[Federal Register Volume 75, Number 205 (Monday, October 25, 2010)]
[Rules and Regulations]
[Pages 65423-65431]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-26869]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 75, No. 205 / Monday, October 25, 2010 / 
Rules and Regulations

[[Page 65423]]



DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 760

RIN 0560-AI11


Crop Assistance Program

AGENCY: Farm Service Agency, USDA.

ACTION: Interim rule.

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

SUMMARY: The Crop Assistance Program (CAP) will provide emergency 
assistance to reestablish the purchasing power of eligible producers of 
rice, cotton, soybeans, and sweet potatoes in specified counties for 
which a Secretarial disaster designation was issued based on excessive 
moisture and related conditions for the 2009 crop year. This rule 
specifies the eligibility requirements, payment calculations, and 
application procedures for CAP. CAP will provide up to $550 million to 
eligible producers. This rule also proposes a new information 
collection for the payment application.

DATES: Effective date: October 22, 2010.
    Comment date: We will consider comments that we receive by November 
24, 2010.
    Application Deadline: We will consider applications that we receive 
by December 9, 2010.

ADDRESSES: We invite you to submit comments on this interim rule. In 
your comment, please specify RIN 0560-AI11 and include the volume, 
date, and page number of this issue of the Federal Register. You may 
submit written comments by any of the following methods:
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#63000213000c0e0e060d1710231407004d161007024d040c15"><span class="__cf_email__" data-cfemail="8be8eafbe8e4e6e6eee5fff8cbfcefe8a5fef8efeaa5ece4fd">[email protected]</span></a>.
    <bullet> Fax: (202) 690-2130.
    <bullet> Mail: Director, Production, Emergencies, and Compliance 
Division, FSA, U.S. Department of Agriculture (USDA), Mail Stop 0517, 
Rm. 4750-S, 1400 Independence Ave., SW., Washington, DC 20250-0517.
    <bullet> Hand Delivery or Courier: Deliver comments to the above 
address.
    <bullet> Federal Rulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
    All written 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. A copy of this rule is available through the FSA home 
page at http://www.fsa.usda.gov/.

FOR FURTHER INFORMATION CONTACT: Steve Peterson, Chief, Disaster 
Assistance Branch, FSA, USDA, Mail Stop 00517, 1400 Independence Ave., 
SW., Washington, DC 20250-0517; telephone: (202) 720-7641; fax: (202) 
690-2130; e-mail: <a href="/cdn-cgi/l/email-protection#95e6e1f0e3f0bbe5f0e1f0e7e6fafbd5e2f1f6bbe0e6f1f4bbf2fae3"><span class="__cf_email__" data-cfemail="c6b5b2a3b0a3e8b6a3b2a3b4b5a9a886b1a2a5e8b3b5a2a7e8a1a9b0">[email protected]</span></a>. Persons with 
disabilities who require alternative means for communications (Braille, 
large print, audio tape, etc.) should contact the USDA Target Center at 
(202) 720-2600 (voice and TDD).

SUPPLEMENTARY INFORMATION:

Background

    Due to the nature and severity of disasters resulting from 
excessive moisture and related conditions in 2009, the Secretary of 
Agriculture determined that producers of rice, upland cotton, soybeans, 
and sweet potatoes would be provided limited financial assistance under 
the authority of clause 3 of section 32 of the Agricultural Adjustment 
Act of 1935 (Pub. L. 74-320, 7 U.S.C. 612c, as amended, referred to as 
``section 32'') due to losses that growers of those crops suffered. 
That clause of Section 32 provides authority for the Secretary of 
Agriculture to use funds to ``reestablish farmers' purchasing power by 
making payments in connection with the normal production of any 
agricultural commodity for domestic consumption.'' FSA has used this 
authority in the past to provide assistance to producers whose 
purchasing power was negatively impacted by unusual market conditions. 
Through CAP, FSA will use up to $550 million in section 32 funds to 
help reestablish the purchasing power of eligible producers of rice, 
upland cotton, soybeans, and sweet potatoes.
    CAP is a limited one-time program to reestablish producer 
purchasing power that was diminished by 2009 crop year losses. The CAP 
payment is intended to address reestablishing producer purchasing 
power, not to reimburse producers for specific losses.
    To expedite implementation of CAP, to simplify producer application 
for CAP payments, and to timely distribute CAP payments to eligible 
producers, FSA has already identified the relevant disaster counties, 
has producer acreage and ownership shares on file, and has determined 
the payment rate for each crop. Each of these items is explained in 
this interim rule.
    For CAP, FSA identified the 953 counties in the following 34 States 
that received Secretarial disaster designations due to excessive 
moisture and related conditions in 2009: Alabama, Arkansas, 
Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, 
Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, 
Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, 
New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, 
Rhode Island, South Dakota, Tennessee, Texas, Wisconsin, and Wyoming. 
The following map shows the counties; a list of the counties is 
available on the FSA Web site and at FSA county offices.

BILLING CODE 3410-05-P

[[Page 65424]]

[GRAPHIC] [TIFF OMITTED] TR25OC10.000

BILLING CODE 3410-05-C

[[Page 65425]]

Producer Eligibility Requirements

    There are several requirements for producers to be eligible for CAP 
payments. Producers must meet all of the following requirements to be 
eligible for a CAP payment:
    (1) The producer must have on file an existing 2009 crop year form 
FSA-578, ``Report of Acreage,'' as planted or considered planted, and 
that acreage report must have been on file with FSA prior to the 
publication of this interim rule;
    (2) The producer's 2009 form FSA-578, Report of Acreage, must 
specify the producer's ownership share of a 2009 crop of upland cotton, 
long grain rice, medium or short grain rice, soybeans, or sweet 
potatoes, and the amount of acres of those crops planted or considered 
planted;
    (3) The producer's eligible crop acreage must be located in a 
primary county for which a Secretarial disaster designation was issued 
based on excessive moisture and related conditions for the 2009 crop 
year;
    (4) The producer must have had a five percent or greater loss in 
crop quality or quantity of the 2009 crop of upland cotton, long grain 
rice, medium or short grain rice, soybeans, or sweet potatoes, for 
which the producer applies for a CAP payment; the loss must be due to a 
disaster, as defined in this rule, and the five percent loss is a 
minimum threshold for CAP eligibility; greater losses do not qualify 
producers for a larger payment; and
    (5) The producer must apply for a CAP payment by December 9, 2010 
certifying that the loss which was due to disaster in 2009 was greater 
than or equal to the five percent threshold; the loss threshold must be 
met for each crop for which the producer requests a CAP payment.
    The identified disaster counties are primary disaster counties 
only; crop acreage in contiguous counties that are not declared 
disaster counties is not eligible for CAP.

Five Percent Loss Threshold Required for Payment Eligibility

    To be eligible for payment, a producer must have had a loss of five 
percent or greater on a farm in the eligible disaster county in quality 
or quantity as compared to historic or expected production for that 
farm to the crop of upland cotton, long grain rice, medium or short 
grain rice, soybeans, or sweet potatoes planted or considered planted 
in 2009 for which the producer is applying for a CAP payment.
    The five percent loss threshold is a per producer per crop on a 
farm minimum threshold for 2009; it is not just a per farm threshold. 
The individual producer's share of the crop on the farm must have 
suffered the loss, independent of what other producers of the crop on 
that farm may have produced or their loss. The producer will need to 
calculate quantity losses based on historical or expected production of 
the crop. The producer will need to certify that the loss was at least 
five percent and will need to maintain verifiable and reliable 
documentation to justify the certification.
    For example, if a producer has a share in a farm with 2009 cotton 
and rice crops, but only suffered a five percent or greater loss for 
the rice crop, that producer can be eligible for a payment on the rice 
crop, but not the cotton crop. Similarly, if a farm had both cotton and 
corn crops in 2009, only a cotton crop loss can meet the eligibility 
requirement for a CAP payment, regardless of what, if any, losses there 
were for the corn or the farm as a whole because corn is not an 
eligible commodity under CAP.
    The determination by a producer that a crop suffered a five percent 
or greater loss is based on the producer's self-certification. 
Producers must be able to document, if requested by FSA, how they 
determined that the five percent loss threshold was met. For quantity 
losses, the calculation must use historic yield and expected production 
as defined in this rule. FSA will provide county average yield data on 
request. At time of application, a producer will not be required to 
submit documentation of production, expected production, quality, or 
loss. However, a producer who applies for CAP will be required to 
retain documentation in support of their application for 3 years after 
the date of application. If documentation is not submitted when 
required by FSA or if documentation cannot demonstrate that the minimum 
loss was suffered as claimed for a crop and farm, the producer will be 
required to refund the payment to FSA.

Crop Acreage and Ownership Share; Acreage Report Information

    The amount of acreage for each crop that will be used to determine 
the amount of the CAP payment (payment acres) and the producer's 
ownership share of the crop will be the amount previously reported to 
FSA by the producer for the 2009 crop year form FSA-578, Report of 
Acreage, that is on file in FSA as of October 22, 2010.
    For the purposes of CAP, a producer cannot revise a crop acreage 
report for the 2009 crop year (such reports are filed using form FSA-
578, Report of Acreage) after submitting the CAP application to 
increase the payment or to create an eligibility. If a producer needs 
to amend or correct the 2009 FSA-578 for other programs, they may be 
able to do so, subject to the rules pertaining to those programs. 
However, no amended 2009 FSA-578 that includes increased crop acreage 
on a farm will be considered in calculating CAP payments.

Payment Calculation

    CAP payments will be calculated by multiplying the total number of 
acres of the crop planted or considered planted on the farm by that 
crop's per-acre payment rate. FSA determined the rates based on average 
per-acre revenue losses on the 2009 crop due to moisture-related 
disasters. The payment rate, which is based on USDA data of average per 
acre 2009 crop losses and limited by available funding, cannot be 
greater than actual losses for producers.\1\ The payment rates are as 
follows:
---------------------------------------------------------------------------

    \1\ For more information about the development of the payment 
rates, see the Cost Benefit Analysis for this rule, which is 
available upon request (see FOR FURTHER INFORMATION CONTACT above).

------------------------------------------------------------------------
                                                               Per acre
                            Crop                               payment
                                                                 rate
------------------------------------------------------------------------
Long grain rice............................................       $31.93
Medium or short grain rice.................................        52.46
Upland cotton..............................................        17.70
Soybeans...................................................        15.62
Sweet potatoes.............................................       155.41
------------------------------------------------------------------------

    The CAP payment will be based on the producer's share of the 
reported or determined planted or considered planted acres of the crop 
times the per acre payment rate for the crop. If there is more than one 
eligible producer on a farm that shared in the crop, each producer may 
apply for a payment based on their share in the crop.
    For example, Producer A has a 100 percent share interest of 2009 
upland cotton and sweet potatoes. Producer A planted 1,000 acres of 
2009 crop upland cotton and certifies a production loss of over five 
percent due to disaster. Upland cotton's payment rate is $17.70 per 
acre. Producer A also planted 100 acres of sweet potatoes and certifies 
a production loss of over five percent of the crop due to a disaster. 
The sweet potato payment rate is $155.41 per acre. The payment 
calculation would be as follows: 1,000 acres (upland cotton planted) 
times $17.70 (payment rate for upland cotton) = $17,700 CAP payment for 
upland cotton. For sweet potato, 100 acres (sweet potatoes planted) 
times $155.41 (payment rate for sweet potatoes) = $15,541 CAP payment 
for

[[Page 65426]]

sweet potatoes. The producer would receive the sum of those two 
payments, or $17,700 + $15,541 = $33,241, subject to payment 
limitations and other restrictions in the regulation.

Disaster Counties

    To be eligible for CAP, a producer must have had a loss on a farm 
in a disaster county that was declared a disaster because of excess 
moisture or a related condition as specified in the regulation. To 
identify the disaster counties for CAP, FSA identified those counties 
that had a Secretarial disaster designation based on flood, flash 
flooding, excessive rain, moisture, humidity, severe storms, 
thunderstorms, ground saturation or standing water, hail, winter 
storms, ice storms, snow, blizzard, hurricane, typhoons, tropical 
storms, or cold wet weather.

Additional Eligibility Considerations

    Only a producer who has an ownership share and risk of loss in the 
crop will qualify for CAP. Any verbal or written agreement that 
precludes a producer from having an ownership share disqualifies the 
producer for CAP, regardless of whether the producer is listed on a 
form FSA-578, Report of Acreage, or any other program document, as 
having a share of the crop. For example, a contract grower would be 
ineligible.
    A person ineligible for 2009 crop year benefits because of fraud or 
any other program violation in any other FSA or Commodity Credit 
Corporation (CCC) program is ineligible for CAP to the extent otherwise 
provided in law.
    There is no requirement to have crop insurance coverage or coverage 
under the Noninsured Crop Disaster Assistance Program (NAP) in order to 
be eligible for CAP. Producers who received NAP payments for a loss of 
a 2009 crop of long grain rice, medium or short grain rice, upland 
cotton, soybeans, or sweet potatoes are eligible for CAP benefits, 
subject to meeting all other eligibility requirements for CAP; the 
multiple benefit exclusion provisions of 7 CFR 1437.13 do not apply. 
Producers can receive NAP payments and CAP payments for the same 2009 
crop. NAP payments are for specific crop losses, whereas CAP payments 
are to help reestablish farmers' purchasing power. Therefore, CAP 
payments are not duplicate payments.

Payment Limitations and Other General Requirements

    General eligibility requirements that apply to other FSA and CCC 
programs also apply to CAP. Specifically, recordkeeping requirements 
and compliance with Highly Erodible Land Conservation and Wetland 
Conservation provisions in this rule are similar to those for previous 
ad hoc crop disaster programs. Records documenting 2009 losses must be 
kept for 3 years after the application is filed. CAP applicants must 
have been in compliance with the provisions of 7 CFR part 12, ``Highly 
Erodible Land and Wetland Conservation,'' during the 2009 crop year. 
Those regulations provide for a denial of benefits for failing to 
comply with general requirements regarding the handling of highly 
erodible cropland and wetlands.
    CAP payments will be treated as 2009 revenue under the Supplemental 
Revenue Assistance Payments (SURE) Program, which is specified in 7 CFR 
part 760, subpart G.
    The payment limits and adjusted gross income (AGI) limits that 
apply to other CCC and FSA programs apply to CAP. Specifically, no 
person or legal entity (excluding a joint venture or general 
partnership), as defined and determined by the regulations in 7 CFR 
part 1400 may receive, directly or indirectly, more than $100,000 in 
CAP benefits. For the payment limit, both indirect and direct benefits 
are counted by attribution; the total amount of payments are attributed 
to a person by taking into account the direct and indirect ownership 
interests of the person in a legal entity that is eligible to receive 
payments. In the case of a legal entity, the same payment is attributed 
to the direct payee in the full amount and to those that have an 
indirect interest to the amount of that indirect interest. This is the 
same way attribution is done for other FSA and CCC programs.
    Payment and average adjusted gross income (AGI) limits will be 
determined as using the standards of 7 CFR part 1400 in the same manner 
as for CCC programs governed by that part. In applying the limitation 
on AGI for 2009, a person or legal entity with an average adjusted 
gross nonfarm income, as defined in 7 CFR 1400.3, that exceeds $500,000 
for the 3 taxable years preceding 2008 (2005-2007) will not be eligible 
to receive CAP payments. Likewise, if a person with an indirect 
interest in a legal entity has an average nonfarm AGI over $500,000, 
then the payment to the legal entity will be commensurately reduced 
based on the interest of that person in the legal entity receiving the 
payment.
    The regulations in 7 CFR 1400.105 specify how payments will be 
attributed. Attribution will be tracked through four levels of 
ownership in legal entities. In addition, the 2008 Farm Bill imposed 
limitations on payments to foreign persons; FSA adopted those limits 
for CAP as specified in this rule.
    The regulations in 7 CFR part 760 subpart B that provide general 
provisions for other recent FSA disaster assistance programs also apply 
for CAP.

Application Process

    This rule announces a 45-day period for submitting CAP 
applications, beginning the day this rule is published in the Federal 
Register. Specifically, the application deadline is December 9, 2010. 
This deadline allows sufficient time for FSA to include CAP payments in 
2009 SURE payment calculations.
    During the application period, producers may apply in person at FSA 
county offices during regular business hours. Applications may also be 
submitted to FSA by mail or fax. CAP application forms may be obtained 
in person, by mail, telephone, and fax from any FSA county office or 
via the Internet at http://www.sc.egov.usda.gov. If there is more than 
one producer on a farm, only the producers on a farm who sign the 
application will be eligible to receive payment. Producers may receive 
payment from shares of eligible crops on multiple farms if they sign an 
application for each farm, subject to the $100,000 payment limit that 
is per person or legal entity, not per farm or per crop.
    An application must include the specific application form for CAP, 
FSA-860, and the following forms, which for most producers will already 
be on file at the FSA county office:
    (1) CCC-902, Farm Operating Plan for Individual or Legal Entity;
    (2) CCC-926, Average Adjusted Gross Income Statement for 2009;
    (3) AD-1026, Highly Erodible Land Conservation (HELC) and Wetland 
Conservation Certification; and
    (4) FSA-578, Report of Acreage, for 2009, which must already be on 
file at the FSA county office.
    See the Paperwork Reduction Act section below for more information 
about the application.
    Any application received by FSA after December 9, 2010 will be 
ineligible for payment.
    Information provided on applications and supporting documentation 
will be subject to verification by FSA; however, FSA is under no 
obligation to perform spot checks within any specific time frame and 
applicants are responsible for producing documents substantiating their 
application when requested by FSA.
    In the event that FSA finds that a payment was issued based on 
inaccurate

[[Page 65427]]

information on a certification submitted by a producer, FSA will 
require a refund of that payment. Producers determined to have made any 
false certifications or adopted any misrepresentation, scheme, or 
device that defeats the program's purpose will be required to refund 
any payments issued through the CAP, including interest on such 
payments, and may be subject to other civil, criminal, or 
administrative remedies.
    Each producer on the farm applies separately for their own CAP 
payment.

Notice and Comment

    Because this rule involves discretionary disaster relief and 
authorities it was determined that under these circumstances it would 
be contrary to the public interest to withhold relief for prior public 
comment. The Administrative Procedures Act (5 U.S.C. 553) provides 
generally that before rules are issued by Government agencies, the rule 
must be published in the Federal Register, and interested persons must 
be given an opportunity to participate in the rulemaking through 
submission of data, views, or arguments. The law exempts from this 
requirement rules, such as this one, relating to public property, 
loans, grants, benefits, and contracts. However, the Secretary of 
Agriculture published in the Federal Register on July 24, 1971 (36 FR 
13804), a Statement of Policy that USDA would publish a notice of 
proposed rulemaking for such rules. USDA is committed to providing the 
public reasonable opportunity to participate in rulemaking, and is 
therefore providing the public 30 days to comment on the provisions of 
this interim rule.

Executive Order 12866

    The Office of Management and Budget (OMB) designated this interim 
rule as economically significant under Executive Order 12866, and, 
therefore OMB reviewed this rule. A cost-benefit analysis of this rule 
is summarized below and is available from the contact listed above.

Cost Benefit Analysis Summary

    The Crop Assistance Program is intended to reestablish purchasing 
power to producers of 2009 crop of rice, upland cotton, soybeans, or 
sweet potatoes who grew those crops in specified counties for which a 
Secretarial disaster designation was issued based on excessive moisture 
and related conditions for the 2009 crop year. Payments will be 
calculated based on acreage reported for 2009 crops. The per acre rate 
payment was set by FSA based on each crop's national average revenue 
per harvested acre in 2009; the payment rate was determined by dividing 
each crop's total value of production (revenue) by the amount of 
production, and then multiplying the product by 3.7 percent. National 
Agricultural Statistics Service (NASS) data was used for the amount of 
production and World Agricultural Supply and Demand Estimates (WASDE) 
data was used for price (value) of production. In summary, producers 
will be paid based on their reported 2009 acreage for each crop, 
multiplied by a payment rate that represents 3.7 percent of average 
revenue per acre.
    The total cost to the government, and the corresponding benefit to 
producers, for CAP will be between $137 million and $543 million, 
depending upon how many producers in disaster counties apply for 
payment. The low end of the range was estimated using NASS data of 
actual yield losses in 2009 as compared to 2004 through 2008 yields; it 
represents the cost if only producers in counties with five percent or 
greater yield losses apply. (Yield data was not available for sweet 
potatoes; the average loss of similar crops was used as an estimate). 
The high end of the range is estimated using total acres of eligible 
crops in primary disaster counties in 2009; it represents the costs and 
benefits if all producers in disaster counties with eligible crops 
apply for payment.
    CAP payments will be considered revenue for the purpose of 
calculating payments for the SURE program. CAP payments are estimated 
to decrease total 2009 SURE payments by $50 million to $107 million, 
depending on how many producers who apply for CAP also had sufficient 
losses (and met other requirements) to qualify for 2009 SURE program 
payments.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this interim rule because CCC is not required by 5 U.S.C. 
553 or any other provision of law to publish a notice of proposed 
rulemaking for this rule. As noted above in the Notice and Comment 
section, CCC is using the good cause justification of the 
Administrative Procedures Act to issue an interim rule effective on 
publication with an opportunity for comment.

Environmental Review

    The environmental impacts of this rule have been considered in a 
manner consistent with the provisions of the National Environmental 
Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations of the Council 
on Environmental Quality (40 CFR parts 1500-1508), and FSA regulations 
for compliance with NEPA (7 CFR part 799). CAP solely provides 
financial assistance to reestablish purchasing power to eligible 
producers who suffered an eligible loss during the 2009 crop year for 
specific commodities. Therefore, FSA has determined that no 
environmental assessment or environmental impact statement will be 
prepared consistent with 7 CFR 799.10(b)(2)(x).

Executive Order 12372

    This program is not subject to Executive Order 12372, which 
requires consultation with State and local officials. See the notice 
related to 7 CFR part 3015, subpart V, published in the Federal 
Register on June 24, 1983 (48 FR 29115).

Executive Order 12988

    This rule has been reviewed under Executive Order 12988. The 
provisions of this proposed rule will not have preemptive effect with 
respect to any State or local laws, regulations, or policies that 
conflict with such provision or which otherwise impede their full 
implementation. The rule will not have retroactive effect. Before any 
judicial action may be brought regarding this rule, all administrative 
remedies must be exhausted.

Executive Order 13132

    The policies contained in this rule will not have any substantial 
direct effect on States, the relationship between the Federal 
Government and the States, or the distribution of power and 
responsibilities among the various levels of government. Nor would this 
proposed rule impose substantial direct compliance costs on State and 
local governments. Therefore, consultation with the States is not 
required.

Executive Order 13175

    The policies contained in this rule do not have tribal implications 
that preempt tribal law. FSA provided the opportunity for government-
to-government consultation with Tribal governments on CAP prior to the 
publication of this interim rule. The Tribal consultation was available 
through a teleconference. Leadership from all Federally recognized 
Tribes that have lands within the affected counties were invited to the 
consultation, which was held on October 12, 2010. The FSA Deputy 
Administrator for Farm Programs with representation from the FSA 
Administrator's office as well as the USDA Office of Tribal Relations

[[Page 65428]]

participated in the call and were available to consult on CAP. No 
Tribes participated in the call. In response to the invitation to the 
conference call, no comments were received.

Unfunded Mandates

    This rule contains no Federal mandates under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995 
(UMRA, Pub. L. 104-4) for State, local, or tribal governments, or the 
private sector. In addition, FSA is not required to publish a notice of 
proposed rulemaking for this rule. Therefore, this interim 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 has been determined to be major under SBREFA (Pub. L. 
104-121). SBREFA normally requires that an agency delay the effective 
date of a major rule for 60 days from the date of publication to allow 
for Congressional review. Section 808 of SBREFA allows an agency to 
make a major regulation effective immediately if the agency finds there 
is good cause to do so. FSA finds for the reasons given earlier with 
respect to Notice and Comment that it would be contrary to the public 
interest to delay implementation of this rule because it would 
significantly delay assistance to the producers affected by disasters 
in 2009 addressed by this rule. Therefore, this rule is effective 
immediately.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
chapter 35), FSA submitted the information collection request for CAP 
to OMB under the emergency procedure in accordance with the Paperwork 
Reduction Act so FSA can begin the sign-up period upon publication of 
this rule.
    FSA is making payments to eligible producers of 2009 upland cotton, 
long grain rice, medium or short grain rice, soybeans, and sweet 
potatoes. CAP is for producers who had at least a five percent loss due 
to disaster in counties having a Secretarial disaster designation for 
2009 due to excessive moisture or related conditions.
    Title: Crop Assistance Program (CAP).
    OMB Number: 0560-NEW.
    Type of Request: New information collection.
    Abstract: This information collection is needed for FSA to identify 
eligible upland cotton, long grain rice, medium or short grain rice, 
soybean, and sweet potato producers and to make payments to those 
producers through CAP. FSA requires producers to submit an application 
on a form specified by FSA to the FSA county office for the farm where 
they had a 2009 crop planted or considered planted acreage of upland 
cotton, long grain rice, medium or short grain rice, soybeans, and 
sweet potatoes.
    For an application to be accepted and approved, the producer will 
be required to provide the following information: producer telephone 
number (optional), whether eligible crops suffered a five percent or 
greater loss, whether each claimed loss was due to quantity or quality 
loss, and producer's signature.
    The following estimated burden also includes an average travel time 
of one hour for the producer's travel to the FSA county office. The 
majority of producers will only need to submit one application form 
(FSA-860) because the rest of their information will already be on-file 
and up to date in the FSA county office. However, approximately 673 
respondents will also need to complete forms AD-1026, CCC-902 and CCC-
926 if FSA does not have them on file.
    Respondents: Producers.
    Estimated Annual Number of Applicants: 279,091.
    Estimated Annual Number of Forms per Applicant: 1.
    Estimated Average Time to Respond: 30 minutes (0.5 hours).
    Estimated Total Annual Burden Hours: 350,210.

E-Government Act Compliance

    CCC is 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 in 7 CFR Part 760

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

0
For the reasons discussed in the preamble, the Farm Service Agency 
(USDA) adds 7 CFR part 760, subpart H, to read as follows:

PART 760--INDEMNITY PAYMENT PROGRAMS

Subpart H--Crop Assistance Program
Sec.
760.701 Applicability.
760.702 Definitions.
760.703 Producer eligibility requirements.
760.704 Time and method of application.
760.705 Payment rates and calculation of payments.
760.706 Availability of funds.
760.707 Proof of loss.
760.708 Miscellaneous provisions and limitations.

    Authority:  7 U.S.C. 612c.

Subpart H--Crop Assistance Program


Sec.  760.701  Applicability.

    (a) This subpart specifies the eligibility requirements and payment 
calculations for the Crop Assistance Program (CAP), which will be 
administered using funds authorized by Section 32 of the Agricultural 
Adjustment Act of 1935 (7 U.S.C. 612c, as amended).
    (b) CAP, within the limits of the funds made available by the 
Secretary for this program, is intended to help reestablish purchasing 
power to producers of long grain rice, medium or short grain rice, 
upland cotton, soybeans, and sweet potatoes who suffered a five percent 
or greater loss in the 2009 crop year due to disaster.
    (c) Only producers who have a share in a farm located in a disaster 
county (a county that is the primary county that is the subject of a 
Secretarial disaster designation for 2009 crop year due to excessive 
moisture and related conditions, as determined by FSA) are eligible for 
CAP benefits.


Sec.  760.702  Definitions.

    The following definitions apply to CAP. The definitions in parts 
718, 760, and 1400 of this title also apply, except where they conflict 
with the definitions in this section.
    Acceptable production records means verifiable or reliable 
production records deemed acceptable by FSA.
    Application means the CAP application form.
    Application period means the 45-day period established by the 
Deputy Administrator for producers on farms in disaster counties to 
apply for CAP that ends December 9, 2010.
    Approved yield means the amount of production per acre, computed in 
accordance with FCIC's Actual Production History (APH) Program at part 
400, subpart G of this title or, for crops not included under part 400, 
subpart G of this title, the yield used to determine the guarantee. For 
crops covered under NAP, the approved yield is established according to 
part 1437 of this title.
    Considered planted means acreage approved as prevented planted or 
failed in accordance with Sec.  718.103 of this chapter.
    Crop means the reported or determined 2009 crop year planted and 
considered planted acres of long grain rice, medium or short grain 
rice, upland cotton, soybean, or sweet potatoes as reflected on 2009 
crop year form FSA-578, Report of Acreage, for a producer

[[Page 65429]]

in a disaster county as of October 22, 2010. Subsequent crops, 
replacement crops, reseeded crops, and replanted crops are not eligible 
crops under this part and no revision of the Report of Acreage that 
would increase an eligibility for payment will be permitted to produce 
that effect.
    Crop year means for 2009:
    (1) For insurable crops, the crop year as defined according to the 
applicable crop insurance policy;
    (2) For NAP covered crops, the crop year as provided in part 1437 
of this title.
    Disaster means excessive moisture or related condition, resulting 
from any of the following: flood, flash flooding, excessive rain, 
moisture, humidity, severe storms, thunderstorms, ground saturation or 
standing water, hail, winter storms, ice storms, snow, blizzard, 
hurricane, typhoons, tropical storms, and cold wet weather. A disaster 
does not include brownouts or power failures.
    Disaster county means a county included in the geographic area 
covered by a qualifying natural disaster designation under section 
321(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 
1961(a)). For CAP, the term ``disaster county'' is limited to those 
primary counties declared a disaster by the Secretary for excessive 
moisture or a related condition, which are limited to designations 
based on any of the following: flood, flash flooding, excessive rain, 
moisture, humidity, severe storms, thunderstorms, ground saturation or 
standing water, hail, winter storms, ice storms, snow, blizzard, 
hurricane, typhoons, tropical storms, and cold wet weather.
    Expected production means, for a producer on a farm who attempts to 
determine what the producer might produce for an eligible crop on a 
farm, the historic yield multiplied by the producer's share of planted 
and considered planted acres of the crop for the farm. Expected 
production may be used to assist producers in determining whether the 
producer has a crop or crops that suffered a qualifying loss of five 
percent and to determine whether that crop is eligible for CAP 
benefits.
    Historic yield means, for a producer on a farm, the higher of the 
county average yield or the producer's approved yields for eligible 
crops on the farm.
    (1) An insured producer's yield will be the higher of the county 
average yield listed or the approved federal crop insurance APH, for 
the disaster year.
    (2) A NAP producer's yield will be the higher of the county average 
yield or NAP approved yield for the disaster year.
    Replacement crop means the planting or approved prevented planting 
of any crop for harvest following the failed planting or prevented 
planting of a crop of long grain rice, medium or short grain rice, 
upland cotton, soybeans, or sweet potatoes not in a recognized double-
cropping sequence. Replacement crops are not eligible for CAP.
    Reseeded or replanted crop means the second planting of a crop of 
long grain rice, medium or short grain rice, upland cotton, soybeans, 
or sweet potatoes on the same acreage after the first planting of that 
same crop that failed.


Sec.  760.703  Producer eligibility requirements.

    (a) A producer must meet all of the requirements in this subpart to 
be eligible for a CAP payment.
    (b) To be eligible, a producer must be an individual or entity who 
is entitled to an ownership share of an eligible crop and who has the 
production and market risks associated with the agricultural production 
of the crop on a farm. An eligible producer must be a:
    (1) Citizen of the United States;
    (2) Resident alien, which for purposes of this subpart means 
``lawful alien'' as defined in 7 CFR part 1400;
    (3) Partnership of citizens of the United States; or
    (4) Corporation, limited liability corporation, or other farm 
organizational structure organized under State law.
    (c) To be eligible, a producer must have:
    (1) Produced a 2009 crop year planted or considered planted long 
grain rice, medium or short grain rice, upland cotton, soybean, or 
sweet potato crop in a 2009 eligible disaster county, and
    (2) Suffered a five percent or greater loss in an eligible disaster 
county in 2009. A list of the disaster counties for CAP is available on 
the FSA Web site and at FSA county offices.


Sec.  760.704  Time and method of application.

    (a) To request a CAP payment, the producer must submit a CAP 
application on the form designated by FSA to the FSA county office 
responsible for administration of the farm.
    (b) Producers submitting an application for a crop must certify 
that they suffered a five percent or greater loss of the crop on the 
farm in a disaster county and that they have documentation to support 
that certification as required in Sec.  760.713.
    (c) Once submitted by a producer, the application is considered to 
contain information and certifications of and pertaining to the 
producer's crop and farm regardless of who entered the information on 
the application.
    (d) Producers requesting benefits under CAP must certify the 
accuracy and truthfulness of the information provided in the 
application as well as with any documentation that may be provided with 
the application or documentation that will be provided to FSA in 
substantiation of the application. All certifications and information 
are subject to verification by FSA.
    (e) Producers applying for CAP must certify that they have an 
eligible ownership share interest in the 2009 crop acreage that 
sustained a five percent or greater loss. The determination and 
certification by a producer that a crop suffered the requisite five 
percent or greater farm crop loss is the expected quantity of 
production of the crop less the actual production of the crop.
    (f) In the event that the producer does not submit documentation in 
response to any request of FSA to support the producer's application or 
documentation furnished does not show a crop loss of at least five 
percent as claimed, the application for that crop will be disapproved 
in its entirety. For quantity losses, producers need to apply a 
standard similar to the historic yield provisions used under previous 
ad hoc disaster programs. Those provisions provided that a historic 
yield was the higher of a county average yield or a producer's approved 
yield. Thus, if an applicant is determining whether a farm has a crop 
that suffered a loss of five percent or greater on the farm's planted 
and considered planted acreage, the applicant could compare the amount 
successfully produced in 2009 from those planted and considered planted 
acres to what the participant expected to produce from that acreage 
using either the county average yield (which may be obtained from FSA 
by request) or based on analysis of approved actual production history 
yields that may exist for producers of the crop on the farm.
    (g) Unless otherwise determined necessary by FSA, producers will 
not be required to submit documentation of farm crop production or loss 
at time of application. FSA's decision not to require proof, 
documentation, or evidence in support of any application at time of 
application is not to be construed as a determination of a producer's 
eligibility.
    (h) Producers who apply are required to retain documentation in 
support of their application for three years after the date of 
application in accordance with Sec.  760.713.

[[Page 65430]]

    (i) The application submitted in accordance with this section is 
not considered valid and complete for issuance of payment under this 
part unless FSA determines all the applicable eligibility provisions 
have been satisfied and the producer has submitted all the required 
forms. In addition to the completed, certified application form, if the 
information for the following forms or certifications is not on file in 
the FSA county office or is not current for 2009, the producer must 
also submit:
    (1) Farm operating plan for individual or legal entity;
    (2) Average adjusted gross income statement for 2009; and
    (3) Highly erodible land conservation (HELC) and wetland 
conservation certification.
    (j) Application approval and payment by FSA does not relieve a 
producer from having to submit any form, records, or documentation 
required, but not filed at the time of application or payment, 
according to paragraph (h) of this section.


Sec.  760.705  Payment rates and calculation of payments.

    (a) CAP payments will be calculated by multiplying the total number 
of reported or determined acres of an eligible crop by the per acre 
payment rate for that crop. Payment rates are as follows:
    (1) Long grain rice, $31.93 per acre;
    (2) Medium or short grain rice, $52.46 per acre;
    (3) Upland cotton, $17.70 per acre;
    (4) Soybeans, $15.62 per acre; and
    (5) Sweet potatoes, $155.41 per acre.
    (b) Payments will be calculated based on the 2009 crop year 
reported or determined planted or considered planted acres of an 
eligible crop on a farm in a disaster county as reflected on a form 
FSA-578, Report of Acreage, on file in FSA as of October 22, 2010.


Sec.  760.706  Availability of funds.

    (a) Payments specified in this subpart are subject to the 
availability of funds. The total available program funds are $550 
million. In order to keep payments within available funds, the Deputy 
Administrator may pro-rate payments, to the extent the Deputy 
Administrator determines that necessary.
    (b) Funds for CAP are being made available only for the 2009 crop 
year reported and determined eligible crop acreage in disaster counties 
as reflected on a form FSA-578, Report of Acreage, as of October 22, 
2010.


Sec.  760.707  Proof of loss.

    (a) All certifications, applications, and documentation are subject 
to spot check and verification by FSA. Producers must submit 
documentation to FSA if and when FSA requests documentation to 
substantiate any certified application.
    (b) Producers are responsible for retaining or providing, when 
required, verifiable or reliable production or loss records available 
for the crop. Producers are also responsible for summarizing all the 
production or loss evidence and providing the information in a manner 
that can be understood by the county committee.
    (c) Any producer receiving payment under this subpart agrees to 
maintain any books, records, and accounts supporting any information or 
certification made according to this part for 3 years after the end of 
the year following application.
    (d) Producers receiving payments or any other person who furnishes 
such information to FSA must permit FSA or authorized representatives 
of USDA and the General Accounting Office during regular business hours 
to inspect, examine, and to allow such persons to make copies of such 
books, records or other items for the purpose of confirming the 
accuracy of the information provided by the producer.


Sec.  760.708  Miscellaneous provisions and limitations.

    (a) A person ineligible under Sec.  1437.15(c) of this title 
concerning violations of the Noninsured Crop Disaster Assistance 
Program for the 2009 crop year is ineligible for benefits under this 
subpart.
    (b) A person ineligible under Sec.  400.458 of this title for the 
2009 crop year concerning violations of crop insurance regulations is 
ineligible for CAP.
    (c) In the event that any request for CAP payment resulted from 
erroneous information or a miscalculation, the payment will be 
recalculated and the producer must refund any excess to FSA with 
interest to be calculated from the date of the disbursement to the 
producer. If for whatever reason the producer signing a CAP application 
overstates the loss level of the crop when the actual loss level 
determined by FSA for the crop is less than the level claimed, or where 
the CAP payment would exceed the producer's actual loss, the 
application will be disapproved for the crop and the full CAP payment 
for that crop will be required to be refunded with interest from date 
of disbursement. The CAP payment cannot exceed the producer's actual 
loss.
    (d) The liability of anyone for any penalty or sanction under or in 
connection with this subpart, or for any refund to FSA or related 
charge is in addition to any other liability of such person under any 
civil or criminal fraud statute or any other provision of law 
including, but not limited to: 18 U.S.C. 286, 287, 371, 641, 651, 1001, 
and 1014; 15 U.S.C. 714; and 31 U.S.C. 3729.
    (e) The regulations in parts 11 and 780 of this title apply to 
determinations under this subpart.
    (f) Any payment to any person under this subpart will be made 
without regard to questions of title under State law and without regard 
to any claim or lien against the crop, or its proceeds.
    (g) Any payment made under this subpart will be considered farm 
revenue for 2009 for the Supplemental Revenue Assistance Payments 
Program.
    (h) The average AGI limitation provisions in part 1400 of this 
title relating to limits on payments for persons or legal entities, 
excluding joint ventures and general partnerships, with certain levels 
of average adjusted gross income (AGI) apply to each applicant for CAP. 
Specifically, a person or legal entity with an average adjusted gross 
nonfarm income, as defined in Sec.  1404.3 of this title, that exceeds 
$500,000 is not eligible to receive CAP payments.
    (i) No person or legal entity, excluding a joint venture or general 
partnership, as determined by the rules in part 1400 of this title may 
receive, directly or indirectly, more than $100,000 in payments under 
this subpart.
    (j) The direct attribution provisions in part 1400 of this title 
apply to CAP. Under those rules, any payment to any legal entity will 
also be considered for payment limitation purposes to be a payment to 
persons or legal entities with an interest in the legal entity or in a 
sub-entity. If any such interested person or legal entity is over the 
payment limitation because of direct payment or their indirect 
interests or a combination thereof, then the payment to the actual 
payee will be reduced commensurate with the amount of the interest of 
the interested person in the payee. Likewise, by the same method, if 
anyone with a direct or indirect interest in a legal entity or sub-
entity of a payee entity exceeds the AGI levels that would allow a 
producer to directly receive a CAP payment, then the payment to the 
actual payee will be reduced commensurately with that interest. For 
CAP, unless otherwise specified in part 1400 of this title, the AGI 
amount will be that person's or legal entity's average AGI for the 
three taxable years that precede the 2008 taxable year (that is 2005, 
2006, and 2007).
    (k) For the purposes of the effect of lien on eligibility for 
Federal programs (28 U.S.C. 3201(e)), FSA waives the

[[Page 65431]]

restriction on receipt of funds under CAP but only as to beneficiaries 
who, as a condition of such waiver, agree to apply the CAP payments to 
reduce the amount of the judgment lien.
    (l) For CAP, producers are either eligible or ineligible. 
Therefore, the provisions of Sec.  718.304 of this chapter, ``Failure 
to Fully Comply,'' do not apply to this subpart.
    (m) The regulations in subpart B apply to CAP. In addition to those 
regulations that specifically include subpart H or apply to this part, 
the following sections specifically apply to this subpart: Sec. Sec.  
760.113(a), 760.114, and 760.116(a).

    Signed in Washington, DC, on October 19, 2010.
Carolyn B. Cooksie,
Administrator, Farm Service Agency.
[FR Doc. 2010-26869 Filed 10-22-10; 8:45 am]
BILLING CODE 3410-05-P


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