' ``generally recognized,'' 
``guarantee,'' ``maximum dollar value for coverage sought,'' ``organic 
agricultural experts,'' ``organic crop,'' ``organic system plan,'' 
``organic standards,'' ``prohibited substance,'' ``short rotation woody 
crops,'' and ``transitional acreage.'' This rule revises the 
definitions for ``application closing date,'' ``catastrophic 
coverage,'' ``crop year,'' ``good farming practices,'' ``industrial 
crop,'' and ``native sod.'' These new and revised terms are needed to 
clarify the new provisions of this rule. For example, the definitions 
for ``feedstock,'' ``industrial crop,'' and ``short rotation woody 
crops'' are needed to implement the changes required by the 2014 Farm 
Bill to add certain biomass feedstocks as eligible crops and to clarify 
the existing provisions for industrial crops. Definitions of 
``agricultural experts'' and ``organic agricultural experts'' are 
needed because those terms are used in the context of determining 
appropriate farming practices for specific crops and locations. The new 
provisions concerning specific market prices and practices for organic 
crops requires adding definitions for ``buffer zone,'' ``certified 
organic acreage,'' ``certifying agent,'' ``organic crop,'' ``organic 
system plan,'' ``organic standards,'' ``prohibited substance,'' and 
``transitional acreage.'' The new ``buy-up coverage'' required several 
additional terms to clarify the provision on premium calculations.

NAP Eligibility for Crops and Practices Not Covered by Federal Crop 
Insurance

    This rule implements changes required by the 2014 Farm Bill with 
regard to NAP crop eligibility. Before the 2014 Farm Bill, NAP coverage 
was available on certain eligible crops for which a catastrophic risk 
protection plan of insurance (CAT) was unavailable from RMA. (A CAT-
level of Federal crop insurance offered by RMA pays 55 percent of the 
price of the commodity established by RMA on crop losses in excess of 
50 percent.) NAP was offered at CAT-levels only on those crops. Prior 
to the required changes made by the 2014 Farm Bill, in some cases, NAP 
could be made available to certain eligible crops that had other forms 
of insurance (additional coverage under sections 508(c) or 508(h)) 
available under the Federal Crop Insurance Act. The 2014 Farm Bill 
amends NAP crop eligibility. As amended, NAP is not available for crops 
for which CAT under section 508(b) or additional coverage under 
sections 508(c) or 508(h) of the Federal Crop Insurance Act are 
available. Therefore, if either CAT or additional coverage (excluding 
pilot policies or plans of insurance) is available for a crop, NAP is 
not available.
    In addition to the mandatory change just described, FSA is making a 
discretionary clarification that NAP coverage may be made available for 
certain eligible crops for certain practices not covered under CAT or 
additional coverage under sections 508(c) or (h). An example of this 
could be where CAT or additional coverage is available for irrigated 
corn grain crop acreage in a county but CAT and additional coverage is 
unavailable for non-irrigated corn crop acreage. In this example, if 
FSA determines that producing non-irrigated corn in the county is a 
good farming practice and that Federal crop insurance is unavailable 
because of a lack of actuarial data, NAP can be made available to non-
irrigated corn acreage in the county. This discretionary decision to 
make NAP available to corn that is not irrigated will provide producers 
with risk management protection. Coverage under NAP under this 
exception will be limited to situations when the unavailability of CAT 
coverage is due to a lack of actuarial data and not due to an absence 
of good farming practices or due to hardiness zones.

Native Sod

    This rule makes mandatory changes to the eligibility of producers 
who grow crops on native sod as required by section 11014 of the 2014 
Farm Bill. Prior to this rule, the regulations allowed that the 
Governor of a State in the Prairie Pothole National Priority Area 
(specific counties within the States of Iowa, Minnesota, Montana, North 
Dakota, and South Dakota) could elect that producers newly tilling 
native sod (specifically, that was tilled for the production of an 
annual crop) would have been ineligible for Federal crop insurance and 
for NAP benefits during the first 5 crop years of planting that annual 
crop. However, the governors were not required to make that decision 
and the producers of tilled native sod would have continued to be 
eligible for both Federal crop insurance and NAP in those States, as 
such decision was discretionary. The 2014 Farm Bill requires a 
reduction of benefits for native sod acreage in Iowa, Minnesota, 
Montana, Nebraska, North Dakota, and South Dakota. There is no longer 
any discretion given to governors of those States. The reduced 
eligibility period is now the first four crop years of planting.
    Under the 2014 Farm Bill and this rule, for the first four years of 
planting on native sod acreage, the NAP service fee and premiums for 
crops planted on that acreage will be 200 percent of the amount 
calculated according to 7 CFR 1437.6, although the premium cannot 
exceed the maximum premium amount of 5.25 percent times the payment 
limitation. The payment limit is $125,000, so the maximum premium 
amount is $6,562.50. In addition, the approved yield will be equal to 
65 percent of the T-yield for the crop. (The T-yield, as specified in 7 
CFR 1437.3, is the estimated county yield that is used when a producer 
does not have 4 years of actual production history.) This rule also 
amends the definition of ``native sod'' to conform to the amended 
definition established by the 2014 Farm Bill to specify that it 
includes land that a producer cannot substantiate has ever been tilled 
as of February 7, 2014. The 2014 Farm Bill does not change the de 
minimis acreage exemption, which applies to areas of 5 acres or less 
and is clarified in this rule to be consistent with the RMA provisions.

Eligible NAP Crops

    Eligible NAP crops currently include commercial crops: Crops grown 
for food (excluding livestock and their by-products); crops planted and 
grown for livestock consumption; crops grown for fiber (excluding trees 
grown for wood, paper, or pulp products); aquaculture species crops 
(including ornamental fish); floriculture; ornamental nursery; 
Christmas tree crops; turf grass sod; industrial crops; seed crops; and 
sea grass and sea oats. As required by the 2014 Farm Bill, this rule 
adds sweet sorghum and biomass sorghum as eligible crops.
    The 2014 Farm Bill and this rule clarify that ``industrial crops'' 
include crops grown expressly for the purpose of producing a feedstock 
for renewable biofuel, renewable electricity, or biobased products. For 
the purpose of implementing this clarification to ``industrial crops,'' 
this rule also adds a definition of ``feedstock'' in Sec.  1437.3 to 
include only crops grown expressly for biofuel; residues and by-
products of crops grown for a purpose other than biofuel are not 
eligible for NAP coverage. This rule excludes crops that are invasive 
or noxious plants from ``industrial crops'' to be consistent with 
Executive Order 13112, which prohibits Federal agencies from funding or 
carrying out actions that ``are likely to cause or promote the 
introduction or spread of invasive species in the United States.'' The 
determination of whether a species is invasive or noxious varies by

[[Page 74564]]

State, and FSA State committees will consult with the State technical 
committees for recommendations concerning the invasive and noxious 
status for otherwise eligible crops for the purposes of NAP. 
Information on ineligible species will be available in FSA county 
offices.

Eligible Causes of Loss

    This rule specifies that in limited instances, insufficient chill 
hours is an eligible cause of loss by itself for specific crops and 
locations for which FSA has determined, in advance of a coverage 
period, based on its review of sufficient scientific evidence, that 
chill hours are required for the crop to produce and a lack of chill 
hours is detrimental to crop production irrespective of management. In 
cases where FSA makes the decision to include insufficient chill hours 
as an eligible cause of loss by itself for a crop and location, the 
crop and location and subsequent crop year coverage period for which 
the decision will apply will be specified in a list maintained by FSA 
and available at FSA county offices. If the crop and location is not on 
that list, then insufficient chill hours can only be an eligible cause 
of loss if the insufficient chill hours was related to damaging weather 
or an adverse natural occurrence (as specified in Sec.  1437.10(b)(1) 
or (b)(2)). This is consistent with current policy.
    FSA is also making discretionary changes to clarify and specify 
additional ineligible causes of loss under this rule. Causes of loss 
that were previously ineligible will continue to be ineligible under 
this rule, except for insufficient chill hours as discussed above. This 
rule also clarifies that ineligible causes of loss include: Failure to 
carry out a good irrigation practice; variance of temperatures from 
average normal temperatures that are not otherwise specified as 
eligible causes of loss; managerial decisions to attempt to grow or 
produce a crop in an area that is not suited for successful commercial 
production of that crop; for aquaculture, loss of inventory or missing 
non-containerized inventory resulting from a managerial decision not to 
seed or raise the crop in containers, net pens, or wire baskets, on 
ropes, or using similar devices (except as provided for mollusks in 
this rule); failure to follow organic farming practices or 
contamination by application or drift of prohibited substances onto 
organic crops; weeds; and any cause of loss that results in damage that 
is not evident or would not have been evident during the NAP coverage 
period. The addition of these causes of loss is discretionary and is 
intended to provide clarification and consistency with the intent of 
NAP to provide coverage only for losses due to drought, flood, or other 
natural disaster, as determined by the Secretary, which has been 
interpreted to include damaging weather and adverse natural occurrences 
and related conditions. FSA is adding ropes as a device on which 
aquacultural species are raised because aquacultural species, including 
mussels and other aquatic organisms such as kelp, are seeded and raised 
on ropes. FSA is adding ropes as an example of a containment device. 
The Deputy Administrator for Farm Programs will determine on a species 
by species, area by area, and practice by practice basis whether ropes 
provide the necessary containment and protection.

Buy-Up Coverage Levels and Premiums

    Prior to the passage of the 2014 Farm Bill, NAP provided only one 
level of coverage, equivalent to CAT risk protection available under 
section 508(b) of the Federal Crop Insurance Act. This CAT-level 
protection covers losses due to low yield that are greater than 50 
percent of expected production. As specified in current regulations in 
7 CFR part 1437, NAP payments for low yield are calculated based on the 
amount of loss that exceeds 50 percent of expected production at 55 
percent of the average market price for the crop. This means that the 
maximum NAP payment for a total loss under CAT-level coverage is 27.5 
percent (50 percent of 55 percent) of the value of the covered crop or 
commodity. Under NAP, prevented planting was calculated not on a loss 
of expected yield, but based on acreage prevented from being planted 
based on total acreage intended to be planted in a crop year. A NAP 
prevented planting payment was issued based on the eligible approved 
prevented planted crop acreage in excess of 35 percent of total planted 
and prevented planted acreage times 55 percent of the average market 
price of the crop. NAP CAT-level coverage is available for a service 
fee of $250 per crop per county, up to $750 per county, not to exceed 
$1,875 per producer--this rule does not change the service fee for CAT-
level coverage.
    NAP will continue to offer CAT-level coverage for eligible crops. 
For the 2015 through 2018 crop years, the 2014 Farm Bill authorizes 
additional levels of coverage equivalent to coverage under subsections 
(c) and (h) of section 508 of the Federal Crop Insurance Act. This 
means that producers may select buy-up coverage ranging from 50 to 65 
percent of production, in 5 percent increments, and for 100 percent of 
the average market price. In other words, all buy-up coverage levels 
are at 100 percent of the average market price. If a producer elects 
buy-up coverage for a crop, prevented planting on that crop will be 
calculated as it was before but with 100 percent of the average market 
price. Payment factors (for acres prevented from being planted, planted 
and not harvested, and planted and harvested) will continue to be 
applied as they were before. Crops and grasses intended for grazing are 
specifically excluded from buy-up coverage by the 2014 Farm Bill. To 
obtain buy-up coverage, producers are required to pay a premium, equal 
to 5.25 percent times the level of coverage, in addition to the NAP 
service fee. The coverage levels and premium calculations are specified 
in the 2014 Farm Bill and FSA has no discretion to offer different 
coverage levels or premiums.
    Premiums for additional coverage will be calculated as the product 
of the producer's share of the NAP covered crop, times the number of 
eligible acres devoted to the crop, times the approved yield per acre, 
times the coverage level, times the average market price, times a 5.25 
percent premium fee. The maximum premium per producer, as specified in 
the 2014 Farm Bill, is $6,562.50 (the product of the applicable payment 
limitation of $125,000 times a 5.25 percent premium fee for the maximum 
level of coverage).
    For example, if Farmer Smith has a 100 percent share interest in 20 
acres of apple trees intended for the fresh market, and the approved 
yield per acre for that crop is 450 bushels, and the average fresh 
market price is $10.00 per bushel, and the coverage level is 65 
percent, the premium will be 1.000 (100 percent share) times 20 (acres) 
times 450 (bushels per acre) times 0.65 (coverage level of 65 percent) 
times $10.00 (price per bushel) times 0.0525 (premium factor), which 
equals $3,071.25. If Farmer Smith suffers a 100 percent loss, the 
payment would be calculated as 1.000 (100 percent share) times 20 
(acres) times 450 (bushels per acre) times 0.65 (coverage level) minus 
0 bushels (actual production) times $10.00 (price per bushel), which 
equals a NAP payment of $58,500.
    Buy-up coverage will also be available for value loss crops. NAP 
payments for value loss crops are based on the field market value of 
the crop before the disaster rather than on an approved yield. Examples 
of value loss crops include aquaculture, floriculture and ornamental 
nursery. The value of a crop before a potential disaster will be 
unknown at the time of premium calculation due to variations in

[[Page 74565]]

inventory and field value throughout the crop year. As a result, 
premiums for value loss crop will be based on the maximum dollar value 
for which a producer requests coverage, subject to applicable payment 
limitation, times the 5.25 percent premium. In the event of a loss, the 
NAP payment will be calculated using the lesser of the field market 
value of the crop before the disaster or the maximum dollar value for 
which the producer requested coverage at the time of application.
    The regulations discuss application closing dates. Because 2015 
application closing dates for some crops have already passed before FSA 
published this rule and made buy-up coverage available, with this rule 
producers may still nonetheless obtain buy-up coverage for those crops 
for the 2015 crop year by submitting an application for coverage 
requesting buy-up coverage and paying the service fee, even if the 
producer did not previously obtain CAT-level coverage and pay the 
service fee for the crop, by January 14, 2015. FSA needed time to 
develop the regulatory changes required to implement the new provisions 
as required by the 2014 Farm Bill, including completing additional 
necessary work, such as updating handbooks and training staff. 
Therefore, it seemed reasonable to provide this retroactive option 
because producers did not know what the changes or available options 
would be when they typically would have been required to purchase NAP 
coverage. In addition, if there are application closing dates near the 
publication of this rule, those producers will also be given 30 days 
from the date of publication of this rule to submit an application for 
coverage to ensure they are able to make their decision to purchase NAP 
coverage based on consideration of these regulatory changes.
    CAT-level coverage for the 2015 crop year was available prior to 
the application closing date prior to this rule; therefore, the 
deadline to apply for CAT-level coverage is not extended.

Coverage Periods

    This rule clarifies that, regardless of when the coverage period 
generally begins for any crop, a producer's own individual coverage for 
a crop that must fall within the general coverage period can start no 
earlier than 30 calendar days after the producer's application for 
coverage is filed, except as discussed below. FSA is making this change 
to be consistent with the requirements of 7 U.S.C. 7333.
    This rule provides an exception for the 2015 crop year for crops 
with application closing dates that have passed prior to publication of 
this rule. For those crops, if a producer did not apply for NAP 
coverage prior to the application closing date but files an application 
for coverage and elects buy-up coverage by January 14, 2015, the 
coverage period will begin as specified for the crop in 7 CFR 1437.6, 
without regard to the date the application for coverage is filed. Under 
this exception, producers must elect buy-up coverage, but such coverage 
can be for any level available under such buy-up coverage. Producers 
who previously purchased CAT-level coverage prior to the application 
closing date for those crops may also elect buy-up coverage until 
January 14, 2015. As noted above, if there are application closing 
dates near the publication of this rule, those producers will also be 
given 30 days following the publication of this rule to ensure they 
have the same period in which to make a decision to purchase NAP 
coverage based on consideration of these regulatory changes.

Service Fee Waiver and Premium Reduction

    Prior to this rule, the NAP regulations waived the service fee for 
producers who met the definition of ``limited resource farmer'' in 7 
CFR 457.8. The 2014 Farm Bill continues to waive service fees for 
limited resource farmers and ranchers and now waives service fees for 
beginning and socially disadvantaged farmers and ranchers as well. In 
addition to the service fee waiver, beginning, limited resource, and 
socially disadvantaged farmers and ranchers who elect buy-up coverage 
are also eligible for a 50 percent premium reduction. For the purpose 
of this rule, ``beginning,'' ``limited resource,'' and ``socially 
disadvantaged farmer and rancher'' are defined in 7 CFR part 718. To be 
eligible for the service fee waiver or premium reduction, persons or 
legal entities must provide a certification of their status as 
beginning, limited resource, or socially disadvantaged at the time they 
file an application for coverage, if they have not already filed that 
certification with FSA.
    For the 2014 crop year, the expanded service fee waiver will apply 
retroactively. In the extension of authorization document published on 
March 28, 2014 (79 FR 17388-17390), FSA announced that beginning and 
socially disadvantaged farmers and ranchers who paid the service fee 
for the 2014 crop year before enactment of the 2014 Farm Bill would be 
refunded the service fee.

Notice of Loss and Completion of Harvest

    This rule clarifies requirements for filing a notice of loss. As 
specified in the NAP regulations, a written notice of loss must be 
filed for prevented planting claims within 15 calendar days after the 
final planting date, or for yield claims or value loss, by the earlier 
of 15 calendar days after the disaster occurrence or date of loss or 
damage to the crop first becomes apparent, or the normal harvest date. 
These requirements for a written notice of loss are not changing with 
this rule.
    In addition to the written notice of loss, FSA is making a 
discretionary change to add a requirement to provide notice to the 
administrative county office within 72 hours for certain crops, 
including hand-harvested crops and other crops as determined by FSA, if 
earlier notice is needed in order to conduct an accurate loss 
assessment of the crop because of the rate at which certain crops 
(these crops ordinarily include hand harvested fruit and vegetable 
crops that can rapidly deteriorate and confound loss adjustment work) 
decompose in the field after a loss event and the reduced ability to 
discern if alleged damage occurred due to an eligible cause of loss as 
opposed to other factors. For example, if a freeze damages a crop of 
tomatoes, the participant is required to provide notice to FSA of 
damage or loss to the tomatoes within 72 hours of when damage is first 
apparent to the NAP covered producer. The earlier notice, which is not 
required to be in writing, provides FSA an opportunity to assess the 
loss before the damaged crop deteriorates and while the amount of loss 
attributable to a specific eligible cause of loss is still apparent. 
This provision is consistent with RMA's notification requirements for 
crop insurance.
    Producers of hand-harvested crops, under the prior rule, were 
required to provide FSA with notification that harvest is complete 
within 15 days of when damage or loss was first apparent. This rule 
changes that deadline from 15 days to within 72 hours. This 
discretionary change allows FSA to make a more accurate appraisal 
before the crop deteriorates or before evidence of the crop suffering a 
loss due to an eligible of loss diminishes or is lost in order to 
differentiate between legitimate losses versus production left in a 
field because of quality or unmarketable because of the lack of market.

[[Page 74566]]

Late-Planted Acreage

    This rule makes discretionary changes to the late planting 
provisions in 7 CFR 1437.103 to add an exception to the rule that crops 
having multiple planting periods and value loss crops are not eligible 
for reduced coverage for late planting. The exception added by this 
rule makes reduced NAP coverage available for the last planting period 
of multiple planted crops and multiple-planting periods having a 
defined gap of 60 days or more between the harvest date of the previous 
planting period and beginning of the immediately following planting 
period.

Average Market Prices

    This rule makes discretionary changes to clarify how average market 
prices are established as specified in 7 CFR 1437.12. NAP payments are 
calculated using average market prices, which are determined by FSA. 
Prior to this rule, an average market price was established for each 
crop and, if practicable, for each intended use of a crop on a 
harvested basis without the inclusion of transportation, storage, 
processing, marketing, or other post-harvest expenses. Prices should 
reflect the average market price actually received by producers, which 
may vary by state. The average market price has been typically 
established on a state-by-state basis, meaning that all NAP payments 
for a crop and, if applicable, for an intended use within a state would 
be based on the same average market price. Average market prices are 
based on the best available data (including National Agricultural 
Statistics Service (NASS) data, National Institute of Food and 
Agriculture (NIFA) data, knowledge of local markets, etc.) and are 
comparable (though not required to be equal) to established Federal 
Crop Insurance Corporation (FCIC) prices. In this rule, FSA details how 
it will determine, average market prices of eligible NAP crops for 
subsequent crop years.
    This rule clarifies that FSA may establish separate prices within a 
state to reflect the different prices producers receive based on 
differences due to different farming practices (conventional or 
organic) and sales to different markets (wholesale, direct sales to 
consumers at farm stands or farmer's markets, etc.). These changes to 
average market price provisions do not extend NAP coverage to 
additional producers or crops; changes made by this rule will allow an 
eligible producer to obtain NAP coverage for eligible crops grown with 
organic farming practices or intended to be marketed directly to 
consumers. This rule simply clarifies that when sufficient data is 
available, FSA may establish separate average market prices within a 
State that more closely reflect the prices obtained by producers based 
on the specific situations.
    To be eligible to receive payment based on an organic price, 
producers must report their organic acreage of the crop. Producers 
reporting organic acreage of a crop must be certified or exempt from 
certification according to the National Organic Program regulations at 
7 CFR part 205 and must provide a copy of their organic system plan to 
FSA. Yields will be adjusted as needed to reflect yields for crops 
using organic production methods. This rule also adds definitions 
related to organic acreage and production in order to implement these 
changes.
    All of the definitions in this rule related to organic production 
and certification are consistent with definitions used by AMS and with 
the basic provisions for Federal crop insurance used by RMA. 
Specifically, the definitions for ``buffer zone,'' ``certified organic 
acreage,'' ``certifying agent,'' conventional farming practice,'' the 
specification of organic farming practices within the definition for 
``good farming practices,'' ``organic agricultural experts,'' ``organic 
crop,'' ``organic farming practice,'' ``organic standards,'' 
``prohibited substance,'' and ``transitional acreage'' are identical to 
or consistent with those terms as used in the Federal crop insurance 
basic provisions. The terms ``certified organic acreage,'' ``good 
farming practices,'' ``organic crop,'' ``organic farming practice,'' 
``organic system plan,'' ``organic standards,'' and ``prohibited 
substance'' reference the AMS National Organic Program regulations, the 
Organic Foods Production Act of 1990 (7 U.S.C. 6501-6523), or both.
    When prices are established by intended use, producers with buy-up 
coverage, but without sufficient evidence of the historical intended 
and actual use or market as reflected in production records and final 
disposition, and those with CAT-level coverage will have NAP payments 
calculated using the average market price of the predominant final use 
of the crop. If a producer elects buy-up coverage and provides 
sufficient evidence of the intended use percentages of the crop in 
prior crop years, the NAP payment will be calculated based on those 
percentages instead of using only the price from the predominant final 
use. Premiums for producers who elect buy-up coverage will be based on 
the intended use of the crop based on the acreage report.
    If different prices are established for crops intended for 
different markets of an intended use of a crop, such as wholesale or 
directly to consumers through farmers markets or farm stands, and where 
FSA has established average market prices based on different markets, 
producers who elect buy-up coverage and provide acceptable 
documentation may elect NAP assistance calculated based on those 
prices.

Approved Yields

    Prior to this rule, when a producer reported acreage for a crop 
year, but failed to certify a report of production, regardless of 
whether that producer obtained NAP coverage for that year, an assigned 
yield or zero-credited yield was used in the producer's actual 
production history for calculation of that producer's approved yield in 
later years. This rule defines ``bypass year'' to include years when 
the producer did not obtain coverage for the crop and does not file a 
report of acreage or production. The rule makes a discretionary change 
to stop using assigned yields and zero-credited yields for bypass years 
in the calculation of a producer's approved yield. This change is 
intended to encourage increased participation in NAP by preventing an 
adverse impact on producers who choose not to report production during 
years when they do not have NAP coverage but choose to elect NAP 
coverage in later years. The policy regarding assigned yields and zero-
credited yields for producers who have NAP coverage, but do not report 
production, is not changing under this rule.
    This rule allows replacement of assigned yields and zero-credited 
yields in a producer's actual production history (APH) for the 1995 
through 2014 crop years with yields equal to the higher of 65 percent 
of the current crop year T-yield (as defined 7 CFR 1437.3) or the 
missing crop year's actual yield. As with the change discussed above 
for bypass years, this discretionary change is intended to encourage 
increased participation in NAP and to avoid penalizing producers who 
did not report production in a year in which they did not have NAP 
coverage.

Adjustment of Production for Quality Losses

    To provide improved risk protection that addresses losses in a 
similar manner to some past ad hoc disaster programs, the NAP payment 
calculation for yield losses will allow an adjustment of net production 
due to quality losses for crops and locations approved by

[[Page 74567]]

FSA. This change allows NAP to provide risk protection for quality 
losses in limited situations when a specific crop in a given location 
typically does not suffer yield losses large enough to result in NAP 
payments, but does suffer significant quality losses due to eligible 
causes of loss. The requests for quality adjustments for crops and 
locations may be processed through any of the FSA State offices. The 
crops and locations eligible for quality adjustments will be determined 
by the Deputy Administrator for Farm Programs in advance of the 
coverage period, only if supporting documentation of industry accepted 
standards for quality discounts are available. Net production will be 
adjusted only if buy-up coverage is elected and the covered producer 
elects to have the quality loss option; no adjustment will be made if a 
producer elects only CAT-level coverage for a crop. Evidence to support 
making a quality loss adjustment must be from records acceptable to FSA 
and are subject to disapproval if FSA is not satisfied that the alleged 
loss of quality occurred as a result of an eligible cause of loss in 
the coverage period. If a producer opts for quality loss adjustment and 
an adjustment to the unit's net production is made, FSA will enter the 
adjusted net production into the producer's actual production history 
database for the loss year. In other words, the lower actual yield that 
results after adjustment for quality will be used to compute future 
year approved yields.

Aquaculture Coverage

    NAP regulations required that for aquaculture losses to be eligible 
for payment, the aquaculture species must be kept in a controlled 
environment and that such species must be planted or seeded in 
containers, net pens, wire baskets, or similar devices designed for 
protection and containment. This rule makes discretionary changes for 
aquaculture producers who raise aquacultural species on a rope and 
certain mollusk producers.
    As noted above, under changes made by this rule for eligible causes 
of loss, NAP coverage will be available for aquaculture producers who 
plant or seed aquatic species in or on certain specifically named 
devices, which now includes ropes, when it is determined by the Deputy 
Administrator for Farm Programs that the ropes provide the necessary 
containment and protection for the species, area, and practice.
    Under changes made by this rule, with respect to mollusks not 
planted or seeded in devices such as containers, net pens, or wire 
baskets, on ropes, or using similar devices designed for protection and 
containment, NAP coverage for such mollusks will only cover losses 
caused by a named tropical storm, typhoon, or hurricane. This change is 
intended to encourage additional NAP participation by mollusk producers 
who do not use containers or similar devices, while maintaining 
integrity in NAP by covering those producers' losses only when their 
losses are caused by certain types of natural disasters. Mollusk 
producers who continue to seed or raise mollusks in devices such as 
containers, net pens, or wire baskets, on ropes, or using similar 
devices designed for protection and containment as well as meet all 
other required conditions remain eligible for all NAP qualifying causes 
of loss for such value loss crops. For these mollusk producers, the 
principal elements of the rule are not changing.
    Certain oyster producers and other stakeholders requested this 
change because the use of containers or similar devices for the 
protection and containment of the species is inconsistent with certain 
customary or ordinary mollusk industry production methods, particularly 
for oyster production on the U.S. East Coast. USDA data from the 2005 
Census of Aquaculture confirms that about 70 percent of mollusk 
producers use the ``on bottom'' production method, without containers 
or pens. In 2011 and 2012, hurricanes caused significant losses for 
mollusk aquaculture crops. Mollusk producers who had NAP coverage in 
those years and met the current requirements were compensated for their 
losses, but the majority of mollusk producers did not have NAP coverage 
and if they had, they would not have had any losses that would have met 
the NAP eligibility requirements at that time. (See the Cost Benefit 
Analysis Summary section for details about the impacts.)
    The purpose of NAP is to provide risk management for agricultural 
operations as they normally or ordinarily exist and operate. Removing 
the requirement to use containers or similar devices benefits mollusk 
producers by offering NAP coverage for their operations, independent of 
how those producers choose to manage their production. FSA is therefore 
amending the regulations to cover eligible losses of mollusks that are 
not grown in containers, net pens, or wire baskets, on ropes, or using 
similar devices. This change permits mollusk producers who accept the 
risks of raising mollusks without containers, net pens, ropes, wire 
baskets, or similar devices to be eligible for NAP coverage; however, 
under such coverage, eligible losses can only be caused by a named 
tropical storm, typhoon, or hurricane. It would likely benefit 
primarily U.S. East Coast oyster producers, as well as producers of 
other mollusk aquaculture crops such as clams and mussels. Mollusk 
producers who plant or seed mollusks in containers, net pens, or wire 
baskets, on ropes or using similar devices designed for protection and 
containment and meet all other required conditions remain eligible for 
NAP coverage for all NAP causes of loss. For these mollusk producers, 
the principal elements of the rule are not changing.
    As specified in 7 U.S.C. 7333, NAP is authorized to provide 
benefits only for losses that are the result of natural disaster; 7 
U.S.C. 7333 also specifies that NAP cannot cover losses due to ``the 
failure of the producer to follow good farming practices.'' FSA has 
determined that a producer's decision to not use containers, net pens, 
ropes, wire baskets, or similar devices is not an example of a poor 
farming practice or an example of something that is not a good farming 
practice. However, given that NAP can only pay for losses stemming from 
an eligible cause of loss (and not a decision not to use containers, 
net pens, ropes, wire baskets, or similar devices), this rule specifies 
that for mollusks not grown in containers, net pens, or wire baskets, 
on ropes, or using similar devices, only losses caused by named 
hurricanes, typhoons, or tropical storms would be eligible for payment. 
NAP coverage does not cover a loss of mollusks if the producer does not 
to use containers to protect the mollusks from loss caused by other 
types of adverse weather, tidal surges, or predators, or other similar 
events or causes. Missing mollusk inventory reported by a producer that 
does not use containers, net pens, ropes, wire baskets, or similar 
devices will not be eligible for a NAP payment unless FSA can determine 
that the loss of inventory was a direct result of a named hurricane, 
typhoon, or tropical storm. All other aquaculture species are still 
subject to the requirement to use protective devices. Additionally, as 
previously mentioned, mollusk producers that choose to grow mollusks in 
an environment that consists of containers, net pens, ropes, wire 
baskets, or similar devices designed for protection and containment 
remain eligible for all NAP qualifying losses.
    Aquaculture species are considered a ``value loss'' crop under NAP, 
which means that NAP coverage is based on the market value of the 
inventory before the loss event, rather than an expected yield. This 
rule does not change NAP

[[Page 74568]]

regulations regarding compensation of eligible aquaculture losses using 
a value loss calculation or the documentation that must be provided to 
prove an eligible loss. Mollusk producers, whether they choose to keep 
their mollusks in controlled environments or not, are still required to 
have control of the waterbed where the mollusks are grown, as specified 
in the NAP regulations, meaning that they must own or lease the 
waterbed. The change being made by this rule merely eliminates the 
requirement that a NAP-covered participant seed or raise the eligible 
mollusk inventory in containers or similar devices to be eligible for 
NAP coverage. It will not change any of the requirements for other 
aquaculture species.

Forage

    This rule makes discretionary changes to methods used by FSA to 
establish losses for grazed acreage. Prior to being amended by this 
rule, grazed acreage losses have been established using two methods:
    (1) Based on the percentages of loss of similar mechanically-
harvested forage acreage on the farm or on similar farms in the area 
when approved yields have been calculated to determine loss; or
    (2) When there is no similar mechanically-harvested forage acreage 
on the farm or similar farms in the area, on the collective percentage 
of loss as determined by FSA for the geographical region after 
consideration of at least two independent assessments of grazed forage 
acreage conditions.
    This rule specifies additional methods that FSA may use to 
establish a collective percentage of loss based on independent 
assessments of grazed forage acreage conditions; the U. S. Drought 
Monitor; information obtained from loss adjusters with sufficient 
forage knowledge to provide grazing loss assessments; data from 
approved areas where clippings are obtained on a regular basis to 
compare with expected levels of production in a geographical region; 
and information from Natural Resources Conservation Service technical 
service providers having specialized knowledge. Additionally, because 
the 2014 Farm Bill did not authorize buy-up coverage for grazed forage, 
this rule clarifies how FSA will treat forage crop acreage intended for 
mechanical harvest or grazing when such acreage is actually put to 
another use for producers who either select catastrophic coverage or 
buy-up coverage. The rule specifies that forage acreage reported to FSA 
as intended to be mechanically harvested, but which is instead, 
subsequently grazed, will be considered for crop definition purposes as 
mechanically harvested. The rule also amends how FSA will determine 
loss for acreage intended to be grazed, including in some cases acreage 
intended to be mechanically harvested, but instead is subsequently 
grazed for producers with catastrophic coverage. The rule also removes 
a prior requirement that producers show a history of forage production 
in order to obtain coverage.

Payment and Income Limitation

    Section 1605 of the 2014 Farm Bill establishes payment and income 
limitations that apply to 2014 and subsequent crop, program, or fiscal 
year benefits. FSA previously implemented these payment and income 
limitations through the final rule published on April 14 (79 FR 21086-
21118). The payment and income limitations are specified in 7 CFR part 
1400.
    NAP assistance is limited to $125,000 per person or legal entity, 
directly or indirectly. Attribution of payments under 7 CFR part 1400 
applies in administering the payment limitation. The average AGI limit 
for most FSA and CCC programs, including NAP, is $900,000. The $900,000 
limit is for total average AGI, as opposed to the prior multiple limits 
for farm and non-farm income, and the separate limit for conservation 
programs.

Consistency With Basic Provisions

    When a producer signs up for NAP coverage, they receive a copy of 
the ``basic provisions,'' which is a document that explains in detail 
what is covered by NAP and how to file a claim. As part of the 
application process, the producer acknowledges that they have received 
and agree to the ``basic provisions.'' This rule amends 7 CFR 1437.2, 
``Administration,'' to specify that when the NAP basic provisions are 
less restrictive than regulations that were in effect at the time of 
signup (such as the situation that may occur in 2015 where the NAP 
basic provisions were provided to participants prior to amendment and 
publication of this rule for the 2015 crop year), the Deputy 
Administrator may determine that the less restrictive provision 
applies. This amendment is needed to prevent adverse results for 
participants that relied on the less restrictive basic provisions 
provided by FSA when they applied for NAP coverage. This rule also 
amends 7 CFR 1437.3, ``Definitions,'' to add a definition of ``basic 
provisions.''

Miscellaneous Conforming and Editorial Changes

    In addition to the changes required by the 2014 Farm Bill and the 
substantive discretionary changes discussed above, this rule makes a 
number of non-substantive changes to make the regulations clear and 
consistent.
    Because this rule expands waivers to beginning farmers and ranchers 
and that term is used for several FSA programs, this rule defines the 
term in 7 CFR part 718 and makes a conforming change to remove the term 
and definition from the Emergency Assistance for Livestock, Honeybees, 
and Farm-Raised Fish Program (ELAP) regulations in 7 CFR part 1416. The 
definition is revised slightly to match the definition on the form FSA 
presents to persons or legal entities who claim they are beginning 
farmers or ranchers and is consistent with what FSA has determined is a 
beginning farmer or rancher. FSA is making this discretionary change to 
provide consistency in the use of the term among FSA programs.
    Because this program requires a few terms that are also needed for 
other FSA and CCC programs, this rule adds those terms to 7 CFR part 
718 and removes them from parts 1416 and 1412. These terms are 
``planted and prevented planted,'' ``controlled environment,'' and 
``United States.'' This rule adds the terms ``intended use'' to part 
718, because it is needed for both NAP and other FSA programs. It 
removes the term ``State'' from 718, because it is redundant with the 
definition of ``United States.''
    This rule replaces ``CCC'' with ``FSA'' where relevant in 7 CFR 
part 1437 to clarify that NAP is administered by FSA for CCC. It also 
amends the provisions regarding requests to waive or modify deadlines 
or other provisions, except where specified by law, to clarify that 
such requests may be considered at the discretion of the Deputy 
Administrator for Farm Programs (``Deputy Administrator''). 
Participants do not have a right to a decision on a request for waiver 
or on such a request, and a refusal to consider a waiver or such a 
request is not a failure to act under any law or regulation.

Notice and Comment

    In general, the Administrative Procedure Act (APA, 5 U.S.C. 553) 
requires that a notice of proposed rulemaking be published in the 
Federal Register and interested persons be given an opportunity to 
participate in the rulemaking through submission of written data, 
views, or arguments with or without opportunity for oral

[[Page 74569]]

presentation, except when the rule involves a matter relating to public 
property, loans, grants, benefits, or contracts. Although FSA could use 
the APA exemption and publish this rule as a final rule without the 
opportunity for public comment, FSA is implementing the regulatory 
changes through an interim rule to provide an opportunity for public 
comment while also implementing the rule without unnecessary delay to 
benefit FSA customers with the additional flexibility provided by the 
changes.

Executive Orders 12866 and 13563

    Executive Order 12866, ``Regulatory Planning and Review,'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review,'' 
direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 13563 emphasizes the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility.
    The Office of Management and Budget (OMB) designated this rule as 
significant under Executive Order 12866, ``Regulatory Planning and 
Review,'' and therefore, OMB has reviewed this rule. The costs and 
benefits of this rule are summarized below. The full cost benefit 
analysis is available on regulations.gov.

Clarity of the Regulation

    Executive Order 12866, as supplemented by Executive Order 13563, 
requires each agency to write all rules in plain language. In addition 
to your substantive comments on this rule, we invite your comments on 
how to make the rule easier to understand. For example:
     Are the requirements in the rule clearly stated? Are the 
scope and intent of the rule clear?
     Does the rule contain technical language or jargon that is 
not clear?
     Is the material logically organized?
     Would changing the grouping or order of sections or adding 
headings make the rule easier to understand?
     Could we improve clarity by adding tables, lists, or 
diagrams?
     Would more, but shorter, sections be better? Are there 
specific sections that are too long or confusing?
     What else could we do to make the rule easier to 
understand?

Cost Benefit Analysis Summary

    The changes to the NAP regulations are expected to have a net 
economic impact of $39.4 million per year. This includes $39.4 million 
for the ``buy up'' coverage provisions required by the 2014 Farm Bill, 
$250,000 for changes to mollusk coverage, $45,000 for aquaculture on 
ropes coverage, and $1.4 million for organic price coverage. As noted 
below, the net impact of $39.4 million includes a partial offset due to 
the $9.8 million increase in annual premium and fee revenue.
    The 2014 Farm Bill NAP ``buy up'' coverage changes are estimated to 
have a net economic cost of $39.4 million annually. This number is 
based on estimating the three largest effects of the new ``buy-up'' 
provisions: The shift of existing CAT level NAP participants to buy-up 
NAP coverage levels, an increase in new NAP participants (not formerly 
in CAT) who purchase buy-up NAP coverage, and the expected NAP payment 
increases due to the greater liability associated with added buy-up 
coverage levels for both existing and new participants. (The greater 
liability effect factors in the payment rate increase from 55 percent 
to 100 percent of the market value of eligible lost production.) These 
three effects together are expected to account for nearly $49.2 million 
in additional payments to producers annually. However, these additional 
payments are expected to be partially offset by a $9.8 million increase 
in annual premium and fee revenue, for a net impact of $39.4 million 
annually.
    The impact on costs from fee waivers for socially disadvantaged and 
beginning farmers is expected to be negligible. This is because the 
persons who are eligible for the waivers added by the 2014 Farm Bill 
for socially disadvantaged farmers and ranchers, (SDA), and beginning 
farmers and ranchers were mostly already eligible for the waivers for 
limited resource farmers and ranchers that were in place prior to this 
rule. The participation of these groups is expected to increase in 
proportion with the overall rate of 44.3 percent increase in new 
participation estimated for buy-up coverage.
    Because the total number of eligible mollusk producers in the 
United States is relatively small, fewer than 800 producers, the total 
impact of the changes in eligibility for mollusks is expected to be 
relatively small, around $250,000 in additional outlays per year. The 
aquaculture grown on ropes cost impact is even smaller, at an estimated 
$45,000 in additional outlays per year. The coverage for organic prices 
is estimated at $1.4 million per year, based on the assumption that the 
organic crops for which RMA has enough price data to provide an organic 
price election in at least one state, but limited enough RMA coverage 
that they fall within the scope of NAP, are primarily specialty fruit 
crops.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA), generally requires an agency to prepare a regulatory 
flexibility analysis of any rule whenever an agency is required by APA 
or any other law to publish a proposed rule, unless the agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities. This rule is not subject to the 
Regulatory Flexibility Act because as noted above, this rulemaking is 
exempt from the notice and comment rulemaking requirements of APA and 
no other law requires that a proposed rule be published for this 
rulemaking initiative.

Environmental Review

    FSA has determined that the administrative expansion of coverage 
for mollusks under NAP, identified in this rule, and the participation 
in NAP itself do not constitute major Federal actions that would 
significantly affect the quality of the human environment because 
Section 196 of 7 U.S.C. 7333 requires that the Secretary of Agriculture 
operate NAP to provide coverage equivalent to the catastrophic risk 
protection otherwise available under section 508(b) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(b)).
    In addition to adding coverage for mollusks, the other 
discretionary changes proposed include coverage for organic crops and 
clarifications regarding eligible losses and causes of loss (types of 
natural disasters). FSA has likewise determined that these 
discretionary efforts do not constitute major Federal actions that 
would significantly affect the quality of the human environment, 
individually or cumulatively, because of their context and the 
anticipated intensity of impacts.
    Therefore, in accordance with the provisions of the National 
Environmental Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations 
of the Council on Environmental Quality (40 CFR parts 1500-1508), and 
FSA regulations for compliance with NEPA (7 CFR part 799), no 
environmental assessment or environmental impact statement will be 
prepared.

[[Page 74570]]

Executive Order 12372

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

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, ``Civil 
Justice Reform.'' This rule will not preempt State or local laws, 
regulations, or policies unless they represent an irreconcilable 
conflict with this rule. The rule has retroactive effect in that for 
the 2014 crop year, the expanded service fee waiver will apply 
retroactively, and for the 2015 crop year the date coverage begins will 
be retroactive as long as the application for coverage is filed by the 
application closing date as specified in Sec.  1437.7(i). Before any 
judicial action may be brought regarding the provisions of this rule, 
the administrative appeal provisions of 7 CFR parts 11 and 780 are to 
be exhausted.

Executive Order 13132

    This rule has been reviewed under Executive Order 13132, 
``Federalism.'' The policies contained in this rule do not have any 
substantial direct effect on States, on the relationship between the 
Federal government and the States, or on the distribution of power and 
responsibilities among the various levels of government, except as 
required by law. Nor does this rule impose substantial direct 
compliance costs on State and local governments. Therefore, 
consultation with the States is not required.

Executive Order 13175

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' Executive Order 13175 requires Federal agencies 
to consult and coordinate with tribes on a government-to-government 
basis on policies that have tribal implications, including regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal Government 
and Indian tribes or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.
    FSA has assessed the impact of this rule on Indian tribes and 
determined that this rule does not, to our knowledge, have tribal 
implications that require tribal consultation under Executive Order 
13175. If a Tribe requests consultation, FSA will work with the USDA 
Office of Tribal Relations to ensure meaningful consultation is 
provided where changes, additions, and modifications identified in this 
rule are not expressly mandated by the 2014 Farm Bill.

Unfunded Mandates

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

Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)

    This rule is not a major rule under the Small Business Regulatory 
Enforcement Fairness Act of 1996, (Pub. L. 104-121, SBREFA). Therefore, 
FSA is not required to delay the effective date for 60 days from the 
date of publication to allow for Congressional review. Accordingly, 
this rule is effective on the date of publication in the Federal 
Register.

Federal Assistance Programs

    The title and number of the Federal Assistance Program, as found in 
the Catalog of Federal Domestic Assistance, to which this rule applies, 
is: Noninsured Assistance 10.451.

Paperwork Reduction Act of 1995

    FSA added the changes required for the buy-up for additional 
coverage, organic crops, and mollusks described in this rule to a 
currently approved information collection by OMB under the control 
number of 0560-0175, Noninsured Crop Disaster Assistance Program. The 
collection of information from the respondents remains the same except 
the new respondents with organic crops and mollusks. FSA described the 
revision of information collection activities and the changes to the 
burden hours due to the new respondents in the request for public 
comment that was published in the Federal Register on October 15, 2014 
(79 FR 61484-61489). FSA confirmed that neither AMS nor RMA collect the 
information that FSA will be collecting, so there is no duplication of 
information collection.

E-Government Act Compliance

    FSA and CCC are committed to complying with the E-Government Act, 
to promote the use of the Internet and other information technologies 
to provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

List of Subjects

7 CFR Part 718

    Acreage allotments, Drug traffic control, Loan programs-
agriculture, Marketing quotas, Price support programs, Reporting and 
recordkeeping requirements.

7 CFR Part 1412

    Cotton, Feed grains, Oilseeds, Peanuts, Price support programs, 
Reporting and recordkeeping requirements, Rice, Soil conservation, 
Wheat.

7 CFR Part 1416

    Dairy products, Indemnity payments, Pesticide and pests, Reporting 
and recordkeeping requirements.

7 CFR Part 1437

    Agricultural commodities, Crop insurance, Disaster assistance, 
Fraud, Penalties, Reporting and recordkeeping requirements.

    For the reasons discussed above, FSA amends 7 CFR part 718 and CCC 
amend 7 CFR parts 1412, 1416, and 1437 as follows:

PART 718--PROVISIONS APPLICABLE TO MULTIPLE PROGRAMS

0
1. Revise the authority citation for part 718 to read as follows:

[[Page 74571]]

    Authority: 7 U.S.C. 1501-1508, 1921-2008, 7201-7302, and 15 
U.S.C. 714b.

0
2. Amend Sec.  718.2 as follows:
0
a. Remove the definition for ``State''; and
0
b. Add, in alphabetical order, definitions for ``Beginning farmer and 
rancher'', ``Controlled environment'', ``Intended use'', ``Planted and 
considered planted (P&CP)''; and ``United States''.
    The additions read as follows:

Sec.  718.2  Definitions.

* * * * *
    Beginning farmer or rancher means a person or legal entity (for 
legal entities to be considered a beginning farmer or rancher, all 
members must be related by blood or marriage and all members must be 
beginning farmers or ranchers) for which both of the following are true 
for the farmer or rancher:
    (1) Has not operated a farm or ranch for more than 10 years; and
    (2) Materially and substantially participates in the operation.
* * * * *
    Controlled environment means, with respect to those crops for which 
a controlled environment is required or expected to be provided, 
including but not limited to ornamental nursery, aquaculture (including 
ornamental fish), and floriculture, as applicable under the particular 
program, an environment in which everything that can practicably be 
controlled with structures, facilities, growing media (including but 
not limited to water, soil, or nutrients) by the producer, is in fact 
controlled by the producer.
* * * * *
    Intended Use means for a crop or a commodity, the end use for which 
it is grown and produced.
* * * * *
    Planted and considered planted (P&CP) means with respect to an 
acreage amount, the sum of the planted and prevented planted acres on 
the farm approved by the FSA county committee for a crop. P&CP is 
limited to initially planted or prevented planted crop acreage, except 
for crops planted in an FSA approved double-cropping sequence. 
Subsequently planted crop acreage and replacement crop acreage are not 
included as P&CP.
* * * * *
    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.
* * * * *

Sec.  718.102  [Amended]

0
3. Amend Sec.  718.102 as follows:
0
a. In paragraph (b)(3), add the word ``intended'' immediately before 
the word ``use'';
0
b. In paragraph (b)(4), remove the words ``in the country of the 
eligible crop'' and add the words ``and intended use of the eligible 
crop in the country'' in their place; and
0
c. In paragraph (b)(6), add the word ``intended'' immediately before 
the word ``use''.

PART 1412--AGRICULTURE RISK COVERAGE, PRICE LOSS COVERAGE, AND 
COTTON TRANSITION ASSISTANCE PROGRAMS

0
4. The authority citation for part 1412 continues to read as follows:

    Authority: 7 U.S.C. 1508b, 7911-7912, 7916, 8702, 8711-8712, 
8751-8752, and 15 U.S.C. 714b and 714c.

Sec.  1412.3  [Amended]

0
5. In Sec.  1412.3, remove the definition for ``Planted and considered 
planted (P&CP)''.

PART 1416--EMERGENCY AGRICULTURAL DISASTER ASSISTANCE PROGRAMS

0
6. Revise the authority citation for part 1416 to read as follows:

    Authority: Title III, Pub. L. 109-234, 120 Stat. 474; and 16 
U.S.C. 3801, note.

Sec.  1416.102  [Amended]

0
7. In Sec.  1416.102, remove the definitions for ``Beginning farmer and 
rancher''; ``Controlled environment''; ``County committee or county 
office''; ``Secretary''; ``State committee, State office, county 
committee, or county office''; and ``United States''.

PART 1437--NONINSURED CROP DISASTER ASSISTANCE PROGRAM

0
8. The authority citation for part 1437 continues to read as follows:

    Authority: 7 U.S.C. 1501-1508 and 7333; 15 U.S.C. 714-714m; 19 
U.S.C. 2497, and 48 U.S.C. 1469a.

Subpart A--General Provisions

0
9. Revise Sec.  1437.1 to read as follows:

Sec.  1437.1  Applicability.

    (a) The purpose of the Noninsured Crop Disaster Assistance Program 
(NAP) is to help manage and reduce production risks faced by producers 
of eligible commercial crops or other agricultural commodities during a 
coverage period. NAP reduces financial losses that occur when natural 
disasters (damaging weather or adverse natural occurrence that is an 
eligible cause of loss) cause a loss of expected production or actual 
value for value loss crops, or where producers are prevented from 
planting an eligible crop because of an eligible cause of loss in a 
coverage period.
    (b) The provisions in this part are applicable to eligible 
producers and eligible crops for which catastrophic coverage under 
section 508(b) or additional coverage of sections 508(c) or 508(h) 
under the Federal Crop Insurance Act (7 U.S.C. 1508) (excluding pilot 
policies or plans of insurance) is not available.
    (c) The regulations in this part are applicable to the 2015 and 
subsequent crop years.

0
10. Revise Sec.  1437.2 to read as follows:

Sec.  1437.2  Administration.

    (a) NAP is administered under the general supervision of the 
Administrator, Farm Service Agency (FSA) (who also serves as the 
Commodity Credit Corporation (CCC) Executive Vice President), and the 
Deputy Administrator for Farm Programs, FSA, (referred to as ``Deputy 
Administrator'' in this part). NAP is carried out by FSA State and 
county committees (State and county committees) with instructions 
issued by the Deputy Administrator.
    (b) State and county committees, and representatives and their 
employees, do not have authority to modify or waive any of the 
provisions of the regulations in this part, NAP's basic provisions, or 
instructions issued by the Deputy Administrator.
    (c) The State committee will take any action required by the 
regulations in this part that the county committee has not taken. The 
State committee will also:
    (1) Correct, or require a county committee to correct, any action 
taken by such county committee that is not in accordance with the 
regulations in this part; or
    (2) Require a county committee to withhold taking any action that 
is not in accordance with this part.
    (d) No delegation to a State or county committee precludes the FSA 
Administrator, the Deputy Administrator, or a designee, from 
determining any question arising under NAP or from reversing or 
modifying any determination made by a State or county committee.
    (e) The Deputy Administrator has the authority to permit State and 
county committees to waive or modify deadlines (except deadlines 
specified in a law) and other requirements or

[[Page 74572]]

program provisions not specified in law, in cases where lateness or 
failure to meet such other requirements or program provisions do not 
adversely affect operation of NAP.
    (1) Producers and participants have no right to a decision in 
response to a request to waive or modify deadlines or program 
provisions. The Deputy Administrator's refusal to consider such a 
request or a decision not to exercise this discretionary authority 
under this section is not an adverse decision and is not appealable.
    (2) FSA's decision not to consider a case under this section is not 
a failure to act under any law or regulation because participants have 
no right to a decision on a request for waiver or modification.
    (f) Items including, but not limited to, application periods, 
application deadlines, basic provisions, internal operating guidelines 
issued to FSA State and county offices, coverage periods, fees, prices, 
yields, and payment factors established for NAP in accordance with this 
part that are used for similarly situated participants and eligible 
crops are not to be construed to be individual program eligibility 
determinations or extent of eligibility determinations and are, 
therefore, not subject to administrative review.
    (g) Where there is any conflict between the basic provisions and 
the regulations, the regulations apply except when the Deputy 
Administrator determines that because of the timing of issuance of the 
regulations, the basic provisions applicable to the specific crop year 
or coverage period that may be less restrictive will apply.

0
11. Amend Sec.  1437.3 as follows:
0
a. Revise the introductory text;
0
b. Revise the definitions for ``Application closing date'' and 
``Catastrophic coverage'';
0
c. In the definition for ``Crop year'', third sentence, add the words 
``or buy-up coverage'' immediately after the words ``catastrophic 
coverage'';
0
d. Revise the definitions for ``Good farming practices'', ``Industrial 
crop'', and ``Native sod'';
0
e. Remove the definitions for ``Controlled environment '' and 
``Intended Use''; and
0
f. Add, in alphabetical order, definitions for ``Acres devoted to the 
eligible crop'', ``Additional coverage'', ``Agricultural experts'', 
``Application for coverage'', ``Basic provisions'', ``Bypass year'', 
``Buffer zone'', ``Buy-up coverage'', ``Buy-up coverage yield'', 
``Certified organic acreage'', ``Certifying agent'', ``Conventional 
farming practice'', ``Feedstock'', ``Generally recognized'', 
``Guarantee'', ``Hand-harvested'', ``Maximum dollar value for coverage 
sought'', ``Organic agricultural experts'', ``Organic crop'', ``Organic 
farming practice'', ``Organic system plan'', ``Organic standards'', 
``Prohibited substance'', ``Secondary use'', ``Short rotation woody 
crops'', and ``Transitional acreage''.
    The revisions and additions read as follows:

Sec.  1437.3  Definitions.

    The terms and definitions in this section apply to NAP. The terms 
and definitions in part 718 of this title and part 1400 of this chapter 
also apply to NAP, except where those same terms are defined in this 
section. In that case, the terms and definitions of this section apply.
    Acres devoted to the eligible crop means the total planted and 
considered planted (P&CP) acres of the eligible crop.
    Additional coverage means insurance coverage offered by the Federal 
Crop Insurance Corporation under sections 508(c) or 508(h) of the 
Federal Crop Insurance Act.
* * * * *
    Agricultural experts means persons who are employed by the National 
Institute of Food and Agriculture, or the agricultural departments of 
universities, or other persons approved by FSA, whose research or 
occupation is related to the specific crop or practice for which such 
expertise is sought.
* * * * *
    Application closing date means the last date, as determined by FSA, 
producers can submit an application for coverage for noninsured crops 
for the specified crop year and coverage period.
    Application for coverage means the form specified by FSA to be 
completed by a producer applying for NAP coverage for an eligible crop 
that is accompanied by the service fee or service fee waiver form in 
the administrative county office by the application closing date.
    Basic provisions means the document summarizing the terms and 
conditions of NAP coverage for a crop year that are acknowledged as 
having been received by the person or legal entity who signs an 
application for coverage according to this part.
    Bypass year means a year that the producer did not obtain NAP 
coverage for the crop and did not file a report of acreage or 
production, or obtained NAP coverage for the crop and had reported or 
determined zero acres devoted to the eligible crop.
    Buffer zone means a parcel of land, as designated in an organic 
system plan, that separates agricultural commodities grown under 
organic practices from agricultural commodities grown under non-organic 
practices and is used to minimize the possibility of unintended contact 
by prohibited substances or organisms.
    Buy-up coverage means NAP assistance that is available for all 
eligible NAP covered crops (other than for crops and grasses intended 
for grazing) at a payment amount that is equal to an indemnity amount 
calculated for buy-up coverage computed under section 508(c) 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.
    Buy-up coverage yield means not less than 50 percent nor greater 
than 65 percent of the approved yield for the crop, as elected by the 
NAP covered participant and specified in 5-percent increments.
    Catastrophic coverage means:
    (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.
    Certified organic acreage means acreage in the certified organic 
farming operation that has been certified by a certifying agent as 
conforming to organic standards specified in part 205 of this title.
    Certifying agent means a private or governmental entity accredited 
by the United States Department of Agriculture (USDA) Secretary for the 
purpose of certifying a production, processing or handling operation as 
organic.
    Conventional farming practice means any good farming practice that 
is not an organic farming practice.
* * * * *
    Feedstock means a crop including, but not limited to, grasses or 
legumes, algae, cotton, peanuts, coarse grains, small grains, oil 
seeds, or short rotation woody crops, that is grown expressly for the 
purpose of producing a biobased material or product, and does not

[[Page 74573]]

include residues and by-products of crops grown for any other purpose.
* * * * *
    Generally recognized means when agricultural experts or organic 
agricultural experts, as applicable, are aware of the production method 
or practice and there is no genuine dispute regarding whether the 
production method or practice allows the crop to make normal progress 
toward maturity and produce at least the yield used to determine the 
production guarantee or amount of insurance.
    Good farming practices means the cultural practices generally 
recognized as compatible with agronomic and weather conditions and used 
for the crop to make normal progress toward maturity and produce at 
least the individual unit approved yield, as determined by FSA. These 
practices are:
    (1) For conventional farming practices, those generally recognized 
by agricultural experts for the area, which could include one or more 
counties; or
    (2) For organic farming practices, those generally recognized by 
the organic agricultural experts for the area or contained in the 
organic system plan that is in accordance with the National Organic 
Program specified in part 205 of this title.
    Guarantee means the level of coverage provided based on the 
application for coverage and buy-up coverage elected under the 
provisions of this part.
    Hand-harvested crop means a non-forage crop that is not harvested 
mechanically and is removed from a field by hand.
* * * * *
    Industrial crop means a commercial crop, or other agricultural 
commodity used in manufacturing or grown expressly for the purpose of 
producing a feedstock for renewable biofuel, renewable electricity, or 
biobased products. Industrial crops include castor beans, chia, crambe, 
crotalaria, cuphea, guar, guayule, hesperaloe, kenaf, lesquerella, 
meadowfoam, milkweed, plantago ovato, sesame, and other crops 
specifically designated by FSA. Industrial crops exclude any plant that 
FSA has determined to be either a noxious weed or an invasive species. 
A list of plants that are noxious weeds and invasive species will be 
available in the FSA county office.
    Maximum dollar value for coverage sought means the total dollar 
amount elected by the NAP covered participant for which buy-up coverage 
may be considered for a value loss crop in a coverage period. The 
amount is set by the NAP covered participant for each value loss crop 
and represents the highest amount of field market value of the crop 
before disaster in a coverage period.
* * * * *
    Native sod means land on which the natural state plant cover before 
tilling was composed principally of native grasses, grass-like plants, 
forbs, or shrubs suitable for grazing and browsing and is land that has 
never been tilled (determined in accordance with information collected 
and maintained by an agency of the USDA or other verifiable records 
that are provided by a producer and acceptable to FSA) for the 
production of an annual crop through February 7, 2014.
* * * * *
    Organic agricultural experts means persons who are employed by the 
following organizations: Appropriate Technology Transfer for Rural 
Areas, Sustainable Agriculture Research and Education, or the National 
Institute of Food and Agriculture, the agricultural departments of 
universities, or other persons approved by FSA, whose research or 
occupation is related to the specific practice for which such expertise 
is sought.
    Organic crop means an agricultural commodity that is organically 
produced consistent with section 2103 of the Organic Foods Production 
Act of 1990 (7 U.S.C. 6502).
    Organic farming practice means a system of plant production 
practices used to produce an organic crop that is approved by a 
certifying agent in accordance with 7 CFR part 205.
    Organic system plan means a plan of management of an organic 
production or handling operation that has been agreed to by the 
producer or handler and the certifying agent and that includes written 
plans concerning all aspects of agricultural production or handling 
described in the Organic Foods Production Act and the regulations in 7 
CFR part 205, subpart C.
    Organic standards means standards in accordance with the Organic 
Foods Production Act of 1990 (7 U.S.C. 6501-6523) and 7 CFR part 205.
    Prohibited substance means any biological, chemical, or other agent 
that is prohibited from use or is not included in the organic standards 
for use on any certified organic, transitional, or buffer zone acreage. 
Lists of such substances are specified in Sec. Sec.  205.602 and 
205.604 of this title.
    Secondary use means the harvested production bears little 
resemblance to, or has a different unit of expression than, the unit of 
expression for the reported intended use. It does not apply to fresh 
and processed harvested production; is not salvage; not counted as 
production of the crop for the following purposes, including, but not 
limited to:
    (1) The determination of whether the unit suffered requisite loss; 
and
    (2) APH and approved yield.
* * * * *
    Short rotation woody crops means fast-growing trees that reach 
their economically optimum size between 4 and 20 years old.
* * * * *
    Transitional acreage means acreage on which organic farming 
practices are being followed that does not yet qualify to be designated 
as organic acreage.
* * * * *

0
12. Amend Sec.  1437.4 as follows:
0
a. Revise paragraph (a) introductory text;
0
b. Revise paragraph (a)(4);
0
c. In paragraph (b)(2), remove the words and punctuation ``except for 
the 2001 and preceding crop years assistance for forage produced on 
Federal- and State-owned lands is available only for seeded forage.'';
0
d. Revise paragraphs (b)(4)(vi), (vii), and (viii), and add paragraphs 
(b)(4)(ix) and (x); and
0
e. Revise paragraphs (c) and (d).
    The revisions and addition read as follows:

Sec.  1437.4  Eligibility.

    (a) Noninsured crop disaster assistance is available during the 
coverage period specified in Sec.  1437.6 for loss of production or 
loss of value for value loss crops or prevented planting of eligible 
commercial crops or other eligible agricultural commodities:
* * * * *
    (4) Determined by FSA to be eligible crops for which:
    (i) Catastrophic risk protection under the Federal Crop Insurance 
Act (7 U.S.C. 1508(b)) is not available;
    (ii) Additional coverage under the Federal Crop Insurance Act (7 
U.S.C. 1508(c) or (h)) is not available (excluding pilot policies or 
plans of insurance) and for which the Deputy Administrator determines 
are appropriate for NAP coverage; or
    (iii) These specific practices for these crops are not included 
under the Federal Crop Insurance Act (7 U.S.C. 1508), but only when the 
Deputy Administrator determines in advance of a coverage period that 
the specific practice is appropriate for NAP coverage and is not 
available for coverage under Federal crop insurance.
    (iv) The producer applies good farming practices.
    (b) * * *

[[Page 74574]]

    (4) * * *
    (vi) Sweet sorghum;
    (vii) Biomass sorghum;
    (viii) Industrial crops (including those grown expressly for the 
purpose of producing a feedstock for renewable biofuel, renewable 
electricity, or biobased products);
    (ix) Seed crops, including propagation stock such as non-ornamental 
seedlings, sets, cuttings, rootstock, and others, as determined by FSA; 
and
    (x) Sea grass and sea oats.
    (c) Except as specified in paragraph (d) of this section, during 
the first 4 crop years of planting, as determined by the Secretary, 
native sod acreage in Iowa, Minnesota, Montana, Nebraska, North Dakota, 
and South Dakota that has been tilled for the production of an annual 
crop after February 7, 2014, will be subject to the following:
    (1) The approved yield will be determined by using a yield equal to 
65 percent of the producer's T-yield for the annually planted crop; and
    (2) The service fee or premium for the annual covered crop planted 
on native sod will be equal to 200 percent of the amount determined in 
Sec.  1437.7, as applicable, but the premium will not exceed the 
maximum amount specified in Sec.  1437.7(d)(2).
    (d) If the producer's total native sod acreage that is tilled in a 
crop year is 5 acres or less, the approved yield, service fee, and 
premium provisions specified in paragraph (c) of this section will not 
apply.
* * * * *

Sec. Sec.  1437.5 through 1437.15  [Redesignated as Sec. Sec.  1437.6 
through 1437.16]

0
13. Redesignate Sec. Sec.  1437.5 through 1437.15 as Sec. Sec.  1437.6 
through 1437.16, respectively.

0
14. Add Sec.  1437.5 to read as follows:

Sec.  1437.5  Coverage levels.

    (a) NAP coverage for prevented planting is provided for approved 
prevented planting of an eligible NAP covered crop due to an eligible 
cause of loss in the coverage period. Payment is based on the approved 
prevented planted acreage in excess of 35 percent of the total intended 
acres to be planted.
    (b) Except as provided in paragraph (d) of this section, NAP 
coverage is equal to 50 percent of the yield or inventory value 
specified in paragraph (c) of this section at 55 percent of the average 
market price established by FSA.
    (c) Except as provided in paragraph (d) of this section, to be 
eligible for a NAP payment a producer must have suffered a yield or 
inventory value loss greater than 50 percent as the result of an 
eligible cause of loss in the coverage period as follows:
    (1) For yield-based crops, a yield loss in excess of 50 percent of 
the approved yield;
    (2) For value loss crops, a loss of value in excess of 50 percent 
of the total value of eligible inventory at the time of disaster;
    (d) For 2015 through 2018 crop years, producers of eligible NAP 
crops, other than crops and grasses intended for grazing, may elect 
buy-up coverage at 100 percent of the average market price in amounts 
of 50 percent to 65 percent, in 5 percent increments, of:
    (1) For yield-based crops, your approved yield; and
    (2) For value loss crops, the lesser of the total value of eligible 
inventory at the time of disaster or the maximum dollar value for 
coverage sought.
    (e) The quantity or value of any eligible NAP crop will not be 
reduced for any quality consideration unless a zero value is 
established based on a total loss of quality, except as specified in 
Sec.  1437.105.
    (f) For crop acreage intended to be grazed, to be eligible for a 
NAP payment, a producer must have suffered a loss of AUD in excess of 
50 percent of expected AUD determined on the basis of acreage, carrying 
capacity, and grazing period.

0
15. Revise newly redesignated Sec.  1437.6 to read as follows:

Sec.  1437.6  Coverage period.

    (a) Coverage period. The coverage period is the time during which 
coverage is available against prevented planting, a loss of production, 
or loss of value, as applicable, of the eligible crop as a result of an 
eligible cause of loss specified in Sec.  1437.10. Except as provided 
in paragraph (h) of this section, coverage periods start no earlier 
than 30 days after date of filing of a valid application for coverage 
as specified in Sec.  1437.7.
    (1) Relief provisions cannot be used to change or modify the date 
an application is filed.
    (2) If an application for coverage is filed within 30 days of the 
end of a coverage period, the application for coverage is invalid and 
will not be processed by FSA. In the event the application for coverage 
is invalid as discussed in this paragraph, service fees will not be 
refunded.
    (3) Except as provided in paragraph (h) of this section, coverage 
is never retroactive.
    (b) Annual crops. Except as provided in paragraph (h) of this 
section, the coverage period for annual crops, including annual forage 
crops,
    (1) Begins the later of:
    (i) 30 calendar days after the date the application for coverage is 
filed; or
    (ii) The date the crop is planted, not to exceed the late planting 
period; and
    (2) Ends on the earlier of:
    (i) The date harvest is complete;
    (ii) The normal harvest date of the crop in the area;
    (iii) The date the crop is abandoned; or
    (iv) The date the crop is destroyed.
    (c) Biennial and perennial crops. Except as otherwise specified in 
this part, the coverage period for biennial and perennial crops begins 
the later of 30 calendar days after the date the application for 
coverage is filed or 30 calendar days after the application closing 
date. The coverage ends as determined by FSA.
    (d) Value loss crops. Except as otherwise specified in this part, 
the coverage period for value loss crops, including ornamental nursery, 
aquaculture, Christmas tree crops, ginseng, and turfgrass sod; and 
other eligible crops, including floriculture and mushrooms begins the 
later of 30 calendar days after the date the application for coverage 
is filed or 30 calendar days after the application closing date. The 
coverage ends the last day of the crop year, as determined by FSA.
    (e) Honey. Except as provided in paragraph (h) of this section, the 
coverage period for honey begins the later of 30 calendar days after 
the date the application for coverage is filed or 30 calendar days 
after the application closing date. The coverage ends the last day of 
the crop year, as determined by FSA.
    (f) Maple sap. Except as provided in paragraph (h) of this section, 
the coverage period for maple sap begins the later of 30 calendar days 
after the date the application for coverage is filed or 30 calendar 
days after the application closing date. The coverage ends on the 
earlier of the date harvest is complete; or the normal harvest date.
    (g) Biennial and perennial forage crops. Except as provided in 
paragraph (h) of this section, for biennial and perennial forage crops 
the coverage period begins the later of 30 calendar days after the date 
the application for coverage is filed or 30 days after the application 
closing date; for first year seedings, the date the crop was planted; 
or the date following the normal harvest date. The coverage ends on the 
normal harvest date of the subsequent year.
    (h) 2015 crop year. For the 2015 crop year only, if a crop's 
application closing date is before January 14, 2015, the coverage 
period of the crop will be as

[[Page 74575]]

specified in paragraphs (a) through (g) of this section except that the 
date coverage begins will be retroactive as long as the application for 
coverage is filed by the application closing date as specified in Sec.  
1437.7(i). This limited retroactive coverage for the 2015 crop year 
only will begin 30 days after the established application date, which 
would be the same as if they had filed by the deadlines as specified in 
paragraphs (a) through (g) of this section.

0
16. Revise newly redesignated Sec.  1437.7 to read as follows:

Sec.  1437.7  Application for coverage, service fee, premium, and 
transfers of coverage.

    (a) Except as provided in paragraph (i) of this section, with 
respect to each crop, commodity, or acreage, producers must file an 
application for coverage under this part in the administrative county 
office by the application closing date.
    (b) The service fee or request for service fee waiver under 
paragraph (g) of this section must accompany the application for 
coverage in order for it to be considered filed. The service fee is 
$250 per crop per administrative county, up to $750 per producer per 
administrative county, not to exceed $1,875 per producer.
    (c) The service fee will be applied per administrative county by 
crop and by planting period, as determined by FSA.
    (d) Producers who elect buy-up coverage must pay a premium, in 
addition to the service fee, equal to the lesser of:
    (1) The product obtained by multiplying:
    (i) A 5.25-percent premium fee; and
    (ii) The applicable payment limit; or
    (2) The sum of the premiums for each eligible crop, with the 
premium for each eligible crop obtained by multiplying:
    (i) The producer's share of the eligible crop;
    (ii) The number of acres devoted to the eligible crop;
    (iii) The approved yield;
    (iv) The coverage level elected by the producer;
    (v) The average market price; and
    (vi) A 5.25-percent premium fee.
    (e) For value loss crops, premiums will be calculated based on the 
maximum dollar value for which coverage is sought by the applicant, 
subject to applicable payment limitation, times the 5.25 percent 
premium.
    (f) Premiums will be calculated separately for each crop, type, and 
intended use as reported on the acreage report and as specified in the 
basic provisions.
    (g) Beginning farmers and ranchers, limited resource farmers and 
ranchers, and socially disadvantaged farmers or ranchers will receive, 
upon certification, a waiver of the service fee and a 50 percent 
premium reduction. The certification is required on or before the time 
the application for coverage is filed using the form specified by FSA.
    (h) Transfers of NAP coverage are governed by the basic provisions.
    (i) For the 2015 crop year, if a crop's application closing date is 
before January 14, 2015, FSA will accept applications for coverage 
without regard to whether or not the application for coverage was filed 
by the crop's application closing date, provided that the application 
for coverage includes buy-up coverage according to Sec.  1437.5(d) and 
is filed by January 14, 2015. Except as specifically stated in this 
rule, the provisions of this paragraph (i) do not apply to crops having 
an application closing date established on or after December 15, 2014 
or to applications for coverage that do not include buy-up coverage as 
an option selected by the applicant. The coverage period for 
applications for coverage filed according to this paragraph (i) will be 
as specified in Sec.  1437.6.

0
17. Amend newly redesignated Sec.  1437.8 as follows:
0
a. Revise paragraph (a) introductory text, add paragraph (a)(3), and 
revise paragraphs (b)(1) and (2) and (c) introductory text;
0
b. In paragraph (d), revise the introductory text, redesignate 
paragraphs (d)(6) through (8) as paragraphs (d)(7) through (9), 
respectively, and add paragraph (d)(6); and
0
c. Add paragraphs (i), (j), and (k).
    The revisions and additions read as follows:

Sec.  1437.8  Records.

    (a) Producers must maintain records of crop acreage, acreage 
yields, and production for the crop for which an application for 
coverage is filed in accordance with Sec.  1437.7. For those crops or 
commodities for which it is impractical, as determined by FSA, to 
maintain crop acreage, yields, or production data, producers must 
maintain records, in addition to the available records required by this 
section, as may be required in subparts C, D, and E of this part. 
Producers must retain records of the production and acreage yield for a 
minimum of 3 years for each crop for which an application for coverage 
is filed in accordance with Sec.  1437.7. Producers may be selected and 
be required to provide records acceptable to FSA to support any 
certification provided. For each harvested crop for which producers 
file an application for payment in accordance with Sec.  1437.11, 
producers must provide documentary evidence acceptable to FSA of 
production and the date harvest was completed, including production of 
crops planted after the planting period or late planting period. Such 
documentary evidence must be provided no later than the acreage 
reporting date for the crop in the subsequent crop year or, for crops 
with a coverage period of more than 12 months, no later than 60 days 
after the normal harvest date. Records of a previous crop year's 
production for inclusion in the actual production history database used 
to calculate an approved yield for the current crop year must be 
certified by the producer no later than the acreage reporting date for 
the crop in the current crop year. Production data provided after the 
acreage reporting date in the current crop year for the crop may be 
included in the actual production history data base for the calculation 
of subsequent approved yield calculations if accompanied by acceptable 
records of production as determined by FSA. Records of production 
acceptable to FSA may include:
* * * * *
    (3) For quality losses specified in Sec.  1437.105, verifiable 
records substantiating a quality loss due to an eligible cause of loss 
in the coverage period. The record submitted must come from tests or 
analysis substantiating that the loss of quality occurred from an 
eligible cause of loss during the coverage period. FSA will disapprove 
quality adjustments under Sec.  1437.105 if FSA determines the evidence 
does not substantiate a loss of quality occurred due to an eligible 
cause of loss in the coverage period. For example, if FSA determines 
the tests or analysis of the specific crop's production were taken too 
late to determine if the measured loss of quality occurred from an 
eligible cause of loss in the coverage period (regardless whether a 
loss of quality was in fact measured or determined), no quality loss 
adjustment will be made or permitted. There is no presumption that a 
measured loss of quality occurred due to an eligible cause of loss in 
the coverage period. It is a NAP covered producer's burden to present 
evidence, satisfactory to FSA, substantiating that the alleged quality 
loss occurred to the NAP covered crop in the coverage period.
    (b) * * *

[[Page 74576]]

    (1) Producers of hand-harvested crops must, in addition to 
providing acceptable production records according to this part, notify 
the administrative county office that harvest is complete. This 
notification must be made within 72 hours of when harvest is complete. 
If an appraisal of the crop acreage is requested by the producer or 
determined necessary by FSA, the producer must not destroy the crop 
residue until the crop acreage is released by an FCIC- or FSA-qualified 
loss adjustor. Producers may, at their expense, request that an 
appraisal by certified FCIC or FSA loss adjusters of hand-harvested 
crop acreage be completed during non-loss crop years in order to 
maintain accurate actual production history.
    (2) Producers must not allow the gathering (gleaning) of any 
produce left in the field following normal harvest of the crop acreage 
until the crop acreage is released by a qualified FSA or FCIC loss 
adjustor, as determined by FSA. Except, crop acreage may be released by 
an authorized FSA representative for acceptable gleaning operations, as 
determined by FSA, when producers and gleaners agree to provide 
acceptable records, as determined by FSA, of the quantity of the crop 
gleaned.
    (c) Producers must provide acceptable evidence, as determined by 
FSA, of:
* * * * *
    (d) Reports of acreage planted or intended but prevented from being 
planted must be provided to FSA at the administrative county office for 
the acreage no later than the date specified by FSA for each crop and 
location. Reports of acreage filed beyond the date specified by FSA for 
the crop and location may, however, be processed and used for 
determining acres devoted to the eligible crop if all the provisions of 
7 CFR part 718 are met. In the case of a crop-share arrangement, all 
producers will be bound by the acreage report filed by the landowner or 
operator unless the producer files a separate acreage report by the 
date specified by FSA for the crop and location. Reports of acreage 
planted or intended and prevented from being planted must include all 
of the following information:
* * * * *
    (6) For organic crops with an average market price established 
under Sec.  1437.12(b), the identity of the crop planted on:
    (i) Acreage using conventional farming practices;
    (ii) Certified organic acreage;
    (iii) Transitional acreage being converted to certified organic 
acreage;
    (iv) Buffer zone acreage;
* * * * *
    (i) Producers requesting payment under this part for a crop grown 
on certified organic acreage for which a price and T-yield are 
established, as provided in Sec. Sec.  1437.12(b) and 1437.102, must 
provide, no later than the acreage reporting date specified by FSA for 
the crop and location:
    (1) A written certification in effect from a certifying agency 
indicating the name of the entity certified, effective date of 
certification, certificate number, types of commodities certified, and 
name and address of the certifying agent (a certificate issued to a 
tenant may be used to qualify a landlord or other similar arrangement); 
and
    (2) Records from the certifying agent showing the specific location 
of certified organic, transitional, and buffer zone acreage, and 
acreage not subject to organic farming practices according to an 
organic system plan.
    (j) Producers providing reports of acreage that include 
transitional acreage being converted to certified organic acreage in 
accordance with an organic system plan must provide, no later than the 
acreage reporting date specified by FSA for the crop and location:
    (1) Written documentation from a certifying agent indicating an 
organic system plan is in effect for the acreage; and
    (2) Records from the certifying agent showing the specific location 
of certified organic, transitional, and buffer zone acreage, and 
acreage not subject to organic farming practices according to an 
organic system plan.
    (k) Producers who are exempt from National Organic certification 
requirements, as specified in Sec.  205.101 of this title, and are 
requesting payment under this part for a crop grown on organic acreage 
for which a price and T-yield is established, as provided in Sec. Sec.  
1437.12(b) and 1437.102, must provide, no later than the acreage 
reporting date specified by FSA for the crop and location, a copy of 
their organic system plan, which must be developed with an organic 
certifying agent.

0
18. Revise newly redesignated Sec.  1437.10 to read as follows:

Sec.  1437.10  Causes of loss.

    (a) To qualify for assistance, production losses or prevented 
planting must occur as a result of an eligible cause of loss during the 
coverage period. Not all causes of loss are eligible causes of loss for 
all crops or all commodities.
    (b) An eligible cause of loss is:
    (1) Damaging weather, including, but not limited to:
    (i) Drought;
    (ii) Hail;
    (iii) Excessive moisture;
    (iv) Freeze;
    (v) Tornado;
    (vi) Hurricane;
    (vii) Excessive wind;
    (viii) Insufficient chill hours, but only for specific crops and 
locations for which FSA has determined in advance of a coverage period, 
based on FSA's review of sufficient scientific evidence that a 
requisite amount of chill hours is required for the crop to produce and 
a lack of chill hours is adverse to the crop's production without any 
regard to any management. In this context, ``without regard to any 
management'' means if a crop's inability to produce due to lack of 
chill hours can be mitigated by any managerial practices, application 
of chemical, or other management intervention, the lack of chill hours 
will not be included as an eligible cause of loss for the crop, In 
cases where FSA makes the decision to include insufficient chill hours 
as a cause of loss by itself for a crop and location, the crop and 
location and subsequent crop year coverage period for which the 
decision will apply will be specified in a list maintained by FSA. If 
the crop and location is not on that list, then insufficient chill 
hours can only be an eligible cause of loss if the insufficient chill 
hours were related to a damaging weather event or an adverse natural 
occurrence included in paragraphs (b)(1) or (2) of this section; or
    (ix) Any combination of paragraphs (b)(1)(i) through (viii) of this 
section;
    (2) Adverse natural occurrence, including, but not limited to:
    (i) Earthquake;
    (ii) Flood; or
    (iii) Volcanic eruption; or
    (3) A condition related to an eligible cause of loss in paragraphs 
(b)(1) or (2) of this section (in this context, the related condition 
must result from the damaging weather or adverse natural occurrence; it 
is not eligible if it occurs on its own) including, but not limited to:
    (i) Heat;
    (ii) Insect infestation;
    (iii) Disease;
    (iv) Insufficient chill hours; or
    (v) Any combination thereof.
    (c) The damaging weather, adverse natural occurrence, or related 
condition as specified in paragraph (b) of this section must occur in 
the coverage period before or during harvest and directly cause, 
accelerate, or exacerbate destruction or deterioration of the eligible 
crop as determined by the county committee.

[[Page 74577]]

    (d) NAP coverage is provided against only eligible causes of loss. 
All specified causes of loss must be due to a naturally occurring event 
during the coverage period. All other causes of loss, including, but 
not limited to, the following, are not covered:
    (1) Negligence, mismanagement, or wrongdoing by the NAP covered 
producer or anyone else;
    (2) Failure to follow recognized good farming practices for the 
eligible crop;
    (3) Water contained or released by any governmental, public, or 
private dam or reservoir project, if an easement exists on the acreage 
affected for the containment or release of the water;
    (4) Failure or breakdown of the irrigation equipment facilities, 
unless the failure or breakdown is due to an eligible cause of loss. If 
damage is due to an eligible cause of loss, the producer must make all 
reasonable efforts to restore the equipment or facilities to proper 
working order within a reasonable amount of time unless FSA determines 
it is not practical to do so. Cost will not be considered when 
determining whether it is practical to restore the equipment or 
facilities;
    (5) Failure to carry out a good irrigation practice for the covered 
crop, if applicable;
    (6) Any cause of loss that results in damage that is not evident or 
would not have been evident during the NAP coverage period. Even though 
FSA may not inspect the damaged crop until after the end of the NAP 
coverage period, only damage due to eligible causes that would have 
been evident during the NAP coverage period will be covered;
    (7) Except for lack of chill hours as specified in paragraph 
(b)(1)(viii) of this section, normal variance of temperatures from 
average normal temperatures including, but not limited to, cyclic yield 
variations that occur for a crop that are not causes of loss included 
in paragraphs (b)(1) or (2) of this section;
    (8) Any managerial decision to attempt to grow or produce a crop in 
an area that is not suited for successful commercial production of the 
eligible NAP crop as determined by FSA;
    (9) Failure of the producer to reseed to the same crop during the 
same planting period in those areas and under such circumstances where 
it is customary to do so;
    (10) Except for tree crops and perennials and as provided for in 
Sec.  1437.201, inadequate irrigation resources at time of planting;
    (11) Except as specified in Sec.  1437.303, a loss of inventory or 
yield of aquaculture (including ornamental fish), floriculture, or 
ornamental nursery stemming from drought or any failure to provide 
water, soil, or growing media to such crop for any reason;
    (12) Any failure to provide a controlled environment or exercise 
good nursery practices when such controlled environment or practices 
are a condition of eligibility under this part;
    (13) Except as provided for mollusks in Sec.  1437.303, any alleged 
or actual loss of inventory or missing non-containerized inventory 
resulting from a managerial decision not to seed or raise the eligible 
NAP crop in containers, net pens, or wire baskets, on ropes, or using 
similar devices;
    (14) For crops grown using organic farming practices, failure to 
comply with organic standards;
    (15) Contamination by application or drift of prohibited substances 
onto land on which crops are grown using organic farming practices; or
    (16) Weeds.
    (e) The lack of an eligible cause of loss during a coverage period 
is not a compliance matter or issue. NAP will not provide assistance 
for crops that do not suffer from an eligible cause of loss during a 
coverage period. The relief provisions of these regulations and of 7 
CFR part 718 cannot be used to pay producers of crops that did not 
suffer from an eligible cause of loss during the coverage period.

0
19. Amend newly redesignated Sec.  1437.11 as follows:
0
a. Revise paragraphs (a) through (c) and (e) through (g);
0
b. In paragraphs (d)(3) remove the words ``FSA administrative county 
office'' and add the words ``administrative county office'' in their 
place;
0
c. In paragraph (d)(4) remove the words ``FSA administrative county 
office'' and add the words ``administrative county office'' in their 
place, and remove the acronym ``CCC'' and add the acronym ``FSA'' in 
its place both times it appears;
0
d. In paragraph (d)(5) remove the words ``FSA administrative county 
office'' and add the words ``administrative county office'' in their 
place; and
0
e. Add paragraph (h).
    The revisions and addition read as follows:

Sec.  1437.11  Notice of loss, appraisal requirements, and application 
for payment.

    (a) In addition to the written notice of loss requirements 
specified for all crops in paragraphs (b) and (c) of this section, for 
hand-harvested crops and for other crops determined by FSA, at least 
one producer having a share in the unit must notify FSA of the damage 
or loss through the administrative county office for the unit within 72 
hours of the date damage or loss on the unit first becomes apparent. 
Notification required under this paragraph may be via telephone to the 
administrative county office during business hours or via written 
notice on a form prescribed by FSA as specified in paragraph (c) of 
this section.
    (b) Unless written notice for hand-harvested crops has already been 
provided within 72 hours of date of damage or loss as specified in 
paragraphs (a) and (c) of this section, in case of damage to any NAP 
covered crop, at least one producer having a share in the unit must 
file a notice of loss in the administrative county office:
    (1) For prevented planting claims, within 15 days after the final 
planting date;
    (2) For low yield claims, the earlier of:
    (i) 15 days after the disaster occurrence or date of loss or damage 
to the crop first becomes apparent; or
    (ii) 15 days after the normal harvest date.
    (c) The notice of loss specified in paragraph (b) of this section 
must be for each crop and be in writing on a form prescribed by FSA and 
include:
    (1) The alleged cause of crop damage;
    (2) Date the disaster occurred and when the damage or loss first 
became apparent;
    (3) A copy of the contract or agreement if a contract or agreement 
of a guaranteed payment for planted acreage exists;
    (4) The type of loss that occurred, for example, prevented planting 
or low yield;
    (5) Practices used, for example, irrigated or non-irrigated;
    (6) For prevented planting:
    (i) Total intended planted acreage of the crop on the unit;
    (ii) Total acreage of the crop planted on the unit;
    (iii) Whether seed, chemicals, fertilizer, etc. was purchased, 
delivered, or an arrangement for purchase or delivery was made for the 
intended to be planted crop;
    (iv) What and when land preparation measures were completed, and
    (v) What has been done or will be done with the acreage, for 
example, abandoned, replanted, etc.;
    (7) For low yield:
    (i) Total acreage devoted to the crop in the unit;
    (ii) Total acreage of the crop affected;
    (iii) What and when land preparation measures and practices were 
completed before and after the loss; and
    (iv) What will be done with the affected crop acreage, for example, 
harvested, destroyed, replanted to a different crop, abandoned, etc.; 
and

[[Page 74578]]

    (8) Any other information requested by an FSA authorized 
representative.
* * * * *
    (e) Crop acreage for which an application for coverage has been 
filed, that is intended for production of forage seed and for which a 
notice of loss is filed indicating the crop acreage will not be 
harvested as seed, will be appraised for potential production of seed 
when producers provide FSA acceptable evidence of a contract to produce 
seed for the current crop year or acceptable records of acreage and 
seed production for three or more of the last 5 consecutive crop years, 
as determined by FSA.
    (f) Forage acreage for which a notice of loss is filed and:
    (1) Catastrophic coverage was obtained for forage intended to be 
grazed will have NAP benefits calculated based on Sec.  1437.401(f);
    (2) Catastrophic coverage was obtained for forage that was intended 
to be mechanical harvested but will be grazed and not mechanical 
harvested;
    (i) Must have an appraisal and release for the unit to have NAP 
benefits calculated based on mechanical harvested forage; or
    (ii) For which an appraisal or release was not obtained, will have 
a loss calculated as specified in Sec.  1437.401(f).
    (3) Buy-up coverage was obtained for forage intended to be 
mechanically harvested but will be grazed and not mechanically 
harvested:
    (i) Must have an appraisal and release in order for the unit to 
have NAP benefits calculated based on the loss of expected mechanically 
harvested forage; or
    (ii) For which an appraisal or release was not obtained is 
ineligible for payment consideration and will have the unit guarantee 
assigned to the forage crop acreage.
    (g) Producers must file an application for payment on a form 
specified by FSA to apply for NAP payments within 60 days of the last 
day of coverage for the crop year for any NAP covered crop in the unit.
    (h) A notice of loss under paragraph (a) of this section filed 
beyond the time specified in this section or notification provided 
under paragraph (b) of this section may satisfy the requirements of 
these provisions, if, at the discretion of FSA, the notice is filed at 
such time that permits:
    (1) An authorized FSA representative to verify information on the 
notice of loss by inspecting the affected acreage or the crop or 
commodity involved; and
    (2) The county committee or an authorized FSA representative the 
opportunity to determine that eligible disaster conditions caused the 
damage or loss.

0
20. Amend newly redesignated Sec.  1437.12 as follows:
0
a. Redesignate paragraph (b) as paragraph (e);
0
c. Remove paragraphs (c) and (d); and
0
d. Add paragraphs (b) through (d) and (f) through (i).
    The additions read as follows:

Sec.  1437.12  Average market price and payment factors.

* * * * *
    (b) For each crop and location (State or county or other location 
as determined appropriate by FSA), FSA will establish an average market 
price using the following method:
    (1) Obtaining market prices for each crop for the 5 consecutive 
crop years immediately preceding the crop year of coverage, if 
available; then
    (2) Dropping the crop years in the 5 consecutive crop years with 
the highest and lowest prices; and then
    (3) Averaging the prices for the remaining 3 crop years in the 5 
consecutive crop years; and
    (4) If 5 crop years of data is not available for determining the 
average market price, FSA will use the best data available, as 
determined by FSA, for as many crop years of average market price data 
as possible within the 5 consecutive crop years immediately preceding 
the previous crop year and determine an average market price for the 
crop by computing a simple average of the prices for those years.
    (c) FSA will disregard small differences in prices for a crop based 
on different types or varieties or various intended uses. If FSA 
determines there is a significant amount of production being marketed 
in a location or region at significantly different prices, FSA will 
determine whether or not to establish different average market prices 
for subsequent crop years.
    (d) Separate average market prices may be established within a 
State based on conventional or organic practices or the intended 
market, as determined by FSA.
* * * * *
    (f) Payment factors will be used to calculate assistance for crops 
produced with significant and variable harvesting expenses that are not 
incurred because the crop acreage was prevented planted, or planted but 
not harvested, as determined by FSA. The imposition of payment factors 
is based on the acre status and disposition not whether a NAP 
participant actually incurs or does not incur expenses.
    (g) The average market price used to determine the amount of NAP 
assistance for crop acreage reported with a specific intended use will 
be based on the smaller of the approved average market price 
established for either the specific intended use reported on the 
acreage report or actual market or actual use for which more than 50 
percent of the acreage's harvested production is marketed. For example: 
A producer reports 50 acres of carrots intended for fresh market and 
the producer suffers a 70 percent loss of production on the acreage. 
Additionally, more than 50 percent of the carrots actually produced 
from the 50 acres are sold as processed carrots. Because the 
established average market price for processed carrots is less than 
fresh carrots and more than 50 percent of the harvested crop was 
marketed as processed carrots, the established average market price for 
processed carrots will be used to compute the producer's NAP 
assistance. If an average market price had not been established for 
processed carrots in this example before the coverage period, then the 
average market price for fresh carrots would be used.
    (1) The provisions of this paragraph do not apply to secondary use, 
peanuts, seed intended uses, and small grain intended for use as 
forage.
    (2) [Reserved]
    (h) For crops with an established yield and market price for 
multiple intended uses, the average market price will be as provided in 
paragraph (g) of this section except that for producers who choose buy-
up coverage under Sec.  1437.5(d), the average market price used to 
determine assistance may be based on historical production and acreage 
evidence provided by the participant. The evidence of actual final use 
of historical production must come from the 3 previous crop years 
immediately preceding the coverage year. Only years in which the 
producer had acreage and production harvested will be counted. In other 
words, if a producer only marketed a crop in 1 previous year, FSA will 
review the evidence of final use in that year and based on the evidence 
for that year, determine a percent of production attributable to each 
use. Based on that determined percentage, an appropriate average market 
price and use will be calculated and determined, respectively. If more 
than 1 and up to 3 years of final use evidence are available, FSA will 
count all years and production and determine the average. If a producer 
had crop acreage and evidence of final use for any year in the 3-year 
period, but the producer does not submit evidence for any other year in 
the 3-year period for

[[Page 74579]]

which the producer also had acreage, the average market price will be 
as provided in paragraph (g) of this section.
    (i) A final payment price will be determined by multiplying, as 
appropriate, the average market price determined in this section by the 
applicable payment factor (that is, harvested, unharvested, or 
prevented planting).

Sec.  1437.14  [Amended]

0
21. Amend newly redesignated Sec.  1437.14 as follows:
0
a. In paragraph (a), remove the word ``shall'' and add the word 
``will'' in its place;
0
b. Remove paragraph (b)(2);
0
c. Redesignate paragraphs (b)(3) through (5) as paragraphs (b)(2) 
through (4), respectively;
0
d. In newly redesignated paragraphs (b)(2) through (4) remove the 
reference ``part 760 of this title'' and add the reference ``part 1416 
of this chapter'' in its place each time it appears; and
0
e. In paragraph (d), remove the word ``FSA'' and add the word 
``county'' in its place.

Sec.  1437.15  [Amended]

0
22. Amend newly redesignated Sec.  1437.15 as follows:
0
a. Remove paragraph (b); and
0
c. Redesignate paragraph (c) as paragraph (b).

0
23. Amend newly redesignated Sec.  1437.16 as follows:
0
a. In paragraph (b), remove the word ``shall'';
0
b. In paragraph (c) introductory text, remove the words ``shall be'' 
and add the word ``is'' in their place;
0
c. In paragraph (e), remove the words ``shall be'' and add the word 
``are'' in their place, and remove the acronym ``CCC'' and add the 
acronym ``FSA'' in its place;
0
d. In paragraph (f), remove the word ``shall'' and add the word 
``will'' in its place;

0
e. Revise paragraph (g);
0
f. In paragraph (i), remove the word ``shall'' and add the word 
``will'' in its place;
0
g. Revise paragraph (j); and
0
h. Add paragraphs (m) through (p).
    The additions and revisions read as follows:

Sec.  1437.16  Miscellaneous provisions.

* * * * *
    (g) The liability of any person for any penalty under this part is 
in addition to any other liability under any civil or criminal fraud 
statute or any other provision of law.
* * * * *
    (j) For the purposes of 28 U.S.C. 3201(e), the Secretary waives the 
ineligibility to receive benefits under this program but only for 
beneficiaries who as a condition of such waiver agree to apply the 
benefits to reduce the amount of the judgment lien.
* * * * *
    (m) Any person or legal entity who has a debt from nonpayment of 
the premium for coverage levels specified in Sec.  1437.5(c) will be 
ineligible for assistance under any subsequent crop year NAP coverage 
on any crop from the crop year of nonpayment of premium until the debt 
is paid in full.
    (1) If a person or legal entity is ineligible for NAP assistance 
due to the debt because of the nonpayment of premium, FSA will permit 
the person or legal entity to file an application for coverage together 
with payment of any service fees; however, that application and payment 
of service fees will not make the person or legal entity eligible for 
any assistance until the premium debt is paid in full.
    (2) Service fees paid with applications for coverage that are filed 
by persons or legal entities who are ineligible for NAP assistance as 
specified in paragraph (m) of this section will not be credited to any 
unpaid premium debt nor are they refundable.
    (n) A person or legal entity ineligible for NAP assistance under 
paragraph (m) of this section may become eligible for future NAP 
assistance if they remit all unpaid debt related to the nonpayment of 
premium before the application for payment filing deadline (see Sec.  
1437.11(g)).
    (o) Any NAP payment that was not issued for a prior NAP crop year 
due to an outstanding debt as specified in paragraph (m) of this 
section will not be issued.
    (p) Unpaid debt related to the failure to pay any premium satisfied 
by administrative offset will reinstate the eligibility of a person or 
legal entity from the date the offset satisfies all the unpaid premium 
debt with interest.

0
24. Add Sec.  1437.17 to read as follows:

Sec.  1437.17  Matters of general applicability.

    (a) The regulations in this part and FSA's interpretation of the 
regulations in this part, the basic provisions, and internal agency 
directives issued to FSA State and county offices are matters of 
general applicability and are not individually appealable in 
administrative appeals according to Sec. Sec.  11.3 and 780.5 of this 
title. Additionally, the regulations in this part and any FSA decisions 
that are not based on specific facts derived from an individual 
participant's application, contract, or file are not appealable under 
parts 11 or 780 of this title. Examples of such decisions include how 
NAP is generally administered, signup deadlines, payment rates, or any 
other generally applicable matter or determination that is made by FSA 
for use in all similarly situated applications. The only extent to 
which the matters referenced in this section are reviewable 
administratively in an appeal forum is whether FSA's determination of 
facts incidental to the case and decision to apply the generally 
applicable matter is in conformance with the regulations in this part.
    (b) The relief provisions of 7 CFR part 718 are applicable only to 
participant ineligibility and noncompliance decisions. The relief 
provisions cannot be used to extend a benefit or assistance not 
otherwise available under law or not otherwise available to others who 
have satisfied or complied with all the eligibility and compliance 
requirements of this part. Equitable relief provisions of part 718 of 
this title cannot be used to obtain a review of either these 
regulations, the requirements of this part, the agency's 
interpretations of this part, or compliance provisions of this part.

Subpart B--Determining Yield Coverage Using Actual Production 
History

0
25. Amend Sec.  1437.102 as follows:
0
a. In paragraph (b)(1), remove the year ``2005'' and add the year 
``2015'' in its place, and remove the term ``1999 through 2003'' and 
add the term ``2009 through 2013'' in its place;
0
b. In paragraph (b)(5)(i), remove the words ``irrigated, non-irrigated, 
and organic practices'' and add the words ``irrigated and non-
irrigated'' in their place;
0
c. Redesignate paragraphs (b)(6) through (8) as paragraphs (b)(8) 
through (10), respectively;
0
d. Add paragraphs (b)(6) and (7);

0
e. In paragraphs (c)(1) and (2), add the words ``in a crop year that is 
not a bypass year'' immediately after the words ``report of 
production'';
0
f. In paragraph (c)(3), remove the reference ``Sec.  1437.7'' and add 
the reference ``Sec.  1437.8'' in its place;
0
g. In paragraph (d)(1), remove the words ``production, as determined by 
CCC'' add the words ``production in a crop year that is not a bypass 
year, as determined by CCC'' in their place;
0
h. In paragraph (d)(2), remove the reference ``Sec.  1437.7'' and add 
the reference ``Sec.  1437.8'' in its place;

[[Page 74580]]

0
i. In paragraph (e)(3), remove the word ``Shall'' and add the word 
``Will'' in its place;

0
j. In paragraph (g), remove the year ``2000'' and add the year ``2014'' 
in its place and remove the acronym ``CCC'' and add the acronym ``FSA'' 
in its place;
0
k. In paragraph (h), remove the words ``50 percent of the initial 
approved yield'' and add the words ``the unit guarantee'' in their 
place, and remove the acronym ``CCC'' each time it appears and add the 
acronym ``FSA'' in its place; and
0
l. Revise paragraph (j).
    The additions and revision read as follows:

Sec.  1437.102  Yield determinations.

* * * * *
    (b) * * *
    (6) Will be adjusted on a State-wide basis, for crops grown on 
certified organic and transitional acreage for which FSA has 
established a separate organic price as specified in Sec.  1437.12(b), 
based on an average of FCIC organic yield reductions, as determined by 
FSA, for the same crop in the same State.
    (7) May be adjusted on a county-wide or regional basis for crops 
grown on certified organic and transitional acreage for which FSA has 
established a separate organic price as specified in Sec.  1437.12(b), 
based on the most representative available historical information, as 
determined by FSA.
* * * * *
    (j) A producer who has not shared in the risk of the production of 
the crop for more than two crop years during the base period, as 
determined by FSA, will have an approved yield calculated based on a 
combination of 100 percent of the applicable T-yield and any actual 
yield for the minimum crop years of the producer's APH base period. 
Producers who have produced the crop for one or more crop years must 
provide FSA, at the administrative county office serving the area in 
which the crop is located, a certification of production and production 
records for the applicable crop years as specified in Sec.  1437.8.
* * * * *
0
26. Revise Sec.  1437.103 to read as follows:

Sec.  1437.103  Late-planted acreage.

    (a) Producers planting crop acreage after the final planting date 
and during the late planting period, as determined by FSA, may be 
eligible for reduced coverage as specified in paragraphs (b) and (c) of 
this section.
    (b) Crops with multiple planting periods and value loss crops are 
not eligible for reduced coverage for late planting. Exceptions to this 
are the last planting period of multiple planted crops and multiple-
planting periods having a defined gap of 60 days or more between 
harvest date of the previous planting period and beginning of the 
immediately following planting period.
    (c) For crops with a growing period of:
    (1) 60 days or less and planted:
    (i) From 1 to 5 calendar days after the final planting date, 
production will be assigned equal to 5 percent of unit expected 
production for each day the crop is actually planted after the final 
planting date;
    (ii) From 6 days after the final planting date, production will be 
assigned equal to the unit guarantee for the late planted crop acreage.
    (2) 61 to 120 calendar days and planted:
    (i) From 1 to 5 calendar days after the final planting date, 
production will be assigned equal to 5 percent of expected unit 
production of the applicable late-planted crop acreage and for days 6 
through 20 an additional 1 percent for each day the crop is planted 
after the final planting date;
    (ii) From 21 days after the final planting date, production will be 
assigned equal to the unit guarantee for the late planted crop acreage.
    (3) 121 calendar days or more and planted:
    (i) From 1 to 5 calendar days after the final planting date, 
production will be assigned equal to 5 percent of expected production 
of the applicable late-planted crop acreage and for days 6 through 25 
an additional 1 percent for each day the crop is planted after the 
final planting date.
    (ii) From 26 or more calendar days after the final planting date, 
production will be assigned equal to unit guarantee of the producer's 
expected production of the applicable late-planted crop acreage.

Sec.  1437.104  [Amended]

0
27. In Sec.  1437.104(a)(2) remove the reference ``Sec.  1437.10(d)'' 
and add the reference ``Sec.  1437.11(e)'' in its place.
0
28. Amend Sec.  1437.105 as follows:
0
a. In paragraph (a) introductory text, remove the word ``shall'' and 
add the word ``will'' in its place;
0
b. In paragraph (a)(1), remove the words ``eligible acreage planted'' 
and add the words ``acres devoted'' in their place;
0
c. In paragraph (a)(2), remove the words ``50 percent'' and add the 
words and punctuation ``50, 55, 60, or 65 percent, as selected by the 
producer as specified in Sec.  1437.5;'' in their place; and
0
d. Revise paragraph (a)(5); and
0
e. Add paragraphs (c), (d), (e), and (f).
    The revision and additions read as follows:

Sec.  1437.105  Determining payments for low yield.

    (a) * * *
    (5) Multiplying the amount calculated as specified in paragraph 
(a)(4) of this section by 55 or 100 percent (selected by the producer 
as specified in Sec.  1437.5) of the final payment price calculated as 
specified in Sec.  1437.12; and
* * * * *
    (c) The crops and locations eligible for quality adjustments will 
be determined by the Deputy Administrator in advance of the coverage 
period, only if supporting documentation of industry standards for 
quality adjustments are available. For specific crops and locations 
determined by the Deputy Administrator for which buy-up coverage under 
Sec.  1437.5(d) is elected and for which adjustments to net production 
based on quality losses will be authorized for a coverage period in 
accordance with this paragraph, producers may opt for an adjustment of 
net production of a covered crop as specified in paragraph (a)(3) of 
this section based on a specific measure of quality against a set of 
standards that are acceptable to FSA. The standards and permissible 
adjustments to net production based on alleged quality losses stemming 
from eligible causes of loss in a coverage period will be based on 
FSA's review of sufficient documentation and are subject to FSA 
acceptance and State committee recommendation to the Deputy 
Administrator. The crops and locations where quality adjustments will 
be permitted will be as specified on a list maintained by FSA.
    (d) Production will not be adjusted under this section unless all 
other provisions of this section are met and the crop and location are 
included on a list of approved crops and locations before the beginning 
of the coverage period for the crop.
    (e) A producer of a NAP covered crop in a location and coverage 
period approved by FSA as specified in paragraphs (c) and (d) of this 
section who opts for the quality loss adjustment option must submit 
verifiable records obtained by testing or analysis of the specific 
crop's production and the alleged loss of quality stemming from an 
eligible cause of loss in the coverage period. Records must meet 
requirements of Sec.  1437.8(a)(3).
    (f) If a quality adjustment option is sought by a producer and 
approved for a crop year, FSA will enter the adjusted

[[Page 74581]]

value of net production into the producer's actual production history 
yield database for the loss year. The lower actual yield that results 
from the quality adjustment will be used for future approved yield 
calculations.

0
29. Amend Sec.  1437.106 as follows:
0
a. Revise paragraph (d);
0
b. In paragraph (e), remove the words ``shall consist'' and add the 
word ``consists'' in its place;
0
c. In paragraph (g) introductory text, remove the words 
``Administrative FSA'' and add the words ``administrative county'' in 
their place;
0
d. In paragraph (g)(2), remove the reference ``Sec.  1437.10'' and add 
the reference ``Sec.  1437.11'' in its place;
0
e. In paragraph (i), remove the words ``in excess of a 50 percent loss 
level'' and add the words ``based on the applicable guarantee'' in 
their place; and
0
f. Add paragraph (j).
    The revision and addition read as follows:

Sec.  1437.106  Honey.

* * * * *
    (d) In addition to filing a report of acreage in accordance with 
Sec.  1437.8, honey producers must provide a record of colonies to FSA. 
The report of colonies must be filed before the crop year for which 
producers seek to maintain coverage. The report of colonies must 
include:
* * * * *
    (j) Premiums for coverage levels specified in Sec.  1437.5(c) will 
be calculated based on the highest number of colonies reported during 
the program year.

0
30. Amend Sec.  1437.107 as follows:
0
a. In paragraph (c), remove the reference ``Sec.  1437.6'' and add the 
reference ``Sec.  1437.7'' in its place, and remove the acronym ``CCC'' 
and add the acronym ``FSA'' in its place;
0
b. In paragraph (d) introductory text, remove the reference ``Sec.  
1437.7'' and add the reference ``Sec.  1437.8'' in its place;

0
c. In paragraph (e), remove the words ``shall be'' and add the word 
``is'' in their place, and remove the acronym ``CCC'' in both places it 
appears and add the acronym ``FSA'' in its place;
0
d. In paragraph (f), remove the words ``shall be'' and add the word 
``is'' in their place;
0
e. In paragraph (g), remove the words ``shall be'' and add the word 
``will'' in their place;
0
f. In paragraph (i), remove the words ``in excess of a 50 percent loss 
level'' and add the words ``based on the applicable guarantee'' in its 
place; and
0
g. Add paragraph (j).
    The addition reads as follows:

Sec.  1437.107  Maple sap.

* * * * *
    (j) Premiums for coverage levels specified in Sec.  1437.5(c) will 
be calculated based on the number of taps reported by the producer.
    Subpart C--Determining Coverage For Prevented Planted Acreage

Sec.  1437.201  [Amended]

0
31. In Sec.  1437.201(a), remove the word ``shall''.

Sec.  1437.202  [Amended]

0
32. Amend Sec.  1437.202 as follows:
0
a. In paragraph (a)(7), remove the words ``by the final'' and add the 
words ``by 55 or 100 percent, as selected by the producer as specified 
in Sec.  1437.5, of the final'' in their place, and remove the 
reference ``Sec.  1437.11'' and add the reference ``Sec.  1437.12'' in 
its place; and
0
b. In paragraph (b), remove the word ``shall'' and add the word 
``will'' in its place.
    Subpart D--Determining Coverage Using Value

0
33. Amend Sec.  1437.301 as follows:
0
a. Revise paragraph (a);
0
b. In paragraph (c) introductory text, remove the reference ``Sec.  
1437.6'' and add the reference ``Sec.  1437.7'' in its place; and
0
c. Add paragraph (d).
    The revision and addition read as follows:

Sec.  1437.301  Value loss.

    (a) Special provisions are required to assess losses and calculate 
assistance for a few crops and commodities that do not lend themselves 
to yield loss situations. Assistance for these commodities is 
calculated based on the loss of value at the time of disaster. FSA 
determines which crops are value-loss crops, but unless otherwise 
announced, value-loss crops are those identified in Sec. Sec.  1437.303 
through 1437.309. Lost production of value loss crops is eligible for 
payment only as specified in this subpart.
* * * * *
    (d) For coverage levels specified in Sec.  1437.5(c), producers 
must pay a premium equal to the lesser of:
    (1) The producer's share, times the maximum dollar value for 
coverage sought, times the coverage level, times the average market 
price, times a 5.25 percent premium fee; or
    (2) A 5.25 percent premium fee times the applicable payment 
limitation.

0
34. Revise Sec.  1437.302 to read as follows:

Sec.  1437.302  Determining payments.

    (a) Subject to all restrictions and the availability of funds, 
value loss payments for qualifying losses will be determined by:
    (1) Multiplying the field market value of the crop before the 
disaster, or for buy-up coverage specified in Sec.  1437.5(c), the 
lesser of the field market value of the crop before the disaster or the 
maximum dollar value for coverage sought, by 50, 55, 60, or 65 percent, 
as selected by the producer as specified in Sec.  1437.5;
    (2) Subtracting the sum of the field market value after the 
disaster and value of ineligible causes of loss from the result from 
paragraph (a)(1) of this section;
    (3) Multiplying the result from paragraph (a)(2) of this section by 
the producer's share;
    (4) Multiplying the result from paragraph (a)(3) of this section by 
55 or 100 percent, as selected by the producer as specified in Sec.  
1437.5, plus whatever appropriate factor reflects savings from non-
harvesting of the damaged crop or other factors as appropriate; and
    (5) Subtracting the producer's share of any salvage value, if 
applicable.
    (b) [Reserved]

0
35. Amend Sec.  1437.303 as follows:
0
a. In paragraph (a) introductory text, remove the words ``is 
compensable'' and add the words ``will have NAP assistance calculated'' 
in their place, and remove the world ``shall'';
0
b. In paragraph (d)(3), add the words and punctuation ``on ropes,'' 
immediately after ``net pens,'';
0
c. Redesignate paragraphs (e) and (f) as paragraphs (f) and (g); and
0
d. Add paragraph (e).
    The addition reads as follows:

Sec.  1437.303  Aquaculture, including ornamental fish.

* * * * *
    (e) For mollusks that are not planted or seeded in containers, net 
pens, on ropes, wire baskets, or similar device designed for the 
containment and protection of the mollusks, the only eligible cause of 
loss of mollusks or missing mollusk inventory will be a direct result 
of a National Oceanic and Atmospheric Administration-determined 
tropical storm, typhoon, or hurricane.
* * * * *

Sec.  1437.304  [Amended]

0
36. Amend Sec.  1437.304 as follows:
0
a. In paragraph (a) introductory text, remove the words ``shall be'' 
and add the word ``is'' in their place; and

[[Page 74582]]

0
b. In paragraph (g), remove the words ``shall be'' and add the word 
``are'' in their place both times they appear.

Sec.  1437.305  [Amended]

0
37. In Sec.  1437.305(e), remove the word ``shall'' and add the word 
``will'' in its place.

Sec.  1437.306  [Amended]

0
36. In Sec.  1437.306(c), remove the word ``shall'' and add the word 
``will'' in its place.

Sec.  1437.308  [Amended]

0
39. In Sec.  1437.308(d)(3), remove the words ``a CCC-certified'' and 
add the words ``an FSA-certified'' in their place.

Sec.  1437.309  [Amended]

0
40. Amend Sec.  1437.309 as follows:
0
a. In paragraph (c), remove the words ``shall be'' and add the word 
``is'' in their place;
0
b. In paragraph (d), removed the word ``shall'' and add the word 
``will'' in its place; and
0
c. In paragraph (e), remove the reference ``Sec.  1437.7'' and add the 
reference ``Sec.  1437.8'' in its place, and remove the acronym ``CCC'' 
and add the acronym ``FSA'' in its place.

Sec.  1437.310  [Amended]

0
41. Amend Sec.  1437.310 as follows:
0
a. In paragraph (b)(1), remove the word ``shall'' and add the word 
``will'' in its place;
0
b. In paragraphs (c)(1) and (2), remove the reference ``Sec.  1437.11'' 
and add the reference ``Sec.  1437.12'' in its place both times it 
appears; and
0
c. In paragraph (h), remove the word ``shall'' and add the word 
``will'' in its place both times it appears.

Subpart E--Determining Coverage of Forage Intended for Animal 
Consumption

0
42. Revise Sec.  1437.401 to read as follows:

Sec.  1437.401  Forage.

    (a) Forage eligible for benefits under this part is limited to 
mature vegetation, as determined by FSA, produced in a commercial 
operation. Benefits are not available for first-year seeding of alfalfa 
and similar vegetation when production is not produced in the seeding 
year, as determined by FSA. The commercial operation must use 
acceptable farming, pasture, and range management practices for the 
location necessary to sustain sufficient quality and quantity of the 
vegetation so as to be suitable for grazing livestock or mechanical 
harvest as hay or seed. Forage to be mechanically harvested will be 
treated under the rules for low-yield crops as calculated under Sec.  
1437.103, except claims on forage for grazing benefits will be 
determined according to paragraph (f) of this section. The provisions 
in this subpart apply to all claims including forage for mechanical 
harvest.
    (b) Producers of forage must, in addition to the records required 
in Sec.  1437.8, specify the intended method of harvest of all acreage 
intended as forage for livestock consumption as either mechanically or 
grazed.
    (c) Producers must request an appraisal from the administrative 
county office for the unit prior to the onset of grazing of any 
intended mechanically harvested forage acreage that will be both 
mechanically harvested and grazed.
    (d) Forage acreage reported to FSA as intended to be mechanically 
harvested, but which is instead subsequently grazed, will be considered 
for crop definition purposes as mechanically harvested. Expected 
production of the specific acreage for which catastrophic coverage was 
obtained will be calculated on the basis of carrying capacity. The loss 
of such grazed forage will be determined according to paragraph (f) of 
this section. For acreage intended to be mechanically harvested which 
is instead subsequently grazed, the loss of intended mechanically 
harvested forage may alternatively be determined based on a review of 
acceptable production evidence or appraisal of the specific crop 
acreage. As part of the payment computation for this loss, intended 
mechanically harvested forage crop acreage that is not mechanically 
harvested but instead grazed will be deemed to be un-harvested for the 
purposes of determining a payment factor.
    (e) Small grain forage is the specific acreage of wheat, barley, 
oats, triticale, or rye intended for use as forage. Small grain forage 
is a separate crop and distinct from any other forage commodities and 
other intended uses of the small grain commodity. In addition to the 
records required in Sec.  1437.8, producers must specify whether the 
intended forage crop is intended for fall and winter, spring, or full 
season forage. In addition to other eligibility requirements, FSA will 
consider other factors, such as water sources and available fencing, 
and adequate fertilization to determine small grain forage eligibility, 
yields, and production.
    (f) FSA will establish forage losses of acreage intended to be 
grazed including, in some cases, acreage intended to be mechanically 
harvested but instead subsequently grazed for producers with 
catastrophic coverage, on the basis of:
    (1) The percentage of loss of similar mechanically-harvested forage 
acreage on the farm, or on similar farms in the area when approved 
yields have been calculated to determine loss; or
    (2) Where there is no similar mechanically-harvested forage acreage 
on the farm or similar farms in the area, the collective percentage of 
loss as determined by FSA for the geographical region after 
consideration of at least two independent assessments of grazed forage 
acreage conditions.
    (i) The assessments must be completed by forage or range 
specialists in Federal, State, and local government agencies, 
educational institutions, and private companies not having a financial 
interest in the outcome of the assessment. Collective percentage of 
loss determined by FSA for the geographical region may be based on any 
or all the following methods as may be available and as determined 
appropriate by the Deputy Administrator:
    (A) Independent assessments of grazed forage acreage conditions;
    (B) The U.S. Drought Monitor;
    (C) Information obtained from loss adjusters with sufficient forage 
knowledge to provide grazing loss assessments;
    (D) Data obtained from approved areas where clippings are obtained 
on a regular basis to compare with expected levels of production in a 
geographical region; or
    (E) Information from Natural Resources Conservation Service 
technical service providers having a specialized knowledge.
    (ii) Neither the assessments themselves, nor collective loss 
percentages established in accordance with this section are subject to 
appeal. FSA's determinations of geographical area for assessments and 
collective grazing loss are generally applicable to all similarly 
situated participants farming in such defined geographical region.

Sec.  1437.402  [Amended]

0
43. In Sec.  1437.402(b) introductory text, add the words ``with 
catastrophic coverage'' immediately after the word ``acreage'', and 
remove the acronym ``CCC'' and add the acronym ``FSA'' in its place.
0
44. Revise Sec.  1437.403 to read as follows:

Sec.  1437.403  Determining payments.

    (a) Subject to payment limits, availability of funds, and other 
limits as may apply, payments for catastrophic

[[Page 74583]]

coverage of losses of forage reported to FSA as intended to be grazed 
will be determined by:
    (1) Multiplying the eligible acreage by the producer's share;
    (2) Dividing the result from paragraph (a)(1) of this section by 
the carrying capacity or adjusted per day carrying capacity established 
for the specific catastrophic coverage acreage, as determined by FSA;
    (3) Multiplying the result from paragraph (a)(2) of this section by 
the number of days established as the grazing period;
    (4) Adding adjustments of AUD for practices and production to the 
product of paragraph (a)(3) of this section;
    (5) Multiplying the result from paragraph (a)(4) of this section by 
the applicable percentage of loss established by FSA;
    (6) Multiplying the amount of assigned AUD, as determined by FSA, 
by the producer's share;
    (7) Subtracting the result from paragraph (a)(6) of this section 
from the result from paragraph (a)(5) of this section;
    (8) Multiplying the result from paragraph (a)(4) of this section by 
0.50;
    (9) Subtracting the result from paragraph (a)(8) of this section 
from the result from paragraph (a)(7) of this section; and
    (10) Multiplying the result from paragraph (a)(9) of this section 
by 55 percent of the final payment price established in accordance with 
Sec.  1437.12.
    (b) [Reserved]

Subpart F--Determining Coverage in the Tropical Region

0
45. Amend Sec.  1437.501 as follows:
0
a. Revise paragraph (a);
0
b. Remove paragraph (b)(2); and
0
c. Redesignate paragraph (b)(3) as paragraphs (b)(2).
    The revision reads as follows:

Sec.  1437.501  Applicability; definition of ``tropical region'' and 
additional definitions.

    (a) This subpart applies to covered tropical crops in the tropical 
region, as those terms are defined in this subpart. Benefits under this 
part may be extended to those crops only to the extent that they are 
otherwise eligible for assistance under this part. Covered crops do not 
include ``value loss'' crops, as defined elsewhere in this part. For 
those crops that are covered by this subpart, loss and payment 
determinations for NAP covered in this part are determined by the rules 
that otherwise apply to NAP subject to the modifications provided by 
this subpart. The rules that otherwise apply include, but are not 
limited to, limitations on payments that are specified in part 1400 of 
this chapter.
* * * * *

Sec.  1437.502  [Amended]

0
46. Amend Sec.  1437.502 as follows:
0
a. In paragraph (a), remove the words ``beginning in 2006 through 
subsequent years'';
0
b. Redesignate paragraphs (d)(1) and (2) as paragraphs (d) and (e), 
respectively; and
0
c. In newly redesignated paragraph (d), remove the word ``shall'' and 
add the words ``will be interpreted to'' in its place.

Sec.  1437.504  [Amended]

0
47. Amend Sec.  1437.504 as follows:
0
a. In paragraph (a), remove the reference ``Sec.  1437.10(c)'' and add 
the reference ``Sec.  1437.11(d)'' in its place; and
0
b. In paragraph (b) introductory text, remove the reference ``Sec.  
1437.10'' and add the reference ``Sec.  1437.11'' in its place.

Sec.  1437.505  [Amended]

0
48. In Sec.  1437.505(a) and (b)(1), remove the reference ``Sec.  
1437.10'' and add the reference ``Sec.  1437.11'' in its place both 
times it appears.

Sec. Sec.  1437.3, 1437.4, 1437.8, 1437., 1437.11, 1437.12, 1437.13, 
1437.16, 1437.102, 1437.104, 1437.201, 1437.301, 1437.304, 1437.305, 
1437.307, 1437.308, 1437.309, 1437.310, 1437.402, 1437.502, 1437.503, 
1437.504  [Amended]

0
49. In addition to the amendments set forth above, in 7 CFR part 1437, 
remove the word ``CCC'' and add, in its place, the word ``FSA'' in the 
following places:
0
a. In Sec.  1437.3, in the definitions of ``Fiber'', ``Final planting 
date'', ``Food'', ``Multiple planted'', and ``Normal harvest date'';
0
b. In Sec.  1437.4(a)(1) and (3);
0
c. In newly redesignated Sec.  1437.8(a)(1) and (2), (e), both times it 
appears, and (f);
0
d. In newly redesignated Sec.  1437.11(d) introductory text and 
(d)(2)(ii) and (iii);
0
e. In newly redesignated Sec.  1437.12(a)(2) and (4);

0
f. In newly redesignated Sec.  1437.13, each time it appears;
0
g. In newly redesignated Sec.  1437.16(d), each time it appears;
0
h. In Sec.  1437.102(b)(4), newly redesignated paragraph (b)(9), (c)(4) 
introductory text, (c)(4)(ii), (c)(5)(i) and (ii), and (f), both times 
it appears;
0
i. In Sec.  1437.104(a) introductory text;
0
j. In Sec.  1437.201(c)(2)(i) and (ii);
0
k. In Sec.  1437.301(c)(1) and (3);

0
l. In Sec.  1437.304(a)(1), (c), and (f);
0
m. In Sec.  1437.305(f);
0
n. In Sec.  1437.307(e);
0
o. In Sec.  1437.308(d)(1) and (4), and (e);
0
p. In Sec.  1437.310(d), (e)(3), (g)(1), and (i);
0
q. In Sec.  1437.402(a) introductory text, (a)(2), and (b)(3);

0
r. In Sec.  1437.502(c)(1) and (2);
0
s. In Sec.  1437.503(c)(2); and
0
t. In Sec.  1437.504(f).

    Signed on December 5, 2014.
Val Dolcini,
Executive Vice President, Commodity Credit Corporation, and 
Administrator, Farm Service Agency.
[FR Doc. 2014-29082 Filed 12-12-14; 8:45 am]
BILLING CODE 3410-05-P
```