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  <AMDDATE>Dec. 23, 2004</AMDDATE>
  <FMTR>
    <TITLEPG>
      <CODE>CODE OF FEDERAL REGULATIONS</CODE>
      <PRTPAGE P="1"/>
      <TITLENUM>7</TITLENUM>
      <PARTS>Parts 700 to 899</PARTS>
      <REVISED>Revised as of January 1, 2005</REVISED>
      <SUBJECT>Agriculture</SUBJECT>
      <CONTAINS>Containing a codification of documents of general applicability and future effect</CONTAINS>
      <DATE>As of January 1, 2005</DATE>
      <ANCIL>With Ancillaries</ANCIL>
      <PUB>
        <P>Published by:</P>
        <P>Office of the Federal Register</P>
        <P>National Archives and Records</P>
        <P>Administration</P>
      </PUB>
      <SPECED>A Special Edition of the Federal Register</SPECED>
    </TITLEPG>
    <BTITLE>
      <PRTPAGE P="?ii"/>
      <HD SOURCE="HED">U.S. GOVERNMENT OFFICIAL EDITION NOTICE</HD>
      <HD SOURCE="HED">Legal Status and Use of Seals and Logos</HD>
      <GPH DEEP="54" HTYPE="LEFT" SPAN="1">
        <GID>e:\seals\archives.ai</GID>
      </GPH>
      <P>The seal of the National Archives and Records Administration (NARA) authenticates the Code of Federal Regulations (CFR) as the official codification of Federal regulations established under the Federal Register Act. Under the provisions of 44 U.S.C. 1507, the contents of the CFR, a special edition of the Federal Register, shall be judicially noticed.  The CFR is prima facie evidence of the original documents published in the Federal Register (44 U.S.C. 1510).</P>
      <P>It is prohibited to use NARA's official seal and the stylized Code of Federal Regulations logo on any republication of this material without the express, written permission of the Archivist of the United States or the Archivist's designee.  Any person using NARA's official seals and logos in a manner inconsistent with the provisions of 36 CFR part 1200 is subject to the penalties specified in 18 U.S.C. 506, 701, and 1017.</P>
      <HD SOURCE="HED">Use of ISBN Prefix</HD>
      <P>This is the Official U.S. Government edition of this publication and is herein identified to certify its authenticity.  Use of the 0--16 ISBN prefix is for U.S. Government Printing Office Official Editions only.  The Superintendent of Documents of the U.S. Government Printing Office requests that any reprinted edition clearly be labeled as a copy of the authentic work with a new ISBN.</P>
      <GPO/>
      <GPH DEEP="18" HTYPE="LEFT" SPAN="1">
        <GID>e:\seals\gpologo.eps</GID>
      </GPH>
      <P>U . S . G O V E R N M E N T P R I N T I N G O F F I C E</P>
      <P>U.S. Superintendent of Documents • Washington, DC 20402-0001</P>
      <P>http://bookstore.gpo.gov</P>
      <P>Phone: toll-free (866) 512-1800; DC area (202) 512-1800</P>
    </BTITLE>
    <TOC>
      <PRTPAGE P="iii"/>
      <HD SOURCE="HED">Table of Contents</HD>
      <PGHD>Page</PGHD>
      <EXPL>
        <SUBJECT>Explanation</SUBJECT>
        <PG>v</PG>
      </EXPL>
      <TITLENO>
        <HD SOURCE="HED">Title 7:</HD>
        <SUBTI>
          <HD SOURCE="HED">Subtitle B—Regulations of the Department of Agriculture (Continued)</HD>
        </SUBTI>
        <CHAPTI>
          <SUBJECT>Chapter VII—Farm Service Agency, Department of Agriculture</SUBJECT>
          <PG>5</PG>
        </CHAPTI>
        <CHAPTI>
          <SUBJECT>Chapter VIII—Grain Inspection, Packers and Stockyard Administration (Federal Grain Inspection Service), Department of Agriculture</SUBJECT>
          <PG>341</PG>
        </CHAPTI>
      </TITLENO>
      <FAIDS>
        <HD SOURCE="HED">Finding Aids:</HD>
        <SUBJECT>Material Approved for Incorporation by Reference</SUBJECT>
        <PG>495</PG>
        <SUBJECT>Table of CFR Titles and Chapters</SUBJECT>
        <PG>497</PG>
        <SUBJECT>Alphabetical List of Agencies Appearing in the CFR</SUBJECT>
        <PG>515</PG>
        <SUBJECT>List of CFR Sections Affected</SUBJECT>
        <PG>525</PG>
      </FAIDS>
    </TOC>
    <CITE>
      <PRTPAGE P="iv"/>
      <P>Cite this Code:<E T="01">CFR</E>
      </P>

      <CITEP>To cite the regulations in this volume use title, part and section number. Thus, <E T="01">7 CFR 700.1</E> refers to title 7, part 700, section 1.</CITEP>
    </CITE>
    <EXPLA>
      <PRTPAGE P="v"/>
      <HD SOURCE="HED">Explanation</HD>
      <P>The Code of Federal Regulations is a codification of the general and permanent rules published in the Federal Register by the Executive departments and agencies of the Federal Government. The Code is divided into 50 titles which represent broad areas subject to Federal regulation. Each title is divided into chapters which usually bear the name of the issuing agency. Each chapter is further subdivided into parts covering specific regulatory areas.</P>
      <P>Each volume of the Code is revised at least once each calendar year and issued on a quarterly basis approximately as follows:</P>
      <IPAR>
        <P SOURCE="P1">Title 1 through Title 16</P>
        <STUB>as of January 1</STUB>
        <P SOURCE="P1">Title 17 through Title 27</P>
        <STUB>as of April 1</STUB>
        <P SOURCE="P1">Title 28 through Title 41</P>
        <STUB>as of July 1</STUB>
        <P SOURCE="P1">Title 42 through Title 50</P>
        <STUB>as of October 1</STUB>
      </IPAR>
      <P>The appropriate revision date is printed on the cover of each volume.</P>
      <SIDEHED>
        <HD SOURCE="HED">LEGAL STATUS</HD>
        <P>The contents of the Federal Register are required to be judicially noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie evidence of the text of the original documents (44 U.S.C. 1510).</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">HOW TO USE THE CODE OF FEDERAL REGULATIONS</HD>
        <P>The Code of Federal Regulations is kept up to date by the individual issues of the Federal Register. These two publications must be used together to determine the latest version of any given rule.</P>
        <P>To determine whether a Code volume has been amended since its revision date (in this case, January 1, 2005), consult the “List of CFR Sections Affected (LSA),” which is issued monthly, and the “Cumulative List of Parts Affected,” which appears in the Reader Aids section of the daily Federal Register. These two lists will identify the Federal Register page number of the latest amendment of any given rule.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">EFFECTIVE AND EXPIRATION DATES</HD>
        <P>Each volume of the Code contains amendments published in the Federal Register since the last revision of that volume of the Code. Source citations for the regulations are referred to by volume number and page number of the Federal Register and date of publication. Publication dates and effective dates are usually not the same and care must be exercised by the user in determining the actual effective date. In instances where the effective date is beyond the cut-off date for the Code a note has been inserted to reflect the future effective date. In those instances where a regulation published in the Federal Register states a date certain for expiration, an appropriate note will be inserted following the text.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">OMB CONTROL NUMBERS</HD>

        <P>The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires Federal agencies to display an OMB control number with their information collection request. <PRTPAGE P="vi"/>Many agencies have begun publishing numerous OMB control numbers as amendments to existing regulations in the CFR. These OMB numbers are placed as close as possible to the applicable recordkeeping or reporting requirements.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">OBSOLETE PROVISIONS</HD>
        <P>Provisions that become obsolete before the revision date stated on the cover of each volume are not carried. Code users may find the text of provisions in effect on a given date in the past by using the appropriate numerical list of sections affected. For the period before January 1, 2001, consult either the List of CFR Sections Affected, 1949-1963, 1964-1972, 1973-1985, or 1986-2000, published in 11 separate volumes. For the period beginning January 1, 2001, a “List of CFR Sections Affected” is published at the end of each CFR volume.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">INCORPORATION BY REFERENCE</HD>
        <P>
          <E T="03">What is incorporation by reference?</E> Incorporation by reference was established by statute and allows Federal agencies to meet the requirement to publish regulations in the Federal Register by referring to materials already published elsewhere. For an incorporation to be valid, the Director of the Federal Register must approve it. The legal effect of incorporation by reference is that the material is treated as if it were published in full in the Federal Register (5 U.S.C. 552(a)). This material, like any other properly issued regulation, has the force of law.</P>
        <P>
          <E T="03">What is a proper incorporation by reference?</E> The Director of the Federal Register will approve an incorporation by reference only when the requirements of 1 CFR part 51 are met. Some of the elements on which approval is based are:</P>
        <P>(a) The incorporation will substantially reduce the volume of material published in the Federal Register.</P>
        <P>(b) The matter incorporated is in fact available to the extent necessary to afford fairness and uniformity in the administrative process.</P>
        <P>(c) The incorporating document is drafted and submitted for publication in accordance with 1 CFR part 51.</P>
        <P>Properly approved incorporations by reference in this volume are listed in the Finding Aids at the end of this volume.</P>
        <P>
          <E T="03">What if the material incorporated by reference cannot be found?</E> If you have any problem locating or obtaining a copy of material listed in the Finding Aids of this volume as an approved incorporation by reference, please contact the agency that issued the regulation containing that incorporation. If, after contacting the agency, you find the material is not available, please notify the Director of the Federal Register, National Archives and Records Administration, Washington DC 20408, or call 202-741-6010.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">CFR INDEXES AND TABULAR GUIDES</HD>

        <P>A subject index to the Code of Federal Regulations is contained in a separate volume, revised annually as of January 1, entitled CFR <E T="04">Index and Finding Aids.</E> This volume contains the Parallel Table of Statutory Authorities and Agency Rules (Table I). A list of CFR titles, chapters, and parts and an alphabetical list of agencies publishing in the CFR are also included in this volume.</P>
        <P>An index to the text of “Title 3—The President” is carried within that volume.</P>
        <P>The Federal Register Index is issued monthly in cumulative form. This index is based on a consolidation of the “Contents” entries in the daily Federal Register.</P>
        <P>A List of CFR Sections Affected (LSA) is published monthly, keyed to the revision dates of the 50 CFR titles.</P>
      </SIDEHED>
      <SIDEHED>
        <PRTPAGE P="vii"/>
        <HD SOURCE="HED">REPUBLICATION OF MATERIAL</HD>
        <P>There are no restrictions on the republication of textual material appearing in the Code of Federal Regulations.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">INQUIRIES</HD>
        <P>For a legal interpretation or explanation of any regulation in this volume, contact the issuing agency. The issuing agency's name appears at the top of odd-numbered pages.</P>
        <P>For inquiries concerning CFR reference assistance, call 202-741-6000 or write to the Director, Office of the Federal Register, National Archives and Records Administration, Washington, DC 20408 or e-mail fedreg.info@nara.gov.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">SALES</HD>
        <P>The Government Printing Office (GPO) processes all sales and distribution of the CFR. For payment by credit card, call toll-free, 866-512-1800 or DC area, 202-512-1800, M-F, 8 a.m. to 4 p.m. e.s.t. or fax your order to 202-512-2250, 24 hours a day. For payment by check, write to the Superintendent of Documents, Attn: New Orders, P.O. Box 371954, Pittsburgh, PA 15250-7954. For GPO Customer Service call 202-512-1803.</P>
      </SIDEHED>
      <SIDEHED>
        <HD SOURCE="HED">ELECTRONIC SERVICES</HD>
        <P>The full text of the Code of Federal Regulations, the LSA (List of CFR Sections Affected), The United States Government Manual, the Federal Register, Public Laws, Public Papers, Weekly Compilation of Presidential Documents and the Privacy Act Compilation are available in electronic format at www.gpoaccess.gov/nara (“GPO Access”). For more information, contact Electronic Information Dissemination Services, U.S. Government Printing Office. Phone 202-512-1530, or 888-293-6498 (toll-free). E-mail, gpoaccess@gpo.gov.</P>
        <P>The Office of the Federal Register also offers a free service on the National Archives and Records Administration's (NARA) World Wide Web site for public law numbers, Federal Register finding aids, and related information.  Connect to NARA's web site at www.archives.gov/federal_register. The NARA site also contains links to GPO Access.</P>
      </SIDEHED>
      <SIG>
        <NAME>Raymond A. Mosley,</NAME>
        <POSITION>Director,</POSITION>
        <OFFICE>Office of the Federal Register.</OFFICE>
      </SIG>
      <DATE>January 1, 2005.</DATE>
    </EXPLA>
    <THISTITL>
      <PRTPAGE P="ix"/>
      <HD SOURCE="HED">THIS TITLE</HD>
      <P>Title 7—<E T="04">Agriculture</E> is composed of fifteen volumes. The parts in these volumes are arranged in the following order: parts 1-26, 27-52, 53-209, 210-299, 300-399, 400-699, 700-899, 900-999, 1000-1199, 1200-1599, 1600-1899, 1900-1939, 1940-1949, 1950-1999, and part 2000 to end. The contents of these volumes represent all current regulations codified under this title of the CFR as of January 1, 2005.</P>
      <P>The Food and Nutrition Service current regulations in the volume containing parts 210-299, include the Child Nutrition Programs and the Food Stamp Program. The regulations of the Federal Crop Insurance Corporation are found in the volume containing parts 400-699.</P>
      <P>All marketing agreements and orders for fruits, vegetables and nuts appear in the one volume containing parts 900-999. All marketing agreements and orders for milk appear in the volume containing parts 1000-1199. Part 900—General Regulations is carried as a note in the volume containing parts 1000-1199, as a convenience to the user.</P>
      <P>For this volume, Robert J. Sheehan was Chief Editor. The Code of Federal Regulations publication program is under the direction of Frances D. McDonald, assisted by Alomha S. Morris.</P>
    </THISTITL>
  </FMTR>
  <TITLE>
    <LRH>7 CFR Ch. VII (1-1-05 Edition)</LRH>
    <RRH>Farm Service Agency, USDA</RRH>
    <CFRTITLE>
      <TITLEHD>
        <PRTPAGE P="1"/>
        <HD SOURCE="HED">Title 7—Agriculture</HD>
        <P>(This book contains parts 700 to 899)</P>
      </TITLEHD>
      <CFRTOC>
        <SUBTI>
          <HD SOURCE="HED">SUBTITLE B—<E T="04">Regulations of the Department of Agriculture (Continued)</E>
          </HD>
        </SUBTI>
        <PTHD>Part</PTHD>
        <CHAPTI>
          <SUBJECT>
            <E T="04">chapter vii</E>—Farm Service Agency, Department of Agriculture</SUBJECT>
          <PG>700</PG>
        </CHAPTI>
        <CHAPTI>
          <SUBJECT>
            <E T="04">chapter viii</E>—Grain Inspection, Packers and Stockyard Administration (Federal Grain Inspection Service), Department of Agriculture</SUBJECT>
          <PG>800</PG>
        </CHAPTI>
      </CFRTOC>
    </CFRTITLE>
    <SUBTITLE>
      <PRTPAGE P="3"/>
      <HD SOURCE="HED">Subtitle B—Regulations of the Department of Agriculture (Continued)</HD>
      <CHAPTER>
        <TOC>
          <TOCHD>
            <PRTPAGE P="5"/>
            <HD SOURCE="HED">CHAPTER VII—FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE</HD>
          </TOCHD>
          <EDNOTE>
            <HD SOURCE="HED">Editorial Note:</HD>
            <P>1. Nomenclature changes to chapter VII appear at 59 FR 60299, Nov. 23, 1994, as corrected at 59 FR 66438, Dec. 27, 1994, and at 60 FR 64297, Dec. 15, 1995.</P>
          </EDNOTE>
          <SUBCHAP>
            <HD SOURCE="HED">SUBCHAPTER A—AGRICULTURAL CONSERVATION PROGRAM</HD>
          </SUBCHAP>
          <PTHD>Part</PTHD>
          <PGHD>Page</PGHD>
          <CHAPTI>
            <PT>700</PT>
            <SUBJECT>Experimental Rural Clean Water Program</SUBJECT>
            <PG>7</PG>
            <PT>701</PT>
            <SUBJECT>Emergency Conservation Program and certain related programs previously administered under this part</SUBJECT>
            <PG>21</PG>
            <PT>702</PT>
            <SUBJECT>Colorado River Basin Salinity (CRSC) Control Program</SUBJECT>
            <PG>29</PG>
            <PT>707</PT>
            <SUBJECT>Payments due persons who have died, disappeared, or have been declared incompetent</SUBJECT>
            <PG>38</PG>
            <PT>708</PT>
            <SUBJECT>Record retention requirements—all programs</SUBJECT>
            <PG>41</PG>
          </CHAPTI>
          <SUBCHAP>
            <HD SOURCE="HED">SUBCHAPTER B—FARM MARKETING QUOTAS, ACREAGE ALLOTMENTS, AND PRODUCTION ADJUSTMENT</HD>
          </SUBCHAP>
          <CHAPTI>
            <PT>711</PT>
            <SUBJECT>Marketing quota review regulations</SUBJECT>
            <PG>42</PG>
            <PT>714</PT>
            <SUBJECT>Refunds of penalties erroneously, illegally, or wrongfully collected</SUBJECT>
            <PG>51</PG>
            <PT>717</PT>
            <SUBJECT>Holding of referenda</SUBJECT>
            <PG>54</PG>
            <PT>718</PT>
            <SUBJECT>Provisions applicable to multiple programs</SUBJECT>
            <PG>67</PG>
            <PT>723</PT>
            <SUBJECT>Tobacco</SUBJECT>
            <PG>87</PG>
            <PT>729</PT>
            <SUBJECT>Peanuts marketing quotas</SUBJECT>
            <PG>174</PG>
          </CHAPTI>
          <SUBCHAP>
            <HD SOURCE="HED">SUBCHAPTER C—REGULATIONS FOR WAREHOUSES</HD>
          </SUBCHAP>
          <CHAPTI>
            <PT>735</PT>
            <SUBJECT>Regulations for the United States Warehouse Act</SUBJECT>
            <PG>175</PG>
            <PT>743</PT>
            <RESERVED>[Reserved]</RESERVED>
          </CHAPTI>
          <SUBCHAP>
            <HD SOURCE="HED">SUBCHAPTER D—SPECIAL PROGRAMS</HD>
          </SUBCHAP>
          <CHAPTI>
            <PT>750</PT>
            <SUBJECT>Soil Bank [Note]</SUBJECT>
            <PG>189</PG>
            <PT>752</PT>
            <SUBJECT>Water Bank Program</SUBJECT>
            <PG>189</PG>
            <PT>755</PT>
            <SUBJECT>Regional programs</SUBJECT>
            <PG>196</PG>
            <PT>760</PT>
            <SUBJECT>Indemnity payment programs</SUBJECT>
            <PG>204</PG>
            <PT>761</PT>
            <SUBJECT>General and administrative</SUBJECT>
            <PG>212</PG>
            <PT>762</PT>
            <SUBJECT>Guaranteed farm loans</SUBJECT>
            <PG>213<PRTPAGE P="6"/>
            </PG>
            <PT>764</PT>
            <SUBJECT>Emergency farm loans</SUBJECT>
            <PG>256</PG>
            <PT>770</PT>
            <SUBJECT>Indian tribal land aquisition loans</SUBJECT>
            <PG>266</PG>
            <PT>771</PT>
            <SUBJECT>Boll Weevil Era Dication Loan Program</SUBJECT>
            <PG>270</PG>
            <PT>772</PT>
            <SUBJECT>Servicing minor program loans</SUBJECT>
            <PG>273</PG>
            <PT>773</PT>
            <SUBJECT>Special Apple Loan Program</SUBJECT>
            <PG>278</PG>
            <PT>774</PT>
            <SUBJECT>Emergency Loan for Seed Producers Program</SUBJECT>
            <PG>283</PG>
            <PT>780</PT>
            <SUBJECT>Appeal regulations</SUBJECT>
            <PG>285</PG>
            <PT>781</PT>
            <SUBJECT>Disclosure of foreign investment in agricultural land</SUBJECT>
            <PG>288</PG>
            <PT>782</PT>
            <SUBJECT>End-Use Certificate Program</SUBJECT>
            <PG>294</PG>
            <PT>783</PT>
            <SUBJECT>Tree Assistance Program</SUBJECT>
            <PG>300</PG>
            <PT>784</PT>
            <SUBJECT>2004 ewe lamb replacement and retention payment program</SUBJECT>
            <PG>303</PG>
            <PT>785</PT>
            <SUBJECT>Certified state mediation program</SUBJECT>
            <PG>308</PG>
          </CHAPTI>
          <SUBCHAP>
            <HD SOURCE="HED">SUBCHAPTER E—PROVISIONS COMMON TO MORE THAN ONE PROGRAM</HD>
          </SUBCHAP>
          <CHAPTI>
            <PT>792</PT>
            <SUBJECT>Debt settlement policies and procedures</SUBJECT>
            <PG>315</PG>
            <PT>795</PT>
            <SUBJECT>Payment limitation</SUBJECT>
            <PG>324</PG>
          </CHAPTI>
          <SUBCHAP>
            <HD SOURCE="HED">SUBCHAPTER F—PUBLIC RECORDS</HD>
          </SUBCHAP>
          <CHAPTI>
            <PT>798</PT>
            <SUBJECT>Availability of information to the public</SUBJECT>
            <PG>331</PG>
          </CHAPTI>
          <SUBCHAP>
            <HD SOURCE="HED">SUBCHAPTER G—ENVIRONMENTAL PROTECTION</HD>
          </SUBCHAP>
          <CHAPTI>
            <PT>799</PT>
            <SUBJECT>Environmental quality and related environmental concerns—compliance with the National Environmental Policy Act</SUBJECT>
            <PG>333</PG>
          </CHAPTI>
        </TOC>
        <SUBCHAP TYPE="N">
          <PRTPAGE P="7"/>
          <HD SOURCE="HED">SUBCHAPTER A—AGRICULTURAL CONSERVATION PROGRAM</HD>
          <PART>
            <EAR>Pt. 700</EAR>
            <HD SOURCE="HED">PART 700—EXPERIMENTAL RURAL CLEAN WATER PROGRAM</HD>
            <CONTENTS>
              <SUBPART>
                <HD SOURCE="HED">Subpart A—General</HD>
                <SECHD>Sec.</SECHD>
                <SECTNO>700.1</SECTNO>
                <SUBJECT>Purpose and scope.</SUBJECT>
                <SECTNO>700.2</SECTNO>
                <SUBJECT>Objective.</SUBJECT>
                <SECTNO>700.3</SECTNO>
                <SUBJECT>Administration.</SUBJECT>
                <SECTNO>700.4</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <SECTNO>700.5</SECTNO>
                <SUBJECT>Responsibilities.</SUBJECT>
                <SECTNO>700.6</SECTNO>
                <SUBJECT>Officials not precluded from exercising authority.</SUBJECT>
              </SUBPART>
              <SUBPART>
                <HD SOURCE="HED">Subpart B—Project Authorization and Funding</HD>
                <SECTNO>700.10</SECTNO>
                <SUBJECT>Applicability.</SUBJECT>
                <SECTNO>700.11</SECTNO>
                <SUBJECT>Availability of funds.</SUBJECT>
                <SECTNO>700.12</SECTNO>
                <SUBJECT>Eligible project areas.</SUBJECT>
                <SECTNO>700.13</SECTNO>
                <SUBJECT>Project applications.</SUBJECT>
                <SECTNO>700.14</SECTNO>
                <SUBJECT>Review and approval of project applications.</SUBJECT>
                <SECTNO>700.15</SECTNO>
                <SUBJECT>Transfer of funds.</SUBJECT>
                <SECTNO>700.16</SECTNO>
                <SUBJECT>Termination of project funding.</SUBJECT>
              </SUBPART>
              <SUBPART>
                <HD SOURCE="HED">Subpart C—Participant's RCWP Contracts</HD>
                <SECTNO>700.20</SECTNO>
                <SUBJECT>Eligible land.</SUBJECT>
                <SECTNO>700.21</SECTNO>
                <SUBJECT>Eligible person (participant).</SUBJECT>
                <SECTNO>700.22</SECTNO>
                <SUBJECT>Application for assistance.</SUBJECT>
                <SECTNO>700.23</SECTNO>
                <SUBJECT>Water quality plan.</SUBJECT>
                <SECTNO>700.24</SECTNO>
                <SUBJECT>Cost-sharing.</SUBJECT>
                <SECTNO>700.25</SECTNO>
                <SUBJECT>RCWP contract.</SUBJECT>
                <SECTNO>700.26</SECTNO>
                <SUBJECT>Contract modifications.</SUBJECT>
                <SECTNO>700.27</SECTNO>
                <SUBJECT>Cost-share payment.</SUBJECT>
                <SECTNO>700.28</SECTNO>
                <SUBJECT>Appeals.</SUBJECT>
                <SECTNO>700.29</SECTNO>
                <SUBJECT>Contract violations.</SUBJECT>
              </SUBPART>
              <SUBPART>
                <HD SOURCE="HED">Subpart D—Monitoring and Evaluation</HD>
                <SECTNO>700.40</SECTNO>
                <SUBJECT>General program monitoring and evaluation.</SUBJECT>
                <SECTNO>700.41</SECTNO>
                <SUBJECT>Comprehensive USDA/EPA joint project water, quality monitoring, evaluation and analysis.</SUBJECT>
                <SECTNO>700.42</SECTNO>
                <SUBJECT>Program evaluation.</SUBJECT>
                <SECTNO>700.43</SECTNO>
                <SUBJECT>Public benefits when installing BMP's.</SUBJECT>
              </SUBPART>
            </CONTENTS>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>Pub. L. 96-108, 93 Stat. 821, 835.</P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>45 FR 14009, Mar. 4, 1980, unless otherwise noted.</P>
            </SOURCE>
            <SUBPART>
              <HD SOURCE="HED">Subpart A—General</HD>
              <SECTION>
                <SECTNO>§ 700.1</SECTNO>
                <SUBJECT>Purpose and scope.</SUBJECT>
                <P>(a) The purpose of this part is for the U.S. Department of Agriculture (USDA), with certain concurrences by the U.S. Environmental Protection Agency (EPA), to set forth regulations to carry out an experimental Rural Clean Water Program (RCWP) as authorized by the Agriculture, Rural Development and Related Agencies Appropriations Act, fiscal year 1980, Pub. L. 96-108 (hereinafter referred to as the “1980 Appropriations Act”) and subsequent appropriations.</P>
                <P>(b) The RCWP will provide financial and technical assistance to private land owners and operators (participants) having control of agricultural land. The assistance is provided through long-term contracts of 3 to 10 years to install best management practices (BMPs) in approved project areas which have critical water quality problems resulting from agricultural activities. The project area must reflect the water quality priority concerns developed through the established water quality management program process. Participation RCWP is voluntary.</P>
                <P>(c) This is a new USDA program using the experiences under various on-going USDA programs and the established water quality management program of EPA.</P>
                <CITA>[45 FR 14009, Mar. 4, 1980, as amended at 46 FR 29454, June 2, 1981]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.2</SECTNO>
                <SUBJECT>Objective.</SUBJECT>
                <P>The objectives of the RCWP are to:</P>
                <P>(a) Improve impaired water use and quality in the approved project area in the most cost-effective manner possible in keeping with the provision of adequate supplies of food, fiber, and a quality environment.</P>
                <P>(b) Assist agricultural land owners and operators to reduce agricultural nonpoint source water pollutants and to improve water quality in rural areas to meet water quality standards or water quality goals.</P>
                <P>(c) Develop and test programs, policies and procedures for the control of agricultural nonpoint source pollution.</P>
                <CITA>[45 FR 14009, Mar. 4, 1980, as amended at 46 FR 29454, June 2, 1981]</CITA>
              </SECTION>
              <SECTION>
                <PRTPAGE P="8"/>
                <SECTNO>§ 700.3</SECTNO>
                <SUBJECT>Administration.</SUBJECT>
                <P>At the national level, the Secretary of Agriculture will administer the RCWP in consultation with the Administrator, EPA, including EPA's concurrence in the selection of the BMPs, as provided in the 1980 Appropriations Act and subsequent appropriations. Authority to approve projects is reserved to the Secretary. The Secretary of Agriculture hereby delegates responsibility for administration of the program to the Administrator, Farm Service Agency (FSA) and the coordination of technical assistance to the Chief, Soil Conservation Service (SCS). FSA will be assisted by other USDA agencies in accordance with existing authorities.</P>
                <P>(a) A National Rural Clean Water Coordinating Committee (NCC), chaired by the Administrator, FSA, will assist in carrying out the RCWP.</P>
                <P>(b) A State Rural Clean Water Coordinating Committee (SCC) will assist the State ASC Committee in administering the program. The State ASC Committee Chairperson will chair the SCC. Where two or more States are involved in a project area the Deputy Administrator, State and County Operations (DASCO), FSA, shall develop a coordinating process.</P>
                <P>(c) A Local Rural Clean Water Coordinating Committee (LCC) will be established to assure coordination at the project level. The LCC committee will be chaired by the County ASC Committee Chairperson and will assist the County ASC Committee as provided in these regulations and as otherwise developed by the SCC and the LCC. Where two or more counties are involved in a project area, the SCC shall develop a coordination process.</P>
                <CITA>[45 FR 14009, Mar. 4, 1980, as amended at 46 FR 29454, June 2, 1981 59 FR 60299, Nov. 23, 1994]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.4</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <P>(a) <E T="03">Adequate Level of Participation.</E> An adequate level of participation is reached when participants having control of 75 percent (unless a different level is approved by the Administrator, FSA, with the concurrence of the NCC), of the identified critical area(s) or source(s) of the agricultural nonpoint source pollution problem in the project area, are under contract.</P>
                <P>(b) <E T="03">Administrative Services.</E> The administration of the RCWP except for the technical phases as assigned in § 700.5 of these regulations.</P>
                <P>(c) <E T="03">Agricultural Land.</E> That portion(s) of a farm or ranch used to produce: Grains, row crops, seed crops, vegetables, hay, pasture, orchards, vineyards, trees, field grown ornamentals, livestock or other agricultural commodities.</P>
                <P>(d) <E T="03">Agricultural Nonpoint Source Pollution.</E> Pollution originating from diffuse sources, including, but not limited to, land areas and return flows from agricultural lands such as:</P>
                <P>(1) Animal waste areas and land used for livestock and/or crop production, or</P>
                <P>(2) Lands with silviculturally related pollution.</P>
                <P>(3) Concentrated animal feeding operations defined as point sources in 40 CFR 125.1 and 125.51, are not eligible for assistance under RCWP.</P>
                <P>(e) <E T="03">Applicant.</E> A person in an approved project area who applies for RCWP assistance.</P>
                <P>(f) <E T="03">Average Cost.</E> The calculated cost, determined by recent actual local costs and current cost estimates, considered necessary for carrying out BMPs or an identifiable unit thereof.</P>
                <P>(g) <E T="03">Best Management Practice (BMP).</E> A single practice or a system of practices to improve water quality included in the approved RCWP application that reduces or prevents agricultural nonpoint source pollution.</P>
                <P>(h) <E T="03">BMP Costs.</E> The amount of money actually paid or obligated to be paid by the participant for equipment use, materials and services for carrying out BMPs or an identifiable unit of a BMP. Loss of income from crops during the first twelve months following the conversion of productive cropland to permanent vegetative cover or trees may be considered a part of the BMP cost for a project where it is determined that harvesting or grazing restrictions are necessary in order to establish properly the practice and the reimbursement for loss of income is necessary to provide incentives to achieve an adequate level of participation as defined in 7 CFR 700.4(a). If the participant uses personal resources, the cost <PRTPAGE P="9"/>includes the computed value of personal labor, equipment use, and materials.</P>
                <P>(i) <E T="03">BMP Life Span.</E> Each BMP shall have a life span of not less than 5 years unless otherwise approved by the Administrator, FSA.</P>
                <P>(j) <E T="03">Conservation District (CD).</E> A subdivision of a State or territory organized pursuant to the State Soil Conservation District Law, as amended. In some States these are called soil conservation districts, soil and water conservation districts, resource conservation districts, or natural resource districts.</P>
                <P>(k) <E T="03">Contract.</E> The document that includes the water-quality plan and is executed by the participant and approved by the County ASC Committee. Such document evidences the agreement between parties for carrying out BMPs on the participant's land.</P>
                <P>(l) <E T="03">Contract Period.</E> That period of time, 3 to 10 years, established as necessary to implement the BMPs needed to solve the water quality problems in the contract.</P>
                <P>(m) <E T="03">Cost-Share Level.</E> That percentage of the total cost of installing a BMP which is to be borne by the government under the RCWP.</P>
                <P>(n) <E T="03">Cost Share Rate.</E> The amount of money per unit (cubic yard, acre, etc.) to be paid for carrying out BMPs under the RCWP.</P>
                <P>(o) <E T="03">County ASC Committee.</E> The County ASC Committee elected by the farmers/ranchers in the county as provided for under section 8(b) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)).</P>
                <P>(p) <E T="03">Critical Areas or Sources.</E> Those designated areas or sources of agricultural nonpoint source pollutants identified in the project area as having the most significant impact on the impaired use of the receiving waters.</P>
                <P>(q) <E T="03">Direct Costs.</E> The costs that can be specifically identified with the program.</P>
                <P>(r) <E T="03">Farmer/Rancher.</E> An owner and/or operator who has a vested interest in the operation of the farm or ranch.</P>
                <P>(s) <E T="03">Federal Funds Authorized.</E> The total amount of funds authorized to approved projects.</P>
                <P>(t) <E T="03">Fiscal Year.</E> The fiscal year beginning October 1 and ending September 30.</P>
                <P>(u) <E T="03">Identifiable Unit.</E> A part of a BMP that can be clearly identified as a separate component in carrying out BMPs in the water quality plan.</P>
                <P>(v) <E T="03">Implementation.</E> The act of carrying out or executing a water quality plan, including both installation and maintenance of BMPs.</P>
                <P>(w) <E T="03">Maximum Payment Limitation.</E> The total amount of RCWP payments which a participant may receive for the full contract period. The total amount of such payments shall not exceed $50,000.</P>
                <P>(x) <E T="03">Offsite Benefits.</E> Favorable effects of BMPs that occur away from the land of the participant receiving RCWP assistance and which accrue to the public.</P>
                <P>(y) <E T="03">Participant.</E> A land owner and/or operator who is an agricultural producer and applies for and receives assistance under RCWP.</P>
                <P>(z) <E T="03">Participant's Water Quality Plan.</E> The plan that identifies critical agricultural nonpoint sources of pollution, identifies water quality problems and schedules the application of BMPs which contribute to meeting the water quality objectives of the project.</P>
                <P>(aa) <E T="03">Plan of Work.</E> A written strategy for implementing the approved project, outlining the actions needed and to be taken by various USDA, State and local agencies and interested groups.</P>
                <P>(bb) <E T="03">Pooling Agreement.</E> An agreement between two or more participants or ranchers to pool their resources to treat a common critical area or source.</P>
                <P>(cc) <E T="03">Privately-Owned Rural Land.</E> Lands not owned by Federal, State, or local governments that include cropland, pastureland, forest land, rangeland, and other associated lands.</P>
                <P>(dd) <E T="03">Project Area.</E> The geographic determination included in the project application as agreed upon by the SCC and LCC, and approved by the Secretary, utilizing the water quality planning process which identifies agricultural nonpoint source water quality problems.</P>
                <P>(ee) <E T="03">Project Life Span.</E> The maximum total life span of a project shall be not greater than fifteen (15) years from the date RCWP funds are first made available for the project.<PRTPAGE P="10"/>
                </P>
                <P>(ff) <E T="03">RCWP Project.</E> The total system of BMPs, administrative support, institutional arrangements, cost-sharing, technical and community support that are authorized in a RCWP project application.</P>
                <P>(gg) <E T="03">Secretary.</E> The Secretary of the U.S. Department of Agriculture.</P>
                <P>(hh) <E T="03">Silvicultural.</E> The science and art of cultivating (growing and tending) forest crops based on the knowledge of forestry. Silviculture-related pollution is included as agriculture nonpoint source pollution in the RCWP.</P>
                <P>(ii) <E T="03">Standards and Specifications.</E> Requirements that establish the minimum acceptable quality level for planning, designing, installing, and maintaining BMPs.</P>
                <P>(jj) <E T="03">State ASC Committee (STC).</E> The State ASC Committee appointed by the Secretary in accordance with Section 8 b of the Soil Conservation and Domestic Allotment Act, as amended.</P>
                <P>(kk) <E T="03">Technical Assistance.</E> The preparation of the participant's water quality plan, the design, layout and implementation of BMPs to accomplish the purposes of the water quality plan, and water quality monitoring and evaluation.</P>
                <P>(ll) <E T="03">Water Quality Management Program.</E> A Federal-state-local program for addressing and solving point and non-point source pollution problems consistent with national clean water goals. The basic authority for this program is in section 208 of the Federal Water Pollution Control Act, as amended, (Pub. L. 92-500).</P>
                <CITA>[45 FR 14009, Mar. 4, 1980, as amended at 46 FR 29454, June 2, 1981]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.5</SECTNO>
                <SUBJECT>Responsibilities.</SUBJECT>
                <P>(a) <E T="03">The United States Department of Agriculture (USDA) shall:</E>
                </P>
                <P>(1) Administer the RCWP by entering into contracts with land owners and operators to install and maintain BMPs to control agricultural nonpoint source pollution for improved water quality and:</P>
                <P>(i) Consult with EPA in the selection of projects;</P>
                <P>(ii) Obtain concurrence from EPA in approval of BMPs; and</P>
                <P>(iii) Insure an adequate joint USDA/EPA monitoring and evaluation plan is carried out on selected projects.</P>
                <P>(2) Provide technical assistance and share the cost of carrying out BMPs as specified in the contracts.</P>
                <P>(3) Evaluate the overall effectiveness of the program in improving water quality.</P>
                <P>(b) <E T="03">The Environmental Protection Agency (EPA) will:</E>
                </P>
                <P>(1) Participate on the NCC, SCC and LCC.</P>
                <P>(2) Furnish information from the water quality management planning process which can assist in identifying areas with the most critical water quality problems for project applications.</P>
                <P>(3) Participate in the approval of project applications for funding.</P>
                <P>(4) Concur with the Secretary on BMPs recommended by the County and State ASC Committees and approved by the Secretary for funding, or recommended by the Secretary, with concurrence of the Administrator, EPA, and approved by the State and County ASC Committees.</P>
                <P>(5) Assist USDA in evaluating the effectiveness of the program in improving water quality, including concurrence on projects selected for comprehensive monitoring and evaluation and development of the criteria for the comprehensive, joint USDA/EPA water quality monitoring, evaluation, and analysis program.</P>
                <P>(c) <E T="03">The Farm Service Agency shall:</E>
                </P>
                <P>(1) Serve as chairperson of the NCC, SCC and LCC and be responsible for developing and administering the RCWP.</P>
                <P>(2) Provide to the Secretary those project applications recommended for approval, including the recommendations of the NCC.</P>
                <P>(3) Through County FSA Offices, provide the administrative support in all approved RCWP projects, such as accepting applications, preparing and approving contracts, carrying out funds control, issuing cost-share payments, otherwise administering contracts and payments, provide compliance oversight, maintain records and develop reports.</P>

                <P>(4) Enter into agreements with Federal, State and local agencies and others as needed for support to be provided in an approved RCWP project.<PRTPAGE P="11"/>
                </P>
                <P>(5) Through County and Community ASC Committees work with landowners and operators in the project area to encourage participation.</P>
                <P>(6) Develop cost-share rates for installing needed BMPs.</P>
                <P>(7) Assure that RCWP is in addition to and is coordinated with other related programs.</P>
                <P>(8) Provide guidance to State and County ASC Committees and coordinate the Agricultural Conservation Program (ACP), the Forestry Incentives Program (FIP), and related conservation programs, with RCWP.</P>
                <P>(9) Allocate project funds to County ASC Committees in the approved proj-ect areas.</P>
                <P>(10) Designate the State ASC Chairperson where a project area involves a part(s) of two or more States to chair the SCC, for that project.</P>
                <P>(d) <E T="03">The Soil Conservation Service (SCS) shall:</E>
                </P>
                <P>(1) Participate on the NCC, SCC and LCC.</P>
                <P>(2) Coordinate technical assistance and recommend appropriate agency or group to provide technical assistance on a project by project basis.</P>
                <P>(3) Provide technical assistance for the appropriate BMPs.</P>
                <P>(4) Assist the LCC in developing criteria for use by the County ASC Committees and the Conservation Districts in determining priorities of assistance among individual applicants for developing the water quality plan.</P>
                <P>(5) Provide technical assistance in developing and certifying the technical adequacy of the participant's water quality plan.</P>
                <P>(e) <E T="03">The Forest Service (FS) shall:</E>
                </P>
                <P>(1) Participate on the NCC and as appropriate, SCC and LCC.</P>
                <P>(2) Have technical responsibility for forestry.</P>
                <P>(3) Provide technical assistance for appropriate BMPs, by providing technical assistance through the State Forestry Agency (State Forester as appropriate) for planning, applying and maintaining forestry BMPs.</P>
                <P>(4) Participate in the monitoring and evaluation as appropriate.</P>
                <P>(5) As appropriate, assist in developing the water quality plan to assure that the most critical water quality problems are addressed.</P>
                <P>(f) <E T="03">The Science and Education Administration (SEA), through the State and County Extension Services, Appropriate, shall:</E>
                </P>
                <P>(1) Participate on the NCC, SCC and LCC.</P>
                <P>(2) Develop, implement, and coordinate informational and educational programs for agricultural nonpoint source water pollution control.</P>
                <P>(3) Encourage the State and County Extension Services to develop and carry out a comprehensive educational and informational program.</P>
                <P>(4) Provide technical assistance for appropriate BMPs including, but not limited to, fertilizer management, pest management, conservation tillage, and animal waste as appropriate.</P>
                <P>(g) <E T="03">The Economics and Statistics Service (ESS) shall:</E>
                </P>
                <P>(1) Participate on the NCC and as appropriate, SCC and LCC.</P>
                <P>(2) Assist in the economic evaluation of RCWP projects and BMPs.</P>
                <P>(3) Make data available from existing and planned ESS surveys relating to water quality and related matters.</P>
                <P>(4) Conduct socioeconomic research, within ESS authorities and funds, on relevant policy and program issues pertinent to RCWP.</P>
                <P>(5) Assist in the annual program evaluation and be responsible for the economic component of the comprehensive evaluation of selected projects.</P>
                <P>(h) <E T="03">The Farmers Home Administration (FmHA) shall:</E>
                </P>
                <P>(1) Participate on the NCC, SCC and LCC.</P>
                <P>(2) Provide assistance and coordinate their farm loan and grant programs with RCWP.</P>
                <P>(3) Assist in the annual program evaluation.</P>
                <P>(i) <E T="03">The National Rural Clean Water Coordinating Committee (NCC).</E> The NCC is chaired by the Administrator, FSA. Other members of the National Committee are Director, Office of Environmental Quality, the Administrators of, FmHA, and ESS: the Chief of FS, SCS; the Director of SEA; and the Assistant Administrator for Water and Waste Management, EPA. Nonfederal agencies such as Conservation Districts, State soil and water conservation agencies, State water quality management agencies, and other organizations <PRTPAGE P="12"/>may attend as observers. The duties of the NCC are to:</P>
                <P>(1) Assist the Administrator, FSA, in developing the program regulations and procedures.</P>
                <P>(2) Recommend to the Administrator, FSA, the project applications to be approved.</P>
                <P>(3) Advise the Secretary on the maximum Federal contribution to the total cost of the project and establish the maximum cost-share levels of BMPs.</P>
                <P>(4) Assist in coordinating individual agency programs with the RCWP.</P>
                <P>(5) Make recommendations as appropriate on the technical aspects of the program.</P>
                <P>(6) Recommend project areas and criteria for comprehensive joint USDA/EPA water quality monitoring, evaluation, and analysis.</P>
                <P>(7) Annually review the plans of work and recommend changes in the projects.</P>
                <P>(8) Annually review the progress in each project and periodically advise the Secretary, the Under Secretary for International Affairs and Commodity Programs, and Assistant Secretary for Natural Resources and the Environment on program and policy issues.</P>
                <P>(j) <E T="03">The State Rural Clean Water Coordinating Committee (SCC).</E> The SCC is chaired by the STC chairperson. Members include a representative of the agency members on the NCC or their designee. Other members are the State water quality agency having responsibility for the water quality management program, the State soil and water conservation agency, the State Director, Cooperative Extension Service, and others, including those recommended by the Governor, and approved by the Chairperson of SCC. Other State and local agencies, and organizations, or individuals may attend as observers. The duties of the committee are to:</P>
                <P>(1) Submit its recommendations for approval of project application(s) to the State ASC Committee for forwarding to the NCC, through the Administrator, FSA.</P>
                <P>(2) Insure that each project application referred to the state ASC committee includes a water quality monitoring plan which specifies the organization(s) responsible for general monitoring, including cost and budget breakdown by organization(s).</P>
                <P>(3) Assure coordination of activities at the project level by assisting in determining the composition and responsibilities of the LCC.</P>
                <P>(4) Assure adequate public participation, including public meeting(s), and appropriate environmental evaluation in the preparation of RCWP applications.</P>
                <P>(5) Provide oversight for the RCWP in the State and to assist USDA and EPA in their comprehensive, joint water quality monitoring and evaluation of selected project areas, including coordination with the LCC.</P>
                <P>(6) Develop procedures for coordination between the RCWP and other water quality programs.</P>
                <P>(7) Assist the State ASC Committee in developing the membership of the LCC. For multi county projects, there will be one LCC.</P>
                <P>(8) Annually review and approve the plan(s) of work and changes proposed by the LCC and forward a copy to the NCC through the administrator, FSA.</P>
                <P>(k) <E T="03">The Local Rural Clean Water Coordinating Committee (LCC).</E> The LCC is chaired by the County ASC Committee Chairperson. Other members include a representative of the agency members on the NCC, or their designee, where applicable, and a representative of the soil and water conservation district, the designated water quality management agency, State forestry agency, the Director, County Extension Service, and others recommended by the LCC and approved by the STC. (Where more than one county is in a project area only one LCC will be established in the proj-ect area.) The duties of the committee are to ensure that a process exists and actions are taken to implement any approved project. The duties will include, among others which may be outlined by the SCC, the following:</P>
                <P>(1) Assure an adequate level of public participation in implementing the project.</P>
                <P>(2) Provide project coordination, including development of the plan of work for implementing the approved project using various USDA agencies, local agencies and interested groups.</P>

                <P>(i) Enlist resources from other agencies and local groups.<PRTPAGE P="13"/>
                </P>
                <P>(ii) Conduct informational and educational activities relating to the proj-ect.</P>
                <P>(iii) Develop criteria with the SCC for use by the County ASC Committee and the soil conservation district to establish priorities among individual applications for developing water quality plans.</P>
                <P>(iv) Assure the development of an adequate plan for project monitoring and evaluation.</P>
                <P>(3) Consult with SCC for coordination with USDA State officials, State water quality official, and EPA regional representatives to develop criteria for project plan of work and project coordination.</P>
                <P>(4) Review the project Plan of Work annually and recommend changes in the approved project to the SCC.</P>
                <P>(l) <E T="03">State ASC Committee shall:</E>
                </P>
                <P>(1) Provide the chairperson for the SCC and be responsible for administration of the RCWP project(s) in the State.</P>
                <P>(2) Submit those project applications recommended by the SCC to the Administrator, FSA.</P>
                <P>(3) Provide overall administrative support for the RCWP through the County ASC Committee(s).</P>
                <P>(4) Designate a County ASC Committee Chairperson to serve as Chairperson of the LCC in multi-county projects.</P>
                <P>(5) Approve the BMPs for inclusion in project applications.</P>
                <P>(6) Be responsible for all other administrative functions as provided in these regulations.</P>
                <P>(m) <E T="03">The Governor of each State, at the Governor's option, may:</E>
                </P>
                <P>(1) Recommend to the SCC Chairperson appropriate additional individuals for membership on the SCC.</P>
                <P>(2) Furnish to the SCC a listing of the water quality priority areas in the State which are to be used by the SCCs and LCCs in considering and developing project applications.</P>
                <P>(n) <E T="03">the State soil and water conservation agency will:</E>
                </P>
                <P>(1) Participate on the SCC.</P>
                <P>(2) Assist in preparing and submitting RCWP project applications.</P>
                <P>(3) Carry out responsibilities of soil conservation districts, including participation on the LCC, where no soil conservation district exists.</P>
                <P>(o) <E T="03">The State water quality agency will:</E>
                </P>
                <P>(1) Participate on the SCC.</P>
                <P>(2) Provide expertise in preparing RCWP project applications.</P>
                <P>(3) Assist in monitoring and evaluating the effectiveness of the water quality projects.</P>
                <P>(p) <E T="03">The County ASC Committee shall:</E>
                </P>
                <P>(1) Be responsible for administration of the RCWP at the local level.</P>
                <P>(2) Provide the chairperson of the LCC.</P>
                <P>(3) Provide overall administrative support for the RCWP approved proj-ect through the FSA County Office, including accepting applications, administering the contracts and making payments and preparing reports.</P>
                <P>(4) Recommend approval of BMP's.</P>
                <P>(5) Together with the Soil Conservation District, determine the priority for technical assistance among individual applicants for water quality plans bases on criteria developed by the LCC to assure that the most critical water quality problems are addressed.</P>
                <P>(6) Establish the recommended cost share level for BMP's in the RCWP project applications in consultation with the LCC.</P>
                <P>(7) Utilize the Community ASC Committee(s) and LCC in encouraging farmers in the project area to install needed BMPs on the priority basis developed by the LCC.</P>
                <P>(8) Be responsible for developing, and annually reviewing, and carrying out the plan of work for the approved project.</P>
                <P>(q) <E T="03">The Soil Conservation District will:</E>
                </P>
                <P>(1) Participate on the LCC.</P>
                <P>(2) Assist in the preparation and submission of applications for the RCWP.</P>
                <P>(3) Assist in the promotion of the approved RCWP project.</P>

                <P>(4) Together with the County ASC Committee, determine the priority of technical assistance among individual applicants for water quality plans based on criteria developed by the LCC to assure that the most critical water quality problems are addressed.<PRTPAGE P="14"/>
                </P>
                <P>(5) Approve applicants' water quality plans and revisions.</P>
                <CITA>[45 FR 14009, Mar. 4, 1980, as amended at 46 FR 29454, June 2, 1981; 59 FR 60299, Nov. 23, 1994]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.6</SECTNO>
                <SUBJECT>Officials not precluded from exercising authority.</SUBJECT>
                <P>Nothing in these regulations shall preclude the Secretary; Administrator, FSA; NCC; or Deputy Administrator, State and County Operations, FSA; from administering any or all phases of the RCWP programs delegated to the LCC, County ASC Committee, SCC, State ASC Committee or any employee(s) where the committee or employee fails to perform a function required in these regulations. In exercising this authority either the Secretary, Administrator, FSA, or Deputy Administrator, FSA, may delegate a person or persons to be in charge with full authority to carry out the program or other function(s) without regard to the LCC, ASC committee(s), or employee(s) for such period of time as is deemed necessary.</P>
                <CITA>[59 FR 60299, Nov. 23, 1994]</CITA>
              </SECTION>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart B—Project Authorization and Funding</HD>
              <SECTION>
                <SECTNO>§ 700.10</SECTNO>
                <SUBJECT>Applicability.</SUBJECT>
                <P>The RCWP is applicable in project areas that meet the criteria for eligibility contained in § 700.12 and are authorized for funding by the Secretary.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.11</SECTNO>
                <SUBJECT>Availability of funds.</SUBJECT>
                <P>(a) The allocation of funds to the County ASC Committee(s) in a project area is to be made on the basis of the total funds needed to carry out the approved project.</P>
                <P>(b) The obligation of Federal funds for RCWP contracts with participants is to be made on the basis of the total contract costs.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.12</SECTNO>
                <SUBJECT>Eligible project areas.</SUBJECT>
                <P>(a) Only those project areas which reflect the water quality priority concerns developed through the established water quality management program planning process and have identified agricultural nonpoint source water quality problems are eligible for authorization under RCWP. Only those critical areas or sources of pollutants significantly contributing to the water quality problems are eligible for financial and technical assistance.</P>
                <P>(b) An RCWP project area is a hydrologically related land area. Exceptions may be made for ease of administration, or to focus on concentrated critical areas. To be designated as an RCWP project area eligible for authorization, the area's water quality problems must be related to agricultural nonpoint source pollutants, including but not limited to, sediment, animal waste, irrigation return flows, runoff, or leachate that contain high concentrations of nitrogen, phosphorus, dissolved solids, toxics (pesticides and heavy metals), or high pathogen levels.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.13</SECTNO>
                <SUBJECT>Project applications.</SUBJECT>
                <P>Existing and subsequent project applications submitted for consideration must contain adequate information on each item specified in § 700.14. Instructions on such information requirements will be issued by the Administrator, FSA. Opportunity will be provided prior to final approval of a project for the LCC and the SCC, in consultation with the Govenor, through the applicable County and State ASC Committees, for modification necessary to bring them into conformance with the provisions of these regulations.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.14</SECTNO>
                <SUBJECT>Review and approval of project applications.</SUBJECT>
                <P>(a) In reviewing applications and recommending priorities, the NCC will consider the following:</P>
                <P>(1) Severity of the water quality problem caused by agricultural and silvicultural related pollutants, including:</P>
                <P>(i) State designated uses of the water affected.</P>
                <P>(ii) Kinds, sources, and effects of pollutants.</P>
                <P>(iii) Miles of stream or acres of water bodies affected, extent of groundwater contamination.</P>
                <P>(2) Demonstration of public benefits from the project, including:</P>
                <P>(i) Effects on human health.<PRTPAGE P="15"/>
                </P>
                <P>(ii) Population benefited by improved water quality.</P>
                <P>(iii) Effects on the natural environment.</P>
                <P>(iv) Additional beneficial uses of the waters that result from improvement of the water quality.</P>
                <P>(3) Economic, and technical feasibility to control water quality problems within the life of the project, including:</P>
                <P>(i) Size of the area and extent of BMPs needed.</P>
                <P>(ii) Cost per participant and cost per acre or source for solution of problem.</P>
                <P>(iii) Cost effectiveness of BMPs.</P>
                <P>(iv) Adequacy of planned actions to meet the project's objectives.</P>
                <P>(4) Suitability of the project for the experimental RCWP in the testing of programs, policies and procedures for the control of agricultural non-point source pollution, including:</P>
                <P>(i) A project representative of a geographic area with significant water quality problems.</P>
                <P>(ii) The potential of the project for monitoring and evaluation, including existing base line data.</P>
                <P>(5) State, local and other input in the project area, including:</P>
                <P>(i) Funds for cost-sharing general monitoring and technical assistance.</P>
                <P>(ii) Commitment of local leadership to promote the program.</P>
                <P>(iii) Commitment of farmers and ranchers to participate in RCWP.</P>
                <P>(6) The project's contribution to meeting the national water quality goals taking into consideration of other major sources of pollutants which affect the water quality in or near the project area.</P>
                <P>(b) Based on the project application, the NCC is to recommend an upper limit of the Federal contribution to the total cost of the project. This includes both BMP cost-share and technical assistance costs.</P>
                <P>(c) All project applications will be reviewed by EPA. BMPs approval for funding require EPA concurrence, except that the Secretary may assume EPA's concurrence, if EPA does not act within 15 days following receipt of the request for concurrence.</P>
                <P>(d) The Secretary will approve proj- ects for funding taking into consideration the recommendations of the NCC and consultation with EPA. The Chairperson, State ASC Committee, through the SCC, will assure that involved Federal, State, and local agencies are informed of the project approval.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.15</SECTNO>
                <SUBJECT>Transfer of funds.</SUBJECT>
                <P>(a) Upon approval of a project, the Administrator, FSA, will transfer funds to the State(s) ASC Committee for funding the project. The State committee will transfer funds to the County ASC Committee(s) for the county or counties in an approved proj-ect.</P>
                <P>(b) FSA will transfer funds to the applicable agency or organization providing specific technical assistance and/or expanded information and education. The transfer will be made on a project by project basis.</P>
                <CITA>[45 FR 14009, Mar. 4, 1980, as amended at 46 FR 29454, June 2, 1981]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.16</SECTNO>
                <SUBJECT>Termination of project funding.</SUBJECT>
                <P>(a) Based on evidence of failure to accomplish the approved project objectives, including inadequate level of participation, the Administrator, FSA, may issue a termination notice after conferring with the Administrator, EPA, and the NCC.</P>
                <P>(b) The State ASC Committee shall give 10-day written notice to the applicable County ASC Committee of intent to terminate project funding. The termination shall establish the effective date of termination and the date for return of funds.</P>
                <P>(c) After receipt of a project termination, the County ASC Committee shall not make any new commitments or enter into any new RCWP contracts. Those contracts in force at the time of project termination will remain in force until completed.</P>
              </SECTION>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart C—Participant's RCWP Contracts</HD>
              <SECTION>
                <SECTNO>§ 700.20</SECTNO>
                <SUBJECT>Eligible land.</SUBJECT>
                <P>RCWP is only applicable to privately owned agricultural lands in approved project areas. Indian tribal lands and lands owned by irrigation districts are eligible lands.</P>
              </SECTION>
              <SECTION>
                <PRTPAGE P="16"/>
                <SECTNO>§ 700.21</SECTNO>
                <SUBJECT>Eligible person (participant).</SUBJECT>
                <P>(a) Any land owner or operator whose land or activities in a project area is contributing to the area's agricultural nonpoint source water quality problems and who has an approved water quality plan is eligible to enter into an RCWP contract. For the purpose of this section, an eligible person is an individual, partnership, corporation (except corporations whose stock is publicly traded), Indian tribe, irrigation district or other entity.</P>
                <P>(b) Federal, State or local governments, or subdivisions thereof (except irrigation districts), are not considered as an eligible person for RCWP contracts.</P>
                <P>(c) This program will be conducted in compliance with all requirements respecting nondiscrimination as contained in the Civil Rights Act of 1964 and amendments thereto and the Regulations of the Secretary of Agriculture (7 CFR 15.1 through 15.12)</P>
                <CITA>[45 FR 14009, Mar. 4, 1980, as amended at 46 FR 29454, June 2, 1981]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.22</SECTNO>
                <SUBJECT>Application for assistance.</SUBJECT>
                <P>(a) Land owners or operators in an approved project area must apply for RCWP assistance through the office of the County ASC Committee(s) by completing the prescribed application form.</P>
                <P>(b) The priority for developing water quality plans among applicants is to be determined by the County ASC Committee and the soil conservation district based on the criteria developed by the LCC in consultation with the SCC, with technical assistance from SCS.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.23</SECTNO>
                <SUBJECT>Water quality plan.</SUBJECT>
                <P>(a) The participant's water quality plan, developed with technical assistance and certification by the SCS or its designee and approved by the CD, is to include appropriate approved BMPs. Such BMPs must reduce the amount of pollutants that enter a stream, aquifer, or lake by:</P>
                <P>(1) Methods such as reducing the application rates or changing the application methods or potential pollutants.</P>
                <P>(2) Methods such as practices or combinations of practices which prevent potential pollutants from leaving source areas or reduce the amount of potential pollutants that reach a stream or lake after leaving a source area.</P>
                <P>(b) Participants' water quality plans shall include BMPs for the treatment of all critical areas or sources on the farm on that land within the project area regardless of eligibility for cost-sharing with RCWP funds. Management type BMPs which are not cost-shared but for which technical advice will be given project participants shall be listed in the plan. A water quality plan is not required for that portion of a farm that does not include a critical area or source.</P>
                <P>(c) The participant is responsible for compliance with all applicable Federal, State, and local laws including those relating to the environment, in installing BMPs to solve the nonpoint source water quality problems.</P>
                <P>(d) Time schedules for implementing BMPs are to be provided in the participant's water quality plan.</P>
                <P>(e) The SCS or its designee shall make an annual status review to assure the technical adequacy of the implementation of the water quality plan.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.24</SECTNO>
                <SUBJECT>Cost-sharing.</SUBJECT>
                <P>(a) The maximum cost-share for each project will be approved by the Secretary, taking into consideration the recommendation of the NCC. The Federal cost-share for each BMP shall not exceed 75 percent of the cost of carrying out the practice unless otherwise approved by the Administrator, FSA.</P>
                <P>(b) The combined cost-sharing by Federal, State, or Subdivision thereof shall not exceed 100% of the cost of carrying out the BMP.</P>
                <P>(c) The County ASC Committee(s) in consultation with the LCC will annually set maximum individual BMP cost-share rates for the project area.</P>
                <P>(d) BMPs to be cost shared must have a positive effect on water quality.</P>
                <P>(e) Cost sharing is not to be made available for measures installed primarily for:</P>
                <P>(1) Bringing additional land into crop production.</P>
                <P>(2) Increasing production on existing crop land.</P>
                <P>(3) Flood protection.<PRTPAGE P="17"/>
                </P>
                <P>(4) Structural measures authorized for installation under Pub. L. 83-566, Watershed Protection and Flood Prevention Act.</P>
                <CITA>[45 FR 14009, Mar. 4, 1980, as amended at 46 FR 29454, June 2, 1981]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.25</SECTNO>
                <SUBJECT>RCWP contract.</SUBJECT>
                <P>(a) In order to participate in the RCWP, each landowner, operator, or person who controls or shares in the control of a tract of land on which one or more of the BMP's will be performed must execute the RCWP contract in which they agree to carry out the water quality plan.</P>
                <P>(b) The participant must furnish satisfactory evidence of his or her control of the tract of land on which one or more of the BMP's will be performed.</P>
                <P>(c) Cost-sharing payments cannot be provided for any measure that is initiated before the contract is approved by the County ASC Committee.</P>
                <P>(d) RCWP contracts shall include the basic contract document, the participant's water-quality plan, schedule of operations, and special provisions as needed.</P>
                <P>(e) Technical assistance will be provided to participants to develop the water quality plan and to install BMPs.</P>
                <P>(f) SCS or its designee shall approve the technical adequacy of the Water Quality Plan.</P>
                <P>(g) Participants shall install BMPs according to the specifications that are applicable at the time the contract is signed or the measures are installed.</P>
                <P>(h) The contract period is to be not less than 3 and not more than 10 years. A contract is to extend for at least 1 year after the application of the last cost-shared BMPs. All contract items are to be accomplished prior to contract expiration.</P>
                <P>(i) BMPs are to be maintained by the participant at no cost to the RCWP.</P>
                <P>(j) All BMPs in the water-quality plan shall be maintained for the established life span of the BMP.</P>
                <P>(k) The County ASC Committee in consultation with the LCC shall establish a BMP life span for each BMP offered in the approved project area. Each BMP cost-shared shall have a life span of at least 5 years, unless otherwise approved by the Administrator, FSA.</P>
                <P>(l) A participant may enter into a pooling agreement with other participants to solve mutual water quality problems.</P>
                <P>(m) Participants are responsible for:</P>
                <P>(1) Accomplishing the water quality plan.</P>
                <P>(2) Obtaining and maintaining any required permits and easements necessary to perform the planned work.</P>
                <P>(3) Applying or arranging for the application of BMPs, as scheduled in the plan, according to approved standards and specifications.</P>
                <P>(4) The operation and maintenance of BMPs installed during the contract period.</P>
                <P>(5) Obtaining the authorities, rights, easements, or other approvals necessary to maintain BMPs in keeping with applicable laws and regulations.</P>
                <P>(n) Unless otherwise approved by the NCC, the County ASC Committees shall not enter into any new RCWP contracts after five (5) years from the date when RCWP funds are first made available to the project.</P>
                <SECAUTH>(Pub. L. 96-108, 98 Stat. 821, 835 and Pub. L. 96-528, 94 Stat. 3095, 3111)</SECAUTH>
                <CITA>[45 FR 14009, Mar. 4, 1980, as amended at 48 FR 42803, Sept. 20, 1983]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.26</SECTNO>
                <SUBJECT>Contract modifications.</SUBJECT>
                <P>(a) The County ASC Committee by mutual agreement with the landowner or operator, may modify contracts previously entered into if it is determined to be desirable to carry out the purposes of the program, facilitate the practical administration thereof, or to accomplish equitable treatment with respect to other conservation, land-use, and/or water quality programs.</P>

                <P>(b) Requirements of active contracts may be modified by the County ASC Committee only if such modifications are specifically provided for in these regulations. The concurrence of SCS or its designee and the CD are necessary when modifications involve a technical aspect of the participant's water quality plan. A contract may be modified only if it is determined that such modifications are desirable to carry out purposes of the program or to facilitate the program's practical administration.<PRTPAGE P="18"/>
                </P>
                <P>(c) Contracts may be modified when the participants add or delete land to the farm.</P>
                <P>(d) Contracts may be modified to add, delete, or substitute BMPs when:</P>
                <P>(1) The installed measure failed to achieve the desired results through no fault of the participant.</P>
                <P>(2) The installed measure deteriorated because of conditions beyond the control of the participant.</P>
                <P>(3) Another BMP will achieve the desired results.</P>
                <P>(4) The extent of the BMP is changed.</P>
                <P>(e) Contract modifications are not required when items of work are accomplished prior to scheduled completion or within 1 year following the year of scheduled completion. Other time schedule revisions will require modification.</P>
                <P>(f) If, during the contract period, all or part of the right and interest in the land is transferred by sale or other transfer action, the contract is terminated on that portion of the contract, the participant:</P>
                <P>(1) Forfeits all right to any future cost-share payments on the transferred portion.</P>
                <P>(2) Must refund all cost-share payments that have been made on the transferred land unit unless the new land owner or operator becomes a party to the contract, except the payment may be retained where it is determined by the County ASC Committee after consultation with the technical agency and the CD, that the established BMPs will provide water quality benefits for the designed life of the BMP.</P>
                <P>(g) If the new land owner or operator becomes a party to the contract:</P>
                <P>(1) Payment which has been earned, may be made to the participant who applied the BMPs and had control prior to the transfer.</P>
                <P>(2) The new land owner or operator is to assume all obligations of the previous participant with respect to the transferred land.</P>
                <P>(3) The contract with the new participant is to remain in effect with the original terms and conditions, except that;</P>
                <P>(4) The original contract is to be modified in writing to show the changes caused by the transfer. If the modification is not acceptable to the County ASC Committee, the provisions of paragraphs (f)(1) and (2) of this section apply.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.27</SECTNO>
                <SUBJECT>Cost-share payment.</SUBJECT>
                <P>(a) <E T="03">General.</E> Participants are to obtain or contract for materials or services as needed to install BMPs. Federal cost-share payments are to be made by the County ASC Committee upon certification by the District Conservationist, SCS, or designee, that the BMPs, or an identifiable unit thereof, have been properly carried out and meet the appropriate standards and specifications.</P>
                <P>(b) <E T="03">Payment maximum.</E> The maximum RCWP cost-share payment to a participant shall be limited to $50,000.</P>
                <P>(c) <E T="03">Basis for cost-share payment.</E> (1) Cost-share payments are to be made by the County ASC Committee at the cost-share percentage specified in the project approval notice and by one of the following methods as set out in the contract:</P>
                <P>(i) Average cost; or</P>
                <P>(ii) Actual cost but not to exceed the average cost.</P>
                <P>(2) If the average cost at the time of starting the installation of a BMP or identifiable unit is less than the costs specified in the contract, payment is to be at the lower rate. If the costs at the start of installation are higher, payment may be made at the higher rate. A modification will be necessary if the higher cost results in a significant increase in the total cost-share obligation. Cost-share payment is not to be made until the modification reflecting the increase is approved.</P>
                <P>(d) <E T="03">Average cost development.</E> Average costs are to be developed by the County ASC Committee for each proj-ect using cost data from the local area. These costs shall be reviewed by the SCC for consistency with average costs in other USDA programs. These average costs shall be updated annually by the County ASC Committee in consultation with the LCC.</P>
                <P>(e) <E T="03">Application for payment.</E> Cost-share payments shall be made by the County ASC Committee after a participant has completed a BMP or an identifiable unit of a BMP and it is determined to <PRTPAGE P="19"/>meet standards and specifications. Application for payment must be submitted to the County ASC Committee, on the prescribed form and be supported by such cost receipts as are required by the County ASC Committee. It is the participant's responsibility to apply for payments.</P>
                <P>(f) <E T="03">Authorizations for payments to suppliers.</E> (1) The contract may authorize that part or all of the Federal cost share for a BMP or an identifiable unit be made directly to suppliers of materials or services. The materials or services must be delivered or performed before payment is made.</P>
                <P>(2) Federal cost shares will not be in excess of the cost share attributable to the material or service used or not in excess of the cost share for all identifiable units as may be requested by the participant.</P>
                <P>(g) <E T="03">Material inspection and analysis.</E> When authorizations for payments to suppliers are specified, the County ASC Committee, its representatives, or the Federal Government reserve the right to inspect, sample, and analyze materials or services prior to their use.</P>
                <P>(h) <E T="03">Assignments, set-offs, and claims.</E> (1) Any person who may be entitled to any cost-share may assign rights thereto in accordance with regulations governing the assignments of payments. (31 U.S.C. 203, as amended, and 41 U.S.C. 15, as amended.)</P>
                <P>(2) If any participant to whom compensation is payable under RCWP is indebted to the United States and such indebtedness is listed on the county register of indebtedness maintained by the County ASC Committee, the compensation due the participant must be used (set-off) to reduce that indebtedness. Indebtedness to USDA is to be given first consideration. Set-offs made pursuant to this section are not to deprive the participant of any right to contest the justness of the indebtedness involved. (See 7 CFR part 13.)</P>
                <P>(3) Any cost-share payment due any participant shall be allowed without deduction of claims for advances except as provided for above and without regard to any claim or lien against any crop, or proceeds thereof, in favor of the participant or any other creditor.</P>
                <P>(i) <E T="03">Access to land unit and records.</E> The County ASC Committee, the agency providing technical assistance or representatives thereof, shall have the right of access at reasonable times to land under application or contract, and the right to examine any program records to ascertain the accuracy of any representations made in the applications or contract.</P>
                <P>(j) <E T="03">Suspension of payments.</E> No cost-share payments will be made pending a decision on whether or not a contract violation has occurred.</P>
                <P>(k) <E T="03">Ineligible payments.</E> The filing of requests for payment for BMPs not carried out, or for BMPs carried out in such a manner that they do not meet the contract specifications, constitutes a violation of the contract.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.28</SECTNO>
                <SUBJECT>Appeals.</SUBJECT>
                <P>(a) The applicant may, prior to execution of the contract, request that the County ASC Committee review or reconsider administrative criteria being used in developing his or her contract.</P>
                <P>(1) The applicant shall make a written request to the County ASC Committee setting forth the basis for the appeal.</P>
                <P>(2) The County ASC Committee shall have 30 days in which to make a decision and notify the applicant in writing.</P>
                <P>(3) The decision of the County ASC Committee may be appealed to the State ASC Committee.</P>
                <P>(4) The State ASC Committee decision shall be final.</P>
                <P>(b) The applicant/participant may request and receive a review by the SCS State Conservationist of criteria used in developing the water quality plan or BMP specifications.</P>
                <P>(c) After the contract has been executed, the participant may request and receive a review of administrative procedures under the FSA appeals procedures set out in 7 CFR part 780.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.29</SECTNO>
                <SUBJECT>Contract violations.</SUBJECT>
                <P>(a) The following actions constitute a violation of the RCWP contract by a participant:</P>
                <P>(1) Knowingly or negligently damaging or causing BMPs to become impaired.</P>
                <P>(2) Failing to comply with the terms of the contract.</P>
                <P>(3) Filing a false claim.<PRTPAGE P="20"/>
                </P>
                <P>(4) Misusing conservation materials or services.</P>
                <P>(5) Adopting a land use or practice during the contract period which tends to defeat the purposes of the program.</P>
                <P>(b) <E T="03">Contract termination as a result of violations.</E> (1) The participant agrees to forfeit all rights to further cost-sharing payments under a contract and to refund all cost-share payments received if the County ASC Committee with the concurrence of the State ASC Committee, determines that:</P>
                <P>(i) There was a violation of the contract during the time the participant had control of the land.</P>
                <P>(ii) The violation was of such a nature as to warrant termination of the contract.</P>
                <P>(2) The participant shall be obligated to refund all cost-share payments, including those paid to vendors for materials and services.</P>
                <P>(c) <E T="03">Payment adjustments and refunds resulting from violations.</E> (1) The participant agrees to refund cost-share payments received under the contract or to accept payment adjustments if the County ASC Committee determines and the State ASC Committee concurs that:</P>
                <P>(i) There was a violation of the contract during the time the participant had control of the land.</P>
                <P>(ii) The nature of the violation does not warrant termination of the contract.</P>
                <P>(2) Payment adjustments may include decreasing the rate of the cost share, or deleting from the contract a cost-share commitment, or withholding cost-share payments earned but not paid. The participant who signs the contract may be obligated to refund cost-share payments.</P>
              </SECTION>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart D—Monitoring and Evaluation</HD>
              <SECTION>
                <SECTNO>§ 700.40</SECTNO>
                <SUBJECT>General program monitoring and evaluation.</SUBJECT>
                <P>(a) <E T="03">Requirement.</E> All approved RCWP projects will be monitored in sufficient detail to determine BMP application progress and to generally document water quality improvement trends through the life of the project. This will include, among others, data on BMP installation progress, payments made, refunds and periodic water quality monitoring for addressing short and long-term trends in water quality.</P>
                <P>(b) <E T="03">Monitoring Report.</E> A water quality monitoring report will be submitted as a part of the annual progress report. The initial report will include:</P>
                <P>(1) A description of water quality monitoring strategy for the area.</P>
                <P>(2) Data collection schedule.</P>
                <P>(3) Parameters being monitored (and baseline values).</P>
                <P>(4) Collection and analytical methods.</P>
                <P>(5) A summary of existing data and trends.</P>
                <FP>Subsequent reports will update the initial data and report any significant changes in water quality land use.</FP>
                <P>(c) <E T="03">Program Monitoring Funding.</E> The project application and the proposed monitoring plan are to include an estimate of the local and State financial and technical support. General monitoring will not be financed with RCWP funds.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.41</SECTNO>
                <SUBJECT>Comprehensive USDA/EPA joint project water quality monitoring, evaluation, and analysis.</SUBJECT>
                <P>(a) <E T="03">Requirement.</E> The Secretary and Administrator, EPA will jointly select a limited number of projects to be comprehensively monitored and evaluated from a list of projects recommended by the NCC. The NCC will develop criteria for selecting the project areas.</P>
                <P>(b) <E T="03">Project Selection.</E> The NCC will recommend projects for this comprehensive program. The project areas are to be representative of the agricultural and silvicultural nonpoint source pollution problems.</P>
                <P>(c) <E T="03">Plan Development.</E> After a proj-ect is selected for the comprehensive monitoring and evaluation, the SCC is to submit within 90 days, a plan for USDA-EPA review and approval. USDA and EPA will have 30 days for the plan review and approval process.</P>
                <P>(d) <E T="03">Plan Requirements.</E> In general, the comprehensive monitoring plan will address and include the following:</P>
                <P>(1) <E T="03">Objective.</E> Define the purpose and scope of the monitoring program and establish clear objectives for each activity proposed.</P>
                <P>(2) <E T="03">Monitoring Strategy.</E> Define the basic hydrological and meteorological <PRTPAGE P="21"/>factors within the proposed RCWP project area and identify the strategy and parameters to be used to identify the changes in water quality attributable to the installation of BMPs. Wherever possible, identify and quantify changes in land use, land use patterns and farming practices that will affect the quantity, quality or timing of nonpoint source pollutants reaching an aquatic system and detail information as to number and location of sampling stations and the frequency of sample collection.</P>
                <P>(3) <E T="03">Socioeconomic Impacts.</E> Identify the positive and negative impacts on the landowners in the project area and estimate the community or off-site benefits expected of the project if completed as planned.</P>
                <P>(4) <E T="03">Institutional Aspects.</E> Identify and clearly define the role and responsibility for each participating agency including, where appropriate fiscal and manpower commitments.</P>
                <P>(5) <E T="03">Educational Aspects.</E> Clearly define the approache(s) to be used to inform and educate individual landowners. Include procedures for periodic evaluation of this effort so the mid-course corrections can be made if needed.</P>
                <P>(6) <E T="03">Quality Assurance.</E> To insure that the data collected is usable to make National projections, a quality assurance program must be included that is consistent with that of the EPA Region within which the project is located.</P>
                <P>(7) <E T="03">Data Storage.</E> The data collected on comprehensive monitoring projects must be available to USDA and EPA RCWP user groups.</P>
                <P>(e) <E T="03">Reporting.</E> Reports for these projects are to be made at least annually to the NCC based on guidance sent to the SCC by the Administrator, FSA.</P>
                <P>(f) <E T="03">Funding.</E> Funding for the comprehensive monitoring will be provided from RCWP funds and other authorizations.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.42</SECTNO>
                <SUBJECT>Program evaluation.</SUBJECT>
                <P>(a) The RCWP will be evaluated annually by the USDA. The evaluation will be based on the reports provided in these regulations and on special studies undertaken by USDA or EPA as part of the RCWP program.</P>
                <P>(b) The USDA Deputy Under Secretary for International Affairs and Commodity Program will have the responsibility for coordinating the program evaluation and preparing an annual report for transmittal to the Secretary of Agriculture and the Administrator of EPA. The Deputy Assistant Secretary for Natural Resources and the Director of Economics, Policy Analysis and Budget, USDA, and the Assistant Administrator for Water and Waste Management, EPA will assist in this effort.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 700.43</SECTNO>
                <SUBJECT>Public benefits when installing BMP's.</SUBJECT>
                <P>All BPM's implemented under this program shall be in compliance with regulations promulgated under part 799 on environmental quality and related environmental concerns or similar regulations issued by a technical agency. Persons responsible for any aspect of performing BMPs shall carry out their responsibilities in such a way as to promote public benefits:</P>
                <P>(a) By improving or preserving environmental quality and ecological balance.</P>
                <P>(b) By preventing or abating pollution and other environmental degradation.</P>
                <P>(c) Benefiting the community by means such as preserving open space or enhancing the appearance of the area.</P>
                <P>(d) Benefiting wildlife and other desirable life forms.</P>
                <P>(e) Preserving historic, archaeological, or scenic sites, wetlands, ecologically critical areas and prime farmland.</P>
                <P>(f) Avoiding the creation of hazards to persons or animals.</P>
                <P>(g) Avoiding actions that may adversely affect an endangered or threatened species and flood plains.</P>
              </SECTION>
            </SUBPART>
          </PART>
          <PART>
            <EAR>Pt. 701</EAR>
            <HD SOURCE="HED">PART 701—EMERGENCY CONSERVATION PROGRAM AND CERTAIN RELATED PROGRAMS PREVIOUSLY ADMINISTERED UNDER THIS PART</HD>
            <CONTENTS>
              <SECHD>Sec.</SECHD>
              <SECTNO>701.1</SECTNO>
              <SUBJECT>Administration.</SUBJECT>
              <SECTNO>701.2</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>701.3</SECTNO>
              <SUBJECT>Scope.</SUBJECT>
              <SECTNO>701.4</SECTNO>
              <SUBJECT>Producer eligibility.</SUBJECT>
              <SECTNO>701.5</SECTNO>
              <SUBJECT>Land eligibility.</SUBJECT>
              <SECTNO>701.6-701.9</SECTNO>
              <SUBJECT>[Reserved]<PRTPAGE P="22"/>
              </SUBJECT>
              <SECTNO>701.10</SECTNO>
              <SUBJECT>Qualifying minimum cost of restoration.</SUBJECT>
              <SECTNO>701.11</SECTNO>
              <SUBJECT>Prohibition on duplicate payments.</SUBJECT>
              <SECTNO>701.12</SECTNO>
              <SUBJECT>Eligible ECP practices.</SUBJECT>
              <SECTNO>701.13</SECTNO>
              <SUBJECT>Submitting requests.</SUBJECT>
              <SECTNO>701.14</SECTNO>
              <SUBJECT>Onsite inspections.</SUBJECT>
              <SECTNO>701.15</SECTNO>
              <SUBJECT>Starting practices before cost-share request is submitted; non-entitlement to payment; payment subject to the availability of funds.</SUBJECT>
              <SECTNO>701.16</SECTNO>
              <SUBJECT>Practice approval.</SUBJECT>
              <SECTNO>701.17-701.20</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>701.21</SECTNO>
              <SUBJECT>Filing payment application.</SUBJECT>
              <SECTNO>701.22</SECTNO>
              <SUBJECT>Eligibility to file for cost-share assistance.</SUBJECT>
              <SECTNO>701.23</SECTNO>
              <SUBJECT>Eligible costs.</SUBJECT>
              <SECTNO>701.24</SECTNO>
              <SUBJECT>Dividing cost-share among more than one participant.</SUBJECT>
              <SECTNO>701.25</SECTNO>
              <SUBJECT>Practices carried out with aid from ineligible persons.</SUBJECT>
              <SECTNO>701.26</SECTNO>
              <SUBJECT>Maximum cost-share percentage.</SUBJECT>
              <SECTNO>701.27</SECTNO>
              <SUBJECT>Maximum ECP payments per person.</SUBJECT>
              <SECTNO>701.28-701.30</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>701.31</SECTNO>
              <SUBJECT>Maintenance and proper use of practices.</SUBJECT>
              <SECTNO>701.32</SECTNO>
              <SUBJECT>Failure to comply with program provisions.</SUBJECT>
              <SECTNO>701.33</SECTNO>
              <SUBJECT>Death, incompetency, or disappearance.</SUBJECT>
              <SECTNO>701.34</SECTNO>
              <SUBJECT>Appeals.</SUBJECT>
              <SECTNO>701.35</SECTNO>
              <SUBJECT>Compliance with regulatory measures.</SUBJECT>
              <SECTNO>701.36</SECTNO>
              <SUBJECT>Schemes and devices and claims avoidances.</SUBJECT>
              <SECTNO>701.37</SECTNO>
              <SUBJECT>Loss of control of property during the practice life span.</SUBJECT>
              <SECTNO>701.38-701.40</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>701.41</SECTNO>
              <SUBJECT>Cost-share assistance not subject to claims.</SUBJECT>
              <SECTNO>701.42</SECTNO>
              <SUBJECT>Assignments.</SUBJECT>
              <SECTNO>701.43</SECTNO>
              <SUBJECT>Information collection requirements.</SUBJECT>
              <SECTNO>701.44</SECTNO>
              <SUBJECT>Agricultural Conservation Program (ACP) contracts.</SUBJECT>
              <SECTNO>701.45</SECTNO>
              <SUBJECT>Forestry Incentives Program (FIP) contracts.</SUBJECT>
            </CONTENTS>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>Pub. L. 95-334, 92 Stat. 420, 16 U.S.C. 2201 <E T="03">et seq.</E>
              </P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>69 FR 10302, Mar. 4, 2004, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>§ 701.1</SECTNO>
              <SUBJECT>Administration.</SUBJECT>
              <P>(a) Subject to the availability of funds, this part provides the terms, conditions and requirements of the Emergency Conservation Program (ECP) administered by the Farm Service Agency (FSA).</P>
              <P>(b) ECP is administered by the Administrator, FSA through the Deputy Administrator, FSA, and shall be carried out in the field by State and county FSA committees (State and county committees), subject to the availability of funds. Except as otherwise provided in this rule, discretionary determinations to be made under this rule will be made by the Deputy Administrator. Matters committed to the discretion of the Deputy Administrator shall be considered in all cases to be permissive powers and no person shall, under any circumstances, be considered to be entitled to an exercise of such power in their favor.</P>
              <P>(c) State and county committees, and representatives and employees, do not have authority to modify or waive any regulations in this part.</P>
              <P>(d) The State committee may take any action authorized or required of the county committee by this part, but which the county committee has not taken, such as:</P>
              <P>(1) Correct or require a county committee to correct any action taken by such county committee that is not in accordance with this part; or</P>
              <P>(2) Require a county committee to withhold taking any action that is not in accordance with this part.</P>
              <P>(e) No provision or delegation herein to a State or county committee shall preclude the Administrator, FSA, or a designee, from determining any questionarising under the program or from reversing or modifying any determination made by a State or county committee.</P>
              <P>(f) The Deputy Administrator may authorize State and county committees to waive or modify deadlines and other requirements in cases where lateness or failure to meet such other requirements does not adversely affect the operation of the program.</P>
              <P>(g) The Deputy Administrator may limit the authority of state and county committees to approve cost share in excess of specified amounts.</P>
              <P>(h) Data furnished by the applicants will be used to determine eligibility for program benefits. Furnishing the data is voluntary; however, the failure to provide data could result in program benefits being withheld or denied.</P>

              <P>(i) FSA may consult with any other USDA agency for such assistance as is determined by FSA to be necessary to implement the ECP. FSA is responsible for the technical aspects of ECP but may enter into a Memorandum of <PRTPAGE P="23"/>Agreement with another party to provide technical assistance. If this limitation results in significant hardship to producers in a county the State committee may request in writing that the Deputy Administrator waive this requirement for that county.</P>
              <P>(j) The provisions in this part shall not create an entitlement in any person to any ECP cost share or claim or any particular notice or form or procedure.</P>
              <P>(k) Additional terms and conditions may be set forth in the application or the forms participants will be required to sign for participation in the ECP.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.2</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>(a) The terms defined in part 718 of this chapter shall be applicable to this part and all documents issued in accordance with this part, except as otherwise provided in this section.</P>
              <P>(b) The following definitions shall apply to this part:</P>
              <P>
                <E T="03">Agricultural producer</E> means an owner, operator, or tenant of a farm or ranch used to produce for food or fiber, crops (including but not limited to, grain or row crops; seed crops; vegetables or fruits; hay forage or pasture; orchards or vineyards; flowers or bulbs; or field grown ornamentals) or livestock (including but not limited to, dairy or beef cattle; poultry; swine; sheep or goats; fish or other animals raised by aquaculture; other livestock or fowl) for commercial production. Producers of animals raised for recreational uses only are not considered agricultural producers.</P>
              <P>
                <E T="03">Annual agricultural production</E> means production of crops for food or fiber in a commercial operation that occurs on an annual basis under normal conditions.</P>
              <P>
                <E T="03">Applicant</E> means a person who has submitted to FSA a request to participate in the ECP.</P>
              <P>
                <E T="03">Cost-share payment</E> means the payment made by FSA to assist a program participant under this part to establish practices required to address qualifying damage suffered in connection with a qualifying disaster.</P>
              <P>
                <E T="03">Deputy Administrator</E> means the Deputy Administrator for Farm Programs, FSA, the ECP Program Manager, or designee.</P>
              <P>
                <E T="03">Farmland</E> means land devoted to agricultural production, including land used for aquaculture, or other land as may be determined by the Deputy Administrator.</P>
              <P>
                <E T="03">Program year</E> means the applicable Federal fiscal year.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.3</SECTNO>
              <SUBJECT>Scope.</SUBJECT>
              <P>(a) FSA will provide cost-share assistance to farmers and ranchers to rehabilitate farmland damaged by wind erosion, floods, hurricanes, or other natural disasters as determined by the Deputy Administrator, and to carry out emergency water conservation measures during periods of severe drought.</P>
              <P>(b) The objective of the ECP is to make cost-share assistance available to eligible participants on eligible land for certain practices, to rehabilitate farmland damaged by floods, hurricanes, wind erosion, or other natural disasters, and for the installation of water conservation measures during periods of severe drought.</P>
              <P>(c) Payments may also be made under this part for:</P>
              <P>(1) Emergency water conservation or water enhancement measures (including measures to assist confined livestock) during periods of severe drought; and</P>
              <P>(2) Floodplain easements for runoff and other emergency measures that the Deputy Administrator determines is necessary to safeguard life and property from floods, drought, and the products of erosion on any watershed whenever fire, flood, or other natural occurrence is causing or has caused, a sudden impairment of the watershed.</P>
              <P>(d) Payments under this part are subject to the availability of appropriated funds and any limitations that may otherwise be provided for by Congress.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.4</SECTNO>
              <SUBJECT>Producer eligibility.</SUBJECT>

              <P>(a) To be eligible to participate in the ECP the Deputy Administrator must determine that a person is an agricultural producer with an interest in the land affected by the natural disaster, and that person must be liable for or have paid the expense that is the subject of the cost share. The applicant must be a landowner or user in the <PRTPAGE P="24"/>area where the qualifying event has occurred, and must be a party who will incur the expense that is the subject of the cost share.</P>
              <P>(b) Federal agencies and States, including all agencies and political subdivisions of a State, are ineligible to participate in the ECP.</P>
              <P>(c) All producer eligibility is subject to the availability of funds and an application may be denied for any reason.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.5</SECTNO>
              <SUBJECT>Land eligibility.</SUBJECT>
              <P>(a) For land to be eligible, the Deputy Administrator must determine that land that is the subject of the cost share:</P>
              <P>(1) Will have new conservation problems caused as a result of a natural disaster that, if not treated, would:</P>
              <P>(i) Impair or endanger the land;</P>
              <P>(ii) Materially affect the productive capacity of the land;</P>
              <P>(iii) Represent unusual damage that, except for wind erosion, is not of the type likely to recur frequently in the same area; and</P>
              <P>(iv) Be so costly to repair that Federal assistance is or will be required to return the land to productive agricultural use. Conservation problems existing prior to the disaster are not eligible for cost-share assistance.</P>
              <P>(2) Be physically located in a county in which the ECP has been implemented; and</P>
              <P>(3) Be one of the following:</P>
              <P>(i) Land expected to have annual agricultural production,</P>
              <P>(ii) A field windbreak or a farmstead shelterbelt on which the ECP practice to be implemented involves removing debris that interferes with normal farming operations on the farm and correcting damage caused by the disaster; or</P>
              <P>(iii) A farm access road on which debris interfering with the normal farming operation needs to be removed.</P>
              <P>(b) Land is ineligible for cost share if the Deputy Administrator determines that it is, as applicable:</P>
              <P>(1) Owned or controlled by the United States;</P>
              <P>(2) Owned or controlled by States, including State agencies or other political subdivisions of a State;</P>
              <P>(3) Protected by a levee or dike that was not effectively and properly functioning prior to the disaster, or is protected, or intended to be protected, by a levee or dike not built to U.S. Army Corps of Engineers, NRCS, or comparable standards;</P>
              <P>(4) Adjacent to water impoundment reservoirs that are subject to inundation when the reservoir is filled to capacity;</P>
              <P>(5) Land on which levees or dikes are located;</P>
              <P>(6) Subject to frequent damage or susceptible to severe damage according to paragraph (c) of this section;</P>
              <P>(7) Subject to flowage or flood easements and inundation when water is released in normal operations;</P>
              <P>(8) Between any levee or dike and a stream, river, or body of water, including land between two or more levees or dikes;</P>
              <P>(9) Located in an old or new channel of a stream, creek, river or other similar body of water, except that land located within or on the banks of an irrigation canal may be eligible if the Deputy Administrator determines that the canal is not a channel subject to flooding;</P>
              <P>(10) In greenhouses or other confined areas, including but not limited to, land in corrals, milking parlors, barn lots, or feeding areas;</P>
              <P>(11) Land on which poor farming practices, such as failure to farm on the contour, have materially contributed to damaging the land;</P>
              <P>(12) Unless otherwise provided for, not considered to be in annual agricultural production, such as land devoted to stream banks, channels, levees, dikes, native woodland areas, roads, and recreational uses; or</P>
              <P>(13) Devoted to trees including, but not limited to, timber production.</P>

              <P>(c) To determine the likely frequency of damage and of the susceptibility of the land to severe damage under paragraph (b)(6) of this section, FSA will consider all relevant factors, including, but not limited to, the location of the land, the history of damage to the land, and whether the land was or could have been protected by a functioning levee or dike built to U. S. Army Corps of Engineers, NRCS, or comparable standards. Further, in making such determinations, information may be obtained and used from <PRTPAGE P="25"/>the Federal Emergency Management Agency or any other Federal, State (including State agencies or political subdivisions), or other entity or individual providing information regarding, for example, flood susceptibility for the land, soil surveys, aerial photographs, or flood plain data or other relevant information.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§§ 701.6-701.9</SECTNO>
              <RESERVED>[Reserved]</RESERVED>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.10</SECTNO>
              <SUBJECT>Qualifying minimum cost of restoration.</SUBJECT>
              <P>(a) To qualify for assistance under § 701.3(a), the eligible damage must be so costly that Federal assistance is or will be required to return the land to productive agricultural use or to provide emergency water for livestock.</P>
              <P>(b) The Deputy Administrator shall establish the minimum qualifying cost of restoration. Each affected State may be allowed to establish a higher minimum qualifying cost of restoration.</P>
              <P>(c) A producer may request a waiver of the qualifying minimum cost of restoration. The waiver request shall document how failure to grant the waiver will result in environmental damage or hardship to the producer and how the waiver will accomplish the goals of the program.</P>
              <CITA>[69 FR 10302, Mar. 4, 2004; 69 FR 22377, Apr. 26, 2004]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.11</SECTNO>
              <SUBJECT>Prohibition on duplicate payments.</SUBJECT>
              <P>(a) <E T="03">Duplicate payments.</E> Participants are not eligible to receive funding under the ECP for land on which the participant has or will receive funding under:</P>
              <P>(1) The Wetland Reserve Program (WRP) provided for in 7 CFR part 1467;</P>
              <P>(2) The Emergency Wetland Reserve Program (EWRP) provided for in 7 CFR part 623;</P>
              <P>(3) The Emergency Watershed Protection Program (EWP) provided for in 7 CFR part 624; or</P>
              <P>(4) Any other program that covers the same or similar expenses so as to create duplicate payments, or, in effect, a higher rate of cost share than is allowed under this part.</P>
              <P>(b) <E T="03">Refund.</E> Participants who receive any duplicate funds, payments, or benefits shall refund any ECP payments received.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.12</SECTNO>
              <SUBJECT>Eligible ECP practices.</SUBJECT>
              <P>(a) Cost-share assistance may be offered for ECP practices to replace or restore farmland, fences, or conservation structures to a condition similar to that existing before the natural disaster. No relief under this part shall be allowed to address conservation problems existing before the disaster.</P>
              <P>(b) The practice or practices made available when the ECP is implemented shall be only those practices authorized by FSA for which cost-share assistance is essential to permit accomplishment of the program goals.</P>
              <P>(c) Cost-share assistance may be provided for permanent vegetative cover, including establishment of the cover where needed, only in conjunction with eligible structures or installations where cover is needed to prevent erosion and/or siltation or to accomplish some other ECP purpose.</P>
              <P>(d) Practice specifications shall represent the minimum levels of performance needed to address the ECP need.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.13</SECTNO>
              <SUBJECT>Submitting requests.</SUBJECT>
              <P>(a) Subject to the availability of funds, the Deputy Administrator shall provide for an enrollment period for submitting ECP cost-share requests.</P>
              <P>(b) Requests may be accepted after the announced enrollment period, if such acceptance is approved by the Deputy Administrator and is in accordance with the purposes of the program.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.14</SECTNO>
              <SUBJECT>Onsite inspections.</SUBJECT>
              <P>An onsite inspection must be made before approval of any request for ECP assistance.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.15</SECTNO>
              <SUBJECT>Starting practices before cost-share request is submitted; non-entitlement to payment; payment subject to the availability of funds.</SUBJECT>

              <P>(a) Subject to paragraphs (b) and (c) of this section, costs will not be shared for practices or components of practices that are started before a request for cost share under this part is submitted with the applicable county FSA office.<PRTPAGE P="26"/>
              </P>
              <P>(b) Costs may be shared for drought and non-drought ECP practices or components of practices that are started before a request is submitted with the county FSA office, only if:</P>
              <P>(1) Considered and approved on a case-by-case basis in accordance with instructions of the Deputy Administrator;</P>
              <P>(2) The disaster that is the basis of a claim for cost-share assistance created a situation that required the producer to take immediate action to prevent further losses;</P>
              <P>(3) The Deputy Administrator determines that the request for assistance was filed within a reasonable amount of time after the start of the enrollment period; and</P>
              <P>(4) The practice was started no more than 60 days before the ECP designation was approved for the applicable county office.</P>
              <P>(c) Any action taken prior to approval of a claim is taken at the producer's own risk.</P>
              <P>(d) An application for relief may be denied for any reason.</P>
              <P>(e) All payments under this part are subject to the availability of funds.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.16</SECTNO>
              <SUBJECT>Practice approval.</SUBJECT>
              <P>(a) Requests shall be prioritized before approval based on factors deemed appropriate by FSA, which include, but are not limited to:</P>
              <P>(1) Type and degree of damage;</P>
              <P>(2) Type of practices needed to address the problem;</P>
              <P>(3) Availability of funds;</P>
              <P>(4) Availability of technical assistance;</P>
              <P>(5) Environmental concerns;</P>
              <P>(6) Safety factors; or</P>
              <P>(7) Welfare of eligible livestock.</P>
              <P>(b) Requests for cost-share assistance may be approved if:</P>
              <P>(1) Funds are available; and</P>
              <P>(2) The requested practice is determined eligible.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§§ 701.17-701-20</SECTNO>
              <RESERVED>[Reserved]</RESERVED>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.21</SECTNO>
              <SUBJECT>Filing payment application.</SUBJECT>
              <P>Cost-share assistance is conditioned upon the availability of funds and the performance of the practice in compliance with all applicable specifications and program regulations.</P>
              <P>(a) <E T="03">Completion of practice.</E> After completion of the approved practice, the participant must certify completion and request payment by the payment request deadline. FSA will provide the participant with a form or another manner to be used to request payment.</P>
              <P>(b) <E T="03">Proof of completion.</E> Participants shall submit to FSA, at the local county office, the information needed to establish the extent of the performance of approved practices and compliance with applicable program provisions.</P>
              <P>(c) <E T="03">Payment request deadline.</E> The time limits for submission of information shall be determined by the Deputy Administrator. The payment request deadline for each ECP practice will be provided in the agreement after the application is approved. Time limits may be extended where failure to submit required information within the applicable time limits is due to reasons beyond the control of the participant.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.22</SECTNO>
              <SUBJECT>Eligibility to file for cost-share assistance.</SUBJECT>
              <P>Any eligible participant, as defined in this part, who paid part of the cost of an approved practice may file an application for cost-share payment.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.23</SECTNO>
              <SUBJECT>Eligible costs.</SUBJECT>
              <P>(a) Cost-share assistance may be authorized for all reasonable costs incurred in the completion of the practice, up to the maximums provided in §§ 701.26 and 701.27.</P>
              <P>(b) Eligible costs shall be limited as follows:</P>
              <P>(1) Costs for use of personal equipment shall be limited to those incurred beyond the normal operation of the farm or ranch.</P>
              <P>(2) Costs for personal labor shall be limited to personal labor not normally required in the operation of the farm or ranch.</P>
              <P>(3) Costs for the use of personal equipment and labor must be less than that charged for such equipment and labor by commercial contractors regularly employed in such areas.</P>

              <P>(4) Costs shall not exceed those needed to achieve the minimum performance necessary to resolve the problem being corrected by the practice. Any costs above those levels shall not be <PRTPAGE P="27"/>considered to be eligible costs for purposes of calculations made under this part.</P>
              <P>(c) Costs shall not exceed the practice specifications in § 701.12(d) for cost-share calculations.</P>
              <P>(d) The gross amount on which the cost-share eligibility may be computed will not include any costs that were reimbursed by a third party including, but not limited to, an insurance indemnity payment.</P>
              <P>(e) Total cost-share payments from all sources shall not exceed the total of eligible costs of the practice to the applicant.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.24</SECTNO>
              <SUBJECT>Dividing cost-share among more than one participant.</SUBJECT>
              <P>(a) For qualifying cost-share assistance under this part, the cost shall be credited to the participant who personally performed the practice or who paid to have it performed by a third party. If a payment or credit was made by one participant to another potential participant, paragraph (c) of this section shall apply.</P>
              <P>(b) If more than one participant contributed to the performance of the practice, the cost-share assistance for the practice shall be divided among those eligible participants in the proportion they contributed to the performance of the practice. FSA may determine what proportion was contributed by each participant by considering the value of the labor, equipment, or material contributed by each participant and any other factors deemed relevant toward performance.</P>
              <P>(c) Allowance by a participant of a credit to another participant through adjustment in rent, cash or other consideration, may be considered as a cost of a practice to the paying party only if FSA determines that such credit is directly related to the practice. An applicant who was fully reimbursed shall be considered as not having contributed to the practice performance.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.25</SECTNO>
              <SUBJECT>Practices carried out with aid from ineligible persons.</SUBJECT>
              <P>Any assistance provided by someone other than the eligible participant, including assistance from a State or Federal agency, shall be deducted from the participant's total costs incurred for the practice for the purpose of computing ECP cost shares. If unusual conditions exist, the Deputy Administrator may waive deduction of such contributions upon a request from the State committee and demonstration of the need for such a waiver.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.26</SECTNO>
              <SUBJECT>Maximum cost-share percentage.</SUBJECT>
              <P>(a) In addition to other restrictions that may be applied by FSA, an ECP participant shall not receive more than 75 percent of the lesser of the participant's total actual cost or of the total allowable costs, as determined by this part, to perform the practice.</P>
              <P>(b) However, notwithstanding paragraph (a) of this section, a qualified limited resource producer that participates in the ECP may receive no more than 90 percent of the participant's actual cost to perform the practice or 90 percent of the total allowable costs for the practice as determined under this part.</P>
              <P>(c) In addition to other limitations that apply, in no case shall the ECP payment exceed 50 percent of what the Deputy Administrator has determined is the agricultural value of the affected land.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.27</SECTNO>
              <SUBJECT>Maximum ECP payments per person.</SUBJECT>
              <P>A person, as defined in part 1400 of this title, is limited to a maximum cost-share of $200,000 per person, per disaster.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§§ 701.28-701.30</SECTNO>
              <RESERVED>[Reserved]</RESERVED>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.31</SECTNO>
              <SUBJECT>Maintenance and proper use of practices.</SUBJECT>
              <P>(a) Each participant receiving cost-share assistance is responsible for the required maintenance and proper use of the practice. Some practices have an established life span or minimum period of time during which they are expected to function as a conservation practice with proper maintenance. Cost-share assistance shall not be authorized for normal upkeep or maintenance of any practice.</P>

              <P>(b) If a practice is not properly maintained for the established life span, the participant may be required to refund <PRTPAGE P="28"/>all or part of cost-share assistance received. The Deputy Administrator will determine what constitutes failure to maintain a practice and the amount that must be refunded.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.32</SECTNO>
              <SUBJECT>Failure to comply with program provisions.</SUBJECT>
              <P>Costs may be shared for performance actually rendered even though the minimum requirements otherwise established for a practice have not been satisfied if a reasonable effort was made to satisfy the minimum requirements and if the practice, as performed, will adequately address the need for the practice.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.33</SECTNO>
              <SUBJECT>Death, incompetency, or disappearance.</SUBJECT>
              <P>In case of death, incompetency, or disappearance of any participant, any cost-share payment due shall be paid to the successor, as determined in accordance with part 707 of this chapter.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.34</SECTNO>
              <SUBJECT>Appeals.</SUBJECT>
              <P>Part 11 of this title and part 780 of this chapter apply to determinations made under this part.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.35</SECTNO>
              <SUBJECT>Compliance with regulatory measures.</SUBJECT>
              <P>Participants who perform practices shall be responsible for obtaining the authorities, permits, rights, easements, or other approvals necessary to the performance and maintenance of the practices according to applicable laws and regulations. The ECP participant shall be wholly responsible for any actions taken with respect to the project and shall, in addition, be responsible for returning and refunding any ECP cost shares made, where the purpose of the project cannot be accomplished because of the applicants' lack of clearances or other problems.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.36</SECTNO>
              <SUBJECT>Schemes and devices and claims avoidances.</SUBJECT>
              <P>(a) If FSA determines that a participant has taken any action designed to defeat, or has the effect of defeating, the purposes of this program, the participant shall be required to refund all or part of any of the program payments otherwise due or paid that participant or related person for that particular disaster. These actions include, but are not limited to, failure to properly maintain or deliberately destroying a practice and providing false or misleading information related to practices, costs, or arrangements between entities or individuals that would have an effect on “person” determinations made under this part.</P>
              <P>(b) All or any part of cost-share assistance that otherwise would be due any participant may be withheld, or required to be refunded, if the participant has adopted, or participated in, any scheme or device designed to evade the maximum cost-share limitation that applies to the ECP or to evade any other requirement or provision of the program or this part.</P>
              <P>(c) If FSA determines that a participant has employed any scheme or device to deprive any other person of cost-share assistance, or engaged in any actions to receive payments under this part that also were designed to avoid claims of the United States or its instrumentalities or agents against that party, related parties, or third parties, the participant shall refund all or part of any of those program payments paid to that participant for the project.</P>
              <P>(d) For purposes of this section, a scheme or device can include, but is not limited to, instances of coercion, fraud, or misrepresentation regarding the claim for ECP assistance and the facts and circumstances surrounding such claim.</P>
              <P>(e) A participant who has knowingly supplied false information or filed a false claim shall be ineligible for cost-share assistance related to the disaster for which the false information was filed, or for any period of time FSA deems appropriate. False information or a false claim includes, but is not limited to, a request for payment for a practice not carried out, a false billing, or a billing for practices that do not meet required specifications.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.37</SECTNO>
              <SUBJECT>Loss of control of the property during the practice life span.</SUBJECT>

              <P>In the event of voluntary or involuntary loss of control of the land by the ECP cost-share recipient during the <PRTPAGE P="29"/>practice life-span, if the person acquiring control elects not to become a successor to the ECP agreement and the practice is not maintained, each participant who received cost-share assistance for the practice may be jointly and severally liable for refunding any ECP cost-share assistance related to that practice. The practice life span, for purposes of this section, includes any maintenance period that is essential to its success.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§§ 701.38-701.40</SECTNO>
              <RESERVED>[Reserved]</RESERVED>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.41</SECTNO>
              <SUBJECT>Cost-share assistance not subject to claims.</SUBJECT>
              <P>Any cost-share assistance or portion thereof due any participant under this part shall be allowed without regard to questions of title under State law, and without regard to any claim or lien against any crop or property, or proceeds thereof, except liens and other claims of the United States or its instrumentalities. The regulations governing offsets and withholdings at parts 792 and 1403 of this title shall be applicable to this program and the provisions most favorable to a collection of the debt shall control.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.42</SECTNO>
              <SUBJECT>Assignments.</SUBJECT>
              <P>Participants may assign ECP cost-share assistance payments, in whole or in part, according to part 1404 of this title.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.43</SECTNO>
              <SUBJECT>Information collection requirements.</SUBJECT>
              <P>Information collection requirements contained in this part have been approved by the Office of Management and Budget under the provisions at 44 U.S.C. Chapter 35 and have been assigned OMB Number 0560-0082.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.44</SECTNO>
              <SUBJECT>Agricultural Conservation Program (ACP) contracts.</SUBJECT>
              <P>Contracts for ACP that are, or were, administered under this part or similar contracts executed in connection with the Interim Environmental Quality Incentives Program, shall, unless the Deputy Administrator determines otherwise, be administered under, and be subject to, the regulations for ACP contracts and the ACP program that were contained in the 7 CFR, parts 700 to 899, edition revised as of January 1, 1998, and under the terms of the agreements that were entered into with participants.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 701.45</SECTNO>
              <SUBJECT>Forestry Incentives Program (FIP) contracts.</SUBJECT>
              <P>The regulations governing the FIP as of July 31, 2002, and contained in the 7 CFR, parts 700 to 899, edition revised as of January 1, 2002, shall continue to apply to FIP contracts in effect as of that date, except as provided in accord with a delegation of the administration of that program and such delegation and actions taken thereunder shall apply to any other FIP matters as may be at issue or in dispute.</P>
            </SECTION>
          </PART>
          <PART>
            <EAR>Pt. 702</EAR>
            <HD SOURCE="HED">PART 702—COLORADO RIVER BASIN SALINITY (CRSC) CONTROL PROGRAM</HD>
            <CONTENTS>
              <SECHD>Sec.</SECHD>
              <SECTNO>702.1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <SECTNO>702.2</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>702.3</SECTNO>
              <SUBJECT>Administration.</SUBJECT>
              <SECTNO>702.4</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <SECTNO>702.5</SECTNO>
              <SUBJECT>Eligible land.</SUBJECT>
              <SECTNO>702.6</SECTNO>
              <SUBJECT>Eligible entity.</SUBJECT>
              <SECTNO>702.7</SECTNO>
              <SUBJECT>Salinity control plan.</SUBJECT>
              <SECTNO>702.8</SECTNO>
              <SUBJECT>Eligible salinity reduction practices (SRP's).</SUBJECT>
              <SECTNO>702.9</SECTNO>
              <SUBJECT>CRSC Contract and obligations of the participant.</SUBJECT>
              <SECTNO>702.10</SECTNO>
              <SUBJECT>Operation and maintenance agreements.</SUBJECT>
              <SECTNO>702.11</SECTNO>
              <SUBJECT>Obligations of USDA.</SUBJECT>
              <SECTNO>702.12</SECTNO>
              <SUBJECT>Availability of cost-share payments.</SUBJECT>
              <SECTNO>702.13</SECTNO>
              <SUBJECT>Levels and rates of cost-share payments.</SUBJECT>
              <SECTNO>702.14</SECTNO>
              <SUBJECT>Assignments.</SUBJECT>
              <SECTNO>702.15</SECTNO>
              <SUBJECT>Payments not subject to claims.</SUBJECT>
              <SECTNO>702.16</SECTNO>
              <SUBJECT>Maximum amount of cost-share payments.</SUBJECT>
              <SECTNO>702.17</SECTNO>
              <SUBJECT>Transfers of land and contract modifications.</SUBJECT>
              <SECTNO>702.18</SECTNO>
              <SUBJECT>Violations.</SUBJECT>
              <SECTNO>702.19</SECTNO>
              <SUBJECT>CRSC Contracts and operation and maintenance agreements not in conformity with regulations.</SUBJECT>
              <SECTNO>702.20</SECTNO>
              <SUBJECT>Appeals.</SUBJECT>
              <SECTNO>702.21</SECTNO>
              <SUBJECT>Access to land.</SUBJECT>
              <SECTNO>702.22</SECTNO>
              <SUBJECT>Performance based upon advice or action of representatives of the Department or a CD.</SUBJECT>
              <SECTNO>702.23</SECTNO>
              <SUBJECT>Filing of false claims.</SUBJECT>
              <SECTNO>702.24</SECTNO>
              <SUBJECT>Depriving others of payments.</SUBJECT>
              <SECTNO>702.25</SECTNO>
              <SUBJECT>Miscellaneous.</SUBJECT>
              <SECTNO>702.26</SECTNO>
              <SUBJECT>Paperwork Reduction Act assigned numbers.</SUBJECT>
            </CONTENTS>
            <AUTH>
              <PRTPAGE P="30"/>
              <HD SOURCE="HED">Authority:</HD>
              <P>Sec. 201, Pub. L. 93-320, 88 Stat. 271; Sec. 2, Pub. L. 98-569, 98 Stat. 2933 (43 U.S.C. 1592(c)).</P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>52 FR 16741, May 5, 1987, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>§ 702.1</SECTNO>
              <SUBJECT>General.</SUBJECT>
              <P>The regulations in this part set forth the terms and conditions of the Colorado River Salinity Control (CRSC) Program authorized by section 202 of the Colorado River Basin Salinity Control Act, as amended (43 U.S.C. 1592) (the Act). Under the Act the Secretary is authorized to:</P>
              <P>(a) Identify salt-source areas in the Colorado River Basin;</P>
              <P>(b) Develop plans for implementing conservation measures that will reduce the salt load in the Colorado River, including the voluntary replacement of incidental fish and wildlife values foregone;</P>
              <P>(c) Share the cost of establishing such conservation measures and practices;</P>
              <P>(d) Provide technical assistance;</P>
              <P>(e) Monitor and evaluate changes in salt contributions to the Colorado River; and</P>
              <P>(f) Carry out related research, demonstration and education activities.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.2</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>(a) The following definitions shall be applicable for the purposes of this part:</P>
              <P>(1) <E T="03">Applicant</E> means an entity who has offered to enter into a CRSC Contract in accordance with the provisions of this part;</P>
              <P>(2) <E T="03">Actual cost</E> means the direct costs of establishing a salinity reduction practice, and includes the cost of labor, supplies, and other necessary activities;</P>
              <P>(3) <E T="03">Average cost</E> means the cost, determined by averaging actual costs and current cost estimates, considered to be necessary for a participant to carry out a salinity reduction practice, a designated component of a salinity reduction practice, or a system of practices;</P>
              <P>(4) <E T="03">Conservation District</E> (CD) means a subdivision of a State organized pursuant to applicable State law. The term includes bodies variously known in the States as conservation district, soil conservation district, soil and water conservation district, natural resource district, resource conservation district, or natural resource conservation district;</P>
              <P>(5) <E T="03">Components</E> means measurable units of a salinity reduction practice which, when completed by the program participant, can be certified by the Soil Conservation Service (SCS) as reasonable, identifiable progress toward completion of the practice with respect to which cost-share payment is being made under the CRSC program;</P>
              <P>(6) <E T="03">Conservation treatment</E> means the combination of salinity reduction practices that will provide the salinity control treatment required to reduce seepage and improve irrigation water management in order to achieve the projected salt load reductions indicated in the applicable published USDA Salinity Control Report. Such treatment may include replacement of incidental fish and wildlife values foregone as a result of salinity control treatment applied by the participant under the CRSC program.</P>
              <P>(7) <E T="03">CRSC Contract</E> means the contract including the salinity control plan, entered into in writing between the local Agricultural Stabilization and Conservation Committee (COC) and the participant which sets forth the terms and conditions for participation in the CRSC Program established in accordance with this part.</P>
              <P>(8) <E T="03">Cost-effective</E> means maximization of the CRSC Program on-farm and offsite benefits at the least Federal cost per unit of salinity reduction.</P>
              <P>(9) <E T="03">Cost-share assistance</E> means the providing of financial resources to assist program participants in establishing conservation treatment identified in participants' contracts;</P>
              <P>(10) <E T="03">Cost-share rate</E> means a fixed amount of cost-share funds paid per unit for carrying out certain salinity reduction practices.</P>
              <P>(11) <E T="03">Deputy Administrator</E> means the FSA Deputy Administrator for State and County Operations, or designee.</P>
              <P>(12) <E T="03">Entity</E> means an individual or group of individuals, Indian tribe, partnership, firm, joint-stock company, corporation, association, trust, estate, irrigation district/company, or other <PRTPAGE P="31"/>public or nonpublic entity (except federal agencies), and wherever applicable, a State, a political subdivision of a State, or any agency thereof;</P>
              <P>(13) <E T="03">Fish and wildlife values foregone</E> means incidental fish and wildlife habitats that may be affected adversely by salinity reduction practices applied by the program participant;</P>
              <P>(14) <E T="03">Irrigation district/company</E> means a group of individuals (private or public) associated together in a locality, that has a vested interested in the operation of an irrigation distribution system that serve as a specific area. This definition includes irrigation districts, mutual water companies or districts, water conservancy districts, canal companies, and other similar entities;</P>
              <P>(15) <E T="03">Lifespan</E> means the period of time during which a salinity reduction practice is expected to effectively achieve or provide the results for which it was developed and implemented.</P>
              <P>(16) <E T="03">Offsite benefits</E> means those benefits which accrue downstream as a result of reduced salinity concentrations in the Colorado River by the salt load reductions achieved through implementation of the CRSC Program and/or its constituent practices and treatments;</P>
              <P>(17) <E T="03">On-farm benefits</E> means those benefits which accrue on a farm from improved irrigation systems and efficiencies, including reduced production costs, reduced labor costs, reduced operation and maintenance costs, and improved crop yields;</P>
              <P>(18) <E T="03">Operation and Maintenance Agreement</E> means the agreement entered into between the COC and the participant which sets forth the terms and conditions requiring the participant to use and maintain the salinity reduction practices for their effective lifespans as set forth in the agreement;</P>
              <P>(19) <E T="03">Participant</E> means any entity who has entered into an approved CRSC Contract with the COC to participate in the CRSC Program;</P>
              <P>(20) <E T="03">Project implementation plan</E> means a plan of operations developed by Farm Service Agency, Extension Service and Soil Conservation Service, in consultation with local officials for the purpose of implementing a project plan for a specific salt source area;</P>
              <P>(21) <E T="03">Project plan</E> means that plan of conservation treatment that is identified in the applicable USDA Salinity Control Report as the preferred plan for implementation of salinity reduction practices in a specific salt source area. The project plan will identify cost-effective salinity reduction practices, the land which should receive conservation treatment on a priority basis in relation to other land in the specific salt source area, and the levels of conservation treatment needed in the specific salt source area in order to achieve the most cost-effective salinity control objectives for the particular area to be achieved;</P>
              <P>(22) <E T="03">Salinity control plan</E> means the plan and schedule of operations that sets forth salinity reduction practices that must be establish on a specific unit of land. The salinity control plan shall be developed by the applicant with assistance from the SCS and must be approved by the CD;</P>
              <P>(23) <E T="03">Salinity Reduction Practice (SRP)</E> means a specific conservation practice designed to reduce salt loading from a salt source area or to replace incidental fish and wildlife values foregone that is identified in a project plan and project implementation plan for a salt-source area;</P>
              <P>(24) <E T="03">Salt-source area</E> means a geographical area within the Colorado River Basin that has been identified by SCS as a significant contributing source of salt to the Colorado River;</P>
              <P>(25) <E T="03">Specifications</E> means minimum quantity and quality requirements established by SCS to meet the standard for a specific conservation practice;</P>
              <P>(26) <E T="03">State Conservationist</E> means the SCS official in charge of agency operations within a state, as set forth in part 600 of this chapter;</P>
              <P>(27) <E T="03">Technical assistance</E> means use of personnel and financial resources to identify salt-source areas, develop project plans, prepare salinity control plans, contracts, and designs, supervise plan installation, and carry out research, demonstration, education, monitoring, and evaluation activities;</P>
              <P>(28) <E T="03">USDA Salinity Control Report</E> means a report that identifies salt source areas in the Colorado River Basin and establishes a cost-effective project plan for such areas designed to <PRTPAGE P="32"/>reduce the salinity levels in the Colorado River. The USDA Salinity Control Report is prepared and published by the Soil Conservation Service with provision for public comment;</P>
              <P>(29) <E T="03">Technical guide</E> means a document on file in the local SCS office containing technical information and specifications for the conservation of soil, water, plant, animal, and related natural resources specifically applicable to the area for which it is prepared.</P>
              <P>(b) In the regulations in this part and in all instructions, forms, and documents in connection therewith, all other words and phrases shall, unless the context of subject matter otherwise requires, have the meanings assigned to them in the regulations governing reconstitutions of farms, allotments and bases, 7 CFR part 719.</P>
              <CITA>[52 FR 16741, May 5, 1987, as amended at 58 FR 11785, Mar. 1, 1993]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.3</SECTNO>
              <SUBJECT>Administration.</SUBJECT>
              <P>(a) <E T="03">Farm Service Agency.</E> (1) The Farm Service Agency (FSA), under the general supervision of the Administrator, FSA, shall administer the program established by this part. This program shall be carried out in the field by State ASC committees (STC) and local county ASC committees (COC).</P>
              <P>(2) Except as provided in paragraph (b) of this section, the Deputy Administrator, State and County Operations, FSA (Deputy Administrator), may determine any question arising under the program provided for in this part, may reverse or modify any determination made by an STC or COC in connection with this program, and may administer any and all phases of this program delegated to the COC, STC, or any employee(s) where the COC, STC, or any employee fails to perform a function required in these regulations. In exercising this authority, the Deputy Administrator may authorize a person or persons to carry out this program for such period of time as is deemed necessary.</P>
              <P>(b) <E T="03">Soil Conservation Service.</E> (1) The Soil Conservation Service (SCS) shall:</P>
              <P>(i) Identify salt source areas in the Colorado River Basin;</P>
              <P>(ii) Develop USDA Salinity Control Reports;</P>
              <P>(iii) Assist participants in developing salinity control plans; and</P>
              <P>(iv) Provide such other technical assistance in the implementation of the CRSC Program as is determined to be necessary.</P>
              <P>(2) The Chief, SCS, may determine any question arising under the CRSC Program with respect to the activities of SCS, State Conservationists, and conservation districts.</P>
              <P>(3) In developing the USDA Salinity Control Report and implementing the project plan, SCS shall coordinate with other agencies of the U.S. Department of Agriculture, the United States Department of the Interior, and the Environmental Protection Agency.</P>
              <P>(c) The Extension Service (ES) shall develop and coordinate information and educational programs and may provide other technical support to carry out the program provided for by this part.</P>
              <P>(d) Other USDA agencies such as Cooperative State Research Service (CSRS) and the Agricultural Research Service (ARS) may conduct research and may provide other technical support needed to carry out the CRSC Program.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.4</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <P>(a) The provision of this part shall be applicable to areas within the Colorado River Basin that have been identified by SCS as salt source areas.</P>
              <P>(b) The program provided for by this part shall be applicable to private lands, Indian tribal lands, lands owned or controlled by irrigation districts or companies, Federal land under the control of the USDA, and State and local government lands.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.5</SECTNO>
              <SUBJECT>Eligible land.</SUBJECT>
              <P>For the purposes of this part, eligible land is land that is within the Colorado River Basin area which:</P>
              <P>(a) Has been identified by SCS as a salt source area;</P>
              <P>(b) Is the subject of a published USDA Salinity Control Report and an approved project implementation plan;</P>
              <P>(c) Has been irrigated at least two years during the period between 1982 and 1986, inclusive; and</P>

              <P>(d) Notwithstanding the criteria articulated in paragraphs (a) through (c) <PRTPAGE P="33"/>of this section, the Deputy Administrator has final authority to approve land for CRSC program eligibility if one of the following conditions is satisfied:</P>
              <P>(1) If it is determined impossible to reorganize the existing irrigation system to increase irrigation efficiencies to obtain salt load reduction, irrigated land may be exchanged for nonirrigated land.</P>
              <P>(2) Nonirrigated wildlife areas devoted to replacing incidental fish and wildlife values foregone because of the CRSC program.</P>
              <P>(3) Incidental land, which in the course of improving or reorganizing the existing irrigation system, becomes irrigable.</P>
              <CITA>[52 FR 16741, May 5, 1987, as amended at 58 FR 11785, Mar. 1, 1993]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.6</SECTNO>
              <SUBJECT>Eligible entity.</SUBJECT>
              <P>In order to be eligible to enter into a CRSC Contract, an entity must own or have control over eligible land.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.7</SECTNO>
              <SUBJECT>Salinity control plan.</SUBJECT>
              <P>(a) The applicant, in consultation with SCS, shall develop the salinity control plan which is the most cost-effective consistent with the project plan.</P>
              <P>(b) All salinity control plans must be approved by the CD in order for the SRP's contained therein to be eligible for cost-share assistance.</P>
              <P>(c) When approving salinity control plans, the CD shall ensure that the salinity control plan is consistent with the approved project plan and cost-effective SRP's identified in the approved project implementation plan for the area.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.8</SECTNO>
              <SUBJECT>Eligible salinity reduction practices (SRP's).</SUBJECT>
              <P>(a) Eligible SRP's are those practices specified in the project implementation plan and the participant's salinity control plan that:</P>
              <P>(1) Significantly reduce the salt loading from a unit of land; or</P>
              <P>(2) Replace incidental fish and wildlife values foregone; or</P>
              <P>(3) Reduce erosion or seepage to a degree which significantly benefits salinity control.</P>
              <P>(b) Notwithstanding the foregoing provisions of this section, the following practices shall not be considered to be eligible SRP's:</P>
              <P>(1) Practices installed primarily for the purpose of bringing additional land into production, for increasing production above that which is incidental to application of conservation treatment for salinity control, or for flood protection; and</P>
              <P>(2) Practices which are installed or commenced before the contract for cost-share assistance has been approved.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.9</SECTNO>
              <SUBJECT>CRSC Contract and obligations of the participant.</SUBJECT>
              <P>(a) In order to receive cost-share assistance in accordance with this part, an eligible entity must enter into a CRSC Contract with a COC and, if required by the COC, enter into separate operation and maintenance agreements in accordance with § 702.10 of this part.</P>
              <P>(b) The CRSC Contract will be comprised of:</P>
              <P>(1) The terms and conditions of the contract; and</P>
              <P>(2) The salinity control plan.</P>
              <P>(c) All CRSC Contracts shall have a term of not less than 3 nor more than 10 years.</P>
              <P>(d) Eligible entities may offer to enter into a CRSC Contract in accordance with this part through the COC located in the same county as the eligible land or such other COC designated to administer contracts in the project area.</P>
              <P>(e) By entering into a CRSC Contract, the participant agrees to:</P>
              <P>(1) Carry out the terms and conditions of the CRSC Contract;</P>
              <P>(2) Implement the salinity control plan:</P>
              <P>(i) In accordance with the schedule of completion dates included in such plan, unless an extension of time is granted by the COC in consultation with the CD; and</P>
              <P>(ii) Install all SRP's included in the salinity control plan in accordance with the SCS field office technical guide, regardless of whether the applicant receives cost-share assistance with respect to a SRP;</P>

              <P>(3) Acquire all authorities, rights, easements, permits or other approvals <PRTPAGE P="34"/>necessary to install and maintain the SRP's and for compliance with applicable Federal, State, and local laws and regulations;</P>
              <P>(4) Hold the Federal government harmless for any losses it may sustain if the participant infringes on the rights of others or fails to comply with applicable Federal, State, or local laws or regulations;</P>
              <P>(5) Operate and maintain, at no cost to the Federal government, the SRP's as specified in the salinity control plan and ACP-245, Practice Approval and Payment Application, or as specified in separate operation and maintenance agreements entered into by the participant for the effective lifespan of the SRP's, as determined by SCS; and</P>
              <P>(6) Not undertake any action on the land subject to the CRSC Contract that tends to defeat the purposes of the program provided for by this part.</P>
              <P>(f) All entities who have a present possessory interest in the land, to be eligible for CRSC cost share, must sign a CRSC contract.</P>
              <P>(g) The participant and each entity signing the CRSC Contract shall be jointly and severally responsible for compliance with the contract and the provisions of this part and for any refunds or payments which may be required for violation of any of the terms and conditions of the CRSC Contract and the provisions of this part.</P>
              <P>(h) The CRSC contract may require that all participants and/or landowners, as a condition of eligibility for cost-share assistance, grant to the Secretary a recordable security interest in the property or equipment of the SRP's that are installed, with the value of the granted interest to be determined by FSA.</P>
              <P>(i) The Deputy Administrator, or the Deputy Administrator's designee, may, in consultation with SCS and the CD, accept or reject offers to enter into a CRSC Contract.</P>
              <P>(j) CRSC Contracts shall be implemented, and salinity control plans shall be developed, in the order of priority within the applicable salt source area that is established by the COC and CD in consultation with SCS.</P>
              <CITA>[52 FR 16741, May 5, 1987, as amended at 58 FR 11785, Mar. 1, 1993]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.10</SECTNO>
              <SUBJECT>Operation and maintenance agreements.</SUBJECT>
              <P>(a) The participant shall enter into with the COC any operation and maintenance agreements determined to be necessary by the COC in order to ensure proper operation and maintenance of the SRP's provided for in the CRSC Contract.</P>
              <P>(b) The operation and maintenance agreement will be comprised of:</P>
              <P>(1) The terms and conditions of the agreement; and</P>
              <P>(2) An operation and maintenance plan prepared by SCS.</P>
              <P>(c) By entering in a operation and maintenance agreement, the participant agrees to:</P>
              <P>(1) Carry out the terms and conditions of the operation and maintenance agreement;</P>
              <P>(2) Operate and maintain, at no cost to the Federal government, the SRP's for the effective lifespan of all SRP's included in the operation and maintenance agreement;</P>
              <P>(3) Operate, maintain and inspect the SRP's in accordance with the operation and maintenance plan;</P>
              <P>(4) Obtain prior COC and SCS approval of all plans, designs, and specifications for any alteration to the SRP's;</P>
              <P>(5) Prohibit the installation of any structure or facility that will interfere with the operation and maintenance of the SRP's;</P>
              <P>(6) Notify the COC and SCS of any agreement to be entered into with other parties for the operation and maintenance of all or part of SRP's and provide the COC and SCS with a copy of such agreement when it has been signed by the participant and the other party; and</P>
              <P>(7) Not undertake any action on the land subject to the operation and maintenance agreement that tends to defeat the purposes of the CRSC program;</P>

              <P>(d) The participant and each person signing the operation and maintenance agreement shall be jointly and severally responsible for compliance with the operation and maintenance agreement and the provisions of this part and for any refunds or payment adjustments that may be required for violation of any of the terms and conditions <PRTPAGE P="35"/>of the operation and maintenance agreement and provisions of this part.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.11</SECTNO>
              <SUBJECT>Obligations of USDA.</SUBJECT>
              <P>FSA shall, subject to the availability of funds, share the cost with participants of establishing eligible SRP's specified in the salinity control plan at the levels and rates of cost-sharing determined in accordance with the provisions of § 702.13 and SCS shall provide such technical assistance as may be necessary to assist the participant in carrying out the CRSC Contract.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.12</SECTNO>
              <SUBJECT>Availability of cost-share payments.</SUBJECT>
              <P>(a) Cost-share payments shall be made available to a participant in a CRSC Contract upon a determination by the COC that SCS has certified that the eligible SRP or an identifiable portion thereof has been established in accordance with the appropriate standards and specifications and that such SRP would serve the functional purposes for which the practice is intended.</P>
              <P>(b) Cost-share payments may be made available under this part only for the establishment or installation of an eligible SRP.</P>
              <P>(c) Cost-share assistance may be approved for the replacement, enlargement, or restoration of SRP's installed under a CRSC Contract if such practices, as originally installed, failed to achieve the desired salinity reduction and if:</P>
              <P>(1) The replacement, enlargement, or restoration of the SRP is required to solve identified problems or to achieve salt reduction benefits;</P>
              <P>(2) The approved specifications for the SRP were met in the original installation of the practice; and</P>
              <P>(3) The failure of the SRP to solve the identified problem or to achieve salt reduction benefits was caused by circumstances beyond the control of the participant.</P>
              <P>(d) If a participant has taken any action which tends to defeat the purposes of the program provided for by this part, the COC may withhold or require a refund of all or part of any payments otherwise due or paid that participant in accordance with this part. Such actions include, but are not limited to, failure to properly maintain or deliberately destroying a SRP.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.13</SECTNO>
              <SUBJECT>Levels and rates of cost-share payments.</SUBJECT>
              <P>(a) The level of Federal cost-share assistance for the required SRP's for the project shall be determined by formulas as established in the USDA Salinity Control Report.</P>
              <P>(b) Except as provided in paragraph (c) of this section, cost-share payments shall not exceed the lesser of 70 percent of the average cost or 70 percent of the actual cost of the installation of the SRP.</P>
              <P>(c) The Deputy Administrator, in consultation with the USDA Salinity Control Coordinating Committee, may approve cost-share levels in excess of 70 percent of the average or actual cost of installation of the SRP or in excess of the level based on the ratio of on-farm and offsite benefits if such increased assistance is necessary to obtain acceptable program participation. Higher cost-share levels shall be considered only when one or more of the following apply, unless the Secretary finds at his descretion that such cost-sharing requirement would result in a failure to proceed with needed on-farm measures:</P>
              <P>(1) On-farm benefits that are low relative to offsite benefits;</P>
              <P>(2) Higher degree of project cost-effectiveness and magnitude of salinity reduction benefits to be achieved relative to other projects;</P>
              <P>(3) The need for and the cost of implementing voluntary SRP's to replace incidental fish and wildlife values foregone;</P>
              <P>(d) The combined cost-share assistance provided by Federal, State, and local governments or subdivisions thereof shall not exceed 100 percent of the cost of installing the SRP.</P>
              <CITA>[52 FR 16741, May 5, 1987, as amended at 58 FR 11786, Mar. 1, 1993]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.14</SECTNO>
              <SUBJECT>Assignments.</SUBJECT>
              <P>Any participant entitled to cost-share payments under this program may assign the right to receive such payment, in whole or in part, as provided in the regulations at 7 CFR part 709, Assignment of Payment, or as provided in instructions issued by the Deputy Administrator.</P>
            </SECTION>
            <SECTION>
              <PRTPAGE P="36"/>
              <SECTNO>§ 702.15</SECTNO>
              <SUBJECT>Payments not subject to claims.</SUBJECT>
              <P>Subject to the regulations found at 7 CFR part 13, any cost-share payment or portion thereof due any entity shall be allowed without regard to questions of title under State law, and without regard to any claim or lien against the practice in favor of the owner or any other creditor, except agencies of the United States Government.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.16</SECTNO>
              <SUBJECT>Maximum amount of cost-share payments.</SUBJECT>
              <P>(a) Maximum payments for on-farm SRP's.</P>
              <P>(1) Except as provided in paragraph (a)(2) of this section, the maximum amount of cost-share payments that a COC may approve for the establishment of on-farm SRP's on all land owned or controlled by a participant for the life of the program provided for by this part shall not exceed $100,000.</P>
              <P>(2) The Deputy Administrator may approve cost-share payments to a participant for the establishment of on-farm SRP's in excess of $100,000.</P>
              <P>(b) Except as provided in paragraphs (b)(1) and (b)(2) of this section, the maximum program cost-share payment that a COC may approve for implementing required SRP's for installing and improving canals and laterals on all land owned and controlled by a participant for the life of the program shall not exceed $200,000.</P>
              <P>(1) Upon the request of the COC, the STC may authorize the COC to approve cost-share payments to a participant for the establishment of canal and lateral improvements in an amount that exceeds, $200,000 but not greater than $400,000.</P>
              <P>(2) Upon the request of the COC, the Deputy Administrator may authorize the COC to approve cost-share payments to a participant for the establishment of canal and laterals improvements in amounts exceeding $400,000.</P>
              <P>(c) Cost-sharing payments in excess of $100,000 shall be considered only when such payment will result in greater total offsite benefits, because the offsite benefits for the participants SCP, are greater than those of other participants under consideration at the same time and one or more of the following conditions exist:</P>
              <P>(1) The cost of establishing required SRP's on the participant's land is high relative to the cost of installing practices on other similar land because of barriers or limitations imposed by nature or by man through past irrigation system practices;</P>
              <P>(2) The extent of SRP's that must be established on a participant's land; and</P>
              <P>(3) Increases in the cost of conservation materials and services that are beyond the participant's control.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.17</SECTNO>
              <SUBJECT>Transfers of land and contract modifications.</SUBJECT>
              <P>(a) CRSC Contracts may be transferrred or modified with the agreement of all parties to the contract. The transferee shall assume full responsibility for performance under the CRSC Contract, including the implementation of scheduled SRP's and the operation and maintenance of existing and scheduled SRP's.</P>
              <P>(b) A participant who sells or loses control of the land under a CRSC Contract or any related operation and maintenance agreement to a new owner who refuses to perform the provisions of the CRSC Contract or operation and maintenance agreement or a participant who sells the water rights before there is compliance with all of the terms and conditions of a CRSC Contract or operation and maintenance agreement may be required to refund all or a portion of the cost-share assistance earned under the program.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.18</SECTNO>
              <SUBJECT>Violations.</SUBJECT>
              <P>(a)(1) If a participant violates the CRSC Contract or any related operations and maintenance agreement, the COC may, after considering the recommendations of the CD and SCS, terminate the CRSC Contract and operation and maintenance agreement.</P>
              <P>(2) If the CRSC Contract is terminated by the COC in accordance with this section, the participant shall forfeit all rights to further cost-share payments under the CRSC Contract and shall refund all or part of the payments received as determined by the COC.</P>

              <P>(b) The following actions constitute a violation of the CRSC Contract or any related operation and maintenance agreement by a participant:<PRTPAGE P="37"/>
              </P>
              <P>(1) Destruction of a SRP on land which is the subject of a CRSC Contract, unless prior approval in writing is granted by FSA with SCS concurrence;</P>
              <P>(2) Failure to comply with the terms and conditions of the CRSC Contract and any related operation and maintenance agreements;</P>
              <P>(3) Filing of a false claim;</P>
              <P>(4) Undertaking any action during the CRSC Contract or any operation and maintenance agreement period that tends to defeat the purpose of the program, including the destruction of any existing conservation practices that were established under any other cost-share program unless the participant provides evidence that all of the participant's obligations under such other program have been met; or</P>
              <P>(5) Employment of any scheme or device to obtain cost-share assistance or additional cost-share assistance, or to deprive any other land user of cost-share assistance or the right to participate in the program.</P>
              <P>(c) The Deputy Administrator may terminate any CRSC Contract and any related operation and maintenance agreements by mutual agreement with the paticipant based upon recommendations from COC, STC, SCS, and CD, if the termination of the CRSC Contract and operation and maintenance agreement is determined to be in the best interest of the public.</P>
              <P>(d) If the participant fails to perform the terms and conditions of the CRSC contract and the Deputy Administrator determines, after considering the recommendations of the CD and SCS, that such failure does not warrant termination of the CRSC contract, the Deputy Administrator may require such participant to refund all or part of the payments received under the CRSC contract, or to accept such adjustments in the payment as are determined to be appropriate by the Deputy Administrator.</P>
              <CITA>[52 FR 16741, May 5, 1987, as amended at 58 FR 11786, Mar. 1, 1993]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.19</SECTNO>
              <SUBJECT>CRSC Contracts and operation and maintenance agreements not in conformity with regulations.</SUBJECT>
              <P>If, after a CRSC Contract and related operation and maintenance agreement are entered in by the COC with a participant, it is discovered that such contract and operation and maintenance agreement are not in conformity with the provisions of this part as the result of a misunderstanding of the program procedures by a signatory to the contract and operation and maintenance agreement, a modification of the contract and operation and maintenance agreement may be made by mutual agreement. If the parties to the CRSC Contract and operation and maintenance agreement cannot reach agreement with respect to such modification, the contract and operation and maintenance agreement shall be terminated and all payments paid or payable under the contract shall be forfeited or refunded to the Federal government, except as may otherwise be allowed in accordance with the provisions of § 702.18 of this part.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.20</SECTNO>
              <SUBJECT>Appeals.</SUBJECT>
              <P>The participant may obtain a review, in accordance with the provisions of 7 CFR part 614 and 7 CFR part 11, of any administrative decision made under the provisions of this part.</P>
              <CITA>[60 FR 67316, Dec. 29, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.21</SECTNO>
              <SUBJECT>Access to land.</SUBJECT>
              <P>The COC, SCS or other agency providing technical services or representatives thereof shall have the right of access to land for which application to enter into a CRSC Contract has been made or for which a CRSC Contract has been entered into and the right to examine any program records to ascertain the accuracy of any representation made in the application or to determine compliance with the contract.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.22</SECTNO>
              <SUBJECT>Performance based upon advice or action of representatives of the Department or a CD.</SUBJECT>

              <P>Notwithstanding any other provision of law, performance rendered in good faith in reliance upon the action or advice of any authorized representative of a CD, a representative of SCS or the STC or COC may be accepted by the Chief of SCS or the Deputy Administrator, as applicable, as meeting the requirements of this program. SCS or the Deputy Administrator, respectively, may grant relief because of such good <PRTPAGE P="38"/>faith reliance to the extent it is deemed necessary to provide fair and equitable treatment.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.23</SECTNO>
              <SUBJECT>Filing of false claims.</SUBJECT>
              <P>(a) If it is determined by the COC, with STC concurrence, that any participant has knowingly submitted false information or filed a false claim, such participant shall be ineligible for payments under the provisions of this part with respect to the calendar year in which the false information or claim was filed.</P>
              <P>(b) False information or false claims include a claim for payment for a SRP not carried out or for the establishment of SRP's which do not meet the required specifications. Any amounts paid under these circumstances shall be refunded and any amounts otherwise due the participant shall be withheld. The withholding or refunding of such payments will be in addition to any other penalty or liability otherwise imposed by law.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.24</SECTNO>
              <SUBJECT>Depriving others of payments.</SUBJECT>
              <P>If the COC with STC concurrence finds that any participant has employed any scheme or device to deprive any other person of payments under this part, it may withhold or require a refund of all or part of any program payment otherwise due or paid that person in accordance with the CRSC Contract. A scheme or device includes, but is not limited to, coercion, fraud, or misrepresentation.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.25</SECTNO>
              <SUBJECT>Miscellaneous.</SUBJECT>
              <P>(a) In accordance with the regulations set forth at 7 CFR part 796:</P>
              <P>(1) No payment shall be made to any participant who harvests or knowingly permits to be harvested for illegal use, marihuana or other such prohibited drug-producing plants on any part of the lands owned or controlled by such participants; and</P>
              <P>(2) Any participant who is convicted under Federal or State law of planting, cultivating, growing, producing, harvesting, or storing a controlled substance in any crop year shall be ineligible for any payments under this part during that crop year and the four (4) succeeding crop years.</P>
              <P>(b) In case of death, incompetency, or disappearance of any participant, any cost-share payment due shall be paid to the participant's successor in accordance with provisions of 7 CFR part 707.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 702.26</SECTNO>
              <SUBJECT>Paperwork Reduction Act assigned numbers.</SUBJECT>
              <P>The Office of Management and Budget has approved the information collection requirements contained in these regulations under the provisions of 44 U.S.C. Chapter 33 and OMB number 0560-0128 has been assigned.</P>
            </SECTION>
          </PART>
          <PART>
            <EAR>Pt. 707</EAR>
            <HD SOURCE="HED">PART 707—PAYMENTS DUE PERSONS WHO HAVE DIED, DISAPPEARED, OR HAVE BEEN DECLARED INCOMPETENT</HD>
            <CONTENTS>
              <SECHD>Sec.</SECHD>
              <SECTNO>707.1</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <SECTNO>707.2</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>707.3</SECTNO>
              <SUBJECT>Death.</SUBJECT>
              <SECTNO>707.4</SECTNO>
              <SUBJECT>Disappearance.</SUBJECT>
              <SECTNO>707.5</SECTNO>
              <SUBJECT>Incompetency.</SUBJECT>
              <SECTNO>707.6</SECTNO>
              <SUBJECT>Death, disappearance, or incompetency of one eligible to apply for payment pursuant to the regulations in this part.</SUBJECT>
              <SECTNO>707.7</SECTNO>
              <SUBJECT>Form of application.</SUBJECT>
            </CONTENTS>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>54 Stat. 728, as amended, sec. 121, 70 Stat. 197, sec. 375, 52 Stat. 66, as amended, sec. 124(i), 75 Stat. 300, sec. 307(h), 76 Stat. 617, sec. 318, 76 Stat. 622, sec. 324(2), 76 Stat. 630, sec. 704, 68 Stat. 911, secs. 4, 8(b), 49 Stat. 164, 1149, as amended, sec. 101(4), 76 Stat. 606, sec. 3, 77 Stat. 45, sec. 4, 62 Stat. 1070; 5 U.S.C. 301, 7 U.S.C. 1334 note, 1339, 1375, 1379j, 1385, 1783, 1809; 16 U.S.C. 590d, 590h(b), 590(e), 590p(h), 15 U.S.C. 714b(d)(j)(k).</P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>30 FR 6246, May 5, 1965, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>§ 707.1</SECTNO>
              <SUBJECT>Applicability.</SUBJECT>
              <P>This part applies to all programs in title 7 of the Code of Federal Regulations which are administered by the Farm Service Agency under which payments are made to eligible program participants. This part also applies to all other programs to which this part is applicable by the individual program regulations.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 707.2</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>

              <P>“Person” when relating to one who dies, disappears, or becomes incompetent, prior to receiving payment, <PRTPAGE P="39"/>means a person who has earned a payment in whole or in part pursuant to any of the programs to which this part is applicable. “Children” shall include legally adopted children who shall be entitled to share in any payment in the same manner and to the same extent as legitimate children of natural parents. “Brother” or “sister”, when relating to one who, pursuant to the regulations in this part, is eligible to apply for the payment which is due a person who dies, disappears, or becomes incompetent prior to the receipt of such payment, shall include brothers and sisters of the half blood who shall be considered the same as brothers and sisters of the whole blood. “Payment” means a payment by draft, check or certificate pursuant to any of the Programs to which this part is applicable. Payments shall not be considered received for the purposes of this part until such draft, check or certificate has been negotiated or used.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 707.3</SECTNO>
              <SUBJECT>Death.</SUBJECT>
              <P>(a) Where any person who is otherwise eligible to receive a payment dies before the payment is received, payment may be made upon proper application therefor, without regard to claims of creditors other than the United States, in accordance with the following order of precedence:</P>
              <P>(1) To the administrator or executor of the deceased person's estate.</P>
              <P>(2) To the surviving spouse, if there is no administrator or executor and none is expected to be appointed, or if an administrator or executor was appointed but the administration of the estate is closed (i) prior to application by the administrator or executor for such payment or (ii) prior to the time when a check, draft, or certificate issued for such payment to the administrator or executor is negotiated or used.</P>
              <P>(3) If there is no surviving spouse, to the sons and daughters in equal shares. Children of a deceased son or daughter of a deceased person shall be entitled to their parent's share of the payment, share and share alike. If there are no surviving direct descendants of a deceased son or daughter of such deceased person, the share of the payment which otherwise would have been made to such son or daughter shall be divided equally among the surviving sons and daughters of such deceased person and the estates of any deceased sons or daughters where there are surviving direct descendants.</P>
              <P>(4) If there is no surviving spouse and no direct descendant, payment shall be made to the father and mother of the deceased person in equal shares, or the whole thereof to the surviving father or mother.</P>
              <P>(5) If there is no surviving spouse, no direct descendant, and no surviving parent, payment shall be made to the brothers and sisters of the deceased person in equal shares. Children of a deceased brother or sister shall be entitled to their parent's share of the payment, share and share alike. If there are no surviving direct descendants of the deceased brother or sister of such deceased person, the share of the payment which otherwise would have been made to such brother or sister shall be divided equally among the surviving brothers and sisters of such deceased person and the estates of any deceased brothers or sisters where there are surviving direct descendants.</P>
              <P>(6) If there is no surviving spouse, direct descendant, parent, or brothers or sisters or their descendants, the payment shall be made to the heirs-at-law in accordance with the law of the State of domicile of the deceased person.</P>
              <P>(b) If any person who is entitled to payment under the above order of prec-edence is a minor, payment of his share shall be made to his legal guardian, but if no legal guardian has been appointed payment shall be made to his natural guardian or custodian for his benefit, unless the minor's share of the payment exceeds $1,000, in which event payment shall be made only to his legal guardian.</P>
              <P>(c) Any payment which the deceased person could have received may be made jointly to the persons found to be entitled to such payment or shares thereof under this section or, pursuant to instructions issued by the Farm Service Agency, a separate payment may be issued to each person entitled to share in such payment.</P>
            </SECTION>
            <SECTION>
              <PRTPAGE P="40"/>
              <SECTNO>§ 707.4</SECTNO>
              <SUBJECT>Disappearance.</SUBJECT>
              <P>(a) In case any person otherwise eligible to receive payment disappears before receiving the payment, such payment may be made upon proper application therefor, without regard to claims of creditors other than the United States, to one of the following in the order mentioned:</P>
              <P>(1) The conservator or liquidator of his estate, if one be duly appointed.</P>
              <P>(2) The spouse.</P>
              <P>(3) An adult son or daughter or grandchild for the benefit of his estate.</P>
              <P>(4) The mother or father for the benefit of his estate.</P>
              <P>(5) An adult brother or sister for the benefit of his estate.</P>
              <P>(6) Such person as may be authorized under State law to receive payment for the benefit of his estate.</P>
              <P>(b) A person shall be deemed to have disappeared if (1) he has been missing for a period of more than 3 months, (2) a diligent search has failed to reveal his whereabouts, and (3) such person has not communicated during such period with other persons who would be expected to have heard from him. Evidence of such disappearance must be presented to the county committee in the form of a statement executed by the person making the application for payment, setting forth the above facts, and must be substantiated by a statement from a disinterested person who was well acquainted with the person who has disappeared.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 707.5</SECTNO>
              <SUBJECT>Incompetency.</SUBJECT>
              <P>(a) Where any person who is otherwise eligible to receive a payment is adjudged incompetent by a court of competent jurisdiction before the payment is received, payment may be made, upon proper application therefor, without regard to claims of creditors other than the United States, to the guardian or committee legally appointed for such incompetent person. In case no guardian or committee has been appointed, payment, if not more than $1,000, may be made without regard to claims of creditors other than the United States, to one of the following in the order mentioned for the benefit of the incompetent person:</P>
              <P>(1) The spouse.</P>
              <P>(2) An adult son, daughter, or grandchild.</P>
              <P>(3) The mother or father.</P>
              <P>(4) An adult brother or sister.</P>
              <P>(5) Such person as may be authorized under State law to receive payment for him (see standard procedure prescribed for the respective region).</P>
              <P>(b) In case payment is more than $1,000, payment may be made only to such person as may be authorized under State law to receive payment for the incompetent.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 707.6</SECTNO>
              <SUBJECT>Death, disappearance, or incompetency of one eligible to apply for payment pursuant to the regulations in this part.</SUBJECT>
              <P>In case any person entitled to apply for a payment pursuant to the provisions of § 707.3, § 707.4, § 707.5, or this section, dies, disappears, or is adjudged incompetent, as the case may be, after he has applied for such payment but before the payment is received, payment may be made upon proper application therefor, without regard to claims of creditors other than the United States, to the person next entitled thereto in accordance with the order of precedence set forth in § 707.3, § 707.4, or § 707.5, as the case may be.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 707.7</SECTNO>
              <SUBJECT>Form of application.</SUBJECT>
              <P>Persons desiring to claim payment in accordance with this part 707 may do so on Form FSA-325, “Application for Payment of Amounts Due Persons Who Have Died, Disappeared, or Have Been Declared Incompetent”. If the person who died, disappeared, or was declared incompetent did not apply for payment by filing the applicable program application for payment form, such program application for payment must also be filed in accordance with applicable regulations. If the payment is made under the Naval Stores Conservation Program, Part II of the Form FSA-325 shall be executed by the local District Supervisor of the U.S. Forest Service. In connection with applications for payment under all other programs itemized in § 707.1, Form FSA-325, and program applications for payments where required, shall be filed with the FSA county office where the person who earned the payment would have been required to file his application.</P>
            </SECTION>
          </PART>
          <PART>
            <PRTPAGE P="41"/>
            <EAR> Pt. 708</EAR>
            <HD SOURCE="HED">PART 708—RECORD RETENTION REQUIREMENTS—ALL PROGRAMS</HD>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>Sec. 4, 49 Stat. 164, secs. 7-17, 49 Stat. 1148, as amended; 16 U.S.C. 590d, 590g-590q.</P>
            </AUTH>
            <SECTION>
              <SECTNO>§ 708.1</SECTNO>
              <SUBJECT>Record retention period.</SUBJECT>
              <P>For the purposes of the programs in this chapter, no receipt, invoice, or other record required to be retained by any agricultural producer as evidence tending to show performance of a practice under any such program needs to be retained by such producer more than two years following the close of the program year of the program.</P>
              <CITA>[25 FR 105, Jan. 7, 1960. Redesignated at 26 FR 5788, June 29, 1961]</CITA>
            </SECTION>
          </PART>
        </SUBCHAP>
        <SUBCHAP TYPE="P">
          <PRTPAGE P="42"/>
          <HD SOURCE="HED">SUBCHAPTER B—FARM MARKETING QUOTAS, ACREAGE ALLOTMENTS, AND PRODUCTION ADJUSTMENT</HD>
          <PART>
            <EAR>Pt. 711</EAR>
            <HD SOURCE="HED">PART 711—MARKETING QUOTA REVIEW REGULATIONS</HD>
            <CONTENTS>
              <SUBJGRP>
                <HD SOURCE="HED">General</HD>
                <SECHD>Sec.</SECHD>
                <SECTNO>711.1</SECTNO>
                <SUBJECT>Effective date.</SUBJECT>
                <SECTNO>711.2</SECTNO>
                <SUBJECT>Expiration of time limitations.</SUBJECT>
                <SECTNO>711.3</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <SECTNO>711.4</SECTNO>
                <SUBJECT>Forms.</SUBJECT>
                <SECTNO>711.5</SECTNO>
                <SUBJECT>Public information.</SUBJECT>
              </SUBJGRP>
              <SUBJGRP>
                <HD SOURCE="HED">Review Committee</HD>
                <SECTNO>711.6</SECTNO>
                <SUBJECT>Eligibility as member of a panel.</SUBJECT>
                <SECTNO>711.7</SECTNO>
                <SUBJECT>Appointment of members of a panel.</SUBJECT>
                <SECTNO>711.8</SECTNO>
                <SUBJECT>Oath of office.</SUBJECT>
                <SECTNO>711.9</SECTNO>
                <SUBJECT>Composition of review committee.</SUBJECT>
                <SECTNO>711.10</SECTNO>
                <SUBJECT>Term of office.</SUBJECT>
                <SECTNO>711.11</SECTNO>
                <SUBJECT>Compensation.</SUBJECT>
                <SECTNO>711.12</SECTNO>
                <SUBJECT>Effect of change in composition of review committee.</SUBJECT>
              </SUBJGRP>
              <SUBJGRP>
                <HD SOURCE="HED">Jurisdiction</HD>
                <SECTNO>711.13</SECTNO>
                <SUBJECT>Areas of venue and jurisdiction.</SUBJECT>
              </SUBJGRP>
              <SUBJGRP>
                <HD SOURCE="HED">Application for Review of Quota</HD>
                <SECTNO>711.14</SECTNO>
                <SUBJECT>Application for review.</SUBJECT>
                <SECTNO>711.15</SECTNO>
                <SUBJECT>Matters subject to review.</SUBJECT>
                <SECTNO>711.16</SECTNO>
                <SUBJECT>County committee answer.</SUBJECT>
                <SECTNO>711.17</SECTNO>
                <SUBJECT>Amendments.</SUBJECT>
              </SUBJGRP>
              <SUBJGRP>
                <HD SOURCE="HED">Hearing and Determination</HD>
                <SECTNO>711.18</SECTNO>
                <SUBJECT>Place and schedule of hearing.</SUBJECT>
                <SECTNO>711.19</SECTNO>
                <SUBJECT>Notice of hearing.</SUBJECT>
                <SECTNO>711.20</SECTNO>
                <SUBJECT>Continuances.</SUBJECT>
                <SECTNO>711.21</SECTNO>
                <SUBJECT>Conduct of hearing.</SUBJECT>
                <SECTNO>711.22</SECTNO>
                <SUBJECT>Nonappearance of applicant.</SUBJECT>
                <SECTNO>711.23</SECTNO>
                <SUBJECT>Determination by review committee.</SUBJECT>
                <SECTNO>711.24</SECTNO>
                <SUBJECT>Service of determination.</SUBJECT>
                <SECTNO>711.25</SECTNO>
                <SUBJECT>Reopening of hearing.</SUBJECT>
                <SECTNO>711.26</SECTNO>
                <SUBJECT>Record of hearing.</SUBJECT>
              </SUBJGRP>
              <SUBJGRP>
                <HD SOURCE="HED">Court Proceedings</HD>
                <SECTNO>711.27</SECTNO>
                <SUBJECT>Procedure in the case of court proceedings.</SUBJECT>
              </SUBJGRP>
              <SUBJGRP>
                <HD SOURCE="HED">Puerto Rico</HD>
                <SECTNO>711.28</SECTNO>
                <SUBJECT>Special provisions applicable to Puerto Rico.</SUBJECT>
              </SUBJGRP>
              <SUBJGRP>
                <HD SOURCE="HED">OMB Control Numbers</HD>
                <SECTNO>711.29</SECTNO>
                <SUBJECT>OMB control numbers assigned pursuant to the Paperwork Reduction Act.</SUBJECT>
              </SUBJGRP>
            </CONTENTS>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>Secs. 301, 363-368, 371, 374, 375, 379, 52 Stat. 38, as amended, 63-66, amended, 79 Stat. 1211, as amended; 7 U.S.C. 1301, 1363-1368, 1371, 1374, 1375, 1379.</P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>35 FR 15355, Oct. 2, 1970, unless otherwise noted.</P>
            </SOURCE>
            <SUBJGRP>
              <HD SOURCE="HED">General</HD>
              <SECTION>
                <SECTNO>§ 711.1</SECTNO>
                <SUBJECT>Effective date.</SUBJECT>
                <P>The Marketing Quota Review Regulations (26 FR 10204, 27 FR 4831, 6539, 28 FR 3913, 31 FR 4271, 5663, 32 FR 15704) shall remain in effect and shall apply to all actions and proceedings taken prior to October 15, 1970, and such regulations are superseded as of midnight, October 14, 1970. The provisions of §§ 711.1 to 711.50 are effective October 15, 1970.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.2</SECTNO>
                <SUBJECT>Expiration of time limitations.</SUBJECT>
                <P>The provisions of part 720 of this chapter concerning the expiration of time limitations shall apply to this part.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.3</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <P>(a) <E T="03">General terms.</E> In determining the meaning of the provisions of this part, unless the context indicates otherwise, words importing the singular include and apply to several persons or things, words importing the plural include the singular, words importing the masculine gender include the feminine as well, and words used in the present tense include the future as well as the present. The definitions in part 719 of this chapter shall apply to this part.</P>
                <P>(b) <E T="03">Act.</E> Act means the Agricultural Adjustment Act of 1938, and any amendments or supplements thereto.</P>
                <P>(c) <E T="03">Applicant.</E> Applicant means the farmer who filed an application for review of a farm marketing quota and if a hearing involves the quota of a farm resulting from the reconstitution by division of a parent farm, the farm operator of each farm resulting from such reconstitution shall be considered an applicant for purposes of this part.</P>
                <P>(d) <E T="03">Clerk.</E> Clerk means the county executive director for the county in which the application for review is filed unless another employee of the county or State office is designated by the State executive director to serve as clerk to the review committee.</P>
                <P>(e) <E T="03">Review committee.</E> Review committee means three farmers designated <PRTPAGE P="43"/>to review a quota by the State executive director from the panel of farmers appointed by the Secretary under section 363 of the Act.</P>
                <P>(f) <E T="03">Quota.</E> Quota means the farm marketing quota established under the Act for a farm during a year in which quotas are approved in the national referendum for a commodity, including any of the following factors:</P>
                <P>(1) Farm acreage allotment, farm marketing quota, and any adjustments in such allotment and quota resulting from: (i) Program violations; (ii) lease and transfer; (iii) sale and purchase; (iv) overmarketing and undermarketing; (v) release and reapportionment; (vi) eminent domain transactions; and (vii) forfeiture and reallocation.</P>
                <P>(2) Farm preliminary yield, farm normal yield and farm yield.</P>
                <P>(3) A determination of the land constituting a farm for which a farm acreage allotment or farm marketing quota is established, including the following: (i) Land devoted to nonagricultural use, (ii) land used for agricultural purposes, (iii) cropland acreage; and (iv) tillable cropland.</P>
                <P>(4) Acreage planted to the commodity on the farm.</P>
                <P>(5) Actual production for the farm.</P>
                <P>(6) Farm marketing excess (acres or pounds).</P>
                <P>(7) Marketing quota penalties, including but not limited to, assessments for marketing quota violations involving: (i) False identification, (ii) failure to account for production and disposition, (iii) failure to file a report, and (iv) the filing of a false report.</P>
                <SECAUTH>(Secs. 301, 363-368, 371, 374, 375, 379, 52 Stat. 38 as amended, 63-64, as amended, 66, as amended; 7 U.S.C. 1301, 1363-1368, 1375)</SECAUTH>
                <CITA>[35 FR 15355, Oct. 2, 1970, as amended by Amdt. 9, 45 FR 37398, June 3, 1980; 49 FR 38240, Sept. 28, 1984]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.4</SECTNO>
                <SUBJECT>Forms.</SUBJECT>
                <P>The following general forms, as revised from time to time, are prescribed for use in connection with review proceedings;</P>
                <P>(a) MQ-53 Application for Review of Farm Marketing Quota.</P>
                <P>(b) MQ-54 Notice of Untimely Filing of Review Application.</P>
                <P>(c) MQ-56 Notice of Hearing of Review Application.</P>
                <P>(d) MQ-58 Determination of Review Committee Farm Marketing Quota.</P>
                <P>(e) MQ-59 Oath of Review Committeeman.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.5</SECTNO>
                <SUBJECT>Public information.</SUBJECT>
                <P>The clerk shall maintain a record of applications and review committee proceedings which shall be available at the office of the clerk for public inspection and copying in accordance with part 798 of this chapter.</P>
              </SECTION>
            </SUBJGRP>
            <SUBJGRP>
              <HD SOURCE="HED">Review Committee</HD>
              <SECTION>
                <SECTNO>§ 711.6</SECTNO>
                <SUBJECT>Eligibility as member of a panel.</SUBJECT>
                <P>Any farmer who meets the eligibility requirements for county committeeman prescribed in the regulations in part 7 of subtitle A of this title, as amended, in a county within the area of venue for which he is to be appointed shall be eligible for appointment as a member of a review committee panel for such area of venue. If the area of venue consists of only one county or a part of a county, these eligibility requirements must be met in such county or in a nearby county. No farmer whose legal residence is in one State shall be eligible for appointment as a member of a review committee panel for an area of venue in another State.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.7</SECTNO>
                <SUBJECT>Appointment of members of a panel.</SUBJECT>
                <P>The Secretary shall appoint six or more eligible farmers to serve as members of a review committee panel in each area of venue. Notice of appointment shall be sent to the State committee, which shall notify the farmers so appointed. Appointments may be made before, during, or after the period in which applications for review of quotas are required to be filed. Notwithstanding the foregoing, the Secretary shall have the continuing power to revoke or suspend any appointment made pursuant to the regulations in this part, and subject to the provisions of the act, to make such other appointment deemed proper.</P>
              </SECTION>
              <SECTION>
                <PRTPAGE P="44"/>
                <SECTNO>§ 711.8</SECTNO>
                <SUBJECT>Oath of office.</SUBJECT>
                <P>Each farmer appointed to serve as a member of a review committee panel shall, as soon as possible after appointment, execute an oath of office on such form as may be prescribed by the Deputy Administrator, duly subscribed and sworn to or affirmed before a notary public. No farmer shall serve on a review committee unless such oath of office has been duly executed and filed with the State executive director or the clerk. A farmer appointed for consecutive terms to serve as a member of a review committee panel shall not be required to file a new oath of office after the original filing. If the form of oath of office is materially changed, a new oath of office shall be executed if required by the Deputy Administrator.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.9</SECTNO>
                <SUBJECT>Composition of review committee.</SUBJECT>
                <P>(a) <E T="03">Three designated members from the panel constitute a review committee.</E> Three members from the panel shall act as a review committee to hear applications for review for the prescribed area of venue. The State executive director shall designate from the panel of members for the prescribed area of venue three members who shall act as a review committee to hear specific applications and shall designate one of these three members as chairman of the review committee and another member as vice-chairman. Where the number of applications pending require two or more review committees for prompt disposition of such applications, the State executive director shall designate the members of each review committee, the chairman and vice chairman thereof, and the specific application to be heard by each review committee. Two or more review committees may hear applications concurrently in an area of venue. In the absence of the chairman, the vice chairman shall perform the duties and exercise the powers of the chairman. The State executive director shall notify members of each review committee of the schedule of hearings. No member shall serve in any case in which a quota will be reviewed for a farm in which such member, any of his relatives or business associates, is interested, nor shall any member serve where he had acted as State, county, or community committee member on a quota to be reviewed by the review committee.</P>
                <P>(b) <E T="03">Only two members present to commence hearing.</E> Where only two members of a review committee are present to commence a hearing, although three members were scheduled to hear the application, at the request of or with the consent of the applicant in writing, a hearing conducted by two members of the review committee shall be deemed to be a regular hearing of the review committee as to such application. The determination made by such members shall constitute the determination of the review committee. In the event such members cannot agree upon a determination, such fact shall be set forth in writing and a new hearing scheduled by the State executive director. If the applicant does not consent in writing to a hearing conducted by two members of the review committee, the hearing shall be rescheduled.</P>
                <P>(c) <E T="03">Only two members remain to complete a hearing.</E> Where only two members of a review committee remain to complete a hearing commenced with three members, due to serious illness, death, or other cause which prevents one of the members from completing the hearing within a reasonable time, at the request or with the consent of the applicant in writing, the remaining two members of the review committee shall henceforth constitute an entire review committee for the purpose of such hearing. In the event such members cannot agree upon a determination, such fact shall be set forth in writing and a new hearing scheduled by the State executive director. If the applicant does not consent in writing to completion of the hearing by two members of the review committee, the hearing shall be rescheduled.</P>
                <P>(d) <E T="03">Reopened or remanded hearings.</E> In the case of a reopened or remanded hearing, if any member of the review committee is no longer in office because of death, resignation, or ineligibility, the State executive director shall designate another member of the review committee panel to serve on the review committee. If a hearing held pursuant to paragraph (b) or (c) of this section is reopened or remanded and <PRTPAGE P="45"/>only one review committee member is available to hear such reopened or remanded hearing, the State executive director shall designate two additional members from the review committee panel to serve on the review committee.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.10</SECTNO>
                <SUBJECT>Term of office.</SUBJECT>
                <P>Appointment as a member of a review committee panel shall be for a term of 3 calendar years. A member may be reappointed for succeeding terms. Notwithstanding the foregoing, a review committee shall continue in office to conclude hearings before it which are begun during such 3-year term and make final determinations thereof, or to hold a reopened hearing, or to conclude a hearing remanded to it by a court.</P>
                <CITA>[Amdt. 3, 38 FR 967, Jan. 8, 1973]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.11</SECTNO>
                <SUBJECT>Compensation.</SUBJECT>
                <P>The members designated as review committeemen shall receive compensation when serving at the same rate as that received by the members of the county committee which established the quotas sought to be reviewed. No member of a review committee shall be entitled to receive compensation for services as such member for more than 30 days in any one year. Payment of compensation, reimbursement for travel expenses and rates therefor, shall be made under such conditions as may be prescribed by the Deputy Administrator.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.12</SECTNO>
                <SUBJECT>Effect of change in composition of review committee.</SUBJECT>
                <P>Nothing contained in §§ 711.6 to 711.11 relating to any vacancy or revocation or suspension of appointment and nothing done pursuant thereto shall be construed as affecting the validity of any prior hearing conducted or determination made in accordance with the regulations in this part, in which the member of the review committee whose office has become vacant participated, or as affecting in any way court proceeding which may be instituted to review such determination.</P>
              </SECTION>
            </SUBJGRP>
            <SUBJGRP>
              <HD SOURCE="HED">Jurisdiction</HD>
              <SECTION>
                <SECTNO>§ 711.13</SECTNO>
                <SUBJECT>Areas of venue and jurisdiction.</SUBJECT>
                <P>(a) <E T="03">Areas of venue.</E> The State committee shall establish one or more areas of venue in the State. An area of venue may consist of all or part of a county, or more than one county within a State. In establishing areas of venue, the State committee shall take into consideration the requirements of section 363 of the Act as to eligibility of review committee members, the prompt handling of applications for review, transportation problems and the limit of 30-day service by review committeemen in any one year.</P>
                <P>(b) <E T="03">Jurisdiction.</E> A review committee shall have jurisdiction within the area of venue for which it is established to hear applications respecting quotas established or denied by written notice issued by the county committee or other authorized official for farms within its area of venue, in accordance with this part.</P>
                <P>(c) A listing of the areas of venue within a State shall be available from the State FSA office and the Deputy Administrator.</P>
                <CITA>[35 FR 15355, Oct. 2, 1970, as amended at 49 FR 38240, Sept. 28, 1984]</CITA>
              </SECTION>
            </SUBJGRP>
            <SUBJGRP>
              <HD SOURCE="HED">Application for Review of Quota</HD>
              <SECTION>
                <SECTNO>§ 711.14</SECTNO>
                <SUBJECT>Application for review.</SUBJECT>
                <P>(a) <E T="03">Manner and time of filing.</E> Any farmer who is dissatisfied with his quota may, within 15 days after the date of mailing to him of notice of such quota, file a written application for review thereof by the review committee. Such 15-day period is prescribed in accordance with section 363 of the Act. Unless application for review is timely filed, as determined under this section, the quota established by the notice shall not be subject to review by the review committee. Notice of quota subject to review under this part includes an official written notice as to the land constituting the farm. For example, a notice denying a request for farm reconstitution would be such a reviewable notice of quota. An application shall be in writing and addressed to, and filed with, the county executive director for the county from which the <PRTPAGE P="46"/>notice of quota was received. Any application (Form MQ-53 available on request) whether made on Form MQ-53 or not, shall contain the following:</P>
                <P>(1) Date of application and commodity (including type where applicable, e.g. Upland cotton, Flue-cured tobacco).</P>
                <P>(2) Correct full name and address of applicant.</P>
                <P>(3) Brief statement of each ground upon which the application is based.</P>
                <P>(4) A statement of the amount of quota which it is claimed should have been established.</P>
                <P>(5) Signature of applicant.</P>
                <FP>In any case where an application is timely filed for review of a quota on a farm which was reconstituted by division of a parent farm into two or more farms, such application shall be considered an application for review of the reconstitution of the parent farm. In any such case the farm operator of each farm resulting from such reconstitution shall be considered an applicant for purposes of this part with all the rights and privileges provided in this part. If an action may be taken by an applicant which affects the rights of any other applicant in the case, the other applicants shall be given the opportunity to concur in such action or to oppose such action.</FP>
                <P>(b) <E T="03">Procedure where application is not timely filed.</E> The county committee shall examine each application for review. If the application is not filed within the prescribed 15-day period, the county executive director shall send a notice of untimely filing on Form MQ-54 by certified mail to the applicant at the address shown on the application. The applicant may file a request in writing with the county executive director within 15 days after the date of mailing such notice to him requesting a review committee hearing on the sole issue of whether the application was filed within the prescribed 15-day period. In the absence of timely request in writing for such review committee hearing, the application shall be deemed withdrawn by the applicant. If timely request in writing for such review committee hearing is filed, a copy of the application and request shall be forwarded by the county executive director to the State executive director with a request that a hearing on the sole issue of timely filing be scheduled before the review committee. In cases involving the sole issue of timely filing of an application, the review committee shall determine whether the date the application was filed, or the postmark date in case of mailing by the applicant, was within the 15-day period. If the review committee determines that the application was timely filed, a hearing on the merits of the application shall be held. In addition, a hearing on the merits shall be conducted and the application treated as timely filed in any case where the review committee determines that the applicant in good faith requested review of his quota by the county or State committee under the regulations in part 780 of this chapter in reliance upon action or advice of any authorized representative of a county or State committee and subsequently filed application for review under this part within a reasonable time after he learns that the quota is subject to review committee jurisdiction.</P>
                <P>(c) <E T="03">Withdrawal of application.</E> An application may be withdrawn upon the written request of the applicant. Any application so withdrawn or deemed withdrawn under paragraph (b) of this section shall be endorsed by the clerk “Dismissed by the applicant”.</P>
                <P>(d) <E T="03">Procedure where application is timely filed.</E> The county committee shall examine each application for review and where an application is found to be timely filed, the county executive director shall forward a copy of the application to the State executive director with a request that a hearing on the merits be scheduled before the review committee.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.15</SECTNO>
                <SUBJECT>Matters subject to review.</SUBJECT>

                <P>In all cases, the review committee shall consider only such factors as, under applicable provisions of law and regulations, are required or permitted to be considered by the county committee in the establishment of the quota being reviewed. The establishment of national marketing quotas and apportionment of national acreage allotments and marketing quotas among States and counties and the establishment of reserve acreages and quotas at <PRTPAGE P="47"/>the national level and apportionment of such reserves among States and counties are not subject to review by a review committee. Review of a quota may include any of the factors which enter into the establishment of such quota for the farm and crop year as set forth in § 711.3(f): <E T="03">Provided, however,</E> That any factor of such quota considered by a review committee in a prior determination for the farm and crop year shall not be considered in a subsequent review proceeding. For example, a determination of the farm acreage allotment by the review committee would not be reconsidered upon any application for review of the farm marketing excess for the same farm and crop year.</P>
                <CITA>[49 FR 38240, Sept. 28, 1984]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.16</SECTNO>
                <SUBJECT>County committee answer.</SUBJECT>
                <P>(a) The county committee shall prepare a written answer to each application scheduled for hearing setting forth the pertinent facts, the applicable regulations, the data used in establishing the quota and any other matters deemed pertinent:</P>
                <P>(b) <E T="03">Provided,</E> That the answer may be limited to the issue of timely filing where the hearing is limited to that issue. If the county committee determines that the increase, adjustment or other determination requested in the application is proper in whole or in part, the written answer shall set forth the proposed determination and in such cases, the applicant shall be notified by the county committee of such proposed determination prior to the scheduled review hearing if practicable to do so. In the event the applicant is satisfied with the proposed determination, the county committee shall, upon the withdrawal of the application, take the necessary action to revise the quota within the limits of the Act and applicable commodity regulations if the required amount of acreage allotment or marketing quota is available in the county. The State executive director may perform the functions of the county committee under this section and the functions of the county committee and county executive director under § 711.14 (b) and (d) in any case where the application for review involves a notice of farm marketing quota issued by officials other than the county committee.</P>
                <CITA>[35 FR 15355, Oct. 2, 1970, as amended at 49 FR 38240, Sept. 28, 1984]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.17</SECTNO>
                <SUBJECT>Amendments.</SUBJECT>
                <P>Upon due request, and within the discretion of the review committee, the right to amend the application and all procedural documents in connection with any hearing, shall be granted upon such reasonable terms as the review committee may deem right and proper.</P>
              </SECTION>
            </SUBJGRP>
            <SUBJGRP>
              <HD SOURCE="HED">Hearing and Determination</HD>
              <SECTION>
                <SECTNO>§ 711.18</SECTNO>
                <SUBJECT>Place and schedule of hearing.</SUBJECT>

                <P>The place of hearing shall be in the office of the county committee through which the quota sought to be reviewed was established, or such other appropriate place in the county as may be designated by the State executive director or by the review committee in cases arising under § 711.21: <E T="03">Provided, however,</E> That the place of hearing may be in some other county if agreed to in writing by the applicant. The State executive director shall schedule applications for hearings and forward such schedule to the clerk.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.19</SECTNO>
                <SUBJECT>Notice of hearing.</SUBJECT>
                <P>The clerk shall give written notice on Form MQ-56 to the applicant by depositing such notice in the U.S. mail, certified and addressed to the last known address of the applicant at least 10 days prior to the time appointed for the hearing and copies of such notice shall also be sent to the county committee and the State office. If the applicant requests waiver of such 10-day period, the hearing may be scheduled earlier upon consent of the other interested parties. The notice of the hearing shall specify the time and place of the hearing, contain a statement of the statutory authority for the hearing, state that the application will be heard by the review committee duly appointed for the area of venue in which the applicant's farm is located, and that a verbatim transcript may be obtained by the applicant if he makes arrangement therefor before the hearing and pays the expense thereof.</P>
              </SECTION>
              <SECTION>
                <PRTPAGE P="48"/>
                <SECTNO>§ 711.20</SECTNO>
                <SUBJECT>Continuances.</SUBJECT>
                <P>Hearings shall be held at the time and place set forth in the notice of hearing or in any subsequent notice amending or superseding the prior notice, but may without notice other than an announcement at the hearing by the chairman of the review committee, be continued from day to day or adjourned to a different place in the county or to a later date or to a date and place to be fixed in a subsequent notice to be issued pursuant to § 711.19. In the event a full committee of three is not present, those members present, or in the absence of the entire committee, the clerk, shall postpone the hearing unless the hearing is held pursuant to § 711.9 (b) or (c). There shall not be a continuance for lack of a full committee in the case of a reopened or remanded hearing where the hearing was initially held pursuant to § 711.9 (b) or (c) and the two review committeemen who previously held the hearing are present and eligible to serve.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.21</SECTNO>
                <SUBJECT>Conduct of hearing.</SUBJECT>
                <P>(a) <E T="03">Open to public.</E> Except as otherwise provided in §§ 711.1 to 711.50, each hearing shall take place before the entire review committee and shall be presided over by the chairman of such committee. The hearing shall be open to the public and shall be conducted in a fair and impartial manner and in such a way as to afford the applicant, members of the appropriate county and community committees, and appropriate officers and agents of the Department of Agriculture, and all persons appearing on behalf of such parties, reasonable opportunity to give and produce evidence relevant to the quota being reviewed.</P>
                <P>(b) <E T="03">Consolidation of hearings.</E> Wherever practicable, two or more applications relating to the same commodity and the same farm shall be consolidated by the review committee on its own motion or at the request of the State executive director and heard at the same time on the same record. In any case involving two or more farms resulting from reconstitution by division of a parent farm, the hearing shall be consolidated.</P>
                <P>(c) <E T="03">Representation.</E> The applicant and the Secretary may be represented at the hearing. The county committee shall be present or represented at the hearing.</P>
                <P>(d) <E T="03">Order of procedure.</E> At the commencement of the hearing, the chairman of the review committee shall read or cause to be read the pertinent portions of the application for review. The written answer of the county committee shall be submitted and shall be made a part of the record of the hearing. If the applicant asserts and shows to the satisfaction of the review committee that he has not been informed of the county committee's position in time to afford him adequate opportunity to prepare and present his case, the review committee shall continue the hearing, without notice other than announcement thereof at the hearing, for such period of time as will afford the applicant reasonable opportunity to meet the issues of fact and law involved. After answer by the county committee and following such continuance, if any, as may be granted by the review committee, evidence shall be received with respect to the matters relevant to the quota under review in such order as the chairman of the review committee shall prescribe. The review committee may take official notice of relevant publications of the Department of Agriculture and regulations of the Secretary.</P>
                <P>(e) <E T="03">Submission of evidence.</E> The burden of proof shall be upon the applicant as to all issues of fact raised by him. Each witness shall testify under oath or affirmation administered by the member of the review committee who is presiding at the hearing. The review committee shall confine the evidence to pertinent matters and shall exclude irrelevant, immaterial, or unduly repetitious evidence. Interested persons shall be permitted to present oral and documentary evidence, to submit rebuttal evidence and to conduct such cross-examination as may be required for a full and true disclosure of the facts. The hearing shall be concluded within such reasonable time as may be determined by the review committee.</P>
                <P>(f) <E T="03">Transcript of testimony.</E> The review committee shall provide for the taking of such notes including but not limited to stenographic reports or recordings at the hearing as will enable it to make <PRTPAGE P="49"/>a summary of the proceedings and the testimony received at the hearing. The testimony received at the hearing shall be reported verbatim by a representative of a private firm under an existing Departmental contract for such services if the review committee, the State Executive Director, or the applicant, requests such transcript be made. If such transcript is so requested, the State Executive Director shall advise the Deputy Administrator, State and County Operations, prior to the hearing date who will then arrange for the service. A copy of such transcript shall be furnished to each of the following: The review committee, the State Executive Director, and the Regional Attorney, Office of the General Counsel, United States Department of Agriculture. The applicant or his representative may obtain a copy from the firm at his own expense.</P>
                <P>(g) <E T="03">Written arguments and proposed findings.</E> The review committee shall permit the applicant, the members of the appropriate county and community committees, and appropriate officers and agents of the Department of Agriculture to file written arguments and proposed findings of fact and conclusions, based on the evidence adduced at the hearing, for the consideration of the review committee within such reasonable time after the conclusion of the hearing as may be prescribed by the review committee. Such written arguments and proposed findings shall be filed in triplicate with the clerk and an additional copy thereof shall be provided to the other party.</P>
                <CITA>[35 FR 15355, Oct. 2, 1970, as amended by Amdt. 5, 38 FR 16989, June 28, 1973]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.22</SECTNO>
                <SUBJECT>Nonappearance of applicant.</SUBJECT>
                <P>(a) <E T="03">Original hearing.</E> If, at the time of the hearing, the applicant is absent and no appearance is made on his behalf, the review committee shall, after a lapse of such period of time as it may consider proper and reasonable, have the name of the absent applicant called in the hearing room. If, upon such call, there is no response, and no appearance on behalf of such applicant and no continuance has been requested by the applicant, the review committee shall thereupon close the hearing, as to such applicant, and, without further proceedings in the case, make a determination dismissing the application.</P>
                <P>(b) <E T="03">Reopened or remanded hearing.</E> If, at a hearing which is reopened pursuant to § 711.25 or remanded by a court, the applicant is absent and no appearance is made on his behalf, the review committee shall continue the hearing for a reasonable period of time and if the applicant does not appear at such continued hearing, the review committee shall make a determination.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.23</SECTNO>
                <SUBJECT>Determination by review committee.</SUBJECT>
                <P>As soon as practicable after hearing on an application, including a hearing on the sole issue of timely filing, the review committee shall make a determination upon the application. If it is determined by the review committee that the application should be dismissed for untimely filing or denied, the review committee shall so indicate. If it is determined that the application should be granted in whole or in part, the review committee shall establish the quota which it finds to be proper. Each determination made by the review committee shall be in writing, shall contain specific findings of fact and conclusions together with the reasons or basis therefor, and shall be based upon and made in accordance with reliable, probative, and substantial evidence adduced at the hearing. The concurrence of two members of the review committee shall be sufficient to make a determination. The written determination shall contain such subscription by each member of the review committee as will indicate his concurrence therein or his dissent therefrom. In case of an increase in the quota, the review committee shall specifically state in the determination in what respect, if any, the county committee has failed properly to apply the act and regulations thereunder. If such increase is based upon evidence not available to the county committee, the findings of the review committee shall so indicate. The appropriate county executive director shall make available to the review committee such clerical and stenographic assistance as may be required.</P>
              </SECTION>
              <SECTION>
                <PRTPAGE P="50"/>
                <SECTNO>§ 711.24</SECTNO>
                <SUBJECT>Service of determination.</SUBJECT>
                <P>A copy of the determination, certified by the clerk as a true and correct copy of the signed original, shall be served upon the applicant by sending the same by certified mail addressed to the applicant at his last known address. The copy of the determination shall contain at the top thereof substantially the following statement: “To all persons who, as operator, landlord, tenant, or sharecropper, are or will be interested in the above-named commodity on the farm identified below in the year for which the marketing quota being reviewed is established” and such statement shall constitute notice to all such persons. The clerk shall make a notation on the original determination of the date and place of such mailing. The clerk forthwith shall forward two copies of such determination to the State office, and one copy to the county committee. The determination of the review committee does not become final until the period for reopening of hearing under § 711.25 has expired without any reopening; or if reopened thereunder, such determination becomes final upon issuance of a new determination pursuant to the reopened hearing, subject to further appeal to a court by the applicant.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.25</SECTNO>
                <SUBJECT>Reopening of hearing.</SUBJECT>
                <P>(a) <E T="03">Upon motion of review committee.</E> Upon its own motion within 15 days from the date of mailing to the applicant of a copy of the determination of the review committee, the review committee may reopen a hearing for the purpose of taking additional evidence or of adding any relevant matter or document.</P>
                <P>(b) <E T="03">Upon written request based on new evidence.</E> Upon written request by the applicant, the county committee, the State executive director, or other interested parties, to the review committee within 15 days from the date of mailing to the applicant of a copy of the determination of the review committee, the review committee shall reopen the hearing for the purpose of taking additional evidence or of adding any relevant matter or document if the review committee finds that such evidence or documents constitute new evidence not available to the parties at the time of the hearing.</P>
                <P>(c) <E T="03">Upon written notice by the Secretary.</E> Upon written notice by the Secretary or on his behalf by the Deputy Administrator to the review committee within 45 days from the date of mailing to the applicant of a copy of the determination of the review committee on Form MQ-58, the hearing shall be deemed reopened and the State executive director shall schedule the reopened hearing.</P>
                <P>(d) <E T="03">Schedule of reopened hearing.</E> Schedule of and notice of any reopened hearing shall follow the requirements of §§ 711.18 and 711.19 insofar as practicable. Notwithstanding the provisions of paragraphs (a), (b), and (c) of this section, no hearing shall be reopened after an appeal to a court pursuant to section 365 of the act has been timely filed by the applicant. No special hearing to contest a reopening of a hearing shall be scheduled; however, the applicant may present evidence and arguments to contest the reopening when the reopened hearing is held.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 711.26</SECTNO>
                <SUBJECT>Record of hearing.</SUBJECT>
                <P>The record of the proceedings shall be prepared by the clerk and shall consist of the following:</P>
                <P>(a) All procedural documents in the case under review, including the application and written notices of quota and hearing and any other written notice in connection with the application.</P>
                <P>(b) Copies of regulations presented at the hearing.</P>
                <P>(c) The answer of the county committee or the State executive director.</P>
                <P>(d) The summary of the proceedings and the testimony prepared by the review committee if a verbatim transcript is not made, or a transcript of the testimony where a verbatim transcript is made, in accordance with § 711.21(f), to which shall be annexed any documentary evidence received at the hearing.</P>
                <P>(e) Any written arguments or proposed findings of fact and conclusions filed in connection with the hearing.</P>
                <P>(f) The written determination of the review committee.</P>

                <P>(g) A list of all papers included in the record and a certificate by the clerk <PRTPAGE P="51"/>stating that such record is true, correct and complete.</P>
              </SECTION>
            </SUBJGRP>
            <SUBJGRP>
              <HD SOURCE="HED">Court Proceedings</HD>
              <SECTION>
                <SECTNO>§ 711.27</SECTNO>
                <SUBJECT>Procedure in the case of court proceedings.</SUBJECT>
                <P>Upon the institution of any suit against the review committee for the purpose of reviewing its determination upon any application for review, the review committee is required by section 365 of the Act to certify and file in court a transcript of the record upon which the determination was made, together with the findings of fact made by the review committee. Any suit for review is required to be instituted by the applicant within 15 days after a notice of the review committee's determination is mailed to him. Such suit may be instituted in the U.S. District Court or in any court of record of the State having general jurisdiction, sitting in the county of the district in which the applicant's farm is located. The bill of complaint in such proceeding may be served by delivering a copy thereof to any member of the review committee. Any member of the review committee served with papers in such suit shall immediately forward such papers to the clerk. No member of the review committee shall appear or permit any appearance in his behalf or in behalf of the review committee, or take any action in respect to the defense of such suit, except in accordance with the instructions from the Deputy Administrator.</P>
              </SECTION>
            </SUBJGRP>
            <SUBJGRP>
              <HD SOURCE="HED">Puerto Rico</HD>
              <SECTION>
                <SECTNO>§ 711.28</SECTNO>
                <SUBJECT>Special provisions applicable to Puerto Rico.</SUBJECT>
                <P>Notwithstanding the provisions of §§ 711.1 to 711.50, the Caribbean Area Agricultural Stabilization and Conservation Committee (hereinafter referred to as the “ASC Committee”) shall perform, insofar as applicable, the duties and assume such responsibilities and be subject to the limitations as are otherwise required of State and county committees except as provided herein. The Director, Caribbean Area FSA office, shall recommend members of the review committee panel, the areas of venue, and perform the functions of the State executive director. Any farmer who is eligible to vote in a referendum for which a quota has been proclaimed shall be eligible for appointment as a member of a review committee panel. The clerk shall be the ASC district supervisor of the district in which the review committee will hold its hearings. Where it is impractical or impossible to use the United States mail to serve the applicant with notice of hearing or determination, use shall be made of such other method of service as is available. However, when such other method is used, the ASC Committee shall make provision for keeping an accurate record of the date and method of delivery to the applicant.</P>
              </SECTION>
            </SUBJGRP>
            <SUBJGRP>
              <HD SOURCE="HED">OMB Control Numbers</HD>
              <SECTION>
                <SECTNO>§ 711.29</SECTNO>
                <SUBJECT>OMB control numbers assigned pursuant to the Paperwork Reduction Act.</SUBJECT>
                <P>The information collection requirements contained in these regulations (7 CFR part 711) have been approved by the Office of Management and Budget (OMB) in accordance with the provisions of the 44 U.S.C. Chapter 35 and have been assigned OMB control number 0560-0068.</P>
                <CITA>[49 FR 38240, Sept. 28, 1984]</CITA>
              </SECTION>
            </SUBJGRP>
          </PART>
          <PART>
            <EAR>Pt. 714</EAR>
            <HD SOURCE="HED">PART 714—REFUNDS OF PENALTIES ERRONEOUSLY, ILLEGALLY, OR WRONGFULLY COLLECTED</HD>
            <CONTENTS>
              <SECHD>Sec.</SECHD>
              <SECTNO>714.35</SECTNO>
              <SUBJECT>Basis, purpose, and applicability.</SUBJECT>
              <SECTNO>714.36</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>714.37</SECTNO>
              <SUBJECT>Instructions and forms.</SUBJECT>
              <SECTNO>714.38</SECTNO>
              <SUBJECT>Who may claim refund.</SUBJECT>
              <SECTNO>714.39</SECTNO>
              <SUBJECT>Manner of filing.</SUBJECT>
              <SECTNO>714.40</SECTNO>
              <SUBJECT>Time of filing.</SUBJECT>
              <SECTNO>714.41</SECTNO>
              <SUBJECT>Statement of claim.</SUBJECT>
              <SECTNO>714.42</SECTNO>
              <SUBJECT>Designation of trustee.</SUBJECT>
              <SECTNO>714.43</SECTNO>
              <SUBJECT>Recommendation by county committee.</SUBJECT>
              <SECTNO>714.44</SECTNO>
              <SUBJECT>Recommendation by State committee.</SUBJECT>
              <SECTNO>714.45</SECTNO>
              <SUBJECT>Approval by Deputy Administrator.</SUBJECT>
              <SECTNO>714.46</SECTNO>
              <SUBJECT>Certification for payment.</SUBJECT>
            </CONTENTS>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>Secs. 372, 375, 52 Stat. 65, as amended, 66, as amended; 7 U.S.C. 1372, 1375.</P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>35 FR 12098, July 29, 1970, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <PRTPAGE P="52"/>
              <SECTNO>§ 714.35</SECTNO>
              <SUBJECT>Basis, purpose, and applicability.</SUBJECT>
              <P>(a) <E T="03">Basis and purpose.</E> The regulations set forth in this part are issued pursuant to the Agricultural Adjustment Act of 1938, as amended, for the purpose of prescribing the provisions governing refunds of marketing quota penalties erroneously, illegally, or wrongfully collected with respect to all commodities subject to marketing quotas under the Act.</P>
              <P>(b) <E T="03">Applicability.</E> This part shall apply to claims submitted for refunds of marketing quota penalties erroneously, illegally, or wrongfully collected on all commodities subject to marketing quotas under the Act. It shall not apply to the refund of penalties which are deposited in a special deposit account pursuant to sections 314(b), 346(b), 356(b), or 359 of the Agricultural Adjustment Act of 1938, as amended, or paragraph (3) of Pub. L. 74, 77th Congress, available for the refund of penalties initially collected which are subsequently adjusted downward by action of the county committee, review committee, or appropriate court, until such penalties have been deposited in the general fund of the Treasury of the United States after determination that no downward adjustment in the amount of penalty is warranted. All prior regulations dealing with refunds of penalties which were contained in this part are superseded upon the effective date of the regulations in this part.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 714.36</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>(a) <E T="03">General terms.</E> In determining the meaning of the provisions of this part, unless the context indicates otherwise, words imparting the singular include and apply to several persons or things, words imparting the plural include the singular, words imparting the masculine gender include the feminine as well, and words used in the present tense include the future as well as the present. The definitions in part 719 of this chapter shall apply to this part. The provisions of part 720 of this chapter concerning the expiration of time limitations shall apply to this part.</P>
              <P>(b) <E T="03">Other terms applicable to this part.</E> The following terms shall have the following meanings:</P>
              <P>(1) “Act” means the Agricultural Adjustment Act of 1938, and any amendments or supplements thereto.</P>
              <P>(2) “Claim” means a written request for refund of penalty.</P>
              <P>(3) “Claimant” means a person who makes a claim for refund of penalty as provided in this part.</P>
              <P>(4) “County Office” means the office of the Agricultural Stabilization and Conservation County Committee.</P>
              <P>(5) “Penalty” means an amount of money collected, including setoff, from or on account of any person with respect to any commodity to which this part is applicable, which has been covered into the general fund of the Treasury of the United States, as provided in section 372(b) of the Act.</P>
              <P>(6) “State office” means the office of the Agricultural Stabilization and Conservation State Committee.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 714.37</SECTNO>
              <SUBJECT>Instructions and forms.</SUBJECT>
              <P>The Deputy Administrator shall cause to be prepared and issued such instructions and forms as are necessary for carrying out the regulations in the part.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 714.38</SECTNO>
              <SUBJECT>Who may claim refund.</SUBJECT>
              <P>Claim for refund may be made by:</P>
              <P>(a) Any person who was entitled to share in the price or consideration received by the producer with respect to the marketing of a commodity from which a deduction was made for the penalty and bore the burden of such deduction in whole or in part.</P>
              <P>(b) Any person who was entitled to share in the commodity or the proceeds thereof, paid the penalty thereon in whole or in part and has not been reimbursed therefor.</P>
              <P>(c) Any person who was entitled to share in the commodity or the proceeds thereof and bore the burden of the penalty because he has reimbursed the person who paid such penalty.</P>
              <P>(d) Any person who, as buyer, paid the penalty in whole or in part in connection with the purchase of a commodity, was not required to collect or pay such penalty, did not deduct the amount of such penalty from the price paid the producer, and has not been reimbursed therefor.</P>

              <P>(e) Any person who paid the penalty in whole or in part as a surety on a <PRTPAGE P="53"/>bond given to secure the payment of penalties and has not been reimbursed therefor.</P>
              <P>(f) Any person who paid the whole or any part of the sum paid as a penalty with respect to a commodity included in a transaction which in fact was not a marketing of such commodity and has not been reimbursed therefor.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 714.39</SECTNO>
              <SUBJECT>Manner of filing.</SUBJECT>
              <P>Claim for refund shall be filed in the county office on a form prescribed by the Deputy Administrator. If more than one person is entitled to file a claim, a joint claim may be filed by all such persons. If a separate claim is filed by a person who is a party to a joint claim, such separate claim shall not be approved until the interest of each person involved in the joint claim has been determined.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 714.40</SECTNO>
              <SUBJECT>Time of filing.</SUBJECT>
              <P>Claim shall be filed within 2 years after the date payment was made to the Secretary. The date payment was made shall be deemed to be the date such payment was deposited in the general fund of the Treasury as shown on the certificate of deposit on which such payment was scheduled.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 714.41</SECTNO>
              <SUBJECT>Statement of claim.</SUBJECT>
              <P>The claim shall show fully the facts constituting the basis of the claim; the name and address of and the amount claimed by every person who bore or bears any part or all of the burden of such penalty; and the reasons why such penalty is claimed to have been erroneously, illegally, or wrongfully collected. It shall be the responsibility of the county committee to determine that any person who executes a claim as agent or fiduciary is properly authorized to act in such capacity. There should be attached to the claim all pertinent documents with respect to the claim or duly authenticated copies thereof.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 714.42</SECTNO>
              <SUBJECT>Designation of trustee.</SUBJECT>
              <P>Where there is more than one claimant and all the claimants desire to appoint a trustee to receive and disburse any payment to be made to them with respect to the claim, they shall be permitted to appoint a trustee. The person designated as trustee shall execute the declaration of trust.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 714.43</SECTNO>
              <SUBJECT>Recommendation by county committee.</SUBJECT>
              <P>Immediately upon receipt of a claim, the date of receipt shall be recorded on the face thereof. The county committee shall determine, on the basis of all available information, if the data and representations on the claim are correct. The county committee shall recommend approval or disapproval of the claim, and attach a statement to the claim, signed by a member of the committee, giving the reasons for their action. After the recommendation of approval or disapproval is made by the county committee, the claim shall be promptly sent to the State committee.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 714.44</SECTNO>
              <SUBJECT>Recommendation by State committee.</SUBJECT>
              <P>A representative of the State committee shall review each claim referred by the county committee. If a claim is sent initially to the State committee, it shall be referred to the appropriate county committee for recommendation as provided in § 714.43 prior to action being taken by the State committee. Any necessary investigation shall be made. The State committee shall recommend approval or disapproval of the claim, attaching a statement giving the reasons for their action, which shall be signed by a representative of the State committee. After recommending approval or disapproval, the claim shall be promptly sent to the Deputy Administrator.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 714.45</SECTNO>
              <SUBJECT>Approval by Deputy Administrator.</SUBJECT>

              <P>The Deputy Administrator shall review each claim forwarded to him by the State committee to determine whether, (a) the penalty was erroneously, illegally, or wrongfully collected, (b) the claimant bore the burden of the payment of the penalty, (c) the claim was timely filed, and (d) under the applicable law and regulations the claimant is entitled to a refund. If a claim is filed initially with the Deputy Administrator, he shall obtain the recommendations of the county committee and the State committee if he deems such action necessary in <PRTPAGE P="54"/>arriving at a proper determination of the claim. The claimant shall be advised in writing of the action taken by the Deputy Administrator. If disapproved, the claimant shall be notified with an explanation of the reasons for such disapproval.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 714.46</SECTNO>
              <SUBJECT>Certification for payment.</SUBJECT>
              <P>An officer or employee of the Department of Agriculture authorized to certify public vouchers for payment shall, for and on behalf of the Secretary of Agriculture, certify to the Secretary of the Treasury of the United States for payment all claims for refund which have been approved.</P>
            </SECTION>
          </PART>
          <PART>
            <EAR>Pt. 717</EAR>
            <HD SOURCE="HED">PART 717—HOLDING OF REFERENDA</HD>
            <CONTENTS>
              <SUBJGRP>
                <HD SOURCE="HED">General</HD>
                <SECHD>Sec.</SECHD>
                <SECTNO>717.1</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <SECTNO>717.2</SECTNO>
                <SUBJECT>Supervision of referenda and prescribed method of balloting.</SUBJECT>
                <SECTNO>717.3</SECTNO>
                <SUBJECT>Voting eligibility.</SUBJECT>
                <SECTNO>717.4</SECTNO>
                <SUBJECT>Register of eligible voters.</SUBJECT>
              </SUBJGRP>
              <SUBJGRP>
                <HD SOURCE="HED">Holding Referenda at Polling Places</HD>
                <SECTNO>717.5</SECTNO>
                <SUBJECT>Community referendum committees.</SUBJECT>
                <SECTNO>717.6</SECTNO>
                <SUBJECT>Place for balloting.</SUBJECT>
                <SECTNO>717.7</SECTNO>
                <SUBJECT>Time of voting.</SUBJECT>
                <SECTNO>717.8</SECTNO>
                <SUBJECT>Notice of referendum.</SUBJECT>
                <SECTNO>717.9</SECTNO>
                <SUBJECT>Manner of voting.</SUBJECT>
                <SECTNO>717.10</SECTNO>
                <SUBJECT>Local arrangements for holding the referendum.</SUBJECT>
                <SECTNO>717.11</SECTNO>
                <SUBJECT>Issuing ballots.</SUBJECT>
                <SECTNO>717.12</SECTNO>
                <SUBJECT>Community referendum committee's canvass of ballots.</SUBJECT>
                <SECTNO>717.13</SECTNO>
                <SUBJECT>Community committee's reporting and record of results of referendum.</SUBJECT>
                <SECTNO>717.14</SECTNO>
                <SUBJECT>County committee's canvass of ballots.</SUBJECT>
                <SECTNO>717.15</SECTNO>
                <SUBJECT>County committee's reporting and record of results of the referendum.</SUBJECT>
                <SECTNO>717.16</SECTNO>
                <SUBJECT>Investigation as to correctness of summary of the referendum.</SUBJECT>
                <SECTNO>717.17</SECTNO>
                <SUBJECT>State committee's reporting and record of result of the referendum.</SUBJECT>
              </SUBJGRP>
              <SUBJGRP>
                <HD SOURCE="HED">Holding Referenda by Mail Ballot</HD>
                <SECTNO>717.18</SECTNO>
                <SUBJECT>Issuing ballots.</SUBJECT>
                <SECTNO>717.19</SECTNO>
                <SUBJECT>Manner of voting.</SUBJECT>
                <SECTNO>717.20</SECTNO>
                <SUBJECT>Receiving and tabulating voted ballots.</SUBJECT>
                <SECTNO>717.21</SECTNO>
                <SUBJECT>Canvassing voted ballots.</SUBJECT>
                <SECTNO>717.22</SECTNO>
                <SUBJECT>Reporting and record of result of the referendum.</SUBJECT>
              </SUBJGRP>
              <SUBJGRP>
                <HD SOURCE="HED">Miscellaneous</HD>
                <SECTNO>717.23</SECTNO>
                <SUBJECT>Applicability of this part to Puerto Rico.</SUBJECT>
                <SECTNO>717.24</SECTNO>
                <SUBJECT>Result of referendum.</SUBJECT>
                <SECTNO>717.25</SECTNO>
                <SUBJECT>Disposition of ballots and records.</SUBJECT>
                <SECTNO>717.26</SECTNO>
                <SUBJECT>Applicability.</SUBJECT>
              </SUBJGRP>
            </CONTENTS>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>Secs. 312, 317, 336, 343, 344a, 358, 376, 52 Stat. 46, as amended; 79 Stat. 66, as amended; 52 Stat. 55, as amended, 56, as amended; 79 Stat. 1197, as amended; 55 Stat. 88 as amended; 52 Stat. 66, as amended; 7 U.S.C. 1312, 1314c, 1336, 1343, 1344b, 1358, 1376.</P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>33 FR 18345, Dec. 11, 1968, unless otherwise noted.</P>
            </SOURCE>
            <SUBJGRP>
              <HD SOURCE="HED">General</HD>
              <SECTION>
                <SECTNO>§ 717.1</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <P>In determining the meaning of the provisions in this part, unless the context indicates otherwise, words importing the singular include and apply to several persons or things, words importing the plural include the singular, words importing the masculine gender include the feminine as well, and words used in the present tense include the future as well as the present.</P>
                <P>(a) <E T="03">General terms.</E> The definitions in part 719 of this chapter shall apply to this part. The provisions of part 720 of this chapter concerning the expiration of time limitations shall apply to this part.</P>
                <P>(b) <E T="03">Act.</E> The Agricultural Adjustment Act of 1938 and any amendments or supplements thereto.</P>
                <P>(c) <E T="03">Referendum community.</E> For referenda conducted by mail ballot, the entire county shall be the referendum community. For referenda conducted at polling places, the referendum community shall conform with the community established by the State committee for purposes of elective areas under the regulations in the subpart—Selection and Functions of Agricultural Stabilization and Conservation County and Community Committees in part 7, subtitle A, of this title (§ 7.7, 33 FR 12955), as amended from time to time: <E T="03">Provided,</E> That a referendum community may be composed of an area differing from the community so established in the following cases:</P>

                <P>(1) A referendum community may be established by the county committee, with the approval of a representative of the State committee, to conform to a <PRTPAGE P="55"/>political township, a local voting precinct for purposes of general elections, or a combination of such townships or precincts;</P>
                <P>(2) A referendum community may be established by the county committee, if it determines eligible producers will be given a convenient place to vote, which consists of a combination of a community with less than 25 farms on which there are producers eligible to vote, with one or more communities; and</P>
                <P>(3) The entire county shall be the referendum community in counties with less than 100 farms on which there are producers eligible to vote unless the county committee, with the approval of the State committee, determines that more than one referendum community is needed in the county.</P>
                <FP>The county committee shall maintain in the county office, and make available for public inspection, a descriptive list of the referendum communities established for the county for referenda conducted at polling places.</FP>
                <CITA>[33 FR 18345, Dec. 11, 1968, as amended by Amdt. 1, 34 FR 12940, Aug. 9, 1969]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.2</SECTNO>
                <SUBJECT>Supervision of referenda and prescribed method of balloting.</SUBJECT>
                <P>(a) <E T="03">Supervision of referenda.</E> The Deputy Administrator shall be in charge of and responsible for conducting each referendum required by the Act. Each State committee shall be in charge of and responsible for conducting such referendum in its State. Each county committee shall be responsible for the proper holding of such referendum in its county. It shall be the duty of the Deputy Administrator and of each committee to conduct each referendum by secret ballot in a fair, unbiased, and impartial manner in accordance with this part.</P>
                <P>(b) <E T="03">Prescribed method of balloting.</E> Each referendum held under this part shall be by mail ballot unless the Administrator, FSA, or the Deputy Administrator prescribes that a particular referendum shall be held at polling places.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.3</SECTNO>
                <SUBJECT>Voting eligibility.</SUBJECT>
                <P>(a) <E T="03">Statutory requirements—</E>(1) <E T="03">Tobacco quotas proclaimed on an acreage basis under section 312</E>(<E T="03">a</E>) <E T="03">of the Act.</E> Within 30 days after the proclamation under section 312(a) of the Act of national marketing quotas on an acreage basis for any kind of tobacco for the next 3 succeeding marketing years, there shall be a referendum under section 312(c) of the Act of farmers engaged in the production of the crop of such tobacco harvested immediately prior to the holding of the referendum to determine whether such farmers are in favor of or opposed to such quotas for the 3-year period. If more than one-third of the farmers voting oppose such quotas, the quotas so proclaimed for the 3-year period shall not be in effect: <E T="03">Provided,</E> That such referendum result shall not preclude the proclamation of national marketing quotas for such kind of tobacco for the next 3 succeeding marketing years subject to a referendum as required under this paragraph. If the referendum results in approval of quotas for the 3-year period, no further referendum applicable to such quotas shall be held (i) unless a new proclamation during the 3-year period is made pursuant to subdivision (3) of section 312(a) of the Act in which case a referendum shall be held as provided in this paragraph (a)(1)(i) of this section, or (ii) unless quotas on an acreage-poundage basis are established pursuant to section 317(c) of the Act, in which case a special referendum shall be held as provided in paragraph (a)(2) of this section.</P>
                <P>(2) <E T="03">Tobacco quotas proclaimed on an acreage-poundage basis under section 317</E>(<E T="03">c</E>) <E T="03">of the Act.</E> During the first or second marketing year of the 3-year period for which marketing quotas for any kind of tobacco are in effect on an acreage basis, if the Secretary, under section 317(c) of the Act, determines that marketing quotas on an acreage-poundage basis would result in a more effective program, at the time of the next announcement of the amount of the marketing quota on an acreage basis, the Secretary shall also announce the national acreage allotment and national average yield goal. Within 45 days after such announcement of acreage-poundage quotas there shall be a special referendum under section 317(c) of the Act of farmers engaged in the production of the kind of tobacco of the most recent crop to determine <PRTPAGE P="56"/>whether such farmers favor the establishment of marketing quotas on an acreage-poundage basis for the next 3 marketing years. If more than two-thirds of the farmers voting in the special referendum favor marketing quotas on an acreage-poundage basis, such quotas shall be in effect for the next 3 marketing years and the marketing quotas on an acreage basis shall cease to be in effect at the beginning of such 3-year period and no further special referendum applicable to such 3-year period shall be held. If marketing quotas on an acreage-poundage basis are not favored by more than two-thirds of the farmers voting in the special referendum, marketing quotas on an acreage basis as previously proclaimed shall continue in effect.</P>
                <P>(3) <E T="03">Tobacco quotas proclaimed on an acreage-poundage basis under section 317</E>(<E T="03">d</E>) <E T="03">of the Act.</E> If marketing quotas on an acreage-poundage basis have been made effective for a kind of tobacco, the Secretary shall proclaim a national marketing quota for such kind of tobacco for the next 3 succeeding marketing years if the marketing year is the last year of 3 consecutive years for which marketing quotas previously proclaimed will be in effect. Such proclamation may be on an acreage-poundage basis or on an acreage basis. Within 30 days after such proclamation, there shall be a referendum under section 312(c) of the Act of farmers engaged in the production of the crop of such kind of tobacco harvested immediately prior to the holding of the referendum to determine whether such farmers are in favor of or opposed to such quotas for the next 3 succeeding marketing years. If more than one-third of the farmers voting oppose such quotas, the quotas so proclaimed for the 3-year period shall not be in effect: <E T="03">Provided,</E> That such referendum result shall not preclude the proclamation of national marketing quotas for such kind of tobacco for the next 3 succeeding marketing years under section 312(a) of the Act subject to a referendum thereon as provided in paragraph (a)(1) of this section. If a referendum results in approval of quotas for 3 marketing years on an acreage basis, no further referendum applicable to such 3 marketing years shall be held except as may be required under section 317(c) of the Act. If a referendum results in approval of quotas for 3 marketing years on an acreage-poundage basis, no further referendum applicable to such 3 marketing years shall be held.</P>
                <P>(4) <E T="03">Tobacco quotas proclaimed but disapproved in 3 successive years.</E> Under section 312(a)(4) of the Act, if producers have disapproved national marketing quotas for a kind of tobacco in referenda held in 3 successive years subsequent to 1952, a national marketing quota shall not be proclaimed for any marketing year within the 3-year period for which quotas were disapproved unless prior to November 10 of the marketing year, one-fourth or more of the farmers engaged in the production of the crop of tobacco harvested in the calendar year in which such marketing year begins petition the Secretary to proclaim a national marketing quota for each of the next 3 succeeding marketing years.</P>
                <P>(5) [Reserved]</P>
                <P>(6) <E T="03">Extra long staple cotton quotas.</E> Not later than December 15 following the proclamation of a national quota for extra long staple cotton there shall be a referendum under section 343 of the Act, of farmers engaged in the production of extra long staple cotton in the calendar year in which the referendum is held to determine whether such farmers are in favor of or opposed to the quota for the next marketing year. If more than one-third of the farmers voting in the referendum oppose the quota, such quota shall not be in effect.</P>
                <P>(7) [Reserved]</P>
                <P>(8) <E T="03">Rice quotas.</E> Within 30 days after the proclamation of a national marketing quota for rice there shall be a referendum under section 354(b) of the Act of farmers engaged in the production of the immediately preceding crop of rice to determine whether such farmers are in favor of or opposed to the quota for the next marketing year. If more than one-third of the farmers voting in the referendum oppose the quota, such quota shall not be in effect.</P>
                <P>(9) <E T="03">Peanut quotas.</E> Not later than December 15 of each calendar year there shall be a referendum under section 358(b) of the Act of farmers engaged in <PRTPAGE P="57"/>the production of peanuts in the calendar year in which the referendum is held to determine whether such farmers are in favor of or opposed to marketing quotas with respect to the crops of peanuts produced in the 3 calendar years immediately following the year in which the referendum is held. If more than one-third of the farmers voting in the referendum oppose such quotas, the quotas so proclaimed shall not be in effect: <E T="03">Provided,</E> That such referendum result shall not preclude the proclamation of quotas in the next calendar year for a 3-year period subject to a referendum as required under this paragraph. If quotas are favored, no further referendum with respect to the 3-year period shall be held.</P>
                <P>(b) <E T="03">Farmers engaged in the production of a commodity.</E> For purposes of referenda with respect to marketing quotas for tobacco, extra long staple cotton, rice and peanuts the phrase “farmers engaged in the production of a commodity” includes any person who is entitled to share in a crop of the commodity, or the proceeds thereof because he shares in the risks of production of the crop as an owner, landlord, tenant, or sharecropper (landlord whose return from the crop is fixed regardless of the amount of the crop produced is excluded) on a farm on which such crop is planted in a workmanlike manner for harvest: <E T="03">Provided,</E> That any failure to harvest the crop because of conditions beyond the control of such person shall not affect his status as a farmer engaged in the production of the crop. In addition, the phrase “farmers engaged in the production of a commodity” also includes each person who it is determined would have had an interest as a producer in the commodity on a farm for which a farm allotment for the crop of the commodity was established and no acreage of the crop was planted but an acreage of the crop was regarded as planted for history acreage purposes under the applicable commodity regulations.</P>
                <P>(c) <E T="03">Special conditions applicable to peanuts and rice—</E>(1) <E T="03">Peanuts.</E> In the case of a referendum for marketing quotas for peanuts, farmers engaged in the production of peanuts as determined under paragraph (b) of this section shall not be eligible to vote in the referendum if the farm does not have any production of peanuts subject to marketing quotas. Under section 359(b) of the Act, marketing quotas are not applicable to peanuts produced on any farm on which the acreage harvested for nuts is 1 acre or less provided the producers who share in the peanuts produced on such farm do not share in the peanuts produced on any other farm. Under section 359(b) of the Act, marketing quotas are not applicable to peanuts which it is established (i) were not picked or threshed either before or after marketing from the farm, or (ii) were marketed by the producer before drying or removal of moisture from such peanuts either by natural or artificial means for consumption exclusively as boiled peanuts.</P>
                <P>(2) <E T="03">Rice.</E> In the case of a referendum for a marketing quota for rice, farmers engaged in the production of rice as determined under paragraph (b) of this section shall not be eligible to vote in the referendum if the farm is not subject to marketing quotas. Under section 353(d) of the Act, marketing quotas are not applicable (i) to nonirrigated rice produced on any farm on which the acreage planted to nonirrigated rice does not exceed 3 acres, or (ii) to rice produced outside the continental United States.</P>
                <P>(d) [Reserved]</P>
                <P>(e) <E T="03">One vote limitation.</E> Each person eligible to vote in a particular marketing quota referendum shall be entitled to only one vote in such referendum regardless of the number of farms in which such person is interested or the number of communities, counties, or States in which farms are located in which farms such person is interested: <E T="03">Provided,</E> That:</P>
                <P>(1) The individual members of a partnership shall each be entitled to one vote, but the partnership as an entity shall not be entitled to vote;</P>
                <P>(2) An individual eligible voter shall be entitled to one vote even though he is interested in an entity (including but not limited to a corporation) which entity is also eligible to vote;</P>

                <P>(3) A person shall also be entitled to vote in each instance of his capacity as a fiduciary (including but not limited to a guardian, administrator, executor or trustee) if in such fiduciary capacity <PRTPAGE P="58"/>he is eligible to vote but the person for whom he acts as a fiduciary shall not be eligible to vote.</P>
                <P>(f) <E T="03">Joint and family interest.</E> Where several persons, such as members of a family, have participated or will participate in the production of a commodity under the same lease or cropping agreement, only the person or persons who signed the lease or agreement, or agreed to an oral lease or agreement, shall be eligible to vote. Where two or more persons have produced or will produce a commodity as joint tenants, tenants in common, or owners of community property, each such person shall be entitled to one vote if otherwise eligible. The eligibility of one spouse does not affect the eligibility of the other spouse.</P>
                <P>(g) <E T="03">Minors.</E> A minor shall be entitled to one vote if he is otherwise eligible and is 18 years of age or older when he votes.</P>
                <P>(h) [Reserved]</P>
                <P>(i) <E T="03">Interpretation.</E> In the case of any commodity on a farm where no acreage of the commodity is actually planted but an acreage of the commodity is regarded as planted under applicable regulations of the Department, persons on the farm who it is determined would have had an interest in the commodity as a producer if an acreage of the commodity had been actually planted shall be eligible to vote in the referendum.</P>
                <CITA>[33 FR 18345, Dec. 11, 1968, as amended by Amdt. 2, 36 FR 12730, July 7, 1971]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.4</SECTNO>
                <SUBJECT>Register of eligible voters.</SUBJECT>
                <P>Prior to the date of the referendum a register shall be prepared by the county office manager listing the name and address of each known eligible voter. For referenda conducted at polling places a register shall be prepared for each referendum community. For referenda conducted by mail ballot the entire county is considered to be the referendum community and one register shall be prepared for the county.</P>
              </SECTION>
            </SUBJGRP>
            <SUBJGRP>
              <HD SOURCE="HED">Holding Referenda at Polling Places</HD>
              <SECTION>
                <SECTNO>§ 717.5</SECTNO>
                <SUBJECT>Community referendum committees.</SUBJECT>
                <P>(a) <E T="03">Where one referendum is to be conducted.</E> Except where the entire county is to be considered a referendum community, the county committee shall designate a community referendum committee for each referendum community. Each referendum committee shall consist of at least three regular members and one alternate. The membership of the referendum committee shall be chosen from among the farmers who reside in the community and who are eligible to vote in the referendum or who are community committeemen elected pursuant to the regulations in the subpart—Selection and Functions of Agricultural Stabilization and Conservation County and Community committees (part 7 of this title). The county committee shall name one member of the community referendum committee as chairman and another member thereof as vice chairman. The vice chairman shall act as the chairman in the event of the absence or incapacity of the chairman and the alternate shall serve on the committee in the place of any regular member who cannot serve. The community referendum committee shall be responsible for the proper holding of the referendum in its community in a fair, unbiased and impartial manner in accordance with this part. In counties where the entire county is treated as one referendum community, the county committee shall perform, in addition to its other duties, the duties of the community referendum committee.</P>
                <P>(b) <E T="03">Where two or more referenda are to be conducted.</E> Where two or more referenda are to be held in the county on the same day, the provisions of paragraph (a) of this section shall be applicable except that (1) the total number of farms on which there are producers eligible to vote in any one or more of such referenda shall be used to determine whether there are 100 or more farms on which there are producers who are eligible to vote in the referenda, and (2) each community referendum committee shall be chosen from among the farmers who reside in the community and who are eligible to vote in any of such referenda or who are community committeemen elected <PRTPAGE P="59"/>pursuant to the regulations in the subpart—Selection and Functions of Agricultural Stabilization and Conservation County and Community committees (part 7 of this title).</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.6</SECTNO>
                <SUBJECT>Place for balloting.</SUBJECT>
                <P>The county committee shall designate only one polling place for balloting in each referendum community. The polling place shall be one well known to and readily accessible to the persons in the community and shall be equipped and arranged so that each voter can mark and cast his ballot in secret and without coercion, duress, or interference of any sort whatsoever. Subject to the provisions of § 717.9(c) for absentee ballots, a farmer or producer eligible to vote, shall vote only at a polling place designated for the referendum community in which he was engaged in the production of the commodity for which the referendum is held.</P>
                <CITA>[33 FR 18345, Dec. 11, 1968, as amended by Amdt. 2, 36 FR 12730, July 7, 1971]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.7</SECTNO>
                <SUBJECT>Time of voting.</SUBJECT>
                <P>There shall be no voting except on the day fixed for the holding of the referendum (except as provided in § 717.9(c) in the case of absentee ballots) and the day fixed for the holding of the referendum shall be the same in all neighborhoods, communities, counties, and States. The date for holding the referendum shall be determined by the Secretary in accordance with the provisions of law applicable thereto and stated in the notice of the referendum prescribed by him. The time that polls shall be opened and closed on the date fixed for holding the referendum in the States and Puerto Rico is as follows:</P>
                <GPOTABLE CDEF="s25,8,8" COLS="3" OPTS="L2">
                  <BOXHD>
                    <CHED H="1">State</CHED>
                    <CHED H="1">Polls to open a.m.</CHED>
                    <CHED H="1">Polls to close p.m.</CHED>
                  </BOXHD>
                  <ROW>
                    <ENT I="01">Alabama</ENT>
                    <ENT>7:00</ENT>
                    <ENT>7:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Alaska</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Arizona</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Arkansas</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:30</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">California</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Colorado</ENT>
                    <ENT>7:00</ENT>
                    <ENT>7:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Connecticut</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Delaware</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Florida</ENT>
                    <ENT>7:00</ENT>
                    <ENT>7:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Georgia</ENT>
                    <ENT>7:00</ENT>
                    <ENT>7:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Idaho</ENT>
                    <ENT>8:00</ENT>
                    <ENT>8:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Illinois</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Indiana</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Iowa</ENT>
                    <ENT>8:00</ENT>
                    <ENT>8:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Kansas</ENT>
                    <ENT>8:00</ENT>
                    <ENT>8:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Kentucky</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Louisiana</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Maine</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Maryland</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Massachusetts</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Michigan</ENT>
                    <ENT>8:00</ENT>
                    <ENT>8:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Minnesota</ENT>
                    <ENT>8:00</ENT>
                    <ENT>8:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Mississippi</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Missouri</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Montana</ENT>
                    <ENT>8:00</ENT>
                    <ENT>7:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Nebraska</ENT>
                    <ENT>8:00</ENT>
                    <ENT>8:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Nevada</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">New Hampshire</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">New Jersey</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">New Mexico</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">New York</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">North Carolina</ENT>
                    <ENT>7:00</ENT>
                    <ENT>7:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">North Dakota</ENT>
                    <ENT>8:00</ENT>
                    <ENT>9:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Ohio</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Oklahoma</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Oregon</ENT>
                    <ENT>8:00</ENT>
                    <ENT>8:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Pennsylvania</ENT>
                    <ENT>8:00</ENT>
                    <ENT>9:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Rhode Island</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">South Carolina</ENT>
                    <ENT>7:00</ENT>
                    <ENT>7:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">South Dakota</ENT>
                    <ENT>8:00</ENT>
                    <ENT>8:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Tennessee</ENT>
                    <ENT>8:00</ENT>
                    <ENT>7:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Texas</ENT>
                    <ENT>8:00</ENT>
                    <ENT>7:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Utah</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Vermont</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Virginia</ENT>
                    <ENT>7:00</ENT>
                    <ENT>7:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Washington</ENT>
                    <ENT>8:00</ENT>
                    <ENT>8:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">West Virginia</ENT>
                    <ENT>8:00</ENT>
                    <ENT>8:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Wisconsin</ENT>
                    <ENT>8:00</ENT>
                    <ENT>8:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Wyoming</ENT>
                    <ENT>8:00</ENT>
                    <ENT>8:00</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Puerto Rico</ENT>
                    <ENT>8:00</ENT>
                    <ENT>6:00</ENT>
                  </ROW>
                </GPOTABLE>
                <FP>The times listed in this section shall be the local time in effect for the area in which the polling place is located.</FP>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.8</SECTNO>
                <SUBJECT>Notice of referendum.</SUBJECT>
                <P>(a) <E T="03">Posting a notice.</E> The county committee shall give public notice of the referendum in each referendum community by posting a notice at one or more places open to the public within such community prior to the date of the referendum. Such notice shall be on a form prescribed by the Deputy Administrator and shall state the commodity or commodities and marketing year, or years, or crops for which the referendum is to be held, the location of the polling place in the community, the date of the referendum, and the hours when the polls will be opened and closed. The county executive director is authorized to sign such notice on behalf of the county committee.</P>
                <P>(b) <E T="03">Use of agencies of public information.</E> The county committee and community referendum committees shall <PRTPAGE P="60"/>utilize, to the extent practicable (without advertising expense), all available agencies of public information, including newspapers, radio, television and other means, to give persons in the county public notice of the day and hours of voting, the location of polling places, and the rules governing eligibility to vote. Such notice should be given as soon as practicable after the arrangements for holding the referendum in the county have been made.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.9</SECTNO>
                <SUBJECT>Manner of voting.</SUBJECT>
                <P>(a) <E T="03">Secret ballot.</E> The voting in the referendum shall be by secret ballot. Each voter shall, at the time he is handed the form on which to cast his ballot, be instructed to mark his ballot form so as to indicate clearly how he votes and in such manner that no one else shall see how he votes and then to fold his ballot and place it in the ballot box without allowing anyone else to see how he voted. A suitable place where each voter may mark and cast his ballot in secret and without coercion, duress, or interference of any sort whatever, shall be provided in each polling place. Every unchallenged ballot shall be placed in the ballot box by the person who voted it. The fact that a voter fails to fold a ballot placed in the ballot box shall not invalidate it. It shall be the duty of each community referendum committee to see that no device of any sort whatever is used whereby any voter's ballot may be identified except as provided in this part in the case of a challenged ballot or an absentee ballot.</P>
                <P>(b) <E T="03">Voting by proxy prohibited.</E> There shall be no voting by proxy or agent, or in any manner except by the eligible voter (or the challenged voter under paragraph (d) of this section) personally depositing in the ballot box his ballot as marked by him (except as provided in the case of an absentee ballot), but a duly authorized officer of a corporation, association, or other legal entity, may cast its vote.</P>
                <P>(c) <E T="03">Absentee ballots.</E> Any person who will not be present on the day of the referendum in the county in which he is eligible to vote or who will be prevented from voting in person on the day of the referendum because of physical incapacity, or whose religious belief forbids him from voting on the day of the referendum, may obtain prior to the date of the referendum, one ballot from a State or county FSA office conveniently situated for him, or from the Commodity Programs Division, FSA, Department of Agriculture, Washington, D.C., and cast an absentee ballot. The office so issuing the ballot form shall endorse on the reverse side thereof a statement in substantially the following form identifying the place in which it was issued and the county to which it will be mailed or delivered, initialed and dated by the person issuing such form.</P>
                <EXTRACT>
                  <P>Issued in ____ County ____ State, or by ________ State FSA Office, or by ________ Division, FSA, Washington, D.C., for use in ____ County, ___ State.</P>
                </EXTRACT>
                <FP>The issuing office shall keep a register showing for each ballot form so issued by it to be voted absentee, the name and address to whom issued, the date of issuance, and the county and State in which the ballot is to be voted, and the name and title of the person who issued the ballot. The person to whom the ballot is issued shall mark the ballot so as to indicate clearly how he votes and place the ballot in a plain envelope which shall be marked clearly with the words “Absentee Ballot,” sealed and inserted in another envelope which shall be marked clearly with the voter's name and return address, sealed and delivered, or mailed, postage paid, to the county committee for the county in which he is eligible to vote. All absentee ballots must, in order to be accepted, reach the county office for the county in which the voter is eligible to vote by not later than the hour for closing the polls in the county on the day of the referendum. No such ballot shall be counted unless the voter's name and address appear on the envelope and it is determined that he is eligible to vote.</FP>
                <P>(d) <E T="03">Challenged ballots.</E> The community referendum committee or any member thereof shall challenge the eligibility of any person to vote in the referendum where (1) the community referendum committee or any member thereof is unable to determine that the person is eligible to vote in the referendum in <PRTPAGE P="61"/>the community, or (2) the community referendum committee or any member thereof has reason to believe that such person has previously voted in the referendum in another community in the same or another county in person or by mail, or (3) the person's name and address have not been entered on the register of eligible voters, prior to its delivery to the referendum committee, unless the referendum committee is satisfied that the person is eligible to vote. In every case where the eligibility of the voter is challenged, his ballot form, after being marked by the challenged person so as to show how he votes, but in such manner that no one else sees how he votes, shall be folded and placed by him (or by a member of the committee if he refuses) in an envelope, which shall then be sealed and placed in another envelope, identified with his name and address, the word “Challenged” and a statement of the reason for the challenge, and shall then be placed in the ballot box. The county committee shall make an investigation in each case of controversy or dispute regarding the eligibility of a voter to vote in the referendum. In each case of a challenged ballot the eligibility of the person to vote in the referendum shall be determined by the county committee as soon as may be possible after the polls are closed and before the time for forwarding to the State committee the county summary of ballots. If it is determined that the person whose vote was challenged is eligible to vote, the sealed envelope containing the ballot shall be placed with the challenged ballot of every other person found to be eligible to vote until all challenged ballots have been passed upon by the county committee. If it is determined that the person whose vote was challenged is not eligible, the sealed envelope shall be marked “Not eligible” and signed by a member of the county committee and shall not be opened. When all of the challenged ballots have been passed upon by the county committee, the challenged ballots which were cast by eligible voters shall be opened and tabulated on the county summary of ballots, but no disclosure shall be made as to how any particular person voted.</P>
                <P>(e) <E T="03">Ballot box.</E> Each polling place shall be furnished with a suitable ballot box. Any container of sufficient size so arranged that no ballot can be read or removed without breaking seals on the container will be suitable. When strip adhesive paper or corresponding seals are used on the ballot box, such seals shall be signed or initialed by the chairman or a member of the community referendum committee so that breaking or replacing the seal will so destroy or affect the identifying marks as to show that the seal has been tampered with.</P>
                <CITA>[33 FR 18345, Dec. 11, 1968, as amended by Amdt. 1, 34 FR 12940, Aug. 9, 1969]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.10</SECTNO>
                <SUBJECT>Local arrangements for holding the referendum.</SUBJECT>
                <P>The county committee shall make all arrangements for the proper holding of the referendum in accordance with this part prior to the date of the referendum. The county committee shall instruct each community referendum committee concerning its duties so that each member of the committee understands his duties and the duties of the committee in all respects, with particular emphasis as to (a) issuing ballot forms, (b) challenged ballots, (c) recording votes, (d) tabulating ballots, and (e) certifying results of the referendum in the referendum community. The county executive director shall furnish each community referendum committee an adequate supply of forms prior to the time the polls in the county are opened for the acceptance of ballots, by delivering the ballot forms and the forms for the community summary of ballots to each chairman of the several community referendum committees.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.11</SECTNO>
                <SUBJECT>Issuing ballots.</SUBJECT>

                <P>The community referendum committee shall open the polling place for the issuance of ballot forms and the casting of ballots at the time designated and shall thereafter until the time when the polls are required to be closed and the casting of ballots discontinued issue a ballot to each person who is eligible to vote and applies for a ballot and to each person who claims to be eligible to vote and insists upon voting even though his eligibility to <PRTPAGE P="62"/>vote is challenged by a member of the committee. The community referendum committeeman who issued the ballot form shall immediately enter on the register of voters opposite the name and address of the person voting, a record of the issuance of the ballot, the casting of the ballot, and any challenge of the eligibility of the person casting the ballot. Ballot forms shall be issued and ballots placed in the ballot box while at least two members serving on the community referendum committee are physically present in the polling place and in position to see each ballot form as it is issued and each ballot as it is placed in the ballot box.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.12</SECTNO>
                <SUBJECT>Community referendum committee's canvass of ballots.</SUBJECT>
                <P>Immediately after the polls are closed, the community referendum committee shall open the ballot box and canvass the ballots cast. The canvass of the ballots shall be kept open to the public. A ballot shall be considered as a spoiled ballot if it is mutilated or marked in such a way that it is not possible to determine with certainty how the ballot was intended to be counted on a particular question. The envelope containing the challenged ballots shall not be opened. The total number of ballots issued as shown on the register of voters shall be determined and the total number of ballots cast, including the spoiled and challenged ballots, shall be determined. The number of ballots cast in favor of and the number of ballots cast in opposition to the question on which the referendum was held shall be determined. The spoiled ballots and challenged ballots shall not be considered in favor of or against the question. If any member of the community referendum committee should see or learn how any person besides himself voted, whether or not the ballot was challenged, spoiled, or otherwise, he shall not disclose such knowledge to a fellow committeeman or any other person except in an investigation conducted under this part.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.13</SECTNO>
                <SUBJECT>Community committee's reporting and record of results of referendum.</SUBJECT>
                <P>The community referendum committee shall notify the county committee by telephone, telegraph, messenger, or in person of the preliminary count of the votes on each question and of the number of spoiled and challenged ballots, as soon as may be possible. All the spoiled ballots shall be placed in an envelope and sealed and marked with the initials of the chairman (or vice chairman) of the community referendum committee and the designation “Spoiled Ballots” followed by the number of spoiled ballots and the names of the community, the county and the State. The community referendum committee shall execute the certification as to the accuracy of the register of eligible voters and ballots cast. The community referendum committee shall then prepare and execute the community summary of ballots and post one copy thereof, as soon as it is executed, in a conspicuous place at the polling place, so that it will remain posted and accessible to the public for at least 3 calendar days after the holding of the referendum. The community referendum committee shall seal the voted ballots, including those challenged and spoiled, the register of eligible voters and ballots cast, and the community summary of ballots, in one or more envelopes appropriately identified by the names of the community, the county, and the State, and the nature of the referendum and the date on which it was held, and deliver them to the county committee not later than 9 a.m., local time, on the second calendar day after the date of the referendum, together with the unused ballot and other forms. The chairman (or vice chairman) of the community referendum committee shall be responsible for the safe delivery of such reports, ballots, and forms to the county committee.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.14</SECTNO>
                <SUBJECT>County committee's canvass of ballots.</SUBJECT>

                <P>The county committee, after the closing of the polls, shall open and canvass the absentee ballots received and determine the eligibility of each voter. If any person voting absentee is found <PRTPAGE P="63"/>to be ineligible to vote, or the ballot is so mutilated or marked that it is not possible to determine with certainty how the person intended to vote, such ballot shall not be counted as for or against the question in the referendum. The county committee shall meet and pass upon the challenged ballots as soon as may be reasonably possible after the challenged ballots are received from the community referendum committees, but not later than 4 calendar days after the day of the referendum. The result of the referendum in each community shall be reviewed and summarized as soon as may be reasonably possible after the records, ballots, and forms are received from the several community referendum committees. Every meeting of the county committee for the purpose of canvassing the ballots cast and reviewing and tabulating the results of the referendum shall be open to the public. No member of the county committee who learns how any person besides himself voted, whether the ballot was an absentee ballot, challenged, spoiled, or otherwise, shall disclose such knowledge to any fellow committeeman or other person except in an investigation conducted under this part.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.15</SECTNO>
                <SUBJECT>County committee's reporting and record of results of the referendum.</SUBJECT>
                <P>The county committee shall notify the State committee by telephone, telegraph, or messenger (who may be a member of the county committee), as to the preliminary count of the votes on each question and the number of challenged ballots by the several community referendum committees as soon as possible. The county committee shall, as soon as may be reasonably possible, but in no event later than 4 calendar days after the date of the referendum, have prepared and certified the county summary of ballots. Such summary shall be prepared and certified in triplicate, one copy of which shall be sent to the State committee, one copy posted for 30 calendar days in a conspicuous place accessible to the public in or near the office of the county committee, and one copy filed in the office of the county committee and kept available for public inspection. One copy of each community summary shall likewise be posted for 30 calendar days in a conspicuous place accessible to the public in or near the office of the county committee.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.16</SECTNO>
                <SUBJECT>Investigation as to correctness of summary of the referendum.</SUBJECT>
                <P>The county committee shall make an investigation in each case of a dispute or challenge regarding the correctness of the summary of the referendum in a community. No dispute or challenge shall be investigated by the county committee unless it is brought to its attention within 3 calendar days after the date on which the referendum was held. The county committee shall promptly decide the dispute or the challenge and report its findings to the State committee within 5 calendar days after the holding of the referendum and send by certified mail, or deliver in person, to the office of the State committee all voted ballots, register forms, and community summary sheets involved in the dispute or challenge.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.17</SECTNO>
                <SUBJECT>State committee's reporting and record of result of the referendum.</SUBJECT>

                <P>The State committee for each State shall notify the Deputy Administrator by telegraph or telephone as to the preliminary count of the votes in the State as soon as the preliminary results of the referendum are made known to the State committee. The county summaries of ballots shall be summarized on the State summary of ballots as soon as possible, but in no event later than 7 calendar days after the date of the referendum, unless there is a dispute or challenge regarding the correctness of the summary for any county, in which case the State committee shall complete its investigation thereof, decide the dispute or challenge, and prepare the State summary accordingly within 14 calendar days after the date of the referendum. The State summary shall be prepared in triplicate and certified to by the State executive director. The original and one copy of the State summary shall be forwarded to the Director of <PRTPAGE P="64"/>the FSA Division having the responsibility for the commodity for which the referendum was held. One copy of the State summary shall be filed for a period of 5 years in the office of the State committee available for public inspection.</P>
                <CITA>[33 FR 18345, Dec. 11, 1968, as amended by Amdt. 1, 34 FR 12940, Aug. 9, 1969]</CITA>
              </SECTION>
            </SUBJGRP>
            <SUBJGRP>
              <HD SOURCE="HED">Holding Referenda by Mail Ballot</HD>
              <SECTION>
                <SECTNO>§ 717.18</SECTNO>
                <SUBJECT>Issuing ballots.</SUBJECT>
                <P>The county committee shall furnish each person who is eligible to vote in a particular referendum a ballot suitable for mailing back to the office of the county committee. If a person who is eligible to vote in a particular referendum is not furnished a ballot, he may obtain one during the referendum period from the office of the county committee for the county in which he is eligible to vote or from any other FSA office where ballots are available, including the Commodity Programs Division, FSA, Department of Agriculture, Washington, D.C. When a ballot is issued from an FSA office other than the FSA office in the county in which the producer is eligible to vote in a particular referendum, the issuing office shall keep a register showing to whom it was issued, the person's address, the county and State in which the ballot is to be voted, and the name and title of the person who issued the ballot.</P>
                <CITA>[33 FR 18345, Dec. 11, 1968, as amended by Amdt. 1, 34 FR 12940, Aug. 9, 1969]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.19</SECTNO>
                <SUBJECT>Manner of voting.</SUBJECT>
                <P>(a) <E T="03">Voting procedure.</E> Each person to whom a ballot is issued by mail or in person may vote in the referendum by marking the ballot so as to indicate clearly how the vote is cast, placing the ballot in a plain envelope, sealing the envelope provided by FSA which is marked clearly with the voter's name and return address, signing the certification on such envelope or making his mark thereto (which mark shall be witnessed), sealing such envelope, and delivering or mailing the envelope to the offfice of the county committee for the county in which the person is eligible to vote.</P>
                <P>(b) <E T="03">Voting by proxy prohibited.</E> There shall be no voting by proxy or agent except as provided in § 717.3.</P>
                <SECAUTH>(Secs. 312, 317, 336, 343, 344, 354, 358, 375, 52 Stat. 46, as amended, 79 Stat. 66, 52 Stat. 55, as amended, 56, as amended, 79 Stat. 1197, 52 Stat. 61, as amended, 55 Stat. 88, as amended, 52 Stat. 66, as amended; 7 U.S.C. 1312, 1314c, 1336, 1343, 1344b, 1354, 1356, 1375)</SECAUTH>
                <CITA>[Amdt. 2, 36 FR 12730, July 7, 1971, as amended by Amdt. 4, 49 FR 24371, June 13, 1984]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.20</SECTNO>
                <SUBJECT>Receiving and tabulating voted ballots.</SUBJECT>
                <P>Ballots received at the county FSA office during the referendum period shall be placed immediately in a ballot box provided by the county executive director and so arranged that ballots cannot be read or removed without breaking the seal on the container. Voted ballots received by the county committee of the county in which the voter is eligible to vote during the period established for holding a particular referendum, shall be tabulated by the county committee. A ballot shall be considered to have been received during the referendum period if (a) in the case of a ballot delivered to the county committee, it was received in the office prior to the close of the work day on the final day of the referendum period, or (b) in the case of a mailed ballot, it was postmarked not later than midnight of the final day of the referendum period and was received in the county office prior to the start of canvassing the ballots. However, no such ballot shall be counted unless the voter signs the certification or his mark is witnessed on the returned envelope, and it is determined that he is eligible to vote in the particular referendum.</P>
                <SECAUTH>(Secs. 312, 317, 336, 343, 344, 354, 358, 375, 52 Stat. 46, as amended, 79 Stat. 66, 52 Stat. 55, as amended, 56, as amended, 79 Stat. 1197, 52 Stat. 61, as amended, 55 Stat. 88, as amended, 52 Stat. 66, as amended; 7 U.S.C. 1312, 1314c, 1336, 1343, 1344b, 1354, 1356, 1375)</SECAUTH>
                <CITA>[33 FR 18345, Dec. 11, 1968, as amended by Amdt. 4, 49 FR 24371, June 13, 1984]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.21</SECTNO>
                <SUBJECT>Canvassing voted ballots.</SUBJECT>
                <P>(a) <E T="03">Time of canvassing.</E> The canvassing of voted ballots shall take place at the opening of the county office on the <PRTPAGE P="65"/>fifth day after the close of the referendum period. Ballots received after the start of tabulation, even though contained in envelopes that were post-marked prior to midnight of the final day of the referendum period, shall not be counted.</P>
                <P>(b) <E T="03">Canvassing by county committee.</E> The canvassing shall be in the presence of at least two members of the county committee and open to the public: <E T="03">Provided,</E> That if two or more counties have been combined and are served by one county office, the canvassing of ballots shall be conducted by at least one member of the county committee from each county served by the county office: <E T="03">Provided further,</E> That the State committee, or the State executive director if authorized by the State committee, may (1) designate the county executive director and a county or State FSA office employee to canvass the ballots and report the results, as provided in paragraph (c) and § 717.22, instead of two members of the county committee, when it is determined that the number of eligible voters for the commodity for which the referendum is being conducted is so limited that having two members of the county committee present for this function is impractical and (2) designate the county Executive Director and/or another county or State FSA office employee to canvass ballots in any emergency situation precluding at least two members of the county committee from being present to carry out the functions required in this section.</P>
                <P>(c) <E T="03">Manner of canvassing.</E> The canvassing of ballots shall follow the following procedure:</P>
                <P>(1) The ballot box shall be opened;</P>
                <P>(2) The envelopes from the ballot box shall be separated into three groups consisting of (i) unopened certification envelopes which do not have a proper signed certification, (ii) unopened certification envelopes from ineligible voters, and (iii) unopened certification envelopes from eligible voters;</P>
                <P>(3) The unopened certification envelopes from eligible voters shall be opened and plain envelopes removed and then shuffled to preserve the secrecy of the ballots contained in such plain envelopes;</P>
                <P>(4) The ballots shall be removed from such plain envelopes and tabulated. A ballot shall be considered as a spoiled ballot if it is mutilated or marked in such a way that it is not possible to determine with certainty how the ballot was intended to be counted on a particular question. The spoiled ballots shall not be considered in favor of or against the question.</P>
                <P>(5) The unopened certification envelopes which do not have a proper signed certification shall not be opened and shall not be considered in favor of or against the question.</P>
                <P>(6) The unopened certification envelopes from ineligible voters shall be considered as challenged ballots. The county committee shall determine the eligibility of the person to vote in the referendum. If determined to be eligible such envelopes shall be handled as provided under paragraphs (c)(3) and (4) of this section. If determined not to be eligible, such envelopes shall not be opened and shall not be considered in favor of or against the question.</P>
                <P>(d) <E T="03">Dispute or challenge.</E> A dispute or challenge with respect to any referendum held by mail ballot shall not be considered unless notification of such dispute or challenge is filed in writing with the county executive director of the county in which the alleged irregularity occurred within 3 days after the date of the canvassing of voted ballots. Such written notification of a dispute or challenge must identify each alleged instance in which the county committee erred when canvassing the ballots or tabulating the referendum results. The county committee shall determine the validity of the dispute or challenge and report its findings to the State committee within 3 working days after the final date for filing a dispute or challenge.</P>
                <CITA>[33 FR 18345, Dec. 11, 1968, as amended by Amdt. 2, 36 FR 12730, July 7, 1971; Amdt. 3, 38 FR 12891, May 17, 1973; 51 FR 10609, Mar. 28, 1986; 52 FR 10727, Apr. 3, 1987]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.22</SECTNO>
                <SUBJECT>Reporting and record of result of the referendum.</SUBJECT>
                <P>(a) <E T="03">County committee.</E> The county committee shall notify the State committee by telephone, telegraph, or messenger (who may be a member of the <PRTPAGE P="66"/>county committee), as to the preliminary count of the votes on each question and the number of challenged ballots as soon as possible. The county committee shall, as soon as may be reasonably possible, but in no event later than 4 calendar days after canvassing of the ballots, have prepared and certified the county summary of ballots. Such summary shall be prepared and certified in triplicate, one copy of which shall be sent to the State committee, one copy posted for 30 calendar days in a conspicuous place accessible to the public in or near the office of the county committee, and one copy filed in the office of the county committee and kept available for public inspection.</P>
                <P>(b) <E T="03">State committee.</E> The State committee for each State shall notify the Deputy Administrator by telephone or telegraph as to the preliminary count of the votes in the State as soon as the preliminary results of the referendum are made known to the State committee. The county summaries of ballots shall be summarized on the State summary of ballots as soon as possible, but in no event later than 7 calendar days after canvassing of the ballots, unless there is a dispute or challenge regarding the correctness of the summary for any county, in which case the State committee shall complete its investigation thereof, decide the dispute or challenge, and prepare the State summary accordingly within 14 calendar days after canvassing of the ballots. The State summary shall be prepared in triplicate and certified to by the State executive director. The original and one copy of the State summary shall be forwarded to the Director of the FSA Division having the responsibility for the commodity for which the referendum was held. One copy of the State summary shall be filed for a period of 5 years in the office of State committee available for public inspection.</P>
                <CITA>[Amdt. 1, 34 FR 12940, Aug. 9, 1969]</CITA>
              </SECTION>
            </SUBJGRP>
            <SUBJGRP>
              <HD SOURCE="HED">Miscellaneous</HD>
              <SECTION>
                <SECTNO>§ 717.23</SECTNO>
                <SUBJECT>Applicability of this part to Puerto Rico.</SUBJECT>
                <P>The Caribbean Area Agricultural Stabilization and Conservation Committee shall be in charge of and responsible for conducting in Puerto Rico each referendum required by the Act. Insofar as applicable, the Caribbean Area ASC Committee shall perform all the duties and assume all the responsibilities otherwise required of State and county committees as provided in this part, except that (a) the Director, Agricultural Stabilization and Conservation Caribbean Area Office shall nominate for appointment by the Caribbean Area ASC Committee the members and alternates to serve on community referendum committees and shall establish the boundaries of referendum communities in such a manner that polling places therein will be conveniently located for the farmers eligible to vote in the referendum, and (b) following the canvass of the ballots, results of the referendum shall be reported to the Caribbean Area ASC Committee.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.24</SECTNO>
                <SUBJECT>Result of referendum.</SUBJECT>
                <P>(a) <E T="03">Proclamation of result.</E> The final and official tabulation of the votes cast in the referendum shall be made by the Deputy Administrator and the result of the referendum will be publicly proclaimed and published in the <E T="04">Federal Register.</E> The State summaries and related papers shall be filed with such tabulation for a period of 5 years available for public inspection in the Department of Agriculture.</P>
                <P>(b) <E T="03">Unofficial announcements of result.</E> Each county committee is authorized to issue unofficial reports of the total “Yes” and “No” votes in its county to the press and the public. Each State committee is authorized to issue to the press and the public the unofficial result of the referendum in its State by counties as rapidly as the votes in the various counties are reported to it.</P>
                <P>(c) <E T="03">Investigations.</E> If the Deputy Administrator or the Secretary deems it necessary, the report of any community referendum committee, county committee, or State committee shall be reexamined and checked by such persons or agents as may be designated.</P>
              </SECTION>
              <SECTION>
                <PRTPAGE P="67"/>
                <SECTNO>§ 717.25</SECTNO>
                <SUBJECT>Disposition of ballots and rec-ords.</SUBJECT>
                <P>The county committee shall seal the voted ballots, challenged ballots found to be ineligible, spoiled ballots, unopened certification envelopes, register sheets, and community summaries for the county in one or more envelopes or packages, plainly marked with the identification of the referendum, the date, and the names of the county and State, and place them under lock in a safe place under the custody of the county office manager for a period of 30 calendar days after the date of the referendum. If no notice to the contrary is received by the end of such time, the voted ballots, challenged ballots, spoiled ballots, and unopened certification envelopes shall be destroyed, but the registers and community and county summary sheets and the register of absentee ballots shall be filed for a period of 5 years in the office of the county committee.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 717.26</SECTNO>
                <SUBJECT>Applicability.</SUBJECT>
                <P>The regulations contained in this part shall be applicable to all referenda held pursuant to the Agricultural Adjustment Act of 1938, as amended.</P>
              </SECTION>
            </SUBJGRP>
          </PART>
          <PART>
            <EAR>Pt. 718</EAR>
            <HD SOURCE="HED">PART 718—PROVISIONS APPLICABLE TO MULTIPLE PROGRAMS</HD>
            <CONTENTS>
              <SUBPART>
                <HD SOURCE="HED">Subpart A—General Provisions</HD>
                <SECHD>Sec.</SECHD>
                <SECTNO>718.1</SECTNO>
                <SUBJECT>Applicability.</SUBJECT>
                <SECTNO>718.2</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <SECTNO>718.3</SECTNO>
                <SUBJECT>State committee responsibilities.</SUBJECT>
                <SECTNO>718.4</SECTNO>
                <SUBJECT>Authority for farm entry and providing information.</SUBJECT>
                <SECTNO>718.5</SECTNO>
                <SUBJECT>Rule of fractions.</SUBJECT>
                <SECTNO>718.6</SECTNO>
                <SUBJECT>Controlled substance.</SUBJECT>
                <SECTNO>718.7</SECTNO>
                <SUBJECT>Furnishing maps.</SUBJECT>
                <SECTNO>718.8</SECTNO>
                <SUBJECT>Administrative county.</SUBJECT>
                <SECTNO>718.9</SECTNO>
                <SUBJECT>Signature requirements.</SUBJECT>
                <SECTNO>718.10</SECTNO>
                <SUBJECT>Time limitations.</SUBJECT>
                <SECTNO>718.11</SECTNO>
                <SUBJECT>Disqualification due to federal crop insurance fraud.</SUBJECT>
              </SUBPART>
              <SUBPART>
                <HD SOURCE="HED">Subpart B—Determination of Acreage and Compliance</HD>
                <SECTNO>718.101</SECTNO>
                <SUBJECT>Measurements.</SUBJECT>
                <SECTNO>718.102</SECTNO>
                <SUBJECT>Acreage reports.</SUBJECT>
                <SECTNO>718.103</SECTNO>
                <SUBJECT>Late-filed reports.</SUBJECT>
                <SECTNO>718.104</SECTNO>
                <SUBJECT>Revised reports.</SUBJECT>
                <SECTNO>718.105</SECTNO>
                <SUBJECT>Tolerances, variances, and adjustments.</SUBJECT>
                <SECTNO>718.106</SECTNO>
                <SUBJECT>Non-compliance and fraudulent acreage reports.</SUBJECT>
                <SECTNO>718.107</SECTNO>
                <SUBJECT>Acreages.</SUBJECT>
                <SECTNO>718.108</SECTNO>
                <SUBJECT>Measuring acreage including skip row acreage</SUBJECT>
                <SECTNO>718.109</SECTNO>
                <SUBJECT>Deductions.</SUBJECT>
                <SECTNO>718.110</SECTNO>
                <SUBJECT>Adjustments.</SUBJECT>
                <SECTNO>718.111</SECTNO>
                <SUBJECT>Notice of measured acreage.</SUBJECT>
                <SECTNO>718.112</SECTNO>
                <SUBJECT>Redetermination.</SUBJECT>
              </SUBPART>
              <SUBPART>
                <HD SOURCE="HED">Subpart C—Reconstitution of Farms, Allotments, Quotas, and Bases</HD>
                <SECTNO>718.201</SECTNO>
                <SUBJECT>Farm constitution.</SUBJECT>
                <SECTNO>718.202</SECTNO>
                <SUBJECT>Determining the land constituting a farm.</SUBJECT>
                <SECTNO>718.203</SECTNO>
                <SUBJECT>County committee action to reconstitute a farm.</SUBJECT>
                <SECTNO>718.204</SECTNO>
                <SUBJECT>Reconstitution of allotments, quotas, and bases.</SUBJECT>
                <SECTNO>718.205</SECTNO>
                <SUBJECT>Substantive change in farming operation, and changes in related legal entities.</SUBJECT>
                <SECTNO>718.206</SECTNO>
                <SUBJECT>Determining farms, tracts, allotments, quotas, and bases when reconstitution is made by division.</SUBJECT>
                <SECTNO>718.207</SECTNO>
                <SUBJECT>Determining allotments, quotas, and bases when reconstitution is made by combination.</SUBJECT>
              </SUBPART>
              <SUBPART>
                <HD SOURCE="HED">Subpart D—Equitable Relief From Ineligibility</HD>
                <SECTNO>718.301</SECTNO>
                <SUBJECT>Applicability.</SUBJECT>
                <SECTNO>718.302</SECTNO>
                <SUBJECT>Definitions and abbreviations.</SUBJECT>
                <SECTNO>718.303</SECTNO>
                <SUBJECT>Reliance on incorrect actions or information.</SUBJECT>
                <SECTNO>718.304</SECTNO>
                <SUBJECT>Failure to fully comply.</SUBJECT>
                <SECTNO>718.305</SECTNO>
                <SUBJECT>Forms of relief.</SUBJECT>
                <SECTNO>718.306</SECTNO>
                <SUBJECT>Finality.</SUBJECT>
                <SECTNO>718.307</SECTNO>
                <SUBJECT>Special relief approval authority for State Executive Directors.</SUBJECT>
              </SUBPART>
            </CONTENTS>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>7 U.S.C. 1311 <E T="03">et seq.,</E> 1501 <E T="03">et seq.,</E> 1921 <E T="03">et seq.,</E> 7201 <E T="03">et seq.,</E> 15 U.S.C. 714b.</P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>61 FR 37552, July 18, 1996, unless otherwise noted.</P>
            </SOURCE>
            <SUBPART>
              <HD SOURCE="HED">Subpart A—General Provisions</HD>
              <SOURCE>
                <HD SOURCE="HED">Source:</HD>
                <P>68 FR 16172, Apr. 3, 2003, unless otherwise noted.</P>
              </SOURCE>
              <SECTION>
                <SECTNO>§ 718.1</SECTNO>
                <SUBJECT>Applicability.</SUBJECT>

                <P>(a) This part is applicable to all programs set forth in chapters VII and XIV of this title which are administered by the Farm Service Agency (FSA). This rule governs how FSA monitors marketing quotas, allotments, base acres and acreage reports. The regulations affected are those that <PRTPAGE P="68"/>establish procedures for measuring allotments and program eligible acreage, and determining program compliance.</P>
                <P>(b) The provisions of this part will be administered under the general supervision of the Administrator, FSA, and shall be carried out in the field by State and county FSA committees (State and county committees).</P>
                <P>(c) State and county committees, and representatives and employees thereof, do not have authority to modify or waive any regulations in this part.</P>
                <P>(d) No provisions or delegation herein to a State or county committee shall preclude the Administrator, FSA, or a designee, from determining any question arising under the program or from reversing or modifying any determination made by a State or county committee.</P>
                <P>(e) The Deputy Administrator may authorize State and county committees to waive or modify deadlines and other requirements in cases where lateness or failure to meet such other requirements does not adversely affect the operation of the program.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.2</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <P>Except as provided in individual parts of chapters VII and XIV of this title, the following terms shall be as defined herein:</P>
                <P>
                  <E T="03">Administrative variance</E> (AV) means the amount by which the determined acreage of tobacco may exceed the effective allotment and be considered in compliance with program regulations.</P>
                <P>
                  <E T="03">Allotment</E> means an acreage for a commodity allocated to a farm in accordance with the Agricultural Adjustment Act of 1938, as amended.</P>
                <P>
                  <E T="03">Allotment crop</E> means any tobacco crop for which acreage allotments are established pursuant to part 723 of this chapter.</P>
                <P>
                  <E T="03">Barley</E> means barley that follows the standard planting and harvesting practice of barley for the area in which the barley is grown.</P>
                <P>
                  <E T="03">Base acres</E> means the quantity of acres established according to part 1413 of this title.</P>
                <P>
                  <E T="03">CCC</E> means the Commodity Credit Corporation.</P>
                <P>
                  <E T="03">Combination</E> means consolidation of two or more farms or parts of farms, having the same operator, into one farm.</P>
                <P>
                  <E T="03">Common ownership unit</E> means a distinguishable parcel of land consisting of one or more tracts of land with the same owners, as determined by FSA.</P>
                <P>
                  <E T="03">Constitution</E> means the make-up of the farm before any change is made because of change in ownership or operation.</P>
                <P>
                  <E T="03">Controlled substances</E> means the term set forth in 21 CFR part 1308.</P>
                <P>
                  <E T="03">Corn</E> means field corn or sterile high-sugar corn that follows the standard planting and harvesting practices for corn for the area in which the corn is grown. Popcorn, corn nuts, blue corn, sweet corn, and corn varieties grown for decoration uses are not corn.</P>
                <P>
                  <E T="03">County</E> means the county or parish of a state. For Alaska, Puerto Rico and the Virgin Islands, a county shall be an area designated by the State committee with the concurrence of the Deputy Administrator.</P>
                <P>
                  <E T="03">County committee</E> means the FSA county committee.</P>
                <P>
                  <E T="03">Crop reporting date</E> means the latest date the Administrator, FSA will allow the farm operator, owner, or their agent to submit a crop acreage report in order for the report to be considered timely.</P>
                <P>
                  <E T="03">Cropland.</E> (a) Means land which the county committee determines meets any of the following conditions:</P>
                <P>(1) Is currently being tilled for the production of a crop for harvest. Land which is seeded by drilling, broadcast or other no-till planting practices shall be considered tilled for cropland definition purposes;</P>
                <P>(2) Is not currently tilled, but it can be established that such land has been tilled in a prior year and is suitable for crop production;</P>
                <P>(3) Is currently devoted to a one-row or two-row shelter belt planting, orchard, or vineyard;</P>
                <P>(4) Is in terraces that, were cropped in the past, even though they are no longer capable of being cropped;</P>
                <P>(5) Is in sod waterways or filter strips planted to a perennial cover;</P>
                <P>(6) Is preserved as cropland in accordance with part 1410 of this title; or</P>

                <P>(7) Is land that has newly been broken out for purposes of being planted to a crop that the producer intends to, <PRTPAGE P="69"/>and is capable of, carrying through to harvest, using tillage and cultural practices that are consistent with normal practices in the area; provided further that, in the event that such practices are not utilized other than for reasons beyond the producer's control, the cropland determination shall be void retroactive to the time at which the land was broken out.</P>
                <P>(b) Land classified as cropland shall be removed from such classification upon a determination by the county committee that the land is:</P>
                <P>(1) No longer used for agricultural production;</P>
                <P>(2) No longer suitable for production of crops;</P>
                <P>(3) Subject to a restrictive easement or contract that prohibits its use for the production of crops unless otherwise authorized by the regulation of this chapter;</P>
                <P>(4) No longer preserved as cropland in accordance with the provisions of part 1410 of this title and does not meet the conditions in paragraphs (a)(1) through (a)(6) of this definition; or</P>
                <P>(5) Converted to ponds, tanks or trees other than those trees planted in compliance with a Conservation Reserve Program contract executed pursuant to part 1410 of this title, or trees that are used in one-or two-row shelterbelt plantings, or are part of an orchard or vineyard.</P>
                <P>
                  <E T="03">Current year</E> means the year for which allotments, quotas, acreages, and bases, or other program determinations are established for that program. For controlled substance violations, the current year is the year of the actual conviction.</P>
                <P>
                  <E T="03">Deputy Administrator</E> means Deputy Administrator for Farm Programs, Farm Service Agency, U.S. Department of Agriculture or their designee.</P>
                <P>
                  <E T="03">Determination</E> means a decision issued by a State, county or area FSA committee or its employees that affects a participant's status in a program administered by FSA.</P>
                <P>
                  <E T="03">Determined acreage</E> means that acreage established by a representative of the Farm Service Agency by use of official acreage, digitizing or planimetering areas on the photograph or other photographic image, or computations from scaled dimensions or ground measurements.</P>
                <P>
                  <E T="03">Direct and counter-cyclical program (DCP) cropland</E> means land that currently meets the definition of cropland, land that was devoted to cropland at the time it was enrolled in a production flexibility contract in accordance with part 1413 of this title and continues to be used for agricultural purposes, or land that met the definition of cropland on or after April, 4, 1996, and continues to be used for agricultural purposes and not for nonagricultural commercial or industrial use.</P>
                <P>
                  <E T="03">Division</E> means the division of a farm into two or more farms or parts of farms.</P>
                <P>
                  <E T="03">Entity</E> means a corporation, joint stock company, association limited partnership, irrevocable trust, estate, charitable organization, or other similar organization including any such organization participating in the farming operation as a partner in a general partnership, a participant in a joint venture, a grantor of a revocable trust, or as a participant in a similar organization.</P>
                <P>
                  <E T="03">Extra Long Staple (ELS) Cotton</E> means cotton that follows the standard planting and harvesting practices of the area in which the cotton is grown, and meets all of the following conditions:</P>
                <P>(1) American-Pima, Sea Island, Sealand, all other varieties of the Barbandense species of cotton and any hybrid thereof, and any other variety of cotton in which 1 or more of these varieties is predominant; and,</P>
                <P>(2) The acreage is grown in a county designated as an ELS county by the Secretary; and,</P>
                <P>(3) The production from the acreage is ginned on a roller-type gin.</P>
                <P>
                  <E T="03">Family member</E> means an individual to whom a person is related as spouse, lineal ancestor, lineal descendant, or sibling, including:</P>
                <P>(1) Great grandparent;</P>
                <P>(2) Grandparent;</P>
                <P>(3) Parent;</P>
                <P>(4) Child, including a legally adopted child;</P>
                <P>(5) Grandchild</P>
                <P>(6) Great grandchildren;</P>

                <P>(7) Sibling of the family member in the farming operation; and<PRTPAGE P="70"/>
                </P>
                <P>(8) Spouse of a person listed in paragraphs (1) through (7) of this definition.</P>
                <P>
                  <E T="03">Farm</E> means a tract, or tracts, of land that are considered to be a separate operation under the terms of this part provided further that where multiple tracts are to be treated as one farm, the tracts must have the same operator and must also have the same owner except that tracts of land having different owners may be combined if all owners agree to the treatment of the multiple tracts as one farm for these purposes.</P>
                <P>
                  <E T="03">Farm inspection</E> means an inspection by an authorized FSA representative using aerial or ground compliance to determine the extent of producer adherence to program requirements.</P>
                <P>
                  <E T="03">Farm number</E> means a number assigned to a farm by the county committee for the purpose of identification.</P>
                <P>
                  <E T="03">Farmland</E> means the sum of the DCP cropland, forest, acreage planted to an eligible crop acreage as specified in 1437.3 of this title and other land on the farm.</P>
                <P>
                  <E T="03">Field</E> means a part of a farm which is separated from the balance of the farm by permanent boundaries such as fences, permanent waterways, woodlands, and croplines in cases where farming practices make it probable that such cropline is not subject to change, or other similar features.</P>
                <P>
                  <E T="03">GIS</E> means Geographic Information System or a system that stores, analyzes, and manipulates spatial or geographically referenced data. GIS computes distances and acres using stored data and calculations.</P>
                <P>
                  <E T="03">GPS</E> means Global Positioning System or a positioning system using satellites that continuously transmit coded information. The information transmitted from the satellites is interpreted by GPS receivers to precisely identify locations on earth by measuring distance from the satellites.</P>
                <P>
                  <E T="03">Grain sorghum</E> means grain sorghum of a feed grain or dual purpose variety (including any cross that, at all stages of growth, having characteristics of a feed grain or dual purpose variety) that follows the standard planting and harvesting practice for grain sorghum for the area in which the grain sorghum was planted. Sweet sorghum is not considered a grain sorghum.</P>
                <P>
                  <E T="03">Ground measurement</E> means the distance between 2 points on the ground, obtained by actual use of a chain tape, GPS with an minimum accuracy level as determined by the Deputy Administrator, or other measuring device.</P>
                <P>
                  <E T="03">Joint operation</E> means a general partnership, joint venture, or other similar business organization.</P>
                <P>
                  <E T="03">Landlord</E> means one who rents or leases farmland to another.</P>
                <P>
                  <E T="03">Measurement service</E> means a measurement of acreage or farm-stored commodities performed by a representative of FSA and paid for by the producer requesting the measurement.</P>
                <P>
                  <E T="03">Measurement service after planting</E> means determining a crop or designated acreage after planting but before the farm operator files a report of acreage for the crop.</P>
                <P>
                  <E T="03">Measurement service guarantee</E> means a guarantee provided when a producer requests and pays for an authorized FSA representative to measure acreage for FSA and CCC program participation unless the producer takes action to adjust the measured acreage. If the producer has taken no such action, and the measured acreage is later discovered to be incorrect, the acreage determined pursuant to the measurement service will be used for program purposes for that program year.</P>
                <P>
                  <E T="03">Minor child</E> means an individual who is under 18 years of age. State court proceedings conferring majority on an individual under 18 years of age will not change such an individual's status as a minor.</P>
                <P>
                  <E T="03">Nonagricultural commercial or industrial use</E> means land that is no longer suitable for producing annual or perennial crops, including conserving uses, or forestry products.</P>
                <P>
                  <E T="03">Normal planting period</E> means that period during which the crop is normally planted in the county, or area within the county, with the expectation of producing a normal crop.</P>
                <P>
                  <E T="03">Normal row width</E> means the normal distance between rows of the crop in the field, but not less than 30 inches for all crops.<PRTPAGE P="71"/>
                </P>
                <P>
                  <E T="03">Oats</E> means oats that follows the standard planting and harvesting practice of oats for the area in which the oats are grown.</P>
                <P>
                  <E T="03">Operator</E> means an individual, entity, or joint operation who is determined by the FSA county committee to be in control of the farming operations on the farm.</P>
                <P>
                  <E T="03">Owner</E> means one who has legal ownership of farmland, including:</P>
                <P>(1) Any agency of the Federal Government, however, such agency shall not be eligible to receive any payment pursuant to such contract;</P>
                <P>(2) One who is buying farmland under a contract for deed;</P>
                <P>(3) One who has a life-estate in the property; or</P>
                <P>(4) For purposes of enrolling a farm in a program authorized by chapters VII and XIV of this title:</P>
                <P>(i) One who has purchased a farm in a foreclosure proceeding; and</P>
                <P>(A) The redemption period has not passed; and</P>
                <P>(B) The original owner has not redeemed the property.</P>
                <P>(ii) One who meets the provisions of paragraph (d)(1)(i) of this definition shall be entitled to receive benefits in accordance with an agency program only to the extent the owner complies with all program requirements.</P>
                <P>(5) One who is an heir to property but cannot provide legal documentation to confirm ownership of the property, if such heir certifies to the ownership of the property and the certification is considered acceptable, as determined by the Deputy Administrator. Upon a false or inaccurate certification the Deputy Administrator may impose liability on the certifying party for additional cost that results—however such a certification may be taken by the Deputy Administrator as a bar to other claims where there has been a failure of other persons claiming an interest in the property to act promptly to protect or declare their interest or where the current public records do not accurately set out the current ownership of the farm.</P>
                <P>
                  <E T="03">Partial reconstitution</E> means a reconstitution that is made effective in the current year for some crops, but is not made effective in the current year for other crops. This results in the same farm having two or more farm numbers in one crop year.</P>
                <P>
                  <E T="03">Participant</E> means one who participates in, or receives payments or benefits in accordance with any of the programs administered by FSA.</P>
                <P>
                  <E T="03">Pasture</E> means land that is used to, or has the potential to, produce food for grazing animals.</P>
                <P>
                  <E T="03">Person</E> means an individual, or an individual participating as a member of a joint operation or similar operation, a corporation, joint stock company, association, limited stock company, limited partnership, irrevocable trust, revocable trust together with the grantor of the trust, estate, or charitable organization including any entity participating in the farming operation as a partner in a general partnership, a participant in a joint venture, a grantor of a revocable trust, or a participant in a similar entity, or a State, political subdivision or agency thereof. To be considered a separate person for the purpose of this part, the individual or other legal entity must:</P>
                <P>(1) Have a separate and distinct interest in the land or the crop involved;</P>
                <P>(2) Exercise separate responsibility for such interest; and</P>
                <P>(3) Be responsible for the cost of farming related to such interest from a fund or account separate from that of any other individual or entity.</P>
                <P>
                  <E T="03">Producer</E> means an owner, operator, landlord, tenant, or sharecropper, who shares in the risk of producing a crop and who is entitled to share in the crop available for marketing from the farm, or would have shared had the crop been produced. A producer includes a grower of hybrid seed.</P>
                <P>
                  <E T="03">Quota</E> means the pounds allocated to a farm for a commodity in accordance with the Agricultural Adjustment Act of 1938, as amended.</P>
                <P>
                  <E T="03">Random inspection</E> means an examination of a farm by an authorized representative of FSA selected as a part of an impartial sample to determine the adherence to program requirements.</P>
                <P>
                  <E T="03">Reconstitution</E> means a change in the land constituting a farm as a result of combination or division.</P>
                <P>
                  <E T="03">Reported acreage</E> means the acreage reported by the farm operator, farm owner, farm producer, or their agent on a Form prescribed by the FSA.<PRTPAGE P="72"/>
                </P>
                <P>
                  <E T="03">Required inspection</E> means an examination by an authorized representative of FSA of a farm specifically selected by application of prescribed rules to determine adherence to program requirements or to verify the farm operator's, farm owner's, farm producer, or agent's report.</P>
                <P>
                  <E T="03">Rice</E> means rice that follows the standard planting and harvesting practices of the area excluding sweet, glutinous, or candy rice such as Mochi Gomi.</P>
                <P>
                  <E T="03">Secretary</E> means the Secretary of Agriculture of the United States, or a designee.</P>
                <P>
                  <E T="03">Sharecropper</E> means one who performs work in connection with the production of a crop under the supervision of the operator and who receives a share of such crop for its labor.</P>
                <P>
                  <E T="03">Skip-row or strip-crop planting</E> means a cultural practice in which strips or rows of the crop are alternated with strips of idle land or another crop.</P>
                <P>
                  <E T="03">Staking and referencing</E> means determining an acreage before planting by:</P>
                <P>(1) Measuring or computing a delineated area from ground measurements and documenting the area measured; and, (2) Staking and referencing the area on the ground.</P>
                <P>
                  <E T="03">Standard deduction</E> means an acreage that is excluded from the gross acreage in a field because such acreage is considered as being used for farm equipment turn-areas. Such acreage is established by application of a prescribed percentage of the area planted to the crop in lieu of measuring the turn area.</P>
                <P>
                  <E T="03">State</E> means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin Islands of the United States, American Samoa, the Commonwealth of the Northern Mariana Islands, or the Trust Territory of the Pacific Islands.</P>
                <P>
                  <E T="03">Subdivision</E> means a part of a field that is separated from the balance of the field by temporary boundary, such as a cropline which could be easily moved or will likely disappear.</P>
                <P>
                  <E T="03">Tenant</E> means:</P>
                <P>(1) One who rents land from another in consideration of the payment of a specified amount of cash or amount of a commodity; or</P>
                <P>(2) One (other than a sharecropper) who rents land from another person in consideration of the payment of a share of the crops or proceeds therefrom.</P>
                <P>
                  <E T="03">Tolerance</E> means a prescribed amount within which the reported acreage and/or production may differ from the determined acreage and/or production and still be considered as correctly reported.</P>
                <P>
                  <E T="03">Tract</E> means a unit of contiguous land under one ownership, which is operated as a farm, or part of a farm.</P>
                <P>
                  <E T="03">Tract combination</E> means the combining of two or more tracts if the tracts have common ownership and are contiguous.</P>
                <P>
                  <E T="03">Tract division</E> means the dividing of a tract into two or more tracts because of a change in ownership or operation.</P>
                <P>
                  <E T="03">Turn-area</E> means the area across the ends of crop rows which is used for operating equipment necessary to the production of a row crop (also called turn row, headland, or end row).</P>
                <P>
                  <E T="03">Upland cotton</E> means planted and stub cotton that is not considered extra long staple cotton, and that follows the standard planting and harvesting practices of the area and is produced from other than pure strain varieties of the Barbadense species, any hybrid thereof, or any other variety of cotton in which one or more of these varieties predominate. For program purposes, brown lint cotton is considered upland cotton.</P>
                <P>
                  <E T="03">Wheat</E> means wheat for feed or dual purpose variety that follows the standard planting and harvesting practice of wheat for the area in which the wheat is grown.</P>
                <CITA>[68 FR 16172, Apr. 3, 2003; 69 FR 250, Jan. 5, 2004]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.3</SECTNO>
                <SUBJECT>State committee responsibilities.</SUBJECT>
                <P>(a) The State committee shall, with respect to county committees:</P>
                <P>(1) Take any action required of the county committee, which the county committee fails to take in accordance with this part;</P>
                <P>(2) Correct or require the county committee to correct any action taken by such committee, which is not in accordance with this part;</P>

                <P>(3) Require the county committee to withhold taking any action which is not in accordance with this part;<PRTPAGE P="73"/>
                </P>
                <P>(4) Review county office rates for producer services to determine equity between counties;</P>
                <P>(5) Determine, based on cost effectiveness, which counties will use aerial compliance methods and which counties will use ground measurement compliance methods; or</P>
                <P>(6) Adjust the per acre rate for acreage in excess of 25 acres to reflect the actual cost involved when performing measurement service from aerial slides or digital images.</P>
                <P>(b) The State committee shall submit to the Deputy Administrator requests to deviate from deductions prescribed in § 718.108, or the error amount or percentage for refunds of redetermination costs as prescribed in § 718.111.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.4</SECTNO>
                <SUBJECT>Authority for farm entry and providing information.</SUBJECT>
                <P>(a) This section applies to all farms that have a tobacco allotment or quota under part 723 of this chapter and all farms that are currently participating in programs administered by FSA.</P>
                <P>(b) A representative of FSA may enter any farm that participates in an FSA or CCC program in order to conduct a farm inspection as defined in this part. A program participant may request that the FSA representative present written authorization for the farm inspection before granting access to the farm. If a farm inspection is not allowed within 30 days of written authorization:</P>
                <P>(1) All FSA and CCC program benefits for that farm shall be denied;</P>
                <P>(2) The person preventing the farm inspection shall pay all costs associated with the farm inspection;</P>
                <P>(3) The entire crop production on the farm will be considered to be in excess of the quota established for the farm; and</P>
                <P>(4) For tobacco, the farm operator must furnish proof of disposition of:</P>
                <P>(i) All tobacco which is in addition to the production shown on the marketing card issued with respect to such farm; and</P>
                <P>(ii) No credit will be given for disposing of excess tobacco other than that identified by a marketing card unless disposed of in the presence of FSA in accordance with § 718.109 of this part.</P>
                <P>(c) If a program participant refuses to furnish reports or data necessary to determine benefits in accordance with paragraph (a) of this section, or FSA determines that the report or data was erroneously provided through the lack of good faith, all program benefits relating to the report or data requested will be denied.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.5</SECTNO>
                <SUBJECT>Rule of fractions.</SUBJECT>
                <P>(a) Fractions shall be rounded after completion of the entire associated computation. All mathematical calculations shall be carried to two decimal places beyond the number of decimal places required by the regulations governing each program. In rounding, fractional digits of 49 or less beyond the required number of decimal places shall be dropped; if the fractional digits beyond the required number of decimal places are 50 or more, the figure at the last required decimal place shall be increased by “1” as follows:</P>
                <GPOTABLE CDEF="s50,r50,10" COLS="3" OPTS="L2,tp0,i1">
                  <BOXHD>
                    <CHED H="1">Required decimal</CHED>
                    <CHED H="1">Computation</CHED>
                    <CHED H="1">Result</CHED>
                  </BOXHD>
                  <ROW>
                    <ENT I="01">Whole numbers</ENT>
                    <ENT>6.49 (or less)<LI>6.50 (or more)</LI>
                    </ENT>
                    <ENT>6<LI>7</LI>
                    </ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Tenths</ENT>
                    <ENT>7.649 (or less)<LI>7.650 (or more)</LI>
                    </ENT>
                    <ENT>7.6<LI>7.7</LI>
                    </ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Hundredths</ENT>
                    <ENT>8.8449 (or less)<LI>8.8450 (or more)</LI>
                    </ENT>
                    <ENT>8.84<LI>8.85</LI>
                    </ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">Thousandths</ENT>
                    <ENT>9.63449 (or less)<LI>9.63450 (or more)</LI>
                    </ENT>
                    <ENT>9.634<LI>9.635</LI>
                    </ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">0 thousandths</ENT>
                    <ENT>10.993149 (or less)<LI>10.993150 (or more)</LI>
                    </ENT>
                    <ENT>10.9931<LI>10.9932</LI>
                    </ENT>
                  </ROW>
                </GPOTABLE>
                <P>(b) The acreage of each field or subdivision computed for tobacco and CCC disaster assistance programs shall be recorded in acres and hundredths of an acre, dropping all thousandths of an acre. The acreage of each field or subdivision computed for crops, except tobacco, shall be recorded in acres and tenths of an acre, rounding all hundredths of an acre to the nearest tenth.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.6</SECTNO>
                <SUBJECT>Controlled substance.</SUBJECT>
                <P>(a) The following terms apply to this section:</P>
                <P>(1) <E T="03">USDA benefit</E> means the issuance of any grant, contract, loan, or payment by appropriated funds of the United States.</P>
                <P>(2) <E T="03">Person</E> means an individual.</P>

                <P>(b) Notwithstanding any other provision of law, any person convicted under Federal or State law of:<PRTPAGE P="74"/>
                </P>
                <P>(1) Planting, cultivating, growing, producing, harvesting, or storing a controlled substance in any crop year shall be ineligible for any payment made under any Act, with respect to any commodity produced during the crop year of conviction and the four succeeding crop years, by such person.</P>
                <P>(2) Possession of a controlled substance, or trafficking in a controlled substance, shall, in addition to any ineligibility under paragraph (b)(1) of this section, be ineligible for any or all USDA benefits, to the extent that a court shall determine to impose such ineligibility pursuant to applicable Federal law, in which case the ineligibility shall be for such period of time as is imposed by the court, pursuant to such law, at the discretion of the court.</P>
                <P>(c) USDA benefits subject to paragraph (b) of this section include:</P>
                <P>(1) Any payments or benefits under the Direct and Counter Cyclical Program (DCP) in accordance with part 1413 of this title;</P>
                <P>(2) Any payments or benefits for losses to trees, crops, or livestock covered under disaster programs administered by FSA;</P>
                <P>(3) Any price support loan available in accordance with part 1464 of this title;</P>
                <P>(4) Any price support or payment made under the Commodity Credit Corporation Charter Act;</P>
                <P>(5) A farm storage facility loan made under section 4(h) of the Commodity Credit Corporation Charter Act or any other Act;</P>
                <P>(6) Crop Insurance under the Federal Crop Insurance Act;</P>
                <P>(7) A loan made or guaranteed under the Consolidated Farm and Rural Development Act or any other law formerly administered by the Farmers Home Administration; or</P>
                <P>(d) If a person denied benefits under this section is a shareholder, beneficiary, or member of an entity or joint operation, benefits for which the entity or joint operation is eligible shall be reduced, for the appropriate period, by a percentage equal to the total interest of the shareholder, beneficiary, or member.</P>
                <CITA>[68 FR 16172, Apr. 3, 2003; 69 FR 250, Jan. 5, 2004]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.7</SECTNO>
                <SUBJECT>Furnishing maps.</SUBJECT>
                <P>A reasonable number, as determined by FSA, of reproductions of photographs, mosaics and maps shall be available to the owner of a farm insurance companies reinsured by the Federal Crop Insurance Corporation (FCIC), private party contractors performing their official duties on behalf of FSA, CCC, and other USDA agencies. To all others, reproductions shall be made available at the rate FSA determines will cover the cost of making such items available.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.8</SECTNO>
                <SUBJECT>Administrative county.</SUBJECT>
                <P>(a) If all land on the farm is physically located in one county, the farm shall be administratively located in such county. If there is no FSA office in the county or the county offices have been consolidated, the farm shall be administratively located in the contiguous county most convenient for the farm operator.</P>
                <P>(b) If the land on the farm is located in more than one county, the farm shall be administratively located in either of such counties as the county committees and the farm operator agree. If no agreement can be reached, the farm shall be administratively located in the county where the principal dwelling is situated, or where the major portion of the farm is located if there is no dwelling.</P>
                <P>(c) The State committee shall submit all requests to deviate from regulations specified in this section to the Deputy Administrator.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.9</SECTNO>
                <SUBJECT>Signature requirements.</SUBJECT>
                <P>(a) When a program authorized by this chapter or Chapter XIV of this title requires the signature of a producer; landowner; landlord; or tenant, a husband or wife may sign all such FSA or CCC documents on behalf of the other spouse, unless such other spouse has provided written notification to FSA and CCC that such action is not authorized. The notification must be provided to FSA with respect to each farm.</P>

                <P>(b) Except a husband or wife may not sign a document on behalf of a spouse with respect to:<PRTPAGE P="75"/>
                </P>
                <P>(1) Program document required to be executed in accordance with part 3 of this title;</P>
                <P>(2) Easements entered into under part 1410 of this title;</P>
                <P>(3) Power of attorney;</P>
                <P>(4) Such other program documents as determined by FSA or CCC.</P>
                <P>(c) An individual; duly authorized officer of a corporation; duly authorized partner of a partnership; executor or administrator of an estate; trustee of a trust; guardian; or conservator may delegate to another the authority to act on their behalf with respect to FSA and CCC programs administered by USDA service center agencies by execution of a Power of Attorney, or such other form as approved by the Deputy Administrator. FSA and CCC may, at their discretion, allow the delegations of authority by other individuals through use of the Power of Attorney or such other form as approved by the Deputy Administrator.</P>
                <P>(d) Notwithstanding another provision of this regulation or any other FSA or CCC regulation in this title, a parent may execute documents on behalf of a minor child unless prohibited by a statute or court order.</P>
                <P>(e) Notwithstanding any other provision in this title, an authorized agent of the Bureau of Indian Affairs (BIA) of the United States Department of Interior may sign as agent for landowners with properties affiliated with or under the management or trust of the BIA. For collection purposes, such payments will be considered as being made to the persons who are the beneficiaries of the payment or may, alternatively, be considered as an obligation of all persons on the farm in general. In the event of a need for a refund or other claim may be collected, among other means, by other monies due such persons or the farm.</P>
                <CITA>[68 FR 16172, Apr. 3, 2003; 69 FR 250, Jan. 5, 2004]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.10</SECTNO>
                <SUBJECT>Time limitations.</SUBJECT>
                <P>Whenever the final date prescribed in any of the regulations in this title for the performance of any act falls on a Saturday, Sunday, national holiday, State holiday on which the office of the county or State Farm Service Agency committee having primary cognizance of the action required to be taken is closed, or any other day on which the cognizant office is not open for the transaction of business during normal working hours, the time for taking required action shall be extended to the close of business on the next working day. Or in case the action required to be taken may be performed by mailing, the action shall be considered to be taken within the prescribed period if the mailing is postmarked by midnight of such next working day. Where the action required to be taken is with a prescribed number of days after the mailing of notice, the day of mailing shall be excluded in computing such period of time.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.11</SECTNO>
                <SUBJECT>Disqualification due to federal crop insurance fraud.</SUBJECT>
                <P>(a) Section 515(h) of the Federal Crop Insurance Act (FCIA) provides that a person who willfully and intentionally provides any false or inaccurate information to the Federal Crop Insurance Corporation (FCIC) or to an approved insurance provider with respect to a policy or plan of FCIC insurance after notice and an opportunity for a hearing on the record, will be subject to one or more of the sanctions described in section 515(h)(3). In section 515(h)(3), the FCIA specifies that in the case of a violation committed by a producer, the producer may be disqualified for a period of up to 5 years from receiving any monetary or non-monetary benefit under a number of programs. The list includes, but is not limited to, benefits under:</P>
                <P>(1) Title V of the FCIA.</P>

                <P>(2) The Agricultural Market Transition Act (7 U.S.C. 7201 <E T="03">et seq.</E>), including the Noninsured Crop Disaster Assistance Program under section 196 of that Act (7 U.S.C. 7333).</P>
                <P>(3) The Agricultural Act of 1949 (7 U.S.C. 1421 <E T="03">et seq.</E>).</P>

                <P>(4) The Commodity Credit Corporation Charter Act (15 U.S.C. 714 <E T="03">et seq</E>).</P>

                <P>(5) The Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 <E T="03">et seq.</E>).</P>

                <P>(6) Title XII of the Food Security Act of 1985 (16 U.S.C. 3801 <E T="03">et seq.</E>).<PRTPAGE P="76"/>
                </P>
                <P>(7) Any law that provides assistance to a producer of an agricultural commodity affected by a crop loss or a decline in prices of agricultural commodities.</P>
                <P>(b) Violation determinations are made by FCIC. However, upon notice from FCIC to FSA that a producer has been found to have committed a violation to which paragraph (a) of this section applies, that person shall be considered ineligible for payments under the programs specified in paragraph (a) of this section that are funded by FSA for the same period of time for which, as determined by FCIC, the producer will be ineligible for crop insurance benefits of the kind referred to in paragraph (a)(1) of this section. Appeals of the determination of ineligibility will be administered under the rules set by FCIC.</P>
                <P>(c) Other sanctions may also apply.</P>
                <CITA>[68 FR 39448, July 2, 2003]</CITA>
              </SECTION>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart B—Determination of Acreage and Compliance</HD>
              <SOURCE>
                <HD SOURCE="HED">Source:</HD>
                <P>68 FR 16176, Apr. 3, 2003, unless otherwise noted.</P>
              </SOURCE>
              <SECTION>
                <SECTNO>§ 718.101</SECTNO>
                <SUBJECT>Measurements.</SUBJECT>
                <P>(a) Measurement services include, but are not limited to, measuring land and crop areas, quantities of farm-stored commodities, and appraising the yields of crops in the field when required for program administration purposes. The county committee shall provide measurement service if the producer requests such service and pays the cost, except that service shall not be provided to determine total acreage or production of a crop when the request is made:</P>
                <P>(1) After the established final reporting date for the applicable crop, unless a late filed report is accepted as provided in § 718.103;</P>
                <P>(2) After the farm operator has furnished production evidence when required for program administration purposes except as provided in this subpart; or</P>
                <P>(3) In connection with a late-filed report of acreage, unless there is evidence of the crop's existence in the field and use made of the crop, or the lack of the crop due to a disaster condition affecting the crop.</P>
                <P>(b) The acreage requested to be measured by staking and referencing shall not exceed the effective farm allotment for marketing quota crops or acreage of a crop that is limited to a specific number of acres to meet any program requirement.</P>
                <P>(c) When a producer requests, pays for, and receives written notice that measurement services have been furnished, the measured acreage shall be guaranteed to be correct and used for all program purposes for the current year even though an error is later discovered in the measurement thereof, if the producer has taken action with an economic significance based on the measurement service, and the entire crop required for the farm was measured. If the producer has not taken action with an economic significance based on the measurement service, the producer shall be notified in writing that an error was discovered and the nature and extent of such error. In such cases, the corrected acreage will be used for determining program compliance for the current year.</P>
                <P>(d) When a measurement service reveals acreage in excess of the permitted acreage and the allowable tolerance as defined in this part, the producer must destroy the excess acreage and pay for FSA to verify destruction, in order to keep the measurement service guarantee.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.102</SECTNO>
                <SUBJECT>Acreage reports.</SUBJECT>
                <P>(a) In order to be eligible for benefits, participants in the programs specified in paragraphs (b)(1) through (b)(6) of this section must annually submit accurate information as required by these provisions.</P>
                <P>(b)(1) Participants in the programs governed by part 1412 of this title must report the acreage of fruits and vegetables planted for harvest on a farm enrolled in such program;</P>

                <P>(2) Participants in the programs governed by parts 1421 and 1427 of this title must report the acreage planted to a commodity for harvest for which a marketing assistance loan or loan deficiency payment is requested;<PRTPAGE P="77"/>
                </P>
                <P>(3) Participants in the programs governed by part 1410 of this title must report the use of land enrolled in such programs;</P>
                <P>(4) All participants in the programs governed by part 1437 of this title must report all acreage in the county of the eligible crop in which the producer has a share;</P>
                <P>(5) Participants in the programs governed by part 723 of this chapter and part 1464 of this title must report the acreage planted to tobacco by kind on all farms that have an effective allotment or quota greater than zero;</P>
                <P>(6) All participants in the programs governed by parts 1412, 1421, and 1427 of this title must report the use of all cropland on the farm.</P>
                <P>(c) The reports required under paragraph (a) of this section shall be timely filed by the farm operator, farm owner, producer of the crop on the farm, or a duly authorized representative with the county committee by the final reporting date applicable to the crop as established by the county committee and State committee.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.103</SECTNO>
                <SUBJECT>Late-filed reports.</SUBJECT>
                <P>(a) A report may be accepted after the required date if the crop or identifiable crop residue is in the field.</P>
                <P>(b) The farm operator shall pay the cost of a farm inspection unless the County Committee determines that failure to report in a timely manner was beyond the producer's control.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.104</SECTNO>
                <SUBJECT>Revised reports.</SUBJECT>
                <P>(a) The farm operator may revise a report of acreage with respect to 2002 and subsequent years to change the acreage reported if:</P>
                <P>(1) The county committee determines that the revision does not have an adverse impact on the program;</P>
                <P>(2) The acreage has not already been determined by FSA; and</P>
                <P>(3) Actual crop or residue is present in the field.</P>
                <P>(b) Revised reports shall be filed and accepted:</P>
                <P>(1) At any time for all crops if the crop or residue still exists in the field for inspection to verify its existence and use made of the crop, the lack of the crop, or a disaster condition affecting the crop; and</P>
                <P>(2) If the requirements of paragraph (a) of this section have been met and the producer was in compliance with all other program requirements at the reporting date.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.105</SECTNO>
                <SUBJECT>Tolerances, variances, and adjustments.</SUBJECT>
                <P>(a) Tolerance is the amount by which the determined acreage for a crop may differ from the reported acreage or allotment for the crop and still be considered in compliance with program requirements under §§ 718.102(b)(1), (b)(3) and (b)(5).</P>
                <P>(b) Tolerance rules apply to those fields for which a staking and referencing was performed but such acreage was not planted according to those measurements or when a measurement service is not requested for acreage destroyed to meet program requirements.</P>
                <P>(c) Tolerance rules do not apply to:</P>
                <P>(1) Program requirements of §§ 718.102(b)(2), (b)(4) and (b)(6);</P>
                <P>(2) Official fields when the entire field is devoted to one crop;</P>
                <P>(3) Those fields for which staking and referencing was performed and such acreage was planted according to those measurements; or</P>
                <P>(4) The adjusted acreage for farms using measurement after planting which have a determined acreage greater than the marketing quota crop allotment.</P>
                <P>(d) An administrative variance is applicable to all allotment crop acreages. Allotment crop acreages as determined in accordance with this part shall be deemed in compliance with the effective farm allotment or program requirement when the determined acreage does not exceed the effective farm allotment by more than an administrative variance determined as follows:</P>
                <P>(1) For all kinds of tobacco subject to marketing quotas, except dark air-cured and fire-cured the larger of 0.1 acre or 2 percent of the allotment; and</P>
                <P>(2) For dark air-cured and fire-cured tobacco, an acreage based on the effective acreage allotment as provided in the table as follows:</P>
                <GPOTABLE CDEF="s50,15" COLS="2" OPTS="L2,tp0,i1">
                  <BOXHD>
                    <CHED H="1">Effective acreage allotment is within this range</CHED>
                    <CHED H="1">Administrative variance</CHED>
                  </BOXHD>
                  <ROW>
                    <ENT I="01">0.01 to 0.99</ENT>
                    <ENT>0.01</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">1.00 to 1.49</ENT>
                    <ENT>0.02</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">1.50 to 1.99</ENT>
                    <ENT>0.03</ENT>
                  </ROW>
                  <ROW>
                    <PRTPAGE P="78"/>
                    <ENT I="01">2.00 to 2.49</ENT>
                    <ENT>0.04</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">2.50 to 2.99</ENT>
                    <ENT>0.05</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">3.00 to 3.49</ENT>
                    <ENT>0.06</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">3.50 to 3.99</ENT>
                    <ENT>0.07</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">4.00 to 4.49</ENT>
                    <ENT>0.08</ENT>
                  </ROW>
                  <ROW>
                    <ENT I="01">4.50 and up</ENT>
                    <ENT>0.09</ENT>
                  </ROW>
                </GPOTABLE>
                <P>(e) A tolerance applies to tobacco, other than flue-cured or burley, if the measured acreage exceeds the allotment by more than the administrative variance but by not more than the tolerance. Such excess acreage of tobacco may be adjusted to the effective farm acreage allotment to avoid marketing quota penalties or receive price support.</P>
                <P>(f) If the acreage report for a crop is outside the tolerance for that crop:</P>
                <P>(1) FSA may consider the requirements of §§ 718.102 (b)(1), (b)(3) and (b)(5) not to have been met, and;</P>
                <P>(2) Participants may be ineligible for all or a portion of payments or benefits subject to the requirements of §§ 718.102 (b)(1), (b)(3) and (b)(5).</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.106</SECTNO>
                <SUBJECT>Non-compliance and fraudulent acreage reports.</SUBJECT>
                <P>Participants that knowingly and willfully provide false or inaccurate acreage reports may be ineligible for some or all payments or benefits subject to the requirements of §§ 718.102 (b)(1), (b)(3) and (b)(5):</P>
                <P>(a) The county committee determines that the acreage report filed according to §§ 718.102 (b)(1), (b)(3) and (b)(5) is inaccurate, and;</P>
                <P>(b) A good-faith effort to accurately report the acreage was not made because the report was knowingly and willfully falsified.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.107</SECTNO>
                <SUBJECT>Acreages.</SUBJECT>
                <P>(a) If an acreage has been established by FSA for an area delineated on an aerial photograph or within a GIS, such acreage will be recognized by the county committee as the acreage for the area until such time as the boundaries of such area are changed. When boundaries not visible on the aerial photograph are established from data furnished by the producer, such acreage shall not be recognized as official acreage until an authorized representative of FSA verifies the boundaries.</P>
                <P>(b) Measurements of any row crop shall extend beyond the planted area by the larger of 15 inches or one-half the distance between the rows.</P>
                <P>(c) The entire acreage of a field or subdivision of a field devoted to a crop shall be considered as devoted to the crop subject to a deduction or adjustment except as otherwise provided in this part.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.108</SECTNO>
                <SUBJECT>Measuring acreage including skip row acreage.</SUBJECT>
                <P>(a) When one crop is alternating with another crop, whether or not both crops have the same growing season, only the acreage that is actually planted to the crop being measured will be considered to be acreage devoted to the measured crop.</P>
                <P>(b) Subject to the provisions of this paragraph and section, whether planted in a skip row pattern or without a pattern of skipped rows, the entire acreage of the field or subdivision may be considered as devoted to the crop only where the distance between the rows, for all rows, is 40 inches or less. If there is a skip that creates idle land wider than 40 inches, or if the distance between any rows is more than 40 inches, then the area planted to the crop shall be considered to be that area which would represent the smaller of; a 40 inch width between rows, or the normal row spacing in the field for all other rows in the field—those that are not more than 40 inches apart. The allowance for individual rows would be made based on the smaller of actual spacing between those rows or the normal spacing in the field. For example, if the crop is planted in single, wide rows that are 48 inches apart, only 20 inches to either side of each row (for a total of 40 inches between the two rows) could, at a maximum, be considered as devoted as the crop and normal spacing in the field would control. Half the normal distance between rows will also be allowed beyond the outside planted rows not to exceed 20 inches and will reflect normal spacing in the field.</P>

                <P>(c) In making calculations under this section, further reductions may be made in the acreage considered planted if it is determined that the acreage is more sparsely planted than normal <PRTPAGE P="79"/>using reasonable and customary full production planting techniques.</P>
                <P>(d) The Deputy Administrator has the discretionary authority to allow row allowances other than those specified in this section in those instances in which crops are normally planted with spacings greater or less than 40 inches, such as in case of tobacco, or where other circumstances are present which the Deputy Administrator finds justifies that allowance.</P>
                <P>(e) Paragraphs (a) through (d) of this section shall apply with respect to the 2003 and subsequent crops. For preceding crops, the rules in effect on January 1, 2002, shall apply.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.109</SECTNO>
                <SUBJECT>Deductions.</SUBJECT>
                <P>(a) Any contiguous area which is not devoted to the crop being measured and which is not part of a skip-row pattern under § 718.108 shall be deducted from the acreage of the crop if such area meets the following minimum national standards or requirements:</P>
                <P>(1) A minimum width of 30 inches;</P>
                <P>(2) For tobacco—three-hundredths (.03) acre. Turn areas, terraces, permanent irrigation and drainage ditches, sod waterways, non-cropland, and subdivision boundaries each of which is at least 30 inches in width may be combined to meet the 0.03-acre minimum requirement; or</P>
                <P>(3) For all other crops and land uses—one-tenth (.10) acre. Turn areas, terraces, permanent irrigation and drainage ditches, sod waterways, non-cropland, and subdivision boundaries each of which is at least 30 inches in width and each of which contain 0.1 acre or more may be combined to meet any larger minimum prescribed for a State in accordance with this subpart.</P>
                <P>(b) If the area not devoted to the crop is located within the planted area, the part of any perimeter area that is more than 217.8 feet (33 links) in width will be considered to be an internal deduction if the standard deduction is used.</P>
                <P>(c) A standard deduction of 3 percent of the area devoted to a row crop and zero percent of the area devoted to a close-sown crop may be used in lieu of measuring the acreage of turn areas.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.110</SECTNO>
                <SUBJECT>Adjustments.</SUBJECT>
                <P>(a) The farm operator or other interested producer having excess tobacco acreage (other than flue-cured or burley) may adjust an acreage of the crop in order to avoid a marketing quota penalty if such person:</P>
                <P>(1) Notifies the county committee of such election within 15 calendar days after the date of mailing of notice of excess acreage by the county committee; and</P>
                <P>(2) Pays the cost of a farm inspection to determine the adjusted acreage prior to the date the farm visit is made.</P>
                <P>(b) The farm operator may adjust an acreage of tobacco (except flue-cured and burley) by disposing of such excess tobacco prior to the marketing of any of the same kind of tobacco from the farm. The disposition shall be witnessed by a representative of FSA and may take place before, during, or after the harvesting of the same kind of tobacco grown on the farm. However, no credit will be allowed toward the disposition of excess acreage after the tobacco is harvested but prior to marketing, unless the county committee determines that such tobacco is representative of the entire crop from the farm of the kind of tobacco involved.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.111</SECTNO>
                <SUBJECT>Notice of measured acreage.</SUBJECT>
                <P>Notice of measured acreage shall be provided by FSA and mailed to the farm operator. This notice shall constitute notice to all parties who have ownership, leasehold interest, or other, in such farm.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.112</SECTNO>
                <SUBJECT>Redetermination.</SUBJECT>

                <P>(a) A redetermination of crop acreage, appraised yield, or farm-stored production for a farm may be initiated by the county committee, State committee, or Deputy Administrator at any time. Redetermination may be requested by a producer with an interest in the farm if they pay the cost of the redetermination. The request must be submitted to FSA within 15 calendar days after the date of the notice described in §§ 718.110 or 718.111, or within 5 calendar days after the initial appraisal of the yield of a crop, or before the farm-stored production is removed from storage. A redetermination shall <PRTPAGE P="80"/>be undertaken in the manner prescribed by the Deputy Administrator. A redetermination shall be used in lieu of any prior determination.</P>
                <P>(b) The county committee shall refund the payment of the cost for a redetermination when, because of an error in the initial determination:</P>
                <P>(1) The appraised yield is changed by at least the larger of:</P>
                <P>(i) Five percent or 5 pounds for cotton;</P>
                <P>(ii) Five percent or 1 bushel for wheat, barley, oats, and rye; or</P>
                <P>(iii) Five percent or 2 bushels for corn and grain sorghum; or</P>
                <P>(2) The farm stored production is changed by at least the smaller of 3 percent or 600 bushels; or</P>
                <P>(3) The acreage of the crop is:</P>
                <P>(i) Changed by at least the larger of 3 percent or 0.5 acre; or</P>
                <P>(ii) Considered to be within program requirements.</P>
              </SECTION>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart C—Reconstitution of Farms, Allotments, Quotas, and Bases</HD>
              <SOURCE>
                <HD SOURCE="HED">Source:</HD>
                <P>68 FR 16178, Apr. 3, 2003, unless otherwise noted.</P>
              </SOURCE>
              <SECTION>
                <SECTNO>§ 718.201</SECTNO>
                <SUBJECT>Farm constitution.</SUBJECT>
                <P>(a) In order to implement agency programs and monitor farmer compliance with regulations, the agency must have records on what land is being farmed by a particular producer. This is accomplished by a determination of what land or groups of land ‘constitute' an individual unit or farm. Land, which has been properly constituted under prior regulations, shall remain so constituted until a reconstitution is required under paragraph (c) of this section. The constitution and identification of land as a farm for the first time and the subsequent reconstitution of a farm made hereafter, shall include all land operated by an individual entity or joint operation as a single farming unit except that it shall not include:</P>
                <P>(1) Land under separate ownership unless the owners agree in writing and the labor, equipment, accounting system, and management are operated in common by the operator but separate from other tracts;</P>
                <P>(2) Land under a lease agreement of less than 1 year duration;</P>
                <P>(3) Land in different counties when the tobacco allotments or quotas established for the land involved cannot be transferred from one county to another county by lease, sale, or owner. However, this paragraph shall not apply if:</P>
                <P>(i) All of the land is contiguous;</P>
                <P>(ii) The land is located in counties that are contiguous in the same State if:</P>
                <P>(A) A burley or flue-cured tobacco quota is established for one or more of the tracts; and</P>
                <P>(B) The county committee determines that the tracts will be operated as a single farming unit as set forth in § 718.202; or</P>
                <P>(iii) Because of a change in operation, tracts or parts of tracts will be divided from the parent farm that currently has land in more than one county, and there is no change in operation and ownership of the remainder of the farm, or if there is a change in ownership, the new owner agrees in writing to the constitution of the farm.</P>
                <P>(4) Federally-owned land;</P>
                <P>(5) State-owned wildlife lands unless the former owner has possession of the land under a leasing agreement; and</P>
                <P>(6) Land constituting a farm which is declared ineligible to be enrolled in a program under the regulations governing the program; and</P>
                <P>(7) For acreage base crops, land located in counties that are not contiguous. However, this paragraph shall not apply if:</P>
                <P>(i) Counties are divided by a river;</P>
                <P>(ii) Counties do not touch because of a correction line adjustment; or</P>
                <P>(iii) The land is within 20 miles, by road, of other land that will be a part of the farming unit.</P>
                <P>(b)(1) If all land on the farm is physically located in one county, the farm shall be administratively located in such county. If there is no FSA office in the county or the county offices have been consolidated, the farm shall be administratively located in the contiguous county most convenient for the farm operator.</P>

                <P>(2) If the land on the farm is located in more than one county, the farm <PRTPAGE P="81"/>shall be administratively located in either of such counties as the county committees and the farm operator agree. If no agreement can be reached, the farm shall be administratively located in the county where the principal dwelling is situated, or where the major portion of the farm is located if there is no dwelling.</P>
                <P>(c) A reconstitution of a farm either by division or by combination shall be required whenever:</P>
                <P>(1) A change has occurred in the operation of the land after the last constitution or reconstitution and as a result of such change the farm does not meet the conditions for constitution of a farm as set forth in paragraph (a) of this section except that no reconstitution shall be made if the county committee determines that the primary purpose of the change in operation is to establish eligibility to transfer allotments subject to sale or lease, or increase amount of program benefits received;</P>
                <P>(2) The farm was not properly constituted the previous time;</P>
                <P>(3) An owner requests in writing that the land no longer be included in a farm composed of tracts under separate ownership;</P>
                <P>(4) The county committee determines that the farm was reconstituted on the basis of false information;</P>
                <P>(5) The county committee determines that tracts included in a farm are not being operated as a single farming unit.</P>
                <P>(d) Reconstitution shall not be approved if the county committee determines that the primary purpose of the reconstitution is to:</P>
                <P>(1) Circumvent the provisions of part 12 of this title; or</P>
                <P>(2) Circumvent any other chapter of this title.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.202</SECTNO>
                <SUBJECT>Determining the land constituting a farm.</SUBJECT>
                <P>(a) In determining the constitution of a farm, consideration shall be given to provisions such as ownership and operation. For purposes of this part, the following rules shall be applicable to determining what land is to be included in a farm.</P>
                <P>(b) A minor shall be considered to be the same owner or operator as the parent, court-appointed guardian, or other person responsible for the minor child, unless the parent or guardian has no interest in the minor's farm or production from the farm, and the minor:</P>
                <P>(1) Is a producer on a farm;</P>
                <P>(2) Maintains a separate household from the parent or guardian;</P>
                <P>(3) Personally carries out the farming activities; and</P>
                <P>(4) Maintains a separate accounting for the farming operation.</P>
                <P>(c) A minor shall not be considered to be the same owner or operator as the parent or court-appointed guardian if the minor's interest in the farming operation results from being the beneficiary of an irrevocable trust and ownership of the property is vested in the trust or the minor.</P>
                <P>(d) A life estate tenant shall be considered to be the owner of the property for their life.</P>
                <P>(e) A trust shall be considered to be an owner with the beneficiary of the trust; except a trust can be considered a separate owner or operator from the beneficiary, if the trust:</P>
                <P>(1) Has a separate and distinct interest in the land or crop involved;</P>
                <P>(2) Exercises separate responsibility for the separate and distinct interest; and</P>
                <P>(3) Maintains funds and accounts separate from that of any other individual or entity for the interest.</P>
                <P>(f) The county committee shall require specific proof of ownership.</P>
                <P>(g) Land owned by different persons of an immediate family living in the same household and operated as a single farming unit shall be considered as being under the same ownership in determining a farm.</P>
                <P>(h) All land operated as a single unit and owned and operated by a parent corporation and subsidiary corporations of which the parent corporation owns more than 50 percent of the value of the outstanding stock, or where the parent is owned and operated by subsidiary corporations, shall be constituted as one farm.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.203</SECTNO>
                <SUBJECT>County committee action to reconstitute a farm.</SUBJECT>

                <P>Action to reconstitute a farm may be initiated by the county committee, the farm owner, or the operator with the <PRTPAGE P="82"/>concurrence of the owner of the farm. Any request for a farm reconstitution shall be filed with the county committee.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.204</SECTNO>
                <SUBJECT>Reconstitution of allotments, quotas, and bases.</SUBJECT>
                <P>(a) Farms shall be reconstituted in accordance with this subpart when it is determined that the land areas are not properly constituted and, to the extent practicable, shall be based on the facts and conditions existing at the time the change requiring the reconstitution occurred.</P>
                <P>(b) Reconstitutions of farms subject to a direct and counter-cyclical program contract in accordance with part 1413 of this title will be effective for the current year if initiated on or before August 1 or prior to the issuance of DCP payments for the farm or farms being reconstituted.</P>
                <P>(c) For tobacco farms, a reconstitution will be effective for the current year for each crop for which the reconstitution is initiated before the planting of such crop begins or would have begun.</P>
                <P>(d) Notwithstanding the provisions of paragraph (c) of this section, a reconstitution may be effective for the current year if the county committee determines, and the State committee concurs, that the purpose of the request for reconstitution is not to perpetrate a scheme or device designed to evade the requirements governing programs found in this title.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.205</SECTNO>
                <SUBJECT>Substantive change in farming operation, and changes in related legal entities.</SUBJECT>
                <P>(a) Land that is properly constituted as a farm shall not be reconstituted if:</P>
                <P>(1) The reconstitution request is based upon the formation of a newly established legal entity which owns or operates the farm or any part of the farm and the county committee determines there is not a substantive change in the farming operation;</P>
                <P>(2) The county committee determines that the primary purpose of the request for reconstitution is to:</P>
                <P>(i) Obtain additional benefits under one or more commodity programs;</P>
                <P>(ii) Avoid damages or penalties under a contract or statute;</P>
                <P>(iii) Correct an erroneous acreage report; or</P>
                <P>(iv) Circumvent any other program provisions. In addition, no farm shall remain as constituted when the county committee determines that a substantive change in the farming operation has occurred which would require a reconstitution, except as otherwise approved by the State committee with the concurrence of the Deputy Administrator.</P>
                <P>(b) In determining whether a substantive change has occurred with respect to a farming operation, the county committee shall consider factors such as the composition of the legal entities having an interest in the farming operation with respect to management, financing, and accounting. The county committee shall also consider the use of land, labor, and equipment available to the farming operations and any other relevant factors that bear on the determination.</P>
                <P>(c) Unless otherwise approved by the State committee with the concurrence of the Deputy Administrator, when the county committee determines that a corporation, trust, or other legal entity is formed primarily for the purpose of obtaining additional benefits under the commodity programs of this title, the farm shall remain as constituted, or shall be reconstituted, as applicable, when the farm is owned or operated by:</P>
                <P>(1) A corporation having more than 50 percent of the stock owned by members of the same family living in the same household;</P>
                <P>(2) Corporations having more than 50 percent of the stock owned by stockholders common to more than one corporation; or</P>
                <P>(3) Trusts in which the beneficiaries and trustees are family members living in the same household.</P>
                <P>(d) Application of the provisions of paragraph (c) of this section shall not limit or affect the application of paragraphs (a) and (b) of this section.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.206</SECTNO>
                <SUBJECT>Determining farms, tracts, allotments, quotas, and bases when reconstitution is made by division.</SUBJECT>

                <P>(a) The methods for dividing farms, tracts, allotments, quotas, and bases in order of precedence, when applicable, are estate, designation by landowner, <PRTPAGE P="83"/>contribution, cropland, DCP cropland, default, and history. The proper method shall be determined on a crop by crop basis.</P>
                <P>(b)(1) The estate method is the pro-rata distribution of allotments, quotas, and bases for a parent farm among the heirs in settling an estate. If the estate sells a tract of land before the farm is divided among the heirs, the allotments, quotas, and bases for that tract shall be determined according to paragraphs (c) through (h) of this section.</P>
                <P>(2) Allotments, quotas, and bases shall be divided in accordance with a will, but only if the county committee determines that the terms of the will are such that a division can reasonably be made by the estate method.</P>
                <P>(3) If there is no will or the county committee determines that the terms of a will are not clear as to the division of allotments, quotas, and bases, such allotments, quotas, and bases shall be apportioned in the manner agreed to in writing by all interested heirs or devisees who acquire an interest in the property for which such allotments, quotas, and bases have been established. An agreement by the administrator or executor shall not be accepted in lieu of an agreement by the heirs or devisees.</P>
                <P>(4) If allotments, quotas, and bases are not apportioned in accordance with the provisions of paragraphs (b)(2) or (b)(3) of this section, the allotments, quotas, and bases shall be divided pursuant to paragraphs (d) through (h) of this section, as applicable.</P>
                <P>(c)(1) If the ownership of a tract of land is transferred from a parent farm, the transferring owner may request that the county committee divide the allotments, quotas, and bases, including historical acreage that has been double cropped, between the parent farm and the transferred tract, or between the various tracts if the entire farm is sold to two or more purchasers, in a manner designated by the owner of the parent farm subject to the conditions set forth in paragraph (c)(3) of this section.</P>
                <P>(2) If the county committee determines that allotments, quotas, and bases cannot be divided in the manner designated by the owner because of the conditions set forth in paragraph (c)(3) of this section, the owner shall be notified and permitted to revise the designation so as to meet the conditions in paragraph (c)(3) of this section. If the owner does not furnish a revised designation of allotments, quotas, and bases within a reasonable time after such notification, or if the revised designation does not meet the conditions of paragraph (c)(3) of this section, the county committee will divide the allotments, quotas, and bases in a pro-rata manner in accordance with paragraphs (d) through (h) of this section.</P>
                <P>(3) A landowner may designate a manner in which allotments, quotas, and bases are divided according to this paragraph.</P>
                <P>(i) The transferring owner and transferee shall file a signed written memorandum of understanding of the designation with the county committee before any CCC or FSA prescribed form, letter or contract providing an allotment, base or quota is issued and before a subsequent transfer of ownership of the land. The landowner shall designate the allotments, quotas, and bases that shall be permanently reduced when the sum of the allotments, quotas, and bases exceeds the cropland for the farm.</P>
                <P>(ii) Where the part of the farm from which the ownership is being transferred was owned for a period of less than 3 years, the designation by landowner method shall not be available with respect to the transfer unless the county committee determines that the primary purpose of the ownership transfer was other than to retain or to sell allotments, quotas, or bases. In the absence of such a determination, and if the farm contains land which has been owned for less than 3 years, that part of the farm which has been owned for less than 3 years shall be considered as a separate farm and the allotments, quotas, or bases, shall be assigned to that part in accordance with paragraphs (d) through (h) of this section. Such apportionment shall be made prior to any designation of allotments, quotas, and bases with respect to the part that has been owned for 3 years or more.</P>

                <P>(4) The designation by landowner method is not applicable to crop allotments or quotas which are restricted to <PRTPAGE P="84"/>transfer within the county by lease, sale, or by owner, when the land on which the farm is located is in two or more counties.</P>
                <P>(5) The designation by landowner method may be applied at the owner's request to land owned by any Indian Tribal Council which is leased to two or more producers for the production of any crop of a commodity for which an allotment, quota, or base has been established. If the land is leased to two or more producers, an Indian Tribal Council may request that the county committee divide the allotments, quotas, and bases between the applicable tracts in the manner designated by the Council. The use of this method shall not be subject to the conditions of paragraph (c)(3) of this section.</P>
                <P>(d)(1) The contribution method is the pro-rata distribution of a parent farm's allotments and quotas to each tract as the tract contributed to the allotments and quotas at the time of combination and may be used when the provisions of paragraphs (b) and (c) of this section do not apply.</P>
                <P>(2) The county committee determines and the State committee or a representative thereof concurs, that the use of the contribution method would not result in an equitable distribution of allotments and quotas, considering available land, cultural operations, and changes in type of farming.</P>
                <P>(e) The cropland method is the pro-rata distribution of allotments and quotas to separate tracts proportionately to the tract's contribution to the cropland for the parent tract. This method shall be used if paragraphs (b) through (d) of this section do not apply unless the county committee determines that division by the history method would result in more representative allotments and quotas than the cropland method, taking into consideration the operation normally carried out on each tract for the commodities produced on the farm.</P>
                <P>(f)(1) The history method is the pro-rata distribution of allotments and quotas to separate tracts on the basis of the operation normally carried out on each tract of the parent farm. The county committee may use the history method of dividing allotments and quotas when it:</P>
                <P>(i) Determines that this method would result in a more accurate pro-rata distribution of allotments and quotas based on actual contribution of the tract to the totals of the parent farm than the cropland method would; and</P>
                <P>(ii) Obtains written consent of all owners to use the history method.</P>
                <P>(2) The county committee may waive the requirement for written consent of the owners for dividing allotments and quotas if the county committee determines that the use of the cropland method would result in an inequitable division of the parent farm's allotments and quotas and the use of the history method would provide more favorable results for all owners.</P>
                <P>(g) The DCP cropland method is the pro-rata distribution of bases to the resulting tracts in the same proportion to the DCP cropland that each resulting tract bears to the DCP cropland for the parent tract. This method of division shall be used if paragraphs (b) and (c) of this section do not apply.</P>
                <P>(h) The default method is the separation of tracts from a farm with each tract maintaining the bases attributed to the tract when the reconstitution is initiated.</P>
                <P>(i)(1) Allotments, quotas, and bases apportioned among the resulting farms pursuant to paragraphs (d) through (h) of this section may be increased or decreased with respect to a farm by as much as 10 percent of the parent farm's allotment, quota, or base determined under such subsections for the parent farm if:</P>
                <P>(i) The owners agree in writing; and</P>
                <P>(ii) The county committee determines the method used did not provide an equitable distribution considering available land, cultural operations, and changes in the type of farming conducted on the farm. Any increase in an allotment, quota, or base with respect to a tract pursuant to this paragraph shall be offset by a corresponding decrease for such allotments, quotas or bases established with respect to the other tracts which constitute the farm.</P>

                <P>(2) Farm program payment yields calculated for the resulting farms of a division may be increased or decreased if the county committee determines <PRTPAGE P="85"/>the method used did not provide an equitable distribution considering available land, cultural operations, and changes in the type of farming conducted on the farm. Any increase in a farm program payment yield on a resulting farm shall be offset by a corresponding decrease on another resulting farm of the division.</P>
                <P>(j) If a farm with burley tobacco quota is divided through reconstitution and one or more of the farms resulting from the division are apportioned less than 1,000 pounds of burley tobacco quota, the owners of such farms shall take action as provided in part 723 of this chapter to comply with the 1,000 pound minimum by July 1 of the current year or the quota shall be dropped. Exceptions to this are farms divided:</P>
                <P>(1) Among family members;</P>
                <P>(2) By the estate method; and</P>
                <P>(3) When no sale or change in ownership of land occurs; or</P>
                <P>(4) With one resulting farm receiving all of the quota.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.207</SECTNO>
                <SUBJECT>Determining allotments, quotas, and bases when reconstitution is made by combination.</SUBJECT>
                <P>When two or more farms or tracts are combined for a year, that year's allotments, quotas, and bases, with respect to the combined farm or tract, as required by applicable commodity regulations, shall not be greater than the sum of the allotments, quotas, and bases for each of the farms or tracts comprising the combination, subject to the provisions of § 718.204.</P>
              </SECTION>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart D—Equitable Relief From Ineligibility</HD>
              <SOURCE>
                <HD SOURCE="HED">Source:</HD>
                <P>67 FR 66307, Oct. 31, 2002, unless otherwise noted.</P>
              </SOURCE>
              <SECTION>
                <SECTNO>§ 718.301</SECTNO>
                <SUBJECT>Applicability.</SUBJECT>

                <P>(a) This subpart is applicable to programs administered by the Farm Service Agency under chapters VII and XIV of this title, except for an agricultural credit program carried out under the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 <E T="03">et seq.</E>). Administration of this subpart shall be under the supervision of the Deputy Administrator, except that such authority shall not limit the exercise of authority allowed State Executive Directors of the Farm Service agency as provided for in § 718.307.</P>
                <P>(b) Sections 718.303, 718.304, and 718.307 do not apply where the action for which relief is requested occurred before May 13, 2002. In such cases, authority that was effective prior to May 13, 2002, may be applied.</P>

                <P>(c) Section 718.306 does not apply to a function performed under either section 376 of the Consolidated Farm and Rural Development Act (7U.S.C. 1921 <E T="03">et seq.</E>), or a conservation program administered by the Natural Resources Conservation Service of the United States Department of Agriculture.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.302</SECTNO>
                <SUBJECT>Definitions and abbreviations.</SUBJECT>
                <P>In addition to the definitions provided in § 718.2 of this part, the following terms apply to this subpart:</P>
                <P>
                  <E T="03">Agricultural commodity</E> means any agricultural commodity, food, feed, fiber, or livestock that is subject to a covered program.</P>
                <P>
                  <E T="03">Covered program</E> means a program specified in § 718.301 of this subpart.</P>
                <P>
                  <E T="03">FSA</E> means the Farm Service Agency of the United States Department of Agriculture.</P>
                <P>
                  <E T="03">OGC</E> means the Office of the General Counsel of the United States Department of Agriculture.</P>
                <P>
                  <E T="03">SED</E> means, for activities within a particular state, the State Executive Director of the United States Department of Agriculture, FSA, for that state.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.303</SECTNO>
                <SUBJECT>Reliance on incorrect actions or information.</SUBJECT>
                <P>(a) Notwithstanding any other law, action or inaction by a participant in a covered program that is to the detriment of the participant, and that is based upon good faith reliance on the action or advice of an authorized representative of a County or State FSA Committee, may be approved by the Administrator, FSA or the Executive Vice President,CCC, as applicable, or their designee, as meeting the requirements of the program, and benefits may be extended or payments made in accordance with § 718.305.</P>

                <P>(b) This section applies only to a participant who relied upon the action of, <PRTPAGE P="86"/>or information provided by, a county or State FSA committee or an authorized representative of such committee and the participant acted, or failed to act, as a result of the Agency action or information. This part does not apply to cases where the participant had sufficient reason to know that the action or information upon which they relied was improper or erroneous or where the participant acted in reliance on their own misunderstanding or misinterpretation of program provisions, notices or information.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.304</SECTNO>
                <SUBJECT>Failure to fully comply.</SUBJECT>
                <P>(a) Under a covered program, when the failure of a participant to fully comply with the terms and conditions of a program authorized by this chapter precludes the providing of payments or benefits, relief may be authorized in accordance with § 718.305 if the participant made a good faith effort to comply fully with the requirements of the covered program.</P>
                <P>(b) This section only applies to participants who are determined by the FSA approval official to have made a good faith effort to comply fully with the terms and conditions of the program and rendered substantial performance.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.305</SECTNO>
                <SUBJECT>Forms of relief.</SUBJECT>
                <P>(a) The Administrator of FSA, Executive Vice President of CCC, or their designee, may authorize a participant in a covered program to:</P>
                <P>(1) Retain loans, payments, or other benefits received under the covered program;</P>
                <P>(2) Continue to receive loans, payments, and other benefits under the covered program;</P>
                <P>(3) Continue to participate, in whole or in part, under any contract executed under the covered program;</P>
                <P>(4) In the case of a conservation program, re-enroll all or part of the land covered by the program; and</P>
                <P>(5) Receive such other equitable relief as determined to be appropriate.</P>
                <P>(b) As a condition of receiving relief under this subpart, the participant may be required to remedy their failure to meet the program requirement, or mitigate its affects.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.306</SECTNO>
                <SUBJECT>Finality.</SUBJECT>
                <P>(a) A determination by a State or county FSA committee made on or after October 13, 1994, becomes final and binding 90 days from the date the application for benefits has been filed, and supporting documentation required to be supplied by the producer as a condition for eligibility for the particular program has been filed, unless one of the following conditions exist:</P>
                <P>(1) The participant has requested an administrative review of the determination in accordance with part 780 of this chapter;</P>
                <P>(2) The determination was based on misrepresentation, false statement, fraud, or willful misconduct by or on behalf of the participant;</P>
                <P>(3) The determination was modified by the Administrator, FSA, or in the case of CCC programs conducted under Chapter XIV of this title, the Executive Vice President, CCC; or</P>
                <P>(4) The participant had reason to know that the determination was erroneous.</P>
                <P>(b) Should an erroneous determination become final under the provisions of this section, it shall only be effective through the year in which the error was found and communicated to the participant.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 718.307</SECTNO>
                <SUBJECT>Special relief approval authority for State Executive Directors.</SUBJECT>
                <P>(a) <E T="03">General nature of the special authority.</E> Notwithstanding provisions in this subpart providing supervision and relief authority to other officials, an SED without further review by other officials (other than the Secretary) may grant relief to a participant under the provisions of §§ 718.303 and 718.304 as if the SED were the final arbiter within the agency of such matters so long as:</P>
                <P>(1) The program matter with respect to which the relief is sought is a program matter in a covered program which is operated within the State under the control of the SED;</P>

                <P>(2) The total amount of relief which will be provided to the person(that is, to the individual or entity that applies for the relief) by thatSED under this special authority for errors during that year is less than$20,000 (including in that calculation, any loan amount or <PRTPAGE P="87"/>other benefit of any kind payable for that year and any other year);</P>
                <P>(3) The total amount of such relief which has been previously provided to the participant using this special authority for errors in that year, as calculated above, is not more than $5,000;</P>
                <P>(4) The total amount of loans, payments, and benefits of any kind for which relief is provided to similarly situated participants by the SED (or the SED's predecessor) for errors for any year under the authority provided in this section, as calculated above, is not more than $1,000,000.</P>
                <P>(b) <E T="03">Report of the exercise of the power.</E> A grant of relief shall be considered to be under this section and subject to the special finality provided in this section only if the SED grants the relief in writing when granting the relief to the party who will receive the benefit of such relief and only if, in that document, the SED declares that they are exercising that power. The SED must report the exercise of that power to the Deputy Administrator so that a full accounting may be made in keeping with the limitations of this section. Absent such a report, relief will not be considered to have been made under this section.</P>
                <P>(c) <E T="03">Additional limits on the authority.</E> The authority provided under this section does not extend to:</P>

                <P>(1) The administration of payment limitations under part 1400 of this chapter (§§ 1001 to 1001F of 7 U.S.C. 1308 <E T="03">et seq.</E>);</P>
                <P>(2) The administration of payment limitations under a conservation program administered by the Secretary; or</P>

                <P>(3) Highly erodible land and wetland conservation requirements under subtitles B or C of Title XII of the Food Security Act of 1985 (16 U.S.C.3811 <E T="03">et seq.</E>) as administered under 7 CFR part 12.</P>
                <P>(d) Relief may not be provided by the SED under this section until a written opinion or written acknowledgment is obtained from OGC that grounds exist for determination that the program participant has, in good faith, detrimentally relied on the guidance or actions of an authorized FSA representative in accordance with the provisions of this subpart, or that the producer otherwise failed, in good faith, to fully comply with the requirements of the program and that the granting of the relief is within the lawful authority of the SED.</P>
                <P>(e) <E T="03">Relation to other authorities.</E> The authority provided under this section is in addition to any other applicable authority that may allow relief. Generally, the SED may, without consultation other than with OGC, decide all matters under $20,000 but those decisions shall not be subject to modification within the Farm Service Agency to the extent provided for under the rules of this section.</P>
              </SECTION>
            </SUBPART>
          </PART>
          <PART>
            <EAR>Pt. 723</EAR>
            <HD SOURCE="HED">PART 723—TOBACCO</HD>
            <CONTENTS>
              <SUBPART>
                <HD SOURCE="HED">Subpart A—General Provisions</HD>
                <SECHD>Sec.</SECHD>
                <SECTNO>723.101</SECTNO>
                <SUBJECT>OMB control numbers assigned pursuant to the Paperwork Reduction Act.</SUBJECT>
                <SECTNO>723.102</SECTNO>
                <SUBJECT>Applicability.</SUBJECT>
                <SECTNO>723.103</SECTNO>
                <SUBJECT>Administration.</SUBJECT>
                <SECTNO>723.104</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <SECTNO>723.105</SECTNO>
                <SUBJECT>Extent of determinations, computations, and rule for rounding fractions.</SUBJECT>
                <SECTNO>723.106</SECTNO>
                <SUBJECT>Location of farm for administrative purposes.</SUBJECT>
                <SECTNO>723.107-723.110</SECTNO>
                <SUBJECT>[Reserved]</SUBJECT>
                <SECTNO>723.111</SECTNO>
                <SUBJECT>Flue-cured (types 11-14) tobacco.</SUBJECT>
                <SECTNO>723.112</SECTNO>
                <SUBJECT>Burley (type 31) tobacco.</SUBJECT>
                <SECTNO>723.113</SECTNO>
                <SUBJECT>Fire-cured (type 21) tobacco.</SUBJECT>
                <SECTNO>723.114</SECTNO>
                <SUBJECT>Fire-cured (types 22-23) tobacco.</SUBJECT>
                <SECTNO>723.115</SECTNO>
                <SUBJECT>Dark air-cured (types 35-36) tobacco.</SUBJECT>
                <SECTNO>723.116</SECTNO>
                <SUBJECT>Sun-cured (type 37) tobacco.</SUBJECT>
                <SECTNO>723.117</SECTNO>
                <SUBJECT>Cigar-filler and binder (types 42-44 and 53-55) tobacco.</SUBJECT>
                <SECTNO>723.118</SECTNO>
                <SUBJECT>Cigar-filler (type 46) tobacco.</SUBJECT>
                <SECTNO>723.119-723.121</SECTNO>
                <SUBJECT>[Reserved]</SUBJECT>
              </SUBPART>
              <SUBPART>
                <HD SOURCE="HED">Subpart B—Allotments, Quotas, Yields, Transfers, Release and Reapportionment, History Acreages, and Forfeitures</HD>
                <SECTNO>723.201</SECTNO>
                <SUBJECT>Determination of preliminary farm acreage allotments and preliminary farm marketing quotas.</SUBJECT>
                <SECTNO>723.202</SECTNO>
                <SUBJECT>Determining farm acreage allotment, except for flue-cured tobacco.</SUBJECT>
                <SECTNO>723.203</SECTNO>
                <SUBJECT>Determination of flue-cured tobacco preliminary farm yields.</SUBJECT>
                <SECTNO>723.204</SECTNO>
                <SUBJECT>Determination of farm yields and normal yields.</SUBJECT>
                <SECTNO>723.205</SECTNO>
                <SUBJECT>Determination of farm acreage allotments and effective farm acreage allotments for flue-cured tobacco.</SUBJECT>
                <SECTNO>723.206</SECTNO>
                <SUBJECT>Determining farm marketing quotas and effective farm marketing quotas.</SUBJECT>
                <SECTNO>723.207</SECTNO>

                <SUBJECT>Determination of acreage allotments or burley marketing quotas for new farms.<PRTPAGE P="88"/>
                </SUBJECT>
                <SECTNO>723.208</SECTNO>
                <SUBJECT>Determination of acreage allotments, marketing quotas, and yields for divided farms.</SUBJECT>
                <SECTNO>723.209</SECTNO>
                <SUBJECT>Determination of acreage allotments, marketing quotas, yields for combined farms; and special tobacco combinations.</SUBJECT>
                <SECTNO>723.210</SECTNO>
                <SUBJECT>Corrections of errors and adjusting inequities in acreage allotments and marketing quotas for old farms.</SUBJECT>
                <SECTNO>723.211</SECTNO>
                <SUBJECT>Allotments, quotas, and yields for farms acquired under right of eminent domain.</SUBJECT>
                <SECTNO>723.212</SECTNO>
                <SUBJECT>Time for making reduction of farm marketing quotas or acreage allotments for violation of the marketing quota or acreage allotment regulations for a prior marketing year.</SUBJECT>
                <SECTNO>723.213</SECTNO>
                <SUBJECT>Approval of acreage allotments and marketing quotas and notices to farm operators.</SUBJECT>
                <SECTNO>723.214</SECTNO>
                <SUBJECT>Application for review.</SUBJECT>
                <SECTNO>723.215</SECTNO>
                <SUBJECT>Transfer of tobacco farm acreage allotment or farm marketing quota that cannot be planted or replanted due to a natural disaster.</SUBJECT>
                <SECTNO>723.216</SECTNO>
                <SUBJECT>Transfer of tobacco acreage allotment or marketing quota by sale, lease, or owner.</SUBJECT>
                <SECTNO>723.217</SECTNO>
                <SUBJECT>Release and reapportionment of old farm acreage allotments for Cigar-filler and Binder (types 42, 43, 44, 54, and 55) tobacco.</SUBJECT>
                <SECTNO>723.218</SECTNO>
                <SUBJECT>Determining tobacco history acreage.</SUBJECT>
                <SECTNO>723.219</SECTNO>
                <SUBJECT>Forfeiture of burley tobacco marketing quota.</SUBJECT>
                <SECTNO>723.220</SECTNO>
                <SUBJECT>Forfeiture of flue-cured tobacco acreage allotment and marketing quota.</SUBJECT>
                <SECTNO>723.221</SECTNO>
                <SUBJECT>Eminent domain acquisitions.</SUBJECT>
                <SECTNO>723.222</SECTNO>
                <SUBJECT>Exempting Federal prison farms and Federal wildlife refuges.</SUBJECT>
                <SECTNO>723.223</SECTNO>
                <SUBJECT>Transfer of allotments and quotas—State public lands.</SUBJECT>
              </SUBPART>
              <SUBPART>
                <HD SOURCE="HED">Subpart C—Tobacco Subject to Quota, Exemptions From Quotas, Marketing Cards, and General Penalty Provisions</HD>
                <SECTNO>723.301</SECTNO>
                <SUBJECT>Identification of tobacco subject to quota.</SUBJECT>
                <SECTNO>723.302</SECTNO>
                <SUBJECT>Tobacco for experimental purposes.</SUBJECT>
                <SECTNO>723.303</SECTNO>
                <SUBJECT>Production of registered or certified flue-cured tobacco seed.</SUBJECT>
                <SECTNO>723.304</SECTNO>
                <SUBJECT>Determination of discount varieties.</SUBJECT>
                <SECTNO>723.305</SECTNO>
                <SUBJECT>Issuance of marketing cards.</SUBJECT>
                <SECTNO>723.306</SECTNO>
                <SUBJECT>Claim stamping and replacing marketing cards.</SUBJECT>
                <SECTNO>723.307</SECTNO>
                <SUBJECT>Invalid cards.</SUBJECT>
                <SECTNO>723.308</SECTNO>
                <SUBJECT>Rate of penalty.</SUBJECT>
                <SECTNO>723.309</SECTNO>
                <SUBJECT>Persons to pay penalty.</SUBJECT>
                <SECTNO>723.310</SECTNO>
                <SUBJECT>Date penalty is due.</SUBJECT>
                <SECTNO>723.311</SECTNO>
                <SUBJECT>Lien for penalty; liability of persons who are affiliated with indebted person or who permit the indebted person to use their identification card.</SUBJECT>
                <SECTNO>723.312</SECTNO>
                <SUBJECT>Request for refund of penalty.</SUBJECT>
                <SECTNO>723.313</SECTNO>
                <SUBJECT>Identification of marketings.</SUBJECT>
              </SUBPART>
              <SUBPART>
                <HD SOURCE="HED">Subpart D—Recordkeeping, Reporting Requirements, Marketing Penalties, and Other Penalties</HD>
                <SECTNO>723.401</SECTNO>
                <SUBJECT>Registration of burley and flue-cured warehouse operators and dealers.</SUBJECT>
                <SECTNO>723.402</SECTNO>
                <SUBJECT>Warehouse authorized to retain producer marketing cards between sales.</SUBJECT>
                <SECTNO>723.403</SECTNO>
                <SUBJECT>Auction warehouse operators' records and reports.</SUBJECT>
                <SECTNO>723.404</SECTNO>
                <SUBJECT>Dealer's records and reports, excluding cigar tobacco buyers.</SUBJECT>
                <SECTNO>723.405</SECTNO>
                <SUBJECT>Dealers exempt from regular records and reports on MQ-79; and season report for dealers.</SUBJECT>
                <SECTNO>723.406</SECTNO>
                <SUBJECT>Provisions applicable to damaged tobacco or to purchases of tobacco from processors or manufacturers.</SUBJECT>
                <SECTNO>723.407</SECTNO>
                <SUBJECT>Cigar tobacco buyer's records and reports.</SUBJECT>
                <SECTNO>723.408</SECTNO>
                <SUBJECT>Producer's records and reports.</SUBJECT>
                <SECTNO>723.409</SECTNO>
                <SUBJECT>Producer violations, penalties, false identification collections and remittances by dealers, buyers, handlers, warehouses, and other parties; related issues.</SUBJECT>
                <SECTNO>723.410</SECTNO>
                <SUBJECT>Penalties considered to be due from warehouse operators, dealers, buyers, and others excluding the producer.</SUBJECT>
                <SECTNO>723.411</SECTNO>
                <SUBJECT>Records and reports regarding hauling, processing, and storage of tobacco.</SUBJECT>
                <SECTNO>723.412</SECTNO>
                <SUBJECT>Separate records and reports from persons engaged in tobacco related businesses.</SUBJECT>
                <SECTNO>723.413</SECTNO>
                <SUBJECT>Length of time records and reports are to be kept.</SUBJECT>
                <SECTNO>723.414</SECTNO>
                <SUBJECT>Failure to keep records and make reports or making false report or record.</SUBJECT>
                <SECTNO>723.415</SECTNO>
                <SUBJECT>Examination of records and reports.</SUBJECT>
                <SECTNO>723.416</SECTNO>
                <SUBJECT>Information confidential.</SUBJECT>
              </SUBPART>
              <SUBPART>
                <HD SOURCE="HED">Subpart E—Establishing Burley and Flue-Cured Tobacco National Marketing Quotas</HD>
                <SECTNO>723.501</SECTNO>
                <SUBJECT>Scope.</SUBJECT>
                <SECTNO>723.502</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <SECTNO>723.503</SECTNO>
                <SUBJECT>Establishing the quotas.</SUBJECT>
                <SECTNO>723.504</SECTNO>
                <SUBJECT>Manufacturer's intentions; penalties.</SUBJECT>
              </SUBPART>
            </CONTENTS>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>7 U.S.C. 1301 <E T="03">et seq.</E>; 7 U.S.C. 1421; 7 U.S.C. 1445-1 and 1445-2.</P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>55 FR 39914, Oct. 1, 1990, unless otherwise noted.</P>
            </SOURCE>
            <EDNOTE>
              <HD SOURCE="HED">Editorial Note:</HD>
              <P>Nomenclature changes to part 723 appear at 62 FR 15600, Apr. 2, 1997, and at 63 FR 11585, Mar. 10, 1998.</P>
            </EDNOTE>
            <SUBPART>
              <PRTPAGE P="89"/>
              <HD SOURCE="HED">Subpart A—General Provisions</HD>
              <SECTION>
                <SECTNO>§ 723.101</SECTNO>
                <SUBJECT>OMB control numbers assigned pursuant to the Paperwork Reduction Act.</SUBJECT>
                <P>The information collection requirements contained in these regulations (7 CFR part 723) have been approved by the Office of Management and Budget (OMB) in accordance with the provisions of U.S.C. chapter 35 and have been assigned OMB control numbers 0560-0058 and 0560-0006.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.102</SECTNO>
                <SUBJECT>Applicability.</SUBJECT>
                <P>The regulations contained in this subpart are applicable to the 1990 and subsequent crops of burley; flue-cured; fire-cured; dark air-cured; Virginia sun-cured; cigar-filler and binder (types 42, 43, 44, 54, and 55); and Cigar filler (type 46) tobacco. These regulations govern the establishment of farm marketing quotas and acreage allotments, the issuance of marketing cards, the identification of marketings of tobacco, the collection and refund of penalties and the keeping of records and making of reports. All of the provisions of these regulations apply to each kind of tobacco for which marketing quotas are in effect unless the wording of the text indicates otherwise.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.103</SECTNO>
                <SUBJECT>Administration.</SUBJECT>
                <P>(a) The regulations in this part will be administered under the general supervision of the Administrator, Farm Service Agency (“FSA”) and shall be carried out in the field by State and county Agricultural Stabilization and Conservation committees (“State and county FSA committees”).</P>
                <P>(b) State and county FSA committees, and representatives and employees thereof do not have the authority to modify or waive any of the provisions of the regulations of this part.</P>
                <P>(c) The State FSA committee shall take any action required by these regulations which has not been taken by the county FSA committee. The State FSA committee shall also:</P>
                <P>(1) Correct, or require a county FSA committee to correct any action taken by such county FSA committee which is not in accordance with the regulations of this part, or</P>
                <P>(2) Require a county FSA committee to withhold taking any action which is not in accordance with the regulations of this part.</P>
                <P>(d) No provision or delegation herein to a State or county FSA committee shall preclude the Administrator, FSA, or a designee, from determining any question arising under the regulations of this part or from reversing or modifying any determination made by a State or county FSA committee. Further, the Administrator or the Administrator's designee may modify any deadline or other provisions of this part to the extent that doing so is determined by such person to be appropriate and not inconsistent with the purposes of the program administered under this part.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 63 FR 9128, Feb. 24, 1998]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.104</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <P>(a) <E T="03">Applicability.</E> The definitions set forth in this section shall be applicable for all purposes of program administration for all kinds of tobacco except as may otherwise be indicated. The definitions in and provisions of parts 718 and 720 of this chapter are hereby incorporated by reference in these regulations unless the context or subject matter or the provisions of these regulations require otherwise.</P>
                <P>(b) <E T="03">Terms.</E> The following terms shall be defined as set forth in this paragraph.</P>
                <P>
                  <E T="03">Act.</E> The Agricultural Adjustment Act of 1938, as amended.</P>
                <P>
                  <E T="03">Active burley and flue-cured tobacco producer.</E> (1) Any person who shared in the risk of producing a crop of burley or flue-cured tobacco in at least one of the three years preceding the current year, or</P>
                <P>(2) Any person who intends to become a burley or flue-cured tobacco producer in the current year by sharing in the risk of producing the crop and who provides a certification of such intentions on a form approved by the Deputy Administrator.</P>
                <P>
                  <E T="03">Allowable floor sweepings.</E> The quantity of floor sweepings determined by multiplying 0.0024 times the total producer first sales of the respective kind of tobacco at auction for the season for the warehouse involved.<PRTPAGE P="90"/>
                </P>
                <P>
                  <E T="03">Auction sale.</E> A marketing of tobacco by a sale at public auction through a warehouse in the regular course of business including sale of all lots of tobacco at public auction in sequence at a given time.</P>
                <P>
                  <E T="03">Base Period.</E> The 5 calendar years immediately preceding the year for which farm acreage allotments or marketing quotas are currently being established. For burley tobacco marketing quotas established effective for the 1994 and subsequent crop years, the base period shall be the 3 calendar years immediately preceding the year for which farm marketing quotas are currently being established. For all other kinds of tobacco the five year base period shall remain in effect.</P>
                <P>
                  <E T="03">Buyer.</E> A person who engages to any extent in acquiring or marketing tobacco in the form normally marketed by producers.</P>
                <P>
                  <E T="03">Buyers corrections account.</E> The warehouse account of tobacco purchased at auction by the buyer but not delivered to the buyer, or any tobacco returned by the buyer, lost ticket, or any other valid reason, which is turned back to the warehouse operator and supported by an adjustment invoice from the buyer. This account shall include the pounds deducted resulting from returned lots, short lots, and short weights, and pounds added resulting from long lots and long weights, which buyers debit or credit to the warehouse operator and support with adjustment invoices.</P>
                <P>
                  <E T="03">Carryover tobacco.</E> Tobacco produced prior to the current calendar year which has not been marketed or otherwise disposed of prior to the beginning of the marketing year for the current crop.</P>
                <P>
                  <E T="03">Common ownership unit.</E> A common ownership unit is a distinguishable part of a farm, consisting of one or more tracts of land with the same owners, as determined by FSA.</P>
                <P>
                  <E T="03">Considered planted acreage.</E> An acreage that is used for determining an old farm's history acreage for a kind of tobacco when the acreage planted on the farm to the kind of tobacco in the current year is less than the farm acreage allotment established for such farm in the current year. With respect to:</P>
                <P>(1) <E T="03">Flue-cured tobacco.</E> If flue-cured tobacco was marketed from the farm during the current year, the considered planted acreage is an acreage determined by subtracting the planted acres from the farm acreage allotment. If flue-cured tobacco was not marketed from the farm in the current year, the considered planted acreage is an acreage, not to exceed the farm's acreage allotment, that is equal to the sum of the acreage:</P>
                <P>(i) That could not be planted to flue-cured tobacco because of a natural disaster,</P>
                <P>(ii) Computed for pounds leased from the farm,</P>
                <P>(iii) In the eminent domain pool,</P>
                <P>(iv) Reduced for overmarketing,</P>
                <P>(v) Reduced for violation of marketing quota regulations, and</P>
                <P>(vi) Converted from the production of flue-cured tobacco during the respective crop year in accordance with part 704 of this chapter.</P>
                <P>(2) <E T="03">A kind of tobacco other than burley or flue-cured tobacco.</E> The considered planted acreage for a farm is an acreage, not to exceed the farm's acreage allotment, that is equal to the sum of the acreage:</P>
                <P>(i) That could not be planted to the kind of tobacco because of a natural disaster.</P>
                <P>(ii) Temporarily transferred from the farm.</P>
                <P>(iii) Temporarily released.</P>
                <P>(iv) Converted from production of the kind of tobacco in accordance with part 704 of this chapter.</P>
                <P>(v) In the eminent domain pool.</P>
                <P>(vi) Reduced for violation of the regulations set forth in this part.</P>
                <P>
                  <E T="03">Container.</E> A package in which tobacco is marketed, packed, and stored.</P>
                <P>
                  <E T="03">Current crop.</E> The crop planted in the current year.</P>
                <P>
                  <E T="03">Current year.</E> The calendar year for which acreage allotments are being established, or tobacco history acreage and yields are being determined, or the farm is being considered under the provisions of the marketing quota program.</P>
                <P>
                  <E T="03">Damaged tobacco.</E> Any tobacco that has suffered a loss of value due to deterioration resulting from a cause such as rot, separation of leaves from stems, fire, smoke, water, or other conditions <PRTPAGE P="91"/>that would cause such tobacco to be distinguishably different from that normally marketed in trade channels.</P>
                <P>
                  <E T="03">Dealer.</E> A person who engages to any extent in acquiring or marketing tobacco in the form normally marketed by producers.</P>
                <P>
                  <E T="03">Director.</E> The Director, or Acting Director, Tobacco and Peanuts Division, Farm Service Agency, U.S. Department of Agriculture.</P>
                <P>
                  <E T="03">Effective farm acreage allotment.</E> The effective farm acreage allotment for flue-cured tobacco is the allotment determined under § 723.205 of this part.</P>
                <P>
                  <E T="03">Effective farm marketing quota.</E> The effective farm marketing quota is the current year farm marketing quota plus or minus any temporary quota adjustments.</P>
                <P>
                  <E T="03">Excess tobacco for a farm.</E> (1) For burley and flue-cured tobacco. The quantity of tobacco marketed above 103 percent of the effective farm marketing quota.</P>
                <P>(2) <E T="03">For kinds of tobacco other than burley or flue-cured.</E> That quantity of tobacco which is equal to the average yield per acre of the entire acreage of tobacco harvested on the farm times the number of acres harvested in excess of the farm acreage allotment, plus any carryover excess tobacco.</P>
                <P>
                  <E T="03">Experimental tobacco.</E> Tobacco grown by or under the direction of a publicly owned agricultural experiment station for experimental purposes only.</P>
                <P>
                  <E T="03">False identification.</E> False identification occurs if:</P>
                <P>(1) Tobacco was marketed or was permitted to be marketed in any marketing year as having been produced on any farm when, in fact, it was produced on another farm; or</P>
                <P>(2) Tobacco was marketed or was permitted to be marketed in any marketing year from a farm and was not identified by a tobacco marketing card for the farm; or</P>
                <P>(3) The farm operator or any other producer on a farm permits the use of the tobacco marketing card for the farm to record a marketing of tobacco when, in fact, no tobacco was marketed from the farm.</P>
                <P>(4) A tobacco marketing card issued to market a kind of tobacco is used to market another kind of tobacco produced on the same farm.</P>
                <P>
                  <E T="03">Family farm corporation.</E> A corporation for which:</P>
                <P>(1) Not less than 50 percent of the stock is owned by:</P>
                <P>(i) An individual or;</P>
                <P>(ii) An individual in combination with:</P>
                <P>(A) The spouse of such individual; or</P>
                <P>(B) The parent, aunt, uncle, child, grandchild, or cousin of such individual; or</P>
                <P>(C) A spouse of any individual specified in paragraph (1)(ii)(B) and;</P>
                <P>(2) One or more of the individuals specified in paragraph (1) participates in the direct management of the day to day operations of the corporation.</P>
                <P>
                  <E T="03">Farm acreage allotment.</E> For flue-cured tobacco, the allotment established in accordance with § 723.205 of this chapter.</P>
                <P>
                  <E T="03">Farm marketing quota.</E> (1) <E T="03">For burley tobacco, old farms.</E> The pounds determined by multiplying the preliminary farm marketing quota by the national factor and adjusting the result for any permanent quota adjustment.</P>
                <P>(2) <E T="03">For burley tobacco, new farms.</E> The pounds for the farm determined by the county FSA committee with the approval of the State FSA committee.</P>
                <P>(3) <E T="03">For flue-cured tobacco.</E> The pounds determined by multiplying the farm acreage allotment by the farm yield.</P>
                <P>(4) <E T="03">For kinds of tobacco other than burley or flue-cured.</E> The actual production of tobacco on the farm acreage allotment, which shall be the average yield per acre for the entire acreage of tobacco harvested on the farm times the farm acreage allotment.</P>
                <P>
                  <E T="03">Farm Service Agency.</E> An agency within the U.S. Department of Agriculture.</P>
                <P>
                  <E T="03">Farm yield.</E> The yield determined as provided in § 723.204 of this part.</P>
                <P>
                  <E T="03">Floor sweepings.</E> The scraps or leaves of tobacco which accumulate on the warehouse floor in the regular course of business.</P>
                <P>
                  <E T="03">FSA.</E> The Farm Service Agency.</P>
                <P>
                  <E T="03">Green weight.</E> The weight of tobacco which is in the form normally marketed by farmers prior to being redried, or processed.</P>
                <P>
                  <E T="03">Leaf account tobacco.</E> The quantity of tobacco purchased or otherwise acquired by or for the account of a warehouse operator, including floor sweepings purchased from another <PRTPAGE P="92"/>warehouse operator or dealer, as adjusted by the debits and credits to the buyers correction account. Such quantity shall not include tobacco in the form not normally marketed by producers, including tobacco pickings, and floor sweepings which accumulate on the warehouse floor.</P>
                <P>
                  <E T="03">Market.</E> The disposition of tobacco in raw or processed form by voluntary or involuntary sale, barter, or exchange, or by gift between living persons. “Marketing” and “marketed” shall have corresponding meaning to the term “market.”</P>
                <P>
                  <E T="03">Marketing recorder.</E> Any employee of the U.S. Department of Agriculture, or any employee of an Farm Service Agency county (FSA) office, whose duties involve the preparation and handling of the records and reports pertaining to the identification of marketing of tobacco.</P>
                <P>
                  <E T="03">Marketing year.</E> (1) For flue-cured tobacco, the period beginning July 1 of the current year and ending June 30 of the following year.</P>
                <P>(2) For kinds of tobacco other than flue cured. The period beginning October 1 of the current year and ending September 30 of the following year.</P>
                <P>
                  <E T="03">New farm.</E> A farm for which an acreage allotment or marketing quota is established for the current year from the national reserve that is set aside for such purpose from the national acreage allotment or marketing quota established for the kind of tobacco.</P>
                <P>
                  <E T="03">Nonauction sale.</E> Any marketing of tobacco other than at an auction sale.</P>
                <P>
                  <E T="03">Old farm.</E> (1) <E T="03">For burley tobacco.</E> A farm which had burley tobacco planted or considered planted in one or more years of the base period.</P>
                <P>(2) <E T="03">For tobacco other than burley.</E> A farm on which there is tobacco history acreage in one or more years of the base period.</P>
                <P>
                  <E T="03">Overmarketings.</E> The pounds by which the pounds marketed exceed the effective farm marketing quota.</P>
                <P>
                  <E T="03">Planted or considered planted credit.</E> For burley tobacco, credit that is assigned in the current year for a farm with an established farm marketing quota when:</P>
                <P>(1) Burley tobacco is planted on the farm.</P>
                <P>(2) Burley tobacco could not be planted because of a natural disaster.</P>
                <P>(3) Quota is:</P>
                <P>(i) Leased and transferred from the farm, or</P>
                <P>(ii) In the eminent domain pool.</P>
                <P>(4) A restrictive lease on federally owned land is in effect prohibiting tobacco production.</P>
                <P>(5) Effective quota is zero because of overmarketings or a violation of regulations, or</P>
                <P>(6) Acreage is converted from production of burley tobacco in accordance with part 704 of this chapter.</P>
                <P>
                  <E T="03">Pound.</E> The amount of tobacco which, if weighed in its unstemmed form and in the condition in which it is normally marketed by a producer, would equal 1 pound standard weight.</P>
                <P>
                  <E T="03">Preceding year.</E> The calendar year immediately preceding the year for which the allotments and quotas are established, or the marketing year preceding the marketing year for which the allotments and quotas are established.</P>
                <P>
                  <E T="03">Preliminary farm marketing quota.</E> For burley tobacco, the farm marketing quota for the preceding year.</P>
                <P>
                  <E T="03">Preliminary farm yield.</E> For flue-cured tobacco, the yield determined for a farm as provided in § 723.203 of this part.</P>
                <P>
                  <E T="03">Processed, Processing.</E> A method of preparing green weight tobacco for storage in which the tobacco may be redried, stemmed, tipped or threshed and the resulting product packed in a container.</P>
                <P>
                  <E T="03">Production record.</E> A record prepared by a processor to account for the processing of tobacco.</P>
                <P>
                  <E T="03">Quota adjustments.</E> For burley tobacco:</P>
                <P>(1) <E T="03">Temporary.</E> Adjustments for:</P>
                <P>(i) Effective undermarketings,</P>
                <P>(ii) Overmarketings from any prior year,</P>
                <P>(iii) Reapportioned quota from quota released from farms in the eminent domain pool,</P>
                <P>(iv) Quota transferred by lease or by owner,</P>
                <P>(v) Pounds in violation of the regulations for a prior year, and</P>

                <P>(vi) Pounds reduced from the burley tobacco quota during the current year in accordance with part 704 of this chapter.<PRTPAGE P="93"/>
                </P>
                <P>(2) <E T="03">Permanent.</E> Adjustments for:</P>
                <P>(i) Old farm adjustment from reserve,</P>
                <P>(ii) Pounds of quota transferred to the farm from the eminent domain pool,</P>
                <P>(iii) Pounds of quota transferred to or from the farm by sale,</P>
                <P>(iv) Pounds of quota transferred to the farm from the forfeiture pool, or</P>
                <P>(v) Pounds of forfeited quota.</P>
                <P>
                  <E T="03">Resale.</E> The disposition by sale, barter, exchange, or gift between living persons, of tobacco which has been marketed previously.</P>
                <P>
                  <E T="03">Sale.</E> The first marketing of tobacco on which the gross amount of the sale price therefore has been or could be readily determined.</P>
                <P>
                  <E T="03">Sale date.</E> The date on which the gross amount of the sale price of tobacco is determined.</P>
                <P>
                  <E T="03">Sale day.</E> The period at the end of which the warehouse operator bills to buyers the tobacco purchased by them during such period.</P>
                <P>
                  <E T="03">Scrap tobacco.</E> The residue which accumulates in the course of preparing tobacco for market, consisting chiefly of portions of tobacco leaves and leaves of poor quality.</P>
                <P>
                  <E T="03">Shared in the risk of production.</E> For burley or flue-cured tobacco, involvement in the production of the respective kind of tobacco by a person who:</P>
                <P>(1) Invests in the production of a crop of the respective kind of tobacco in an amount which is not less than 20 percent of the proceeds of the sale of the crop;</P>
                <P>(2) Depends solely on a share of the proceeds from the marketing of the tobacco for the return on the investment;</P>
                <P>(3) Waits until such crop of tobacco is marketed to receive any return on the investment; and</P>
                <P>(4) Maintains records, for a period of 3 years after the end of the marketing year in which the tobacco is sold, which may be used to verify that the provisions of this definition have been met.</P>
                <P>
                  <E T="03">Strip, scrap, stem.</E> Types of products resulting from processing of tobacco.</P>
                <P>
                  <E T="03">Suspended sale.</E> Any marketing of tobacco at auction for which the sale is not identified by a producer marketing card or a dealer's identification card by the end of the sale day on which such marketing occurred.</P>
                <P>
                  <E T="03">Tillable cropland.</E> With respect to flue-cured tobacco only, cropland (excluding orchards, vineyards, land devoted to trees, and land being prepared for non-agricultural uses) which the county FSA committee determines can be planted to crops without unusual preparation or cultivation.</P>
                <P>
                  <E T="03">Tobacco.</E> Kinds of tobacco that are subject to marketing quotas as follows: Burley tobacco, (type 31); Flue-cured tobacco, (types 11, 12, 13, and 14); Fire-cured tobacco (types 21, 22, and 23); Dark air-cured tobacco (types 35 and 36); Virginia sun-cured tobacco (type 37); Cigar filler (type 46); and Cigar-filler and binder tobacco (types 42, 43, 44, 54, and 55) as classified by the Agricultural Marketing Service at part 30 of this title.</P>
                <P>
                  <E T="03">Tobacco available for marketing.</E> All tobacco produced on a farm which has not been marketed and which has not been disposed of so that it cannot be marketed.</P>
                <P>
                  <E T="03">Tobacco in the form not normally marketed by producers.</E> Tobacco leaves, stems, strips, scrap or parts thereof that are the result of green tobacco having been redried, stemmed, tipped, threshed or otherwise processed.</P>
                <P>
                  <E T="03">Tobacco pickings.</E> The residue which accumulates in the course of processing tobacco prior to the redrying of such tobacco, consisting of scrap, stems, portions of leaves, and leaves of poor quality shall be considered to be tobacco in the form not normally marketed by producers.</P>
                <P>
                  <E T="03">Trucker.</E> A person who trucks, or who otherwise hauls tobacco for a producer, or for any other person.</P>
                <P>
                  <E T="03">Undermarketings.</E> For burley or flue-cured tobacco, the actual undermarketings are the pounds by which the effective farm marketing quota is more than the pounds of the respective kind of tobacco marketed, and the effective undermarketings are the smaller of actual undermarketings or the sum of the previous year's farm marketing quota plus pounds of quota temporarily transferred to the farm for the previous year. However, with respect to the 1989 crop, actual undermarketings are the number of pounds by which the effective farm marketing quota is more than the sum of the number of pounds of tobacco marketed and number of <PRTPAGE P="94"/>pounds for which a disaster payment was made on the 1989 crop of tobacco under part 1477 of this title.</P>
                <P>
                  <E T="03">Warehouse operator.</E> A person who engages in the business of conducting a sale of tobacco at public auction.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 56 FR 21441, May 9, 1991; 57 FR 43581, Sept. 21, 1992; 63 FR 11582, Mar. 10, 1998]</CITA>
                <EDNOTE>
                  <HD SOURCE="HED">Editorial Note:</HD>

                  <P>At 65 FR 7953, § 723.104(h) was amended by removing the definition of <E T="03">Tillable cropland.</E> However, there is no paragraph (h) in § 723.104.</P>
                </EDNOTE>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.105</SECTNO>
                <SUBJECT>Extent of determinations, computations, and rule for rounding fractions.</SUBJECT>
                <P>(a) <E T="03">General.</E> All rounding herein shall be in accordance with the provisions of part 793 of this chapter.</P>
                <P>(b) <E T="03">Allotments.</E> Farm acreage allotments shall be determined in hundredths of acres.</P>
                <P>(c) <E T="03">Percent excess.</E> The percentage of excess tobacco available for marketing from a farm, hereinafter referred to as the “percent excess,” shall be determined in tenths of a percent.</P>
                <P>(d) <E T="03">Converted rate of penalty.</E> For tobacco other than burley or flue-cured, the amount of penalty per pound upon marketings of tobacco subject to penalty, hereinafter referred to as the “converted rate of penalty,” shall be determined in tenths of a cent.</P>
                <P>(e) <E T="03">Percentage reduction for violation.</E> A percentage of reduction in an allotment due to a violation shall be determined in tenths of a percent.</P>
                <P>(f) <E T="03">Yields and quotas.</E> Yields and quotas shall be determined in whole pounds.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.106</SECTNO>
                <SUBJECT>Location of farm for administrative purposes.</SUBJECT>
                <P>The location of a farm in a county for administrative purposes shall be as provided in part 718 of this chapter.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§§ 723.107-723.110</SECTNO>
                <RESERVED>[Reserved]</RESERVED>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.111</SECTNO>
                <SUBJECT>Flue-cured (types 11-14) tobacco.</SUBJECT>
                <P>(a) The 1993-crop national marketing quota is 891.8 million pounds.</P>
                <P>(b) The 1994-crop national marketing quota is 802.6 million pounds.</P>
                <P>(c) The 1995-crop national marketing quota is 934.6 million pounds.</P>
                <P>(d) The 1996-crop national marketing quota is 873.6 million pounds.</P>
                <P>(e) The 1997-crop national marketing quota is 973.8 million pounds.</P>
                <P>(f) The 1998-crop national marketing quota is 807.6 million pounds.</P>
                <P>(g) The 1999-crop national marketing quota is 666.2 million pounds.</P>
                <P>(h) The 2000 crop national marketing quota is 543.0 million pounds.</P>
                <P>(i) The 2001 crop national marketing quota is 548.9 million pounds.</P>
                <P>(j) The 2002 crop national marketing quota is 582.0 millions pounds.</P>
                <CITA>[58 FR 11962, Mar. 2, 1993, as amended at 59 FR 6866, Feb. 14, 1994; 60 FR 22460, May 8, 1995; 61 FR 37673, July 19, 1996; 62 FR 24800, May 7, 1997; 63 FR 55938, Oct. 20, 1998; 64 FR 66718, Nov. 30, 1999; 68 FR 34779, June 11, 2003]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.112</SECTNO>
                <SUBJECT>Burley (type 31) tobacco.</SUBJECT>
                <P>(a) The 1993-crop national marketing quota is 603.0 million pounds.</P>
                <P>(b) The 1994-crop national marketing quota is 542.7 million pounds.</P>
                <P>(c) The 1995-crop national marketing quota is 549.0 million pounds.</P>
                <P>(d) The 1996-crop national marketing quota is 633.8 million pounds.</P>
                <P>(e) The 1997-crop national marketing quota is 704.5 million pounds.</P>
                <P>(f) The 1998-crop national marketing quota is 637.8 million pounds.</P>
                <P>(g) [Reserved]</P>
                <P>(h) The 2000-crop national marketing quota is 247.4 million pounds.</P>
                <CITA>[58 FR 36859, July 9, 1993, as amended at 59 FR 22725, May 3, 1994; 60 FR 27868, May 26, 1995; 61 FR 50425, Sept. 26, 1996; 62 FR 30230, June 3, 1997; 63 FR 55940, Oct. 20, 1998; 65 78407, Dec. 15, 2000]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.113</SECTNO>
                <SUBJECT>Fire-cured (type 21) tobacco.</SUBJECT>
                <P>(a) The 1993-crop national marketing quota is 1.975 million pounds.</P>
                <P>(b) The 1994-crop national marketing quota is 2.15 million pounds.</P>
                <P>(c) The 1995-crop national marketing quota is 1.95 million pounds.</P>
                <P>(d) The 1996-crop national marketing quota is 1.97 million pounds.</P>
                <P>(e) The 1997-crop national marketing quota is 2.395 million pounds.</P>
                <P>(f) The 1998-crop national marketing quota is 2.725 million pounds.</P>

                <P>(g) The 1999-crop national marketing quota is 2.6 million pounds.<PRTPAGE P="95"/>
                </P>
                <P>(h) The 2000-crop national marketing quota is 2.138 million pounds.</P>
                <CITA>[58 FR 36857, July 9, 1993, as amended at 59 FR 27220, May 26, 1994; 60 FR 38234, July 26, 1995; 61 FR 63702, Dec. 2, 1996; 62 FR 43922, Aug. 18, 1997; 64 FR 15295, Mar. 31, 1999; 65 FR 41556, July 6, 2000; 65 FR 64594, Oct. 30, 2000]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.114</SECTNO>
                <SUBJECT>Fire-cured (types 22-23) tobacco.</SUBJECT>
                <P>(a) The 1993-crop national marketing quota is 38.2 million pounds.</P>
                <P>(b) The 1994-crop national marketing quota is 40.4 million pounds.</P>
                <P>(c) The 1995-crop national marketing quota is 39.8 million pounds.</P>
                <P>(d) The 1996-crop national marketing quota is 40.6 million pounds.</P>
                <P>(e) The 1997-crop national marketing quota is 43.4 million pounds.</P>
                <P>(f) The 1998-crop national marketing quota is 44.6 million pounds.</P>
                <P>(g) The 1999-crop national marketing quota is 41.4 million pounds.</P>
                <P>(h) The 2000-crop national marketing quota is 42.9 million pounds.</P>
                <CITA>[58 FR 36857, July 9, 1993, as amended at 59 FR 27220, May 26, 1994; 60 FR 38234, July 26, 1995; 61 FR 63702, Dec. 2, 1996; 62 FR 43922, Aug. 18, 1997; 64 FR 15295, Mar. 31, 1999; 65 FR 41556, July 6, 2000; 65 FR 64594, Oct. 30, 2000]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.115</SECTNO>
                <SUBJECT>Dark air-cured (types 35-36) tobacco.</SUBJECT>
                <P>(a) The 1993-crop national marketing quota is 11.16 million pounds.</P>
                <P>(b) The 1994-crop national marketing quota is 10.6 million pounds.</P>
                <P>(c) The 1995-crop national marketing quota is 9.6 million pounds.</P>
                <P>(d) The 1996-crop national marketing quota is 9.2 million pounds.</P>
                <P>(e) The 1997-crop national marketing quota is 9.88 million pounds.</P>
                <P>(f) The 1998-crop national marketing quota is 11.15 million pounds.</P>
                <P>(g) The 1999-crop national marketing quota is 12.8 million pounds.</P>
                <P>(h) The 2000-crop national marketing quota is 12.75 million pounds.</P>
                <CITA>[58 FR 36857, July 9, 1993, as amended at 59 FR 27220, May 26, 1994; 60 FR 38234, July 26, 1995; 61 FR 63702, Dec. 2, 1996; 62 FR 43922, Aug. 18, 1997; 64 FR 15295, Mar. 31, 1999; 65 FR 41556, July 6, 2000; 65 FR 64594, Oct. 30, 2000]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.116</SECTNO>
                <SUBJECT>Sun-cured (type 37) tobacco.</SUBJECT>
                <P>(a) The 1993-crop national marketing factor is 128,000 pounds.</P>
                <P>(b) The 1994-crop national marketing quota is 131,000 pounds.</P>
                <P>(c) The 1995-crop national marketing quota is 130,000 pounds.</P>
                <P>(d) The 1996-crop national marketing quota is 148,000 pounds.</P>
                <P>(e) The 1997-crop national marketing quota is 156,400 pounds.</P>
                <P>(f) The 1998-crop national marketing quota is 163,000 pounds.</P>
                <P>(g) The 1999-crop national marketing quota is 171,000 pounds.</P>
                <P>(h) The 2000-crop national marketing quota is 171,000 pounds.</P>
                <CITA>[58 FR 36857, July 9, 1993, as amended at 59 FR 27220, May 26, 1994; 60 FR 38234, July 26, 1995; 61 FR 63702, Dec. 2, 1996; 62 FR 43922, Aug. 18, 1997; 64 FR 15295, Mar. 31, 1999; 65 FR 41556, July 6, 2000; 65 FR 64594, Oct. 30, 2000]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.117</SECTNO>
                <SUBJECT>Cigar-filler and binder (types 42-44 and 53-55) tobacco.</SUBJECT>
                <P>(a) The 1993-crop national marketing quota is 14 million pounds.</P>
                <P>(b) The 1994-crop national marketing quota is 9.3 million pounds.</P>
                <P>(c) The 1995-crop national marketing quota is 9.0 million pounds.</P>
                <P>(d) The 1996-crop national marketing quota is 8.9 million pounds.</P>
                <P>(e) The 1997-crop national marketing quota is 8.4 million pounds.</P>
                <P>(f) The 1998-crop national marketing quota is 6.63 million pounds.</P>
                <P>(g) The 1999-crop national marketing quota is 4.5 million pounds.</P>
                <P>(h) The 2000-crop national marketing quota is 3.64 million pounds.</P>
                <CITA>[58 FR 36857, July 9, 1993, as amended at 59 FR 27220, May 26, 1994; 60 FR 38234, July 26, 1995; 61 FR 63702, Dec. 2, 1996; 62 FR 43922, Aug. 18, 1997; 64 FR 15295, Mar. 31, 1999; 65 FR 41556, July 6, 2000; 65 FR 64594, Oct. 30, 2000]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.118</SECTNO>
                <SUBJECT>Cigar-filler (type 46) tobacco.</SUBJECT>
                <P>(a) The 1993-crop national marketing quota is zero pounds.</P>
                <P>(b) The 1994-crop national marketing quota is zero pounds.</P>
                <P>(c) The 1995-crop national marketing quota is 0.0 million pounds.</P>
                <P>(d) There shall be no national or individual marketing quotas for the 1996 and subsequent marketing years for this type (46).</P>
                <CITA>[58 FR 36857, July 9, 1993, as amended at 59 FR 27220, May 26, 1994; 60 FR 38234, July 26, 1995; 61 FR 63702, Dec. 2, 1996]</CITA>
              </SECTION>
              <SECTION>
                <PRTPAGE P="96"/>
                <SECTNO>§§ 723.119-723.121</SECTNO>
                <RESERVED>[Reserved]</RESERVED>
              </SECTION>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart B—Allotments, Quotas, Yields, Transfers, Release and Reapportionment, History Acreages, and Forfeitures</HD>
              <SECTION>
                <SECTNO>§ 723.201</SECTNO>
                <SUBJECT>Determination of preliminary farm acreage allotments and preliminary farm marketing quotas.</SUBJECT>
                <P>(a) <E T="03">Flue-cured tobacco.</E> A preliminary farm acreage allotment shall be determined for the current year for each farm which has flue-cured tobacco history acreage for the base period. The preliminary farm acreage allotment shall be the same as the farm acreage allotment established for the preceding year.</P>
                <P>(b) <E T="03">Burley tobacco.</E> The preceding year's farm marketing quota shall be the current year's preliminary farm marketing quota for each old farm except that the preliminary farm marketing quota shall be zero if:</P>
                <P>(1) The farm or all of cropland has gone out of agricultural production and eminent domain procedure of part 718 of this chapter does not apply.</P>
                <P>(2) Quota that was pooled under the provisions of part 718 of this chapter has been canceled.</P>
                <P>(3) A new farm quota that was established in a prior year is canceled.</P>
                <P>(4) There was no acreage of burley tobacco planted or considered planted for any year of the base period.</P>
                <P>(5) All the cropland on the farm has been determined by the county FSA committee to be no longer suitable for the production of a crop and provisions of part 704 of this chapter do not apply.</P>
                <P>(6) Beginning with the 1994 crop year there was no acreage of burley tobacco planted or considered planted in 2 out of the 3 immediate preceding years.</P>
                <P>(c) <E T="03">Kinds of tobacco other than flue-cured and burley.</E> A preliminary farm acreage allotment shall be determined for each farm which has tobacco history acreage, as established under paragraph § 723.218 of this part in the base period. If the history acreage for the previous year is the same as the basic allotment, the preliminary allotment shall be the same as the previous year's basic allotment. Otherwise, the preliminary allotment shall be the simple average of the sum of the basic allotment and history acreage for the preceding year.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 56 FR 21441, May 9, 1991]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.202</SECTNO>
                <SUBJECT>Determining farm acreage allotment, except for flue-cured tobacco.</SUBJECT>
                <P>With respect to each kind of tobacco, the preliminary allotments determined for all old farms shall be adjusted uniformly so that the total of such allotments for old farms plus the reserve acreage available for establishing new farm allotments, adjusting inequities in acreage allotments for old farms, and for correcting errors in old farm allotments shall not exceed the national acreage allotment established for such kind of tobacco.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.203</SECTNO>
                <SUBJECT>Determination of flue-cured tobacco preliminary farm yields.</SUBJECT>
                <P>(a) <E T="03">Old farms.</E> The preliminary farm yield for a flue-cured tobacco old farm for the current year shall be determined as follows:</P>
                <P>(1) <E T="03">Farm having preliminary farm acreage allotment.</E> The preliminary farm yield established for the farm shall be the same preliminary farm yield as was in effect for the preceding year.</P>
                <P>(2) <E T="03">Farm not having preliminary farm acreage allotment.</E> The preliminary farm yield shall be determined by dividing the farm yield by the national yield factor.</P>
                <P>(b) <E T="03">New Farms.</E> The preliminary farm yield for a new farm shall be determined by dividing the farm yield determined in accordance with § 723.204 of this part for such farm by the national yield factor applicable for the year in which the new farm allotment was established.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.204</SECTNO>
                <SUBJECT>Determination of farm yields and normal yields.</SUBJECT>
                <P>(a) <E T="03">Flue-cured tobacco.</E> The farm yield for an old farm shall be determined by multiplying the preliminary farm yield, if the farm has such a yield, by the national yield factor for the current year. The farm yield for new farms and old farms that do not have a preliminary yield shall be that yield, which the county FSA committee determines for the farm taking into consideration:<PRTPAGE P="97"/>
                </P>
                <P>(1) The soil and other physical factors affecting the production of tobacco on the farm, and</P>
                <P>(2) The farm yields determined for other farms on which the soil and other physical factors affecting the production of tobacco are similar.</P>
                <P>(b) <E T="03">Burley tobacco.</E> The farm yield for a farm on which a farm yield has been established shall be the same in the current year as the farm yield previously established for the farm. For any farm not having a previously established yield, the county FSA committee shall establish a yield based on similar farms having a farm yield; however, such yield shall not exceed 3500 pounds.</P>
                <P>(c) <E T="03">All kinds of tobacco except burley and flue-cured.</E> The normal yield for a farm shall be that yield which the county FSA committee determines is normal for the farm taking into consideration the yields obtained on the farm during any of the years of the base period for which data are available, the soil and other physical factors affecting the production of tobacco on the farm, and the yields obtained on other farms in the locality which are similar with respect to such factors. The normal yield first determined for a farm for any year in accordance with the foregoing provision shall serve as the normal yield for the farm for all purposes in connection with the tobacco marketing program for the year for which such normal yield is determined.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.205</SECTNO>
                <SUBJECT>Determination of farm acreage allotments and effective farm acreage allotments for flue-cured tobacco.</SUBJECT>
                <P>(a) <E T="03">Farm acreage allotments.</E> The farm acreage allotment shall be determined by multiplying the national acreage factor as determined by the Secretary for the current year by the preliminary farm acreage allotment for the current year and adjusting the result by:</P>
                <P>(1) <E T="03">Upward adjustment.</E> Adding the:</P>
                <P>(i) Acreage approved in accordance with the provisions of § 723.210 of this part in order to adjust for an inequity or to correct an error;</P>
                <P>(ii) Acreage determined by dividing the pounds of quota which are purchased in the current year by the farm yield; and</P>
                <P>(iii) Acreage determined by dividing the pounds of forfeited quota which are approved for adjustment from the forfeiture pool by the farm yield.</P>
                <P>(2) <E T="03">Downward Adjustment.</E> Subtracting the:</P>
                <P>(i) Acreage determined by dividing the pounds of quota sold in the current year by the farm yield; and</P>
                <P>(ii) Acreage of forfeited allotment.</P>
                <P>(b) <E T="03">Effective farm acreage allotment.</E> The effective farm acreage allotment for the current year shall be determined by dividing by the effective farm marketing quota by the farm yield.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.206</SECTNO>
                <SUBJECT>Determining farm marketing quotas and effective farm marketing quotas.</SUBJECT>
                <P>(a) <E T="03">Burley tobacco.</E> The burley farm marketing quota shall be determined by multiplying the national factor as determined by the Secretary for the current year by the preliminary farm marketing quota for the current year and adjusting the result for permanent quota adjustments.</P>
                <P>(b) <E T="03">Flue-cured tobacco.</E> The flue-cured farm marketing quota shall be determined by multiplying the farm acreage allotment by the farm yield.</P>
                <P>(c) <E T="03">Burley or flue-cured tobacco.</E> The effective farm marketing quota shall be the farm marketing quota adjusted by:</P>
                <P>(1) <E T="03">Upward adjustments.</E> Adding the:</P>
                <P>(i) Effective under marketings from the preceding marketing year, but effective for the 2002 and subsequent marketing years, the aggregate amount for all farms of under marketings of burley tobacco for all farms that can be carried over shall be limited to 10 percent of the national basic quota of the preceding year. If needed, factoring will be undertaken to insure that the limit of the preceding sentence is not exceeded.</P>
                <P>(ii) The pounds of quota which are temporarily transferred to the farm in the current year.</P>
                <P>(2) <E T="03">Downward adjustments.</E> Subtracting the pounds of quota that are:</P>
                <P>(i) Overmarketed from the preceding marketing year,</P>

                <P>(ii) Overmarketed from any year before the preceding year but have not been subtracted when determining the <PRTPAGE P="98"/>effective farm marketing quota in a prior year.</P>
                <P>(iii) Temporarily transferred from the farm in the current year.</P>
                <P>(iv) Reduced in the current year as a result of a violation in a prior year as provided for in § 723.408 of this part.</P>
                <P>(v) [Reserved]</P>
                <P>(vi) Determined, for flue-cured tobacco only, by multiplying the farm yield by the acres reduced from the flue-cured tobacco acreage allotment during the current year in accordance with part 704 of this chapter.</P>
                <P>(vii) For burley tobacco only, designated for reduction under a Conservation Reserve Program contract in accordance with part 704 of this chapter.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 66 FR 53509, Oct. 23, 2001; 66 FR 59675, Nov. 30, 2001]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.207</SECTNO>
                <SUBJECT>Determination of acreage allotments or burley marketing quotas for new farms.</SUBJECT>
                <P>(a)(1) <E T="03">All kinds of tobacco.</E> The acreage allotment or burley marketing quota established in any crop year for all new farms shall not exceed the national acreage or poundage, as applicable, reserved for new farms for the respective kind of tobacco. The acreage allotment or burley marketing quota for a new farm shall be that acreage or burley marketing quota which the county FSA committee, with the approval of the State FSA committee, determines is fair and reasonable for the farm, taking into consideration the past tobacco experience of the farm operator; the land, labor, and equipment available for the production of tobacco; crop rotation practices; and the soil and other physical factors affecting the production of tobacco. Such acreage allotments or burley marketing quota shall not exceed 50 percent (75 percent for Cigar-filler and Binder tobacco) of the average of the applicable acreage allotments or burley marketing quotas established for at least two but not more than five old farms which are similar with respect to land, labor; and equipment available for the production of tobacco; crop rotation practices; and the soil and other physical factors affecting the production of tobacco; and with respect to flue-cured tobacco acreage allotments, shall not exceed one acre.</P>
                <P>(2) <E T="03">Kinds of tobacco, except burley and flue-cured.</E> If the acreage planted to tobacco on a new tobacco farm is less than 75 percent of the tobacco acreage allotment otherwise established for the farm pursuant to this section, such allotment shall be automatically reduced to the sum of the tobacco planted acreage and the prevented planted tobacco acreage as determined under part 718 of this chapter for the farm.</P>
                <P>(b)(1) <E T="03">Written application.</E> The farm operator must file an application for a new farm acreage allotment or marketing quota at the office of the county FSA committee where the farm is administratively located on or before February 15 of the year for which the new farm acreage allotment or marketing quota is requested.</P>
                <P>(2) <E T="03">Operator requirements.</E> The operator requesting a new farm acreage allotment or marketing quota must be the sole owner of the farm, except for Cigar-filler and Binder tobacco, the operator need not own the farm. The farm operator shall not own or have an ownership interest in or operate any other farm in the United States for which a tobacco allotment or quota for any kind of tobacco is established for the current year.</P>
                <P>(3) <E T="03">Availability of equipment and facilities.</E> The operator must own, or have readily available, adequate equipment and any other facilities of production necessary to the production of tobacco on the farm.</P>
                <P>(4)(i) <E T="03">Income from farming.</E> The operator must expect to obtain during the current year more than 50 percent of the producer's income from the production of agricultural commodities or products. The following shall be considered in computing the operator's income:</P>
                <P>(A) <E T="03">Farm income.</E> Income from farming shall include the estimated return from home gardens, livestock and livestock products, poultry, or other agricultural products produced for home consumption or other use on the farm(s). The estimated return from the production of the requested new farm allotment or quota shall not be included.<PRTPAGE P="99"/>
                </P>
                <P>(B) <E T="03">Non-farm income.</E> Non-farming income shall include but not limited to salaries, commissions, pensions, social security payments, and unemployment compensation.</P>
                <P>(C) <E T="03">Spousal income.</E> The spouse's farm and non-farm income shall be included in the computation.</P>
                <P>(ii) <E T="03">Operator a partnership.</E> If the operator is a partnership, each partner must expect to obtain more than 50 percent of their current year income from farming.</P>
                <P>(iii) <E T="03">Operator a corporation.</E> If the operator is a corporation, it must have no other major corporate purpose other than ownership or operation of the farm(s). Farming must provide its officers and general manager with more than 50 percent of their expected income. Salaries and dividends from the corporation shall be considered as income from farming.</P>
                <P>(iv) <E T="03">Special provisions for low-income farmers.</E> The county FSA committee may waive the income provisions in this section provided they determine that the farm operator's income, from both farm and non-farm sources is so low that it will not provide a reasonable standard of living for the operator and the operator's family, and a State FSA committee representative approves such action. In making their determination, the county FSA committee shall consider such factors as size and type of farming operations, estimated net worth, estimated gross family income, estimated family off-farm income, number of dependents, and other factors affecting the individual's ability to provide a reasonable standard of living.</P>
                <P>(5) <E T="03">Experience.</E> The operator must have had experience in producing, harvesting, and marketing the kind of tobacco requested. Such experience must have been gained by being a sharecropper, tenant, or farm operator (bona fide tobacco production experience gained by a person as a member of a partnership shall be accepted as experience gained in meeting this requirement) during at least 2 of the 5 years immediately preceding the year for which the new farm allotment is requested. The experience must have been gained on a farm having a tobacco allotment for such years for the kind of tobacco requested in the application. However, for Cigar-filler and binder tobacco only, the operator must have experience in any prior year in the production of tobacco as a farm owner, farm operator, sharecropper, tenant, warehouse operator, or laborer on a farm which produced Cigar-filler and binder tobacco.</P>
                <P>(6) <E T="03">Operator has not sold or forfeited allotment.</E> For flue-cured tobacco only, during the current or the 4 preceding years, the operator must not have sold or forfeited any flue-cured tobacco allotment from any farm.</P>
                <P>(c) <E T="03">Eligibility requirements for the farm.</E> A new farm acreage allotment or marketing quota may be established if each of the following conditions is met:</P>
                <P>(1) <E T="03">Current allotment or quota.</E> The farm must not have on the date of approval of a new farm acreage allotment, an allotment or quota for any kind of tobacco.</P>
                <P>(2) <E T="03">Availability of land, type of soil, and topography.</E> The available land, type of soil, and topography of the land on the farm must be suitable for tobacco production. Also, continuous production of tobacco must not result in an undue erosion hazard.</P>
                <P>(3) <E T="03">Eminent domain acquisition.</E> A farm which includes land acquired by an agency having the right of eminent domain for which the entire tobacco allotment was pooled pursuant to part 718 of this chapter, which is subsequently returned to agricultural production shall not be eligible for a new farm allotment or marketing quota for a period of 5 years from the date the former owner was displaced.</P>
                <P>(4) <E T="03">Farm includes land previously having a tobacco acreage allotment.</E> A farm which includes land which has no tobacco allotment because the owner did not designate an allotment for such land when the parent farm was reconstituted pursuant to part 718 of this chapter shall not be eligible for a new farm acreage allotment for a period of 5 years beginning with the year in which the reconstitution became effective.</P>
                <P>(5) <E T="03">Entire quota sold.</E> A new farm tobacco acreage allotment may not be established for a farm if, during the current year or the 4 preceding years, the farm was constituted as any part of a <PRTPAGE P="100"/>farm for which an acreage allotment or marketing quota had been established and for which the current or a former owner sold or permanently transferred all of the tobacco acreage allotment or marketing quota.</P>
                <P>(d) <E T="03">False information.</E> Any new farm acreage allotment or marketing quota which was determined by the county FSA committee on the basis of incomplete or inaccurate information knowingly furnished by the applicant, shall be canceled by the county FSA committee as of the date the allotment or quota was established. When incomplete or inaccurate information was unknowingly furnished by the applicant, the allotment or quota shall be canceled effective for the current crop year.</P>
                <P>(e) <E T="03">Failure to plant.</E> A new farm acreage allotment or marketing quota shall be reduced to zero if no tobacco is planted on the farm the first year.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.208</SECTNO>
                <SUBJECT>Determination of acreage allotments, marketing quotas, and yields for divided farms.</SUBJECT>
                <P>(a) <E T="03">Flue-cured tobacco.</E> The farm acreage allotment for the divided farm shall be divided pursuant to the provisions of part 718 of this chapter. History acreages and other basic data shall be apportioned among the divided tracts as provided in part 718 of this chapter.</P>
                <P>(b) <E T="03">Burley tobacco.</E> (1) <E T="03">Division of farm marketing quota.</E> The farm marketing quota for the divided farm shall be divided according to part 718 of this chapter. Other basic data shall be apportioned among the resulting farms in the same proportion as the farm marketing quota.</P>
                <P>(2) <E T="03">Divided burley tobacco farms with less than 1,000 pounds of quota.</E> If a farm is divided through reconstitution and the burley tobacco poundage quota which transfers with the resulting farms receive less than 1,000 pounds of quota, the owners of such farms shall take action by July 1 of the current crop year to increase the quota to a minimum of 1,000 pounds or the quota shall be reduced to zero. The quota on the divided farms may be increased by:</P>
                <P>(i) Combining the farm having less than 1,000 pounds with other land owned by the same person so that the combined farm has a minimum of 1,000 pounds of farm marketing quota, or</P>
                <P>(ii) Purchasing a sufficient amount of quota so that the farm has at least 1,000 pounds of quota.</P>
                <P>(3) <E T="03">Sale of Quota.</E> If the owners of the divided farms fail to increase the quota on such farms to a minimum of 1,000 pounds as provided in paragraph (b)(2), the owner must sell the quota by July 1 of the current crop year.</P>
                <P>(4) <E T="03">Effective Quota.</E> For the current crop year, the effective farm marketing quota on the divided farms shall be considered to be zero for leasing and planting purposes until the farm complies with the 1,000 pound minimum quota.</P>
                <P>(5) <E T="03">Reduction of Quota.</E> The county FSA committee shall reduce the quota to zero on the divided farms if the owners of such farms fail to take action as provided in paragraph (b)(2) and (3) of this section.</P>
                <P>(6) <E T="03">Farm Exemptions.</E> Farms exempt from the 1,000 pound minimum quota limitation are farm divisions:</P>
                <P>(i) among immediate family members,</P>
                <P>(ii) through probate or,</P>
                <P>(iii) when no sale or change in ownership of land occurs or,</P>
                <P>(iv) when the buyer and purchaser can furnish proof acceptable to the county FSA committee, in accordance with guidelines provided by the Deputy Administrator, that the transaction was finalized prior to November 15, 1990.</P>
                <P>(v) when the individual tract or farm with less than 1,000 pounds of quota could be combined with another tract or farm with sufficient quota to reach 1,000 pounds but for the existence of a production flexibility contract on one of the farms.</P>
                <P>(c) <E T="03">Burley and flue-cured tobacco.</E> (1) <E T="03">Tract yield.</E> The tract yield for the tracts divided from a parent farm shall be the same as the tract yield established for the tracts before the division of the parent farm. If a tract is divided, the tract yields for the resulting tracts shall be the same as the tract yield established for the tract before it was divided.</P>
                <P>(2) <E T="03">Single tract farm.</E> If a tract that is divided from a parent farm becomes a single tract farm, the tract yield shall <PRTPAGE P="101"/>become the preliminary farm yield and the farm yield for the farm shall be determined by multiplying the preliminary farm yield by the national yield factor for the current year.</P>
                <P>(3) <E T="03">Carryover tobacco.</E> Where carryover tobacco produced on a parent farm is marketed after the effective date of a reconstitution, such marketings shall be charged to the divided tracts in the same ratio as the marketing quotas are established for the divided tracts or as the county FSA committee determines that:</P>
                <P>(i) The proceeds from such marketings are received by the owner or operator of one or more of the divided tracts, or</P>
                <P>(ii) The owners of the divided tracts agree.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 56 FR 21441, May 9, 1991; 62 FR 15600, Apr. 2, 1997]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.209</SECTNO>
                <SUBJECT>Determination of acreage allotments, marketing quotas, yields for combined farms; and special tobacco combinations.</SUBJECT>
                <P>(a) <E T="03">Burley tobacco.</E> The farm yield for a combined burley farm shall be the weighted average of the tract yields for the tracts being combined. The weighted average shall be the summation of the extensions of each respective tract's contribution percentage times the tract's yield.</P>
                <P>(b) <E T="03">Flue-cured tobacco.</E> Flue-cured farm acreage allotments, history acreages, and other basic data for combined farms shall be computed for the base period in accordance with part 718 of this chapter, except that the preliminary farm yield for a combined farm shall be the weighted average of the tract yields for the tracts that comprise the combination. The weighted average shall be the summation of the extensions of each respective tract's contribution percentage times the tract's yield. The farm yield for the combined farm shall be determined by multiplying the preliminary farm yield for the combined farm by the national yield factor for the current year.</P>
                <P>(c) <E T="03">Special tobacco combinations.</E> Notwithstanding other provision of this title, the Deputy Administrator may, upon proper application and to the extent deemed consistent with other obligations, permit farms, with respect to tobacco allotments and tobacco quotas, to be considered combined for purposes of this part and part 1464 of this title only without being combined for other purposes. This allowance shall apply for tobacco of all kinds and types and with respect to all farms even if one or more of the farms to be combined is the subject of a production flexibility contract (PFC) executed in connection with the program operated under the provisions of 7 CFR part 1412. Such special, limited combinations must otherwise meet the requirements of 7 CFR part 718 for combinations, except the signature (consent) requirements of § 718.201(a)(2) of that part. The Deputy Administrator may set such consent requirements for special farm combinations under this section as the Deputy Administrator believes necessary or appropriate. Further, in any case in which one of the farms is a PFC farm, none of the land on any PFC farm that would have been used for the production of tobacco can be used for the production of a “PFC commodity” as defined in this section. Such permission shall be conditioned upon the agreement of all interested parties that land on the PFC allotment or quota farm that would have been used for the production of tobacco shall not be used for the production of any PFC commodity. In the event that such production nonetheless occurs, the special tobacco combination may be made void, retroactive to the date of original approval. Such curative action will likely result in a finding of excess tobacco plantings and sanctions and remedies, which would likely include liability for penalties and other sanctions for excess marketings of tobacco. The Deputy Administrator may set such other conditions on the combinations as needed or deemed appropriate to serve the goals of the tobacco program and the goals of the PFC. The term <E T="03">PFC commodity</E> for purposes of this section means wheat, corn, grain sorghum, barley, oats, upland cotton, and rice.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 62 FR 15600, Apr. 2, 1997; 63 FR 9128, Feb. 24, 1998; 63 FR 26714, May 14, 1998]</CITA>
              </SECTION>
              <SECTION>
                <PRTPAGE P="102"/>
                <SECTNO>§ 723.210</SECTNO>
                <SUBJECT>Corrections of errors and adjusting inequities in acreage allotments and marketing quotas for old farms.</SUBJECT>
                <P>(a)(1) <E T="03">General.</E> The allotment or quota for a farm under a long-term land use program agreement shall be given the same consideration under this section as the allotment or quota for any other old farm. Notwithstanding the limitations contained in any other section of this part, the farm acreage allotment or marketing quota for each kind of tobacco established for an old farm may be increased to correct an error or adjust an inequity if the county FSA committee determines, with the approval of a representative of the State FSA committee, that the increase is necessary to establish an allotment or quota for such farm which is fair and equitable in relation to the allotment or quota for other old farms in the county in which the farm is located. Correction of errors shall be made out of that portion of the national reserve held at the national level.</P>
                <P>(2) <E T="03">Burley tobacco.</E> The reserve for adjusting inequities under this paragraph will be prorated to States based on the relationship of the total of the preliminary farm marketing quotas in each State to the national total of preliminary farm marketing quotas.</P>
                <P>(3) <E T="03">All kinds of tobacco except burley tobacco.</E> The reserve for adjusting inequities under this paragraph will be prorated to States based on the relationship of the total preliminary farm acreage allotments in each State to the national total of preliminary farm acreage allotments.</P>
                <P>(b) <E T="03">Basis for adjustment.</E> Increases to adjust inequities in acreage allotments or marketing quotas shall be made on the basis of the past farm acreage, yields, and farm acreage allotments of tobacco, making due allowances for failed acreage and acreage prevented from being planted because of a natural disaster as determined under part 718 of this chapter; land, labor, and equipment available for the production of tobacco; crop rotation practices; and the soil and other physical factors affecting the production of tobacco. The total of all adjustments in old farm allotments or quotas under this paragraph shall not exceed the pounds apportioned to the county for such purpose.</P>
                <P>(c)(1) <E T="03">Burley tobacco.</E> Adjustments in a farm marketing quota under this paragraph shall become a part of the farm marketing quota.</P>
                <P>(2) <E T="03">Flue-cured tobacco.</E> Acreage apportioned to a farm under this section becomes a part of the farm acreage allotment. The farm marketing quota for such a farm shall be adjusted by multiplying the adjusted farm acreage allotment by the farm yield.</P>
                <P>(3) <E T="03">All other kinds of tobacco.</E> For all other kinds of tobacco, acreage approved for a farm under this section becomes a part of the farm acreage allotment.</P>
                <P>(d) <E T="03">Making certain adjustments on a common ownership unit basis.</E> Notwithstanding other provisions of this section, inequity adjustments may be allotted by common ownership unit rather than by farm when it is determined by the county FSA committee that the making of the allocation on that basis provides greater equity.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 63 FR 11582, Mar. 10, 1998]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.211</SECTNO>
                <SUBJECT>Allotments, quotas, and yields for farms acquired under right of eminent domain.</SUBJECT>
                <P>(a) <E T="03">Determination of acreage allotments and marketing quotas.</E> The determination of farm acreage allotments and marketing quotas for farms acquired by an agency having the right of eminent domain, the transfer of such allotments or quotas to a pool, and reallocation from the pool shall be administered as provided in part 718 of this chapter. Where all or a part of an allotment or quota is pooled, all or a proportionate part of the farm acreage allotment or marketing quota shall be pooled.</P>
                <P>(b) <E T="03">Closing dates.</E> The State FSA committee shall establish, in accordance with instructions issued by the Deputy Administrator, a final date for:</P>
                <P>(1) <E T="03">Release.</E> Releasing pooled farm acreage allotment or farm marketing quota to the county FSA committee for reapportionment to other farms in the county having allotments or quotas for the same kinds of tobacco.</P>
                <P>(2) <E T="03">Request for reapportionment.</E> Filing a request to receive reapportioned <PRTPAGE P="103"/>acreage or quota from the county FSA committee for the current year.</P>
                <P>(c) <E T="03">Displaced owner release.</E> The displaced owner of a farm may, not later than the final release date established by the State FSA committee for the current year, release in writing to the county FSA committee for the current year, all or any part of the acreage allotment or burley tobacco marketing quota for the farm in a pool under part 718 of this chapter for reapportionment for the current year by the county committee to other farms in the county having allotments or marketing quotas for the same kind of tobacco.</P>
                <P>(d) <E T="03">Reapportionment.</E> The county FSA committee may reapportion, not later than 30 days after the final date established by the State FSA committee for requesting reapportioned acreage or marketing quota for the current year, the released acreage or quota or any part thereof to other farms in the county on the basis of the past farm acreage or marketings and the past farm acreage allotments or quotas for the same kind of tobacco; land, labor, and equipment available for the production of such kind of tobacco; crop rotation practices; and soil and other physical factors affecting the production of such kind of tobacco.</P>
                <P>(e) <E T="03">Effect of reapportionment.</E> For purposes of establishing future farm allotments or quotas, any reapportioned allotment or quota shall not be considered as planted on the farm to which the allotment or quota was reapportioned.</P>
                <P>(f) <E T="03">Burley or flue-cured tobacco provisions.</E> For burley or flue-cured tobacco:</P>
                <P>(1) <E T="03">Farm yield.</E> The farm yield for a farm to which a pooled marketing quota is transferred shall be determined in accordance with instructions issued by the Deputy Administrator.</P>
                <P>(2) <E T="03">Undermarketings or overmarketings.</E> The undermarketings of a farm acquired by eminent domain shall be added to the marketing quota for the receiving farm and the overmarketings of the acquired farm shall be subtracted from the marketing quota of the receiving farm.</P>
                <P>(3) <E T="03">Undermarketings while in eminent domain pool.</E> The pooled quota is considered planted while in the pool. Therefore, for the purpose of determining undermarketings during the time the quota is pooled, the effective quota is considered to be zero.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.212</SECTNO>
                <SUBJECT>Time for making reduction of farm marketing quotas or acreage allotments for violation of the marketing quota or acreage allotment regulations for a prior marketing year.</SUBJECT>
                <P>Any reduction made in a farm acreage allotment or farm marketing quota for the current year for any of the reasons provided for in § 723.408 of this part, shall be made no later than April 1 of the current year in the States of Alabama, Florida, Georgia, North Carolina, South Carolina, and Virginia; or May 1 in all other States. If the reduction cannot be made by such dates for the current year, the reduction shall be made in the farm acreage allotment or farm marketing quota next established for the farm, but no later than by corresponding dates in a later year. No reduction shall be made in the farm acreage allotment or farm marketing quota for any farm for a violation if the farm acreage allotment or marketing quota for such farm for any prior year was reduced because of the same violation.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.213</SECTNO>
                <SUBJECT>Approval of acreage allotments and marketing quotas and notices to farm operators.</SUBJECT>
                <P>(a) <E T="03">Review by State FSA committee.</E> All farm yields, acreage allotments, and marketing quotas shall be determined by the county FSA committee of the county in which the farm is located and shall be reviewed by a representative of the State FSA committee.</P>
                <P>(b) <E T="03">Notice to farm operator.</E> An official notice of the effective farm acreage allotment or farm marketing quota shall be mailed to the operator of each farm shown by the records of the county FSA committee to be entitled to an allotment or quota. The notice to the operator of the farm shall constitute notice to all persons who as operator, landlord, tenant, or sharecropper are interested in the farm for which the allotment or quota is established. Insofar as practicable, all notices shall be mailed in time to be received prior to the date of any tobacco marketing <PRTPAGE P="104"/>quota or acreage allotment referendum. A copy of such notice containing the date of mailing or a printout summary of such data shall be maintained for not less than 30 days in a conspicuous place in the county FSA office and shall thereafter be kept available for public inspection in the office of the county FSA committee. A copy of the notice of acreage allotment or marketing quota certified as true and correct shall be furnished to any person interested in the farm for which the allotment or quota is established.</P>
                <P>(c) <E T="03">Marketing quota erroneous notice.</E> (1) If the official written notice of the farm acreage allotment and marketing quota issued for any farm erroneously stated an acreage allotment or marketing quota larger than the correct effective farm acreage allotment or marketing quota, the acreage allotment or marketing quota shown on the erroneous notice shall be deemed to be the tobacco acreage allotment or marketing quota for the farm for the current year only, if the county FSA committee determines (with the approval of the State Executive Director) that the:</P>
                <P>(i) Error was not so gross as to place the operator on notice thereof, and</P>
                <P>(ii) Operator, relying upon such notice and acting in good faith, materially changes the operator's position with respect to the production of the crop.</P>
                <P>(2) Undermarketings and overmarketings for farms for which the erroneous notice of marketing quota is applied shall be determined based on the correct effective farm marketing quota.</P>
                <P>(3) For purposes of determining history acreage the correct acreage allotment shall be used, in determining whether or not 75 percent of the allotment has been planted.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 63 FR 11582, Mar. 10, 1998]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.214</SECTNO>
                <SUBJECT>Application for review.</SUBJECT>
                <P>Any producer who is dissatisfied with the farm acreage allotment and marketing quota established for the producer's farm may, within 15 days after mailing of the official notice of the farm acreage allotment and marketing quota, file application in writing with the county FSA office to have such allotment and marketing quota reviewed by a review committee in accordance with part 711 of this chapter.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.215</SECTNO>
                <SUBJECT>Transfer of tobacco farm acreage allotment or farm marketing quota that cannot be planted or replanted due to a natural disaster.</SUBJECT>
                <P>(a) <E T="03">Designation of counties affected by a natural disaster.</E> The State FSA committee shall determine those counties affected by a natural disaster (including but not limited to hurricane, rain, flash flood, hail, drought, and any other severe weather) which prevents the timely planting or replanting of any of the tobacco acreage allotment or marketing quota for any farm in the county. The county FSA committee of each county affected by the determination shall publicize the determination.</P>
                <P>(b) <E T="03">Application for transfer.</E> The owner or operator of a farm in a county designated for any year under paragraph (a) of this section may file a written application for transfer of tobacco acreage with the farm acreage allotment or marketing quota for such year to another farm or farms in the same county or in any other nearby county in the same or another State if such acreage cannot be planted or replanted because of the natural disaster determined for such year. The application shall be filed with the county FSA committee for the county in which the farm affected by such disaster is located. If the application involves a transfer to a nearby county, the county FSA committee for the nearby county shall be consulted before action is taken by the county FSA committee receiving the application.</P>
                <P>(c)(1) <E T="03">Amount of burley tobacco transfer.</E> The burley quota to be transferred shall not exceed the smaller of:</P>
                <P>(i) The effective farm quota established under this part less such quota planted to tobacco and not destroyed by the natural disaster, or</P>
                <P>(ii) The quota requested to be transferred.</P>
                <P>(2) <E T="03">Amount of transfer for other than burley tobacco.</E> The allotment to be transferred shall not exceed the smaller of:<PRTPAGE P="105"/>
                </P>
                <P>(i) The farm allotment established under this part less such acreage planted to tobacco and not destroyed by the natural disaster, or</P>
                <P>(ii) The allotment requested to be transferred.</P>
                <P>(d) <E T="03">County FSA committee approval.</E> The county FSA committee shall approve the transfer if it finds that:</P>
                <P>(1) All or part of the farm acreage allotment or marketing quota for the transferring farm could not be timely planted or replanted because of the natural disaster.</P>
                <P>(2) One or more of the producers of tobacco on the transferring farm will be a bona fide producer engaged in the production of tobacco on the receiving farm and will share in the proceeds of the tobacco.</P>
                <P>(e) <E T="03">Cancellation of transfer.</E> If a transfer is approved under this section and it is later determined that the conditions in paragraph (d) of this section have not been met, the county FSA committee, or the Deputy Administrator may cancel such transfer. Action by the county FSA committee to cancel a transfer shall be subject to the approval of the State FSA committee or its representative.</P>
                <P>(f) <E T="03">Acreage history credits.</E> Any acreage transferred under this paragraph shall be considered for the purpose of determining future allotments or quotas to have been planted to tobacco on the farm from which such allotment or quota is transferred.</P>
                <P>(g) <E T="03">Closing dates.</E> The closing date for filing applications for transfers with the county FSA committee shall be July 15 of the current year. Notwithstanding such closing date requirement, the county FSA committee may accept applications filed after the closing date upon a determination by the county FSA committee that the failure to timely file an application was the result of conditions beyond the control of the applicant and a representative of the State FSA committee approves such determination.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.216</SECTNO>
                <SUBJECT>Transfer of tobacco acreage allotment or marketing quota by sale, lease, or owner.</SUBJECT>
                <P>(a) <E T="03">General.</E> The allotment or quota established for a farm may be transferred to another farm to the extent provided for in this section. For transfers by sale, common ownership units on a farm may be considered to be separate farms. Transfers are not permitted for cigar binder (types 54 and 55) tobacco allotments.</P>
                <P>(1) <E T="03">Types of transfers.</E> With respect to:</P>
                <P>(i) Cigar-filler (type 46) and cigar-filler (types 42, 43, and 44), tobacco transfers may be by lease only.</P>
                <P>(ii) Flue-cured tobacco, transfers may be by:</P>
                <P>(A) Sale, or</P>
                <P>(B) Lease under certain natural disaster conditions provided in this section.</P>
                <P>(iii) Burley tobacco, transfers may be by:</P>
                <P>(A) Lease</P>
                <P>(B) Owner, or</P>
                <P>(C) Sale.</P>
                <P>(iv) Fire-cured, dark air-cured, and Virginia sun-cured tobacco, transfers may be by:</P>
                <P>(A) Lease,</P>
                <P>(B) Owner, or</P>
                <P>(C) Sale.</P>
                <P>(2) <E T="03">Transfer agreement.</E> In order to transfer a marketing quota or allotment between two eligible farms, including a marketing quota or allotment that is pooled in accordance with part 718 of this chapter, the transfer must be recorded on Form FSA-375 and:</P>
                <P>(i) <E T="03">Where to file.</E> Filed in the county FSA office which serves the county in which the transferring farm is located for administrative purposes.</P>
                <P>(ii) <E T="03">Signature-burley tobacco.</E> Signed by, for burley tobacco only:</P>
                <P>(A) <E T="03">Leases.</E> The owner and operator of the transferring farm and the owner or operator of the receiving farm. For leases made under the disaster provisions of this section, the signature of the owner of the transferring farm will not be required if the FSA determines that the farm is cash leased for the current crop year and that the owner does not share in the crop.</P>
                <P>(B) <E T="03">Sales.</E> The owner of the selling farm and an active burley tobacco producer who is the buyer. If the buyer is neither owner nor operator of the farm to which the quota will be assigned, the owner or operator of the farm must give written consent for the quota to be assigned to the farm.<PRTPAGE P="106"/>
                </P>
                <P>(C) <E T="03">Owner transfers.</E> The owner of the transferring farm, who also must be the owner or operator of the receiving farm.</P>
                <P>(iii) <E T="03">Signature-flue-cured tobacco.</E> Signed by, for flue-cured tobacco only:</P>
                <P>(A) <E T="03">Leases.</E> The owner of the transferring farm and the owner or operator of the receiving farm. For leases made under the disaster provisions of this section, the signature of the owner of the transferring farm will not be required if the FSA determines that the farm is cash leased for the current crop year and that the owner does not share in the crop.</P>
                <P>(B) <E T="03">Sales.</E> The owner of the selling farm and an active flue-cured tobacco producer who is the buyer. If the buyer is neither owner nor operator of the farm to which allotment and quota will be assigned, the owner or operator of the farm must be given written consent for the allotment and quota to be assigned to the farm.</P>
                <P>(iv) <E T="03">Signatures—except burley and flue-cured tobacco.</E> Signed by, for all kinds of tobacco other than burley and flue-cured tobacco, the owner and operator of the transferring farm and the owner or operator of the receiving farm.</P>
                <P>(v) <E T="03">Witness.</E> Each person whose signature is required by paragraphs (a)(2)(ii), (iii), or (iv) of this section must sign Form FSA-375 in the presence of a State or county FSA committee member or employee who shall sign Form FSA-375 as a witness, except that when both the owner and the operator of a transferring farm must sign, such witness is required for the signature of either the owner or operator, but not both. If such signatures cannot be witnessed in the county FSA office where the farm is administratively located, they may be witnessed in any State or county FSA office convenient to the owner or operator's residence. The requirement that signatures be witnessed for producers that are ill, infirm, reside in distant areas, or are in similar hardship situations or may be unduly inconvenienced may be waived provided the county FSA office mails Form FSA-375 for the required signatures;</P>
                <P>(b) <E T="03">Effective date.</E> In order for the transfer to be effective for the current year, the Form FSA-375 shall be filed:</P>
                <P>(1) <E T="03">When to file—burley tobacco.</E> For burley tobacco:</P>
                <P>(i) On or before July 1 of the current year, except as provided in paragraph (b)(1)(ii) of this section. An agreement to transfer quota by lease may be considered to have been filed on July 1 of the current year if such transfer agreement is filed not later than the end of the marketing year that begins during the current year and the county FSA committee, with the concurrence of the State FSA committee, determines that on or before July 1 of the current year the lessee and lessor agreed to such lease and transfer of quota and the failure to file such transfer agreement did not result from gross negligence on the part of any party to such lease and transfer.</P>
                <P>(ii) After July 1 of the current crop year and before February 16 of the following calendar year when the transfer is by lease and the transferring farm has suffered a loss of production of burley tobacco due to hail, drought, excessive rain, wind, tornado, or other natural disasters as determined by the Deputy Administrator.</P>
                <P>(2) <E T="03">When to file—flue-cured tobacco.</E> For flue-cured tobacco:</P>
                <P>(i) On or before June 15 if the transfer is by sale.</P>
                <P>(ii) After June 30 and on or before November 15 for a transfer by lease when the transferring farm has suffered a loss of production of flue-cured tobacco due to drought, excessive rain, hail, wind, tornado, or other natural disasters as determined by the Deputy Administrator.</P>
                <P>(3) <E T="03">When to file—except burley and flue-cured tobacco.</E> For all other kinds of tobacco, by the date established by the State FSA committee, except that a lease shall be effective if the county FSA committee, with the approval of a State FSA committee representative, finds that the producer was prevented from timely filing the transfer agreement due to reasons beyond the control of the producer.</P>
                <P>(c) <E T="03">Approval or disapproval.</E> A transfer agreement shall not be approved before the period for filing an application for review of the initial notice of allotment or quota has expired. The county FSA committee or its designee shall approve each transfer agreement that <PRTPAGE P="107"/>meets the eligibility requirements of this section. The county FSA committee shall disapprove any transfer agreement that does not meet the eligibility requirement of this section. Any approval or disapproval of a transfer agreement shall to the extent possible be made within 30 days after the transfer agreement is filed with the county FSA committee unless additional time is required as the result of conditions beyond the control of the county FSA committee. However;</P>
                <P>(1) <E T="03">Burley tobacco.</E> If an agreement is filed after July 1 which provides for the sale of quota, a transfer agreement shall not be approved until the next year's quota is computed for the selling farm. In addition, if marketing quota referendum will be conducted to determine whether or not quotas will be in effect for the crop, a transfer agreement shall not be approved until the Secretary announces that quotas have been approved by referendum.</P>
                <P>(2) <E T="03">Flue-cured tobacco.</E> If an agreement is filed after June 15 which provides for the sale of an allotment and quota, a transfer agreement shall not be approved until next year's allotment and quota is computed for the selling farm. In addition, if a marketing quota referendum will be conducted to determine whether or not quotas will be in effect for the crop, a transfer agreement shall not be approved until the Secretary announces that quotas have been approved by referendum.</P>
                <P>(d) <E T="03">Time of determination.</E> An approved transfer agreement shall become effective for the then current crop year, except that if an agreement that is filed after June 15 for the sale of flue-cured tobacco quota or after July 1 for the sale of burley tobacco quota, such approved agreement shall become effective for the next crop year.</P>
                <P>(e) <E T="03">Burley tobacco.</E> For burley tobacco only:</P>
                <P>(1) <E T="03">Basis for transfer by sale.</E> If the transfer of a quota is by sale, the transfer shall be based on part or all of the farm poundage quota.</P>
                <P>(2) <E T="03">Basis for transfer by lease or owner.</E> If the transfer of a quota is by lease or by the owner, transfer shall be based on a part of or all of the effective farm poundage quota.</P>
                <P>(3) <E T="03">Accumulation of quota.</E> A transfer by lease or by owner shall not be approved if the county FSA committee determines that the primary purpose of the transfer is to accumulate the quota on the farm (i.e., alternately transferring to and from the farm for 2 or more years to maintain the quota without satisfactory evidence of plans for producing the quota on the receiving farm).</P>
                <P>(4) <E T="03">Subleasing.</E> In order to determine whether there is any subleasing of a burley farm marketing quota, the current year is divided into two periods, the period up to and including July 1, and the period after July 1. The county FSA committee shall not approve a transfer during either period if the effect would be both a transfer to and from the farm during the same period. However, a transfer may be approved within any crop year if quota is transferred from a farm for one or more years and the farm subsequently is combined with another farm that otherwise is eligible to receive quota by lease or by the owner.</P>
                <P>(5) <E T="03">Transferring farm restrictions.</E> An agreement to transfer quota from a farm by lease or by the owner shall not be approved:</P>
                <P>(i) <E T="03">Limitation.</E> If the pounds of quota being transferred exceed the difference obtained by subtracting from the effective farm marketing quota the total pounds of quota purchased and/or reallocated from forfeited quota in the current and two preceding years, as adjusted to reflect changes in national quota factors which have occurred since each respective purchase and/or reallocation of quota. However, this provision shall not be applicable to transfer agreements that are filed after July 1.</P>
                <P>(ii) <E T="03">New farm.</E> If the farm is a new farm.</P>
                <P>(iii) <E T="03">Reduction pending.</E> If consideration of a marketing quota violation is pending which may result in a quota reduction for the farm for the current year. However, if the county FSA committee determines that a decision will not be made on the pending case on or before the date specified in § 723.212 of this part, a   1-year transfer will be approved if otherwise eligible.<PRTPAGE P="108"/>
                </P>
                <P>(iv) <E T="03">Filed on or before July 1.</E> Unless the receiving farm is administratively located in the same county as the transferring farm. However, burley tobacco producers in the States of Tennessee, Ohio and Indiana shall, irrespective of the preceding sentence, be permitted to lease and transfer burley tobacco quota from one farm in a State to any other farm in the State if other conditions for the transfer are met.</P>
                <P>(v) <E T="03">Filed after July 1.</E> If the transfer agreement is filed after July 1, unless the county FSA committee in the county in which the farm is located for administrative purposes determines that the:</P>
                <P>(A) Farm's expected production of burley tobacco is less than 80 percent of the farm's effective marketing quota as a result of a flood, hail, wind, drought, excessive rain, tornado, or other natural disaster.</P>
                <P>(B) Acreage planted to burley tobacco on the farm was sufficient to produce, under average conditions, an amount of tobacco which, when added to any carryover tobacco from the previous marketing year, would equal the farm's effective farm marketing quota.</P>
                <P>(C) Lessor made reasonable and customary efforts to produce the effective farm marketing quota;</P>
                <P>(D) Producers on the farm qualify for price support in accordance with the provisions of part 1464 of this title; and</P>
                <P>(E) Receiving farm is administratively located in the same State as the transferring farm.</P>
                <P>(vi) <E T="03">Consent of lien holder.</E> For a multiple year transfer, if the farm is subject to lien, unless the lien holder agrees in writing to the transfer; and</P>
                <P>(vii) <E T="03">Claim for marketing quota penalty.</E> If a claim has been filed against the lessor for a tobacco marketing quota penalty and the claim remains unpaid; However, this provision shall not apply if the claim is paid or the entire proceeds of the lease of the quota are applied against the claim and the county FSA committee determines that the amount paid for the lease represents a reasonable price for the pounds of quota being leased.</P>
                <P>(viii) <E T="03">Forfeiture pending.</E> To the extent that forfeiture of such quota is expected to become final before July 1.</P>
                <P>(ix) <E T="03">Divided farms with less than 1,000 pounds of quota.</E> If the farm has been divided by reconstitution and the divided farm has a farm marketing quota of less than 1,000 pounds subject to being reduced to zero pursuant to section 723.208(b).</P>
                <P>(6) <E T="03">Receiving farm restrictions.</E> An agreement to transfer quota to a farm by lease or by owner shall not be approved:</P>
                <P>(i) <E T="03">Filed on or before July 1.</E> If the transfer agreement is filed on or before July 1:</P>
                <P>(A) Unless the receiving farm is administratively located in the same county as the transferring farm and the provisions of paragraph (e)(5)(iv) of this section are not applicable.</P>
                <P>(B) If the pounds of quota being transferred to the farm exceed the smaller of 30,000 pounds or the difference between the farm marketing quota and one-half the result obtained by multiplying the acres of cropland on the farm by the farm yield.</P>
                <P>(ii) <E T="03">Filed after July 1.</E> If the transfer agreement is filed after July 1, unless the:</P>
                <P>(A) Producers on the farm qualify for price support in accordance with the provisions of part 1464 of this title; and</P>
                <P>(B) Pounds of quota to be transferred to the lessee farm do not exceed the difference obtained by subtracting the effective farm marketing quota (before the filing of the transfer agreement) for the lessee farm from the total pounds of tobacco marketed and/or available for marketing (based on estimated pounds of tobacco on hand and/or in the process of being produced) from the farm in the current year. However, the total quantity of tobacco that can be leased or transferred to a farm during a crop year may not exceed that quantity which equals 15 percent of the effective quota on the farm prior to any leases or transfers filed after July 1 of the crop year.</P>
                <P>(C) Transferring farm is administratively located in the same State as the receiving farm.</P>
                <P>(7) <E T="03">Selling farm restrictions.</E> A transfer of quota from a farm by sale shall not be approved:</P>
                <P>(i) <E T="03">Previously purchased and/or reallocated quota.</E> If the farm marketing quota was bought and/or reallocated <PRTPAGE P="109"/>from quota previously forfeited as provided in § 723.219(i)(1), and the purchase and/or reallocation became effective within the current or any of the three preceding years; if the purchased and/or reallocated quota was obtained from quota purchased and/or reallocated as provided in paragraph (b) of this section within the four preceding years. However, this provision shall not be applicable if:</P>
                <P>(A) The quota was purchased and/or reallocated to the farm during four preceding years; and</P>
                <P>(B) The county FSA committee, with the concurrence of a representative of the State FSA committee, determines that the failure to permit the sale of quota, to the extent otherwise permitted by this section, would cause an undue hardship on the seller and the:</P>
                <P>
                  <E T="03">(1)</E> Sale is in connection with the settlement of an estate which includes the farm for which the quota was established;</P>
                <P>
                  <E T="03">(2)</E> Owner of the quota is experiencing financial distress to the extent that current year financing is unlikely;</P>
                <P>
                  <E T="03">(3)</E> Owner of the quota is disabled due to health reasons to the extent that such person can no longer continue to share in the risk of production of the purchased and/or reallocated quota; or</P>
                <P>
                  <E T="03">(4)</E> Owner of the quota is sharing in the risk of production as an investing producer and loses resources necessary to produce the crop due to reasons beyond such owner's control such as the loss of a tenant or sharecropper and a replacement cannot be obtained.</P>
                <P>(ii) <E T="03">Location of farms.</E> Unless both the selling farm and the buying farm are administratively located in the same county.</P>
                <P>(iii) <E T="03">Pounds for sale.</E> The pounds transferred by sale shall be based on part of all of the farm poundage quota.</P>
                <P>(iv) <E T="03">Reduction pending.</E> If consideration of an indicated marketing quota violation is pending which may result in quota reduction for the farm for the current year. However, if the county FSA committee determines that a decision will not be made on the pending case on or before the date specified in § 723.212 of this part, a transfer will be approved if otherwise eligible.</P>
                <P>(v) <E T="03">Forfeiture pending.</E> If the agreement for transfer by sale is filed subsequent to the final date which is permitted for the sale of the quota in order to prevent forfeiture.</P>
                <P>(vi) <E T="03">Claim for marketing quota penalty.</E> If a claim has been filed against the seller for a tobacco marketing quota penalty and the claim remains unpaid: However, this provision shall not be applicable if the claim for such penalty is paid or the entire proceeds of the sale of the quota are applied against the claim and the county FSA committee determines that the amount paid represents a reasonable selling price for the pounds of quota being sold.</P>
                <P>(vii) <E T="03">Consent of lien holder.</E> Requires consent of the lien holder, if the farm is subject to a lien, unless the lien holder agrees in writing to the transfer. However, consent of a lien holder is not required for a transfer of the pounds of quota from a farm for which forfeiture is required in accordance with the provisions of § 723.219.</P>
                <P>(viii) <E T="03">Quota is subject to an approved Conservation Reserve Program Contract.</E> If the quota has been reduced because of an approved Conservation Reserve Program contract according to part 704 of this chapter unless forfeiture is otherwise required.</P>
                <P>(8) <E T="03">Restrictions on buying farm.</E> A transfer of quota to a farm by purchase shall not be approved:</P>
                <P>(i) <E T="03">Active producers.</E> Unless the buyer is an active burley tobacco producer.</P>
                <P>(ii) <E T="03">Cropland limitation.</E> If the sum of the pounds of quota being transferred exceeds the difference between the farm marketing quota and one-half the result obtained by multiplying the acres of cropland on the farm by the farm yield.</P>
                <P>(iii) <E T="03">Quota previously sold.</E> If quota was sold from the farm in the current or either of the two preceding years.</P>
                <P>(iv) Unless both the buying farm and the selling farm are administratively located in the same county.</P>
                <P>(v) <E T="03">Quota limitation.</E> If the sum of the pounds of quota being transferred in the current year exceeds the larger of: (A) 30 percent of the receiving farm's existing quota, or (B) 20,000 pounds.</P>
                <P>(9) <E T="03">Period of transfer.</E> A transfer by lease or by owner may be for a period of one to five years: However, an agreement to transfer quota by lease shall be limited to the current crop year if <PRTPAGE P="110"/>the transfer is filed after July 1 in accordance with the natural disaster provisions of this section.</P>
                <P>(10) <E T="03">Redetermination of quota after transfer by lease or by the owner.</E> After a transfer by lease or by the owner, the effective farm marketing quota shall be redetermined for both the transferring farm and the receiving farm.</P>
                <P>(11) <E T="03">Apportionment of data-selling farm.</E> The pounds of farm marketing quota retained on the selling farm after the sale of quota shall be divided by the farm marketing quota established for the selling farm before the sale to determine a factor for apportioning farm data. The data to be retained on the selling farm shall be determined by multiplying the factor by the following data:</P>
                <P>(i) The amount of any overmarketings which have not been subtracted when a determination is made of the effective farm marketing quota of the selling farm;</P>
                <P>(ii) The pounds of quota which have been transferred from the selling farm by lease or by the owner in the current year;</P>
                <P>(iii) The pounds of quota which have been reduced in the current year as the result of a marketing quota violation in a prior year;</P>
                <P>(iv) The pounds of quota transferred to the farm by lease or by owner in the previous year;</P>
                <P>(v) The previous year's farm marketing quota; and</P>
                <P>(vi) The previous year's effective farm marketing quota.</P>
                <P>(12) <E T="03">Apportionment of data-buying farm.</E> The buying farm's share of each respective item of farm data shall be determined by subtracting the pounds which are retained on the selling farm for the respective item from the pounds which were established for the selling farm for the respective item before the current sale of quota. However, the pounds of quota transferred from the selling farm by lease or by the owner and/or the pounds of quota reduction resulting from a marketing quota violation on the selling farm may be apportioned between the farms in accordance with a written agreement between the buyer and the seller if the farm marketing quota retained on the selling farm is sufficient to satisfy the pounds of quota which were transferred by lease or by the owner, the pounds of quota which have been reduced as the result of a marketing quota violation, and the overmarketings for the farm, if any. The data determined in accordance with this paragraph shall he added to any previous data for the buying farm.</P>
                <P>(13) <E T="03">Redetermination quota after sale or purchase of quota.</E> After adjusting the data in accordance with the provisions of this section, the effective farm marketing quota shall be determined for both the buying and selling farm.</P>
                <P>(14) <E T="03">Farm division after transfer by lease.</E> If a farm is divided after there has been a transfer of a marketing quota to the farm by lease, the transferred quota shall be divided in the manner which is designated in writing by the lessee. In the absence of a written designation, the leased quota shall be apportioned in the same manner as the farm marketing quota of the parent farm.</P>
                <P>(15) <E T="03">Multiple year transfer by lease or by owner.</E> The effective farm marketing quota on a receiving farm having a multiple-year transfer agreement in effect shall be adjusted for each year for which such transfer agreement is in effect to reflect any decrease in the national quota factor which causes the farm marketing quota established for the transferring farm to be less than the pounds of quota which have been transferred to the receiving farm.</P>
                <P>(16) <E T="03">Considered planted credit.</E> Considered planted credit shall be given to the transferring farm when tobacco quota is transferred from the farm by lease or by owner.</P>
                <P>(f) <E T="03">Flue-cured tobacco.</E> For flue-cured tobacco only:</P>
                <P>(1) <E T="03">Location of buying and selling farms.</E> Marketing quota transferred by sale must be to a farm administratively located within the same county. However, beginning with the 2002 and subsequent crops, flue-cured tobacco owners in the States of Florida and Georgia shall be permitted to sell flue-cured tobacco marketing quota to any other farm in their respective State if all other conditions for such a sale are met.</P>
                <P>(2) <E T="03">Maximum quota to be transferred by sale.</E> If the transfer is by sale, the <PRTPAGE P="111"/>transfer shall be based on part or all of the farm poundage quota. the maximum quota that may be transferred by sale is the farm poundage quota.</P>
                <P>(3) <E T="03">Transfer by lease-involvement of outside parties.</E> If the transfer is by lease, only the lessor and lessee (or any attorney, trustee, bank, or other agent who regularly represents either the lessor or lessee in business transactions unrelated to the production or marketing of tobacco) may be parties to, or involved in the arrangements for such transfer. The transfer shall be based on a portion or all of the effective farm poundage quota. The maximum quota that may be transferred by lease is the effective farm poundage quota.</P>
                <P>(4) <E T="03">Lessor farm restrictions.</E> A transfer of quota from a farm by lease shall not be approved:</P>
                <P>(i) <E T="03">New farm.</E> If the farm is a new farm.</P>
                <P>(ii) <E T="03">Natural disaster.</E> Unless the county FSA committee in the county in which the farm is located for administrative purposes determines that the:</P>
                <P>(A)<E T="03">(1)</E> The farm has planted an acreage equal to or more than 90 percent of the effective farm acreage allotment, or</P>
                <P>(<E T="03">2</E>) In accordance with guidelines issued by the Deputy Administrator, the planted acreage of flue-cured tobacco on the farm is sufficient to produce, under average conditions, an amount of tobacco which, when added to any carryover tobacco from the previous marketing year, would equal the farm's effective farm marketing quota;</P>
                <P>(B) Lessor made reasonable and customary efforts to produce the effective farm marketing quota;</P>
                <P>(C) Producers on the farm qualify for price support in accordance with the provisions of part 1464 of this title; and</P>
                <P>(D) Farm's expected production of flue-cured tobacco is less than 80 percent of the farm's effective marketing quota as a result of a drought, excessive rain, hail, wind, tornado, or other natural disaster as determined by the Deputy Administrator.</P>
                <P>(iii) <E T="03">Claim for tobacco marketing quota penalty.</E> If a claim has been filed against the lessor for tobacco marketing quota penalty and the claim remains unpaid unless the claim is paid or the entire proceeds of the lease of the allotment and quota are applied against the claim and the county FSA committee determines that the amount of the lease represents a reasonable price for the pounds of quota being leased.</P>
                <P>(iv) <E T="03">Located in the same State.</E> Unless the lessor farm is administratively located in the same State as the lessee farm.</P>
                <P>(5) <E T="03">Lessee farm restrictions.</E> A transfer of quota to a farm by lease shall not be approved:</P>
                <P>(i) <E T="03">Price support eligibility.</E> Unless the producers on the farm qualify for price support under the provisions of part 1464 of this title; and</P>
                <P>(ii) <E T="03">Limitation.</E> If the pounds of quota to be transferred to the lessee farm exceed the difference obtained by subtracting the effective farm marketing quota (before the filing of the transfer agreement) for the lessee farm from the total pounds of tobacco marketed and/or available for marketing (based on estimated pounds of tobacco on hand and/or in the process of being produced) from the farm in the current year.</P>
                <P>(iii) <E T="03">Located in same State.</E> Unless the lessee farm is administratively located in the same State as the lessor farm.</P>
                <P>(6) <E T="03">Selling farm restrictions.</E> A transfer of quota from a farm by sale shall not be approved:</P>
                <P>(i) <E T="03">Previously purchased and/or reallocated quota.</E> If a farm marketing quota includes quota that was purchased and/or reallocated from the quota which has been forfeited and the purchase and/or reallocation became effective in the current or any of the three preceding years. However, this provision shall not be applicable if:</P>
                <P>(A)(<E T="03">1</E>) The quota being sold was purchased in such period, if forfeiture of such quota is required by § 723.220 of this part, and the amount of quota being transferred does not exceed the amount of quota for which forfeiture otherwise is required in accordance with the provisions of § 723.220 of this part; or</P>
                <P>(<E T="03">2</E>) The county FSA committee, with the concurrence of a representative of the State FSA committee, determines that the failure to approve the sale would cause an undue hardship on the seller and:<PRTPAGE P="112"/>
                </P>
                <P>(B) The sale is in connection with the settlement of an estate which includes the farm for which the quota was established;</P>
                <P>(C) The owner of the quota is experiencing financial distress to the extent that current year financing is unlikely;</P>
                <P>(D) The owner of the quota is disabled due to health reasons to the extent that such person can no longer continue to share in the risk of production of the purchased and/or reallocated quota; or</P>
                <P>(E) The owner of the quota is sharing in the risk of production as an investing producer and loses resources necessary to produce the crop due to reasons beyond such owner's control such as the loss of a tenant or share cropper and a replacement cannot be obtained.</P>
                <P>(ii) <E T="03">Reduction pending.</E> If consideration of an indicated violation is pending which may result in an allotment and quota reduction for the farm for the current year. However, if the county FSA committee determines that a decision will not be made on the pending case on or before April 1, a transfer may be approved.</P>
                <P>(iii) <E T="03">Forfeiture pending.</E> If the agreement for transfer by sale is filed subsequent to the final date which is permitted for the sale of the allotment and quota in order to prevent forfeiture.</P>
                <P>(iv) <E T="03">Consent of lien holder.</E> If the farm is subject to a lien unless the lien holder agrees in writing to the transfer: However, consent of a lien holder is not required for a transfer of the pounds of quota for which forfeiture is required in accordance with the provisions of § 723.220 of this part.</P>
                <P>(v) <E T="03">Claim for marketing quota penalty.</E> If a claim has been filed against the seller for a tobacco marketing quota penalty and the claim remains unpaid: However, this provision shall not be applicable if the claim for such penalty is paid or the entire proceeds of the sale of the allotment and quota are applied against the claim and the county FSA committee determines that the amount paid represents a reasonable selling price for the pounds of quota being sold.</P>
                <P>(vi) <E T="03">Allotment and quota subject to an approved Conservation Reserve Program contract.</E> If the allotment and quota is subject to an approved Conservation Reserve Program contract, unless forfeiture otherwise would be required in accordance with the provisions of § 723.220 of this part.</P>
                <P>(7) <E T="03">Buying farm restrictions.</E> A transfer of quota to a farm by purchase shall not be approved:</P>
                <P>(i) <E T="03">Active producer.</E> Unless the buyer is an active flue-cured tobacco producer.</P>
                <P>(ii) [Reserved]</P>
                <P>(iii) <E T="03">Quota previously sold.</E> If the farm owner sold quota from a farm during the current or any of two preceding years.</P>
                <P>(iv) <E T="03">Installment payment option.</E> Unless the buyer of the flue-cured tobacco acreage allotment and marketing quota has been afforded an option to pay for such allotment and quota in two to five equal annual installments payable each fall beginning with the fall of the crop year in which the transfer becomes effective and such buyer certifies on a form prescribed by the Deputy Administrator that such option has been made available to the buyer.</P>
                <P>(8) <E T="03">Allotment and quota after transfer by lease.</E> The effective farm acreage allotment and the effective farm marketing quota shall be determined for both the lessee farm and the lessor farm in accordance with the provisions of §§ 723.205 and 723.206 of this part, respectively.</P>
                <P>(9) <E T="03">Apportionment of data after transfer of quota by sale-selling farm.</E> The pounds of farm marketing quota retained on the selling farm after the sale of quota shall be divided by the farm marketing quota established for the selling farm before the sale to determine a factor for apportioning farm data for the current year and for the base period. The data to be retained on the selling farm shall be determined by multiplying the factor by the following data:</P>
                <P>(i) The planted and considered planted acres for the base period;</P>
                <P>(ii) The history acres for the base period;</P>
                <P>(iii) The farm acreage allotment for the current year and for the base period;</P>

                <P>(iv) The amount of any overmarketings which have not been subtracted when a determination is made <PRTPAGE P="113"/>of the effective farm marketing quota of the selling farm;</P>
                <P>(v) The pounds of quota which have been transferred from the selling farm by lease in the current year;</P>
                <P>(vi) The acres of allotment which have been reduced in the current year as the result of a marketing quota violation in a prior year;</P>
                <P>(vii) The pounds of quota transferred to the farm by lease in the previous year;</P>
                <P>(viii) The previous year's farm marketing quota;</P>
                <P>(ix) The previous year's effective farm marketing quota; and</P>
                <P>(x) The previous year's marketings.</P>
                <P>(10) <E T="03">Apportionment of data-buying farm.</E> The pounds of farm marketing quota which have been purchased shall be divided by the farm yield for the buying farm in order to determine the farm acreage allotment for the buying farm. The buying farm's share of other farm data shall be determined by subtracting the acres or pounds, as applicable, which are retained on the selling farm from the acres or pounds which were established for the selling farm before the current sale of quota: However, the acres computed for the acres of reduction resulting from a marketing quota violation for the buying farm shall be multiplied by a factor determined by dividing the farm yield of the selling farm by the farm yield of the buying farm in order to determine the acres of reduction from the buying farm for the current year. The pounds of quota transferred from the selling farm by lease and/or the acres of allotment reduction resulting from a marketing quota violation on the selling farm may be apportioned between the farms in accordance with a written agreement between the buyer and the seller if the farm marketing quota retained on the selling farm is sufficient to satisfy the pounds of quota which are leased, the pounds of quota which have been reduced as the result of a marketing quota violation, and the overmarketings for the farm, if any. The data determined in accordance with this paragraph shall be added to any previous data for the buying farm.</P>
                <P>(11) <E T="03">Allotment and quota.</E> After adjusting the data in accordance with the provisions of this section, the farm acreage allotment, the effective farm acreage allotment, and the effective farm marketing quota shall be determined for both the buying and the selling farm.</P>
                <P>(12) <E T="03">Effect of price support eligibility.</E> If a lease agreement is filed after the farm operator reports the acreage of tobacco on the farm in the current year, the effective farm acreage allotment which has been determined prior to the approval of the transfer will be used in determining price support eligibility for the farm.</P>
                <P>(13) <E T="03">Violation of lease provisions.</E> (i) If, after a lease agreement is approved, information is brought to the attention of the county FSA committee which indicates that either the lessor or the lessee, or both, knowingly filed a false certification with respect to a transfer of quota by lease, the county FSA committee shall schedule a hearing, notify such person of the time and place of the hearing, and present evidence at the hearing with respect to the allegation of false certification. If, as a result of the evidence presented, the county FSA committee determines that such person knowingly made a false certification, the county FSA committee shall notify the person of the determination and afford such person 15 days after the mailing of the notice to request a review of the determination by a review committee as provided for by part 711 of this chapter.</P>
                <P>(ii) If it is determined that the lessor knowingly made a false certification, the next flue-cured tobacco acreage allotment and marketing quota established for the lessor's farm shall be reduced by that percentage which the leased quota was of the total flue-cured tobacco farm marketing quota established for the farm in the year of the lease.</P>
                <P>(iii) If it is determined that the lessee knowingly made a false certification, the lease agreement for purposes of the flue-cured tobacco marketing quota program with respect to the lessee's farm shall be considered to be null and void as of the date approved by the county FSA committee.</P>
                <P>(14) <E T="03">Considered planted credit.</E> Considered planted credit shall be given to the lessor farm for the tobacco acreage <PRTPAGE P="114"/>allotment which is deducted as the result of the transfer of quota from the farm by lease.</P>
                <P>(15) <E T="03">Sale of quota with installment payment option.</E> Notwithstanding any other provision of this section the owner of a farm who sells any flue-cured tobacco acreage allotment and marketing quota may:</P>
                <P>(i) Negotiate with more than one prospective buyer before selling such allotment and quota; or</P>
                <P>(ii) Sell such allotment and quota to any eligible buyer whom such owner may select; or</P>
                <P>(iii) Sell such allotment and quota for a single payment; or</P>
                <P>(iv) Include provisions in the agreement of sale to protect the seller's interest if the buyer fails to make full payment. Such provisions may not include the use of such allotment and quota as collateral for purposes of protecting the seller's interest in the allotment and quota.</P>
                <P>(v) Flue-cured tobacco acreage allotment and marketing quota purchased in accordance with this subparagraph shall not revert to the seller's farm but shall remain with the farm to which assigned at the time of purchase even though the buyer fails to make full payment to the seller for such allotment and quota.</P>
                <P>(g) <E T="03">Burley and flue-cured tobacco.</E> For burley or flue-cured tobacco:</P>
                <P>(1) <E T="03">Carryover tobacco.</E> If tobacco is marketed after the entire farm marketing quota of the producing farm has been transferred by sale, the tobacco shall be considered as having been marketed on each farm to which farm marketing quota was transferred by sale in accordance with a transfer agreement filed after June 15 for flue-cured tobacco, or July 1 for burley tobacco, of the last year in which a farm marketing quota was established for the producing farm. Such marketing shall be prorated to each farm in proportion to the pounds of farm poundage quota purchased by each farm. If there was more than one farm to which a farm marketing quota was transferred by sale, the marketing may be assigned to the farms in the manner agreed to in writing by each of the buyers of such farm marketing quota.</P>
                <P>(2) <E T="03">Cancellation of transfer.</E> A transfer of flue-cured allotment and quota, or burley quota, under this section which was approved in error or on the basis of incorrect information furnished by the parties to the agreement shall be canceled by the county FSA committee. For the purpose of determining any overmarketings and undermarketings from the farms, and for the purpose of determining eligibility for price support and marketing quota penalties, the cancellation shall be effective as of the date of approval. However, such cancellation shall not be effective for the current marketing year for price support and marketing quota penalty purposes if the:</P>
                <P>(i) Transfer approval was made in error or on the basis of incorrect information which had been unknowingly furnished by the parties to the agreement; and</P>
                <P>(ii) Parties to the transfer agreement were not notified of the cancellation before the marketing for the receiving farm exceeded the correct effective farm marketing quota.</P>
                <P>(3) <E T="03">Canceled because of fraud.</E> If a transfer of a flue-cured allotment and quota, or burley quota, is canceled because of fraud on the part of the owner of the transferring farm but no fraud is attributable to either the owner or operator of the receiving farm, such cancellation shall be effective as of the date of approval of the transfer except for purposes of determining eligibility for price support and marketing quota penalties for the receiving farm. In such case, the overmarketings shall be charged against the farm from which the transfer was made if the farm, after any reconstitution which may be necessary as a result of fraud, is assigned a flue-cured allotment and quota, or burley quota, against which the overmarketings could be charged. Otherwise, the overmarketings shall be charged against any other farm involved in the fraud having a flue-cured allotment and quota, or burley quota, after any reconstitution required by such fraud. Notwithstanding the foregoing, any overmarketings on the receiving farm which are in excess of the amount of quota involved in the canceled transfer shall be charged against the receiving farm.<PRTPAGE P="115"/>
                </P>
                <P>(4) <E T="03">Dissolution or revision of a transfer agreement.</E> A transfer agreement may be dissolved or minor revisions made with respect to such agreement if a written request by all parties to the agreement is made to the county FSA committee by November 15 of the current marketing year for flue-cured tobacco, or by February 15 of the current marketing year for burley tobacco. After any such dissolution or revision of a transfer agreement, an official notice of the flue-cured acreage allotment and marketing quota, or burley quota, shall be issued by the county FSA committee to each of the operators involved in the transfer agreement.</P>
                <P>(h) <E T="03">Cigar tobacco.</E> For cigar-filler (type 46) and cigar-filler (types 42, 43, and 44) tobacco only, the provisions of paragraph (j) of this section are applicable in addition to the following:</P>
                <P>(1) <E T="03">Farm eligible.</E> The owner and operator (acting together if different person) of any farm for which an old farm tobacco acreage allotment is established for the current year may lease and transfer all or any part of the farm acreage allotment established for such farm to any other owner or operator of a farm in the same county with a current year's allotment (old or new farm) for the same kind of tobacco for use on such farm. Transfer of allotments by lease shall not exceed 5 years.</P>
                <P>(2) <E T="03">Transfer approved acre per acre.</E> The lease and transfer shall be approved acre per acre.</P>
                <P>(3) <E T="03">Considered planted credit.</E> The amount of allotment acreage which is leased from a farm shall be considered for the purpose of determining future allotments (and tobacco history acreage) to have been planted to tobacco on such farm. The amount of allotment acreage which is leased and transferred to a farm shall not be taken into account in establishing allotments for subsequent years for such farms.</P>
                <P>(4) <E T="03">Limitation on acreage transferred.</E> The total acreage allotted to any farm after the transfer by lease of tobacco acreage allotment to the farm shall not exceed 50 percent of the acreage of cropland in the farm, except that in the case of cigar-filler (types 42, 43, 44, and 46) transfers, such transfers shall be limited to a total of 10 acres.</P>
                <P>(5) <E T="03">Transfer from the pool.</E> Allotments in a pool pursuant to part 718 of this chapter may be eligible for lease and transfer during the 3-year life of the pooled allotment. An agreement to lease and transfer shall not serve to extend the life of such pooled allotment.</P>
                <P>(i) <E T="03">Fire-cured, Dark air-cured, and Virginia sun-cured tobacco.</E> For Fire-cured, Dark air-cured, and Virginia sun-cured tobacco, only, the provisions of this section are applicable in addition to the following:</P>
                <P>(1) <E T="03">Persons eligible to file a record of transfer (FSA-375)—sale or lease.</E> The owner and operator of any old farm for which a Fire-cured, Dark air-cured, or Virginia sun-cured tobacco allotment is established for the current year may sell or lease all or any part of such allotment to any other owner or operator of a farm in the same county, and in the same State for Virginia fire-cured (type 21) or Virginia sun-cured (type 37) tobaccos. The receiving farm need not be an old farm. In the case of a permanent transfer, a statement signed by all parties to the transaction confirming that the sale has been made shall be filed with the county FSA committee.</P>
                <P>(2) <E T="03">By owner.</E> The owner of any old tobacco farm for which a Fire-cured, Dark air-cured, or Virginia sun-cured tobacco allotment is established for the current year may transfer any or all of such allotment permanently, or for a term of years designated by the owner, to another farm in the same county (within the same State for Virginia fire-cured and Virginia sun-cured tobacco) owned or controlled by such owner.</P>
                <P>(3) <E T="03">Maximum period of transfer by lease.</E> Transfer of allotments by lease shall not exceed 5 years.</P>
                <P>(4) <E T="03">Basis for transfer.</E> The transfer shall be approved acre for acre.</P>
                <P>(5) <E T="03">Adjustments in farm history acreage.</E> The farm history acreage for the immediately preceding 5 years on farms from which and to which permanent transfer of allotment is made shall be adjusted by the county FSA committee for each of the base years to correspond with the amount of allotment transferred between the farms. In the case of temporary transfers of allotment for 1 or more years by lease or by owner, the <PRTPAGE P="116"/>farm history acreage shall not be reduced on the farm from which the transfer is made and farm history acreage shall not be transferred to the receiving farm.</P>
                <P>(6) <E T="03">Limitation on acreage transferred.</E> The total of the Fire-cured, Dark air-cured, or Virginia sun-cured tobacco allotment which may be transferred for each kind of tobacco, by sale, lease, or by owner, to a farm shall not exceed 50 percent of the acreage of cropland on the farm. The cropland in the farm for the current year for purposes of such transfers shall be the total cropland as defined in Part 718 of this chapter.</P>
                <P>(7) <E T="03">Prohibition on permanent transfer.</E> A permanent transfer by sale or by owner shall not be approved from any farm to which an allotment was permanently transferred by sale or by owner within the 3 immediately preceding crop years.</P>
                <P>(8) <E T="03">Temporary transfer to non-owned farm.</E> A transfer requested on a temporary basis to a farm controlled but not owned by the applicant shall be approved only if the applicant will be the operator of the farm to which the transfer is to be made for each year of the period for which the transfer is requested. When the applicant for whom such transfer has been approved no longer is the operator of the receiving farm due to conditions beyond such operator's control, the transfer shall remain in effect unless the transfer is terminated under the provisions of paragraph (j) of this section. Conditions beyond the operator's control shall include, but not be limited to, death, illness, incompetence, or bankruptcy of such person.</P>
                <P>(9) <E T="03">Transfer of pooled allotment.</E> Allotments established for a farm as pooled allotment under part 718 of this chapter may be transferred on a:</P>
                <P>(i) Permanent basis during the 3-year life of a pooled allotment, or</P>
                <P>(ii) Temporary basis for a term of years not to exceed the remaining number of crop years of such 3-year period. A temporary agreement to transfer shall not serve to extend the life of such pooled allotment.</P>
                <P>(10) <E T="03">New farm eligibility.</E> Any farm from which the entire farm allotment is sold or permanently transferred by the owner shall not be eligible for a new farm tobacco allotment for the kind transferred during the 5 years following the year in which such transfer is made.</P>
                <P>(11) <E T="03">Transfer of history acreage.</E> Permanent transfer of allotment shall have the effect of transferring history acreage, farm base, and marketing quota attributable to such allotment. In the case of a transfer by lease, the transferred allotment shall be considered for purposes of establishing future allotments to have been planted on the farm from which such allotment was transferred.</P>
                <P>(j) <E T="03">Tobacco except burley, flue-cured, and cigar (types 54 and 55).</E> For tobacco that may be transferred in accordance with the provisions of paragraph (h) or (i) of this section, the following provisions shall also apply:</P>
                <P>(1) <E T="03">New farm allotment.</E> A new farm allotment shall not be transferred.</P>
                <P>(2) <E T="03">Tobacco allotment subject to an approved Conservation Reserve Program contract.</E> A transfer of allotment designated for reduction under a Conservation Reserve Program contract shall not be approved.</P>
                <P>(3) <E T="03">Subleasing prohibited.</E> A transfer of allotment from a farm shall not be approved during the period for which a current temporary transfer agreement is in effect that transferred quota to the same farm.</P>
                <P>(4) <E T="03">Limitation on transfer to and from a farm in the same year.</E> If a transfer agreement is in effect for the current crop year for a farm, a transfer of allotment shall not be approved during the same crop year:</P>
                <P>(i) From such farm receiving allotment by transfer for such year, or</P>
                <P>(ii) To such farm which had allotment transferred from it for such year.</P>
                <P>(5) <E T="03">Farm in violation.</E> If consideration of a violation is pending which may result in an allotment reduction for a farm for the current year, the county FSA committee shall delay approval of any transfer of allotment from or to the farm until the violation is cleared or the allotment reduction is made. However, if the allotment reduction in such case cannot be made effective for the current crop year before the final date for reducing allotments for violations, the transfer may be approved by the county FSA committee. In any <PRTPAGE P="117"/>case, if, after a transfer of a tobacco acreage allotment has been approved by the county FSA committee, it is determined that the allotment for the farm from which or to which such acreage is transferred is to be reduced for a violation, the allotment reduction for such farm shall be delayed until the following year.</P>
                <P>(6) <E T="03">Claim for tobacco marketing quota penalty.</E> A transfer of acreage allotment from a farm shall not be approved if a claim has been filed against the lessor, seller, or transferring owner for a tobacco marketing quota penalty and the claim remains unpaid. However, this provision shall not apply if the claim is paid or the entire proceeds of the lease or sale of the allotment are applied against the claim and the county FSA committee determines that the amount paid for the lease or sale represents a reasonable price for the acres of allotment being transferred.</P>
                <P>(7) <E T="03">Approval after review period.</E> A transfer of allotment shall not be approved by the county FSA committee for any farm before the time of filing an application for review, as shown on the original allotment notice for the farm, has expired. If an application for review is filed for a farm involved in a transfer agreement, such agreement shall not be approved by the county FSA committee until the allotment for such farm is finally determined pursuant to part 711 of this chapter.</P>
                <P>(8) <E T="03">Acreage allotment after lease and transfer.</E> The acreage allotment determined after a temporary transfer for a farm under the provisions of this section shall be the allotment of such farm for the current year only for the purpose of determining:</P>
                <P>(i) Excess acreage,</P>
                <P>(ii) The amount of penalty to be collected on marketings of excess tobacco including absorption of carryover penalty tobacco,</P>
                <P>(iii) Eligibility for price support, and</P>
                <P>(iv) The farm marketing quota and the percentage reduction for a violation in the allotment for the farm.</P>
                <P>(9) <E T="03">Cancellation of transfer.</E> Any transfer of allotment under this section which was approved by the county FSA committee in error or on the basis of incorrect information furnished by the parties to the agreement shall be canceled by the county FSA committee. Such cancellation shall be effective as of the date of approval for purposes of determining eligibility for price support and marketing quota penalties except that such cancellation shall not be effective for the current marketing year for price support and marketing quota penalty purposes, if:</P>
                <P>(i) The transfer approval was made in error or on the basis of incorrect information unknowingly furnished by the parties to the transfer agreement; and</P>
                <P>(ii) The parties to the transfer agreement were not notified of the cancellation before the tobacco was planted.</P>
                <P>(10) <E T="03">Dissolution or revision.</E> A transfer agreement may be dissolved or minor revisions made where a request by all parties to the agreement is made in writing to the county FSA committee. Such written notification shall be filed prior to planting the tobacco. A late filed request to dissolve or revise the transfer may be effective for the current year if the county FSA committee with approval of a representative of the State FSA committee determines that the producer was prevented from timely filing for reasons beyond such producer's control.</P>
                <P>(11) <E T="03">Reconstituted farm.</E> The allotment for a farm being divided or combined in the current year shall be the allotment after the transfer has been approved. Notwithstanding the above, in the case of a division, the county FSA committee shall allocate the acreage that was transferred by lease to the tracts involved in the division as the parent farm owners and operators designate in writing. In the absence of such designation, the county FSA committee shall apportion the leased acreage.</P>
                <P>(12) <E T="03">Consent of lien holder.</E> A transfer of allotment other than by annual lease shall not be approved from a farm subject to a mortgage or other lien unless the transfer is agreed to in writing by the lien holder.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 56 FR 21441, May 9, 1991; 58 FR 11960, Mar. 2, 1993; 63 FR 11582, Mar. 10, 1998; 65 FR 7953, Feb. 16, 2000; 66 FR 53509, Oct. 23, 2001; 67 FR 41310, June 18, 2002]</CITA>
              </SECTION>
              <SECTION>
                <PRTPAGE P="118"/>
                <SECTNO>§ 723.217</SECTNO>
                <SUBJECT>Release and reapportionment of old farm acreage allotments for Cigar-filler and Binder (types 42, 43, 44, 54, and 55) tobacco.</SUBJECT>
                <P>(a) <E T="03">Annual or permanent release of acreage allotments to State committee.</E> Except as provided in this paragraph, all or any part of a farm acreage allotment on which Cigar-filler and Binder (types 42, 43, 44, 54, and 55) tobacco will not be produced and which the operator of the farm voluntarily releases on an annual basis, or both the owner and operator voluntarily releases on a permanent basis, in writing to the State FSA committee by not later than the final date for filing releases established by the State FSA committee for the current year shall be deducted from the allotment of such farm.</P>
                <P>(1) For the farm voluntarily releasing tobacco farm acreage allotment on an annual basis, such acreage will be considered as having been planted on the releasing farm for the purpose of establishing allotments for subsequent years. For the farm receiving such annual released acreage, such acreage shall not be taken into account in establishing future allotments for the farm. The tobacco history acreage for a farm releasing on a permanent basis shall not be taken into account in establishing future allotments for the farm. The tobacco history acreage for a farm releasing on a permanent basis shall be adjusted to reflect the acreage permanently released.</P>
                <P>(2) An acreage allotment shall not be released either annually or permanently:</P>
                <P>(i) From the eminent domain allotment pool if an application for transfer from the pool has been filed in accordance with part 718 of this chapter;</P>
                <P>(ii) From a new farm; or</P>
                <P>(iii) To the extent such acreage is designated for reduction under a Conservation Reserve Program contract.</P>
                <P>(b) <E T="03">Reapportionment of released acreage allotment.</E> The acreage voluntarily released on an annual or permanent basis for the current year may be reapportioned by the State FSA committee to any farm in any county in the State including a farm receiving a new farm allotment. The State FSA committee shall select the counties to which the released acreage will be reapportioned. The county FSA committee shall select the farms to which the released acreage will be reapportioned. The State FSA committee shall keep records on both an annual and permanent basis of the source of acreage released. Any acreage released for the current year on a permanent basis which is not reapportioned by the State FSA committee in the current year may be reapportioned in the following year. The county FSA committee for the county receiving released acreage may reapportion the tobacco allotment acreage on an annual or permanent basis to other farms in the county in amounts determined by the county FSA committee to be fair and reasonable on the basis of land, labor, and equipment available for production of Cigarfiller and binder (types 42, 43, 44, 54, and 55) tobacco; crop rotation practices; and the soil and other physical factors affecting the production of tobacco. Released acreage should not be reapportioned on a temporary or permanent basis to any farm unless there is assurance from the operator to the county FSA committee that the released acreage being received will be produced. Allotment reapportioned to a farm on an annual basis can only be used by the receiving farm for increased production during the current year. Allotment reapportioned to a farm on a permanent basis shall be added to the current year allotment or shall serve to establish an allotment for a farm without a current allotment. A farm shall be eligible to receive reapportionment of released acreage on either or both an annual or permanent basis only if a written request is filed by the farm owner or operator at the office of the county FSA committee not later than the final date for filing such requests established by the State FSA committee for the current year.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.218</SECTNO>
                <SUBJECT>Determining tobacco history acreage.</SUBJECT>

                <P>With respect to each respective kind of tobacco, the tobacco history acreage shall be determined for each farm for which a tobacco acreage allotment was established for such kind of tobacco for the current year.<PRTPAGE P="119"/>
                </P>
                <P>(a) The history acreage shall be the same as the farm acreage allotment for the respective kind of tobacco if in the current year, or either of the two preceding years, the sum of the planted and considered planted acreage of such kind of tobacco was as much as 75 percent of the farm acreage allotment. Otherwise, the history acreage shall be the sum of the planted and considered planted acreage of such kind of tobacco.</P>
                <P>(b) Notwithstanding any other provision of this section, for the respective kind of tobacco, the history acres for the current year and for each year of the base period shall be reduced to zero if:</P>
                <P>(1) A new farm allotment was canceled;</P>
                <P>(2) The allotment was in a pool established in accordance with the eminent domain provision of part 718 of this chapter and the period of eligibility has expired for transferring the allotment from the pool; or</P>
                <P>(3) The county FSA committee determines that the farm has been retired from agricultural production and the allotment is not eligible for pooling in accordance with the eminent domain provisions of part 718 of this chapter.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.219</SECTNO>
                <SUBJECT>Forfeiture of burley tobacco marketing quota.</SUBJECT>
                <P>(a) <E T="03">Determination of quota subject to forfeiture.</E> (1) For purposes of paragraph (b) of this section, the phrase “owns a farm” means ownership of:</P>
                <P>(i) A farm as constituted under part 718 of this chapter, if the entire farm shares a common ownership; or</P>
                <P>(ii) All of the land within a farm which shares a common ownership if the parent farm consists of tracts of land having separate ownerships.</P>
                <P>(2) For purposes of paragraph (b) of this section, the county FSA committee shall apportion, in accordance with the provisions of part 718 of this chapter, the burley tobacco quota assigned to a farm between the various tracts of land which are separately owned by:</P>
                <P>(i) A person not using the land on the farm for which a burley tobacco marketing quota is established for agricultural purposes.</P>
                <P>(ii) A person who uses the land on the farm for which the burley tobacco marketing quota is established for agricultural purposes or for educational, instructional, or demonstrational purposes.</P>
                <P>(3) The farm marketing quota determined under this section for each farm or tract, as applicable, shall be the amount of quota subject to forfeiture under this section.</P>
                <P>(b) <E T="03">Person who does not use the land on the farm for which the marketing quota is established for agricultural purposes or does not use such marketing quota for educational, instructional, or demonstrational purposes.</E> For purposes of this paragraph, the term “person” means a person as defined in part 718 of this chapter, including any governmental entity, public utility, educational institution, religious institution or joint venture (but not including any farming operation involving only spouses), but excluding any individual.</P>
                <P>(1) <E T="03">Required forfeiture.</E> With respect to any person owning a farm for which a burley tobacco marketing quota is established, if the county FSA committee determines that such person does not use the land on such farm for agricultural purposes, or does not use such burley tobacco marketing quota for educational, instructional, or demonstrational purposes, such person shall forfeit such quota which is not sold on or before December 1 of the year after any year for which the county FSA committee makes such determination.</P>
                <P>(2) <E T="03">Agricultural purposes.</E> Land on the farm for which a burley tobacco marketing quota is established shall be considered to be used for agricultural purposes if the county FSA committee determines that:</P>
                <P>(i) In the current year or either of the 2 preceding years such land is used for the production of:</P>
                <P>(A) Row crops of any type;</P>
                <P>(B) Livestock or poultry (including pasture and forage for livestock);</P>
                <P>(C) Trees (including orchards and vineyards); or</P>
                <P>(D) Hay or native grasses on open land; or</P>

                <P>(ii) In the current year such farm is owned by an educational institution <PRTPAGE P="120"/>which uses such burley tobacco marketing quota solely for educational, instructional, or demonstrational purposes.</P>
                <P>(3) <E T="03">Documentation.</E> Within 30 days after a written request is made by the county FSA committee, or within such extended time as may be granted by the county FSA committee, a person must submit such documentation as may be requested to support a determination that the provisions of paragraph (b)(1) of this section have been met with respect to such person. Upon failure of such person to timely respond to this request, the county FSA committee shall determine that the person does not use the land on the farm for agricultural purposes, or does not use the burley tobacco marketing quota for educational, instructional, or demonstrational purposes.</P>
                <P>(c) <E T="03">Buyers of quota fail to share in the risk of production.</E>
                </P>
                <P>(1) <E T="03">Forfeiture required.</E> If any person buys burley tobacco quota and such person fails to share in the risk of producing the tobacco which was planted subject to such quota during any of the 3 crop years beginning with the crop year for which the purchase became effective, such person shall forfeit the purchased quota if it is not sold on or before December 31 of the year after the crop year in which such crop was planted. However, any purchaser or subsequent purchaser of quota required to be sold under the mandatory sale to prevent forfeiture, provisions of paragraph (b) of this section shall be required to share in the risk of production of such quota for five crop years beginning with the crop year for which the purchase became effective.</P>
                <P>(2) Failure to utilize purchased quota for the production of tobacco shall not result in the forfeiture of such quota, but the three year period and the five year period which is specified in paragraph (c)(1) of this section shall be extended 1 year for each year for which the quota is not utilized.</P>
                <P>(3) <E T="03">Reduction for failure to share in the risk of production.</E> The effective quota shall be reduced, but not below zero pounds, for leasing and marketing quota purposes only, to the extent of the purchased quota for each crop after the crop year in which the buyer of such quota fails to share in the risk of producing a crop of tobacco which is subject to such quota.</P>
                <P>(4) <E T="03">Determining forfeited amount.</E> If only part of the quota on a farm is attributable to a purchased quota, the amount of the farm marketing quota which must be forfeited under paragraph (c) of this section shall be determined by increasing or decreasing each respective purchase of farm marketing quota for the farm to reflect changes in national quota factors since the purchase occurred and subtracting the pounds of quota which have been sold to prevent forfeiture.</P>
                <P>(d) <E T="03">Hearing.</E> Before any forfeiture of quota becomes effective under the provisions of this section, the county FSA committee shall:</P>
                <P>(1) Schedule a hearing for the affected person.</P>
                <P>(2) Notify the affected person of the hearing at least 10 days in advance of the hearing.</P>
                <P>(3) Make a determination, on the basis of the evidence presented at the hearing by or on behalf of the affected person and by or on behalf of the county FSA committee as to whether or not:</P>
                <P>(i) Any of the conditions for forfeiture specified in this section exist; and</P>
                <P>(ii) The affected person knowingly failed to take steps to prevent forfeiture of allotment and quota when such forfeiture conditions have been determined to exist with respect to the provisions of paragraph (b) of this section.</P>
                <P>(iii) The affected person knowingly failed to take steps to prevent forfeiture of burley tobacco quota.</P>
                <P>(4) Notify the affected persons of the county FSA committee determination and, if forfeiture of quota is to be required, afford such person an opportunity to appeal to a review committee in accordance with the provision of part 711 of this chapter.</P>
                <P>(e) <E T="03">Apportionment of data and determination of quota after forfeiture.</E> (1) <E T="03">Apportionment of data.</E> The pounds of farm marketing quota retained on the forfeiting farm after the forfeiture shall be divided by the farm marketing quota established for the farm before the forfeiture to determine a factor for <PRTPAGE P="121"/>apportioning farm data. The data to be retained on the forfeiting farm shall be determined by multiplying the factor by the following data for the forfeiting farm:</P>
                <P>(i) Overmarketings which have been subtracted when determining the effective farm marketing quota of the forfeiting farm.</P>
                <P>(ii) Pounds of quota transferred from the forfeiting farm by lease or by the owner in the current year.</P>
                <P>(iii) Pounds of quota reduced in the current year for a marketing quota violation in a prior year.</P>
                <P>(iv) Previous year's effective farm marketing quota.</P>
                <P>(v) Previous year's marketings.</P>
                <P>(vi) Previous year's farm marketing quota.</P>
                <P>(vii) Pounds of quota transferred to the farm by lease or by owner in the previous year.</P>
                <FP>The portion of the forfeiting farm data which shall be included in a forfeiture pool for the county shall be determined by subtracting the pounds of each respective item of farm data which are retained on the forfeiting farm from the pounds of the respective item of data which were established for the forfeiting farm before forfeiture.</FP>
                <P>(2) <E T="03">Forfeiture pool.</E> The data for the forfeiture pool shall be added to any previous data in the forfeiture pool.</P>
                <P>(3) <E T="03">Quota after forfeiture.</E> After adjustment of data, the effective farm marketing quota shall be determined in accordance with the provisions of § 723.206 of this part for the forfeiting farm.</P>
                <P>(f) <E T="03">Forfeiture pool.</E> (1) <E T="03">Establishing forfeiture pool.</E> A forfeiture pool shall be established in each county in which a forfeiture of quota occurs. The forfeiture pool shall be increased to include data for each forfeiture and shall be decreased for each reallocation in order to reflect any forfeited or reallocated amounts of:</P>
                <P>(i) Farm marketing quota for the current year.</P>
                <P>(ii) Quota reduced for marketing quota violations.</P>
                <P>(iii) Quota transferred from the forfeiting farm by lease or by the owner.</P>
                <P>(iv) Previous year's effective farm marketing quota.</P>
                <P>(v) Previous year's marketings.</P>
                <P>(2) <E T="03">Adjustment of data in forfeiture pool.</E> At the beginning of the current year, the data in the forfeiture pool shall be adjusted by the factor used in determining quotas for old farms. Quota data in the forfeiture pool shall be decreased each time any burley tobacco quota is reallocated from the forfeiture pool. Such decrease in the quota data will be made in the same proportion as the pounds of quota which are reallocated from the pool are to the pounds of quota which were in the pool before the reallocation.</P>
                <P>(g) <E T="03">Reallocation of quota from forfeiture pool.</E> (1) <E T="03">Application.</E> In order to establish eligibility to receive quota from the forfeiture pool in the current year, an application must be made on a form approved by the Deputy Administrator. Such application must be filed:</P>
                <P>(i) <E T="03">Who may file.</E> By an active producer.</P>
                <P>(ii) <E T="03">When to file.</E> On or before April 30. The State FSA committee may establish an earlier date if notice of such earlier date is given in time for interested applicants to file an application by the earlier date.</P>
                <P>(iii) <E T="03">Where to file.</E> At the county FSA office which serves the farm for which the application is filed.</P>
                <P>(2) <E T="03">Eligibility of applicant.</E> In order for an applicant to be eligible for quota from the forfeiture pool, the county FSA committee must determine that:</P>
                <P>(i) The application was filed timely.</P>
                <P>(ii) The applicant is an active tobacco producer.</P>
                <P>(iii) During the current year or during the 4 years preceding the current year, the applicant has not sold or forfeited quota from any farm.</P>
                <P>(3) <E T="03">Time to reallocate.</E> The county FSA committee shall:</P>
                <P>(i) Not reallocate any quota from the forfeiture pool until the time has passed for filing an application for forfeited quota for the current year.</P>
                <P>(ii) Reallocate any quota from the forfeiture pool only during the 30-day period beginning on the day after the final day for filing an application for quota from the forfeiture pool.</P>
                <P>(4) <E T="03">Reallocation by county FSA committee.</E> Reallocation of any burley tobacco quota shall be made by the county FSA committee. In making its determination of the amounts of quota to <PRTPAGE P="122"/>reallocate, the county FSA committee may consider the size of the current quotas on the farms of the eligible applicants, the length of time the applicants have been farming tobacco, the type of farming done by the applicants (i.e., livestock, grain, or other commodities), previous leasing history of the applicants, and such other factors which in the judgment of the county FSA committee should be considered. A burley tobacco quota may be reallocated to a farm which currently does not have a burley tobacco quota. A factor shall not be used to reallocate quota between all eligible applicants.</P>
                <P>(5) <E T="03">Basis for reallocation from forfeiture pool.</E> Reallocation from the forfeiture pool shall be on the basis of pounds of farm marketing quota.</P>
                <P>(6) <E T="03">Amount of quota to be reallocated.</E> The county FSA committee may reallocate all or part of the quota in the forfeiture pool. The minimum amount of quota which may be reallocated to an eligible applicant is the total amount of quota in the pool or 100 pounds, whichever is less. The maximum amount is 500 pounds. However, up to 1,500 pounds may be allocated with State FSA committee concurrence.</P>
                <P>(7) <E T="03">Data for receiving farm.</E> All data for the forfeiture pool shall be apportioned to the receiving farm in the proportion that the reallocated farm marketing quota is to the total farm marketing quota in the forfeiture pool before the reallocation. The data determined for the receiving farm in accordance with the provisions of this paragraph shall be added to any previous data for the receiving farm.</P>
                <P>(8) <E T="03">Quota for receiving farm.</E> After any adjustments which are made in accordance with the provisions of this section, the effective farm marketing quota shall be determined for the receiving farm.</P>
                <P>(h) <E T="03">Forfeiture of reallocated quota.</E> Any burley tobacco quota which is reallocated in accordance with the provisions of this section shall be forfeited if the applicant to whom the quota is reallocated fails to share in the risk of producing a crop of tobacco which is subject to such quota during any of the 3 years beginning with the crop year during which the quota is reallocated. The amount of farm marketing quota which must be forfeited shall be determined in the same manner which is specified in paragraph (c)(4) of this section with respect to the forfeiture of purchased quota. Any forfeiture of quota shall occur on December 1 of the year in which the applicant fails to share in the risk of production of tobacco which is produced subject to such quota. While the failure to utilize a quota shall not subject the quota to forfeiture, the 3 year period which is specified in this paragraph shall be extended by 1 year for each year in which the quota is not utilized.</P>
                <P>(i) <E T="03">Successor-in-interest.</E> A successor-in-interest shall be subject to the provisions of this section in the same manner and to the same extent as would be applicable to the person whose interest has been assumed by such successor-in-interest.</P>
                <P>(1) <E T="03">New owner of farm.</E> The new owner of a farm on which a portion or all of the farm marketing quota for such farm was either purchased and/or was reallocated from forfeited quota shall become the successor-in-interest to the previous owner of the farm. However, if a farm is acquired by a new owner on or before June 30 of the current crop year and such owner would otherwise be required to sell or forfeit the farm marketing quota because in the preceding crop year the owner of such quota did not share in the risk of producing a crop of tobacco which was subject to such purchased or reallocated quota, the new owner may be considered the buyer of the quota instead of being considered as a successor-in-interest to the previous owner of the farm. However, the new owner must furnish to the county FSA committee on or before June 30 of the current year a certification that such owner intends to become an active burley tobacco producer. Any purchased or reallocated quota, which is acquired by a new owner who is not considered to be the buyer of the quota in accordance with the provisions of this paragraph, shall be subject to the same terms and conditions with respect to forfeiture which would be applicable if the new owner actually had purchased the quota at the time the farm was acquired.<PRTPAGE P="123"/>
                </P>
                <P>(2) <E T="03">Buyer no longer shares in risk of production.</E> The owner of a farm shall become the successor-in-interest to the buyer of burley tobacco quota which was transferred to a farm but which was not owned by such buyer if the buyer ceases to share in the risk of production of burley tobacco produced on the farm.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 56 FR 21442, May 9, 1991]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.220</SECTNO>
                <SUBJECT>Forfeiture of flue-cured tobacco acreage allotment and marketing quota.</SUBJECT>
                <P>(a) <E T="03">Determination of allotment and quota subject to forfeiture.</E> (1) For purposes of paragraphs (b) and (c) of this section, the phrase “owns a farm” means ownership of:</P>
                <P>(i) A farm as constituted under part 718 of the chapter if the entire farm shares a common ownership; or</P>
                <P>(ii) All of the land within a common ownership if the parent farm consists of separate ownership tracts of land.</P>
                <P>(2) For purposes of paragraphs (b) and (c) of this section, the county FSA committee shall, in accordance with the provisions of part 718 of this chapter, apportion the flue-cured tobacco acreage allotment and marketing quota assigned to a farm between:</P>
                <P>(i) All land which is owned by any person which is not significantly involved in the management or use of land for agricultural purposes, as described in paragraph (b) of this section; and</P>
                <P>(ii) Each common ownership tract of land in the farm other than that described in paragraph (a)(2)(i) of this section.</P>
                <P>(3) With respect to the provisions of paragraph (c) of this section, an acreage allotment and marketing quota shall be determined for a tract in accordance with paragraph (a)(2)(ii) of this section only to the extent that records are available to show the contribution which the tract made to the flue-cured tobacco acreage allotment of the parent farm.</P>
                <P>(4) The farm acreage allotment and farm marketing quota determined under this section for each farm or tract, as applicable, will be the amount of allotment and quota subject to forfeiture under this section.</P>
                <P>(b) <E T="03">Persons not significantly involved in management or use of land for agricultural purposes.</E> For purposes of this paragraph, the term “person” means a person as defined in part 718 of this chapter, including any: Governmental entity, public utility, educational institution, or religious institution, but not including any: Individual, partnership, joint venture, family farm corporation, trust, estate, or similar fiduciary account with respect to which 50 percent or more of the beneficial interest is in one or more individuals; or educational institution that uses a flue-cured tobacco acreage allotment and marketing quota for instruction or demonstrational purposes.</P>
                <P>(1) <E T="03">Required forfeiture.</E> If at any time the county FSA committee determines that any person which owns farm for which a flue-cured tobacco acreage allotment and marketing quota are established is not significantly involved in the management or use of land for agricultural purposes, such person shall forfeit such allotment and quota which is not sold on or before December 1 of the year for which the county FSA committee makes such a determination.</P>
                <P>(2) <E T="03">Owner ceases to be significantly involved.</E> A person shall be considered to be significantly involved in the management or use of land for agricultural purposes if the county FSA committee determines that:</P>
                <P>(i) For the 3 preceding years, more than 20 percent of the gross income of the person has been derived from the management or use of land for the production of crops which are planted and harvested annually, and/or livestock, including pasture and forage for livestock; and</P>
                <P>(ii) Any other person or all other persons which in combination own more than 50 percent of the assets of the owner of the flue-cured tobacco allotment and marketing quota also meet the criteria specified in paragraph (b)(2)(i) of this section.</P>
                <P>(3) <E T="03">Documentation.</E> Within 30 days after a written request is made by the county FSA committee, or within such extended time as may be granted by the county FSA committee, a person must submit such documentation as <PRTPAGE P="124"/>may be requested to support a determination that the provisions of paragraph (b)(2) of this section have been met with respect to such person. Upon failure of such person to timely respond to such request, the county FSA committee shall determine that the person is not significantly involved in the management or use of land for agricultural purposes.</P>
                <P>(c)-(d) [Reserved]</P>
                <P>(e) <E T="03">Buyers of allotment fail to share in the risk of production.</E>
                </P>
                <P>(1) <E T="03">Forfeiture required.</E> If any person buys flue-cured acreage allotment and quota and such person fails to share in the risk of producing the tobacco which was planted subject to such quota during any of the three crop years beginning with the crop year for which the purchase became effective such person shall forfeit the purchased quota if it is not sold on or before December 31 of the year after the crop year in which such crop was planted.</P>
                <P>(2) <E T="03">Failure to utilize purchased allotment and quota.</E> Failure to utilize purchased allotment and quota for the production of tobacco shall not result in the forfeiture of such quota, but the 3 year period which is specified in paragraph (e)(1) of this section shall be extended 1 year for each year for which the quota is not utilized.</P>
                <P>(3) <E T="03">Reduction for failure to share in risk of production.</E> The effective allotment and quota shall be reduced, but not below zero acres or pounds, for planting, leasing, and marketing quota purposes only, to the extent of purchased allotment and quota for each crop year after the crop year in which the buyer of such allotment and quota fails to share in the risk of producing a crop of tobacco planted under such allotment and quota.</P>
                <P>(4) <E T="03">Determining forfeited amount.</E> If only part of the allotment and quota on a farm resulted from purchased allotment or quota, the amount of farm marketing quota which must be forfeited under paragraph (e) of this section shall be determined by:</P>
                <P>(i) Increasing or decreasing each respective purchase of farm marketing quota for the farm to reflect any annual changes in national acreage and national yield factors subsequent to the year of purchase.</P>
                <P>(ii) Adding the amounts determined in paragraph (e)(4)(i) of this section, multiplying the result by the farm yield for the farm, and subtracting the pounds of quota which have been sold to prevent forfeiture.</P>
                <P>(f) <E T="03">Tobacco not planted nor considered planted.</E> Notwithstanding any other provision of this part, any person who owns a farm for which a flue-cured tobacco acreage allotment and marketing quota are established, shall forfeit such allotment and quota after February 15 of any year immediately following the 1st year of the 3-year period immediately preceding the year for which the county FSA committee determines that flue-cured tobacco was not planted nor considered planted on such farm during at least 2 years of such 3-year period.</P>
                <P>(g) <E T="03">Hearing.</E> Before any forfeiture of allotment and quota becomes effective under the provisions of this section, the county FSA committee shall:</P>
                <P>(1) Schedule a hearing for the affected person.</P>
                <P>(2) Notify the affected person of the hearing at least 10 days in advance of the hearing.</P>
                <P>(3) Make a determination, on the basis of evidence presented at the hearing by or on behalf of the affected person and by or on behalf of the county FSA committee as to whether:</P>
                <P>(i) Any of the conditions of requiring forfeiture as specified in this section exist; and</P>
                <P>(ii) The affected person knowingly failed to take steps to prevent forfeiture of a flue-cured tobacco acreage allotment and marketing quota.</P>
                <P>(4) Notify the affected person of the county FSA committee determination and, if forfeiture of allotment and quota is to be required, afford such person an opportunity to appeal to a review committee under the provision of part 711 of this chapter.</P>
                <P>(5) Wait until the period has passed for the affected person to appeal the county FSA committee or review committee determination that allotment and quota must be forfeited under the provisions of this section.</P>
                <P>(h) <E T="03">Apportionment of data and determination of allotment and quota after forfeiture.</E> (1) <E T="03">Apportionment of data.</E> The <PRTPAGE P="125"/>pounds of farm marketing quota retained on the forfeiting farm after the forfeiture shall be divided by the farm marketing quota established for the forfeiting farm before the forfeiture to determine a factor for apportioning farm data for the current year and for the base period. The data to be retained on the forfeiting farm shall be determined by multiplying the factor by the following data of the forfeiting farm, the:</P>
                <P>(i) Planted and considered planted acres for the base period.</P>
                <P>(ii) History acres for the base period.</P>
                <P>(iii) Farm acreage allotment for the base period.</P>
                <P>(iv) Overmarketings which have not been subtracted when determining the effective farm marketing quota of the forfeiting farm.</P>
                <P>(v) Acres of allotment reduced in the current year for a marketing quota violation in a prior year.</P>
                <P>(vi) Previous year's effective farm marketing quota.</P>
                <P>(vii) Previous year's marketings.</P>
                <P>(viii) Previous year's farm marketing quota.</P>
                <P>(ix) Pounds of quota transferred from the forfeiting farm by lease in the current year.</P>
                <P>(x) Pounds of quota transferred to the farm by lease in the previous year.</P>
                <FP>The portion of the forfeiting farm data which shall be included in a forfeiture pool for the county shall be determined by subtracting the acres or pounds which are retained on the forfeiting farm from the acres or pounds established for the forfeiting farm before forfeiture.</FP>
                <P>(2) <E T="03">Forfeiture pool.</E> The data for the forfeiture pool shall be added to any previous data in the forfeiture pool.</P>
                <P>(3) <E T="03">Allotment and quota after forfeiture.</E> After adjustment of data, the effective farm acreage allotment and the effective farm marketing quota shall be determined in accordance with § 723.205 and 723.206 of this part, respectively, for the forfeiting farm.</P>
                <P>(i) <E T="03">Forfeiture pool.</E> (1) <E T="03">Establishing forfeiture pool.</E> A forfeiture pool shall be established in each county in which a forfeiture of allotment and quota occurs. The forfeiture pool shall be increased to include data for each forfeiture and shall be decreased for each reallocation in order to reflect any forfeited or reallocated amounts of the:</P>
                <P>(i) Farm acreage allotment for the current year and for the base period.</P>
                <P>(ii) Farm marketing quota for the current year and for the base period.</P>
                <P>(iii) Acres reduced for violation.</P>
                <P>(iv) Planted and considered planted acres for the base period.</P>
                <P>(v) History acres for the base period.</P>
                <P>(vi) Previous year's effective farm marketing quota.</P>
                <P>(vii) Previous year's marketing.</P>
                <P>(viii) Quota transferred from the forfeiting farm by lease.</P>
                <P>(2) <E T="03">Yield for forfeiture pool.</E> The farm yield for the forfeiture pool shall be determined by dividing the farm marketing quota in the forfeiture pool by the farm acreage allotment in the forfeiture pool. The preliminary farm yield for the forfeiture pool shall be determined by dividing the farm yield by the national yield factor.</P>
                <P>(3) <E T="03">Adjustment of data in forfeiture pool.</E> At the beginning of the current year, the data in the forfeiture pool shall be adjusted by the factors used in determining yields, allotments, and quotas for old farms. Acreage and quota data in the forfeiture pool shall be decreased each time quota is reallocated from the forfeiture pool, such decrease to be made in the same proportion as the pounds of quota which are reallocated from the pool are to the pounds of quota which were in the pool before the reallocation.</P>
                <P>(j) <E T="03">Reallocation of allotment and quota from forfeiture pool.</E> (1) <E T="03">Application.</E> In order to establish eligibility to receive allotment and quota from the forfeiture pool in the current year, an application must be made on a form approved by the Deputy Administrator. Such application must be filed:</P>
                <P>(i) <E T="03">Who may file.</E> By an active producer.</P>
                <P>(ii) <E T="03">When to file.</E> On or before March 31. The State FSA committee may establish an earlier date if notice of such earlier date is given in time for interested applicants to file an application by the earlier date.</P>
                <P>(iii) <E T="03">Where to file.</E> At the county FSA office which serves the farm for which the application is filed.<PRTPAGE P="126"/>
                </P>
                <P>(2) <E T="03">Eligibility of applicant.</E> In order for an applicant to be eligible for allotment and quota from the forfeiture pool, the county FSA committee must determine that:</P>
                <P>(i) The application was filed timely.</P>
                <P>(ii) The applicant is an active producer.</P>
                <P>(iii) During the current year or during the 4 years preceding the current year, the applicant has not:</P>
                <P>(A) Sold or forfeited allotment and quota from any farm.</P>
                <P>(B) Used the designation method of division to retain less allotment than the farm would have retained by another method of division.</P>
                <P>(3) <E T="03">Time to reallocate.</E> The county FSA committee shall:</P>
                <P>(i) Not reallocate any allotment and quota from the forfeiture pool until the time has passed for filing an application for forfeited allotment and quota for the current year.</P>
                <P>(ii) Reallocate any allotment and quota from the forfeiture pool only during the 30-day period beginning on the day after the final day for filing an application for allotment and quota from the forfeiture pool.</P>
                <P>(4) <E T="03">Reallocation by county FSA committee.</E> Reallocation of any allotment and quota shall be made by the county FSA committee. In making its determination of the amounts to reallocate, the county FSA committee may consider the size of the current allotments on the farms of the eligible applicants, the length of time the applicants have been farming tobacco, the type of farming done by the applicants (i.e., livestock, grain, or other commodities), and other factors which in the judgment of the county FSA committee should be considered. Allotment and quota may be reallocated to a farm which currently does not have a flue-cured tobacco allotment. A factor shall not be used to reallocate allotment and quota between all eligible applicants.</P>
                <P>(5) <E T="03">Basis for reallocation from forfeiture pool.</E> Reallocation from the forfeiture pool shall be on the basis of pounds of farm marketing quota.</P>
                <P>(6) <E T="03">Amount of quota to reallocate.</E> The county FSA committee may reallocate all or part of the quota in the forfeiture pool.</P>
                <P>(i) <E T="03">Minimum.</E> The minimum amount of quota which may be reallocated to an eligible applicant is the total amount of quota in the pool or 200 pounds, whichever is less.</P>
                <P>(ii) <E T="03">Maximum.</E> The maximum amount of quota which may be reallocated to an eligible applicant is 1,000 pounds. However, with State FSA committee approval, up to 2,500 pounds may be allocated.</P>
                <P>(7) <E T="03">Data for receiving farm.</E> All data for the forfeiture pool shall be apportioned to the receiving farm in the proportion that the reallocated farm marketing quota is to the total farm marketing quota in the forfeiture pool before the reallocation. The pounds of farm marketing quota reallocated to a farm shall be divided by the farm yield for the farm to determine the amount of reallocated farm acreage allotment. The data determined for the receiving farm in accordance with the provisions of this paragraph shall be added to any previous data for the receiving farm.</P>
                <P>(8) <E T="03">Allotment and quota for receiving farm.</E> After any adjustments which are made in accordance with the provisions of this section, the farm acreage allotment, the effective farm acreage allotment, and the effective farm marketing quota shall be determined for the receiving farm according to §§ 723.205 and 723.206, respectively, of this part.</P>
                <P>(k) <E T="03">Forfeiture of reallocated allotment and quota.</E> Allotment and quota which is reallocated in accordance with the provisions of this section shall be forfeited if the applicant to whom the quota is reallocated fails to share in the risk of producing a crop of tobacco which is subject to such quota during any of the 3 years beginning with the crop year during which the quota is reallocated. The amount of farm marketing quota which must be forfeited shall be determined in the same manner which is specified in paragraph (e)(4) of this section with respect to the forfeiture of purchased quota. Any forfeiture of quota shall occur on December 1 of the year in which the applicant fails to share in the risk of production of tobacco which is produced subject to such quota. While the failure to utilize a quota shall not subject the quota to forfeiture, the 3 year period which is <PRTPAGE P="127"/>specified in this paragraph shall be extended by 1 year for each year in which the quota is not utilized.</P>
                <P>(l) <E T="03">Successor-in-interest.</E> The successor-in-interest shall be subject to the provisions of this section in the same manner and to the same extent as would be applicable to the person whose interest was assumed.</P>
                <P>(1) <E T="03">New owner.</E> The new owner of a farm on which a portion or all of the farm acreage allotment and farm marketing quota for such farm was either purchased and/or was reallocated from forfeited allotment and quota shall become the successor-in-interest to the previous owner of the farm. However, if a farm is acquired by a new owner on or before June 15 of the current crop year and such owner would otherwise be required to sell or forfeit the farm acreage allotment and farm marketing quota because in the preceding crop year the owner of such allotment and quota did not share in the risk of producing a crop of tobacco which was subject to such purchased or reallocated allotment and quota, the new owner may be considered the buyer of the allotment and quota instead of being considered as a successor-in-interest to the previous owner of the farm. However, the new owner must furnish to the county FSA committee on or before June 15 of the current year a certification that such owner intends to become an active flue-cured tobacco producer. Any purchased or reallocated allotment and quota, which is acquired by a new owner who is considered to be the buyer of the allotment and quota in accordance with the provisions of this paragraph, shall be subject to the same terms and conditions with respect to forfeiture which would be applicable if the new owner actually had purchased the allotment and quota at the time the farm was acquired.</P>
                <P>(2) <E T="03">Buyer no longer shares in risk of production.</E> The owner of a farm shall become the successor-in-interest to the buyer of allotment and quota which was transferred to a farm but which was not owned by such buyer if the buyer ceases to share in the risk of the production of tobacco produced on the farm.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 56 FR 21442, May 9, 1991; 65 FR 7953, Feb. 16, 2000]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.221</SECTNO>
                <SUBJECT>Eminent domain acquisitions.</SUBJECT>
                <P>(a) This section provides a uniform method for reallocating tobacco with respect to land involved in eminent domain acquisitions. An eminent domain acquisition is a taking of title to land, an easement to impound water on the land (impoundment), or an easement to flood the land (flowage), under the power of a Federal, State, or other agency. Acquisition may be by court condemnation of the land or by negotiation between the agency and the owner. This section does not apply to acquisition of land by an agency by a method other than eminent domain acquisition. All land acquired, including surrounding land acquired as a package acquisition, shall be considered an eminent domain acquisition if the agency expended funds using its power of eminent domain.</P>
                <P>(b) In this section, owner means a person having title to the land for a period of at least 12 months immediately before the date of transfer of title or grant of the impoundment or flowage easement under the eminent domain acquisition. If a person has owned the land for less than such 12-month period, they may still be considered the owner if the State committee determines they acquired the land for farming and not for obtaining status as an owner under this section. However, no person shall be considered the owner if he acquired the land subject to a pending eminent domain acquisition contract to an agency or an option by an agency or subject to pending condemnation proceedings. When the current titleholders are not the owner according to this section, the State committee shall determine who previously had title to the land and who is the owner according to this paragraph.</P>
                <P>(c) Tobacco may be pooled for the benefit of an owner whose farm is acquired by eminent domain. Pooling shall be for a 3-year period from the date of displacement or during a period. The displaced owner may request transfer of allotments and quotas from the pool to other farms owned by such person.</P>

                <P>(d) The owner shall be considered displaced from a farm by eminent domain acquisition on the date:<PRTPAGE P="128"/>
                </P>
                <P>(1) The owner loses possession of the land;</P>
                <P>(2) The owner is voluntarily displaced if a binding contract for acquisition has been executed;</P>
                <P>(3) The owner, in the case of a flowage easement, determines it is no longer practical to conduct farming operations on the land; or</P>
                <P>(4) The owner loses possession of the land as lessee under a lease from the agency that provided uninterrupted possession to the owner from the date of acquisition to the end of the lease.</P>
                <P>(e) The owner shall notify the county committee in writing of the eminent domain acquisition and furnish the date of displacement within 30 days so that tobacco may be pooled in accordance with this section. Failure to so notify the county committee shall result in the loss of the ability of the owner to extend the 3-year period provided in paragraph (c) of this section.</P>
                <P>(f) If the county committee is notified or otherwise determines that an owner has been displaced from the farm, the county committee shall establish a pool for the tobacco eligible under this section for a 3-year period beginning on the date of displacement. Pooled tobacco shall be considered fully planted and, for each year in the pool, shall be established in accordance with applicable regulations.</P>
                <P>(g) There shall be no pooling of an tobacco if:</P>
                <P>(1) The county committee determines that an agency has eminent domain power to acquire a farm for the continued production of an tobacco, and</P>
                <P>(i) The agency acquires a farm only for such purpose; and</P>
                <P>(ii) The agency files a written notice with the county committee designating the tobacco to be produced on the farm.</P>
                <P>(2) An agency acquires and retains the land in an agricultural or related activity. The tobacco for such land will be in accordance with applicable regulations.</P>
                <P>(3) A displaced owner voluntarily waives the right to have all the tobacco or any part pooled and requests that the tobacco be retained on the agency acquired land;</P>
                <P>(4) Agency acquired cropland will not be farmed and represents less than 15 percent of the total cropland on the farm. The tobacco shall be retained on the portion of the farm not acquired by the agency.</P>
                <P>(5) An agency acquires land that will not be farmed and the cropland it contains is less than 15 percent of the total on the farm, the entire tobacco for the acquired land shall be retained on the land not acquired by the agency. The owner must file a written request with the county committee for such retention. The tobacco to be retained on the farm cannot exceed the land devoted to an agriculture related activity. Tobacco that is not retained shall be pooled; or</P>
                <P>(6) If, prior to pooling, an owner requests transfer of the tobacco to other farms they own in the same county, the county committee may approve a transfer without establishment of a pool, subject to the requirements of paragraph (j) of this section. This paragraph shall govern the release and reapportionment of pooled tobacco notwithstanding other provisions of applicable commodity regulations.</P>
                <P>(h) Pooled tobacco may be released on an annual basis by the owner to a county committee during any year in which tobacco is pooled and not otherwise transferred from the pool. The county committee may reapportion the released tobacco to other farms in the same county that have tobacco for the same commodity. Pooled tobacco shall not be released on a permanent basis or surrendered after release to the State committee for reapportionment in other counties. Reapportionment shall be on the basis of past acreage of the commodity, land, labor, and equipment available for the production of the commodity, crop rotation practices, and other physical factors affecting the production of the commodity. Pooled tobacco that is released shall be considered to have been fully planted in the pool and not on the farm to which such tobacco is reapportioned.</P>

                <P>(i) Pooled tobacco that may be transferred on a permanent or temporary basis by sale, lease, or by owner designation may be transferred permanently from the pool by the owner or temporarily for the duration of the pooled tobacco, subject to the terms and conditions for such transfers in the <PRTPAGE P="129"/>applicable commodity regulations. The transfer of tobacco acreage allotment or marketing quota shall be approved acre for acre.</P>
                <P>(j)(1) Displaced owners may request a transfer of all or part of the pooled tobacco to any other farm in the United States that is owned by the displaced owner, but only if there are farms in the receiving county with tobacco, for the particular commodity or, if there are no such farms, the county committee determines that farms in the receiving county are suited for the production of the commodity. For purposes of this paragraph:</P>
                <P>(i) Receiving farm means the farm to which transfer from the pool is to be made;</P>
                <P>(ii) Receiving State and county committee mean those committees for the State and county in which the receiving farm is located; and</P>
                <P>(iii) Transferring State and county committees mean those committees for the State and county in which the agency acquired farm is located.</P>
                <P>(2) The displaced owner shall file with the receiving county committee written application for transfer of tobacco from the pool within 3 years after the date of displacement. The application shall contain a certification from the owner that no agreement has been made with any person for the purpose of obtaining tobacco from the pool for a person other than for the displaced owner. The owner shall attach to the application all pertinent documents pertaining to the current ownership or purchase of land and any leasing arrangements, such as the deed of trust or mortgage, a warranty deed, a note, sales agreement, and lease.</P>
                <P>(3) The receiving county committee shall consider each application and determine whether the transfer from the pool shall be approved. Before an application is acted upon by the receiving county committee, the owner shall personally appear before the receiving county committee after reasonable notice, bring any additional pertinent documents as may be requested for examination by the receiving county committee, and answer all pertinent questions bearing on the proposed transfer. Such personal appearance requirement may be waived if the receiving county committee determines from facts presented to it on behalf of the owner that such personal appearance would unduly inconvenience the owner on account of illness or other good cause and such personal appearance would serve no useful purpose. Any action by the receiving county committee shall be subject to the approval required under paragraph (j)(5) of this section.</P>
                <P>(4) The transfer from the pool will be approved by the receiving county committee only if the county committee determines that the owner has made a normal acquisition of the receiving farm for the purpose of bona fide ownership to reestablish farming operations. The elements of such an acquisition shall include, but are not limited to, the following:</P>
                <P>(i) Appropriate legal documents must establish title to the receiving farm;</P>
                <P>(ii) If the displaced owner was the operator of the acquired farm at the date of displacement, such owner must personally operate and be the operator of the receiving farm for the first year that the tobacco is transferred;</P>
                <P>(iii) If the displaced owner was not the operator of the acquired farm at the date of displacement and was not a producer on that farm because the leasing or rental agreement provided for cash, fixed rent, or standing rent payment, such owner shall not be required to operate personally and be the operator of the receiving farm, but at least 75 percent of the allotments for the receiving farm must be planted on the receiving farm during the first year of the transfer. With respect to a commodity for which a quota is applicable but for which there is no acreage allotment, an acreage that is equal to the result of dividing the quota transferred to the receiving farms by the receiving farm's yield, multiplied by 75 percent must be planted during the first year of the transfer;</P>

                <P>(iv) If the displaced owner was not the operator of the acquired farm at the date of displacement but was a producer on that farm at the date of displacement as the result of having received a share of the crops produced on the acquired farm, such displaced owner shall not be required to be the operator of the receiving farm but <PRTPAGE P="130"/>must be a producer on the receiving farm during the first year that tobacco is transferred;</P>
                <P>(v) The agreement between the displaced owner and the seller of the receiving farm must not contain a requirement that the receiving farm be leased to the seller or a person designated by or subject to the control of the seller. The seller or a person designated by or subject to the control of the seller may not lease the receiving farm for the first year the tobacco is transferred; and</P>
                <P>(vi) The agreement under which the receiving farm was purchased or leased must be customary in the community where the receiving farm is located with respect to purchase price and timing and amount of purchase or rental payments.</P>
                <P>(5) The approval by the receiving county committee of a transfer from the pool under this paragraph shall be effective upon concurrence by the State committee of the receiving State. The receiving State committee may authorize a transfer from the pool in any case where the owner presents evidence satisfactory to the receiving State committee that:</P>
                <P>(i) The eligibility requirements of paragraphs (j)(4)(ii) through (j)(4)(iv) of this section cannot be met without substantial hardship because of illness, old age, multiple farm ownership, or lack of a dwelling on the farm to which an allotment or quota is to be transferred; or</P>
                <P>(ii) The owner has made a normal acquisition of the receiving farm for the purpose of bona fide ownership to reestablish farming operations for the displaced owner, even if the farm is leased to the seller of the farm for the first year for which the tobacco is transferred.</P>
                <P>(6) Upon approval under this paragraph, the receiving county committee shall issue a notice of tobacco under the applicable commodity regulations, taking into consideration the land, labor, and equipment available for the production of the commodity, crop rotation practices, and the soil and other physical factors. In determining the tobacco available for transfer, the receiving county committee shall consider the receiving tract as a separate ownership. The acreage transferred from the pool shall not exceed the tobacco most recently established for the acquired farm placed in the pool. When all or a part of the tobacco placed in the pool is transferred and used to establish or increase the tobacco for other farms owned or purchased by the owner, all of the proportionate part of the past acreage history for the acquired farm shall be transferred to and considered for purposes of future tobacco to have been planted on the receiving farm for which tobacco, are established or increased under this section. If only a part of the available tobacco is transferred from the pool, the remaining part of the tobacco, shall remain in the pool for transfer to other farms of the owner until all such tobacco has been transferred or until the period of eligibility for establishing or increasing tobacco under this section has expired.</P>
                <P>(7) If any tobacco is transferred under this section and it is later determined by the receiving county or State committee, or by the Deputy Administrator, that the transfer was obtained by misrepresentation, or that the conditions of paragraph (j)(4) of this section are not met, the tobacco for the receiving farm shall be reduced for each year the transfer purportedly was in effect by the amount attributable to the tobacco transferred from the pool. If the time for the transfer of the tobacco from the pool has not expired, the tobacco initially transferred from the pool shall be returned to the pool after the period of time has expired in which the displaced owner could request administrative review. Cancellation of the transfer of tobacco by the receiving county committee requires approval by the receiving State committee. The receiving county committee shall issue a notice of marketing quota and penalty in accordance with applicable commodity regulations.</P>

                <P>(8) If the displaced owner requests transfer of pooled tobacco, within the prescribed period, but the request for transfer is filed during a year or a part of the pooled tobacco was released to the transferring county committee pursuant to paragraph (h), the request will be processed in the usual manner <PRTPAGE P="131"/>but the amount released shall not be effective until the succeeding year. When a request for transfer of pooled tobacco involves a transfer from one State to another, the receiving State committee shall ask the transferring State committee whether any of the tobacco for which transfer is requested has been released to the transferring county committee for the current year.</P>
                <P>(k)(1) When the displaced owner leases part but not all of the agency acquired land, such part shall be constituted as a separate farm on the date of the displacement of the owner from the land not so leased.</P>
                <P>(2) If a parent farm consists of separate ownership tracts, each such tract being acquired in whole or in part shall be considered as a separate farm for purposes of paragraphs (g)(3) and (g)(4) of this section.</P>
                <P>(3) If a portion of a farm is acquired by an agency and the owner is displaced therefrom, the acquired portion shall be constituted as a separate farm on the date of displacement unless the tobacco is retained on the portion not acquired as provided in paragraphs (g)(3) and (g)(4) of this section, in which case the farm shall not be reconstituted but the farmland and cropland data shall be corrected on all appropriate records for the parent farm.</P>
                <P>(l)(1) The displaced owner may request from the county committee a written designation of beneficiary of the rights in the tobacco attributable to the acquired land in the event of the death of the displaced owner, and may revise such designation from time to time. The beneficiary of a deceased owner may continue a lease or negotiate a lease with the agency, transfer rights with respect to farms owned by the beneficiary, and release, sale, lease, and owner transfer rights under this section.</P>
                <P>(2) If the displaced owner does not file a designation of beneficiary under paragraph (l)(1) of this section and the displaced owner dies before displacement or after pooling occurs, the following persons shall be considered the beneficiary with applicable rights:</P>
                <P>(i) The surviving joint owner of the farm where two persons own the farm as joint tenants with right of survivorship; and</P>
                <P>(ii) The persons who succeed to the deceased displaced owner's interest under a will or by intestate succession. However, in the case of intestate succession, the person shall be limited to the surviving spouse, parent, sibling or child of the deceased displaced owner. In the settlement of the estate of the deceased displaced owner, the heirs may file a written agreement with the county committee for the division of the deceased displaced owner's rights under this section.</P>
                <P>(m)(1) No transfer from the pool under paragraphs (h), (i), or (j) of this section shall be approved if there remains any unpaid marketing quota penalty due with respect to the marketing of the commodity from the acquired farm by the displaced owner, or if any of the commodity produced on the agency acquired farm has not been accounted for as required under applicable regulations.</P>
                <P>(2) If tobacco for an acquired farm next established after the date of displacement would have been reduced because of false or improper identification of the commodity produced on or marketed from the farm, or as the result of a false acreage report, the tobacco shall be reduced in the pool accordance to applicable regulations.</P>
                <CITA>[68 FR 16181, Apr. 3, 2003]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.222</SECTNO>
                <SUBJECT>Exempting Federal prison farms and Federal wildlife refuges.</SUBJECT>
                <P>A marketing penalty shall not be assessed with respect to any commodity that is produced on a Federal prison farm or Federal wildlife refuge. This exception does not apply to penalties incurred by an individual who has a separate interest in a crop that is subject to marketing quotas and was produced on a Federal prison farm or Federal wildlife refuge.</P>
                <CITA>[68 FR 16181, Apr. 3, 2003]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.223</SECTNO>
                <SUBJECT>Transfer of allotments and quotas—State public lands.</SUBJECT>
                <P>(a) Transfers of allotments and quotas between farms in the same county may be permitted where both farms are lands owned by the State.</P>

                <P>(b) An application requesting the transfer of one or more of the allotments and quotas on a farm entirely <PRTPAGE P="132"/>comprised of lands owned by a State shall be filed with the county committee by the State. The application shall identify the farms as being within the same county, show that each farm is entirely comprised of lands owned by the State, and list the allotments and quotas requested to be transferred. Additional information about the farm operations, including leases, shall also be included in the application.</P>
                <P>(c) The State committee shall establish the closing date for filing applications under paragraph (b) of this section, for each year, which shall be no later than the general planting date in the county for the commodity involved in the transfer.</P>
                <P>(d)(1) Each transfer of an allotment and quota shall be adjusted for differences in farm productivity if the yield projected for the year the transfer is to take effect for the farm to which transfer is made exceeds by more than ten percent the yield projected for the year the transfer is to take effect for the farm from which transfer is made. The county committee shall determine the amount of the allotment and quota to be transferred where a productivity adjustment is required to be made by dividing:</P>
                <P>(i) The product of the yield for the farm from which the transfer is made and the acreage to be transferred from such farm, by</P>
                <P>(ii) The yield for the farm to which the transfer is made.</P>
                <P>(2) Acreage for the farm receiving the allotment or quota shall be adjusted by the same percentage as the allotment or quota being transferred is adjusted. The allotment and quota and related acreage transferred from the farm from which the transfer is made shall be the full amount, but the amount of all allotment or quota and related acreage for the farm to which the transfer is made shall be the adjusted amount.</P>
                <P>(e) The amount of allotment and quota on a farm after a transfer under this section is made shall not exceed the average amount of allotment or quota of at least three farms with acreage of cropland similar to the farm receiving the transfer in the community having the applicable allotment acreage and quota on these farms.</P>
                <P>(f) Each transfer of any allotment and quota shall be require that acreage equal to the allotment and quota transferred shall be devoted to and maintained in permanent vegetative cover on the farm from which the transfer is made before any productivity adjustment. The acreage to be devoted to and maintained in permanent vegetative cover with respect to quota crops shall be determined by dividing the quota transferred by the yield of the farm from which the quota is transferred.</P>
                <P>(g) Transfer of an allotment and quota under this section shall only be approved if:</P>
                <P>(1) The county committee determines that a timely filed application has been received and that the provisions of this section have been met; and</P>
                <P>(2) A representative of the State committee also determines that the provisions of this section have been met. If a transfer is approved, the county committee shall issue revised notices of the allotment or quota for each farm affected. If a county committee determines that requirements for a transfer were not met, a report shall be provided to the State committee. If the State committee agrees that requirements were not met, the transfer will be canceled, and the allotment and quota shall be transferred back to the original farm. Where a cancellation and transfer back is required, the county committee shall issue revised notices of the allotment or quota showing the reasons for the cancellation.</P>
                <CITA>[68 FR 16181, Apr. 3, 2003]</CITA>
              </SECTION>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart C—Tobacco Subject to Quota, Exemptions From Quotas, Marketing Cards, and General Penalty Provisions</HD>
              <SECTION>
                <SECTNO>§ 723.301</SECTNO>
                <SUBJECT>Identification of tobacco subject to quota.</SUBJECT>

                <P>(a) Except as provided in paragraphs (b) and (c) of this section, any tobacco which is determined by a representative of the State FSA committee or county FSA committee to have the same appearance and characteristics as a kind of tobacco for which marketing quotas are in effect shall be deemed to <PRTPAGE P="133"/>be a quota kind of tobacco. Such tobacco shall continue to be deemed a quota kind of tobacco unless it has been certified by the Agricultural Marketing Service, U.S. Department of Agriculture, under the Tobacco Inspection Act (7 U.S.C. 511) and implementing regulations (7 CFR part 30), prior to removal of the tobacco from the State where it was produced, as a kind of tobacco not subject to marketing quotas.</P>
                <P>(b) Any kind of tobacco for which marketing quotas are not in effect that is produced in a State where marketing quotas are in effect for any kind of tobacco shall be subject to the quota for the kind of tobacco for which marketing quotas are in effect in that State. If marketing quotas are in effect in a State for more than one kind of tobacco, nonquota tobacco produced in the State shall be subject to the quota for the kind of quota tobacco produced in the State having the highest price support under the Agricultural Act of 1949.</P>
                <P>(c) Paragraph (b) of this section shall not apply to:</P>
                <P>(1) Maryland (type 32) tobacco when it is nonquota tobacco and produced on a farm for which a marketing quota for Maryland (type 32) tobacco was established when marketing quotas for such kind of tobacco were last in effect (1965);</P>
                <P>(2) Cigar-filler (type 41) tobacco when it is nonquota tobacco and produced in Pennsylvania;</P>
                <P>(3) Cigar-wrapper (types 61 and 62) tobacco when it is nonquota tobacco and produced in Connecticut, Massachusetts, Georgia or Florida;</P>
                <P>(4) Tobacco produced in a quota State that is represented to be nonquota tobacco and that is readily and distinguishably different from all kinds of quota tobacco, as determined by the Agricultural Marketing Service, U.S. Department of Agriculture, through application of the standards issued by the Secretary for the inspection and identification of tobacco. Such inspection and identification shall be made prior to removal of the tobacco from the State where it was produced; and</P>
                <P>(5) Tobacco which is nonquota tobacco and produced in a quota area in which the total of the acreage allotments for quota tobacco established for farms is less than twenty acres.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.302</SECTNO>
                <SUBJECT>Tobacco for experimental purposes.</SUBJECT>
                <P>For farms on which tobacco is being grown for experimental purposes by or under the direction of a publicly owned agricultural experiment station, such tobacco shall be exempt from any penalties otherwise required by this part if, before the beginning of the harvesting of tobacco from any farm on which experimental tobacco is being grown, the director of such publicly owned agricultural experimental station furnishes a report, to the State Executive Director for the State in which the farm is located, that includes the following information:</P>
                <P>(a) Name and address of the publicly owned agricultural experiment station.</P>
                <P>(b) Name of the owner, and name of the operator if different from the owner, and the farm number of each farm on which tobacco is grown for experimental purposes only.</P>
                <P>(c) The acreage or poundage of tobacco that is to be grown on each farm for experimental purposes only.</P>
                <P>(d) A certification signed by the director of the publicly owned agricultural experiment station to the effect that such acreage or poundage of tobacco is being grown for each farm for experimental purposes only, the tobacco is being grown under the auspices of such director, and the acreage of each plot was considered necessary for carrying out the experiment.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.303</SECTNO>
                <SUBJECT>Production of registered or certified flue-cured tobacco seed.</SUBJECT>
                <P>Producers of registered or certified flue-cured tobacco seed may devote flue-cured tobacco acreage in excess of the effective allotment to seed production without such acreage of tobacco causing a “No Price Support” entry on the marketing card issued for the farm if an agreement is signed by the farm operator, and the producer, if different from the operator, which provides:</P>
                <P>(a) <E T="03">Destruction prior to harvest.</E> For the destruction prior to harvest of all tobacco produced on the acreage designated for seed production.</P>
                <P>(b) <E T="03">Producer payment of compliance costs.</E> That the producers shall pay the <PRTPAGE P="134"/>cost of compliance visits to a farm by representatives of the county FSA committee for the purposes of:</P>
                <P>(1) Designating and determining the acreage of seed production, and</P>
                <P>(2) Determining that no tobacco has been harvested from the acreage designated for seed production and to witness destruction of tobacco leaves.</P>
                <P>(c) <E T="03">Agreement.</E> That the producer(s) signing the agreement shall agree to timely notify the county FSA office when the tobacco seed has been harvested.</P>
                <P>(d) <E T="03">No history credit.</E> That the planting of the tobacco acreage for seed production will not create history acreage for the purpose of establishing future farm allotments.</P>
                <P>(e) <E T="03">Cancellation of marketing cards.</E> That if the county FSA committee determines that any of the terms and conditions of the agreement have been violated or any material misrepresentation has been made, any marketing card issued for the farm in recognition of the agreement shall be recalled and canceled, and a marketing card shall be issued to reflect that tobacco produced on the farm is not eligible for price support.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.304</SECTNO>
                <SUBJECT>Determination of discount varieties.</SUBJECT>
                <P>(a) <E T="03">Definition. Discount variety</E> means any of the flue-cured tobacco seed varieties designated as Coker 139, Coker 140, Coker 316, Reams 64, Reams 266, or Dixie Bright 244, or a mixture or strain of such seed varieties, or any breeding line of flue-cured tobacco seed varieties, including, but not limited to, 187-Golden Wilt (also designated by such names as No-Name, XYZ, Mortgage Lifter, Super XyZ), having the quality and chemical characteristics of the seed varieties designated as Coker 139, Coker 140, Coker 316, Reams 64, Reams 266, or Dixie Bright 244. However, where there is growing in a field offtype plants of not more than 2 percent, such offtype plants shall not be considered in certifying the flue-cured tobacco variety being produced. Flue-cured tobacco variety which is not certified to be discount variety shall be considered as “acceptable variety.”</P>
                <P>(b) <E T="03">Producer report.</E> The operator, or any producer, on each farm producing flue-cured tobacco shall file with the county FSA office a report on MQ-32 showing whether or not discount variety tobacco was planted on the farm.</P>
                <P>(c) <E T="03">Failure to file report.</E> If the operator of a farm on which flue-cured tobacco is being produced in the current year fails or refuses, within 7 days after a request of the county FSA committee on MQ-34-1, Notice of Action Required Regarding Determination of Seed Varieties of Flue-Cured Tobacco, to file a report on MQ-32, showing whether or not there was planted any of the discount varieties of flue-cured tobacco on such farm, all flue-cured tobacco produced on such farm shall be considered by the county FSA committee to be discount variety tobacco unless the county FSA committee finds that failure to comply with the request was due to circumstances beyond the control of the farm operator.</P>
                <P>(d) <E T="03">Notice to farm operator.</E> The farm operator having discount variety tobacco shall be given written notice by certified mail on MQ-34-2, Notice of Determination of Discount Variety of Flue-Cured Tobacco. This notice to the farm operator shall constitute notice to all persons who, as owner, operator, landlord, tenant, or sharecropper, are interested in the tobacco grown on the farm.</P>
                <P>(e) <E T="03">Producer's right to recertify.</E> Any producer on a farm who received a Form MQ-34-2 notifying such producer that the farm has discount variety tobacco when in fact an acceptable variety is being produced may recertify on Form MQ-32.</P>
                <P>(f) <E T="03">Issuance of marketing cards.</E> (1) If a farm is considered to have discount variety tobacco available for marketing and the farm is eligible for price support, the county FSA executive director shall issue MQ-76, bearing the notation “Discount Variety-Limited Price Support.” If the farm is considered to have discount variety tobacco but it is not eligible for price support, the county FSA executive director shall issue MQ-76, bearing the notation “Discount Variety-No Price Support.”</P>

                <P>(2)(i) Where an MQ-76, bearing the notation, “Discount Variety-Limited Price Support” is issued for a farm, the card may be exchanged at the county <PRTPAGE P="135"/>FSA office for an MQ-76, without the notation, or</P>
                <P>(ii) Where an MQ-76, bearing the notation “Discount Variety-No Price Support” is issued for a farm the card may be exchanged at the county FSA office for MQ-76 with the notation “No Price Support.” However, the farm operator shall establish to the satisfaction of the county FSA committee that there has been no commingling or substitution of discount variety tobacco produced on the farm or on any other farm operated by such operator, and that all discount variety tobacco has been marketed or satisfactorily disposed of, or accounted for.</P>
                <P>(3) MQ-76 issued to identify marketings of tobacco grown for experimental purposes by or for publicly owned experiment stations shall bear the notation “Discount Variety-Limited Price Support” if such tobacco is discount variety tobacco.</P>
                <P>(g) <E T="03">Identification of flue-cured leaf account tobacco as acceptable variety—</E>(1) Whenever the Director determines there is a significant amount of discount variety tobacco available for marketing in any marketing year, the Director may cause to be initiated the provisions of this paragraph. In addition, the Director may terminate any action initiated hereunder when it is determined that no discount variety of flue-cured tobacco remains available for sale during the remainder of the current marketing season. Notification to warehouse operators of action required under this paragraph shall be by the State FSA executive director.</P>
                <P>(2)(i) Each warehouse operator who offers for auction sale any leaf account flue-cured tobacco on a warehouse floor other than such operator's own floor, and who requests the other warehouse operator to identify such tobacco as being “acceptable variety” shall execute MQ-79-1 (Flue-Cured), Dealer's Certification-Resale Tobacco.</P>
                <P>(ii) Each warehouse operator who is participating in the Commodity Credit Corporation price support program, and who identifies resale tobacco indicating that such tobacco with a “certified” lot ticket indicating that such tobacco is covered by an executed MQ-79-1.</P>
                <P>(iii) Each executed MQ-79-1 (Flue-Cured) shall show the following information with respect to each lot of resale tobacco:</P>
                <P>(A) Crop year.</P>
                <P>(B) Name and address of warehouse where the tobacco is being offered for sale.</P>
                <P>(C) Tobacco sale bill number and date.</P>
                <P>(D) Date, signature of dealer and current address, and dealer identification number.</P>
                <P>(3)(i) Each dealer or any other person who offers for auction sale any resale flue-cured tobacco on a warehouse floor which is participating in the Commodity Credit Corporation price support program and on which floor eligible resale flue-cured tobacco is identified with a “certified” lot ticket, and who requests the warehouse operator to identify such operator's tobacco as being an “acceptable variety,” shall execute MQ-79-1 (Flue-Cured), Dealer's Certification-Resale Tobacco.</P>
                <P>(ii) Each executed MQ-79-1 (Flue-Cured) shall show the following information with respect to resale tobacco:</P>
                <P>(A) Crop year.</P>
                <P>(B) Name and address of warehouse where the tobacco is being offered for sale.</P>
                <P>(C) Date, signature of dealer and current address and dealer identification number.</P>
                <P>(D) Tobacco sale bill number and date.</P>
                <P>(iii) Each dealer or any person who acquires acceptable variety tobacco in a manner which would make it eligible for certification on MQ-79-1, or who has on hand both discount variety tobacco and acceptable variety tobacco, and desires to dispose of acceptable variety tobacco prior to disposing of the discount variety tobacco, may apply in writing to the State FSA executive director for a special authorization to have the acceptable variety tobacco certified when offered for auction sale.</P>
                <P>(h) Estimate of production. For any farm on which discount variety tobacco is being grown, a Form MQ-92, Estimate of Production, shall be obtained.</P>
              </SECTION>
              <SECTION>
                <PRTPAGE P="136"/>
                <SECTNO>§ 723.305</SECTNO>
                <SUBJECT>Issuance of marketing cards.</SUBJECT>
                <P>(a) <E T="03">General.</E> Each marketing of tobacco from a farm in a quota area shall be identified by a valid marketing card unless prior to marketing an AMS certification is issued for such tobacco to indicate that such tobacco is a nonquota kind of tobacco.</P>
                <P>(1) A marketing card (MQ-76 or MQ-77) shall be issued for the current marketing year for each farm having quota tobacco available for marketing. Cards shall be issued in the name of the farm operator except that:</P>
                <P>(i) Cards issued for tobacco grown for experimental purposes only shall be issued in the name of the experiment station,</P>
                <P>(ii) Cards issued to a successor-in-interest shall be issued in the name of the successor-in-interest,</P>
                <P>(iii) For kinds of tobacco other than flue-cured and burley, if a part of a farm which includes the tobacco acreage on the farm is cash leased to such producer, cards shall be issued in the name of such producer. The face of the marketing card may show the name of other interested producers. A marketing card may be issued in the name of a producer who is not the farm operator if the county FSA committee determines pursuant to the procedure in paragraph (a)(2) of this section that such producer has been or likely will be deprived of the right to use the marketing card issued for the farm to market such producer's proportionate share of the crop.</P>
                <P>(2) If the county FSA committee has reason to believe that one or more producers on the farm have been or likely will be deprived of the right to use such marketing card to market such producer's proportionate share of the crop, a hearing shall be scheduled by the county FSA committee and the operator of the farm and the producer or producers involved shall be invited to be present, or to be represented, at which time they shall be given the opportunity to substantiate their claims concerning the use of the farm marketing card to market each such producer's proportionate share of the effective farm marketing quota for such crop. At least two members of the county FSA committee shall be present at the hearing. The hearing shall be held at the time and place named in the notice. A summary of the evidence presented at the hearing shall be prepared for use of the county FSA committee. If the farm operator or other producer(s) on the farm do not attend the hearing, or are not represented, the county FSA committee shall make its decision on the basis of information available to such committee. If the county FSA committee finds that any producer on the farm has been or likely will be deprived of the right to use the marketing card issued for the farm to market such producer's proportionate share of the crop, a separate marketing card shall be issued to such producer. With respect to burley and flue-cured tobacco, the marketing card issued for the farm shall be recalled and a separate marketing card, showing 103 percent of the producer's proportionate share of the effective farm marketing quota shall be issued to each such producer who it is determined has been or likely will be deprived of the opportunity to market such producer's proportionate share of the crop and another card (or other cards if considered preferable by the county FSA committee) shall be issued showing 103 percent of the effective farm marketing quota to enable the other producers on the farm to market their proportionate shares. The marketing cards issued pursuant to this subparagraph shall reflect the proportionate pounds, if any, already marketed by each producer.</P>
                <P>(3) The procedure in paragraph (a)(2) of this section shall not apply to a person who was a producer on the farm in a prior year but who is not a producer in the current crop year.</P>
                <P>(b) <E T="03">Person authorized to issue marketing cards.</E> The county FSA executive director shall be responsible for the issuance of marketing cards. For kinds of tobacco other than burley and flue-cured tobacco, each marketing card shall bear the actual or facsimile signature of the county FSA executive director who issued the card.</P>
                <P>(c) <E T="03">Rights of producers and successors-in-interest.</E> (1) Each producer having a share in tobacco available for marketing from a farm shall be entitled to <PRTPAGE P="137"/>the use of the marketing card for marketing such producer's proportionate share.</P>
                <P>(2) Any person who succeeds, other than a dealer, in whole or in part to the share of a producer in the tobacco available for marketing from a farm, shall, to the extent of such succession, have the same right to the use of the marketing card and bear the same liability for penalties as the original producer.</P>
                <P>(d) <E T="03">No price support-burley and flue-cured tobacco.</E> For burley and flue-cured tobacco, the notation “No Price Support” shall be entered on each marketing card issued for the use of:</P>
                <P>(1) <E T="03">Farm.</E> The farm if any producer on the farm is ineligible for price support under the provisions of part 1464 of this title.</P>
                <P>(2) <E T="03">Producer.</E> The producer on a farm if the producer is ineligible for price support under the provisions of part 1464 of this title.</P>
                <P>(e) <E T="03">Farm quota data entered on marketing card and supplemental card for burley or flue-cured tobacco:</E>
                </P>
                <P>(1) Any marketing card issued to market burley or flue-cured tobacco shall show when issued, in the space provided on the reverse side, the pounds computed by multiplying 103 percent times the effective farm marketing quota.</P>
                <P>(2) Notwithstanding paragraph (e)(1) of this section, if the tobacco available for marketing from the farm is determined by the county FSA committee or the county FSA executive director to be less than the effective farm marketing quota, for purposes of issuing a marketing card and showing thereon the farm's 103 percent of the effective quota, the effective farm marketing quota for the farm shall be considered to be the pounds determined to be available for marketing from the farm. If any producer on the farm satisfies the county FSA committee or county FSA executive director that the quantity of tobacco produced on the farm in the current year, plus any carryover tobacco from a prior year, is greater than the previously determined pounds of tobacco available for marketing from the farm, the pounds shown on the marketing card shall be increased accordingly, but not to exceed an amount which would cause the total pounds shown on the marketing card to equal 103 percent of the effective farm marketing quota.</P>
                <P>(3) Upon request by the farm operator, a supplemental marketing card bearing the same name and identification as shown on the original marketing card may be issued for a farm upon return to the county FSA office of an original marketing card or a supplemental marketing card. The pounds computed as the balance of 103 percent of quota from a prior marketing card shall be shown in the first space on the reverse side of the marketing card.</P>
                <P>(4) Upon written request of the farm operator two or more marketing cards may be issued for a farm if the farm operator specifies the number of pounds of quota to be assigned to each marketing card. In such case, the total pounds of quota specified in the entry, “103 percent of quota,” on all marketing cards issued for the farm may not exceed 103 percent of the effective farm marketing quota.</P>
                <P>(f) <E T="03">Farm quota data entered on marketing card and supplemental card for any kind of tobacco other than burley or flue-cured:</E> (1) Within quota marketing card. A within quota marketing card, MQ-76, indicating the tobacco is eligible for price support shall be issued for use in identifying the kind of tobacco that is available for marketing from a farm when such tobacco:</P>
                <P>(i) Is eligible for price support according to the provisions of part 1464 of this title.</P>
                <P>(ii) Was grown for experimental purposes by a publicly owned agricultural experiment station.</P>
                <P>(2) <E T="03">Excess marketing card.</E> An excess marketing card (MQ-77) shall be issued for a farm for marketing a kind of tobacco that is ineligible for price support. Before the MQ-77 is issued the county FSA executive director shall enter on such marketing card the rate of any penalty that is to be deducted from the proceeds from any marketing of tobacco identified by such marketing card. An MQ-77 shall be issued for each farm for each kind of tobacco for which:</P>

                <P>(i) There is excess tobacco available for marketing from the farm; or<PRTPAGE P="138"/>
                </P>
                <P>(ii) The producer is not an eligible producer or the tobacco is not eligible tobacco as determined in accordance with part 1464 of this title.</P>
                <P>(3) <E T="03">Full penalty rate.</E> The full penalty rate shall be entered on each MQ-77 issued to identify tobacco produced on a farm for which:</P>
                <P>(i) An acreage allotment was not established;</P>
                <P>(ii) The farm operator or another producer on the farm prevents the county FSA committee from obtaining information necessary to determine the correct acreage of tobacco on the farm;</P>
                <P>(iii) The farm operator fails in accordance with part 718 of this chapter to provide a certification of acreage planted to tobacco, or</P>
                <P>(iv) The farm operator or another producer on the farm has not agreed to make contributions to the No Net Cost Fund or pay assessments to the No Net Cost Account, as applicable, in accordance with part 1464 of this title.</P>
                <P>(4) <E T="03">Converted penalty rate.</E> Except as provided in paragraph (f)(3) of this section, a converted penalty rate shall be entered on each MQ-77 issued to identify tobacco produced on a farm from which there is excess tobacco available for marketing and the percentage of excess is less than 100 percent. For the purpose of determining the penalty due on each marketing by a producer of tobacco subject to penalty, the converted rate of penalty per pound shall be determined by multiplying the applicable rate of penalty for the current crop by the percent excess determined according to this paragraph. For a farm without carryover tobacco from a prior year, the percent excess shall be determined by dividing the excess acreage of tobacco by the harvested acreage of tobacco for the farm. For a farm having carryover tobacco from a prior year, the percent excess shall be determined as follows:</P>
                <P>(i) Determine the number of “carryover” acres by dividing the number of pounds of carryover tobacco from the prior year by the normal yield for the farm for that year. Reduce such “carryover” acres by the amount determined by subtracting the harvested acreage from the allotment in the current year. If the “carryover” acres are entirely offset by the underharvested acreage, the percent excess will be zero and a MQ-76 may be issued if the farm otherwise is eligible for price support and the remainder of this paragraph (f)(4) of this section are inapplicable.</P>
                <P>(ii) Determine the number of “within quota carryover acres” by multiplying the “carryover acres” by the “percent within quota” (i.e., 100 percent minus the percent excess) for the year in which the carryover tobacco was produced.</P>
                <P>(iii) Determine the “total acres” of tobacco by adding the “carryover acres” and the acreage of tobacco harvested in the current year.</P>
                <P>(iv) Determine the “excess acres” by subtracting from the “total acres” the sum of the current year's allotment and the “within quota carryover acres.”</P>
                <P>(v) Determine the percent excess by dividing the “excess acres” by the “total acres.”</P>
                <P>(5) Except as provided in paragraphs (f)(3) and (4) of this section, a zero penalty rate shall be entered on any MQ-77 issued in accordance with this section.</P>
                <P>(g) <E T="03">Other marketing card data.</E> Other data specified in instructions issued by the Deputy Administrator shall be entered on the marketing card.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.306</SECTNO>
                <SUBJECT>Claim stamping and replacing marketing cards.</SUBJECT>
                <P>(a) <E T="03">Claim stamping.</E> If a person is indebted to the United States and such indebtedness has been recorded on the county debt record, any marketing card issued for the farm on which the person has a producer interest shall bear the notation “U.S. Claim” followed by the amount of the indebtedness. The name of the debtor-producer, if different from the farm operator, shall be recorded directly under the claim notation. The notation “TMQ” indicating tobacco marketing quota as the type of indebtedness shall constitute notice to any buyer that until the amount of penalty is paid, the United States has a lien with respect to any crop of tobacco in which the debtor-producer has an interest. A claim notation other than “TMQ” shall constitute notice to any buyer that subject to prior liens, the net proceeds from any tobacco pledged as collateral <PRTPAGE P="139"/>for a price support loan shall be paid to the “Farm Service Agency, USDA” to the extent of the indebtedness shown. The acceptance and use of a marketing card bearing a notation and information concerning an indebtedness to the United States shall not constitute a waiver by the debtor-producer of any right to contest the validity of such indebtedness by appropriate appeal. As claim collections are made, the amount of the claim shown on the card shall be revised to show the claim balance. If requested by the producer, the county FSA executive director who issued the marketing card shall issue a claim-free marketing card when the claim has been paid.</P>
                <P>(b) <E T="03">Replacing, exchanging, or issuing additional marketing cards.</E> Subject to the approval of the county FSA executive director, two or more marketing cards may be issued for any farm. Upon the return to the county FSA office of a marketing card which had been used in its entirety and before the marketing of tobacco from the farm has been completed, a new marketing card bearing the same name, information, and identification as the used card shall be issued for the farm. A new marketing card shall be issued to replace a card which has been determined by the county FSA executive director who issued the card to have been lost, destroyed, or stolen.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.307</SECTNO>
                <SUBJECT>Invalid cards.</SUBJECT>
                <P>(a) <E T="03">Reasons for being invalid.</E> A marketing card shall be invalid if:</P>
                <P>(1) It is not issued or delivered in the manner prescribed;</P>
                <P>(2) An entry is omitted or is incorrect;</P>
                <P>(3) It is lost, destroyed, stolen, or becomes illegible; or,</P>
                <P>(4) Any erasure or alteration has been made and not properly initialed by the county FSA executive director.</P>
                <P>(b) <E T="03">Validating invalid cards.</E> If any entry is not made on a marketing card as required, either through omission or incorrect entry, and the proper entry is made and initialed by the county FSA executive director who issued the card, or by a marketing recorder, then such card shall become valid.</P>
                <P>(c) <E T="03">Returning invalid cards.</E> In the event any marketing card becomes invalid (other than by loss, destruction or theft, or by omission, alteration, or incorrect entry, which has not been corrected by the county FSA executive director who issued the card, or by a marketing recorder), the farm operator, or the person in possession of the card, shall return it to the county FSA office at which it was issued.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.308</SECTNO>
                <SUBJECT>Rate of penalty.</SUBJECT>
                <P>The rate of penalty for a marketing year shall be equal to seventy-five (75) percent of the average market price for the kind of tobacco for the immediately preceding marketing year as determined and announced annually by the U.S. Department of Agriculture.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 63 FR 11582, Mar. 10, 1998]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.309</SECTNO>
                <SUBJECT>Persons to pay penalty.</SUBJECT>
                <P>Subject to any additional requirements or provisions for remittances which are contained in § 723.409 of this part, the persons to pay the penalty due on any marketing of tobacco subject to penalty shall be determined as follows:</P>
                <P>(a) <E T="03">Auction sale.</E> The penalty due on marketings by a producer or dealer through an auction sale shall be paid by the warehouse operator who may deduct an amount equivalent to the penalty from the price paid to the producer or dealer.</P>
                <P>(b) <E T="03">Nonauction sale.</E> The penalty due on tobacco acquired directly from a producer or dealer, other than at an auction sale, shall be paid by the person acquiring the tobacco who may deduct an amount equivalent to the penalty from the price paid to the producer or dealer in the case of a sale.</P>
                <P>(c) <E T="03">Marketing outside the United States.</E> The penalty due on marketings by a producer or dealer directly to any person outside the United States shall be paid by the producer or dealer making the sale.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 63 FR 11582, Mar. 10, 1998]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.310</SECTNO>
                <SUBJECT>Date penalty is due.</SUBJECT>
                <P>(a) <E T="03">Payment of penalty.</E> Penalties shall become due at the time the tobacco is marketed, except that in the case of <PRTPAGE P="140"/>false identification or failure to account for disposition, the penalty shall be due on the date of such false identification or failure to account for disposition. The penalty shall be paid by remitting the amount due to the State FSA office not later than the end of the calendar week in which the tobacco becomes subject to penalty. A draft, money order, or check drawn payable to the Farm Service Agency may be used to pay any penalty, but any such draft or check shall be received subject to payment at par.</P>
                <P>(b) <E T="03">Auction sale net proceeds.</E> If the penalty due on any auction sale of tobacco by a producer is in excess of the net proceeds of such sale (gross amount for all lots included in the sale less usual warehouse charges), the amount of the net proceeds accompanied by a copy of the tobacco sale bill covering such sale may be remitted as the full penalty due. Usual warehouse charges shall not include the following:</P>
                <P>(1) Advances to producers,</P>
                <P>(2) Charges for hauling, or</P>
                <P>(3) Any other charges not usually incurred by producers in marketing tobacco through a warehouse.</P>
                <P>(c) <E T="03">Nonauction sales.</E> Nonauction sales of excess tobacco shall be subject to the full rate of penalty and shall be paid in full even though the penalty may exceed the proceeds for the sale of tobacco.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.311</SECTNO>
                <SUBJECT>Lien for penalty; liability of persons who are affiliated with indebted person or who permit the indebted person to use their identification card.</SUBJECT>
                <P>(a) <E T="03">Lien on tobacco.</E> Until the amount of any marketing quota penalty imposed under this part is paid, a lien shall exist in favor of the United States for the amount of the penalty on:</P>
                <P>(1) The tobacco with respect to which such penalty is incurred; and</P>
                <P>(2) Any other tobacco subject to marketing quotas in which the person liable for payment of the penalty has an interest and which is marketed in the same or a subsequent marketing year.</P>
                <P>(b) <E T="03">Lien precedence.</E> The lien, described in paragraph (a) of this section, attaches at the time that the penalty is assessed. As to third parties, in the event of a lack of actual notice of the lien, then notice shall be deemed to occur when:</P>
                <P>(1) In the case of indebted producers, the debt is entered on the debt record maintained by the county FSA office of the county in which the tobacco was grown;</P>
                <P>(2) In the case of an indebted warehouse operator, the debt is entered on the debt record of the State FSA office for the State in which the warehouse is located; and</P>
                <P>(3) In the case of an indebted dealer, the debt is entered on the debt record of the State FSA office for the State in which the dealer is required to file reports.</P>
                <P>(c) <E T="03">Availability of list of marketing quota penalty debts.</E> Each county and State FSA office shall maintain a list of tobacco marketing penalty debts which have been entered on the debt record in their office. The list shall be available for examination upon request by any interested person.</P>
                <P>(d) <E T="03">Liability for penalty owed by another person.</E> (1) When a penalty in excess of $10,000 is incurred under this part by an entity, all persons who have a substantial ownership interest in the entity shall be jointly and severally liable with the entity for the payment of such penalty, unless it is demonstrated to the satisfaction of the Deputy Administrator that the violation was inadvertent. Substantial ownership interest shall be deemed to be any ownership interest greater than ten percent.</P>

                <P>(2) A dealer or warehouse operator who permits an indebted person to use such dealer's or warehouse operator's identification card to market tobacco shall be liable for the amounts due by the indebted person to the United States under this part up to the amount of the value of the tobacco so marketed. In addition, unless the Deputy Administrator determines otherwise, any persons or person, who as a warehouse operator or dealer becomes affiliated with any person who at the time of affiliation is indebted under this part to the United States, shall be liable for the amount of the debt owed to the United States by the person with whom such person or persons become affiliated up to the amount of the value of any tobacco which is marketed by <PRTPAGE P="141"/>such affiliated warehouse operator or dealer during the time of the affiliation with the indebted person. Affiliation may include any relationship in which the parties have a common interest in tobacco, or in an enterprise or entity involved in the marketing, processing, or handling of tobacco, or where the parties both hold a position of responsibility or ownership in such an enterprise or entity, or where there is common ownership of a business involved in the transaction. A warehouse operator or dealer may also be considered to be affiliated with an indebted person when such warehouse operator or dealer is associated with a person who is both:</P>
                <P>(i) An employee or otherwise authorized to buy and sell tobacco for such warehouse operator or dealer; and</P>
                <P>(ii) An indebted person or at the time of indebtedness incurred by an entity was a substantial owner or an officer of the indebted entity.</P>
                <FP>Affiliation may also be deemed to occur where parties have traded in tobacco under circumstances which indicate that there may be a lack of arm's length trading between the parties such as where the parties engage in casual or undocumented transactions in significant quantities of tobacco, or where the parties have traded in tobacco with each other without a movement of the tobacco, or where there is a trading in tobacco without documentation of a significant exchange of money, or other circumstances which indicate an affiliation. Where questions of affiliation arise, it shall be the burden on the parties involved to show that trading in such tobacco was conducted in accordance with normal trade practices and was not part of a scheme or device to avoid payments of sums due the United States or the CCC.</FP>
                <P>(e) <E T="03">TMQ lien notation.</E> Upon notification that a TMQ lien has been established, the producer marketing card (MQ-76) or dealer identification card (MQ-79-2) shall be returned immediately to the issuing office for recording the TMQ lien. Failure to immediately return the applicable card will result in FSA notifying all registered warehouse operators and dealers of the TMQ lien information and of their responsibilities for collecting the TMQ lien. The card shall be promptly returned to the producer or dealer after it is annotated with the TMQ lien.</P>
                <CITA>[57 FR 43581, Sept. 21, 1992]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.312</SECTNO>
                <SUBJECT>Request for refund of penalty.</SUBJECT>
                <P>Any person who paid any penalty may request the return of the amount of any such payment which is in excess of the amount required to be paid. Such request shall be filed on Form MQ-85, Farm Record and Account, with the county FSA office within 2 years after the payment of the penalty. Approval of return shall be by the county FSA committee, subject to the approval of the State FSA executive director.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.313</SECTNO>
                <SUBJECT>Identification of marketings.</SUBJECT>
                <P>(a) <E T="03">Burley or flue-cured tobacco.</E> With respect to:</P>
                <P>(1) <E T="03">Identification of producer marketings.</E> Each auction and nonauction marketing of burley or flue-cured tobacco shall be identified by a valid marketing card, Form MQ-76, issued for the farm. The reverse side of the marketing card shall show in pounds:</P>
                <P>(i) 103 percent of quota,</P>
                <P>(ii) Balance of 103 percent of quota after each sale, and</P>
                <P>(iii) Date of each sale.</P>
                <P>(2) <E T="03">Cross-references of tobacco sale bill number to prior sale bill.</E> Each warehouse operator, for each lot of tobacco weighed in on the warehouse floor for sale the same day, shall cross-reference the tobacco sale bill to each prior tobacco sale bill for tobacco identified by the same marketing card. To accomplish the cross-reference, each other tobacco sale bill number shall be entered by the warehouse operator in the “Remarks” space on the tobacco sale bill, on all copies, at the time such tobacco is weighed at the warehouse.</P>
                <P>(3) <E T="03">Recording producer sale.</E> Each producer sale at auction shall be recorded on Form MQ-72-1, Report of Tobacco Auction Sale, and each producer sale at nonauction shall be recorded on a Form MQ-72-2, Report of Tobacco Nonauction Purchase. For producer sales at nonauction, the dealer purchaser shall execute Form MQ-72-2 and shall enter the data on Form MQ-76. For producer sales at auction, Form 72-1 <PRTPAGE P="142"/>and Form MQ-76 shall be executed only by the FSA marketing recorder.</P>
                <P>(4) <E T="03">Identification of dealer marketings of resale tobacco.</E> Each auction and nonauction marketing of resale tobacco in the current year, such tobacco shall be identified by a dealer identification card, Form MQ-79-2, issued to the dealer for use in the current marketing year.</P>
                <P>(b) <E T="03">Dark air-cured, fire-cured, or Virginia sun-cured tobacco.</E> With respect to dark air-cured, fire-cured, or Virginia sun-cured tobacco:</P>
                <P>(1) <E T="03">Identification of producer marketings.</E> Each marketing of such kind of tobacco from a farm shall be identified by a valid marketing card issued for the farm for the respective kind of a tobacco, either an MQ-76 or MQ-77 (including sale memo). With respect to each nonauction sale from:</P>
                <P>(i) A within quota farm a check mark shall be entered on the inside of MQ-76, and</P>
                <P>(ii) An excess farm for which an MQ-77 is issued, an executed bill of nonauction sale shall be prepared, and such bill of nonauction sale shall be delivered to a marketing recorder or other person who is authorized to issue sale memos.</P>
                <P>(2) <E T="03">Suspended sale and sales without marketing cards.</E> Any suspended sale, which is not identified by an MQ-76 or MQ-77 (including a sale memo) on or before the last warehouse sale day of the marketing season, or within 4 weeks after the date of marketing, whichever comes first, shall be identified by MQ-82, Sale Without Marketing Card, as a marketing of excess tobacco. Form MQ-82 shall be executed only by a marketing recorder or other representative of the State FSA executive director.</P>
                <P>(3) <E T="03">Other persons authorized to execute MQ-76 or MQ-77 (including sale memo).</E> (i) A warehouse operator who has been authorized during the current marketing year on MQ-78, Tobacco Warehouse Organization, may record a sale on MQ-76 or MQ-77 (including the issuance of a sale memo) to identify a sale for a farm if a marketing recorder is not available at the warehouse when the marketing card is presented.</P>
                <P>(ii) Any warehouse operator, or dealer, who engages in the business of acquiring scrap tobacco from farmers, and who has been authorized on MQ-78, may for each purchase of scrap tobacco execute an MQ-76, or MQ-77 (including a sale memo if the bill of nonauction sale has been executed).</P>
                <P>(4) <E T="03">Verification of sales processed during the absence of marketing recorder.</E> Any person authorized on MQ-78 to act as a marketing recorder shall promptly present to a marketing recorder for verification each warehouse bill (floor sheet) processed and identified by an MQ-76 or MQ-77 (including any sale memos) executed in the absence of a marketing recorder.</P>
                <P>(5) <E T="03">Withdrawal of approval to act as marketing recorder.</E> The authorization on MQ-78 for persons may be withdrawn by the State FSA executive director if such action is determined to be necessary to properly enforce the regulations in this part.</P>
                <P>(c) <E T="03">Separate display on auction warehouse floor.</E> Any warehouse operator upon whose floor more than one kind of tobacco is offered for sale at public auction shall for each respective kind of tobacco:</P>
                <P>(1) Display it in separate areas on the auction warehouse floor.</P>
                <P>(2) Use a lot ticket that is distinguishably different from the lot ticket used to identify any other kind of tobacco.</P>
                <P>(3) Identify each lot by a lot ticket clearly showing the kind of tobacco. However, if where the tobacco is represented to be a nonquota kind the lot ticket shall have imprinted thereon the type designation for the kind of quota tobacco normally marketed in the area.</P>
                <P>(4) Make and keep records that will ensure a separate accounting and reporting of each of such kinds of tobacco (quota and nonquota) sold at auction over the warehouse floor.</P>
                <P>(d) <E T="03">Identification of returned first sale (producer) tobacco.</E> When resold at auction, tobacco which has been previously sold and returned to the warehouse by the buyer is resale tobacco. When such tobacco is resold by the warehouse operator, it shall be identified as leaf account resale tobacco.</P>
                <P>(e) <E T="03">Verification of penalties by warehouse operators or dealers.</E> Each sale of tobacco by a producer which is subject <PRTPAGE P="143"/>to penalty and which has been recorded by a marketing recorder shall be verified by a warehouse operator or dealer to determine whether the amount of penalty shown to be due has been correctly computed. Such warehouse operator shall not be relieved of any liability for the amount of penalty due because of any error which may occur in computing the penalty and recording the sale.</P>
                <P>(f) <E T="03">Check register.</E> The serial number of the tobacco sale bill(s) shall be recorded by the warehouse operator on the check register or check stub for the check written covering the auction sale of tobacco by a producer.</P>
                <P>(g) <E T="03">Marketing card and sale memo for cigar tobacco.</E> With respect to cigar tobacco:</P>
                <P>(1) If a sale of producer's cigar tobacco to a buyer is not identified with a marketing card (MQ-76 or MQ-77) issued for the farm, including a sale memo from MQ-77, by the end of the sale day and recorded and reported on MQ-79 (CF&amp;B), Buyers Record, by the tenth day of the calendar month next following the month during which the sale occurred, the marketing shall be identified on MQ-79 (CF&amp;B) as a marketing of excess tobacco and reported not later than the tenth day of the calendar month next following the month during which the sale date occurred, the marketing shall be identified on MQ-79 (CF&amp;B) as a marketing of excess tobacco, and reported not later than the tenth day of the calendar month next following the month during which the sale day occurred.</P>
                <P>(2) <E T="03">Verification of penalty by buyer.</E> Each excess sale memo issued by a buyer shall be verified by the buyer to determine whether the amount of penalty shown to be due has been correctly computed and such buyer shall not be relieved of any liability with respect to the amount of penalty due because of any error which may occur in issuing the sale memo.</P>
              </SECTION>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart D—Recordkeeping, Reporting Requirements, Marketing Penalties, and Other Penalties</HD>
              <SECTION>
                <SECTNO>§ 723.401</SECTNO>
                <SUBJECT>Registration of burley and flue-cured tobacco warehouse operators and dealers.</SUBJECT>
                <P>(a) <E T="03">Warehouse registration.</E> For burley and flue-cured tobacco, any warehouse operator dealing in either flue-cured or burley tobacco shall be registered with the U.S. Department of Agriculture. Such registration will be handled by the North Carolina State FSA Office, Raleigh, North Carolina.</P>
                <P>(b) <E T="03">Dealer registration.</E> Each person who expects to deal in burley or flue-cured tobacco during a marketing year shall complete a Dealer Application and Agreement (MQ-79-2-A) annually, except dealers who are exempt from maintaining or filing records and reports as provided in § 723.405. The application must be filed after March 1 of the calendar year in which the marketing year begins, and shall be filed with the State FSA office or, if designated by the State Executive Director, the county FSA office for the county where the dealer resides or where the dealer's principal business is located. The applicant shall provide the names, and such other information as required by the Deputy Administrator, of all other persons who will be authorized to use the dealer identification card (MQ-79-2). A dealer entity is limited to one dealer registration number. Persons affiliated with another dealer of the same household shall not be eligible for a dealer registration number unless the Deputy Administrator determines that the entities or individuals are separate and independent.</P>
                <P>(c) <E T="03">Approval of application and agreement.</E> The State Executive Director of the State FSA office shall, under the direction of the Deputy Administrator, be the approving official for the Dealer Application and Agreement. If the approving official has reason to doubt that the applicant is a bona fide dealer or intends to become a bona fide dealer, the application may be disapproved until such time as the applicant furnishes information satisfactory to the <PRTPAGE P="144"/>State FSA committee that the application is bona fide. An application shall also be disapproved for any person who has failed to file reports or permit inspections required in § 723.404(d)(9). A person whose application is disapproved shall be provided with the opportunity to appeal the disapproval and to furnish information to substantiate the application or to comply with other requirements in § 723.404.</P>
                <P>(d) <E T="03">Letter of credit or bond</E>—(1) <E T="03">General requirements.</E> Effective with the beginning of the 1992 marketing year for burley tobacco and with the 1993 marketing year for flue-cured tobacco, in order to secure the payment of penalties as may be incurred by a dealer during the marketing year for which approval as a dealer is sought, each dealer, as a condition for final approval to handle tobacco, must present a letter of credit or bond which is determined by the Deputy Administrator to be acceptable security and which meets the dollar requirements of this section. The letter of credit or bond shall be submitted to the State FSA office where the dealer is registered. A letter of credit must have been issued by a commercial bank insured by the Federal Deposit Insurance Corporation. A bond must be a surety bond insured by a bonding company or agent licensed in the State where the dealer is registered. The letter of credit or bond must be in the form and have the content specified by the Deputy Administrator. A letter of credit or bond shall be furnished annually after initial approval of the dealer's application and notification of the amount required. The dealer identification card shall not be issued until it is determined that acceptable security has been presented.</P>
                <P>(2) <E T="03">Amount required.</E> The base amount of the letter of credit or bond shall be the larger of:</P>
                <P>(i) $25,000 or</P>
                <P>(ii) the sum of the amounts determined by multiplying the respective pounds of burley and flue-cured tobacco purchased by the dealer during the preceding marketing year by 10 percent of the marketing year penalty rate for the respective kind of tobacco involved for the relevant year with the resulting amount not to exceed $100,000.</P>
                <FP>A dealer shall submit the letter of credit or bond for the base amount plus an amount equal to the amount of any unpaid tobacco marketing quota penalty owed by such dealer. The amount shall also be increased by $5,000 for each 10,000 pounds of tobacco for which the dealer has failed to file reports or filed false reports in violation of § 723.404 for the 3 previous marketing years. The Deputy Administrator may reduce the amount of security required in order to avoid undue hardship and shall make provision for release of the letter of credit or bond at the appropriate time.</FP>
                <P>(e) <E T="03">Suspension and surrender of dealer card.</E> The dealer identification card shall be surrendered upon demand of the FSA. Failure to comply with the provisions of §§ 723.404 or 723.414 or with other material provisions of this part shall be cause for suspension of the dealer identification card and the dealer shall be given 15 days to complete all necessary compliance measures or to show cause why the card should not remain suspended.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 56 FR 21443, May 9, 1991; 57 FR 43581, Sept. 21, 1992]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.402</SECTNO>
                <SUBJECT>Warehouse authorized to retain producer marketing cards between sales.</SUBJECT>
                <P>(a) <E T="03">General.</E> Notwithstanding any other provisions of this part, to facilitate the scheduling of farmer's tobacco to the warehouse, marketing cards, with the permission of the producer, may be retained at the warehouse between sales even though no producer on the farm for which the card is issued has tobacco on the floor for sale or to be settled for, as provided in this section.</P>
                <P>(b) <E T="03">Warehouse eligible to retain producers marketing cards between sales.</E> A warehouse shall be eligible to retain producer marketing cards between sales if the operator thereof shall:</P>
                <P>(1) Execute and file on a form approved by FSA a written request with the State FSA committee (or county FSA committee if designated by the State FSA committee).</P>

                <P>(2) Agree to be responsible to FSA for an amount of money equal to that amount that may be assessed against <PRTPAGE P="145"/>any producer as marketing quota penalties, if the marketing that is the basis of assessment of penalty occurred while the warehouse was authorized to have custody of the marketing card, for:</P>
                <P>(i) Burley or flue-cured tobacco for any overmarketing resulting from errors made at the warehouse in entering “balance after sale” pounds on the producer's marketing card or failure to deduct pounds sold on producer's marketing card.</P>
                <P>(ii) Tobacco falsely identified for marketing by use of the producer's marketing card.</P>
                <P>(iii) Producer's failure to account for any tobacco marketed by use of the producer's marketing card.</P>
                <P>(iv) Any burley or flue-cured tobacco marketed at the warehouse in excess of 103 percent of quota as shown on the producer's marketing card.</P>
                <P>(3) Agree to maintain an accurate and up-to-date journal containing a listing of all producer marketing cards retained by the warehouse to facilitate the scheduling of farmer's tobacco. The journal shall show for each card retained the:</P>
                <P>(i) Name of the operator;</P>
                <P>(ii) Serial number of farm;</P>
                <P>(iii) Marketing card number, if applicable;</P>
                <P>(iv) Date marketing card obtained from producer; and</P>
                <P>(v) Date marketing card returned to producer.</P>
                <FP>Such journals shall be maintained for the length of time and under the conditions required for other warehouse records.</FP>
                <P>(4) Agree to return the marketing card to the producer at any time the producer may so request, or in the absence of a request, return it to the producer within 7 days after the close of the warehouse for the season.</P>
                <P>(5) Agree that this authorization may be terminated by FSA for failure to comply with provisions of this agreement.</P>
                <P>(c) <E T="03">Penalties considered to be the responsibility of warehouse operators.</E> Notwithstanding any other provision of this part, a warehouse operator who executes and files a written request with the State FSA committee (or county FSA committee if designated by the State FSA committee) for authorization to retain producer's marketing cards at the warehouse, with grower permission, shall be responsible to FSA for an amount of money equal to the amount that may be assessed against the producer as marketing quota penalties if the marketing that is the basis of such assessment occurred while the warehouse was authorized to have custody of the marketing card, for:</P>
                <P>(1) Any burley or flue-cured tobacco overmarketings resulting from errors made at the warehouse in entering “balance after sale” pounds on the burley or flue-cured producer's marketing card or failure to deduct pounds sold on the producer's marketing card. However, the warehouse operator shall not be responsible for any penalty under this subparagraph, if such penalty would not have been assessed against the producer in accordance with § 723.409(e) of this part.</P>
                <P>(2) Tobacco falsely identified for marketing by use of the producer's marketing card.</P>
                <P>(3) Producer's failure to account for any tobacco marketed by use of such producer's marketing card.</P>
                <P>(4) With respect to burley or flue-cured producers, tobacco marketed at the warehouse in excess of 103 percent of quota as shown on the producer's marketing card.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.403</SECTNO>
                <SUBJECT>Auction warehouse operators' records and reports.</SUBJECT>
                <P>(a) <E T="03">Report on Form MQ-78, Tobacco Warehouse organization.</E> Each warehouse operator shall annually, prior to opening of auction markets, furnish FSA an executed Form MQ-78 showing:</P>
                <P>(1) Form of business organization.</P>
                <P>(2) Names and addresses of warehouse officials and bookkeeper.</P>
                <P>(3) Names and addresses of other warehouses in which the officials and bookkeepers have a financial interest.</P>
                <P>(4) Names and addresses of custodians of warehouse records, including their location.</P>
                <P>(b) <E T="03">Separate records and reports.</E> Each auction warehouse operator shall keep the records and make the reports separately for each quota or nonquota kind of tobacco as provided in this section.<PRTPAGE P="146"/>
                </P>
                <P>(c) <E T="03">Record of marketing.</E> Each warehouse operator shall:</P>
                <P>(1) <E T="03">Auction or nonauction sale.</E> Keep such records as will enable the warehouse operator to furnish the following information to State FSA office with respect to each sale of tobacco made at such person's warehouse:</P>
                <P>(i) The name of the operator of the farm on which the tobacco was produced and the name of the producer, in the case of a sale by a producer.</P>
                <P>(ii) The name of the seller in the case of a resale.</P>
                <P>(iii) Date of sale.</P>
                <P>(iv) Number of pounds sold.</P>
                <P>(v) Amount of any penalty and the amount of any deduction for such penalty from the price paid the producer.</P>
                <P>(vi) With respect to each individual lot of tobacco constituting an auction sale, the:</P>
                <P>(A) Name of purchaser.</P>
                <P>(B) Number of pounds sold.</P>
                <P>(C) Gross sale price.</P>
                <P>(2) <E T="03">Separate account records.</E> Maintain records of all purchases and resales of tobacco by the warehouse operator to show a separate account for:</P>
                <P>(i) Nonauction purchases by or on behalf of the warehouse operator of farmer-owned tobacco.</P>
                <P>(ii) Purchases and resales of:</P>
                <P>(A) Leaf account tobacco.</P>
                <P>(B) Floor sweeping tobacco.</P>
                <P>(d) <E T="03">Tobacco sale bill for burley and flue-cured tobacco.</E> (1) Each burley or flue-cured tobacco warehouse operator shall use tobacco sales bills furnished at the warehouse operator's expense showing, as a minimum, the following information:</P>
                <P>(i) Tobacco sale bill number;</P>
                <P>(ii) For flue-cured tobacco only, registration number assigned the warehouse by the Department;</P>
                <P>(iii) Name and address of warehouse where sale is held;</P>
                <P>(iv) For flue-cured tobacco only, the identification of other producers having an interest in the tobacco;</P>
                <P>(v) Date of sale;</P>
                <P>(vi) Number of pounds in each lot;</P>
                <P>(vii) Name and address of seller; and</P>
                <P>(A) Farm number (including State and county codes) for producer tobacco, and</P>
                <P>(B) Dealer registration number for resale tobacco;</P>
                <P>(viii) Identification number, if available, for each lot of tobacco to be offered for sale;</P>
                <P>(ix) Poundage balance before sale for producer tobacco based on 103 percent of farm quota;</P>
                <P>(x) Name or symbol of purchaser of each lot which is sold;</P>
                <P>(xi) Gross number of pounds sold;</P>
                <P>(xii) Sale price for each lot and gross sale price for all lots sold;</P>
                <P>(xiii) Nonauction purchases by the warehouse holding the sale;</P>
                <P>(xiv) Tobacco grade for tobacco consigned to price support;</P>
                <P>(xv) The buyer's grade symbol for tobacco bought by private buyers.</P>
                <P>(xvi) The letters “N/A” in the buyer and grade space for nonauction purchases by the warehouse.</P>
                <P>(xvii) Marketing quota penalty collected; and</P>
                <P>(xviii) Amount withheld from sale to cover claims due the United States.</P>
                <P>(2) At the end of each sale day, the tobacco sale bills shall be sorted and filed in numerical order by sale dates, and lot tickets shall be filed in an orderly manner by sale dates or by numerical order.</P>
                <P>(e) <E T="03">Identification of tobacco for marketing—</E>(1) <E T="03">Marketing card.</E> Each marketing of tobacco from a farm in any State for which a farm marketing quota has been established for any kind of tobacco shall be identified by a marketing card issued for the farm on which such tobacco was produced (unless prior to the marketing of such tobacco an AMS inspection certificate is obtained showing that the tobacco offered for sale is a kind of tobacco not subject to marketing quotas).</P>
                <P>(2) <E T="03">Recording farm identification.</E> For burley or flue-cured tobacco, at the time the tobacco is weighed in, the warehouse operator shall record on the tobacco sale bill, the State and county codes and the farm serial number from the marketing card issued for the farm from which the tobacco is to be marketed.</P>
                <P>(3) <E T="03">Return of marketing card.</E> For tobacco that is to be sold at auction, the warehouse operator shall retain the marketing card until the producer has been paid for the sale of the tobacco or the tobacco is removed from the warehouse by the producer at which time <PRTPAGE P="147"/>the marketing card shall be returned to the producer. In any case where a producer's marketing card is found in the possession of a warehouse operator, and no producer on the farm for which the card is issued has tobacco on the floor for sale, or tobacco for which settlement is not yet completed, such card will be picked up by an FSA representative for return to the producer. The warehouse operator shall be responsible for the safekeeping and proper use of the marketing card during such person's retention of the marketing card.</P>
                <P>(4) <E T="03">No price support.</E> For burley or flue-cured tobacco, if tobacco is to be marketed at auction from a farm for which a marketing card is issued bearing the notation “No Price Support”, the warehouse operator shall enter the same notation on the tobacco sale bill at the time the tobacco is weighed in for sale. The warehouse operator shall prepare a separate tobacco sale bill to cover any tobacco which represents more than 103 percent of the effective farm marketing quota and the notation “No Price Support” shall be shown on such tobacco sale bill. The sale of such tobacco shall be considered a separate sale.</P>
                <P>(5) <E T="03">Nonauction purchase.</E> The warehouse operator shall enter the letters “NA” on each line of a tobacco sale bill on which there is recorded tobacco purchased by or for the warehouse at nonauction sale and shall record on all such tobacco sale bills:</P>
                <P>(i) For burley or flue-cured tobacco, the farm serial number from the marketing card that is used to identify the tobacco at the time of the nonauction purchase.</P>
                <P>(ii) For tobacco other than burley or flue-cured, the serial number of the marketing card that is used to identify the tobacco at the time of the nonauction purchase.</P>
                <P>(6) <E T="03">Copy of sale bill.</E> The warehouse operator shall furnish to the producer a copy of the tobacco sale bill bearing the letters “NA” for any lot of such tobacco purchased by the warehouse operator.</P>
                <P>(7) <E T="03">Lot ticket.</E> At the time tobacco is weighed for marketing, the warehouse operator shall record the weight of the lot of tobacco on the tobacco sale bill and on the lot ticket. The sale bill number on which the lot of tobacco is recorded shall be recorded on the lot ticket. If the marketing card which is presented to identify the tobacco at weigh-in bears the notation “No Price Support,” the same notation shall be entered by the warehouse operator on the lot ticket for each lot of tobacco which is identified with the same marketing card.</P>
                <P>(8) <E T="03">Recording serial number of marketing card.</E> For tobacco other than burley or flue-cured, before the tobacco is offered for sale, the warehouse operator shall record, on the sale bill, the serial number of the Form MQ-76 or MQ-77 issued for the farm from which the tobacco is to be marketed at auction.</P>
                <P>(9) <E T="03">Recording sale bill number.</E> For tobacco other than burley or flue-cured, the serial number of the sale bill shall be recorded:</P>
                <P>(i) By the warehouse operator on the check register or check stub from the check written to cover an auction sale of tobacco by a producer.</P>
                <P>(ii) On the inside of the marketing card by the marketing recorder or warehouse operator for each sale of tobacco by a producer.</P>
                <P>(10) <E T="03">Burley or flue-cured marketings.</E> A marketing card used to cover a sale of burley or flue-cured tobacco shall show on the reverse side the poundage balance of the “103 percent of quota.”</P>
                <P>(i) <E T="03">Auction sale.</E> At the time of weigh-in the tobacco sale bill shall show the poundage balance of 103 percent of the farm's quota. The tobacco sale bill shall show the pounds on which penalty is due, and the amount of penalty.</P>
                <P>(ii) <E T="03">Nonauction sale to a warehouse operator at the warehouse.</E> If the tobacco sale bill includes both an auction sale and a nonauction sale such combined pounds shall be used to compute and reflect the balance of the “103 percent of quota.” The tobacco sale bill shall show the pounds on which penalty is due and the amount of the penalty.</P>
                <P>(iii) <E T="03">Nonauction country purchase by a warehouse operator.</E> The warehouse operator shall deduct, from the balance of the “103 percent of quota” entry on the marketing card, the pounds of tobacco purchased as a nonauction country purchase. In addition, each warehouse <PRTPAGE P="148"/>operator shall record on Form MQ-79 and on Form MQ-72-2, Report of Tobacco Nonauction Purchase, each nonauction country purchase of tobacco made by such warehouse operator. The data to be reported on Form MQ-72-2 is set forth in § 723.404 of this part.</P>
                <P>(11) <E T="03">Sale memo and bill of nonauction sales.</E> For tobacco other than burley or flue-cured, a record of sales on Forms MQ-76, MQ-77, or MQ-82, Sale Without Marketing Card (including sale memo from MQ-77 or MQ-82), shall be obtained by a warehouse operator to cover each marketing of tobacco from a farm through a warehouse and each nonauction sale of tobacco purchased by or for the warehouse operator including scrap tobacco obtained as a result of providing curing space or stripping space for farmers. Each MQ-76 and MQ-77 (including sale memo) shall be executed as follows:</P>
                <P>(i) <E T="03">Auction sale.</E> An auction sale identified by MQ-76 shall show in the spaces provided thereon, the sale bill number, check-mark to show the sale was by auction, a check-mark to show nonauction for purchases identified “NA” on the sale bill, pounds sold, name and address of warehouse, and date of sale. In addition, each sale memo issued from MQ-77 to cover an auction sale shall show on the first page thereof in all of the spaces provided therefor, the warehouse bill number, pounds sold, amount of penalty due, name and address of warehouse, and date of sale.</P>
                <P>(ii) <E T="03">Nonauction sale to a warehouse operator who does not prepare a sale bill.</E> An MQ-76 used to cover a nonauction sale of tobacco to a warehouse operator who does not prepare a sale bill to cover the sale shall show, a check-mark to indicate sale was by nonauction, pounds sold, name and address of the warehouse, and date of sale. When an MQ-77 is used under this paragraph, a sale memo shall be executed, including the signature of the producer on the reverse side.</P>
                <P>(iii) <E T="03">Nonauction sale to a warehouse operator who prepares a sale bill.</E> When a warehouse operator purchases:</P>
                <P>(A) All the delivery of a producer's tobacco at a nonauction sale and prepares a sale bill to cover the purchase, on MQ-76 there shall be shown the bill number, check-mark to show nonauction purchases, pounds sold, name and address of warehouse, and date of sale. When an MQ-77 is used a sale memo shall be executed, including the signature of the producer on the reverse side.</P>
                <P>(B) Part of a delivery of a producer's tobacco as a nonauction purchase and the remainder of the tobacco is sold at auction, if such tobacco is identified by an MQ-76 the Record of Sales shall be completed to show the name and address of the warehouse, the date of sale, the sale bill number, check-mark under both auction and nonauction, and, under “Lbs. Sold,” the total number of pounds covered by the entire delivery. If the sale is identified by an MQ-77, the sale memo (front) shall be completed to show the sale bill number, the total number of pounds covered by the entire delivery under “Lbs. Sold,” the amount of penalty due, name and address of the warehouse, and the date of sale. In addition, the reverse side of the sale memo shall show the number of pounds sold at nonauction.</P>
                <P>(f) <E T="03">Nonquota tobacco or quota tobacco of a different kind.</E> If tobacco is presented for sale that is represented to be nonquota tobacco or should there be a question as to what kind of quota tobacco is being offered for sale, an inspection shall be obtained from the Agricultural Marketing Service of this Department (AMS) after the tobacco is weighed and in line for sale. The lot ticket for the tobacco shall be cross-referenced to the sale bill by sale bill number and date. The sale bill shall show the producer's name and address and the State and county code and farm number of the farm on which the tobacco was produced. If an AMS inspection shows that a lot of tobacco is of a different kind than that identified by the lot ticket, such tobacco shall be deleted from the original sale bill and a revised sale bill prepared. Copies of the lot ticket and sale bill shall be furnished to the State FSA office at the end of the sale day.</P>
                <P>(g) <E T="03">Labeling tobacco sale bill for resale tobacco.</E> In the case of resales, each sale bill shall show “resale” and;</P>

                <P>(1) For dealers, the name of the dealer making each resale; and<PRTPAGE P="149"/>
                </P>
                <P>(2) For the warehouse, the name of the warehouse and either “floor sweepings” or “leaf account” tobacco.</P>
                <P>(h) <E T="03">Suspended sale record.</E> (1) Any tobacco sale bill covering sale of tobacco for which a valid marketing card or dealer identification card was not presented at the end of the sale day shall be given to a marketing recorder who shall stamp such bills, “Suspended”, and shall handle according to instructions provided by the Deputy Administrator.</P>
                <P>(2) When cleared, such suspended sale shall show “suspended-cleared” and date cleared. If a suspended sale is not cleared from suspension by the last auction sale day for the warehouse for the season (or for burley tobacco only, within 7 days of the sale if such date is earlier), it shall be considered a sale of excess tobacco and penalty at the full rate shall be remitted by the warehouse operator.</P>
                <P>(i) <E T="03">Payee to be shown on auction warehouse check.</E> Any auction warehouse which issues a check to cover the auction or nonauction sale of tobacco shall issue such check only in the name of the payee. A warehouse check shall not be issued in the name of the seller and bearer, for example “John Doe or Bearer.”</P>
                <P>(j) <E T="03">Warehouse entries on other dealer's reports.</E> Each warehouse operator shall record, or have the dealer record, on a Form MQ-79 the total purchases and resales made by each such dealer or other warehouse operator during each sale day at the warehouse. Warehouse operators shall sign the Form MQ-79 on the same line as the transaction is recorded when a dealer resells tobacco at the warehouse. If any tobacco resold by the dealer and carried over by the dealer from a crop produced prior to the current crop, an entry shall be made on the MQ-79 to clearly show such fact.</P>
                <P>(k) <E T="03">Warehouse data for burley or flue-cured tobacco.</E> (1) Each operator of a burley or flue-cured tobacco auction warehouse shall prepare at the end of each sale day a report on MQ-80, Daily Warehouse Sales Summary, showing for each sale day:</P>
                <P>(i) For each manufacturer, buyer, order buyer, and any tobacco cooperative, pounds of tobacco purchased at auction (consigned in the case of tobacco cooperatives).</P>
                <P>(ii) The sum of the items for paragraph (k)(1)(i) of this section.</P>
                <P>(iii) Resales at auction for each person listed under paragraph (k)(1)(i) of this section.</P>
                <P>(iv) For each dealer subject to reporting purchases and resales on MQ-79, as originally billed, the total pounds of tobacco purchased at auction, and resales at auction.</P>
                <P>(v) The total pounds purchased at auction at the warehouse for the leaf account.</P>
                <P>(vi) The total pounds purchased at nonauction at the warehouse for the leaf account.</P>
                <P>(vii) The sum of the total pounds for paragraphs (k)(v) and (vi) of this section.</P>
                <P>(viii) The total leaf account resales.</P>
                <P>(ix) The total floor sweeping resales.</P>
                <P>(x) The sum of the total purchases for paragraphs (k)(1)(ii), (iv), and (vii) of this section.</P>
                <P>(xi) The sum of the total resales for paragraphs (k)(1)(ii), (iv), (viii) and (ix) of this section.</P>
                <P>(xii) The totals of the purchases column on the Form MQ-79 representing the nonauction purchases for the warehouse leaf account.</P>
                <P>(xiii) The totals of the resales column on Form MQ-79 representing the nonauction resales (including floor sweepings nonauction sales) by the warehouse.</P>
                <P>(xiv) For each warehouse sale of excess tobacco from a farm, the applicable farm number with daily remittance of the penalty due to accompany Form MQ-72-1.</P>
                <P>(xv) For each dealer, at the time of settlement having excess resale tobacco, the applicable dealer identification number with daily remittance of the penalty due.</P>
                <P>(2) As to the information required to be entered on MQ-80, Daily Warehouse Sales Summary, by the marketing recorder, the warehouse operator shall keep and make available such records as will enable the marketing recorder to enter thereon:</P>

                <P>(i) The total number of Forms MQ-72-1 for the sale day and the sum of pounds sold, and<PRTPAGE P="150"/>
                </P>
                <P>(ii) The total number of suspended sale bills and the sum of such pounds sold.</P>
                <P>(3) At the end of the season, each warehouse operator shall:</P>
                <P>(i) Report on the final MQ-80 for the season the quantity of leaf account tobacco and floor sweepings, if any, on hand and its location, provided further that if on inspection it is determined that there is damaged tobacco in the warehouse or otherwise on hand, no carryover credit for the next marketing year shall be allowed for the damaged tobacco and the amount of pounds of damaged tobacco shall be deducted from the operator's purchase credit for the current year,</P>
                <P>(ii) Permit its inspection by a representative of FSA, and</P>
                <P>(iii) Provide for the weighing of such tobacco, to be witnessed by an FSA representative, and furnish to such representative a certification as to the actual weight of such tobacco. After the weight of such tobacco has been obtained, it shall be considered as the official weight for comparing purchases and resales for the purpose of determining the amount of penalty, if penalty is due.</P>
                <P>(4) The warehouse operator shall furnish to the marketing recorder a copy of each executed MQ-80.</P>
                <P>(5) Before the next marketing season begins, carryover tobacco reported by the warehouse operator as provided in paragraph (k)(3) of this section shall be reinspected by a representative of FSA.</P>
                <P>(i) If the reinspection indicates an amount of carryover tobacco different from that amount determined by the initial inspection, the warehouse operator shall:</P>
                <P>(A) Provide for the weighing of such tobacco which shall be witnessed by a representative of FSA.</P>
                <P>(B) Furnish to such representative at the time of weighing a certification as to the actual weight of the tobacco.</P>
                <P>(ii) If the FSA representative determines that the weight of the tobacco is different, by reweighing, than the amount reported on the initial certification, the initial weight, together with the reweighed quantity after taking into consideration any purchases and resales that occurred subsequent to the initial certification as provided in paragraph (k)(3) of this section, shall be used for the purpose of determining the amount of penalty, if penalty is due.</P>
                <P>(iii) The reweighed quantity shall be the official pounds to be credited to the account as carryover tobacco.</P>
                <P>(iv) If upon reinspection by a representative of FSA, there is an amount of tobacco determined to be damaged tobacco, the pounds of damaged tobacco shall be deducted from the purchase credit, if not done so previously, and no carryover credit shall be allowed for such damaged tobacco for the next marketing year.</P>
                <P>(l) <E T="03">Warehouse data for tobacco other than burley or flue-cured.</E> (1) Each operator of a tobacco auction warehouse, other than the operator of a burley or flue-cured auction warehouse, shall prepare and promptly forward at the end of each sale day to the State FSA office a report on MQ-80, Daily Auction Warehouse Report, showing for each sale day, unless otherwise stated below:</P>
                <P>(i) For each dealer or buyer as originally billed, the total pounds of tobacco purchased at auction and resales at auction on the warehouse floor.</P>
                <P>(ii) For any association as originally billed, the total pounds and gross amount of loan tobacco acquired at auction, and resales at auction, if any, on the warehouse floor.</P>
                <P>(iii) The total pounds of:</P>
                <P>(A) Leaf account purchases at auction on the warehouse operator's own floor,</P>
                <P>(B) Leaf account purchases at nonauction sale for which a floor sheet is prepared,</P>
                <P>(C) All leaf account resales at auction on the warehouse operator's own floor, including resales of tobacco from the warehouse operator's buyers corrections account, and</P>
                <P>(D) All resales at auction on the warehouse operator's own floor of floor sweepings which accumulated on the warehouse operator's own floor.</P>
                <P>(iv) The respective sums of the purchases, including loan tobacco, and resales for paragraphs (l)(1)(i), (ii), and (iii) of this section.</P>

                <P>(v) The computed total of first sales at auction on the warehouse floor.<PRTPAGE P="151"/>
                </P>
                <P>(vi) The warehouse gross sale pounds for the day as billed to buyers.</P>
                <P>(vii) The pounds on warehouse check register if shown thereon, and</P>
                <P>(viii) The total pounds of the resales,</P>
                <P>(ix) On the report for the last sale day for the season, the pounds of all tobacco on hand whether such tobacco represents leaf account tobacco or floor sweepings which accumulated on the warehouse operator's own floor.</P>
                <P>(x) For each warehouse sale of excess tobacco from a farm, the applicable sale memo and numbers thereof with remittance of the penalty due as shown thereon.</P>
                <P>(2) As to information required to be entered on MQ-80, Daily Auction Warehouse Report, by the marketing recorder, the warehouse operator shall keep and make available such records as will enable the marketing recorder to enter thereon:</P>
                <P>(i) For each sale identified by an MQ-76, MQ-77 (including sale memo), or MQ-82, Sale Without Marketing Card, the pounds sold;</P>
                <P>(ii) For each sale suspended, the warehouse bill(s) number and pounds sold;</P>
                <P>(iii) For each sale cleared from suspension, the MQ-76 number or, for MQ-77 or MQ-82, the sale memo number and the date of clearance.</P>
                <P>(3) When a producer rejects the sale of a lot of tobacco, and the tobacco has been billed out and the bills presented to the buyer, the warehouse operator shall not change the marketing card, or Form MQ-80 on which the sale was reported. If the warehouse operator gains possession of the tobacco and it is resold by such warehouse operator, it shall be identified as resale tobacco.</P>
                <P>(4) In balancing first sales (represented by marketing recorder's total) with computed first sales (bill-out total minus resales as reported by the warehouse operator) the State FSA executive director is authorized to approve reports with variance not to exceed one-half of 1 percent of such pounds.</P>
                <P>(5) At the end of the season, each warehouse operator shall:</P>
                <P>(i) Report on the final MQ-80 for the season the quantity of leaf account tobacco and floor sweepings, if any, on hand and its location,</P>
                <P>(ii) Permit its inspection by a representative of FSA, and</P>
                <P>(iii) Provide for the weighing of such tobacco (to be witnessed by a representative of FSA) and furnish to such representative a certification as to the actual weight of such tobacco. After the weight of such tobacco has been obtained, it shall be considered as the official weight for comparing purchases and resales for the purpose of determining the amount of penalty, if penalty is due. Separate data shall be reported for floor sweeping tobacco.</P>
                <P>(m) <E T="03">Bill-out invoice.</E> For flue-cured tobacco when the tobacco has been sold at auction, the bill-out invoice to the buyer shall include the warehouse registration number (warehouse code), sale bill number, and line number on which the lot of tobacco was recorded on the sale bill.</P>
                <P>(n) <E T="03">Maintaining copies of bill-out invoices to purchaser or daily summary journal sheet to reflect daily transactions.</E> For each marketing year, the warehouse operator shall maintain copies of the bill-out invoice to the purchaser by grades showing the pounds purchased. In lieu of this requirement, the warehouse operator may prepare and maintain for each sale day on a current basis a daily summary journal sheet to reflect for each purchaser (including warehouse leaf account or other similar account) pounds and dollar amounts for:</P>
                <P>(1) Tobacco originally billed to the purchaser.</P>
                <P>(2) Mathematical billing errors and corrections (added and deducted) from purchaser's adjustment invoices.</P>
                <P>(3) Short (deducted) and long (added) weights from purchaser's adjustment invoices.</P>
                <P>(4) Short (deducted) and long (added) lots from purchaser's adjustment invoices.</P>
                <P>(5) Net tobacco received and paid for by purchase.</P>
                <P>(o) <E T="03">Handling rejected (producer) sale after bill-out.</E> Where a producer rejects the sale of a lot of tobacco, and the tobacco has been billed-out and bills presented to the buyer, the warehouse operator shall not change the MQ-76 or MQ-80 on which the sale was reported. If the warehouse operator gains possession of the tobacco, and it is resold by <PRTPAGE P="152"/>such warehouse operator, it shall be identified as resale tobacco.</P>
                <P>(p) <E T="03">Report to county FSA office of long weights and long lots.</E> Each warehouse operator shall report to the county FSA office or marketing recorder long weights and long lots of producer tobacco (first sales) for which the farmer has been paid.</P>
                <P>(q) <E T="03">Record and report of warehouse operator's leaf account purchases and resales not on such warehouse operator's floor.</E> (1) Each warehouse operator shall keep a record and make reports on MQ-79, Dealer's Report, showing:</P>
                <P>(i) All nonauction purchases of tobacco, except nonauction purchases at such warehouse operator's warehouse which are reported on MQ-80.</P>
                <P>(ii) All purchases and resales of tobacco at public auction through warehouses other than such operator's own warehouse.</P>
                <P>(iii) All nonauction resales of tobacco.</P>
                <P>(2) Form MQ-79 shall be prepared and a copy, including copies of Form MQ-72-2 for all nonauction purchases of burley or flue-cured tobacco, forwarded to the State FSA office not later than the end of the calendar week (at the end of each sale day during the auction season for such warehouse) in which such tobacco was purchased or resold.</P>
                <P>(3) If tobacco is purchased prior to the opening of the local auction market, an MQ-79 shall be prepared and a copy, together with copies of MQ-72-2 for all nonauction purchases of burley or flue-cured tobacco, forwarded to the State FSA office not later than the end of the calendar week which would include the first sale day of the local auction markets.</P>
                <P>(4) A remittance for all penalties shown by the entries on Form MQ-79 and Form MQ-72-2 to be due shall be forwarded to the State FSA office with the original copy of MQ-79.</P>
                <P>(5) Resales of floor sweepings shall be reported separately from leaf account tobacco.</P>
                <P>(r) <E T="03">Buyers corrections account.</E> Each warehouse operator shall keep such records including negative adjustment invoices as will enable the warehouse operator to furnish a weekly report on Form MQ-71 to the State FSA office showing the total pounds of the debits (for returned lots, short lots, and short weights of tobacco) and the credits (for long lots and long weights of tobacco) to the buyers corrections account. Where the warehouse operator returns to the seller tobacco debited to the buyers corrections account, the warehouse operator shall prepare an adjustment invoice to the seller. This invoice shall be the basis for a credit entry for the warehouse in the buyers corrections account and a corresponding purchase (debit entry) in the case of a dealer on such dealer's MQ-79, Dealer's Report. Any balancing figure reflected on the warehouse operator's summary of bill-outs shall not be included in the buyers corrections account.</P>
                <P>(s) <E T="03">Reporting of processed leaf account tobacco.</E> Any warehouse operator who delivers tobacco to a firm for the purpose of redrying, processing, or stemming of such tobacco shall, by the end of the week in which such tobacco was delivered, report to the State FSA office on MQ-79, Dealer's Report:</P>
                <P>(1) The date delivered;</P>
                <P>(2) Name and address of the firm to which the tobacco was delivered, and</P>
                <P>(3) The pounds of tobacco (green weight) delivered which shall be entered in the resales pounds column. Such tobacco shall be considered a resale on the date of delivery for the purpose of balancing the warehouse account and collection of penalties where penalties are due.</P>
                <P>(t) <E T="03">Report of farm scrap resulting from grading tobacco for farmers.</E> Any warehouse operator or any other person who grades tobacco for farmers shall maintain records which will enable such person to furnish the State FSA office the name of the farm operator and the approximate amount of scrap tobacco obtained from the grading of tobacco from each farm.</P>
                <P>(u) <E T="03">Report of farm scrap resulting from furnishing stripping space for farmers.</E> Any warehouse operator or any other person who provides tobacco curing space or stripping space for farmers shall maintain records which will enable such person to furnish the State FSA office the name of the farm operator and the approximate amount of scrap tobacco obtained from each farm resulting from providing such space.<PRTPAGE P="153"/>
                </P>
                <P>(v) <E T="03">Producer tobacco.</E> Producer tobacco (first sale) in possession of a warehouse operator, resulting from long weights and long lots, which has not previously been identified by a sale shall be recorded and reported in the same manner as a nonauction sale to a warehouse operator who does not prepare a warehouse bill (floor sheet) and shall be reported on MQ-79, Dealer's Record. Penalty shall be due on this tobacco at the full penalty rate for the respective kind of tobacco or, if the kind is not known, at the penalty rate for the kind of tobacco generally marketed through the warehouse.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 57 FR 43582, Sept. 21, 1992]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.404</SECTNO>
                <SUBJECT>Dealer's records and reports, excluding cigar tobacco buyers.</SUBJECT>
                <P>(a) <E T="03">General.</E> This section is applicable to all kinds of tobacco except cigar tobacco.</P>
                <P>(1) Each dealer, except as provided in § 723.405 of this part shall keep by kinds of tobacco the records and make the reports separately for each kind (quota and nonquota) of tobacco as provided in this section. Adjustment invoices, including the adjustment invoices for any sale day for which there is no adjustment to be made, required to be furnished to an auction warehouse shall be identified by the warehouse identification number (if applicable) and the reporting dealer's identification number (if applicable) as well as the names of the warehouse and dealers involved in the transaction.</P>
                <P>(2) Each dealer shall properly execute the “Receipt for Dealer's Record” contained in MQ-79, which is issued to the dealer, and shall transmit such receipt to the applicable State FSA office.</P>
                <P>(b) <E T="03">Record of marketings.</E> A dealer shall keep records which provide the following information for each lot of tobacco, including scrap tobacco, purchased or sold by the dealer:</P>
                <P>(1) <E T="03">Purchases.</E> (i) The name of:</P>
                <P>(A) The warehouse through which the tobacco was purchased, if purchased at a warehouse auction; or</P>
                <P>(B) The operator of the farm on which the tobacco was produced, if purchased from a producer as a nonauction purchase, and the name of the producer of the tobacco, if different from the operator; or</P>
                <P>(C) The seller if purchased as a nonauction purchase from a warehouse operator or dealer.</P>
                <P>(ii) The identification number of the warehouse, farm, or dealer, as applicable, at/from which the tobacco was purchased.</P>
                <P>(iii) The address, the producer association number, if applicable, and percentage share of the proceeds of the farm operator and any other producer from whom tobacco was purchased as a nonauction purchase.</P>
                <P>(iv) The date of purchase.</P>
                <P>(v) The pounds of tobacco purchased.</P>
                <P>(vi) The gross purchase price.</P>
                <P>(vii) The amount of penalty.</P>
                <P>(viii) The amounts remitted for the No Net Cost and the Tobacco Marketing Assessments.</P>
                <P>(ix) The quantity of tobacco purchased from a prior crop and carried over for marketing in a subsequent crop year.</P>
                <P>(2) <E T="03">Sales.</E> (i) The name and identification number of the:</P>
                <P>(A) Warehouse through which the tobacco was sold, if sold at a warehouse auction, or</P>
                <P>(B) Buyer if the tobacco was sold at a nonauction sale.</P>
                <P>(ii) The date of sale.</P>
                <P>(iii) The pounds of tobacco sold.</P>
                <P>(iv) The gross sale price.</P>
                <P>(c) <E T="03">Nonauction purchase.</E> (1) Each purchase of tobacco from a producer from a quota producing area shall be identified by a marketing card, issued for the farm on which the tobacco was produced unless an AMS inspection is obtained prior to purchase which shows that tobacco being offered for sale is a kind not subject to marketing quotas.</P>
                <P>(2) For burley and flue-cured tobacco:</P>

                <P>(i) After each nonauction purchase, the dealer shall enter a declining balance of “103 percent of quota” on the reverse side of the marketing card. The declining balance shall be determined by reducing the previous “103 percent of quota” entry on the marketing card by the number of pounds of tobacco purchased. The date the tobacco was purchased also shall be entered on the marketing card at the time each lot of tobacco is purchased.<PRTPAGE P="154"/>
                </P>
                <P>(ii) After each nonauction purchase, the dealer shall prepare a form MQ-72-2 which shall set forth the following:</P>
                <P>(A) The date of the purchase.</P>
                <P>(B) The registration number of the dealer.</P>
                <P>(C) The name and address of the person selling the tobacco.</P>
                <P>(D) The identification number (farm number, warehouse code, or dealer number, as applicable) of the person selling the tobacco.</P>
                <P>(E) The pounds of tobacco purchased.</P>
                <P>(F) The amount of penalty collected.</P>
                <P>(G) The method (estimating or weighing) of determining the pounds of tobacco marketed.</P>
                <P>(H) The signature of the seller and the date signed.</P>
                <P>(iii) For nonauction purchases which are made by the dealer from producers, the dealer shall remit the producer's and the dealer's share of the No Net Cost and Tobacco Marketing Assessments as provided in part 1464 of this title. The dealer may deduct the producer's share of each assessment from the price paid for the tobacco. However, the No Net Cost Assessment shall not be remitted from a producer who identifies the tobacco for marketing with a marketing card which has zero pounds as the 103 percent entry on the marketing card. A marketing penalty at the full rate shall be collected on the marketings identified by such card. The amount of the No Net Cost and the Tobacco Marketing Assessments which is applicable to tobacco marketed during each marketing year will be the amount per pound which is approved and announced by the Secretary.</P>
                <P>(3) For all other kinds of tobacco:</P>
                <P>(i) When a Form MQ-77 Marketing Card is used to identify a nonauction sale, the producer's signature shall be obtained on the reverse side of a sale memo which is a part of the Form MQ-77. A nonauction sale not identified by a marketing card shall be identified by a Form MQ-82 executed by a marketing recorder or other representative of the State FSA committee. The dealer shall record each nonauction purchase of tobacco on Form MQ-79, Dealer's Record.</P>
                <P>(ii) For nonauction purchases which are made by the dealer from producers, the dealer shall remit the producer's and the dealer's share of the No Net Cost and Tobacco Marketing Assessments as provided in part 1464 of this title. The dealer may deduct the producer's share of each assessment from the price paid for the tobacco. However, the No Net Cost Assessment shall not be remitted from a producer if the marketing card used to identify a kind of tobacco shows a converted penalty rate of 100 percent. A marketing penalty at the full rate shall be collected on the marketings identified by such card. The amount of the No Net Cost and the Tobacco Marketing Assessments which is applicable for each kind of tobacco marketed during each marketing year will be the amount per pound which is approved and announced by the Secretary.</P>
                <P>(d) <E T="03">Record and report of purchases and resales.</E> (1) For burley and flue-cured tobacco, each dealer shall keep a record and make reports on Form MQ-79 showing all purchases and resales, excluding tobacco not in the form normally marketed by producers. After each transaction is entered on the Form MQ-79, each dealer shall enter a balance to reflect the pounds of tobacco remaining that may be sold without causing prior resales to exceed prior purchases. Any tobacco sold in excess of such balance shall be considered excess tobacco and subject to a marketing quota penalty at the full penalty rate. The purchaser shall sign the Form MQ-79 on the same line as the transaction is recorded by the dealer who is offering such tobacco for resale. In the event of a purchase or resale of tobacco which is purchased by the dealer from a crop of tobacco produced prior to the current crop, the Form MQ-79 shall be annotated to indicate that such tobacco was so purchased and carried over from a crop produced prior to the current crop.</P>
                <P>(2) For all other kinds of tobacco, each dealer shall keep a record and make reports on Form MQ-79 showing all purchases and resales of tobacco made by or for the dealer and, in the event of a purchase or resale of tobacco which is purchased prior to the current crop, the fact that such tobacco was so purchased and carried over from a crop produced prior to the current crop.</P>

                <P>(3) A Form MQ-79 shall be prepared and a copy (together with executed <PRTPAGE P="155"/>copies of Form MQ-72-2 for all nonauction purchases of burley and flue-cured tobacco) shall be forwarded to the State FSA office not later than the end of the calendar week in which such tobacco was purchased or resold. However, if tobacco is purchased prior to the opening of the local auction market, a Form MQ-79 shall be prepared and a copy, together with executed copies of Form MQ-72-2 for all nonauction purchases, shall be forwarded to the State FSA office not later than the end of the calendar week which would include the first sale date of the local auction markets. In addition, if tobacco is resold in a State other than where the tobacco is produced and the auction markets at such location open earlier than the auction market where the tobacco normally would be sold at auction by farmers, reports together with executed copies of Form MQ-72-2 for all nonauction purchases shall be prepared and forwarded to the State FSA office not later than the end of the calendar week which would include the first day of the local auction market where the resale takes place.</P>
                <P>(4) The data to be entered on Form MQ-72-2 for nonauction purchases from a producer shall be the data which is enumerated in accordance with the provisions of paragraph (c)(2) of this section.</P>
                <P>(5) At the end of the dealer's marketing operation, but not later than April 1 for tobacco other than flue-cured and January 15 for flue-cured tobacco, such dealer shall for each kind of tobacco:</P>
                <P>(i) Show the word “final” on the Dealer's Report, MQ-79, for the season,</P>
                <P>(ii) Report on such “final” MQ-79 for the season the quantity of tobacco on hand and its location,</P>
                <P>(iii) Permit its inspection by a representative of FSA, and</P>
                <P>(iv) Provide for weighing of such tobacco (to be witnessed by a representative of FSA) and furnish a certification as to the actual weight of such tobacco. After the weight of such tobacco has been determined as provided in this section, it shall be considered as the official weight for comparing purchases and resales for the purpose of determining the amount of penalty, if penalty is due.</P>
                <P>(v) If upon inspection by a representative of FSA, there is an amount of tobacco determined to be damaged tobacco according to § 723.104, such amount of pounds shall be deducted from the purchase credit and no carryover credit shall be allowed for such damaged tobacco for the next marketing year.</P>
                <P>(6) Notwithstanding the provisions of paragraph (d)(5) of this section, any dealer having tobacco transactions after January 15 for flue-cured and April 1 for other than flue-cured shall make reports on Form MQ-79 at the end of each week, as provided in paragraph (d)(3) of this section.</P>

                <P>(7) For burley and flue-cured tobacco, before the next marketing season begins, carryover tobacco reported by the dealer as provided in paragraph (d)(5) of this section shall be reinspected by a representative of FSA. When the reinspection indicates an amount of carryover tobacco different from that amount determined by the initial inspection, the dealer shall provide for the weighing of such tobacco which shall be witnessed by an FSA representative. The dealer shall furnish to such representative at the time of weighing a certification as to the actual weight of such tobacco. If an FSA representative determines that the weight of the tobacco is different, by reweighing, than the amount reported on the initial weight together with the reweighed quantity after taking into consideration any purchases and resales that occurred subsequent to the initial certification as provided in paragraph (d)(5) of this section shall be used for the purpose of determining penalty, if penalty is due. Penalty shall be assessed, after the initial certification and reconciliation, when the redetermined pounds exceed the amount determined by taking the initial pounds of carryover tobacco plus purchases, minus resales. The redetermined pounds shall be the official pounds to be credited to the account as carryover. If upon reinspection by a representative of FSA, there is an amount of tobacco determined to be damaged tobacco under § 723.104, such amount of pounds shall be deducted from the purchase credit and no carryover credit shall be allowed for such <PRTPAGE P="156"/>damaged tobacco for the next marketing year.</P>
                <P>(8) In addition to forms MQ-79 and MQ-72-2, if applicable, form MQ-79 (Supplemental) shall be executed to record information relating to each nonauction purchase of tobacco for which the No Net Cost and Tobacco Marketing Assessments are due from producers and dealers. The form MQ-79 (Supplemental) shall be forwarded to the State FSA office at the same time as the purchase is reported on the MQ-79. A check, draft, or money order in the amount of the collections recorded on form MQ-79 (Supplemental) and made payable to Commodity Credit Corporation shall be submitted to the State FSA office along with the forms MQ-79 and MQ-79 (Supplemental).</P>
                <P>(9) Any flue-cured or burley dealer who fails to comply with all provisions of paragraph (d)(5) of this section by January 15 for flue-cured and April 1 for burley tobacco will be issued a notice of noncompliance and the dealer shall be given 15 days to either comply or show cause why compliance is not feasible. Failure to complete all required actions within 15 days from date of such notice shall result in such dealer not being issued a MQ-79-2 for the marketing year immediately following the marketing year in which the dealer failed to conform with the deadline of January 15 for flue-cured and April 1 for burley tobacco.</P>
                <P>(e) <E T="03">Daily report to warehouse operator for buyers correction account.</E> Notwithstanding the provisions of § 723.405 of this part, reports shall be made as follows:</P>
                <P>(1) Any dealer, buyer, or any other person receiving tobacco from or through a warehouse operator at an auction sale or otherwise, which is not invoiced to such person or which is incorrectly invoiced to such person by the warehouse operator, shall furnish to the warehouse operator on a daily sales basis an adjustment invoice or buyers settlement sheet.</P>
                <P>(2) Each dealer who purchases tobacco on a warehouse floor for any sale day in which there is no adjustment required in the account as shown on the warehouse bill-out invoice for that sale day, shall file a negative report with the warehouse operator for that sale day.</P>
                <P>(3) Such reports as required under paragraphs (d)(1) and (2) of this section shall be furnished daily, if practicable (otherwise, they shall be furnished at the end of each week), and shall show the identification number of the warehouse where the purchase was made.</P>
                <P>(f) <E T="03">Reporting of processed tobacco.</E> Any dealer who delivers tobacco to a firm for the purpose of redrying, processing or stemming of such tobacco shall, by the end of the week in which such tobacco was delivered, report to the State FSA office on MQ-79, Dealer's Report:</P>
                <P>(1) The date delivered;</P>
                <P>(2) Name and address of the firm to which the tobacco was delivered; and</P>
                <P>(3) Pounds of tobacco (green weight) delivered which shall be entered in the resales pounds column. Such tobacco shall be considered as a resale on the date of delivery for the purpose of balancing the dealer account and collection of penalties where penalties are due.</P>
                <P>(g) <E T="03">Tobacco represented to be a nonquota kind.</E> Any dealer who plans to purchase tobacco that was produced on a farm in a quota area shall treat such tobacco as a quota kind of tobacco according to the provisions of this part 723 unless prior to the purchase a certification is obtained from an AMS inspector to indicate that such tobacco is a nonquota kind of tobacco. In such case, the dealer shall mail or otherwise deliver to the State FSA office, on the date of the purchase, a copy of the AMS certification and a statement signed by the AMS inspector, the producer, and the dealer to indicate the:</P>
                <P>(1) State and county code and farm number of the farm on which the tobacco was produced.</P>
                <P>(2) Name and address of the producer.</P>
                <P>(3) Name and address of the dealer.</P>
                <P>(4) Weight of the tobacco.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 56 FR 21443, May 9, 1991; 57 FR 43582, Sept. 21, 1992]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.405</SECTNO>
                <SUBJECT>Dealers exempt from regular records and reports on MQ-79; and season report for dealers.</SUBJECT>

                <P>(a) Any dealer or buyer who acquires tobacco in the form in which tobacco <PRTPAGE P="157"/>ordinarily is sold by farmers and resells 5 percent or less of any such tobacco shall not be subject to the requirements of § 723.404 of this part except for the requirements which relate to the reporting of nonauction purchases from producers and the requirements of § 723.404(e) of this part. A dealer or buyer whose resales in the form normally marketed by producers farmers exceed 5 percent of their purchases as a direct result of order buying for another dealer for a service fee may report under paragraph (b) of this section in lieu of § 723.404 of this part (except for requirements which relate to nonauction purchases from producers and requirements of § 723.404(e) of this part.</P>
                <P>(b)(1) This paragraph is applicable only to burley and flue-cured tobacco. Each dealer or buyer shall make a report to the Director, not later than February 1 of each year for flue-cured and April 1 for burley tobacco, showing by States where acquired, source and pounds of all tobacco, in the form normally marketed by producers, purchased at auction or nonauction including tobacco received which was not billed to the dealer or buyer. Any acquisition of tobacco in the form normally marketed by producers by the dealer or buyer during the marketing year (October 1 through September 30 for burley tobacco and July 1 through June 30 for flue-cured tobacco) which is not included in the initial report shall be reported in like manner no later than the end of the calendar week following the week in which the tobacco was acquired. The report shall show:</P>
                <P>(2) For purchases at auction for each warehouse;</P>
                <P>(i) USDA registration number (warehouse code),</P>
                <P>(ii) Name and address of warehouse,</P>
                <P>(iii) Gross pounds originally billed to the buyer,</P>
                <P>(iv) Gross pounds billed to the buyer for which payment was made,</P>
                <P>(v) Gross pounds from the company correction account deducted for short lots and short weights and returned lots, and</P>
                <P>(vi) Gross pounds from the company correction account added for long lots and long weights.</P>
                <P>(3) For purchases at nonauction;</P>
                <P>(i) Name and address of seller (dealer or farmer),</P>
                <P>(ii) Seller's number (dealer's registration number or farm number, including State and county code), and</P>
                <P>(iii) Pounds purchased.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.406</SECTNO>
                <SUBJECT>Provisions applicable to damaged tobacco or to purchases of tobacco from processors or manufacturers.</SUBJECT>
                <P>(a) <E T="03">Damaged tobacco.</E> Any dealer, warehouse operator, or other person who intends to purchase damaged tobacco shall notify the State FSA office where the warehouse operator or dealer is registered or should be registered. Such report must be made at least 2 business days in advance of the purchase so as to allow for inspection arrangements to be made. The inspection shall be conducted by an FSA representative and no purchase credit shall be allowed the buyer for the quantity determined to be damaged tobacco. Damaged tobacco may be disposed of without incurring a penalty only if the tobacco is destroyed and the destruction is witnessed by an FSA representative or the tobacco is sold directly to a processor or manufacturer and such sale is reported to the same State FSA office. Any tobacco not disposed of in that manner shall be deemed to have been a marketing of excess tobacco and will be subject to a penalty at the full penalty rate for the quantity of tobacco involved.</P>
                <P>(b) <E T="03">Purchase from processor or manufacturer.</E> Any tobacco purchased by a dealer, warehouse operator, or other person from a processor or manufacturer shall be considered to be tobacco in the form not normally marketed by producers unless the purchaser obtains from the processor or manufacturer a certification stating that such purchased tobacco is in the form normally marketed by producers. The certification by the processor or manufacturer shall be on a form prescribed by the Deputy Administrator certifying to FSA that the tobacco involved in the transfer of ownership is in the form normally marketed by producers. No purchase credit shall be given to a dealer, warehouse operator, or other person on MQ-79, Dealer's Record Book, for any purchase of tobacco <PRTPAGE P="158"/>which is not in the form normally marketed by producers. Tobacco which meets the definition of pickings as defined in this part shall be considered tobacco in the form not normally marketed by producers.</P>
                <P>(c) <E T="03">Report by dealer or warehouse operator.</E> Any dealer, warehouse operator or other person who plans to purchase tobacco in the form normally marketed by producers from a processor or manufacturer shall, prior to purchase, report such plans to the State FSA office issuing form MQ-79, Dealer's Record Book, to such person. Such report shall be made timely so that a representative of FSA may inspect the tobacco to determine its marketable value and whether the tobacco is in the form normally marketed by producers. Any tobacco purchased from processors or manufacturers before such plans are reported to the state FSA office and before the tobacco is inspected by an FSA representative or an inspection is declined by an FSA representative shall be deemed excess tobacco and the penalty at the full rate shall be due.</P>
                <P>(d) <E T="03">Report by processor or manufacturer.</E> Each processor or manufacturer shall make a report to the Director, showing the quantity of tobacco sold in the form not normally marketed by producers to dealers and buyers other than processor or manufacturers. The report shall be filed no later than the end of the calendar week following the week in which such tobacco was sold and shall show the name of the purchaser, the date of the sale and the pounds sold.</P>
                <P>(e) <E T="03">Dealer records and reports.</E> (1) Any dealer, warehouse operator or other persons who purchased tobacco classified as not in the form normally marketed by producers shall keep such records as will enable such person to report to the State FSA office the following:</P>
                <P>(i) Name of seller, pounds purchased, and date of purchase.</P>
                <P>(ii) The disposition of such tobacco including name of buyer, pounds sold, date of sale,</P>
                <P>(2) Upon request by the State FSA office such person shall provide for the inspection and weighting of the tobacco to be witnessed by an FSA representative.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 56 FR 21443, May 9, 1991; 57 FR 43582, Sept. 21, 1992]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.407</SECTNO>
                <SUBJECT>Cigar tobacco buyer's records and reports.</SUBJECT>
                <P>(a) <E T="03">This section is applicable to buyers of cigar tobacco</E>—(1) <E T="03">Definition of cigar buyer.</E> With respect to this section, a buyer is any person who buys cigar tobacco including an association or cooperation that receives tobacco from producers for the purpose of:</P>
                <P>(i) Selling it for the producers, or</P>
                <P>(ii) Placing it under price-support loan through Commodity Credit Corporation.</P>
                <P>(2) <E T="03">Report of buyer's name and address.</E> Each buyer shall properly execute, detach, and promptly forward to the State FSA office, “Receipt for Buyer's Record” contained in MQ-79 (CF&amp;B), which is issued to the buyer.</P>
                <P>(b) <E T="03">Record of purchases.</E> A buyer shall keep records which provide the following information for each lot of each kind of tobacco purchased or sold by the buyer, including tobacco obtained from grading tobacco for producers or furnishing curing space, or stripping space:</P>
                <P>(1) The name of:</P>
                <P>(i) The operator of the farm on which the tobacco was produced; or</P>
                <P>(ii) The name and address of the seller, in the case of a sale by a person other than the farm operator.</P>
                <P>(2) The identification number of the farm at/from which the tobacco was purchased.</P>
                <P>(3) The date of purchase.</P>
                <P>(4) The pounds of tobacco purchased.</P>
                <P>(5) The gross purchase price.</P>
                <P>(6) The amount of penalty.</P>
                <P>(7) The amounts remitted for the No Net Cost and Tobacco Marketing Assessments.</P>
                <P>(c) <E T="03">Report of sales.</E> Each buyer shall maintain records which will show, by kind of tobacco, the disposition of tobacco purchased under paragraph (b) of this section.</P>

                <P>(d) The dealer shall remit the producer's and the dealer's share of the No Net Cost and Tobacco Marketing Assessments as provided in part 1464 of this title. The dealer may deduct the producer's share of each assessment <PRTPAGE P="159"/>from the price paid for the tobacco. The No Net Cost Assessment shall not be collected from a producer who identifies the tobacco for marketing with a marketing card which has a converted penalty rate of 100 percent on the marketing card. A marketing penalty at the full rate shall be collected on the marketings identified by such card. The amount of the No Net Cost and the Tobacco Marketing Assessments which is applicable to tobacco marketed during each marketing year will be the amount per pound which is approved and announced by the Secretary.</P>
                <P>(e) <E T="03">Identification of sale or marketing card memo and buyers records.</E> Each MQ-76 and each sale memo from an MQ-77 used to identify each sale of tobacco by a producer shall be properly executed by the buyer. The serial number of the MQ-76 marketing card or sale memo from an HQ-77 to identify such tobacco, shall be recorded on the buyer's copy of the MQ-79 (CF&amp;B) and on the check register or check stub for the check written with respect to such tobacco.</P>
                <P>(f) <E T="03">Record and report of purchases of tobacco from producers.</E> (1) Each buyer shall keep a record and make reports on MQ-79 (CF&amp;B), Buyer's Record, showing by kinds of tobacco purchased by or for such buyer from producers. Such record and report shall show for each sale the sale date, the name of the farm operator, (and the name and address of the person selling the tobacco if other than the operator), the serial number of the within quota marketing card (MQ-76), and from each excess card (MQ-77), the sale memo number used to identify the sale, the pounds of tobacco represented in the sale, the rate of penalty shown on the sale memo (MQ-77), and the amount of penalty. If a marketing card is not presented by the producer, the buyer shall record and report the purchase as provided above except that the buyer shall enter the word “None” in the space for the serial number of the marketing card (MQ-76) or sale memo (MQ-77), the applicable rate of penalty per pound in the space for rate of penalty, and shall show the name and address of the seller in the space for the seller's name.</P>
                <P>(2) The original of MQ-79 (CF&amp;B), excess sale memos (MQ-77), and a remittance for all penalties shown by entries on MQ-79 (CF&amp;B) and on the excess sale memos (MQ-77) to be due shall be forwarded to the State FSA office not later than the 10th day of the calendar month next following the month during which the sale date occurred.</P>
                <P>(3) In addition to forms MQ-79 and MQ-72-2, if applicable, form MQ-79 (Supplemental) shall be executed to record information relating to each nonauction purchase of tobacco for which the No Net Cost and Tobacco Marketing Assessments are due from producers and dealers. The form MQ-79 (Supplemental) shall be forwarded to the State FSA office at the same time as the purchase is reported on the MQ-79. A check, draft, or money order in the amount of the collections recorded on form MQ-79 (Supplemental) and made payable to Commodity Credit Corporation shall be submitted to the State FSA office along with the forms MQ-79 and MQ-79 (Supplemental).</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 56 FR 21443, May 9, 1991]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.408</SECTNO>
                <SUBJECT>Producer's records and reports.</SUBJECT>
                <P>(a) <E T="03">Failure to file reports or filing false reports.</E> (1) With respect to any kind of tobacco, if the producer on a farm files an incomplete or incorrect report, fails to file a report, or files or aids or acquiesces in the filing of any false report with respect to the amount of such kind of tobacco produced on or marketed from the farm, applicable tobacco acreage allotment or burley farm marketing quota next established for such farm shall be reduced, unless the county and State FSA committees determine, according to instructions issued by the Deputy Administrator, that such reduction is not required.</P>

                <P>(2) For all kinds of tobacco except burley tobacco, if a farm operator files a report of acreage of the applicable kind of tobacco on the farm and, after a determination of the acreage, it is determined by the county FSA committee (with approval of the State FSA committee) that the report was false (either significantly under reported or significantly over reported by more than the tolerance for reporting as provided in part 718 of this chapter) in what amounts to a scheme or device to <PRTPAGE P="160"/>defeat the purpose of the program, the allotment next established for the farm shall be reduced by an amount determined by multiplying the acreage falsely reported (difference between reported and determined acreage) by:</P>
                <P>(i) With respect to flue-cured tobacco, the farm yield established for the farm for the year in which the false report was filed, or</P>
                <P>(ii) For any other kind of tobacco, the actual yield per acre for the year in which the false report was filed.</P>
                <P>(3) Any report of a marketing of tobacco by a producer or any use of producer's marketing card to sell the tobacco or the pledge the tobacco for a price support loan shall be considered the filing of a false report by the producer and, in addition to other remedies as may apply, the remedies provided in paragraph (a)(1) of this section shall apply, if, under the provisions of part 1464 of this title, the producer was not considered to have been an “eligible producer” with respect to such marketing or other disposition of tobacco.</P>
                <P>(b) <E T="03">Harvesting second crop tobacco from the same farm.</E> For all kinds of tobacco except burley, if in the same calendar year more than one crop of tobacco was grown from:</P>
                <P>(1) The same tobacco plants, or</P>
                <P>(2) Different tobacco plants, and is harvested for marketing from the same acreage of a farm, the acreage allotment next established for such farm shall be reduced by an amount equivalent to the acreage from which more than one crop of tobacco was so grown and harvested.</P>
                <P>(c) <E T="03">False identification.</E> If there is false identification of any kind of tobacco, the applicable farm acreage allotment or farm marketing quota next established for the farm and kind of tobacco involved shall be reduced, except that such reduction for any such farm shall not be made if the county and State FSA committees determine, according to instructions issued by the Deputy Administrator, that such reduction is not required.</P>
                <P>(d) <E T="03">Report on marketing card.</E> (1) The operator of each farm on which tobacco is produced shall return to the county FSA office each marketing card issued for the farm whenever marketings from the farm are completed and, in no event, later than,</P>
                <P>(i) June 1 of the marketing year in the case of cigar tobacco, and</P>
                <P>(ii) For all other kinds of tobacco, not later than 20 days after the close of the tobacco auction markets for the marketing year for the locality in which the farm is located. Failure to return the marketing card within 15 days after written request by certified mail from the county FSA executive director shall constitute failure to account for disposition of all tobacco marketed from the farm unless disposition of tobacco marketed from the farm is otherwise accounted for to the satisfaction of the county FSA committee.</P>
                <P>(2) For all kinds of tobacco except burley and flue-cured:</P>
                <P>(i) At the time the marketing card is returned to the county FSA office, the farm operator must certify with respect to each:</P>
                <P>(A) MQ-77, to the quantity of tobacco on hand and its location.</P>
                <P>(B) MQ-76, to the accuracy of the Record of Sales recorded on the card.</P>
                <P>(ii) Failure of the farm operator to make the applicable certification shall constitute failure to satisfactorily account for the disposition of tobacco marketed from the farm.</P>

                <P>(3) Upon failure to satisfactorily account to the county FSA committee for disposition of tobacco marketed from the farm the allotment or quota next established for such farm and such kind of tobacco shall be reduced, except that such reduction for any such farm shall not be made if it is established to the satisfaction of the county FSA committee and a representative of the State FSA committee that the failure to furnish such proof of disposition was unintentional and no producer on such farm could reasonably have been expected to furnish such proof of disposition. However, such failure will be construed as intentional unless such proof of disposition is furnished and payment of all additional penalty is made, or no person connected with such farm for the year for which the acreage allotment or quota is being established caused, aided, or acquiesced in the failure to furnish such proof.<PRTPAGE P="161"/>
                </P>
                <P>(e) <E T="03">Report of production and disposition.</E> (1) In addition to any other reports which may be required by this subpart, the operator or any producer on a farm (even though the harvested acreage does not exceed the acreage allotment or even though no farm acreage allotment or farm marketing quota was established for the farm) shall, upon written request by certified mail from the State or county FSA committee, furnish on MQ-108, Report of Production and Disposition, a written report of the acreage, production and disposition of all tobacco produced on the farm by sending the same to the State or county FSA committee within 15 days after the request was mailed showing as to the farm at the time of filing such report with respect to the applicable kind of tobacco the:</P>
                <P>(i) Total harvested acres,</P>
                <P>(ii) Total amount of tobacco on hand and its location,</P>
                <P>(iii) Total pounds of tobacco produced,</P>
                <P>(iv) Name and address of the warehouse operator, dealer, or other person to or through whom tobacco was marketed, and the number of pounds marketed, the gross price paid and the date of the marketings, and</P>
                <P>(v) Complete details as to any tobacco disposed of other than by sale.</P>
                <P>(2) With respect to any farm on which burley or flue-cured tobacco was produced or available for marketing from carryover tobacco, the operator or any producer on the farm (even though the harvested acreage does not exceed the flue cured farm acreage allotment or even though no farm acreage allotment or farm marketing quota was established for the farm) shall, upon written request from the county FSA committee, furnish on Form MQ-108-1, Report of Unmarketed Tobacco, a written report of the amount and location of the applicable kind of tobacco produced on the farm which is unmarketed at the end of the marketing season and the amount the applicable kind of tobacco produced by such operator or producer on any other farm, which is unmarketed at the end of the marketing season and which is stored on the farm, by sending the report to the county FSA committee within 15 days after the request was mailed to such person at such person's last known address.</P>
                <P>(3) Failure to file the MQ-108 or MQ-108-1 as requested, or the filing of MQ-108 or MQ-108-1 which is found by the State or county FSA committee to be incomplete or incorrect shall, to the extent that it involves tobacco produced on the farm, constitute failure to account for the disposition of tobacco produced on the farm and the allotment or quota next established for such farm shall be reduced, except that such reduction shall not be made if it is established to the satisfaction of the county or State FSA committee that failure to furnish such proof of disposition was unintentional and no producer on such farm could reasonably have been expected to furnish such proof of disposition: However, such failure will be construed as intentional unless such proof of disposition is furnished and payment of all additional penalty is made, or no person connected with such farm for the year for which the farm acreage allotment or farm marketing quota is being established caused, aided, acquiesced in the failure to furnish such proof.</P>
                <P>(f) <E T="03">Reports by producer-manufacturers.</E> (1) For all kinds of tobacco except burley and flue-cured tobacco, each producer who manufactures tobacco products from tobacco produced by or for such person as a producer, shall report to the State FSA office with respect to each farm on which such tobacco is produced and as soon as all tobacco from the farm has been weighed as follows:</P>
                <P>(i) If the harvested acreage is within the allotment, the producer-manufacturer shall report the total pounds of tobacco produced, the date(s) on which such tobacco was weighed, the farm serial number of the farm on which it was produced, and the estimated value of such tobacco.</P>

                <P>(ii) If the harvested acreage is in excess of the allotment, the producer-manufacturer shall report the total pounds of tobacco produced on the farm, the date(s) on which the tobacco was weighed, the farm serial number of the farm on which it was produced, the estimated value of the tobacco, and the location of the tobacco. If the required reports are not made, penalty shall be <PRTPAGE P="162"/>paid on the tobacco by the producer-manufacturer, at the converted rate of penalty shown on the marketing card issued for the farm, when it is moved from the place where it can be conveniently inspected by the county FSA committee at any time separate and apart from any other tobacco.</P>
                <P>(2) If the producer-manufacturer has excess tobacco and does not pay the penalty thereon at the converted rate of penalty shown on the marketing card, such producer-manufacturer shall notify in writing the buyer of the manufactured product or the buyer of any residue resulting from processing the tobacco, at time of sale of such product or residue, of the precise amount of penalty due on such manufactured product or residue. In such event, the producer-manufacturer shall immediately notify the State FSA executive director and shall account for the disposition of such tobacco by furnishing the State FSA executive director a report on a form to be furnished by such State FSA executive director, showing the name and address of the buyer of the manufactured products or residue, a detailed account of the disposition of such tobacco and the exact amounts of penalty due with respect to each such sale of such products or residue to indicate, together with copies of the written notice that was given to the buyer of such products or residue to indicate the exact amount of the penalty due.</P>
                <P>(3) Failure to file the report required in paragraph (f)(2) of this section, or the filing of a report which is found by the State FSA committee to be incomplete or incorrect, shall be considered failure of the producer-manufacturer to account for the disposition of tobacco produced on the farm and the allotment next established for the farm shall be reduced for such failure, except that such reduction for any such farm shall not be made if it is established to the satisfaction of the county and State FSA committees, that:</P>
                <P>(i) The failure to furnish such report of disposition was unintentional and the producer-manufacturer on such farm could not reasonably have been expected to furnish such report of disposition. However such failure will be construed as intentional unless such report of disposition is furnished and payment of all additional penalty is made, or</P>
                <P>(ii) No person connected with such farm for the year for which the allotment is being established caused, aided, or acquiesced in the failure to furnish such report. The producer-manufacturer shall be liable for the payment of penalty.</P>
                <P>(g) <E T="03">Amount of allotment or quota reductions—</E>(1) <E T="03">Burley tobacco.</E> For burley tobacco, the farm marketing quota determined for a farm for the current year shall be reduced by that amount of tobacco which is involved in a marketing quota violation as described in paragraphs (a), (b), (c), (d), or (e), of this section which occurred in any prior year. However, the amount of such reduction shall not exceed the current year farm marketing quota. The county FSA committee shall determine the amount of tobacco involved in the marketing quota violation. If the actual quantity of tobacco involved in such violation is unknown, the county FSA committee shall determine the quantity by considering both the condition of the crop during production, if known, and such other information as is available.</P>
                <P>(2) <E T="03">Kinds of tobacco except burley tobacco.</E> The amount of reduction in the allotment for the current year for a violation described in paragraphs (a), (c), (d), (e), or (f) of this section shall be that percentage, but not to exceed 100 percent, which the amount of the tobacco involved in the violation is of the respective farm marketing quota for the farm for the year in which the violation occurred times the current year farm acreage allotment. The quantity of tobacco in violation shall be determined by the county FSA committee. If known, the actual quantity shall be determined by the county FSA committee to be the amount of tobacco involved in the violation. If the actual quantity is unknown, determine the quantity by taking into consideration the condition of the crop during production, if known, and such other information that is available.</P>
                <P>(h) <E T="03">Allotment or quota reduction for combined farms.</E> If the farm involved in the violation is combined with another <PRTPAGE P="163"/>farm prior to the reduction, the allotment or quota reduction shall be applied as heretofore provided in this section to that portion of the farm acreage allotment or farm marketing quota for which a reduction is required.</P>
                <P>(i) <E T="03">Allotment or quota reduction for divided farms.</E> If the farm involved in the violation has been divided prior to the reduction, the reduction shall be applied as heretofore provided in this section to the allotments or quota for the divided farms required to be reduced.</P>
                <P>(j) <E T="03">Quota reductions for flue-cured tobacco.</E> For flue-cured tobacco only, if an acreage allotment reduction is made under this section, the marketing quota shall be reduced to reflect such reduction in an amount determined by multiplying the acreage reduction by the farm yield.</P>
                <P>(k) <E T="03">County administrative hearing in connection with violations.</E> Except for the failure to return a marketing card, the allotment or quota for any farm shall not be reduced for a violation under this section until the operator of the farm has been afforded an opportunity to discuss the nature and extent of the violation with the county FSA committee. If after having been afforded an opportunity to discuss a violation with the county FSA committee the farm operator fails or refused to discuss the violation, the county FSA committee shall take action as required by this part.</P>
                <P>(l) <E T="03">Sequence of allotment or quota reductions.</E> For burley and flue-cured tobacco, if the tobacco farm acreage allotment or farm marketing quota for a farm is to be reduced in the current year because of both:</P>
                <P>(1) A violation, and</P>
                <P>(2) Overmarketings in a prior year, the reduction in the farm acreage allotment or farm marketing quota for the violation shall be made before making the reduction for overmarketings.</P>
                <P>(m) <E T="03">Correction of farm records.</E> For burley and flue-cured tobacco, where farm data for actual marketings are determined to be incorrect because of a violation, the records shall be corrected for each farm on which the tobacco was produced, and for each farm whose card was used to identify marketings.</P>
                <P>(n) <E T="03">Report on Form MQ-92, Estimate of Production.</E> An estimate of production, Form MQ-92, shall be prepared immediately prior to harvest for each farm for which the county or State FSA committee or a representative of the county or State FSA committee believes than an MQ-92 for the farm would be in the best interests of the program. The county FSA committee shall have the authority to visit any farm for the purposes of making an estimate of production or determination of planted acreage needed to complete an estimate of production.</P>
                <P>(o) <E T="03">Effect of false identification on establishing future farm marketing quotas.</E> Notwithstanding any other provision of this section, with respect to burley or flue-cured tobacco, if a producer falsely identifies such tobacco as having been produced on or marketed from a farm, the quantity of the tobacco which is falsely identified shall be considered, for the purpose of establishing future farm marketing quotas, as having been produced on both the farm for which it was identified as having been produced, and the farm of actual production, if known, or, as the case may be, such quantity of tobacco shall be considered as actually marketed from the farm.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 57 FR 43582, Sept. 21, 1992]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.409</SECTNO>
                <SUBJECT>Producer violations, penalties, false identification collections and remittances by dealers, buyers, handlers, warehouses, and other parties; related issues.</SUBJECT>
                <P>(a) <E T="03">Generally—(1) Circumstances in which penalties are due.</E> A penalty shall be due on all marketings from a farm which are:</P>
                <P>(i) In excess of the applicable quota or allotment;</P>
                <P>(ii) Made without a valid marketing card;</P>

                <P>(iii) Made under circumstances where a buyer or dealer, or their agents, know, or have reason to know, that the tobacco was, or is, marketed in a manner which by itself or in combination with other marketings is designed to, or has the effect of, defeating the purposes of the tobacco price support and production adjustment program, avoiding marketing quota limitations, or <PRTPAGE P="164"/>otherwise avoiding provisions of this part or part 1464 of this title;</P>
                <P>(iv) Falsely identified; or,</P>
                <P>(v) Marketings for which the producer or other party fails to make a proper account as required by the provisions of this part.</P>
                <P>(2) <E T="03">Amount of the penalty.</E> The amount of the penalty shall be the amount computed by multiplying the penalty rate by the penalty quantity.</P>
                <P>(3) <E T="03">Penalty rate.</E> The penalty rate for purposes of this section is that rate which is computed as the penalty rate per pound for the applicable kind of tobacco under § 723.308, except to the extent that a converted penalty rate may be used as provided for in this section.</P>
                <P>(4) <E T="03">Penalty quantity.</E> The penalty quantity for purposes of this section is the quantity of tobacco that is determined by the county FSA committee subject to the Director's review to be subject to penalty, provided further that:</P>
                <P>(i) For burley and flue-cured tobacco, the penalty quantity for purposes of this section shall be the amount of marketings from the farm in excess of 103 percent of the farm's effective marketing quota for that year, except that if the violation involves false identification or a failure to account for tobacco, the FSA may, in its discretion, depending on the nature of the violations, use as the penalty quantity an amount up to 25 percent of the farm's effective marketing quota plus 100 percent of the farm yield on any excess acreage for the farm (acreage planted in excess of the allotted acres, as estimated or determined).</P>
                <P>(ii) For tobacco other than burley and flue-cured tobacco, the penalty quantity shall be the amount of marketings from the farm in excess of the farm's marketing quota provided further, that in order to aid in the collection of the penalty the FSA may endeavor, to the extent practicable, to apply the penalty to all of the farm's marketing by converting the full penalty rate to a converted proportionate penalty rate which rate may be identified on the producer's marketing card and collected and remitted accordingly. In making the calculation of the converted penalty rate, the agency shall take into account any carryover tobacco applicable for the farm. If an erroneous penalty rate is shown on the marketing card, then the producer of the tobacco and the producer who marketed the tobacco shall be liable for any balance due.</P>
                <P>(5) <E T="03">Limitations on reduced penalty quantities.</E> No penalty shall be assessed at less than the maximum amount unless it is determined by the county FSA committee, with the concurrence of the State FSA committee, that all of the following exist with respect to such violation:</P>
                <P>(i) The violation was inadvertent and unintentional;</P>
                <P>(ii) All of the farm's production has been accounted for and there are no excess marketings for which there are penalties outstanding;</P>
                <P>(iii) The records for all involved farms have been corrected to show the marketings involved; and</P>
                <P>(iv) The false identification or failure to account did not give the producer an advantage under the program.</P>
                <P>(6) <E T="03">Effect of improper, invalid, deceptive or unaccounted for marketings on penalty quantity calculation.</E> Any marketing made without a valid marketing card, falsely identified, or unaccounted for in accordance with the requirements of this part, or made under circumstances which are designed to, or have the effect of, defeating the purpose of the tobacco marketing quota and price support program, avoiding any limitation on marketings, avoiding a penalty, or avoiding compliance with, or the requirements of, any regulation under this part or under part 1464 of this title, shall be considered an excess marketing of tobacco. Further, such marketings shall, unless shown to the satisfaction of the county FSA committee to be otherwise, be considered, where relevant, to be in excess of 103 percent of the applicable marketing quota for the farm, and shall be subject to a penalty at the full penalty rate for each pound so marketed.</P>
                <P>(7) <E T="03">Pledging of tobacco by an ineligible producer.</E> In addition to any other circumstances in which a penalty may be assessed under this part, the marketing or pledging for a price support loan of any tobacco when the producer is not considered to be an “eligible producer” under the provisions of part 1464 of this <PRTPAGE P="165"/>title, shall be considered to be a false identification of tobacco and shall be dealt with accordingly. This remedy shall be in addition to all others as may apply.</P>
                <P>(8) <E T="03">Failures to make certain reports.</E> If any producer who manufactures tobacco products from tobacco produced by such person or another fails to make the report required by § 723.408(f) or otherwise required by this part, or makes a false report, such producer shall be deemed to have failed to account for the disposition of tobacco produced on the farm(s) involved. The filing of a report by a producer under § 723.408 of this part which the State FSA committee finds to be incomplete or incorrect shall constitute a failure to account for the disposition of tobacco produced on the farm.</P>
                <P>(b) <E T="03">Special provisions for tobacco buyers, dealers, handlers, warehouse operators and others who acquire, handle, or facilitate the marketing of tobacco.</E> Notwithstanding the provisions of paragraph (a) of this section and other provisions of this part:</P>
                <P>(1) Unless such amount has been remitted by another in accord with the provisions of this part, a dealer, buyer, warehouse operator or other person handling tobacco shall collect, and remit to FSA, an amount equal to the full penalty rate provided for in § 723.208 times the quantity of tobacco involved where the tobacco is not identified with a valid producer or dealer card, the tobacco is sold under suspicious circumstances, or when there is reason to suspect that the tobacco may be subject to a penalty for any reason or may be marketed in derogation of the goals and purposes of the tobacco support program. For purposes of the preceding sentence “handling” shall include any services provided with respect to the tobacco, and any facilitation of the marketing of tobacco regardless of the level or amount of contact, if any, that the party may actually have with the tobacco.</P>
                <P>(2) The amount of the penalty required to be collected may be deducted from the proceeds due a seller and all parties chargeable under paragraph (b)(1) of this section shall be jointly and severally liable for insuring that the monies are remitted to FSA except to the extent that the Director shall allow for an exemption to facilitate the marketing of tobacco, or for some other reason.</P>
                <P>(3) The collection and remittance of penalty shall be in addition to any other obligations that such person may have to collect other amounts, including other penalties or assessments due on such marketings.</P>
                <P>(4) If a penalty is collected and remitted by a buyer, dealer, or warehouse operator that is shown not to be due or only partially due, then the overpayment shall be refunded to the appropriate party. It is the responsibility of the person that collected the penalty and the person that sold the tobacco involved to show to the satisfaction of the FSA that such penalty is not due in the full amount collected.</P>
                <P>(c) <E T="03">Canceled allotment or quota.</E> If part or all of the tobacco produced on a farm has been marketed and the farm acreage allotment or farm marketing quota for the farm is canceled, any penalty due on the marketings shall be paid by the producers.</P>
                <P>(d) <E T="03">Overmarketing proportionate share of effective farm marketing quota-burley or flue-cured tobacco.</E> With respect to burley or flue cured tobacco, if the county FSA committee determines that the farm operator or another producer on the farm has marketed more than 103 percent of such operator's or producer's share of the effective farm marketing quota with intent to deprive some other producer on the farm from marketing such producer's proportionate share of the same crop of tobacco, such operator or other producer shall be liable for marketing penalties at the full rate per pound for each pound of tobacco marketed above 103 percent of such producer's share of the effective farm marketing quota. However, the sum of such penalties shall not exceed the total penalties due on total marketings above 103 percent of the effective farm marketing quota for the farm on which such tobacco was produced. Before assessment of penalty pursuant to this paragraph, a hearing shall be scheduled by the county FSA committee and the operator and affected producers shall be invited to be present, or to be represented, to determine whether the operator or another <PRTPAGE P="166"/>producer on the farm has marketed more than 103 percent of such person's proportionate share of the effective farm marketing quota. The notice of the hearing shall request the farm operator and affected producers to bring to the hearing floor sheets and other relevant supporting documents. At least two members of the county FSA committee shall be present at the hearing. The hearing shall be held at the time and place named in the notice and any action taken to impose penalty shall be taken after the hearing. If the farm operator or other affected producer does not attend the hearing, or is not represented, the county FSA committee shall make a determination on the basis of available records and shall assess any penalties that may be required against the applicable person.</P>
                <P>(e) <E T="03">Penalties not to be assessed-burley or flue-cured tobacco.</E> With respect to burley or flue-cured tobacco, if the operator or another producer on the farm markets a quantity of tobacco above 103 percent of the effective farm marketing quota for the farm and such overage is found to have been caused by the failure to record or improper recording of tobacco poundage data on the marketing card, that amount of the penalty as was due to such failure to record or improper recording will not be required to be paid by the farm operator or other producer if:</P>
                <P>(1) For amounts of $100 or less, the county FSA committee, and</P>
                <P>(2) For amounts over $100, the county FSA committee with approval of the State FSA committee determines that each of the following conditions is applicable:</P>
                <P>(i) The failure to record or incorrect recording resulted from action or inaction of a marketing recorder or another FSA employee, and</P>
                <P>(ii) The farm operator or another producer on the farm had no knowledge of such failure or error. Overmarketings for a farm for which the marketing penalty will not be paid pursuant to the provisions of this paragraph shall be determined based upon the correct effective farm marketing quota and correct actual marketings of tobacco from the farm.</P>
                <P>(f) <E T="03">Refusal to contribute required assessments.</E> A marketing penalty at the full rate per pound is due on each pound of tobacco marketed from a farm when the farm operator or producers refuse to pay no-net-cost or marketing assessments as provided in part 1464 of this title. In all such cases, the farm from which the tobacco has been produced shall be considered to have a marketing quota of zero pounds and an allotment of zero acres.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 57 FR 43583, Sept. 21, 1992; 63 FR 11582, Mar. 10, 1998]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.410</SECTNO>
                <SUBJECT>Penalties considered to be due from warehouse operators, dealers, buyers, and others excluding the producer.</SUBJECT>
                <P>Subject to any additional requirements or provisions for remittances which are contained in § 723.409 of this part, any marketing of tobacco under one of the following conditions shall be considered to be a marketing of excess tobacco.</P>
                <P>(a) <E T="03">Auction sale without burley or flue-cured tobacco marketing card.</E> For burley and flue-cured tobacco, any first marketing of tobacco at an auction sale by a producer which is not identified by a valid marketing card at the time of marketing shall be considered to be a marketing of excess tobacco and the penalty thereon shall be collected and remitted by the warehouse operator unless prior to marketing, an AMS inspection certificate is obtained showing that the tobacco is of a kind not subject to marketing quotas.</P>
                <P>(b) <E T="03">Auction sale without dark air-cured, fire-cured, or Virginia sun-cured tobacco marketing card.</E> For dark air-cured, fire-cured, or Virginia sun-cured tobacco, any first marketing of tobacco at an auction sale by a producer which is not identified by a valid marketing card (MQ-76 or MQ-77 (including sale memo)) on or before the last warehouse sale day of the marketing season, or within 4 weeks following the date of marketing, whichever comes first, shall be identified by an MQ-82, and shall be presumed, subject to rebuttal, to be a marketing of excess tobacco. The penalty thereon shall be paid by the warehouse operator.</P>
                <P>(c) <E T="03">Burley or flue-cured tobacco nonauction sale.</E> For burley and flue-cured tobacco, any nonauction marketing of tobacco which:<PRTPAGE P="167"/>
                </P>
                <P>(1) Is not identified by a valid marketing card and recorded at the time of marketing on MQ-79, Dealer's Report, the marketing card, and MQ-72-2, Report of Tobacco Nonauction Purchase; or,</P>
                <P>(2) If purchased prior to the opening of the local auction market for the current year, it is not identified by a valid marketing card and recorded on MQ-79, the marketing card, and MQ-72-2, Report of Tobacco Nonauction Purchase not later than the end of the calendar week which includes the first sale day of the local auction markets, shall be considered a marketing of excess tobacco. The penalty thereon shall be collected by the purchaser of such tobacco, and remitted with MQ-79, unless prior to marketing an AMS inspection certificate is obtained showing that the tobacco is of a kind not subject to marketing quotas.</P>
                <P>(d) <E T="03">Nonauction sale, except burley, flue-cured, and cigar tobacco.</E> For dark air-cured, fire-cured, or Virginia sun-cured tobacco, any nonauction sale of tobacco which:</P>
                <P>(1) Is not identified by an MQ-76 or MQ-77 (including a valid sale memo); and</P>
                <P>(2) Recorded on MQ-79, Dealer's Record, not later than the end of the calendar week in which the tobacco was purchased; or</P>
                <P>(3) If purchased prior to the opening of the local auction market for the current year, is not identified by an MQ-76 or MQ-77 (including a valid sale memo) and recorded on MQ-79 not later than the end of the calendar week which includes the first day of the local auction markets, shall be presumed, subject to rebuttal, to be a marketing of excess tobacco. The penalty thereon shall be paid by the purchaser of such tobacco.</P>
                <P>(e) <E T="03">Failure to obtain an MQ-76 and sale memo, and failure to record a sale on MQ-76-cigar tobacco.</E> Any sale of cigar tobacco for which a dealer:</P>
                <P>(1) If within quota, fails to record the sale on the marketing card issued for the farm, or</P>
                <P>(2) If the tobacco was produced on a farm for which an excess marketing card was issued, fails to obtain a valid sale memo by the end of the sale date, shall be presumed, subject to rebuttal, to be a marketing of excess tobacco. The penalty thereon shall be paid by the buyer who fails to make the required record.</P>
                <P>(f) <E T="03">Leaf account tobacco.</E> If warehouse resales exceed prior leaf account purchases, such marketings shall be considered to be a marketing of excess tobacco unless such warehouse operator furnishes evidence acceptable to the State FSA committee showing that such marketing is not a marketing of excess tobacco. However, evidence acceptable to the State FSA committee shall not be based on the warehouse operator's proof of purchase of tobacco that is not in the form normally marketed by producers even though such evidence indicates that resales exceed prior leaf account purchases as a result of the blending of tobacco, which was not in the form normally marketed by producers, with the warehouse operator's prior purchases of leaf account tobacco.</P>
                <P>(g) <E T="03">Dealer tobacco—burley and flue-cured.</E> The burley or flue-cured tobacco resales by a dealer (as shown or due to be shown on Form MQ-79), which are in excess of such dealer's total prior purchases of the respective kind of tobacco shall be considered to be a marketing of excess tobacco and penalty thereon shall be due at the time the marketing takes place which results in the excess. If the resale which results in penalty being due is made at auction, the warehouse shall deduct the penalty from the proceeds of the sale and shall remit the penalty to the marketing recorder. If the resale which results in penalty being due is made at nonauction, the purchaser shall deduct the penalty from the proceeds of the sale and shall remit the penalty to the applicable State FSA office.</P>
                <P>(h) <E T="03">Resales not reported.</E> Any resale of tobacco which is required to be reported by a warehouse operator or dealer, but which is not reported within the time and in the manner required, shall be considered to be a marketing of excess tobacco, unless and until such warehouse operator or dealer furnishes proof of such resale which is acceptable to the State FSA executive director. The penalty thereon shall be paid by the warehouse operator or <PRTPAGE P="168"/>dealer who fails to make the report as required.</P>
                <P>(i) <E T="03">Marketing falsely identified by a person other than the producer of the tobacco.</E> If any marketing of tobacco by a person other than the producer is identified by a marketing card other than the marketing card issued for the farm on which the tobacco was produced, and the source of production of the tobacco is unknown, such marketing shall be presumed, subject to rebuttal, to be a marketing of excess tobacco. The marketing quota penalty shall be paid by the person who marketed the tobacco.</P>
                <P>(j) <E T="03">Carryover tobacco, except cigar tobacco.</E> Any tobacco on hand, except for cigar tobacco, and reported or due to be reported under § 723.403 of this part for warehouse operators and § 723.404 of this part for dealers shall be included as a resale in determining whether an account for a kind of tobacco has excess resales. Unless the warehouse operator furnishes proof acceptable to the State FSA committee and unless the dealer furnishes proof acceptable to the State FSA executive director, showing that such account does not represent excess tobacco, penalty at the full rate for the respective kind of tobacco shall be paid thereon by such warehouse operator or dealer.</P>
                <P>(k) <E T="03">Unrecorded sale of cigar tobacco.</E> Any sale of cigar tobacco which is not recorded on MQ-79 (CF&amp;B), Buyer's Record Book, by the 10th day of the month following the month during which the sale dated occurred shall be presumed, subject to rebuttal, to be a marketing of excess tobacco. The penalty thereon shall be paid by the buyer who fails to make the record.</P>
                <P>(l) <E T="03">Floor sweepings.</E> Any person who markets floor sweepings in excess of allowable floor sweepings shall be subject to a civil penalty of 150 percent of the average market price for the immediately preceding marketing year, as determined by the U.S. Department of Agriculture. The calculated penalty rate shall be rounded to the nearest whole cent. Any floor sweepings on hand more than 30 days (15 days with respect to flue-cured tobacco) after the warehouse closes for the auction season shall be considered marketed. The floor sweepings on hand shall be weighed by the warehouse operator and the weight shall be certified by the warehouse operator, such weighing to be done in the presence of a representative of either the county FSA committee or State FSA committee. Floor sweepings which are destroyed in the presence of a representative of the county FSA committee, within 30 days (15 days with respect to flue-cured tobacco) after the warehouse closes shall not be considered as marketed when determining the quantity of floor sweepings marketed. If the county FSA committee determines, after the warehouse has been closed for the auction season for more than 30 days (15 days with respect to flue-cured tobacco), that the cumulative quantity of floor sweepings marketed and considered marketed in the current marketing year is in excess of the allowable floor sweepings, the person responsible for such marketings shall be given notice of the determination and shall be afforded an opportunity to request reconsideration of such determination in accordance with the provisions of part 780 of this chapter. A determination that a civil penalty is due for marketing floor sweepings in excess of the allowable floor sweepings shall not become final and shall not be assessed until such person has been afforded an opportunity for a hearing and such person has exhausted the applicable administrative remedies. The notice of assessment shall require such person to pay the civil penalty to the “Farm Service Agency, USDA” within 15 days after the mailing of the notice.</P>
                <P>(m) <E T="03">Blending tobacco not in the form normally marketed by producers—burley and flue-cured tobacco.</E> Tobacco purchased from processors or manufacturers that is considered not in the form normally marketed by producers that is blended with tobacco in the form normally marketed by producers shall not be credited as a purchase to the dealer's or warehouse operator's account by the State FSA committee when reconciling the warehouse operator's leaf account or the dealer's purchases and resales. Tobacco not in the form normally marketed by producers that is blended with other tobacco shall be deemed to be excess tobacco and penalty shall be due on the pounds <PRTPAGE P="169"/>of tobacco by which a warehouse operator's or dealer's resales exceed prior purchases.</P>
                <P>(n) <E T="03">Advances and other cases in which the producer's marketing card is used improperly.</E> For tobacco of any kind to which this part applies, if tobacco is marketed by a person by using the producer's marketing card or the tobacco is pledged for a price support loan by using that card, but under the provisions of part 1464 of this title, the producer is deemed to have not been an “eligible producer” with respect to the disposition of that tobacco at the time because of an advance or other preauction arrangement, such disposition of the tobacco shall be considered a false identification of the tobacco and may be considered to be a marketing of excess tobacco. In such cases, the person who paid the advance, took possession of the tobacco, or made the agreement with the producer which made the producer no longer an “eligible producer” with respect to the tobacco, shall be jointly and severally liable with the producer for any penalty with respect to such disposition which is levied against the producer under the provisions of this part and additionally, if such disposition is determined to be a marketing of excess tobacco, shall be liable for a penalty calculated by using the penalty rate for the tobacco involved multiplied by the pounds of tobacco involved. These remedies shall be in addition to any other remedies which may apply, including but not limited to, any liability for a refund of any price support loan advances which were paid in the name of, or for the account of, the producer of the tobacco.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 56 FR 21444, May 9, 1991; 57 FR 43583, Sept. 21, 1992; 63 FR 11583, Mar. 10, 1998]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.411</SECTNO>
                <SUBJECT>Records and reports regarding hauling, processing, and storage of tobacco.</SUBJECT>
                <P>(a) <E T="03">Trucker records.</E> Each trucker shall keep such records as will enable such trucker to furnish the State FSA office a report with respect to each lot of tobacco received by such trucker showing.</P>
                <P>(1) The name and address of the producer;</P>
                <P>(2) The date of receipt of the tobacco;</P>
                <P>(3) The number of pounds received;</P>
                <P>(4) The location where received; and</P>
                <P>(5) The name and address of the person to whom it was delivered.</P>
                <P>(b) <E T="03">Processor records.</E> Each firm engaged in the business of processing tobacco shall keep records with respect to each lot of tobacco received by such firm showing:</P>
                <P>(1) The name and address of producer, dealer, warehouse operator, or other person for whom the tobacco was received.</P>
                <P>(2) The date of receipt of tobacco.</P>
                <P>(3) The number of pounds (green weight) received.</P>
                <P>(4) The purpose for which tobacco was received (redrying or stemming).</P>
                <P>(5) The amount of any advance or loan made by such person on the tobacco.</P>
                <P>(6) The disposition of the tobacco including the net weight of the tobacco processed and the number of containers by classification (strips, stems, scrap or leaf).</P>
                <P>(7) Person to whom delivered and pounds involved.</P>
                <P>Any such firm shall report this information to the State FSA office of the State in which the business is located within 15 days of the end of the marketing year, except for tobacco handled for an association operating the price support program and tobacco purchased at auction or tobacco which was previously reported on Form MQ-79. Where such firm qualifies for the exemption in § 723.405 of this part, such firm is required to report only such tobacco received that does not belong to such firm.</P>
                <P>(c) <E T="03">Records for stored tobacco.</E> Each firm engaged in storing unprocessed tobacco shall keep records with respect to each lot of unprocessed tobacco received by such firm showing:</P>
                <P>(1) The name and address of producer, dealer, warehouse operator, marketing agent or other person for whom the tobacco was received;</P>
                <P>(2) The date and receipt of the tobacco;</P>
                <P>(3) The number of pounds received;</P>
                <P>(4) The amount of any advance or loan made by such firm;</P>
                <P>(5) The disposition of the tobacco; and<PRTPAGE P="170"/>
                </P>
                <P>(6) The person to whom delivered and the pounds involved.</P>
                <P>Any such firm shall report this information to the State FSA office of the State in which the business is located within 15 days of the end of the marketing year, except for tobacco handled for an association operating the price support program and tobacco purchased by such firm at auction or for which such firm had previously reported on Form MQ-79. Where such firm qualifies for the exemption in § 723.405 of this part, the firm is only required to report such tobacco received for storage that does not belong to such firm.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.412</SECTNO>
                <SUBJECT>Separate records and reports from persons engaged in tobacco related businesses.</SUBJECT>
                <P>Any person who is required to keep any record or make any report as a warehouse operator, dealer, buyer, trucker, or as a person engaged in the hauling, processing, or storage of tobacco, and who is engaged in more than one such business, shall keep such records as will enable such person to make separate reports for each such business in which such person is engaged to the same extent for each such business as if the person were engaged in no other business.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.413</SECTNO>
                <SUBJECT>Length of time records and reports are to be kept.</SUBJECT>
                <P>Records to be kept and copies of the reports required to be made by any person under this subpart shall be on a marketing year basis and shall be retained for 3 years after the end of the marketing year. Records shall be kept for such longer period of time as may be requested in writing by the State FSA executive director, or the Director.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.414</SECTNO>
                <SUBJECT>Failure to keep records and make reports or making false report or record.</SUBJECT>
                <P>(a)(1) <E T="03">Failure to keep records and make reports.</E> Under the provisions of section 373(a) of the Act, any warehouse operator, processor, buyer, dealer, trucker, or person engaged in the business of sorting, redrying, stemming, packing, or otherwise processing tobacco who fails to make any report or keep any record as required, or who makes any false report or record, is guilty of a misdemeanor, and upon conviction shall be subject to a fine of not more than $500 for each offense. In addition, any tobacco warehouse operator, dealer, or buyer who fails, upon being requested to do so, to remedy a violation by submitting complete reports and keeping accurate records shall be subject to an additional fine, not to exceed $5,000.</P>
                <P>(2) <E T="03">Failure to obtain producer marketing card or sale memo.</E> The failure of any dealer or warehouse operator to obtain a:</P>
                <P>(i) Producer's marketing card, MQ-76 and MQ-77, to identify a sale of producer tobacco, or</P>
                <P>(ii) Dealer identification card, MQ-79-2, to cover a resale of tobacco, shall constitute a failure to make a report.</P>
                <P>(b) <E T="03">False representation—warehouse operators, dealers, and processors.</E> The monetary penalties described in this part are in addition to penalties prescribed by other criminal statutes including 18 U.S.C. 231 which provides for a fine of not more than $10,000 or imprisonment for not more than 5 years, or both, for a person convicted of knowingly and willingly committing such acts as making a false acreage report, altering a marketing card, falsely identifying tobacco or buying and selling unused “103 percent of quota poundage” on marketing cards.</P>
                <P>(c) <E T="03">Misrepresentation and scheme or device.</E> A warehouse operator or dealer who is determined by FSA to have knowingly:</P>
                <P>(1) Adopted any scheme or device which tends to defeat the purpose of the tobacco program.</P>
                <P>(2) Made any fraudulent representation,</P>
                <P>(3) Misused a MQ-76 or MQ-79-2, or</P>
                <P>(4) Sold excess tobacco, shall pay a marketing quota penalty as prescribed in this part.</P>
                <CITA>[55 FR 39914, Oct. 1, 1990, as amended at 56 FR 21444, May 9, 1991]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.415</SECTNO>
                <SUBJECT>Examination of records and reports.</SUBJECT>

                <P>For the purpose of ascertaining the correctness of any report made or record kept, or of obtaining the information required to be furnished, in any <PRTPAGE P="171"/>report, but not so furnished, any warehouse operator, processor, dealer, buyer, trucker, or person engaged in the business of sorting, redrying, stemming, picking, or otherwise processing tobacco for producers, shall make available at one place for examination by representatives of the State FSA executive director and by employees of the Office of Investigation and Office of Audit, and of the Tobacco and Peanuts Division of the Farm Service Agency, U.S. Department of Agriculture upon written request by the State FSA executive director, all such books, papers, records, lot tickets, tobacco sale bills, buyer adjustment invoices, accounts, canceled checks, check register, check stubs, correspondence, contracts, documents, warehouse bill-out invoices or daily summary journal sheet, the tissue copy of Form MQ-72-l, Report of Tobacco Auction Sale, journal of producer marketing cards retained at warehouse and memoranda as the State FSA executive director has reason to believe are relevant and are within the control of such person.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.416</SECTNO>
                <SUBJECT>Information confidential.</SUBJECT>
                <P>All data reported to or acquired by the Secretary pursuant to the provisions of this subpart shall be kept confidential by all officers and community committees, and all county FSA office employees. Only such data so reported or acquired as the Deputy Administrator deems relevant shall be disclosed by them, and then only in a suit or administrative hearing under title III of the Act. The provisions of this section shall not be deemed to prohibit the issuance of general statements based upon the report of a number of parties which statements do not identify the information furnished by any person.</P>
              </SECTION>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart E—Establishing Burley and Flue-Cured Tobacco National Marketing Quotas</HD>
              <SOURCE>
                <HD SOURCE="HED">Source:</HD>
                <P>63 FR 11583, Mar. 10, 1998, unless otherwise noted.</P>
              </SOURCE>
              <SECTION>
                <SECTNO>§ 723.501</SECTNO>
                <SUBJECT>Scope.</SUBJECT>
                <P>This subpart sets out regulations for setting annual national marketing quotas for burley and flue-cured tobacco based on the purchase intentions of certain manufacturers of cigarettes and on other factors. It also sets out penalty provisions for manufacturers who fail to purchase, within the tolerances set in this part, the amount of domestic tobacco, by kind, reflected in the stated intention as accounted for in accordance with this subpart.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.502</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <P>In addition to the definitions set forth at § 723.104, the definitions set forth in this section shall be applicable for purposes of administering the provisions of this subpart.</P>
                <P>
                  <E T="03">CCC.</E> The Commodity Credit Corporation, an instrumentality of the USDA.</P>
                <P>
                  <E T="03">Domestic manufacturer.</E> A domestic manufacturer of cigarettes.</P>
                <P>
                  <E T="03">Domestic manufacturer of cigarettes.</E> A manufacturer, who as determined by the Director, produces and sells more than 1 percent of the cigarettes produced and sold in the United States annually.</P>
                <P>
                  <E T="03">Price support inventory.</E> The inventory of tobacco which, with respect to a particular kind of tobacco, has been pledged as collateral for a price support loan made by CCC through a producer-owned cooperative marketing association.</P>
                <P>
                  <E T="03">Producer owned cooperative marketing associations.</E> Those associations or their successors, which by law act as agents for producers for price support loans for tobacco, and which were, as of January 1, 1996, for burley and flue-cured tobacco, the Burley Tobacco Growers Cooperative Association, the Burley Stabilization Corporation, and the Flue-Cured Tobacco Cooperative Stabilization Corporation.</P>
                <P>
                  <E T="03">Unmanufactured tobacco.</E> Stemmed and unstemmed leaf tobacco, stems, trimmings, and scrap tobacco.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.503</SECTNO>
                <SUBJECT>Establishing the quotas.</SUBJECT>
                <P>(a) <E T="03">General.</E> Subject to the 3-percent adjustment provided for in paragraph (b) of this section, the annual marketing quotas for burley and flue-cured tobacco shall be calculated for each marketing year for each kind separately as follows:</P>
                <P>(1) <E T="03">Domestic manufacturer purchase intentions.</E> First, for each kind and year, <PRTPAGE P="172"/>the Director shall calculate the aggregate relevant purchaser intentions as declared or set under this section.</P>
                <P>(2) <E T="03">Exports.</E> Next, the Director shall add to the total determined under paragraph (a)(1) of this section the amount which is equal to the Director's determination of the average quantity of exported domestic leaf tobacco of the applicable kind for the past 3 marketing years. For this purpose, exports include unmanufactured tobacco only, including, but not limited to, stemmed and unstemmed leaf tobacco, stems, trimmings, and scrap tobacco, and excludes tobacco contained in manufactured products including, but not limited to, cigarettes, cigars, smoking tobacco, chewing tobacco, snuff and semi-processed bulk smoking tobacco. The quantity of exports for the most recent year, as needed, may be estimated.</P>
                <P>(3) Reserve stock level adjustment. The total calculated by adding the sums of paragraphs (a)(1) and (a)(2) of this section may be adjusted by the Director as necessary to maintain inventories of producer loan associations for burley and flue-cured tobacco at the reserve stock level. For burley, the reserve stock level is the larger of 50 million pounds farm sales weight or 15 percent of the previous year's national market quota. For flue-cured, the reserve stock level is the larger of 60 million pounds or 10 percent of the previous year's quota. The Director shall consider supply conditions when making any adjustment and a downward adjustment for burley tobacco may not exceed either 35 million pounds farm sales weight or 50 percent of the amount by which loan inventories exceed the reserve stock level, whichever is larger. If the uncommitted pool stocks of burley tobacco for 2001 and subsequent crops equal or are less than the reserve stock level, then the downward adjustment in quota for that year may be made based on the reserve stock level for that kind of tobacco, with no downward limitation.</P>
                <P>(b) <E T="03">Additional 3-percent adjustment.</E> The amount otherwise calculated under paragraph (a) of this section may be adjusted by the Director by 3 percent of the total. This adjustment is discretionary and may be made irrespective of whether any adjustment has been made under paragraph (a)(3) of this section and may be made to the extent the Director deems such an adjustment is in the best interest of the program.</P>
                <P>(c) <E T="03">Dates of announcement.</E> For flue-cured tobacco, the quota determination should be announced by December 15 preceding the marketing year. For burley, the announcement should be made by February 1 preceding the marketing year.</P>
                <CITA>[63 FR 11583, Mar. 10, 1998, as amended at 66 FR 53509, Oct. 23, 2001; 67 FR 62871, Oct. 9, 2002]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 723.504</SECTNO>
                <SUBJECT>Manufacturers' intentions; penalties.</SUBJECT>
                <P>(a) <E T="03">Generally.</E> Each domestic manufacturer shall, for each marketing year, for burley and flue-cured tobacco separately, submit a statement of its intended purchases of eligible tobacco by the date prescribed in paragraph (d) of this section; further, at the end of the marketing year, each such manufacturer shall submit a statement of its actual countable purchases of eligible tobacco for that marketing year, by kind, for burley and flue-cured tobacco. For these purposes, countable purchases of eligible tobacco shall be as defined in, and determined under, paragraph (b) of this section. If a domestic manufacturer fails to file a statement of intentions, the Director shall declare the amount which will be considered that manufacturer's intentions for the marketing year. That declaration by the Director shall be based on the domestic manufacturer's previous reports, or such other information as is deemed appropriate by the Director in the Director's discretion. Notice of the amount so declared shall be forwarded to the domestic manufacturer. If the domestic manufacturer fails to file a year-end report or files an inaccurate or incomplete report, then the Director may deem that the manufacturer has no purchases to report or take such other action as the Director believes is appropriate to fulfill the goals of this section. Intentions and purchases of countable tobacco will be compared for purposes of determining whether a penalty is due from the domestic manufacturer.<PRTPAGE P="173"/>
                </P>
                <P>(b) <E T="03">Eligible tobacco for statements of intentions and countable purchases toward those intentions.</E> For reports and determinations under this section, eligible tobacco for purposes of determining the countable purchases under paragraph (a) of this section will be unmanufactured domestic tobacco of the relevant kind for use to manufacture, for domestic or foreign consumption, cigarettes, semi-processed bulk smoking tobacco and other tobacco products. Eligible tobacco for these purposes does not include tobacco purchased for export as leaf tobacco, stems, trimmings, or scrap. Countable purchases of eligible tobacco shall include purchases of eligible tobacco made by domestic manufacturers directly from the producers, from a regular auction market, or from the price support loan inventory, and shall also include purchases by the manufacturer where the manufacturer purchases or acquires the tobacco from dealers or buyers who purchased the tobacco for the domestic manufacturer during the relevant marketing year directly from a producer, at a regular auction market, or from the price support loan inventory.</P>
                <P>(c) <E T="03">Weight basis and nature of reports.</E> The weight basis used for all reports and comparisons shall be a farm sales weight basis unless the Director permits otherwise and all reports will be considered to have been made on that basis unless the report clearly states otherwise. Submitted reports shall be assumed to cover countable purchases of eligible tobacco only, absent indications to the contrary.</P>
                <P>(d) <E T="03">Due dates and addresses for reports.</E> For flue-cured tobacco, the domestic manufacturer's statement of intentions shall be submitted by December 1 before the marketing year and the year-end report shall be submitted by August 20 following the end of the marketing year. Those respective dates for burley tobacco shall be January 15 before the burley tobacco marketing year and November 20 after the burley tobacco marketing year. Reports shall be mailed or delivered to the Director, Tobacco and Peanuts Division, STOP 0514, 1400 Independence Avenue, SW, Washington, DC 20250-0514.</P>
                <P>(e) <E T="03">Penalties.</E> A domestic manufacturer shall be liable for a penalty equal to twice the purchaser's no-net-cost assessment rate per pound for the applicable kind of tobacco for the relevant marketing year, if the manufacturer's purchases of either burley or flue-cured tobacco for the marketing year do not equal or exceed, as determined by the Director, 90 percent of their stated purchase intentions for that kind of tobacco for the relevant marketing year. The Director shall adjust the domestic manufacturer's intentions, however, to the extent, that producers have not produced the full amount of the national quota for the relevant marketing year for the particular kind of tobacco. The burden of establishing all purchases shall be with the domestic manufacturer and the Director may, in the case of indirect purchases for the manufacturer, require that the manufacturer obtain verification of the purchases by the dealer who made the purchase from the producer, at a regular auction market, or from the price support loan inventory, in order to assure that the tobacco is, to the manufacturer, a countable purchase. The Director may require such additional information as determined needed to enforce this subpart.</P>
                <P>(f) <E T="03">Penalty notice and penalty remittance.</E> Penalties will be assessed after notice and an opportunity for hearing before the Director. Remittances are to be made to the CCC and will be credited to the applicable producer loan association's no-net-cost fund or account as provided for in part 1464 of this title.</P>
                <P>(g) <E T="03">Maintenance and examination of records.</E> Each domestic manufacturer shall keep all relevant records of purchases, by kind, of burley and flue-cured tobacco for a period of at least 3 years. The Director, Office of Inspector General, or other duly authorized representative of the United States may examine such records, receipts, computer files, or other information held by a domestic manufacturer that may be used to verify or audit such manufacturer's reports. The reasonable cost of such examination or audit may be charged to the domestic manufacturer who is the subject of the examination or audit. All records examined or received under this part by officials of <PRTPAGE P="174"/>the Department of Agriculture shall be kept confidential to the extent required by law.</P>
              </SECTION>
            </SUBPART>
          </PART>
          <PART>
            <EAR>Pt. 729</EAR>
            <HD SOURCE="HED">PART 729—PEANUT MARKETING QUOTAS</HD>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>7 U.S.C. 7271; 15 U.S.C. 714b-c; 7 U.S.C. 7959.</P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>62872, Oct. 9, 2002, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>§ 729.1</SECTNO>
              <SUBJECT>Applicablity to 1996 through 2001 crops of peanuts.</SUBJECT>
              <P>Sections 1309 and 1310 of the Farm Security Rural Investment Act of 2002 terminated, beginning with the 2002 crop, the marketing quota and price support program for peanuts. However, 7 CFR part 729, revised as of January 1, 2002 continues to apply to the 1996 through 2001 crops of peanuts.</P>
            </SECTION>
          </PART>
        </SUBCHAP>
        <SUBCHAP TYPE="P">
          <PRTPAGE P="175"/>
          <HD SOURCE="HED">SUBCHAPTER C—REGULATIONS FOR WAREHOUSES</HD>
          <PART>
            <EAR>Pt. 735</EAR>
            <HD SOURCE="HED">PART 735—REGULATIONS FOR THE UNITED STATES WAREHOUSE ACT</HD>
            <CONTENTS>
              <SUBPART>
                <HD SOURCE="HED">Subpart A—General Provisions</HD>
                <SECHD>Sec.</SECHD>
                <SECTNO>735.1</SECTNO>
                <SUBJECT>Applicability.</SUBJECT>
                <SECTNO>735.2</SECTNO>
                <SUBJECT>Administration.</SUBJECT>
                <SECTNO>735.3</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <SECTNO>735.4</SECTNO>
                <SUBJECT>Fees.</SUBJECT>
                <SECTNO>735.5</SECTNO>
                <SUBJECT>Penalties.</SUBJECT>
                <SECTNO>735.6</SECTNO>
                <SUBJECT>Suspension, revocation and liquidation.</SUBJECT>
                <SECTNO>735.7</SECTNO>
                <SUBJECT>Return of suspended or revoked certificates of licensing or certificates of authorization.</SUBJECT>
                <SECTNO>735.8</SECTNO>
                <SUBJECT>Appeals.</SUBJECT>
                <SECTNO>735.9</SECTNO>
                <SUBJECT>Dispute resolution and arbitration of private parties.</SUBJECT>
                <SECTNO>735.10</SECTNO>
                <SUBJECT>Posting of certificates of licensing, certificates of authorization or other USWA documents.</SUBJECT>
                <SECTNO>735.11</SECTNO>
                <SUBJECT>Lost or destroyed certificates of licensing, authorization or agreements.</SUBJECT>
                <SECTNO>735.12</SECTNO>
                <SUBJECT>Safe keeping of records.</SUBJECT>
                <SECTNO>735.13</SECTNO>
                <SUBJECT>Information of violations.</SUBJECT>
                <SECTNO>735.14</SECTNO>
                <SUBJECT>Bonding and other financial assurance requirements.</SUBJECT>
              </SUBPART>
              <SUBPART>
                <HD SOURCE="HED">Subpart B—Warehouse Licensing</HD>
                <SECTNO>735.100</SECTNO>
                <SUBJECT>Application.</SUBJECT>
                <SECTNO>735.101</SECTNO>
                <SUBJECT>Financial records and reporting requirements.</SUBJECT>
                <SECTNO>735.102</SECTNO>
                <SUBJECT>Financial assurance requirements.</SUBJECT>
                <SECTNO>735.103</SECTNO>
                <SUBJECT>Amendments to license.</SUBJECT>
                <SECTNO>735.104</SECTNO>
                <SUBJECT>Insurance requirements.</SUBJECT>
                <SECTNO>735.105</SECTNO>
                <SUBJECT>Care of agricultural products.</SUBJECT>
                <SECTNO>735.106</SECTNO>
                <SUBJECT>Excess storage and transferring of agricultural products.</SUBJECT>
                <SECTNO>735.107</SECTNO>
                <SUBJECT>Warehouse charges and tariffs.</SUBJECT>
                <SECTNO>735.108</SECTNO>
                <SUBJECT>Inspections and examinations of warehouses.</SUBJECT>
                <SECTNO>735.109</SECTNO>
                <SUBJECT>Disaster loss to be reported.</SUBJECT>
                <SECTNO>735.110</SECTNO>
                <SUBJECT>Conditions for delivery of agricultural products.</SUBJECT>
                <SECTNO>735.111</SECTNO>
                <SUBJECT>Fair treatment.</SUBJECT>
                <SECTNO>735.112</SECTNO>
                <SUBJECT>Terminal and futures contract markets</SUBJECT>
              </SUBPART>
              <SUBPART>
                <HD SOURCE="HED">Subpart C—Inspectors, Samplers, Classifiers, and Weighers</HD>
                <SECTNO>735.200</SECTNO>
                <SUBJECT>Service licenses.</SUBJECT>
                <SECTNO>735.201</SECTNO>
                <SUBJECT>Agricultural product certificates; format.</SUBJECT>
                <SECTNO>735.202</SECTNO>
                <SUBJECT>Standards of grades for other agricultural products.</SUBJECT>
              </SUBPART>
              <SUBPART>
                <HD SOURCE="HED">Subpart D—Warehouse Receipts</HD>
                <SECTNO>735.300</SECTNO>
                <SUBJECT>Warehouse receipt requirements.</SUBJECT>
                <SECTNO>735.301</SECTNO>
                <SUBJECT>Notification requirements.</SUBJECT>
                <SECTNO>735.302</SECTNO>
                <SUBJECT>Paper warehouse receipts.</SUBJECT>
                <SECTNO>735.303</SECTNO>
                <SUBJECT>Electronic warehouse receipts.</SUBJECT>
              </SUBPART>
              <SUBPART>
                <HD SOURCE="HED">Subpart E—Electronic Providers</HD>
                <SECTNO>735.400</SECTNO>
                <SUBJECT>Administration.</SUBJECT>
                <SECTNO>735.401</SECTNO>
                <SUBJECT>Electronic warehouse receipt and USWA electronic document providers.</SUBJECT>
                <SECTNO>735.402</SECTNO>
                <SUBJECT>Providers of other electronic documents.</SUBJECT>
                <SECTNO>735.403</SECTNO>
                <SUBJECT>Audits.</SUBJECT>
                <SECTNO>735.404</SECTNO>
                <SUBJECT>Schedule of charges and rates. </SUBJECT>
              </SUBPART>
            </CONTENTS>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>7 U.S.C. 241 <E T="03">et seq.</E>
              </P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>67 FR 50763, Aug. 5, 2002, unless otherwise noted.</P>
            </SOURCE>
            <SUBPART>
              <HD SOURCE="HED">Subpart A—General Provisions</HD>
              <SECTION>
                <SECTNO>§ 735.1</SECTNO>
                <SUBJECT>Applicability.</SUBJECT>
                <P>(a) The regulations of this part set forth the terms and conditions under which the Secretary of Agriculture through the Farm Service Agency (FSA) will administer the United States Warehouse Act (USWA or the Act) and sets forth the standards and the terms and conditions a participant must meet for eligibility to act under the USWA. The extent the provisions of this part are more restrictive, or more lenient, with respect to the same activities governed by State law, the provisions of this part shall prevail.</P>
                <P>(b) Additional terms and conditions may be set forth in applicable licensing agreements, provider agreements and other documents.</P>
                <P>(c) Compliance with State laws relating to the warehousing, grading, weighing, storing, merchandising or other similar activities is not required with respect to activities engaged in by a warehouse operator in a warehouse subject to a license issued in accordance with this part.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.2</SECTNO>
                <SUBJECT>Administration.</SUBJECT>
                <P>(a) FSA will administer all provisions and activities regulated under the Act under the general direction and supervision of the FSA's Deputy Administrator, Commodity Operations (DACO), or a designee.</P>

                <P>(b) DACO may waive or modify the licensing or authorization requirements or deadlines in cases where lateness or <PRTPAGE P="176"/>failure to meet such requirements does not adversely affect the licensing or authorizations operated under the Act.</P>
                <P>(c) DACO will provide affected licensees or authorized providers with changes to their licensing or provider agreements before the effective date.</P>
                <P>(d) Licensing and authorization agreement updates will be available at:</P>
                <P>(1) DACO's USWA website, and</P>
                <P>(2) The following address: Deputy Administrator, Commodity Operations, Farm Service Agency, United States Department of Agriculture, STOP 0550, 1400 Independence Avenue, SW, Washington, DC 20250-0550.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.3</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <P>Words used in this part will be applicable to the activities authorized by this part and will be used in all aspects of administering the Act.</P>
                <P>
                  <E T="03">Access</E> means the ability, when authorized, to read, change, and transfer warehouse receipts or other applicable document information retained in a central filing system.</P>
                <P>
                  <E T="03">Agricultural product</E> means an agriculturally-produced product stored or handled for the purposes of interstate or foreign commerce, including a processed product of such agricultural product, as determined by DACO.</P>
                <P>
                  <E T="03">Central filing system (CFS)</E> means an electronic system operated and maintained by a provider, as a disinterested third party, authorized by DACO where information relating to warehouse receipts, USWA documents and other electronic documents is recorded and maintained in a confidential and secure fashion independent of any outside influence or bias in action or appearance.</P>
                <P>
                  <E T="03">Certificate</E> means a USWA document that bears specific assurances under the Act or warrants a person to operate or perform in a certain manner and sets forth specific responsibilities, rights, and privileges granted to the person under the Act.</P>
                <P>
                  <E T="03">Control of the facility</E> means ultimate responsibility for the operation and integrity of a facility by ownership, lease, or operating agreement.</P>
                <P>
                  <E T="03">Department</E> means the Department of Agriculture.</P>
                <P>
                  <E T="03">Electronic document</E> means any document that is generated, sent, received, or stored by electronic, optical, or similar means, including, but not limited to, electronic data interchange, advanced communication methods, electronic mail, telegram, telex, or telecopy.</P>
                <P>
                  <E T="03">Electronic warehouse receipt</E> (EWR) means a warehouse receipt that is authorized by DACO to be issued or transmitted under the Act in the form of an electronic document.</P>
                <P>
                  <E T="03">Examiner</E> means an individual designated by DACO for the purpose of examining warehouses or for any other activities authorized under the Act.</P>
                <P>
                  <E T="03">Financial assurance</E> means the surety or other financial obligation authorized by DACO that is a condition of receiving a license or authorization under the Act.</P>
                <P>
                  <E T="03">Force majeure</E> means severe weather conditions, fire, explosion, flood, earthquake, insurrection, riot, strike, labor dispute, act of civil or military, non-availability of transportation facilities, or any other cause beyond the control of the warehouse operator or provider that renders performance impossible.</P>
                <P>
                  <E T="03">Holder</E> means a person that has possession in fact or by operation of law of a warehouse receipt, USWA electronic document, or any electronic document.</P>
                <P>
                  <E T="03">License</E> means a license issued under the Act by DACO.</P>
                <P>
                  <E T="03">Licensing agreement</E> means the document and any amendment or addenda to such agreement executed by the warehouse operator and FSA specifying licensing terms and conditions specific to the warehouse operator and the agricultural product licensed to be stored.</P>
                <P>
                  <E T="03">Non-storage agricultural product</E> means an agricultural product received temporarily into a warehouse for conditioning, transferring or assembling for shipment, or lots of an agricultural product moving through a warehouse for current merchandising or milling use, against which no warehouse receipts are issued and no storage charges assessed.</P>
                <P>
                  <E T="03">Official Standards of the United States</E> means the standards of the quality or condition for an agricultural product, fixed and established under (7 U.S.C. 51) the United States Cotton Standards Act, (7 U.S.C. 71) the United States <PRTPAGE P="177"/>Grain Standards Act, (7 U.S.C. 1622) the Agricultural Marketing Act of 1946, or other applicable official United States Standards.</P>
                <P>
                  <E T="03">Other electronic documents</E> (OED) means those electronic documents, other than an EWR or USWA electronic document, that may be issued or transferred, related to the shipment, payment or financing of agricultural products that DACO has authorized for inclusion in a provider's CFS.</P>
                <P>
                  <E T="03">Person</E> means a person as set forth in 1 U.S.C. 1, a State; or a political subdivision of a State.</P>
                <P>
                  <E T="03">Provider</E> means a person authorized by DACO, as a disinterested third party, which maintains one or more confidential and secure electronic systems independent of any outside influence or bias in action or appearance.</P>
                <P>
                  <E T="03">Provider agreement</E> means the document and any amendment or addenda to such agreement executed by the provider and FSA that sets forth the provider's responsibilities concerning the provider's operation or maintenance of a CFS.</P>
                <P>
                  <E T="03">Receipt</E> means a warehouse receipt issued in accordance with the Act, including an electronic warehouse receipt.</P>
                <P>
                  <E T="03">Schedule of charges</E> means the tariff or uniform rate or amount charged by an authorized person for specific services offered or rendered under the Act.</P>
                <P>
                  <E T="03">Schedule of fees</E> means the fees charged and assessed by FSA for licensing, provider agreements or services furnished under the Act to help defray the costs of administering the Act, and as such are shown in a schedule of fees attached to the licensing or provider agreement.</P>
                <P>
                  <E T="03">Service license</E> means the document and any amendment to such document, issued under the Act by DACO to individuals certified competent by the licensed warehouse operator to perform inspection, sampling, grading classifying, or weighing services according to established standards and procedures, set forth in § 735.202, at the specific warehouse license.</P>
                <P>
                  <E T="03">Stored agricultural products</E> means all agricultural products received into, stored within, or delivered out of the warehouse that are not classified as a non-storage agricultural product under this part.</P>
                <P>
                  <E T="03">User</E> means a person that uses a provider's CFS.</P>
                <P>
                  <E T="03">USWA electronic document</E> means a USWA electronic document initiated by DACO to be issued, transferred or transmitted that is not identified as an EWR or OED in the appropriate licensing or provider agreement or as determined by DACO.</P>
                <P>
                  <E T="03">Warehouse</E> means a structure or other authorized storage facility, as determined by DACO, in which any agricultural product may be stored or handled for the purpose of interstate or foreign commerce.</P>
                <P>
                  <E T="03">Warehouse capacity</E> means the maximum quantity of an agricultural product that the warehouse will accommodate when stored in a manner customary to the warehouse as determined by DACO.</P>
                <P>
                  <E T="03">Warehouse operator</E> means a person lawfully engaged in the business of storing or handling agricultural products.</P>
                <P>
                  <E T="03">Warehousing activities and practices</E> means any legal, operational, managerial or financial duty that a warehouse operator has regarding an agricultural product.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.4</SECTNO>
                <SUBJECT>Fees.</SUBJECT>
                <P>(a) FSA will assess persons covered by the Act fees to cover the costs of administering the Act.</P>
                <P>(b) Warehouse operators, licensees, applicants, or providers must pay:</P>
                <P>(1) An annual fee as provided in the applicable licensing or provider agreement; and</P>
                <P>(2) Fees that FSA assesses for specific services, examinations and audits, or as provided in the applicable licensing or provider agreement.</P>
                <P>(c) The schedule of fees showing the current fees or any annual fee changes will be provided as an addendum to the applicable licensing or provider agreement or/and:</P>
                <P>(1) Will be available at DACO's USWA Web site, or</P>

                <P>(2) May be requested at the following address: Deputy Administrator, Commodity Operations, Farm Service Agency, United States Department of <PRTPAGE P="178"/>Agriculture, STOP 0550, 1400 Independence Avenue, SW., Washington, DC 20250-0550.</P>
                <P>(d) At the sole discretion of DACO, these fees may be waived.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.5</SECTNO>
                <SUBJECT>Penalties.</SUBJECT>
                <P>If a person fails to comply with any requirement of the Act, the regulations set forth in this part or any applicable licensing or provider agreement, DACO may assess, after an opportunity for a hearing as provided in § 735.8, a civil penalty:</P>
                <P>(a) Of not more than $25,000 per violation, if an agricultural product is not involved in the violation; or</P>
                <P>(b) Of not more than 100 percent of the value of the agricultural product, if an agricultural product is involved in the violation.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.6</SECTNO>
                <SUBJECT>Suspension, revocation and liquidation.</SUBJECT>
                <P>(a) DACO may, after an opportunity for a hearing as provided in § 735.8, suspend, revoke or liquidate any license or agreement issued under the Act, for any violation of or failure to comply with any provision of the Act, regulations or any applicable licensing or provider agreement.</P>
                <P>(b) The reasons for a suspension, revocation or liquidation under this part include, but are not limited to:</P>
                <P>(1) Failure to perform licensed or authorized services as provided in this part or in the applicable licensing or provider agreement;</P>
                <P>(2) Failure to maintain minimum financial requirements as provided in the applicable licensing or provider agreement;</P>
                <P>(3) Failure to submit a proper annual financial statement within the established time period as provided in the applicable licensing or provider agreement.</P>
                <P>(4) Failure to maintain control of the warehouse or provider system.</P>
                <P>(5) The warehouse operator or provider requests closure, cancellation or liquidation. and</P>
                <P>(6) Commission of fraud against FSA, any depositor, EWR or OED holder or user, or any other function or operation under this part.</P>
                <P>(c) FSA retains USWA's full authority over a warehouse operator or provider for one year after such license revocation or provider agreement termination or until satisfaction of any claims filed against such warehouse operator or provider are resolved, whichever is later.</P>
                <P>(d) Upon DACO's determination that continued operation of a warehouse by a warehouse operator or an electronic provider system by a provider is likely to result in probable loss of assets to storage depositors, or loss of data integrity to EWR or OED holders and users. DACO may immediately suspend, close, or take control and begin an orderly liquidation of such warehouse inventory or provider system data as provided in this part or in the applicable licensing or provider agreement.</P>
                <P>(e) Any disputes involving probable loss of assets to storage depositors, or loss of data integrity to EWR or OED holders and users will be determined by DACO for the benefit of the depositors, or EWR or OED holders and users and such determinations shall be final.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.7</SECTNO>
                <SUBJECT>Return of suspended or revoked certificates of licensing or certificates of authorization.</SUBJECT>
                <P>(a) When a license issued to a warehouse operator or service license ends or is suspended or revoked by DACO, such certificates of licensing and applicable licensing agreement and certificates of authorization must be immediately surrendered and returned to DACO.</P>
                <P>(b) When an agreement with a provider ends or is suspended or revoked by DACO, such certificates of authorization and applicable provider agreement must be immediately surrendered to DACO</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.8</SECTNO>
                <SUBJECT>Appeals.</SUBJECT>
                <P>(a) Any person who is subject to an adverse determination made under the Act may appeal the determination by filing a written request with DACO at the following address: Deputy Administrator, Commodity Operations, Farm Service Agency, United States Department of Agriculture, STOP 0550, 1400 Independence Avenue, SW., Washington, DC 20250-0550.</P>

                <P>(b) Any person who believes that they have been adversely affected by a <PRTPAGE P="179"/>determination under this part must seek review by DACO within twenty-eight calendar days of such determination, unless provided with notice by DACO of a different deadline.</P>
                <P>(c) The appeal process set forth in this part is applicable to all licensees and providers under any provision of the Act, regulations or any applicable licensing agreement as follows:</P>
                <P>(1) DACO will notify the person in writing of the nature of the suspension, revocation or liquidation action;</P>
                <P>(2) The person must notify DACO of any appeal of its action within twenty-eight calendar days;</P>
                <P>(3) The appeal and request must state whether:</P>
                <P>(i) A hearing is requested,</P>
                <P>(ii) The person will appear in person at such hearing, or</P>
                <P>(iii) Such hearing will be held by telephone;</P>
                <P>(4) DACO will provide the person a written acknowledgment of their request to pursue an appeal;</P>
                <P>(5) When a person requests an appeal and does not request a hearing DACO will allow that person:</P>
                <P>(i) To submit in writing the reasons why they believe DACO's determination to be in error,</P>
                <P>(ii) Twenty-eight calendar days from the receipt of the acknowledgment to file any statements and documents in support of their appeal, unless provided with notice by DACO of a different deadline, and</P>
                <P>(iii) An additional fourteen calendar days to respond to any new issues raised by DACO in response to the person's initial submission, unless provided with notice by DACO of a different deadline;</P>
                <P>(6) If the person requests to pursue an appeal and requests a hearing, DACO will:</P>
                <P>(i) Notify the person of the date of the hearing,</P>
                <P>(ii) Determine the location of the hearing, when the person asks to appear in person,</P>
                <P>(iii) Notify the person of the location of the hearing,</P>
                <P>(iv) Afford the person twenty-eight calendar days from the receipt of the notification of the scheduling of the hearing to submit any statements and documents in support of the appeal, unless provided with notice by DACO of a different deadline, and</P>
                <P>(v) Allow the person an additional fourteen calendar days from the date of the hearing to submit any additional material, unless provided with notice by DACO of a different deadline;</P>
                <P>(7) Determinations of DACO will be final and no further appeal within USDA will be available except as may be specified in the final determination of DACO; and</P>
                <P>(8) A person may not initiate an action in any court of competent jurisdiction concerning a determination made under the Act prior to the exhaustion of the appeal process set forth in this section.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.9</SECTNO>
                <SUBJECT>Dispute resolution and arbitration of private parties.</SUBJECT>
                <P>(a) A person may initiate legal action in any court of competent jurisdiction concerning a claim for noncompliance or an unresolved dispute with respect to activities authorized under the Act.</P>
                <P>(b) Any claim for noncompliance or an unresolved dispute between a warehouse operator or provider and another party with respect to activities authorized under the Act may be resolved by the parties through mutually agreed-upon arbitration procedures or as may be prescribed in the applicable licensing or provider agreement. No arbitration determination or award will affect DACO's authority under the Act.</P>
                <P>(c) In no case will USDA provide assistance or representation to parties involved in an arbitration proceeding arising with respect to activities authorized under the Act.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.10</SECTNO>
                <SUBJECT>Posting of certificates of licensing, certificates of authorization or other USWA documents.</SUBJECT>
                <P>(a) The warehouse operator must post, in a conspicuous place in the principal place where warehouse receipts are issued, any applicable certificate furnished by DACO that the warehouse operator is an authorized licensee under the Act.</P>

                <P>(b) Immediately upon receipt of their certificate of service licensing or any modification or extension thereof under the Act, the licensee and warehouse operator must jointly post the <PRTPAGE P="180"/>same, and thereafter, except as otherwise provided in the regulations in this part or as prescribed in the applicable licensing agreement, keep such certificate of licensing conspicuously posted in the office where all or most of the services are done, or in such place as may be designated by DACO.</P>
                <P>(c) The provider must post, in a conspicuous place in the principal place of business, any applicable certificate of authorization furnished by DACO that the provider is authorized to offer and provide specific services under the Act.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.11</SECTNO>
                <SUBJECT>Lost or destroyed certificates of licensing, authorization or agreements.</SUBJECT>
                <P>FSA will replace lost or destroyed certificates of licensing, certificate of authorization or applicable agreement upon satisfactory proof of loss or destruction. FSA will mark such certificates or agreements as duplicates.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.12</SECTNO>
                <SUBJECT>Safe keeping of records.</SUBJECT>
                <P>Each warehouse operator or provider must take necessary precautions to safeguard all records, either paper or electronic format, from destruction.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.13</SECTNO>
                <SUBJECT>Information of violations.</SUBJECT>
                <P>Every person licensed or authorized under the Act must immediately furnish DACO any information they may have indicating that any provision of the Act or the regulations in this part has been violated.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.14</SECTNO>
                <SUBJECT>Bonding and other financial assurance requirements.</SUBJECT>
                <P>(a) As a condition of receiving a license or authorization under the Act, the person applying for the license or authorization must execute and file with DACO a bond or provide such other financial assurance as DACO determines appropriate to secure the person's compliance with the Act.</P>
                <P>(b) Such bond or assurance must be for a period of not less than one year and in such amount as required by DACO.</P>
                <P>(c) Failure to provide for, or renew, a bond or a financial assurance instrument will result in the immediate and automatic revocation of the warehouse operator's license or provider's agreement.</P>
                <P>(d) If DACO determines that a previously accepted bond or other financial assurance is insufficient, DACO may immediately suspend or revoke the license or authorization covered by the bond or other financial assurance if the person that filed the bond or other financial assurance does not provide such additional bond or other financial assurance as DACO determines appropriate.</P>
                <P>(e) To qualify as a suitable bond or other financial assurance, the entity issuing the bond or other financial assurance must be subject to service of process in lawsuits or legal actions on the bond or other financial assurance in the State in which the warehouse is located.</P>
              </SECTION>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart B—Warehouse Licensing</HD>
              <SECTION>
                <SECTNO>§ 735.100</SECTNO>
                <SUBJECT>Application.</SUBJECT>
                <P>(a) An applicant for a license must submit to DACO information and documents determined by DACO to be sufficient to conclude that the applicant can comply with the provisions of the Act. Such documents must include a current review or an audit-level financial statement prepared according to generally accepted accounting standards as defined by the American Institute of Certified Public Accountants. For any entity that is not an individual, a document that establishes proof of the existence of the entity, such as:</P>
                <P>(1) For a partnership, an executed partnership agreement; and</P>
                <P>(2) For a corporation:</P>
                <P>(i) Articles of incorporation certified by the Secretary of State of the applicable State of incorporation;</P>
                <P>(ii) Bylaws; and</P>
                <P>(iii) Permits to do business; and</P>
                <P>(3) For a limited partnership, an executed limited partnership agreement; and</P>
                <P>(4) For a limited liability company:</P>
                <P>(i) Articles of organization or similar documents; and</P>
                <P>(ii) Operating agreement or similar agreement.</P>

                <P>(b) The warehouse facilities of an operator licensed under the Act must, as determined by DACO, be:<PRTPAGE P="181"/>
                </P>
                <P>(1) Physically and operationally suitable for proper storage of the applicable agricultural product or agricultural products specified in the license;</P>
                <P>(2) Operated according to generally accepted warehousing activities and practices in the industry for the applicable agricultural product or agricultural products stored in the facility; and</P>
                <P>(3) Subject to the warehouse operator's control of the facility including all contiguous storage space with respect to such facilities.</P>
                <P>(c) As specified in individual licensing agreements, a warehouse operator must:</P>
                <P>(1) Meet the basic financial requirements determined by DACO; and</P>
                <P>(2) Meet the net worth requirements determined by DACO;</P>
                <P>(d) In order to obtain a license, the warehouse operator must correct any exceptions made by the warehouse examiner at the time of the original warehouse examination.</P>
                <P>(e) DACO may issue a license for the storage of two or more agricultural products in a single warehouse as provided in the applicable licensing agreements. The amount of the bond or financial assurance, net worth, and inspection and license fees will be determined by DACO in accordance with the licensing agreements applicable to the specific agricultural product, based upon the warehouses' total capacity for storing such product, that would require:</P>
                <P>(1) The largest bond or financial assurance;</P>
                <P>(2) The greatest amount of net worth; and</P>
                <P>(3) The greatest amount of fees.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.101</SECTNO>
                <SUBJECT>Financial records and reporting requirements.</SUBJECT>
                <P>(a) Warehouse operators must maintain complete, accurate, and current financial records that must be available to DACO for review or audit at DACO's request as may be prescribed in the applicable licensing agreement.</P>
                <P>(b) Warehouse operators must, annually, present a financial statement as may be prescribed in the applicable licensing agreement to DACO.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.102</SECTNO>
                <SUBJECT>Financial assurance requirements.</SUBJECT>
                <P>(a) Warehouse operators must file with DACO financial assurances approved by DACO consisting of:</P>
                <P>(1) A warehouse operator's bond; or</P>
                <P>(2) Obligations that are unconditionally guaranteed as to both interest and principal by the United States, in a sum equal at their par value to the amount of the bond otherwise required to be furnished, together with an irrevocable power of attorney authorizing DACO to collect, sell, assign and transfer such obligations in case of any default in the performance of any of the conditions required in the licensing agreement; or</P>
                <P>(3) An irrevocable letter of credit issued in the favor of DACO with a term of not less than two years; or</P>
                <P>(4) A certificate of participation in, and coverage by, an indemnity or insurance fund as approved by DACO, established and maintained by a State, backed by the full faith and credit of the applicable State, which guarantees depositors of the licensed warehouse full indemnification for the breach of any obligation of the licensed warehouse operator under the terms of the Act. If a warehouse operator files a bond or financial assurance in the form of a certification of participation in an indemnity or insurance fund, the certification may only be used to satisfy any deficiencies in assets above the minimum net worth requirement as prescribed in the applicable licensing agreement. A certificate of participation and coverage in this fund must be furnished to DACO annually; or</P>
                <P>(5) Other alternative instruments and forms of financial assurance approved by DACO as may be prescribed in the applicable licensing agreement.</P>
                <P>(b) The warehouse operator may not withdraw obligations required under this section until one year after license termination or until satisfaction of any claims against the obligations, whichever is later.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.103</SECTNO>
                <SUBJECT>Amendments to license.</SUBJECT>
                <P>FSA will issue an amended license upon:</P>

                <P>(a) Receipt of forms prescribed and furnished by DACO outlining the requested changes to the license;<PRTPAGE P="182"/>
                </P>
                <P>(b) Payment of applicable licensing and examination fees;</P>
                <P>(c) Receipt of bonding or other financial assurance if required in the applicable licensing agreement; and</P>
                <P>(d) Receipt of a report on the examination of the proposed facilities pending inclusion or exclusion, if determined necessary by DACO.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.104</SECTNO>
                <SUBJECT>Insurance requirements.</SUBJECT>
                <P>Each warehouse operator must comply fully with the terms of insurance policies or contracts covering their licensed warehouse and all products stored therein, and must not commit any acts, nor permit others to do anything, that might impair or invalidate such insurance.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.105</SECTNO>
                <SUBJECT>Care of agricultural products.</SUBJECT>
                <P>Each warehouse operator must at all times, including during any period of suspension of their license, exercise such care in regard to stored and non-storage agricultural products in their custody as required in the applicable licensing agreement.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.106</SECTNO>
                <SUBJECT>Excess storage and transferring of agricultural products.</SUBJECT>
                <P>(a) If at any time a warehouse operator stores an agricultural product in a warehouse subject to a license issued under the Act in excess of the warehouse capacity for which it is licensed, such warehouse operator must immediately notify DACO of such excess storage and the reason for the storage.</P>
                <P>(b) A warehouse operator who desires to transfer stored agricultural products to another warehouse may do so either by physical movement, by other methods as may be provided in the applicable licensing agreement, or as authorized by DACO.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.107</SECTNO>
                <SUBJECT>Warehouse charges and tariffs.</SUBJECT>
                <P>(a) A warehouse operator must not make any unreasonable or exorbitant charge for services rendered.</P>
                <P>(b) A warehouse operator must follow the terms and conditions for each new or revised warehouse tariff or schedule of charges and rates as prescribed in the applicable licensing agreement.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.108</SECTNO>
                <SUBJECT>Inspections and examinations of warehouses.</SUBJECT>
                <P>(a) Warehouse operators must permit any agent of the Department to enter and inspect or examine, on any business day during the usual hours of business, any licensed warehouse, the offices of the warehouse operator, the books, records, papers, and accounts.</P>
                <P>(b) Routine and special inspections and examinations will be unannounced.</P>
                <P>(c) Warehouse operators must provide safe access to all storage facilities.</P>
                <P>(d) Warehouse operators must inform any agent of the Department, upon arrival, of any hazard.</P>
                <P>(e) Agents of the Department must accomplish inspections and examinations of warehouses in a manner that is efficient and cost-effective without jeopardizing any inspection and examination integrity.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.109</SECTNO>
                <SUBJECT>Disaster loss to be reported.</SUBJECT>
                <P>If at any time a disaster or loss occurs at or within any licensed warehouse, the warehouse operator must report immediately the occurrence of the disaster or loss and the extent of damage, to DACO.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.110</SECTNO>
                <SUBJECT>Conditions for delivery of agricultural products.</SUBJECT>
                <P>(a) In the absence of a lawful excuse, a warehouse operator will, without unnecessary delay, deliver the agricultural product stored or handled in the warehouse on a demand made by:</P>
                <P>(1) The holder of the warehouse receipt for the agricultural product; or</P>
                <P>(2) The person that deposited the agricultural product, if no warehouse receipt has been issued.</P>
                <P>(b) Prior to delivery of the agricultural product, payment of the accrued charges associated with the storage or handling of the agricultural product, including satisfaction of the warehouse operator's lien, must be made if requested by the warehouse operator.</P>
                <P>(c) When the holder of a warehouse receipt requests delivery of an agricultural product covered by the warehouse receipt, the holder must surrender the warehouse receipt to the warehouse operator before obtaining the agricultural product.</P>

                <P>(d) A warehouse operator must cancel each warehouse receipt surrendered to <PRTPAGE P="183"/>the warehouse operator upon the delivery of the agricultural product for which the warehouse receipt was issued and in accordance with the applicable licensing agreement.</P>
                <P>(e) For the purpose of this part, unless prevented from doing so by force majeure, a warehouse operator will deliver or ship such agricultural products stored or handled in their warehouse as prescribed in the applicable licensing agreement.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.111</SECTNO>
                <SUBJECT>Fair treatment.</SUBJECT>
                <P>(a) Contingent upon the capacity of a warehouse, a warehouse operator will deal in a fair and reasonable manner with persons storing, or seeking to store, an agricultural product in the warehouse if the agricultural product is:</P>
                <P>(1) Of the kind, type, and quality customarily stored or handled in the area in which the warehouse is located;</P>
                <P>(2) Tendered to the warehouse operator in a suitable condition for warehousing; and</P>
                <P>(3) Tendered in a manner that is consistent with the ordinary and usual course of business.</P>
                <P>(b) Nothing in this section will prohibit a warehouse operator from entering into an agreement with a depositor of an agricultural product to allocate available storage space.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.112</SECTNO>
                <SUBJECT>Terminal and futures contract markets.</SUBJECT>
                <P>(a) DACO may issue service licenses to weigh-masters or their deputies to perform services relating to warehouse receipts that are deliverable in satisfaction of futures contracts in such contract markets or as may be prescribed in any applicable licensing agreement.</P>
                <P>(b) DACO may authorize a registrar of warehouse receipts issued for an agricultural product in a warehouse licensed under the Act that operates in any terminal market or in any futures contract market the official designated by officials of the State in which such market is located if such individual is not:</P>
                <P>(1) An owner or employee of the licensed warehouse;</P>
                <P>(2) The owner of, or an employee of the owner of, such agricultural product deposited in any such licensed warehouse; or</P>
                <P>(3) As may be prescribed in any applicable licensing or provider agreement.</P>
              </SECTION>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart C—Inspectors, Samplers, Classifiers, and Weighers</HD>
              <SECTION>
                <SECTNO>§ 735.200</SECTNO>
                <SUBJECT>Service licenses.</SUBJECT>
                <P>(a) FSA may issue to a person a license for:</P>
                <P>(1) Inspection of any agricultural product stored or handled in a warehouse subject to the Act;</P>
                <P>(2) Sampling of such an agricultural product;</P>
                <P>(3) Classification of such an agricultural product according to condition, grade, or other class and certify the condition, grade, or other class of the agricultural product;</P>
                <P>(4) Weighing of such an agricultural product and certify the weight of the agricultural product; or</P>
                <P>(5) Performing two or more services specified in paragraphs (a)(1), (a)(2), (a)(3) or (a)(4) of this section.</P>
                <P>(b) Each person seeking a license to perform activities described in this section must submit an application on forms furnished by DACO that contain, at a minimum, the following information:</P>
                <P>(1) The name, location and license number of the warehouses where the applicant would perform such activities;</P>
                <P>(2) A statement from the warehouse operator that the applicant is competent and authorized to perform such activities at specific locations; and</P>
                <P>(3) Evidence that the applicant is competent to inspect, sample, classify, according to grade or weigh the agricultural product.</P>
                <P>(c) The warehouse operator will promptly notify DACO in writing of any changes with respect to persons authorized to perform such activities at the licensed warehouse.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.201</SECTNO>
                <SUBJECT>Agricultural product certificates; format.</SUBJECT>
                <P>Each inspection, grade, class, weight or combination certificate issued under the Act by a licensee to perform such services must be:</P>
                <P>(a) In a format prescribed by DACO;<PRTPAGE P="184"/>
                </P>
                <P>(b) Issued and maintained in a consecutive order; and</P>
                <P>(c) As prescribed in the applicable licensing or provider agreement and authorized by DACO.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.202</SECTNO>
                <SUBJECT>Standards of grades for other agricultural products.</SUBJECT>
                <P>Official Standards of the United States for any kind, class or grade of an agricultural product to be inspected must be used if such standards exist. Until Official Standards of the United States are fixed and established for the kind of agricultural product to be inspected, the kind, class and grade of the agricultural product must be stated, subject to the approval of DACO. If such standards do not exist for such an agricultural product, the following will be used:</P>
                <P>(a) State standards established in the State in which the warehouse is located, (b) In the absence of any State standards, in accordance with the standards, if any, adopted by the local board of trade, chamber of commerce, or by the agricultural product trade generally in the locality in which the warehouse is located, or</P>
                <P>(c) In the absence of the standards set forth in paragraphs (a) and (b) of this section, in accordance with any standards approved for the purpose by DACO.</P>
              </SECTION>
            </SUBPART>
            <SUBPART>
              <HD SOURCE="HED">Subpart D—Warehouse Receipts</HD>
              <SECTION>
                <SECTNO>§ 735.300</SECTNO>
                <SUBJECT>Warehouse receipt requirements.</SUBJECT>
                <P>(a) Warehouse receipts may be:</P>
                <P>(1) Negotiable or non-negotiable;</P>
                <P>(2) For a single unit, multiple units, identity preserved or commingled lot; and</P>
                <P>(3) In a paper or electronic format that, besides complying with the requirements of the Act, must be in a format as prescribed in the applicable licensing or provider agreement and authorized by DACO.</P>
                <P>(b) The warehouse operator must:</P>
                <P>(1) At the request of a depositor of an agricultural product stored or handled in a warehouse licensed under the Act, issue a warehouse receipt to the depositor;</P>
                <P>(2) Not issue a warehouse receipt for an agricultural product unless the agricultural product is actually stored in their warehouse at the time of issuance;</P>
                <P>(3) Not issue a warehouse receipt until the quality, condition and weight of such an agricultural product is ascertained by a licensed inspector and weigher;</P>
                <P>(4) Not directly or indirectly compel or attempt to compel the depositor to request the issuance of a warehouse receipt omitting the statement of quality or condition;</P>
                <P>(5) Not issue an additional warehouse receipt under the Act for a specific identity-preserved or commingled agricultural product lot (or any portion thereof) if another warehouse receipt representing the same specific identity-preserved or commingled lot of the agricultural product is outstanding. No two warehouse receipts issued by a warehouse operator may have the same warehouse receipt number or represent the same agricultural product lot;</P>
                <P>(6) When issuing a warehouse receipt and purposefully omitting any information, notate the blank to show such intent;</P>
                <P>(7) Not deliver any portion of an agricultural product for which they have issued a negotiable warehouse receipt until the warehouse receipt has been surrendered to them and canceled as prescribed in the applicable licensing agreement;</P>
                <P>(8) Not deliver more than 90% of the receipted quantity of an agricultural product for which they have issued a non-negotiable warehouse receipt until such warehouse receipt has been surrendered or the depositor or the depositor's agent has provided a written order for the agricultural product and the warehouse receipt surrendered upon final delivery; and</P>
                <P>(9) Deliver, upon proper presentation of a warehouse receipt for any agricultural product, and payment or tender of all advances and charges, to the depositor or lawful holder of such warehouse receipt the agricultural product of such identity, quantity, grade and condition as set forth in such warehouse receipt.</P>

                <P>(c) In the case of a lost or destroyed warehouse receipt, a new warehouse receipt upon the same terms, subject to the same conditions, and bearing on its <PRTPAGE P="185"/>face the number and the date of the original warehouse receipt may be issued.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.301</SECTNO>
                <SUBJECT>Notification requirements.</SUBJECT>
                <P>Warehouse operators must file with DACO the name and genuine signature of each person authorized to sign warehouse receipts for the licensed warehouse operator, and will promptly notify DACO of any changes with respect to persons authorized to sign.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.302</SECTNO>
                <SUBJECT>Paper warehouse receipts.</SUBJECT>
                <P>Paper warehouse receipts must be issued as follows:</P>
                <P>(a) On distinctive paper specified by DACO;</P>
                <P>(b) Printed by a printer authorized by DACO; and</P>
                <P>(c) Issued, identified and maintained in a consecutive order.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.303</SECTNO>
                <SUBJECT>Electronic warehouse receipts.</SUBJECT>
                <P>(a) Warehouse operators issuing EWR under the Act may issue EWR's for the agricultural product stored in their warehouse. Warehouse operators issuing EWR's under the Act must:</P>
                <P>(1) Only issue EWR's through one FSA-authorized provider annually;</P>
                <P>(2) Inform DACO of the identity of their provider, when they are a first time user of EWR's, 60 calendar days in advance of issuing an EWR through that provider. DACO may waive or modify this 60-day requirement as set forth in § 735.2(b);</P>
                <P>(3) Before issuing an EWR, request and receive from FSA a range of consecutive warehouse receipt numbers that the warehouse will use consecutively for issuing their EWR's;</P>
                <P>(4) When using an authorized provider, issue and cancel all warehouse receipts as EWR's;</P>
                <P>(5) Cancel an EWR only when they are the holder of the warehouse receipt;</P>
                <P>(6) Be the holder of an EWR to correct information contained within any required data field;</P>
                <P>(7) Receive written authorization from FSA at least 30 calendar days before changing providers. Upon authorization, they may request their current provider to transfer their EWR data from its Central Filing System (CFS) to the CFS of the authorized provider whom they select; and</P>
                <P>(8) Notify all holders of EWR's by inclusion in the CFS at least 30 calendar days before changing providers, unless otherwise required or allowed by FSA.</P>
                <P>(b) An EWR establishes the same rights and obligations with respect to an agricultural product as a paper warehouse receipt and possesses the following attributes:</P>
                <P>(1) The holder of an EWR will be entitled to the same rights and privileges as the holder of a paper warehouse receipt.</P>
                <P>(2) Only the current holder of the EWR may transfer the EWR to a new holder.</P>
                <P>(3) The identity of the holder must be confidential and included as information for every EWR.</P>
                <P>(4) Only one person may be designated as the holder of an EWR at any one time.</P>
                <P>(5) A warehouse operator may not issue an EWR on a specific identity-preserved or commingled lot of agricultural product or any portion thereof while another valid warehouse receipt representing the same specific identity-preserved or commingled lot of agricultural product remains not canceled. No two warehouse receipts issued by a warehouse operator may have the same warehouse receipt number or represent the same agricultural product lot.</P>
                <P>(6) An EWR may only be issued to replace a paper warehouse receipt if requested by the current holder of the paper warehouse receipt.</P>
                <P>(7) Holders and warehouse operators may authorize any other user of their provider or the provider itself to act on their behalf with respect to their activities with this provider. This authorization must be in writing, and acknowledged and retained by the warehouse operator and provider.</P>
                <P>(c) A warehouse operator not licensed under the Act may, at the option of the warehouse operator, issue EWRs in accordance with this subpart, except this option does not apply to a warehouse operator that is licensed under State law to store agricultural products in a warehouse if the warehouse operator elects to issue an EWR under State law.</P>
              </SECTION>
            </SUBPART>
            <SUBPART>
              <PRTPAGE P="186"/>
              <HD SOURCE="HED">Subpart E—Electronic Providers</HD>
              <SECTION>
                <SECTNO>§ 735.400</SECTNO>
                <SUBJECT>Administration.</SUBJECT>
                <P>This subpart sets forth the regulations under which DACO may authorize one or more electronic systems under which:</P>
                <P>(a) Electronic documents relating to the shipment, payment, and financing of the sale of agricultural products may be issued or transferred; or</P>
                <P>(b) Electronic receipts may be issued and transferred.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.401</SECTNO>
                <SUBJECT>Electronic warehouse receipt and USWA electronic document providers.</SUBJECT>
                <P>(a) To establish a USWA-authorized system to issue and transfer EWR's and USWA electronic documents, each applicant must submit to DACO information and documents determined by DACO to be sufficient to determine that the applicant can comply with the provisions of the Act. Each provider operating pursuant to this section must meet the following requirements:</P>
                <P>(1) Have and maintain a net worth as specified in the applicable provider agreement;</P>
                <P>(2) Maintain two insurance policies; one for “errors and omissions” and another for “fraud and dishonesty.” Each policy's minimum coverage and maximum deductible amounts and applicability of other forms of financial assurances as set forth in § 735.14 will be prescribed in the applicable provider agreement. Each policy must contain a clause requiring written notification to FSA 30 days prior to cancellation or as prescribed by FSA;</P>
                <P>(3) Submit a current review or an audit level financial statement prepared according to generally accepted accounting standards as defined by the American Institute of Certified Public Accountants;</P>
                <P>(4) For any entity that is not an individual, a document that establishes proof of the existence, such as:</P>
                <P>(i) For a partnership, an executed partnership agreement; and</P>
                <P>(ii) For a corporation:</P>
                <P>(A) Articles of incorporation certified by the Secretary of State of the applicable State of incorporation;</P>
                <P>(B) Bylaws; and</P>
                <P>(C) Permits to do business; and</P>
                <P>(iii) For a limited partnership, an executed limited partnership agreement; and</P>
                <P>(iv) For a limited liability company:</P>
                <P>(A) Articles of organization or similar documents; and</P>
                <P>(B) Operating agreement or similar agreement.</P>
                <P>(5) Meet any additional financial requirements as set forth in the applicable provider agreement;</P>
                <P>(6) Pay user fees annually to FSA, as set and announced annually by FSA prior to April 1 of each calendar year; and</P>
                <P>(7) Operate a CFS as a neutral third party in a confidential and secure fashion independent of any outside influence or bias in action or appearance.</P>
                <P>(b) The provider agreement will contain, but not be limited to, these basic elements:</P>
                <P>(1) Scope of authority;</P>
                <P>(2) Minimum document and warehouse receipt requirements;</P>
                <P>(3) Liability;</P>
                <P>(4) Transfer of records protocol;</P>
                <P>(5) Records;</P>
                <P>(6) Conflict of interest requirements;</P>
                <P>(7) USDA common electronic information requirements;</P>
                <P>(8) Financial requirements</P>
                <P>(9) Terms of insurance policies or assurances;</P>
                <P>(10) Provider's integrity statement;</P>
                <P>(11) Security audits; and</P>
                <P>(12) Submission, authorization, approval, use and retention of documents.</P>
                <P>(c) DACO may suspend or terminate a provider's agreement for cause at any time.</P>
                <P>(1) Hearings and appeals will be conducted in accordance with procedures as set forth in §§ 735.6 and 735.8.</P>
                <P>(2) Suspended or terminated providers may not execute any function pertaining to USDA, USWA documents, or USWA or State EWR's during the pendency of any appeal or subsequent to this appeal if the appeal is denied, except as authorized by DACO.</P>
                <P>(3) The provider or DACO may terminate the provider agreement without cause solely by giving the other party written notice 60 calendar days prior to termination.</P>

                <P>(d) Each provider agreement will be automatically renewed annually on <PRTPAGE P="187"/>April 30th as long as the provider complies with the terms contained in the provider agreement, the regulations in this subpart, and the Act.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.402</SECTNO>
                <SUBJECT>Providers of other electronic documents.</SUBJECT>
                <P>(a) To establish a USWA-authorized system to issue and transfer OED, each applicant must submit to DACO information and documents determined by DACO to be sufficient to determine that the applicant can comply with the provisions of the Act. Each provider operating pursuant to this section must meet the following requirements:</P>
                <P>(1) Have and maintain a net worth as specified in the applicable provider agreement;</P>
                <P>(2) Maintain two insurance policies; one for 'errors and omissions' and another for 'fraud and dishonesty'. Each policy's minimum coverage and maximum deductible amounts and applicability of other forms of financial assurances as set forth in § 735.14 will be prescribed in the applicable provider agreement. Each policy must contain a clause requiring written notification to FSA 30 days prior to cancellation or as prescribed by FSA;</P>
                <P>(3) Submit a current review or an audit level financial statement prepared according to generally accepted accounting standards as defined by the American Institute of Certified Public Accountants;</P>
                <P>(4) For any entity that is not an individual, a document that establishes proof of the existence, such as:</P>
                <P>(i) For a partnership, an executed partnership agreement; and</P>
                <P>(ii) For a corporation:</P>
                <P>(A) Articles of incorporation certified by the Secretary of State of the applicable State of incorporation;</P>
                <P>(B) Bylaws; and</P>
                <P>(C) Permits to do business; and</P>
                <P>(iii) For a limited partnership, an executed limited partnership agreement; and</P>
                <P>(iv) For a limited liability company:</P>
                <P>(A) Articles of organization or similar documents; and</P>
                <P>(B) Operating agreement or similar agreement.</P>
                <P>(5) Meet any additional financial requirements as set forth in the applicable provider agreement;</P>
                <P>(6) Pay user fees annually to FSA, as set and announced annually by FSA prior to April 1 of each calendar year; and</P>
                <P>(7) Operate a CFS as a neutral third party in a confidential and secure fashion independent of any outside influence or bias in action or appearance.</P>
                <P>(b) The provider agreement will contain, but not be limited to, these basic elements:</P>
                <P>(1) Scope of authority;</P>
                <P>(2) Minimum document and warehouse receipt requirements;</P>
                <P>(3) Liability;</P>
                <P>(4) Transfer of records protocol;</P>
                <P>(5) Records;</P>
                <P>(6) Conflict of interest requirements;</P>
                <P>(7) USDA common electronic information requirements;</P>
                <P>(8) Financial requirements;</P>
                <P>(9) Terms of insurance policies or assurances;</P>
                <P>(10) Provider's integrity statement;</P>
                <P>(11) Security audits; and</P>
                <P>(12) Submission, authorization, approval, use and retention of documents.</P>
                <P>(c) DACO may suspend or terminate a provider's agreement for cause at any time.</P>
                <P>(1) Hearings and appeals will be conducted in accordance with procedures as set forth in §§ 735.6 and 735.8.</P>
                <P>(2) Suspended or terminated providers may not execute any function pertaining to USDA, USWA documents, USWA or State EWR's or OED's during the pendency of any appeal or subsequent to this appeal if the appeal is denied, except as authorized by DACO.</P>
                <P>(d) Each provider agreement will be automatically renewed annually on April 30th as long as the provider complies with the terms contained in the provider agreement, the regulations in this subpart, and the Act.</P>
                <P>(e) In addition to audits prescribed in this section the provider must submit a copy of any audit, examination or investigative report prepared by any Federal regulatory agency with respect to the provider including agencies such as, but not limited to, the Comptroller of the Currency, Department of the Treasury, the Federal Trade Commission, and the Commodity Futures Trading Commission.</P>
              </SECTION>
              <SECTION>
                <PRTPAGE P="188"/>
                <SECTNO>§ 735.403</SECTNO>
                <SUBJECT>Audits.</SUBJECT>
                <P>(a) No later than 120 calendar days following the end of the provider's fiscal year, the provider authorized under §§ 735.401 and 735.402 must submit to FSA an annual audit level financial statement and an electronic data processing audit that meets the minimum requirements as provided in the applicable provider agreement. The electronic data processing audit will be used by DACO to evaluate current computer operations, security, disaster recovery capabilities of the system, and compatibility with other systems authorized by DACO.</P>
                <P>(b) Each provider will grant the Department unlimited, free access at any time to all records under the provider's control relating to activities conducted under this part and as specified in the applicable provider agreement.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 735.404</SECTNO>
                <SUBJECT>Schedule of charges and rates.</SUBJECT>
                <P>(a) A provider authorized under §§ 735.401 or 735.402 must furnish FSA with copies of its current schedule of charges and rates for all services as they become effective.</P>
                <P>(b) Charges and rates assessed any user by the provider must be in effect for a minimum period of one year.</P>
                <P>(c) Providers must furnish FSA and all users a 60-calendar day advance notice of their intent to change any charges and rates.</P>
              </SECTION>
            </SUBPART>
          </PART>
          <PART>
            <RESERVED>PART 743 [RESERVED]</RESERVED>
          </PART>
        </SUBCHAP>
        <SUBCHAP TYPE="P">
          <PRTPAGE P="189"/>
          <HD SOURCE="HED">SUBCHAPTER D—SPECIAL PROGRAMS</HD>
          <PART>
            <EAR>Pt. 750</EAR>
            <HD SOURCE="HED">PART 750—SOIL BANK</HD>
            <EDNOTE>
              <HD SOURCE="HED">Editorial Note:</HD>

              <P>Part 750 (formerly part 485 of title 6), published at 21 FR 6289, Aug. 22, 1956, and redesignated at 26 FR 5788, June 29, 1961, is no longer carried in the Code of Federal Regulations. This deletion does not relieve any person of any obligation or liability incurred under these regulations, nor deprive any person of any rights received or accrued under the provisions of this part. For <E T="04">Federal Register</E> citations affecting this part, see the “List of CFR Sections Affected, 1949-1963, 1964-1972, and 1973-1985,” published in seven separate volumes.</P>
            </EDNOTE>
          </PART>
          <PART>
            <EAR>Pt. 752</EAR>
            <HD SOURCE="HED">PART 752—WATER BANK PROGRAM</HD>
            <CONTENTS>
              <SECHD>Sec.</SECHD>
              <SECTNO>752.1</SECTNO>
              <SUBJECT>Program objective.</SUBJECT>
              <SECTNO>752.2</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <SECTNO>752.3</SECTNO>
              <SUBJECT>Administration.</SUBJECT>
              <SECTNO>752.4</SECTNO>
              <SUBJECT>Geographical applicability.</SUBJECT>
              <SECTNO>752.5</SECTNO>
              <SUBJECT>Eligible farm.</SUBJECT>
              <SECTNO>752.6</SECTNO>
              <SUBJECT>Land eligible for designation.</SUBJECT>
              <SECTNO>752.7</SECTNO>
              <SUBJECT>Use of designated acreage.</SUBJECT>
              <SECTNO>752.8</SECTNO>
              <SUBJECT>Water bank program agreement.</SUBJECT>
              <SECTNO>752.9</SECTNO>
              <SUBJECT>Agreement period.</SUBJECT>
              <SECTNO>752.10</SECTNO>
              <SUBJECT>Awarding water bank agreements.</SUBJECT>
              <SECTNO>752.11</SECTNO>
              <SUBJECT>Responsibility of agreement signers.</SUBJECT>
              <SECTNO>752.12</SECTNO>
              <SUBJECT>Provisions relating to tenants and sharecroppers.</SUBJECT>
              <SECTNO>752.13</SECTNO>
              <SUBJECT>Determination of compliance.</SUBJECT>
              <SECTNO>752.14</SECTNO>
              <SUBJECT>Annual payments.</SUBJECT>
              <SECTNO>752.15</SECTNO>
              <SUBJECT>Adjustment of annual rates.</SUBJECT>
              <SECTNO>752.16</SECTNO>
              <SUBJECT>Refunds or forfeitures for noncompliance.</SUBJECT>
              <SECTNO>752.17</SECTNO>
              <SUBJECT>Actions defeating purposes of program.</SUBJECT>
              <SECTNO>752.18</SECTNO>
              <SUBJECT>Filing of false claims.</SUBJECT>
              <SECTNO>752.19</SECTNO>
              <SUBJECT>Depriving others of payments.</SUBJECT>
              <SECTNO>752.20</SECTNO>
              <SUBJECT>Modification of an agreement.</SUBJECT>
              <SECTNO>752.21</SECTNO>
              <SUBJECT>Termination of agreements.</SUBJECT>
              <SECTNO>752.22</SECTNO>
              <SUBJECT>Transfer of interest in an agreement.</SUBJECT>
              <SECTNO>752.23</SECTNO>
              <SUBJECT>Successors-in-interest.</SUBJECT>
              <SECTNO>752.24</SECTNO>
              <SUBJECT>Agreement not in conformity with regulations.</SUBJECT>
              <SECTNO>752.25</SECTNO>
              <SUBJECT>Performance based upon advice or action of county or State committee.</SUBJECT>
              <SECTNO>752.26</SECTNO>
              <SUBJECT>Setoffs and withholdings.</SUBJECT>
              <SECTNO>752.27</SECTNO>
              <SUBJECT>Debt collection.</SUBJECT>
              <SECTNO>752.28</SECTNO>
              <SUBJECT>Appeals.</SUBJECT>
              <SECTNO>752.29</SECTNO>
              <SUBJECT>Payments not subject to claims.</SUBJECT>
              <SECTNO>752.30</SECTNO>
              <SUBJECT>Prohibition against payments.</SUBJECT>
              <SECTNO>752.31</SECTNO>
              <SUBJECT>Delegation of authority.</SUBJECT>
              <SECTNO>752.32</SECTNO>
              <SUBJECT>Paperwork Reduction Act assigned numbers.</SUBJECT>
            </CONTENTS>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>Secs. 2-12, 84 Stat. 1468-1471, as amended (16 U.S.C. 1301-1311).</P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>48 FR 45528, Oct. 6, 1983, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>§ 752.1</SECTNO>
              <SUBJECT>Program objective.</SUBJECT>
              <P>(a) The regulations in this part set forth the terms and conditions for the Water Bank Program. The Secretary is authorized to enter into agreements and make payments to eligible persons in important migratory waterfowl nesting and breeding areas. Specified wetlands identified for the conservation of water or related uses on a conservation plan shall be developed in cooperation with the Soil and Water Conservation District in which the lands are located.</P>
              <P>(b) The objective of the Water Bank Program (hereinafter referred to in this part as the “program”) is to preserve, restore, and improve the wetlands of the Nation, and thereby: (1) Conserve surface waters, (2) preserve and improve habitat for migratory waterfowl and other wildlife resources, (3) reduce runoff, soil and wind erosion, (4) contribute to flood control, (5) contribute to improved water quality and reduce stream sedimentation, (6) contribute to improved subsurface moisture, (7) reduce acres of new land coming into production and to retire lands now in agricultural production, (8) enhance the natural beauty of the landscape, and (9) promote comprehensive and total water management planning.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.2</SECTNO>
              <SUBJECT>Definitions.</SUBJECT>
              <P>(a) <E T="03">Adjacent land</E> means land on a farm which adjoins designated types 1 through 7 wetlands and is considered essential for the protection of the wetland or for the nesting, breeding, or feeding of migratory waterfowl. Adjacent land need not be contiguous to the land designated as wetland, but cannot be located more than one quarter of a mile away. Types 1 and 2 wetlands may be designated as adjacent land rather than wetland if located not more than one quarter mile from types 3 through 7 wetlands.</P>
              <P>(b) <E T="03">Administrator</E> means the Administrator or Acting Administrator of the Farm Service Agency (FSA), U.S. Department of Agriculture.<PRTPAGE P="190"/>
              </P>
              <P>(c) <E T="03">Agreement</E> means a water bank agreement.</P>
              <P>(d) <E T="03">Conservation plan</E> means a written record of the land user's decisions on the use and management of the wetland and adjacent areas covered by the agreement. The conservation plan is the basis for the agreement. It includes a schedule of conservation treatment and management required to improve, protect, or restore the wetland and to maintain the wetland and adjacent land as a functional wetland unit for the life of the agreement. Conservation treatment and management of the vegetation for wetland protection, wildlife habitat, or other authorized objectives are consistent with the program objectives and priorities.</P>
              <P>(e) <E T="03">Wetlands</E> means the inland fresh areas described as types 1 through 7 in Circular 39, Wetlands of the United States, as published by the United States Department of the Interior.</P>
              <P>(f) In the regulations in this part and in all instructions, forms, and documents in connection therewith, all other words and phrases specifically relating to FSA operation shall, unless the context of subject matter otherwise requires, have the meanings assigned to them in the regulations governing reconstitution of farms, allotments and bases, part 719 of this chapter, as amended.</P>
              <CITA>[48 FR 45528, Oct. 6, 1983, as amended at 50 FR 7744, Feb. 26, 1985]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.3</SECTNO>
              <SUBJECT>Administration.</SUBJECT>
              <P>(a) The program will be administered under the general supervision of the Administrator, in consultation with the Secretary of the Interior or his designee, and shall be carried out in the field by FSA State and county committees.</P>
              <P>(b) Members of county committees are authorized to approve water bank agreements on behalf of the Secretary of Agriculture.</P>
              <P>(c) State and county committees do not have authority to modify or waive any of the provisions of these regulations, or any amendment, supplement, or revision thereto. They do not have authority to modify or waive any of the provisions of any agreement entered into hereunder except to the extent specifically authorized in this part.</P>
              <CITA>[48 FR 45528, Oct. 6, 1983, as amended at 50 FR 7744, Feb. 26, 1985]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.4</SECTNO>
              <SUBJECT>Geographical applicability.</SUBJECT>
              <P>The program will be applicable in States and counties designated by the Deputy Administrator, State and County Operations, FSA (hereinafter referred to as the “Deputy Administrator”) after consultation with the United States Fish and Wildlife Service, United States Department of the Interior.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.5</SECTNO>
              <SUBJECT>Eligible farm.</SUBJECT>
              <P>A farm is eligible for participation in the program if: (a) At the time the request for an agreement is filed, land on the farm is not covered by a Water Bank Program agreement; (b) the farm contains at least one of the types 3 through 7 wetlands which are identified in a conservation plan developed in cooperation with the Soil and Water Conservation District in which the farm is located; and (c) the farm meets the other requirements specified in this part.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.6</SECTNO>
              <SUBJECT>Land eligible for designation.</SUBJECT>
              <P>(a) Land placed under an agreement shall be specifically identified and designated for the period of the agreement.</P>

              <P>(b) Land eligible for designation must be: (1) Privately owned inland fresh wetland areas of types 1 through 7 of which at least 2 acres must be types 3 through 7 wetlands with respect to which, in the absence of inclusion in the program, destruction of the wetland character could reasonably be expected; (2) privately owned inland fresh wetland areas of types 1 through 7, which are under a drainage easement with the U.S. Department of the Interior or with a State government which permits agricultural use; or (3) other privately owned land which is adjacent to or within one quarter mile of designated types 1 through 7 wetlands and which is determined by the county committee to be essential for the nesting, breeding, or feeding of migratory waterfowl, or for the protection of wetland.<PRTPAGE P="191"/>
              </P>
              <P>(c) The following land is not eligible for designation: (1) Land on which the ownership has changed during the 2-year period preceding the first year of the agreement period unless: (i) The new ownership was acquired by will or succession as a result of the death of the previous owner, or (ii) the land was acquired by the owner or operator to replace eligible land from which he was displaced because of its acquisition by any Federal, State, or other agency having the right of eminent domain. However a new owner shall not be prohibited from entering into an agreement if the person has operated the land to be designated for as long as 2 years preceding the first year of the agreement and has control of such land for the agreement period. The provisions of this subparagraph shall not prohibit the continuation of an agreement by a new owner after an agreement has once been entered into under this part.</P>
              <P>(2) Land which is set aside or diverted under any other program administered by the Department of Agriculture.</P>
              <P>(3) Land which is owned by the United States or a State or local government or political subdivision thereof.</P>
              <P>(4) Land which is harvested in the first year of the agreement period prior to being designated, except for land on which timber is harvested in accordance with § 752.7(g).</P>
              <P>(5) Types 1 through 7 wetlands which are common to more than one farm unless the portion of a wetland area located on the farm which controls the potential outlet for drainage is placed under agreement. After an agreement has been approved for the farm controlling the outlet for drainage, an agreement may be entered into with any or all other farms for other portions of the common wetland area if all agreements have the same beginning date as the farm controlling the outlet for drainage.</P>
              <CITA>[48 FR 45528, Oct. 6, 1983, as amended at 50 FR 7744, Feb. 26, 1985]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.7</SECTNO>
              <SUBJECT>Use of designated acreage.</SUBJECT>
              <P>(a) The acreage designated under an agreement shall be maintained for the agreement period in a manner which will preserve, restore or improve the wetland character of the land. Persons entering into an agreement shall devote the adjacent land to conservation uses as specified in the agreement.</P>
              <P>(b) The designated acreage shall not be drained, burned, filled, or otherwise used in a manner which would destroy the wetland character of the acreage, except that the provisions of this paragraph shall not prohibit the carrying out of management practices which are specified in a conservation plan for the farm which is developed in cooperation with the Soil and Water Conservation District in which the farm is located.</P>
              <P>(c) The designated acreage shall not be used as a dumping area for draining other wetlands. However, the county committee may authorize the use of the designated area to receive limited drainage waters upon a determination that such use is consistent with the sound management of wetlands and is specified in the conservation plan for the farm.</P>
              <P>(d) The designated acreage shall not be used: (1) As a source of irrigation water or as acreage for a set-aside, land diversion, acreage reduction or other program, or (2) to meet the conserving base acreage requirement for any other program.</P>
              <P>(e) No crop shall be harvested from the designated acreage and such acreage shall not be grazed, except as may be specified in the conservation plan for the farm except that the designated acreage may be grazed in the first year of the agreement period prior to the date the agreement is approved.</P>
              <P>(f) During periods of severe drought, haying of the designated acreage may be approved under specified conditions which are prescribed by the Deputy Administrator in consultation with the Secretary of Interior or his designee.</P>
              <P>(g) The harvesting of timber products may be permitted but only in accordance with a Forest Management Plan which is included in the conservation plan and which is approved by the State forester or equivalent State official.</P>
              <CITA>[48 FR 45528, Oct. 6, 1983, as amended at 50 FR 7744, Feb. 26, 1985]</CITA>
            </SECTION>
            <SECTION>
              <PRTPAGE P="192"/>
              <SECTNO>§ 752.8</SECTNO>
              <SUBJECT>Water bank program agreement.</SUBJECT>
              <P>(a) An agreement shall be executed for each participating farm. The agreement shall be signed by the owner of the designated acreage and any other person who, as landlord, tenant, or share cropper, will share in the payment or has an interest in the designated acreage.</P>
              <P>(b) There may be more than one agreement for a farm.</P>
              <P>(c) Each agreement shall be signed by a member of the county committee on behalf of the Secretary.</P>
              <CITA>[48 FR 45528, Oct. 6, 1983, as amended at 50 FR 7744, Feb. 26, 1985]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.9</SECTNO>
              <SUBJECT>Agreement period.</SUBJECT>
              <P>(a) The agreement period shall be 10 years. The agreement shall become effective on January 1 of the year in which the agreement is approved except that the agreement shall become effective on January 1 of the next succeeding year in cases where, at the time the agreement is approved, the county committee determines that the agreement signers will be unable to comply with the provisions of § 752.7 relating to the use of designated acreage in the year in which such agreement is approved.</P>
              <P>(b) Subject to a modification of payment rates and such other provisions which may be determined to be desirable, agreements may be renewed for additional periods of 10 years each.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.10</SECTNO>
              <SUBJECT>Awarding water bank agreements.</SUBJECT>
              <P>(a) Persons wishing to be considered for an agreement shall file a request with the county committee indicating the acreage which is to be designated under the agreement. In order to be eligible for participation in the program, such persons must agree to designate: (1) 2 or more acres of types 3 through 7 wetlands, and (2) a total of at least 10 acres consisting of types 1 through 7 wetlands or adjacent land, or any combination thereof, identified in a conservation plan developed in cooperation with the Soil and Water Conservation District in which the farm is located. In addition, the Soil Conservation Service (SCS) must certify that the designated acreage constitutes a viable wetland unit, contains sufficient adjacent land to protect the wetland, and provides essential habitat for the nesting, breeding or feeding of migratory waterfowl. An acreage of less than 10 acres may be designated if the SCS representative recommends acceptance of the acreage and certifies that the area offered for agreement is a good, viable wetland unit and that the acceptance of the acreage would be in accord with the purposes of the program.</P>
              <P>(b) Persons desiring to participate in the program may agree to designate any additional amount to types 1 through 7 wetlands and adjacent land. However, the maximum acreage of adjacent land which is designated under the agreement with respect to which payment shall be based cannot exceed four times the total acreage of types 3 through 7 wetlands which is designated under the agreement. This maximum acreage restriction may be waived by the State committee if such waiver would further the program objectives.</P>
              <P>(c) Where funds allocated to the county do not permit accepting all requests which are filed, the county committee may limit the approval of requests for agreements in accordance with instructions issued by the Deputy Administrator.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.11</SECTNO>
              <SUBJECT>Responsibility of agreement signers.</SUBJECT>
              <P>(a) The owner of the designated acreage is responsible for compliance with the agreement and for any refunds or deductions for failure to comply fully with the terms of the agreement while a party to such agreement.</P>
              <P>(b) Each other person signing the agreement is jointly and severally responsible with the owner for compliance with the agreement and for any refunds or payment reductions which may be required for failure to comply fully with the terms of the agreement while a party to such agreement.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.12</SECTNO>
              <SUBJECT>Provisions relating to tenants and sharecroppers.</SUBJECT>

              <P>(a) No agreement shall be approved if it appears that the owner, landlord, or <PRTPAGE P="193"/>operator has (1) not afforded the tenants and sharecroppers having an interest in the designated acreage an opportunity to participate in the program, or (2) adopted any device or scheme for the purpose of depriving any tenant or sharecropper of their payment or any other right under the program.</P>
              <P>(b) The agreement shall be deemed to be in noncompliance if any of the conditions set forth in paragraph (a) of this section occur after the approval of the agreement.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.13</SECTNO>
              <SUBJECT>Determination of compliance.</SUBJECT>
              <P>(a) Determination of the acreage designated under the agreement shall be made in accordance with part 718 of this chapter, as amended.</P>
              <P>(b) A representative of the county or State committee or any authorized representative of the Secretary shall have the right at any reasonable time to enter a farm concerning which representations have been made on any forms filed under the program in order to measure the designated acreage, to examine any records pertaining thereto, and to otherwise determine the accuracy of any representations and the performance of any obligations by the signatories of a WBP agreement.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.14</SECTNO>
              <SUBJECT>Annual payments.</SUBJECT>
              <P>(a) Persons on the farm having an interest in the designated acreage shall be eligible for an annual payment.</P>
              <P>(b) The annual per acre payment rates for wetlands and for adjacent land shall be those rates which are recommended by the county and State committee and approved for each county by the Deputy Administrator. If the wetlands are subject to a drainage easement with the United States Department of the Interior or a state governmental entity, the payment rates for such wetlands will be 80 percent of the approved county rates which are applicable to wetlands in the county. A listing of all approved rates shall be available for inspection at the county FSA office.</P>
              <P>(c) The payment shall be divided among the owner of the designated acreage and any other person having an interest in such acreage, including tenants and sharecroppers, in the manner agreed upon by them as representing their respective contributions to compliance with the agreement. The county committee shall refuse to approve an agreement if it determines that the proposed division of payment is not fair and equitable. The annual payment and the division of the payment shall be specified in the agreement.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.15</SECTNO>
              <SUBJECT>Adjustment of annual rates.</SUBJECT>
              <P>(a) The county committee shall reexamine the payment rates with respect to each agreement at the beginning of the fifth year of any ten-year initial or renewal period and before the renewal period expires.</P>
              <P>(b) An adjustment in the payment rates shall be made for any initial or renewal period taking into consideration the current land rental rates and crop values in the area. No adjustment shall be made in a payment rate which will result in a reduction of an annual payment rate from the rate which is specified in the initial agreement.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.16</SECTNO>
              <SUBJECT>Refunds or forfeitures for noncompliance.</SUBJECT>
              <P>(a) Except as otherwise provided in paragraph (b) of this section, no payment shall be made to any person for any year with respect to any agreement for which it is determined that for such year:</P>
              <P>(1) There has been a failure to maintain the wetland character of the designated acreage and devote the adjacent land to the use specified in the agreement as provided in § 752.7. (a);</P>
              <P>(2) There has been a failure to comply with the prohibition against draining, burning, filling, or otherwise using the designated acreage in a manner which would destroy the wetland character of the acreage as provided in § 752.7 (b);</P>
              <P>(3) There has been a failure to comply with the prohibition against using the designated acreage as a dumping area for draining other wetlands as provided in § 752.7 (c);</P>

              <P>(4) There has been a failure to comply with the prohibition against using the designated acreage as a source of irrigation water or as acreage for a set-aside, land diversion, acreage reduction or other program, or to meet the conserving base acreage requirement for <PRTPAGE P="194"/>any other program as provided in § 752.7 (d);</P>
              <P>(5) There has been a failure to comply with the prohibition against harvesting a crop from or grazing the designated acreage as provided in § 752.7(e);</P>
              <P>(6) There has been a failure to comply with the provisions relating to haying the designated acreage during periods of severe drought as provided in § 752.7(f);</P>
              <P>(7) There has been a failure to comply with the provisions relating to the harvesting of timber products as provided in § 752.7(g); or</P>
              <P>(8) There has been a failure to comply with the provisions relating to tenants and sharecroppers as provided in § 752.12.</P>
              <P>(b) The regulations governing the making of payments when there has been a failure to comply fully with the provisions of the program, part 791 of this chapter, are applicable to the WBP.</P>
              <P>(c) The agreement shall be terminated in any case in which the failure to comply with the provisions of this part requires a refund or forfeiture of the entire annual payment under the agreement for the year and it is determined that the failure to comply is of such a nature as to warrant termination of the agreement. If an agreement is terminated, the persons signing the agreement shall forfeit all rights to further payments under the agreement and shall refund all payments received under the agreement.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.17</SECTNO>
              <SUBJECT>Actions defeating purposes of program.</SUBJECT>
              <P>If the county committee with the concurrence of the State committee, or the State committee, finds that any person has taken any action which tends to defeat the purposes of the program, all or any part of the annual payment which otherwise would be due under the program may be withheld or be required to be refunded.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.18</SECTNO>
              <SUBJECT>Filing of false claims.</SUBJECT>
              <P>The making of a fraudulent representation by a person in the payment documents or otherwise for the purpose of obtaining a payment from the county committee shall render the person liable, in addition to any liability under applicable Federal criminal and civil fraud statutes, for a refund of any payments received by such person as the result of the fraudulent representation.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.19</SECTNO>
              <SUBJECT>Depriving others of payments.</SUBJECT>
              <P>If the State committee finds that any person has employed any scheme or device (including coercion, fraud, or misrepresentation) which deprives any other person of a payment to which such person is otherwise entitled under the program, the State committee may withhold or require a refund of all or any part of the program payment which otherwise would be due to the person who employed such scheme or device.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.20</SECTNO>
              <SUBJECT>Modification of an agreement.</SUBJECT>
              <P>(a) Any reconstitution of farms shall be made in accordance with the regulations governing reconstitution of farms, part 719 of this chapter, as amended.</P>

              <P>(b) If the farm is reconstituted because of purchase, sale, change of operation, or otherwise, the agreement shall be modified in accordance with instructions issued by the Deputy Administrator with respect to any reconstituted farm which contains all or any part of the original designated acreage. The modified agreement or agreements shall reflect the changes in the number of acres in any reconstituted farm, the designated acreage, interested persons, and division of payments. If persons who were not signatories to the original agreement are required to execute such modified agreement or agreements in accordance with the provisions of § 752.8, but such persons are not willing to become parties to the modified agreement or for any other reason a modified agreement is not executed, the agreement shall be terminated with respect to the designated acreage which is not continued in the program, and all unearned payments shall be forfeited or refunded to FSA. The annual payment for the year in which a reconstitution occurs shall not be considered earned unless the designated acreage is continued in the program and there is a compliance with the agreement for the full agreement year. The persons on the farm prior to the reconstitution who were signatories to the agreement <PRTPAGE P="195"/>shall be jointly and severally responsible for refunding the unearned payments previously made.</P>
              <P>(c) Except with respect to a farm which is reconstituted, if the ownership or operation of the farm changes in such a manner that the agreement no longer contains the signatures of persons required to sign the agreement in accordance with § 752.8, the agreement shall be modified in accordance with instructions issued by the Deputy Administrator to reflect the new interested persons and new divisions of payments. If such persons are not willing to become parties to the modified agreement or for any other reason a modified agreement is not executed, the agreement shall be terminated and all unearned payments shall be forfeited or refunded. The annual payment for the year in which the change of ownership or operation occurs shall not be considered to have been earned unless the designated acreage is continued in the program and there is compliance with the agreement for the full agreement year. The persons on the farm prior to the change of ownership or operation who were signatories to the agreement shall be jointly and severally responsible for refunding the unearned payments previously made.</P>
              <P>(d) The Deputy Administrator may authorize other agreement modifications which are determined to be desirable to carry out the purposes of the program or to facilitate its administration.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.21</SECTNO>
              <SUBJECT>Termination of agreements.</SUBJECT>
              <P>The Deputy Administrator may, by mutual agreement with the parties to the agreement, consent to the termination of an agreement where: (a) The operator of the farm is physically handicapped and could not reasonably be expected to comply with the terms and conditions of the agreement; (b) the operator is or was mentally unstable at the time of the signing of the agreement and could not reasonably be expected to comply with the terms and conditions of the agreement; (c) the parties to the agreement are unable to comply with the terms of the agreement as the result of conditions beyond their control; (d) compliance with the terms of the agreement would work a severe hardship on the parties to the agreement; or (e) termination of the agreement would be in the public interest. If an agreement is terminated in accordance with the provisions of this section, the annual payment for the year in which the agreement is terminated shall not be considered to have been earned unless there is compliance with the terms and conditions of the agreement for the entire calendar year.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.22</SECTNO>
              <SUBJECT>Transfer of interest in an agreement.</SUBJECT>
              <P>(a) If a person acquires an interest in the designated acreage during the period covered by an agreement, such person may, with the consent of the other parties to the agreement and with approval of the county committee, become a party to the agreement and share in payments thereunder. A person, by becoming a party to the agreement, shall be jointly and severally responsible with the other signatories to the agreement for compliance with the terms and conditions of the agreement. In addition, such person shall be liable for any payment reductions or refunds which may be required as the result of the failure to comply with the terms and conditions of such agreement after becoming a party to the agreement.</P>
              <P>(b) If a signatory to an agreement ceases to have an interest in the designated acreage, such person thereby ceases to be a party to the agreement. However, such person will not be relieved of any liability for deductions and refunds for failure to comply with the terms and conditions of the agreement while a party to the agreement.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.23</SECTNO>
              <SUBJECT>Successors-in-interest.</SUBJECT>
              <P>In case of death, incompetency, or disappearance of any person, any payment due shall be paid to the successor as determined in accordance with provisions of the regulations in part 707 of this chapter, as amended.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.24</SECTNO>
              <SUBJECT>Agreement not in comformity with regulations.</SUBJECT>

              <P>If, after an agreement is approved by the county committee, it is discovered <PRTPAGE P="196"/>that such agreement is not in conformity with the regulations as the result of a misunderstanding of the program procedures by a signatory to the agreement, a modification of the agreement may be made by mutual agreement. If persons who are currently eligible to execute the corrected agreement are unwilling to do so, the agreement shall be terminated and all payments paid or payable under the agreement shall be forfeited or refunded, except as may be allowed by the Deputy Administrator in accordance with the provisions of § 752.25.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.25</SECTNO>
              <SUBJECT>Performance based upon advice or action of county or State committee.</SUBJECT>
              <P>The provisions of part 790 of this chapter, as amended, relating to performance based upon action or advice of an authorized representative of the Secretary shall be applicable to this program.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.26</SECTNO>
              <SUBJECT>Setoffs and withholdings.</SUBJECT>
              <P>The regulations issued by the Secretary governing setoffs and withholdings, part 13 of this title, as amended, shall be applicable to this program.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.27</SECTNO>
              <SUBJECT>Debt collection.</SUBJECT>
              <P>Any debts arising under this program are governed with respect to their collection by the Federal Claims Collection Act of 1966 (31 U.S.C. 3701) and the regulations found at chapter II of 4 CFR.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.28</SECTNO>
              <SUBJECT>Appeals.</SUBJECT>
              <P>Any person may obtain review of determinations affecting participation in this program in accordance with part 614 of this title.</P>
              <CITA>[60 FR 67316, Dec. 29, 1995]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.29</SECTNO>
              <SUBJECT>Payments not subject to claims.</SUBJECT>
              <P>Any payments due any person shall be determined and allowed without regard to State law and without regard to any claim or lien against any crop, or proceeds thereof, which may be asserted by any creditor, except as provided in § 752.26.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.30</SECTNO>
              <SUBJECT>Prohibition against payments.</SUBJECT>
              <P>The regulations in part 796 of this chapter prohibiting the making of payments to program participants who harvest or knowingly permit to be harvested for illegal use marijuana or other such prohibited drug-producing plants on any part of the lands owned or controlled by them are applicable to this program.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.31</SECTNO>
              <SUBJECT>Delegation of authority.</SUBJECT>
              <P>No delegation herein to a State or county committee shall preclude the Administrator, or his designee, from determining any question arising under the program or from reversing or modifying any determination made by a State or county committee.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 752.32</SECTNO>
              <SUBJECT>Paperwork Reduction Act assigned numbers.</SUBJECT>
              <P>The Office of Management and Budget has approved the information collection requirements contained in these Regulations (§§ 752.8, 752.10 and 752.13) under the provisions of 44 U.S.C. Chapter 35 and OMB number 0560-0062 has been assigned.</P>
            </SECTION>
          </PART>
          <PART>
            <EAR>Pt. 755</EAR>
            <HD SOURCE="HED">PART 755—REGIONAL PROGRAMS</HD>
            <CONTENTS>
              <SUBPART>
                <HD SOURCE="HED">Subpart—Appalachian Land Stabilization and Conservation Program</HD>
                <SECHD>Sec.</SECHD>
                <SECTNO>755.1</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <SECTNO>755.2</SECTNO>
                <SUBJECT>Purposes and objectives.</SUBJECT>
                <SECTNO>755.3</SECTNO>
                <SUBJECT>Geographical applicability.</SUBJECT>
                <SECTNO>755.4</SECTNO>
                <SUBJECT>General.</SUBJECT>
                <SECTNO>755.5</SECTNO>
                <SUBJECT>State programs.</SUBJECT>
                <SECTNO>755.6</SECTNO>
                <SUBJECT>Cost-share contract.</SUBJECT>
                <SECTNO>755.7</SECTNO>
                <SUBJECT>Cost-share payments.</SUBJECT>
                <SECTNO>755.8</SECTNO>
                <SUBJECT>Modification of contract.</SUBJECT>
                <SECTNO>755.9</SECTNO>
                <SUBJECT>Termination of contracts.</SUBJECT>
                <SECTNO>755.10</SECTNO>
                <SUBJECT>Noncompliance.</SUBJECT>
                <SECTNO>755.11</SECTNO>
                <SUBJECT>Signatures.</SUBJECT>
                <SECTNO>755.12</SECTNO>
                <SUBJECT>Filing of false claims.</SUBJECT>
                <SECTNO>755.13</SECTNO>
                <SUBJECT>Delegation of authority.</SUBJECT>
                <SECTNO>755.14</SECTNO>
                <SUBJECT>Reporting performance.</SUBJECT>
                <SECTNO>755.15</SECTNO>
                <SUBJECT>Handling exceptional cases.</SUBJECT>
                <SECTNO>755.16</SECTNO>
                <SUBJECT>Access to farms and to farm records.</SUBJECT>
                <SECTNO>755.17</SECTNO>
                <SUBJECT>Preservation of cropland, crop acreage and allotment history.</SUBJECT>
                <SECTNO>755.18</SECTNO>
                <SUBJECT>Appeals.</SUBJECT>
                <SECTNO>755.19</SECTNO>
                <SUBJECT>Availability of funds.</SUBJECT>
                <SECTNO>755.20</SECTNO>
                <SUBJECT>Rural community development proj-ects.</SUBJECT>
              </SUBPART>
            </CONTENTS>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>Sec. 208, 79 Stat. 5, 12; 40 U.S.C. App. 1, 2, 203.</P>
            </AUTH>
            <SOURCE>
              <PRTPAGE P="197"/>
              <HD SOURCE="HED">Source:</HD>
              <P>30 FR 8669, July 9, 1965, unless otherwise noted.</P>
            </SOURCE>
            <SUBPART>
              <HD SOURCE="HED">Subpart—Appalachian Land Stabilization and Conservation Program</HD>
              <SECTION>
                <SECTNO>§ 755.1</SECTNO>
                <SUBJECT>Definitions.</SUBJECT>
                <P>As used in this subpart the following terms shall have the following meanings:</P>
                <P>(a) <E T="03">Act</E> means the Appalachian Regional Development Act of 1965.</P>
                <P>(b) <E T="03">Appalachian Region</E> or <E T="03">the Region</E> means that area of the Eastern United States consisting of the following counties (including any political subdivision located within such area):</P>
                <EXTRACT>
                  <P>In Alabama, the counties of Bibb, Blount, Calhoun, Chambers, Cherokee, Chilton, Clay, Cleburne, Colbert, Coosa, Cullman, De Kalb, Elmore, Etowah, Fayette, Franklin, Jackson, Jefferson, Lamar, Lauderdale, Lawrence, Limestone, Madison, Marion, Marshall, Morgan, Pickens, Randolph, Saint Clair, Shelby, Talladega, Tallapoosa, Tuscaloosa, Walker, and Winston;</P>
                  <P>In Georgia, the counties of Banks, Barrow, Bartow, Carroll, Catoosa, Chattooga, Cherokee, Dade, Dawson, Douglas, Fannin, Floyd, Forsyth, Franklin, Gilmer, Gordon, Gwinnett, Habersham, Hall, Haralson, Heard, Jackson, Lumpkin, Madison, Murray, Paulding, Pickens, Polk, Rabun, Stephens, Towns, Union, Walker, White, and Whitfield;</P>
                  <P>In Kentucky, the counties of Adair, Bath, Bell, Boyd, Breathitt, Carter, Casey, Clark, Clay, Clinton, Cumberland, Elliott, Estill, Fleming, Floyd, Garrard, Green, Greenup, Harlan, Jackson, Johnson, Knott, Knox, Laurel, Lawrence, Lee, Leslie, Letcher, Lewis, Lincoln, McCreary, Madison, Magoffin, Martin, Menifee, Monroe, Montgomery, Morgan, Owsley, Perry, Pike, Powell, Pulaski, Rockcastle, Rowan, Russell, Wayne, Whitley, and Wolfe;</P>
                  <P>In Maryland, the counties of Allegany, Garrett, and Washington;</P>
                  <P>In Mississippi, the counties of Alcorn, Benton, Chickasaw, Choctaw, Clay, Itawamba, Kemper, Lee, Lowndes, Marshall, Monroe, Noxubee, Oktibbeha, Pontotoc, Prentiss, Tippah, Tishomingo, Union, Webster, and Winston;</P>
                  <P>In New York, the counties of Allegany, Broome, Cattaraugus, Chautauqua, Chemung, Chenango, Cortland, Delaware, Otsego, Schoharie, Schuyler, Steuben, Tioga, and Tompkins;</P>
                  <P>In North Carolina, the counties of Alexander, Alleghany, Ashe, Avery, Buncombe, Burke, Caldwell, Cherokee, Clay, Davie, Forsyth, Graham, Haywood, Henderson, Jackson, McDowell, Macon, Madison, Mitchell, Polk, Rutherford, Stokes, Surry, Swain, Transylvania, Watauga, Wilkes, Yadkin, and Yancey;</P>
                  <P>In Ohio, the counties of Adams, Athens, Belmont, Brown, Carroll, Clermont, Coshocton, Gallia, Guernsey, Harrison, Highland, Hocking, Holmes, Jackson, Jefferson, Lawrence, Meigs, Monroe, Morgan, Muskingum, Noble, Perry, Pike, Ross, Scioto, Tuscarawas, Vinton, and Washington;</P>
                  <P>In Pennsylvania, the counties of Allegheny, Armstrong, Beaver, Bedford, Blair, Bradford, Butler, Cambria, Cameron, Carbon, Centre, Clarion, Clearfield, Clinton, Columbia, Crawford, Elk, Erie, Fayette, Forest, Fulton, Greene, Huntingdon, Indiana, Jefferson, Juniata, Lackawanna, Lawrence, Luzerne, Lycoming, McKean, Mercer, Mifflin, Monroe, Montour, Northumberland, Perry, Pike, Potter, Schuylkill, Snyder, Somerset, Sullivan, Susquehanna, Tioga, Union, Venango, Warren, Washington, Wayne, Westmoreland, and Wyoming;</P>
                  <P>In South Carolina, the counties of Anderson, Cherokee, Greenville, Oconee, Pickens, and Spartanburg;</P>
                  <P>In Tennessee, the counties of Anderson, Bledsoe, Blount, Bradley, Campbell, Cannon, Carter, Claiborne, Clay, Cocke, Coffee, Cumberland, DeKalb, Fentress, Franklin, Grainger, Greene, Grundy, Hamblen, Hamilton, Hancock, Hawkins, Jackson, Jefferson, Johnson, Knox, Loudon, McMinn, Macon, Marion, Meigs, Monroe, Morgan, Overton, Pickett, Polk, Putnam, Rhea, Roane, Scott, Sequatchie, Sevier, Smith, Sullivan, Unicoi, Union, Van Buren, Warren, Washington, and White;</P>
                  <P>In Virginia, the counties of Alleghany, Bath, Bland, Botetourt, Buchanan, Carroll, Craig, Dickenson, Floyd, Giles, Grayson, Highland, Lee, Pulaski, Russell, Scott, Smyth, Tazewell, Washington, Wise, and Wythe;</P>
                  <P>All the counties of West Virginia.</P>
                </EXTRACT>
                <P>(c) <E T="03">Secretary</E> means the Secretary of Agriculture of the United States or any officer or employee of the United States Department of Agriculture to whom authority has been delegated, or to whom authority may hereafter be delegated, to act in his stead.</P>
                <P>(d) <E T="03">Administrator</E> means the Administrator or Acting Administrator of the Farm Service Agency, United States Department of Agriculture.</P>
                <P>(e) <E T="03">Deputy Administrator</E> means the Deputy Administrator or Acting Deputy Administrator for State and County Operations, Farm Service Agency, United States Department of Agriculture.<PRTPAGE P="198"/>
                </P>
                <P>(f) <E T="03">Director</E> means the Director or Acting Director of the Farmer Programs Division, Farm Service Agency, United States Department of Agriculture.</P>
                <P>(g) <E T="03">State</E> means any one of the States in the Appalachian Region.</P>
                <P>(h) <E T="03">State committee</E> means the persons in a State designated by the Secretary as the Agricultural Stabilization and Conservation State Committee under section 8(b) of the Soil Conservation and Domestic Allotment Act, as amended.</P>
                <P>(i) <E T="03">County</E> means a political subdivision of a State identified as a county.</P>
                <P>(j) <E T="03">County committee</E> means the persons elected within a county as the county committee pursuant to regulations governing the selection and functions of Agricultural Stabilization and Conservation county and community committees under section 8(b) of the Soil Conservation and Domestic Allotment Act, as amended.</P>
                <P>(k) <E T="03">Operator</E> means the person who is in charge of the supervision and conduct of the farming operations on the entire farm.</P>
                <P>(l) <E T="03">Occupier</E> means any person other than the owner or operator who has an interest as tenant or sharecropper in the acreage covered by the contract.</P>
                <P>(m) <E T="03">Farm</E> means that area of land defined as a farm under the regulations governing Reconstitution of Farms, Allotments, and Bases, part 719 of this chapter, as amended, or, for purposes of contracts entered into pursuant to § 755.20, the land covered by the contract.</P>
                <P>(n) <E T="03">Cropland</E> means that land considered as cropland under the regulations governing Reconstitution of Farms, Allotments, and Bases, part 719 of this chapter, as amended.</P>
                <P>(o) <E T="03">Contract</E> means a Cost-Share Contract, Appalachian Land Stabilization and Conservation Program.</P>
                <P>(p) <E T="03">Commission</E> means the Appalachian Regional Commission which is composed of one Federal member (Federal Cochairman) and one member from each participating State in the Appalachian region.</P>
                <P>(q) <E T="03">Federal Cochairman</E> means the Federal Cochairman of the Appalachian Regional Commission.</P>
                <P>(r) <E T="03">State Cochairman</E> means the State Cochairman of the Appalachian Regional Commission as elected by the State members of the Commission from among their number.</P>
                <CITA>[30 FR 8669, July 9, 1965, as amended by Amdt. 2, 30 FR 14099, Nov. 9, 1965; Amdt. 4, 33 FR 16141, Nov. 5, 1968; Amdt. 5, 35 FR 8442, May 29, 1970]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.2</SECTNO>
                <SUBJECT>Purposes and objectives.</SUBJECT>
                <P>The general purposes and objectives of the Appalachian Land Stabilization and Conservation Program are to promote economic growth of the Region and to promote the conservation and development of the Region's soil and water resources. This program is a long-term program designed to carry out the policy of the Act by assisting landowners, operators, or occupiers through contracts providing for land stabilization, erosion and sediment control, reclamation through changes in land use, and the establishment of practices and measures for the conservation and development of the Region's soil, water, woodland, wildlife, and recreation resources.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.3</SECTNO>
                <SUBJECT>Geographical applicability.</SUBJECT>
                <P>The Appalachian Land Stabilization and Conservation Program will be limited to the States and counties designated as part of the Appalachian Region as defined in § 755.1 of the regulations of this part, and then only in counties or areas specifically approved in the State program developed hereunder.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.4</SECTNO>
                <SUBJECT>General.</SUBJECT>
                <P>(a) The Appalachian Land Stabilization and Conservation Program will be administered in the field by State and county committees under the general direction and supervision of the Administrator. Members of county committees are hereby authorized to sign contracts on behalf of the Secretary. State and county committees do not have authority to modify or waive any of the provisions of these regulations, or any amendment, supplement, or revision thereto.</P>

                <P>(b) Landowners, operators, and occupiers desiring to share in the accomplishment of the purposes and objectives of the program will be given an <PRTPAGE P="199"/>opportunity to participate in the program in accordance with the provisions of the program as set forth in this subpart. An applicant, as a part of his application for assistance, will file an acceptable conservation and development plan for the acreage to be included in his contract, and the measures specified in the plan must be carried out irrespective of whether cost-sharing is offered. The county committee will determine the practices and extent of such practices to be approved for cost-sharing to assist the applicant in carrying out his acceptable plan. A contract shall be entered into setting forth the extent of the approved assistance. An acceptable conservation and development plan will be a plan developed for the land proposed to be placed under contract, on a form prescribed by the Administrator, with technical planning assistance by technicians of the Soil Conservation Service, except in cases where the proposed treatment involves only a single practice of pasture renovation or timber stand improvement or conversion of less than 10 acres of land to grass or trees and such use does not involve critical areas or unusual costs and the conservation and development plan is acceptable to the county committee. In approving contracts, the county committees shall give preference to needy landowners, operators, and occupiers to the extent that such preference is consistent with the development of land treatment programs in the project area.</P>
                <P>(c) Detailed information concerning the program as it applies to an individual farm may be obtained from the county FSA office for the county in which the farm is located or from the State FSA office.</P>
                <CITA>[30 FR 8669, July 9, 1965, as amended by Amdt. 4, 33 FR 16141, Nov. 5, 1968]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.5</SECTNO>
                <SUBJECT>State programs.</SUBJECT>
                <P>(a) The State program shall be developed by the State or a political subdivision thereof in accordance with the regulations contained in this subpart. The Farm Service Agency and other applicable agencies of the Department of Agriculture shall cooperate with the State governmental officials in the development of the program. The chairman of the State committee as the chairman of the State Agricultural Conservation Program Development Group shall be the point of contact with the State governmental officials. The State Agricultural Conservation Program Development Group, which consists of the State ASC Committee (including the State Director of Extension), the State conservationist of the Soil Conservation Service, and the Forest Service official having jurisdiction over farm forestry in the State, shall consult with organizations and agencies within the State that have conservation interests and responsibilities. Upon request of the Governor of the State, a person selected as a direct representative of the Governor may be designated by the Secretary as an additional member of the ACP Development Group with equal authority with other members of the Group in the development of the State program.</P>
                <P>(b) The State program shall include the following provisions: (1) Identification of program objectives and areas in the State where the program will be applicable; (2) the designation of practices for which cost-share assistance is requested for each designated area, including specifications for each proposed practice; and (3) the proposed cost-share rates for each practice.</P>

                <P>(c) Minimum specifications which practices must meet to be eligible for Federal cost-sharing shall be set forth in the State program, or be incorporated therein by specific reference to a standard publication or other written document containing such specifications. For practices involving the establishment or improvement of vegetative cover, the specifications shall include, where appropriate, liming fertilization, and seeding rates, eligible seeds and mixtures, seeding dates, requirements for cultural operations and inoculation, and other steps essential to the successful establishment or improvement of the vegetative cover. For mechanical or construction type practices, the specifications shall include, where appropriate, the types and sizes of material, installation or construction requirements, and other steps essential to the proper functioning of the structure. For other practices, the specifications shall include those steps essential to the successful performance <PRTPAGE P="200"/>of the practice. Practice specifications may provide minimum performance requirements which will qualify the practice for cost-sharing and maximum limits of performance which will be eligible for cost-sharing. For practices which authorize Federal cost-sharing for applications of liming materials and commercial fertilizers, the minimum applications and maximum applications on which cost-sharing is authorized shall be determined on the basis of a current soil test: <E T="03">Provided, however,</E> That if available facilities are not adequate to permit the desired use of soil tests under the program, an alternative basis for determination by the county committee of such application shall be authorized to the extent necessary.</P>
                <P>(d) The following practices and uses are authorized:</P>
                <P>(1) Establishment of permanent sod waterways to dispose of excess water without causing erosion.</P>
                <P>(2) Establishment of a permanent vegetative cover for soil protection or as a needed land use adjustment.</P>
                <P>(3) Constructing terraces to detain or control the flow of water and check soil erosion.</P>
                <P>(4) Constructing diversion terraces, ditches, or dikes to intercept runoff and divert excess water to protected outlets.</P>
                <P>(5) Constructing erosion control, detention, or sediment retention dams, pits, or ponds to prevent or heal gullying or to retard or reduce runoff of water.</P>
                <P>(6) Constructing channel lining, chutes, drop spillways, pipe drops, drop inlets, or similar structures for the protection of outlets and water channels that dispose of excess water.</P>
                <P>(7) Streambank or shore protection, channel clearance, enlargement or realinement, or construction of floodways, levees, or dikes, to prevent erosion or flood damage to farmland.</P>
                <P>(8) Establishment of a stand of trees or shrubs to prevent erosion.</P>
                <P>(9) Establishment of a stand of forest trees or shrubs on farmland for purposes other than the prevention of erosion.</P>
                <P>(10) Improvement of a stand of forest trees.</P>
                <P>(11) Establishment of contour strip-cropping to protect soil from erosion.</P>
                <P>(12) Constructing or sealing dams, pits, or ponds as a means of protecting vegetative cover or to make practicable the utilization of the land for vegetative cover.</P>
                <P>(13) Developing springs or seeps for livestock water as a means of protecting vegetative cover or to make practicable the utilization of the land for vegetative cover.</P>
                <P>(14) Controlling competitive shrubs to permit growth of adequate desirable vegetative cover.</P>
                <P>(15) Improvement of an established vegetative cover for soil or watershed protection.</P>
                <P>(16) Treatment of farmland to permit the use of legumes and grasses for soil improvement and protection.</P>
                <P>(17) Construction of water facilities for wildlife habitat or protection.</P>
                <P>(18) Establishment of vegetative cover to provide habitat, food, or shelter for wildlife.</P>
                <P>(19) Conservation practices to develop recreation resources—establishment of picnic and sports area; establishment of camping and nature recreation areas; establishment of hunting and shooting preserve area; establishment of fishing area; establishment of summer water sports area; establishment of winter sports area.</P>
                <P>(20) Other practices not covered above which are determined to be needed to accomplish the purpose of the program.</P>
                <P>(e) The Soil Conservation Service shall have the same technical responsibility for Appalachian Land Stabilization and Conservation Program practices as it has for the same or similar Agricultural Conservation Program Practices including applicable components of approved recreation practices. The Forest Service is responsible for the technical phases of forestry practices.</P>

                <P>(f) Each proposed State program shall be submitted to the Commission by the member thereof representing such State. The estimated amount of funds needed to accomplish the objectives of such program shall be stated in the submission of the proposed program to the Commission. If approved by the Commission, the proposed State <PRTPAGE P="201"/>program shall be submitted to the Secretary by the Federal Cochairman. Responsibility is assigned to the Farmer Programs Division, FSA for review and recommendation for approval or disapproval by the Secretary.</P>
                <P>(g) Copies of bulletins setting forth the State program as approved by the Secretary shall be available in the office of the county committee.</P>
                <CITA>[30 FR 8669, July 9, 1965, as amended by Amdt. 2, 30 FR 14099, Nov. 9, 1965]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.6</SECTNO>
                <SUBJECT>Cost-share contract.</SUBJECT>
                <P>(a) <E T="03">Filing requests.</E> (1) Landowners, operators, or occupiers in eligible counties shall be furnished information with respect to the program and afforded an opportunity to request a cost-share contract covering those practices which would accomplish the objectives of the program on the farm.</P>
                <P>(2) The request shall be on a form and in accordance with instructions prescribed by the Administrator.</P>
                <P>(b) <E T="03">Entering into a contract.</E> (1) The county committee is authorized to approve the contract on behalf of the Secretary.</P>
                <P>(2) The contract must be signed by the owner of the land on which cost-share payments are provided under the contract and by the operator of the farm. The contract shall also be signed by any occupiers who will share in payments in one or more years of the contract period.</P>
                <P>(3) There shall be only one contract for a farm.</P>
                <P>(4) The final date for signing the contract shall be the date announced by the Administrator.</P>
                <P>(c) <E T="03">Contract period.</E> (1) The period to be covered by a contract shall be not less than 3 years or longer than 10 years as agreed to by the contract signers and the county committee.</P>
                <P>(2) The first year of the contract period shall begin on the date of the approval of the contract and shall end on December 31 of such year. Each subsequent year of the contract period shall be on a calendar year basis.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.7</SECTNO>
                <SUBJECT>Cost-share payments.</SUBJECT>
                <P>(a) Subject to the conditions and limitations in this subpart, cost-sharing may be authorized for practices needed during the period of the contract to conserve and develop soil, water, woodland, wildlife, and recreation resources. Payment of the cost-shares shall be made only upon application submitted on a form prescribed by the Administrator. Practices required to be established under the contract which are started after a request for a contract is filed shall be considered as started during the contract period.</P>
                <P>(b) Cost-share rates shall not exceed 80 per centum of the average cost of carrying out the land treatment measures or such lower rate as the county committee determines will accomplish the objectives of the program. As a further limitation, cost-sharing may not be authorized in excess of a total amount computed by multiplying the number of acres designated under contract times $50, unless a representative of the State committee approves an amount in excess of this limitation on the basis that the income potential and benefits derived from expenditures of the additional money warrant the higher limit.</P>
                <P>(c) Cost-sharing shall not be approved for more than 50 acres per farm.</P>
                <P>(d) The total acreage with respect to which any landowner, operator, or occupier receives cost-sharing payments shall not exceed 50 acres under all contracts in which he has an interest.</P>
                <P>(e) Cost-sharing for the practices or components thereof contained in the approved State program is conditioned upon the establishment, maintenance, and performance of the practices in accordance with all applicable specifications and program provisions. The county committee shall specify on the practice approval the date by which the practice must be completed. Subject to the availability of funds, cost-sharing may be authorized for the restoration or replacement of any needed conservation measure if during the contract period the original conservation use is destroyed or rendered unsuitable through no fault of the contract signers.</P>
                <P>(f) In addition to the provisions contained in this subpart, cost-sharing payments shall also be subject to the following regulations of the Agricultural Conservation Program (7 CFR 701.1-701.93, as amended):</P>
                <EXTRACT>
                  <PRTPAGE P="202"/>
                  <FP SOURCE="FP-1">Section 701.24 <E T="03">Failure to meet minimum requirements,</E>
                  </FP>
                  <FP SOURCE="FP-1">Section 701.25 <E T="03">Conservation materials and services,</E>
                  </FP>
                  <FP SOURCE="FP-1">Section 701.26 <E T="03">Practices carried out with aid for ineligible persons,</E>
                  </FP>
                  <FP SOURCE="FP-1">Section 701.27 <E T="03">Division of Federal cost-share,</E>
                  </FP>
                  <FP SOURCE="FP-1">Section 701.33 <E T="03">Compliance with regulatory measures,</E>
                  </FP>
                  <FP SOURCE="FP-1">Section 701.36 <E T="03">Depriving others of Federal cost-sharing,</E>
                  </FP>
                  <FP SOURCE="FP-1">Section 701.38 <E T="03">Misuse of purchase orders,</E>
                  </FP>
                  <FP SOURCE="FP-1">Section 701.39 <E T="03">Federal cost-shares not subject to claims,</E> and</FP>
                  <FP SOURCE="FP-1">Section 701.40 <E T="03">Assignments.</E>
                  </FP>
                </EXTRACT>
                <FP>The Agricultural Conservation Program regulations referred to above shall mean the Agricultural Conservation Program regulations applicable to the year in which the contract is approved.</FP>
                <P>(g) Cost-share payments shall not be made under the program with respect to land owned by the Federal Government, a State, or a political subdivision thereof.</P>
                <CITA>[30 FR 8669, July 9, 1965, as amended by Amdt. 1, 30 FR 9758, Aug. 5, 1965; Amdt. 4, 33 FR 16141, Nov. 5, 1968]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.8</SECTNO>
                <SUBJECT>Modification of contract.</SUBJECT>
                <P>(a) If the farm is reconstituted in accordance with the regulations governing Reconstitution of Farms, Allotments, and Bases, part 719 of this chapter, as amended, or if there is any change in the land covered by a contract entered into pursuant to § 755.20, because of purchase, sale, change of operation, or otherwise, the contract shall be modified. Such modified contract or contracts shall reflect the changes in the number of acres in any resulting farm, the acreage covered by the contract, interested persons, and practices called for under the original contract. If persons who were not signatories to the original contract are eligible and required to sign such modified contract or contracts but are not willing to become parties to the modified contract or for any other reason a modified contract is not entered into, cost-share payments for practices which have not been carried out shall be forfeited with respect to acreage not continued in the program. In addition, with respect to acreage not continued in the program, cost-share payments paid for practices (or components thereof) which have been carried out shall be refunded by the owner of such acreage prior to reconstitution unless the county committee with the approval of the State committee determines that the failure to carry out all of the practices called for by the original contract will not impair the practices which have been carried out and the completed practices will provide conservation benefits consistent with the cost-shares which have been paid. Notwithstanding the foregoing, if control of land was lost through eminent domain proceedings or to an agency having the right of eminent domain, any cost-share payments paid under the contract with respect to such land are not required to be refunded.</P>
                <P>(b) Except in cases covered by paragraph (a) of this section, if the ownership or operation of the farm or the land covered by the contract changes in such a manner that the contract no longer contains the signatures of persons required to sign the contract as provided in § 755.6, the contract shall be modified to reflect the new interested persons. If such persons are not willing to become parties to the modified contract, or for any other reason a modified contract is not entered into, cost-share payments shall be forfeited and refunded in accordance with the rules in paragraph (a) of this section.</P>
                <P>(c) Upon request of the contract signers and approval of the county committee, a contract may be modified to change or add practices, or to make other changes which are consistent with this subpart, the State program, and the conservation and development plan.</P>
                <P>(d) Upon request of the contract signers, a contract which would otherwise be in a noncompliance status at the end of the contract period under the provisions of § 755.10(a) of these regulations may be modified to extend the contract period not to exceed a total period of 10 years if the county committee determines that failure to establish the practices specified in the contract was not the result of the fault or negligence of the contract signers.</P>
                <CITA>[30 FR 8669, July 9, 1965, as amended by Amdt. 5, 35 FR 8442, May 29, 1970]</CITA>
              </SECTION>
              <SECTION>
                <PRTPAGE P="203"/>
                <SECTNO>§ 755.9</SECTNO>
                <SUBJECT>Termination of contracts.</SUBJECT>
                <P>The Deputy Administrator may consent to the termination of a contract in cases where the parties to the contract are unable to comply with the terms of the contract due to conditions beyond their control, in cases where compliance with the terms of the contract would work a severe hardship on the parties to the contract, or in cases where termination of the contract would be in the public interest, provided the parties to the contract refund such part of the cost-share payments made under the contract as the Deputy Administrator determines appropriate.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.10</SECTNO>
                <SUBJECT>Noncompliance.</SUBJECT>
                <P>(a) Failure to establish the practices specified in the contract within the time specified by the county committee shall be a violation of the contract and all payments under the contract shall be forfeited and refunded.</P>
                <P>(b) Failure to maintain a practice for the contract period or the normal lifespan of the practice, whichever is shorter, in accordance with good farming practices shall be a violation of the contract and any payment made in connection with such practice shall be refunded unless the practice is restored within the time prescribed by the county committee. The normal -lifespan of a practice shall be determined by the county committee.</P>
                <P>(c) If the county committee finds that any person has adopted or participated in any practice which tends to defeat the purposes of the program, it may withhold, or require to be refunded, all or any part of cost-share payments paid or payable under the program. It shall be considered a practice defeating the purposes of the program if the contract signers do not make available for public use a recreation resource development for which costs are shared. The regulations governing nondiscrimination in federally assisted programs of the Department of Agriculture, part 15 of this title, shall be applicable to this program.</P>
                <CITA>[30 FR 8669, July 9, 1965, as amended by Amdt. 3, 32 FR 12938, Sept. 12, 1967]</CITA>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.11</SECTNO>
                <SUBJECT>Signatures.</SUBJECT>
                <P>Signatures to contracts and related forms shall be in conformity with the instructions on signatures and authorizations applicable to the Agricultural Conservation Program.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.12</SECTNO>
                <SUBJECT>Filing of false claims.</SUBJECT>
                <P>The making of a fraudulent representation by a person in the payment documents or otherwise for the purpose of obtaining a payment from the county committee shall render the person liable, aside from any additional liability under criminal and civil frauds statutes, for a refund of the payments received by him with respect to which the fraudulent representation was made.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.13</SECTNO>
                <SUBJECT>Delegation of authority.</SUBJECT>
                <P>No delegation in this subpart to a State or county committee shall preclude the Administrator, or his designee, from determining any question arising under the program or reversing or modifying any determinations made by a State or county committee.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.14</SECTNO>
                <SUBJECT>Reporting performance.</SUBJECT>
                <P>The Operator of the farm, in accordance with instructions issued by the Deputy Administrator, shall report to the county committee on Form ACP-245 the extent of compliance with the terms of the contract.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.15</SECTNO>
                <SUBJECT>Handling exceptional cases.</SUBJECT>

                <P>The Deputy Administrator may allow payment for performance not meeting all program requirements, where not prohibited by statute, if in his judgment such action is needed to permit a proper disposition of the case. Such action may be taken only where the person acted in good faith and in reasonable reliance on any instruction or commitment of any member, or employee of the State or county committee or representatives of other Federal agencies assigned responsibility under the program, in meeting his obligations under the contract and in so doing reasonably accomplished the purposes of the contract. The amount of the payment shall be based on the actual performance and shall not exceed the amount to which the person <PRTPAGE P="204"/>would have been entitled if the performance rendered had met all requirements.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.16</SECTNO>
                <SUBJECT>Access to farms and to farm rec-ords.</SUBJECT>
                <P>County committeemen or their authorized representatives, or any authorized representative of the Secretary of Agriculture, shall have such access to farms and to records pertaining thereto as is necessary to make acreage determinations and to determine the extent of compliance with the terms of the contract.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.17</SECTNO>
                <SUBJECT>Preservation of cropland, crop acreage and allotment history.</SUBJECT>
                <P>The cropland, crop acreage, and allotment history applicable to the designated acreage shall be preserved, for any Federal program under which such history is used as a basis for an allotment or other limitation on the production of such crop, for the period covered by the contract and an equal period thereafter so long as the approved practice is maintained on the land.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.18</SECTNO>
                <SUBJECT>Appeals.</SUBJECT>
                <P>Any person may obtain reconsideration and review of determinations made under this subpart in accordance with the Appeal Regulations, part 780 of this chapter (29 FR 8200), as amended.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.19</SECTNO>
                <SUBJECT>Availability of funds.</SUBJECT>
                <P>The provisions of this program are necessarily subject to such legislation as the Congress of the United States may hereafter enact; the payments provided for in this subpart are contingent upon such appropriations as the Congress has or may hereafter provide for such purpose, and the amount of such payments must necessarily be within the limits finally determined by such appropriations.</P>
              </SECTION>
              <SECTION>
                <SECTNO>§ 755.20</SECTNO>
                <SUBJECT>Rural community development projects.</SUBJECT>
                <P>(a) Notwithstanding any other provision of this subpart, the county committee, in accordance with instructions issued by the Deputy Administrator, may enter into a contract with a State, county, city, town, or subdivision thereof, or a group acting for such a body, which owns, operates, or occupies land in the Appalachian Region. The contracts approved under this section shall be for projects which promote rural community development and conservation of the soil and water resources of the region.</P>
                <P>(b) Cost-sharing approved under this section shall not exceed 80 per centum of the cost of carrying out the approved land uses and conservation treatment on 50 acres of land occupied by such owner, operator, or occupier.</P>
                <CITA>[35 FR 8442, May 29, 1970]</CITA>
              </SECTION>
            </SUBPART>
          </PART>
          <PART>
            <EAR>Pt. 760</EAR>
            <HD SOURCE="HED">PART 760—INDEMNITY PAYMENT PROGRAMS</HD>
            <CONTENTS>
              <SUBPART>
                <HD SOURCE="HED">Subpart—Dairy Indemnity Payment Program</HD>
                <SUBJGRP>
                  <HD SOURCE="HED">Program Operations</HD>
                  <SECHD>Sec.</SECHD>
                  <SECTNO>760.1</SECTNO>
                  <SUBJECT>Administration.</SUBJECT>
                  <SECTNO>760.2</SECTNO>
                  <SUBJECT>Definitions.</SUBJECT>
                </SUBJGRP>
                <SUBJGRP>
                  <HD SOURCE="HED">Payments to Dairy Farmers for Milk</HD>
                  <SECTNO>760.3</SECTNO>
                  <SUBJECT>Indemnity payments on milk.</SUBJECT>
                  <SECTNO>760.4</SECTNO>
                  <SUBJECT>Normal marketings of milk.</SUBJECT>
                  <SECTNO>760.5</SECTNO>
                  <SUBJECT>Fair market value of milk.</SUBJECT>
                  <SECTNO>760.6</SECTNO>
                  <SUBJECT>Information to be furnished.</SUBJECT>
                  <SECTNO>760.7</SECTNO>
                  <SUBJECT>Other requirements for affected farmers.</SUBJECT>
                  <SECTNO>760.8</SECTNO>
                  <SUBJECT>Application for payments for milk.</SUBJECT>
                  <SECTNO>760.9</SECTNO>
                  <SUBJECT>Other legal recourse.</SUBJECT>
                </SUBJGRP>
                <SUBJGRP>
                  <HD SOURCE="HED">Payments to Manufacturers Affected by Pesticides</HD>
                  <SECTNO>760.20</SECTNO>
                  <SUBJECT>Payments to manufacturers of dairy products.</SUBJECT>
                  <SECTNO>760.21</SECTNO>
                  <SUBJECT>Application for payments by manufacturers.</SUBJECT>
                  <SECTNO>760.22</SECTNO>
                  <SUBJECT>Information to be furnished by manufacturer.</SUBJECT>
                  <SECTNO>760.23</SECTNO>
                  <SUBJECT>Other requirements for manufacturers.</SUBJECT>
                </SUBJGRP>
                <SUBJGRP>
                  <HD SOURCE="HED">General Provisions</HD>
                  <SECTNO>760.24</SECTNO>
                  <SUBJECT>Limitation of authority.</SUBJECT>
                  <SECTNO>760.25</SECTNO>
                  <SUBJECT>Estates and trusts; minors.</SUBJECT>
                  <SECTNO>760.26</SECTNO>
                  <SUBJECT>Appeals.</SUBJECT>
                  <SECTNO>760.27</SECTNO>
                  <SUBJECT>Setoffs.</SUBJECT>
                  <SECTNO>760.28</SECTNO>
                  <SUBJECT>Overdisbursement.</SUBJECT>
                  <SECTNO>760.29</SECTNO>
                  <SUBJECT>Death, incompetency, or disappearance.</SUBJECT>
                  <SECTNO>760.30</SECTNO>
                  <SUBJECT>Records and inspection thereof.</SUBJECT>
                  <SECTNO>760.31</SECTNO>
                  <SUBJECT>Assignment.</SUBJECT>
                  <SECTNO>760.32</SECTNO>
                  <SUBJECT>Instructions and forms.</SUBJECT>
                  <SECTNO>760.33</SECTNO>
                  <SUBJECT>Availability of funds.</SUBJECT>
                  <SECTNO>760.34</SECTNO>
                  <SUBJECT>Paperwork Reduction Act assigned numbers.</SUBJECT>
                </SUBJGRP>
              </SUBPART>
              <SUBPART>
                <PRTPAGE P="205"/>
                <RESERVED>Subpart—Beekeeper Indemnity Payment Program (1978-80) [Reserved]</RESERVED>
              </SUBPART>
            </CONTENTS>
            <SUBPART>
              <HD SOURCE="HED">Subpart—Dairy Indemnity Payment Program</HD>
              <AUTH>
                <HD SOURCE="HED">Authority:</HD>
                <P>Pub. L. 106-387, 114 Stat. 1549, and Pub. L. 107-76, 115 Stat. 704.</P>
              </AUTH>
              <SOURCE>
                <HD SOURCE="HED">Source:</HD>
                <P>43 FR 10535, Mar. 14, 1978, unless otherwise noted.</P>
              </SOURCE>
              <SUBJGRP>
                <HD SOURCE="HED">Program Operations</HD>
                <SECTION>
                  <SECTNO>§ 760.1</SECTNO>
                  <SUBJECT>Administration.</SUBJECT>
                  <P>This indemnity payment program will be carried out by FSA under the direction and supervision of the Deputy Administrator. In the field, the program will be administered by the State and county committees.</P>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.2</SECTNO>
                  <SUBJECT>Definitions.</SUBJECT>
                  <P>For purposes of this subject, the following terms shall have the meanings specified:</P>
                  <P>(a) <E T="03">Secretary</E> means the Secretary of Agriculture of the United States or any officer or employee of the U.S. Department of Agriculture to whom he has delegated, or to whom he may hereafter delegate, authority to act in his stead.</P>
                  <P>(b) <E T="03">FSA</E> means the Farm Service Agency, U.S. Department of Agriculture.</P>
                  <P>(c) <E T="03">Deputy Administrator</E> means the Deputy Administrator, State and County Operations, FSA.</P>
                  <P>(d) <E T="03">State committee</E> means the Agricultural Stabilization and Conservation State committee.</P>
                  <P>(e) <E T="03">County committee</E> means the Agricultural Stabilization and Conservation county committee.</P>
                  <P>(f) <E T="03">Pesticide</E> means an economic poison which was registered pursuant to the provisions of the Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. 135 through 135k), and approved for use by the Federal Government.</P>
                  <P>(g) <E T="03">Chemicals or Toxic Substances</E> means any chemical substance or mixture as defined in the Toxic Substances Control Act (15 U.S.C. 2602).</P>
                  <P>(h) <E T="03">Nuclear Radiation or Fallout</E> means contamination from nuclear radiation or fallout from any source.</P>
                  <P>(i) <E T="03">Violating Substance</E> means one or more of the items defined in paragraphs (f), (g), and (h) of this section.</P>
                  <P>(j) <E T="03">Public agency</E> means any Federal, State or local public regulatory agency.</P>
                  <P>(k) <E T="03">Affected farmer</E> means a person who produces whole milk which is removed from the commerical market any time from:</P>
                  <P>(1) Pursuant to the direction of a public agency because of the detection of pesticide residues in such whole milk by tests made by a public agency or under a testing program deemed adequate for the purpose by a public agency, or</P>
                  <P>(2) Pursuant to the direction of a public agency because of the detection of other residues of chemicals or toxic substances residues, or contamination from nuclear radiation or fallout in such whole milk by tests made by a public agency or under a testing program deemed adequate for the purpose by a public agency.</P>
                  <P>(l) <E T="03">Affected manufacturer</E> means a person who manufactures dairy products which are removed from the commercial market pursuant to the direction of a public agency because of the detection of pesticide residue in such dairy products by tests made by a public agency or under a testing program deemed adequate for the purpose by a public agency.</P>
                  <P>(m) <E T="03">Milk handler</E> means the marketing agency to or through which the affected dairy farmer marketed his whole milk at the time he was directed by the public agency to remove his whole milk from the commercial market.</P>
                  <P>(n) <E T="03">Person</E> means an individual, partnership, association, corporation, trust, estate, or other legal entity.</P>
                  <P>(o) <E T="03">Application period</E> means any period during which an affected farmer's whole milk is removed from the commercial market pursuant to direction of a public agency for a reason specified in paragraph (k) of this section and for which application for payment is made.</P>
                  <P>(p) <E T="03">Pay period</E> means (1) in the case of an affected farmer who markets his whole milk through a milk handler, the period used by the milk handler in settling with the affected farmer for <PRTPAGE P="206"/>his whole milk, usually biweekly or monthly, or (2) in the case of an affected farmer whose commercial market consists of direct retail sales to consumers, a calendar month.</P>
                  <P>(q) <E T="03">Whole milk</E> means milk as it is produced by cows.</P>
                  <P>(r) <E T="03">Commercial market</E> means (1) the market to which the affected farmer normally delivers his whole milk and from which it was removed because of detection therein of a residue of a violating substance(s) or (2) the market to which the affected manufacturer normally delivers his dairy products and from which they were removed because of detection therein of pesticide residue.</P>
                  <P>(s) <E T="03">Removed from the commercial market</E> means (1) produced and destroyed or fed to livestock, (2) produced and delivered to a handler who destroyed it or disposed of it as salvage (such as separating whole milk, destroying the fat, and drying the skim milk), or (3) produced and otherwise diverted to other than the commercial market.</P>
                  <P>(t) <E T="03">Payment subject to refund</E> means a payment which is made by a milk handler to an affected farmer, and which such farmer is obligated to refund to the milk handler.</P>
                  <P>(u) <E T="03">Base period</E> means the calendar month or 4-week period immediately preceding removal of milk from the market.</P>
                  <CITA>[43 FR 10535, Mar. 14, 1978, as amended by Amdt. 1, 44 FR 36360, July 22, 1979; 52 FR 17935, May 13, 1987; 53 FR 44001, Nov. 1, 1988; 56 FR 1358, Jan. 14, 1991; 61 FR 18485, Apr. 26, 1996]</CITA>
                </SECTION>
              </SUBJGRP>
              <SUBJGRP>
                <HD SOURCE="HED">Payments to Dairy Farmers for Milk</HD>
                <SECTION>
                  <SECTNO>§ 760.3</SECTNO>
                  <SUBJECT>Indemnity payments on milk.</SUBJECT>
                  <P>An indemnity payment for milk may be made to an affected farmer who is determined by the county committee to be in compliance with all the terms and conditions of this subpart in the amount of the fair market value of his normal marketings for the application period, as determined in accordance with §§ 760.4 and 760.5, less (a) any amount he received for whole milk marketed during the applications period, and (b) any payment not subject to refund which he received from a milk handler with respect to whole milk removed from the commercial market during the application period.</P>
                  <CITA>[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]</CITA>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.4</SECTNO>
                  <SUBJECT>Normal marketings of milk.</SUBJECT>
                  <P>(a) The county committee shall determine the affected farmer's normal marketings which, for the purposes of this subpart, shall be the sum of the quantities of whole milk which such farmer would have sold in the commercial market in each of the pay periods in the application period but for the removal of his whole milk from the commercial market because of the detection of a residue of a violating substance.</P>
                  <P>(b) Normal marketings for each pay period are based on the average daily production during the base period.</P>
                  <P>(c) Normal marketings determined in paragraph (b) of this section are adjusted for any change in the daily average number of cows milked during each pay period the milk is off the market compared with the average number of cows milked daily during the base period.</P>
                  <P>(d) If only a portion of a pay period falls within the application period, normal marketings for such pay period shall be reduced so that they represent only that part of such pay period which is within the application period.</P>
                  <CITA>[43 FR 10535, Mar. 14, 1978, as amended by Amdt. 1, 44 FR 36360, July 22, 1979]</CITA>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.5</SECTNO>
                  <SUBJECT>Fair market value of milk.</SUBJECT>
                  <P>(a) The county committee shall determine the fair market value of the affected farmer's normal marketings, which, for the purposes of this subpart, shall be the sum of the net proceeds such farmer would have received for his normal marketings in each of the pay periods in the application period.</P>

                  <P>(b) The county committee shall determine the net proceeds the affected farmer would have received in each of the pay periods in the application period (1) in the case of an affected farmer who markets his whole milk through a milk handler, by multiplying the affected farmer's normal marketings for each such pay period by the average net price per hundred-weight of whole milk paid during the pay period by <PRTPAGE P="207"/>such farmer's milk handler in the same area for whole milk similar in quality and butterfat test to that marketed by the affected farmer in the base period used to determine his normal marketings, or (2) in the case of an affected farmer whose commercial market consists of direct retail sales to consumers, by multiplying the affected farmer's normal marketings for each such pay period by the average net price per hundredweight of whole milk, as determined by the county committee, which other producers in the same area who marketed their whole milk through milk handlers received for whole milk similar in quality and butterfat test to that marketed by the affected farmer during the base period used to determine his normal marketings.</P>
                  <P>(c) In determining the net price for whole milk, the county committee shall deduct from the gross price therefor any transportation, administrative, and other costs of marketing which it determines are normally incurred by the affected farmer but which were not incurred because of the removal of his whole milk from the commercial market.</P>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.6</SECTNO>
                  <SUBJECT>Information to be furnished.</SUBJECT>
                  <P>The affected farmer shall furnish to the county committee complete and accurate information sufficient to enable the county committee or the Deputy Administrator to make the determinations required in this subpart. Such information shall include, but is not limited to:</P>
                  <P>(a) A copy of the notice from, or other evidence of action by, the public agency which resulted in the removal of the affected farmer's whole milk from the commercial market.</P>
                  <P>(b) The specific name of the violating substance causing the removal of his whole milk from the commercial market, if not included in the notice or other evidence of action furnished under paragraph (a) of this section.</P>
                  <P>(c) The quantity and butterfat test of whole milk produced and marketed during the base period. This information must be a certified statement from the affected farmer's milk handler or any other evidence the county committee accepts as an accurate record of milk production and butterfat tests during the base period.</P>
                  <P>(d) The average number of cows milked during the base period and during each pay period in the application.</P>
                  <P>(e) If the affected farmer markets his whole milk through a milk handler, a statement from the milk handler showing, for each pay period in the application period, the average price per hundred-weight of whole milk similar in quality to that marketed by the affected farmer during the base period used to determine his normal marketings. If the milk handler has information as to the transportation, administrative, and other costs of marketing which are normally incurred by producers who market through the milk handler but which the affected farmer did not incur because of removal of his whole milk from the market, the average price stated by the milk handler shall be the average gross price paid producers less any such costs. If the milk handler does not have such information, the affected farmer shall furnish a statement setting forth such costs, if any.</P>
                  <P>(f) The amount of proceeds, if any, received by the affected farmer from the marketing of whole milk produced during the application period.</P>
                  <P>(g) The amount of any payments not subject to refund made to the affected farmer by the milk handler with respect to the whole milk produced during the application period and remove from the commercial market.</P>
                  <P>(h) To the extent that such information is available to the affected farmer, the name of any pesticide, chemical, or toxic substance used on the farm within 24 months prior to the application period, the use made of the pesticide, chemical, or toxic substance, the approximate date of such use, and the name of the manufacturer and the registration number, if any, on the label on the container of the pesticide, chemical, or toxic substance.</P>

                  <P>(i) To the extent possible, the source of the pesticide, chemical, or toxic substance that caused the contamination of the whole milk, and the results of any laboratory tests on the feed supply.<PRTPAGE P="208"/>
                  </P>
                  <P>(j) Such other information as the county committee may request to enable the county committee or the Deputy Administrator to make the determinations required in this subpart.</P>
                  <CITA>[43 FR 10535, Mar. 14, 1978, as amended by Amdt. 1, 44 FR 36360, June 22, 1979]</CITA>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.7</SECTNO>
                  <SUBJECT>Other requirements for affected farmers.</SUBJECT>
                  <P>An indemnity payment for milk may be made under this subpart to an affected farmer only under the following conditions:</P>
                  <P>(a) If the pesticide, chemical, or toxic substance, contaminating the milk was used by the affected farmer, he established each of the following:</P>
                  <P>(1) That the pesticide, chemical or toxic substance, when used, was registered (if applicable) and approved for use as provided in § 760.2(f);</P>
                  <P>(2) That the contamination of his milk was not the result of his failure to use the pesticide, chemical, or toxic substance, according to the directions and limitations stated on the label;</P>
                  <P>(3) That the contamination of his milk was not otherwise his fault.</P>
                  <P>(b) If the pesticide, chemical, or toxic substance contaminating the milk was not used by the affected farmer, he establishes each of the following:</P>
                  <P>(1) He did not know or have reason to believe that any feed which he purchased and which contaminated his milk contained a harmful residue of a pesticide, a chemical, or a toxic substance or was contaminated by nuclear radiation or fallout.</P>
                  <P>(2) None of the milk was produced by dairy cattle which he knew, or had reason to know at the time he acquired them, were contaminated with residues of pesticides, chemicals or toxic substances, or by nuclear radiation or fallout.</P>
                  <P>(3) The contamination of his milk was not otherwise his fault.</P>
                  <P>(c) The affected farmer has adopted recommended practices for eliminating residues of pesticides, chemicals, or toxic substances or contamination from nuclear radiation or fallout from his milk as soon as practicable following the discovery of the initial contamination.</P>
                  <CITA>[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]</CITA>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.8</SECTNO>
                  <SUBJECT>Application for payments for milk.</SUBJECT>
                  <P>The affected farmer or his legal representative, as provided in §§ 760.25 and 760.29, must sign and file an application for payment on a form which is approved for that purpose by the Deputy Administrator. The form must be filed with the county FSA office for the county where the farm headquarters are located no later than December 31 following the end of the fiscal year in which the loss occurred, or such later date as the Deputy Administrator may specify. The application for payment shall cover application periods of at least 28 days, except that, if the entire application period, or the last application period, is shorter than 28 days, applications for payment may be filed for such shorter period. The application for payment shall be accompanied by the information required by § 760.6 as well as any other information which will enable the county committee to determine whether the making of an indemnity payment is precluded for any of the reasons set forth in § 760.7. Such information shall be submitted on forms approved for the purpose by the Deputy Administrator.</P>
                  <CITA>[43 FR 10535, Mar. 14, 1978, as amended at 51 FR 12986, Apr. 17, 1986; 52 FR 17935, May 13, 1987]</CITA>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.9</SECTNO>
                  <SUBJECT>Other legal recourse.</SUBJECT>
                  <P>(a) No indemnity payment shall be made for contaminated milk resulting from residues of chemicals or toxic substances if, within 30 days after receiving a complete application, the Deputy Administrator determines that other legal recouse is available to the farmer. An application shall not be deemed complete unless it contains all information necessary to make a determination as to whether other legal recourse is available to the farmer. However, notwithstanding such a determination, the Deputy Administrator may reopen the case at a later date and make a new determination on the merits of the case as may be just and equitable.</P>

                  <P>(b) In the event that a farmer receives an indemnity payment under this subpart, and such farmer is later compensated for the same loss by the <PRTPAGE P="209"/>person (or the representative or successor in interest of such person) responsible for such loss, the indemnity payment shall be refunded by the farmer to the Department of Agriculture: <E T="03">Provided,</E> That the amount of such refund shall not exceed the amount of other compensation received by the farmer.</P>
                  <CITA>[Amdt. 1, 44 FR 36361, June 22, 1979]</CITA>
                </SECTION>
              </SUBJGRP>
              <SUBJGRP>
                <HD SOURCE="HED">Payments to Manufacturers Affected by Pesticides</HD>
                <SECTION>
                  <SECTNO>§ 760.20</SECTNO>
                  <SUBJECT>Payments to manufacturers of dairy products.</SUBJECT>
                  <P>An indemnity payment may be made to the affected manufacturer who is determined by the Deputy Administrator to be in compliance with all the terms and conditions of this subpart in the amount of the fair market value of the product removed from the commercial market because of pesticide residues, less any amount the manufacturer receives for the product in the form of salvage.</P>
                  <NOTE>
                    <HD SOURCE="HED">Note:</HD>
                    <P>Manufacturers are not eligible for payment when dairy products are contaminated by chemicals, toxic substances (other than pesticides) or nuclear radiation or fallout.</P>
                  </NOTE>
                  <CITA>[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]</CITA>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.21</SECTNO>
                  <SUBJECT>Application for payments by manufacturers.</SUBJECT>
                  <P>The affected manufacturer, or his legal representatives, shall file an application for payment with the Deputy Administrator, FSA, Washington, D.C., through the county office serving the county where the contaminated product is located. The application for payment may be in the form of a letter or memorandum. Such letter or memorandum, however, must be accompanied by acceptable documentation to support such application for payment.</P>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.22</SECTNO>
                  <SUBJECT>Information to be furnished by manufacturer.</SUBJECT>
                  <P>The affected manufacturer shall furnish the Deputy Administrator, through the county committee, complete and accurate information sufficient to enable him to make the determination as to the manufacturer's eligibility to receive an indemnity payment. Such information shall include, but is not limited to:</P>
                  <P>(a) A copy of the notice or other evidence of action by the public agency which resulted in the product being removed from the commerical market.</P>
                  <P>(b) The name of the pesticide causing the removal of the product from the commerical market and, to the extent possible, the source of the pesticide.</P>
                  <P>(c) A record of the quantity of milk or butterfat used to produce the product for which an indemnity payment is requested.</P>
                  <P>(d) The identity of any pesticide used by the affected manufacturer.</P>
                  <P>(e) Such other information as the Deputy Administrator may request to enable him to make the determinations required in this subpart.</P>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.23</SECTNO>
                  <SUBJECT>Other requirements for manufacturers.</SUBJECT>
                  <P>An indemnity payment may be made under this subpart to an affected manufacturer only under the following conditions:</P>
                  <P>(a) If the pesticide contaminating the product was used by the affected manufacturer, he establishes each of the following: (1) That the pesticide, when used, was registered and recommended for such use as provided in § 760.2(f); (2) that the contamination of his product was not the result of his failure to use the pesticide in accordance with the directions and limitations stated on the label of the pesticide; and (3) that the contamination of his product was not otherwise his fault.</P>
                  <P>(b) If the pesticide contaminating the product was not used by the affected manufacturer: (1) He did not know or have reason to believe that the milk from which the product was processed contained a harmful level of pesticide residue, and (2) the contamination of his product was not otherwise his fault.</P>

                  <P>(c) In the event that a manufacturer receives an indemnity payment under this subpart, and such manufacturer is later compensated for the same loss by the person (or the representative or successor in interest of such person) responsible for such loss, the indemnity payment shall be refunded by the manufacturer to the Department of Agriculture: <E T="03">Provided,</E> That the amount of such refund shall not exceed the <PRTPAGE P="210"/>amount of other compensation received by the manufacturer.</P>
                  <CITA>[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982; 51 FR 12987, Apr. 17, 1986; 52 FR 17935, May 13, 1987]</CITA>
                </SECTION>
              </SUBJGRP>
              <SUBJGRP>
                <HD SOURCE="HED">General Provisions</HD>
                <SECTION>
                  <SECTNO>§ 760.24</SECTNO>
                  <SUBJECT>Limitation of authority.</SUBJECT>
                  <P>(a) County executive directors and State and county committees do not have authority to modify or waive any of the provisions of the regulations in this subpart.</P>
                  <P>(b) The State committee may take any action authorized or required by the regulations in this subpart to be taken by the county committee when such action has not been taken by the county committee. The State committee may also:</P>
                  <P>(1) Correct, or require a county committee to correct, any action taken by such county committee which is not in accordance with the regulations in this subpart, or (2) require a county committee to withhold taking any action which is not in accordance with the regulations in this subpart.</P>
                  <P>(c) No delegation herein to a State or county committee shall preclude the Deputy Administrator or his designee from determining any question arising under the regulations in this subpart or from reversing or modifying any determination made by a State or county committee.</P>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.25</SECTNO>
                  <SUBJECT>Estates and trusts; minors.</SUBJECT>
                  <P>(a) A receiver of an insolvent debtor's estate and the trustee of a trust estate shall, for the purpose of this subpart, be considered to represent an insolvent affected farmer or manufacturer and the beneficiaries of a trust, respectively, and the production of the receiver or trustee shall be considered to be the production of the person or manufacturer he represents. Program documents executed by any such person will be accepted only if they are legally valid and such person has the authority to sign the applicable documents.</P>
                  <P>(b) An affected dairy farmer or manufacturer who is a minor shall be eligible for indemnity payments only if he meets one of the following requirements:</P>
                  <P>(1) The right of majority has been conferred on him by court proceedings or by statute; (2) a guardian has been appointed to manage his property and the applicable program documents are signed by the guardian; or (3) a bond is furnished under which the surety guarantees any loss incurred for which the minor would be liable had he been an adult.</P>
                  <P>(2) [Reserved]</P>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.26</SECTNO>
                  <SUBJECT>Appeals.</SUBJECT>
                  <P>The appeal regulations issued by the Administrator, FSA, part 780 of this chapter, shall be applicable to appeals by dairy farmers or manufacturers from determinations made pursuant to the regulations in this subpart.</P>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.27</SECTNO>
                  <SUBJECT>Setoffs.</SUBJECT>
                  <P>(a) If the affected farmer or manufacturer is indebted to any agency of the United States and such indebtedness is listed on the county debt record, indemnity payments due the affected farmer or manufacturer under the regulations in this part shall be applied, as provided in the Secretary's setoff regulations, part 13 of this title, to such indebtedness.</P>
                  <P>(b) Compliance with the provisions of this section shall not deprive the affected farmer or manufacturer of any right he would otherwise have to contest the justness of the indebtedness involved in the setoff action, either by administrative appeal or by legal action.</P>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.28</SECTNO>
                  <SUBJECT>Overdisbursement.</SUBJECT>
                  <P>If the indemnity payment disbursed to an affected farmer or to a manufacturer exceeds the amount authorized under the regulations in this subpart, the affected farmer or manufacturer shall be personally liable for repayment of the amount of such excess.</P>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.29</SECTNO>
                  <SUBJECT>Death, incompetency, or disappearance.</SUBJECT>

                  <P>In the case of the death, incompetency, or disappearance of any affected farmer or manufacturer who would otherwise receive an indemnity payment, such payment may be made to the person or persons specified in the regulations contained in part 707 of this chapter. The person requesting <PRTPAGE P="211"/>such payment shall file Form FSA-325, “Application for Payment of Amounts Due Persons Who Have Died, Disappeared, or Have Been Declared Incompetent,” as provided in that part.</P>
                  <CITA>[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]</CITA>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.30</SECTNO>
                  <SUBJECT>Records and inspection thereof.</SUBJECT>
                  <P>(a) The affected farmer, as well as his milk handler and any other person who furnished information to such farmer or to the county committee for the purpose of enabling such farmer to receive a milk indemnity payment under this subpart, shall maintain any existing books, records, and accounts supporting any information so furnished for 3 years following the end of the year during which the application for payment was filed. The affected farmer, his milk handler, and any other person who furnishes such information to the affected farmer or to the county committee shall permit authorized representatives of the Department of Agriculture and the General Accounting Office, during regular business hours, to inspect, examine, and make copies of such books, rec-ords, and accounts.</P>
                  <P>(b) The affected manufacturer or any other person who furnishes information to the Deputy Administrator for the purposes of enabling such manufacturer to receive an indemnity payment under this subpart shall maintain any books, records, and accounts supporting any information so furnished for 3 years following the end of the year during which the application for payment was filed. The affected manufacturer or any other person who furnishes such information to the Deputy Administrator shall permit authorized representatives of the Department of Agriculture and the General Accounting Office, during regular business hours, to inspect, examine, and make copies of such books, records, and accounts.</P>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.31</SECTNO>
                  <SUBJECT>Assignment.</SUBJECT>
                  <P>No assignment shall be made of any indemnity payment due or to come due under the regulations in this subpart. Any assignment or attempted assignment of any indemnity payment due or to come due under this subpart shall be null and void.</P>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.32</SECTNO>
                  <SUBJECT>Instructions and forms.</SUBJECT>
                  <P>The Deputy Administrator shall cause to be prepared such forms and instructions as are necessary for carrying out the regulations in this subpart. Affected farmers and manufacturers may obtain information necessary to make application for a dairy indemnity payment from the county FSA office. Form FSA-373—Application for Indemnity Payment, is available at the county ASC office.</P>
                  <CITA>[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]</CITA>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.33</SECTNO>
                  <SUBJECT>Availability of funds.</SUBJECT>
                  <P>Payment of indemnity claims will be contingent upon the availability of funds to the Department to pay such claims. With respect to claims filed after October 1, 1982, if the Department determines that the amount of claims to be filed under the program will exceed the funds available to the Department, to pay such claims payments will be made so that each eligible claimant will receive a pro rata share of the remaining funds available to the Department to pay dairy indemnity claims.</P>
                  <APPRO>(Approved by the Office of Management and Budget under control number 0560-0045)</APPRO>
                  <CITA>[48 FR 40367, Sept. 7, 1983 and 49 FR 8906, Mar. 9, 1984]</CITA>
                </SECTION>
                <SECTION>
                  <SECTNO>§ 760.34</SECTNO>
                  <SUBJECT>Paperwork Reduction Act assigned numbers.</SUBJECT>
                  <P>The information collection requirements contained in these regulations (7 CFR part 760) have been approved by the Office of Management and Budget (OMB) under the provisions of 44 U.S.C. Chapter 35 and have been assigned OMB control number 0560-0045.</P>
                  <CITA>[49 FR 29564, July 23, 1984]</CITA>
                </SECTION>
              </SUBJGRP>
            </SUBPART>
            <SUBPART>
              <RESERVED>Subpart—Beekeeper Indemnity Payment Program (1978-80) [Reserved]</RESERVED>
            </SUBPART>
          </PART>
          <PART>
            <PRTPAGE P="212"/>
            <EAR>Pt. 761</EAR>
            <HD SOURCE="HED">PART 761—GENERAL AND ADMINISTRATIVE</HD>
            <CONTENTS>
              <SUBPART>
                <HD SOURCE="HED">Subpart A—General Provisions</HD>
                <SECHD>Sec.</SECHD>
                <SECTNO>761.1-761.6</SECTNO>
                <SUBJECT>[Reserved]</SUBJECT>
                <SECTNO>761.7</SECTNO>
                <SUBJECT>Appraisals.</SUBJECT>
                <SECTNO>761.8</SECTNO>
                <SUBJECT>Loan limitations.</SUBJECT>
              </SUBPART>
            </CONTENTS>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>5 U.S.C. 301, 7 U.S.C. 1989.</P>
            </AUTH>
            <SOURCE>
              <HD SOURCE="HED">Source:</HD>
              <P>64 FR 62567, Nov. 17, 1999, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>§§ 761.1-761.6</SECTNO>
              <RESERVED>[Reserved]</RESERVED>
            </SECTION>
            <SECTION>
              <SECTNO>§ 761.7</SECTNO>
              <SUBJECT>Appraisals.</SUBJECT>
              <P>(a) <E T="03">General.</E> This section describes requirements for:</P>
              <P>(1) Real estate and chattel appraisals made in connection with the making and servicing of direct Farm Loan Program and nonprogram loans; and,</P>
              <P>(2) Appraisal reviews conducted on appraisals made in connection with the making and servicing of direct and guaranteed Farm Loan Program and nonprogram loans.</P>
              <P>(b) <E T="03">Definitions.</E>
              </P>
              <P>
                <E T="03">Administrative appraisal review</E> means a review of an appraisal to determine if the appraisal:</P>
              <P>(1) Meets applicable Agency requirements; and</P>
              <P>(2) Is accurate outside the requirements of standard 3 of USPAP.</P>
              <P>
                <E T="03">Agency</E> means the Farm Service Agency, including its employees and state and area committee members, and any successor agency.</P>
              <P>
                <E T="03">Farm Loan Programs (FLP) loans</E> refers to Farm Ownership (FO), Soil and Water (SW), Recreation (RL), Economic Opportunity (EO), Operating (OL), Emergency (EM), Economic Emergency (EE), Softwood Timber (ST), and Rural Housing loans for farm service buildings (RHF).</P>
              <P>
                <E T="03">Technical appraisal review</E> means a review of an appraisal to determine if such appraisal meets the requirements of USPAP pursuant to standard 3 of USPAP.</P>
              <P>
                <E T="03">USPAP (Uniform Standards of Professional Appraisal Practice)</E> means standards governing the preparation, reporting, and reviewing of appraisals established by the Appraisal Foundation pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.</P>
              <P>(c) <E T="03">Appraisal standards.</E> (1) <E T="03">Real estate.</E> Real estate appraisals, technical appraisal reviews of real estate appraisals, and their respective forms must comply with the standards contained in USPAP, as well as applicable Agency regulations and procedures for the specific Farm Loan Program activity involved. A current copy of USPAP along with other applicable appraisal procedures and regulations is available for review in each Agency State Office.</P>
              <P>(2) <E T="03">Chattel.</E> An appraisal of chattel property may be completed on an applicable Agency form (available in each Agency State Office) or other format containing the same information.</P>
              <P>(d) <E T="03">Use of an existing real estate appraisal.</E> The Agency may use an existing real estate appraisal to reach a loan making or servicing decision under either of the following conditions:</P>
              <P>(1) The appraisal was completed within the previous 12 months and the Agency determines that:</P>
              <P>(i) The appraisal meets the provisions of this section and the applicable Agency loan making or servicing requirements, and</P>
              <P>(ii) Current market values have remained stable since the appraisal was completed; or</P>
              <P>(2) The appraisal was not completed in the previous 12 months, but has been updated by the appraiser or appraisal firm that completed the appraisal, and both the update and original appraisal were completed in accordance with USPAP.</P>
              <P>(e) <E T="03">Appraisal reviews.</E> (1) <E T="03">Real estate appraisals.</E> With respect to a real estate appraisal, the Agency may conduct a technical appraisal review or an administrative appraisal review, or both.</P>
              <P>(2) <E T="03">Chattel appraisals.</E> With respect to a chattel appraisal, the Agency may conduct an administrative appraisal review.</P>
              <CITA>[64 FR 62567, Nov. 17, 1999; 64 FR 69322, Dec 10, 1999; 65 FR 14433, Mar. 17, 2000]</CITA>
            </SECTION>
            <SECTION>
              <SECTNO>§ 761.8</SECTNO>
              <SUBJECT>Loan limitations.</SUBJECT>
              <P>(a) <E T="03">Dollar limits.</E> The outstanding principal balances for a farm loan applicant or anyone who will sign the <PRTPAGE P="213"/>promissory note cannot exceed any of the following:</P>
              <P>(1) Farm Ownership loans, Beginning Farmer Down payment loans and Soil and Water loans:</P>
              <P>(i) Direct—$200,000;</P>
              <P>(ii) Guaranteed—$700,000 (for fiscal year 2000 and increased at the beginning of each fiscal year in accordance with paragraph (b) of this section);</P>
              <P>(iii) Any combination of a direct Soil and Water loan, direct Farm Ownership loan, guaranteed Soil and Water loan, and guaranteed Farm Ownership loan—$700,000 (for fiscal year 2000 and increased each fiscal year in accordance with paragraph (b) of this section);</P>
              <P>(2) Operating loans:</P>
              <P>(i) Direct—$200,000;</P>
              <P>(ii) Guaranteed—$700,000 (for fiscal year 2000 and increased each fiscal year in accordance with paragraph (b) of this section);</P>
              <P>(iii) Any combination of a direct Operating loan and guaranteed Operating loan—$700,000 (for fiscal year 2000 and increased each fiscal year in accordance with paragraph (b) of this section);</P>
              <P>(3) Any combination of guaranteed Farm Ownership loan, guaranteed Soil and Water loan, and guaranteed Operating loan—$700,000 (for fiscal year 2000 and increased each fiscal year in accordance with paragraph (b) of this section);</P>
              <P>(4) Any combination of direct Farm Ownership loan, direct Soil and Water loan, direct Operating loan, guaranteed Farm Ownership loan, guaranteed Soil and Water loan, and guaranteed Operating loan—the amount in paragraph (a)(1)(ii) of this section plus $200,000;</P>
              <P>(5) Emergency loans—$500,000;</P>
              <P>(6) Any combination of direct Farm Ownership loan, direct Soil and Water loan, direct Operating loan, guaranteed Farm Ownership loan, guaranteed Soil and Water loan, guaranteed Operating loan, and Emergency loan—the amount in paragraph (a)(1)(ii) of this section plus $700,000.</P>
              <P>(b) The dollar limits of guaranteed loans will be increased each fiscal year based on the percentage change in the Prices Paid by Farmers Index as compiled by the National Agricultural Statistics Service, USDA. The maximum loan limits for the current fiscal year are available in any FSA office and on the FSA website at http://www.fsa.usda.gov.</P>
              <P>(c) <E T="03">Line of credit advances.</E> The total dollar amount of guaranteed line of credit advances and income releases cannot exceed the total estimated expenses, less interest expense, as indicated on the borrower's cash flow budget, unless the cash flow budget is revised and continues to reflect a feasible plan.</P>
              <CITA>[66 FR 7566, Jan. 24, 2001, as amended at 67 FR 41312, June 18, 2002]</CITA>
            </SECTION>
          </PART>
          <PART>
            <EAR>Pt. 762</EAR>
            <HD SOURCE="HED">PART 762—GUARANTEED FARM LOANS</HD>
            <CONTENTS>
              <SECHD>Sec.</SECHD>
              <SECTNO>762.1-762.100</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>762.101</SECTNO>
              <SUBJECT>Introduction.</SUBJECT>
              <SECTNO>762.102</SECTNO>
              <SUBJECT>Abbreviations and definitions.</SUBJECT>
              <SECTNO>762.103</SECTNO>
              <SUBJECT>Full faith and credit.</SUBJECT>
              <SECTNO>762.104</SECTNO>
              <SUBJECT>Appeals.</SUBJECT>
              <SECTNO>762.105</SECTNO>
              <SUBJECT>Eligibility and substitution of lenders.</SUBJECT>
              <SECTNO>762.106</SECTNO>
              <SUBJECT>Preferred and certified lender programs.</SUBJECT>
              <SECTNO>762.107-762.109</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>762.110</SECTNO>
              <SUBJECT>Loan application.</SUBJECT>
              <SECTNO>762.111-762.119</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>762.120</SECTNO>
              <SUBJECT>Loan applicant eligibility.</SUBJECT>
              <SECTNO>762.121</SECTNO>
              <SUBJECT>Loan purposes.</SUBJECT>
              <SECTNO>762.122</SECTNO>
              <SUBJECT>Loan limitations.</SUBJECT>
              <SECTNO>762.123</SECTNO>
              <SUBJECT>Insurance and farm inspection requirements.</SUBJECT>
              <SECTNO>762.124</SECTNO>
              <SUBJECT>Interest rates, terms, charges, and fees.</SUBJECT>
              <SECTNO>762.125</SECTNO>
              <SUBJECT>Financial feasibility.</SUBJECT>
              <SECTNO>762.126</SECTNO>
              <SUBJECT>Security requirements.</SUBJECT>
              <SECTNO>762.127</SECTNO>
              <SUBJECT>Appraisal requirements.</SUBJECT>
              <SECTNO>762.128</SECTNO>
              <SUBJECT>Environmental and special laws.</SUBJECT>
              <SECTNO>762.129</SECTNO>
              <SUBJECT>Percent of guarantee and maximum loss.</SUBJECT>
              <SECTNO>762.130</SECTNO>
              <SUBJECT>Loan approval and issuing the guarantee.</SUBJECT>
              <SECTNO>762.131-762.139</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>762.140</SECTNO>
              <SUBJECT>General servicing responsibilities.</SUBJECT>
              <SECTNO>762.141</SECTNO>
              <SUBJECT>Reporting requirements.</SUBJECT>
              <SECTNO>762.142</SECTNO>
              <SUBJECT>Servicing related to collateral.</SUBJECT>
              <SECTNO>762.143</SECTNO>
              <SUBJECT>Servicing distressed accounts.</SUBJECT>
              <SECTNO>762.144</SECTNO>
              <SUBJECT>Repurchase of guaranteed portion from a secondary market holder.</SUBJECT>
              <SECTNO>762.145</SECTNO>
              <SUBJECT>Restructuring guaranteed loans.</SUBJECT>
              <SECTNO>762.146</SECTNO>
              <SUBJECT>Other servicing procedures.</SUBJECT>
              <SECTNO>762.147</SECTNO>
              <SUBJECT>Servicing shared appreciation agreements.</SUBJECT>
              <SECTNO>762.148</SECTNO>
              <SUBJECT>Bankruptcy.</SUBJECT>
              <SECTNO>762.149</SECTNO>
              <SUBJECT>Liquidation.</SUBJECT>
              <SECTNO>762.150</SECTNO>
              <SUBJECT>Interest assistance program.</SUBJECT>
              <SECTNO>762.151-762.159</SECTNO>
              <SUBJECT>[Reserved]</SUBJECT>
              <SECTNO>762.160</SECTNO>
              <SUBJECT>Sale, assignment and participation.</SUBJECT>
            </CONTENTS>
            <AUTH>
              <HD SOURCE="HED">Authority:</HD>
              <P>5 U.S.C. 301, 7 U.S.C. 1989.</P>
            </AUTH>
            <SOURCE>
              <PRTPAGE P="214"/>
              <HD SOURCE="HED">Source:</HD>
              <P>64 FR 7378, Feb. 12, 1999, unless otherwise noted.</P>
            </SOURCE>
            <SECTION>
              <SECTNO>§§ 762.1-762.100</SECTNO>
              <RESERVED>[Reserved]</RESERVED>
            </SECTION>
            <SECTION>
              <SECTNO>§ 762.101</SECTNO>
              <SUBJECT>Introduction.</SUBJECT>
              <P>(a) <E T="03">Scope.</E> This subpart contains regulations governing Operating Loans and Farm Ownership loans guaranteed by the Farm Service Agency. This subpart applies to lenders, holders, borrowers, Agency personnel, and other parties involved in making, guaranteeing, holding, servicing, or liquidating such loans.</P>
              <P>(b) <E T="03">Policy.</E> The Agency issues guarantees on loans made to qualified loan applicants without regard to race, color, religion, sex, national origin, marital status, or age, provided the loan applicant can enter into a legal and binding contract, or whether all or part of the applicant's income derives from any public assistance program or whether the applicant, in good faith, exercises any rights under the Consumer Protection Act.</P>
              <P>(c) <E T="03">Lender list and classification.</E> (1) The Agency maintains a current list of lenders who express a desire to participate in the guaranteed loan program. This list is made available to farmers upon request.</P>
              <P>(2) Lenders who participate in the Agency guaranteed loan program will be classified into one of the following categories:</P>
              <P>(i) Standard Eligible Lender under § 762.105,</P>
              <P>(ii) Certified Lender, or</P>
              <P>(iii) Preferred Lender under § 762.106.</P>
              <P>(3) Lenders may continue to make loans under Approved Lender Program (ALP) agreements until they expire; however, these agreements will not be renewed when they expire. All ALP agreements with farm credit institutions will expire on February 12, 2001.</P>
              <P>(d) <E T="03">Type of guarantee.</E> Guarantees are available for both a loan note or a line of credit. A loan note is used for a loan of fixed amount and term. A line of credit has a fixed term, but no fixed amount. The principal amount outstanding at any time, however, may not exceed the line of credit ceiling contained in the contract. Both guarantees are evidenced by the same loan guarantee form.</P>
              <P>(e) <E T="03">Termination of loan guarantee.</E> The loan guarantee will automatically terminate as follows:</P>
              <P>(1) Upon full payment of the guaranteed loan. A zero balance within the period authorized for advances on a line of credit will not terminate the guarantee;</P>
              <P>(2) Upon payment of a final loss claim; or</P>
              <P>(3) Upon written notice from the lender to the Agency that a guarantee is no longer desired provided the lender holds all of the guaranteed portion of the loan. The loan guarantee will be returned to the Agency office for cancellation within 30 days of the date of the notice by the lender.</P>
            </SECTION>
            <SECTION>
              <SECTNO>§ 762.102</SECTNO>
              <SUBJECT>Abbreviations and definitions.</SUBJECT>
              <P>(a) <E T="03">Abbreviations.</E>
              </P>
              <P>ALP—Approved lender program</P>
              <P>CLP—Certified lender program</P>
              <P>CONACT—Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.)</P>
              <P>EPA—Environmental Protection Agency</P>
              <P>EIS—Environmental impact statement</P>
              <P>EM—Emergency loans</P>
              <P>FO—Farm ownership loans</P>
              <P>FSA—Farm Service Agency</P>
              <P>OL—Operating loans</P>
              <P>PLP—Preferred lender program</P>
              <P>SW—Soil and water</P>
              <P>USDA—United States Department of Agriculture</P>
              <P>(b) <E T="03">Definitions.</E>
              </P>
              <P>
                <E T="03">Additional security.</E> Collateral in excess of that needed to fully secure the loan.</P>
              <P>
                <E T="03">Agency.</E> The Farm Service Agency, including its employees and state and area committee members, and any successor agency.</P>
              <P>
                <E T="03">Allonge.</E> An attachment or an addendum to a note.</P>
              <P>
                <E T="03">Applicant.</E> For guaranteed loans, the lender requesting a guarantee is the applicant. The party applying to the lender for a loan will be considered the loan applicant.</P>
              <P>
                <E T="03">Aquaculture.</E> The husbandry of aquatic organisms in a controlled or selected environment. An aquatic organism is any fish, amphibian, reptile, or aquatic <PRTPAGE P="215"/>plant. An aquaculture operation is considered to be a farm only if it is conducted on the grounds which the loan applicant owns, leases, or has an exclusive right to use. An exclusive right to use must be evidenced by a permit issued to the loan applicant and the permit must specifically identify the waters available to be used by the loan applicant only.</P>
              <P>
                <E T="03">Assignment of guaranteed portion.</E> A process by which the lender transfers the right to receive payments or income on the guaranteed loan to another party, usually in return for payment in the amount of the loan's guaranteed principal. The lender retains the unguaranteed portion in its portfolio and receives a fee from the purchaser or assignee to service the loan, and receive and remit payments according to a written assignment agreement. This assignment can be reassigned or sold multiple times.</P>
              <P>
                <E T="03">Average farm customers.</E> Those conventional farm borrowers who are required to pledge their crops, livestock, and other chattel and real estate security for the loan. This does not include those high-risk farmers with limited security and management ability who are generally charged a higher interest rate by conventional agricultural lenders. Also, this does not include those low-risk farm customers who obtain financing on a secured or unsecured basis, who have as collateral such items as savings accounts, time deposits, certificates of deposit, stocks and bonds, and life insurance, which they are able to pledge for the loan.</P>
              <P>
                <E T="03">Basic Security.</E> All farm machinery, equipment, vehicles, foundation and breeding livestock herds and flocks, including replacements, and real estate which serves as security for a loan guaranteed by the Agency.</P>
              <P>
                <E T="03">Beginning farmer or rancher.</E> A beginning farmer or rancher is an individual or entity who:</P>
              <P>(1) Meets the loan eligibility requirements for OL or FO assistance, as applicable, in accordance with this subpart;</P>
              <P>(2) Has not operated a farm or ranch, or who has operated a farm or ranch for not more than 10 years. This requirement applies to all members of an entity;</P>
              <P>(3) Will materially and substantially participate in the operation of the farm or ranch:</P>
              <P>(i) In the case of a loan made to an individual, individually or with the immediate family, material and substantial participation requires that the individual provide substantial day-to-day labor and management of the farm or ranch, consistent with the practices in the county or State where the farm is located.</P>
              <P>(ii) In the case of a loan made to an entity, all members must materially and substantially participate in the operation of the farm or ranch. Material and substantial participation requires that the individual provide some amount of the management, or labor and management necessary for day-to-day activities, such that if the individual did not provide these inputs, operation of the farm or ranch would be seriously impaired;</P>
              <P>(4) Agrees to participate in any loan assessment and financial management programs required by Agency regulations;</P>
              <P>(5) Does not own real farm or ranch property or who, directly or through interests in family farm entities, owns real farm or ranch property, the aggregate acreage of which does not exceed 30 percent of the average farm or ranch acreage of the farms or ranches in the county where the property is located. If the farm is located in more than one county, the average farm acreage of the county where the loan applicant's residence is located will be used in the calculation. If the applicant's residence is not located on the farm or if the loan applicant is an entity, the average farm acreage of the county where the major portion of the farm is located will be used. The average county farm or ranch acreage will be determined from the most recent Census of Agriculture developed by the U.S. Department of Commerce, Bureau of the Census or USDA;</P>
              <P>(6) Demonstrates that the available resources of the loan applicant and spouse (if any) are not sufficient to enable the loan applicant to enter or continue farming or ranching on a viable scale; and</P>
              <P>(7) In the case of an entity:<PRTPAGE P="216"/>
              </P>
              <P>(i) All the members are related by blood or marriage; and</P>
              <P>(ii) All the stockholders in a corporation are beginning farmers or ranchers.</P>
              <P>
                <E T="03">Borrower.</E> An individual or entity which has outstanding obligations to the lender under any Agency loan or loan guarantee program. A borrower includes all parties liable for Agency debt, including collection-only borrowers, except those whose total loan and accounts have been voluntarily or involuntarily foreclosed or liquidated, or who have been discharged of all Agency debt.</P>
              <P>
                <E T="03">Capital leases.</E> Agreements under which the lessee effectively acquires ownership of the asset being leased. A lease is a capital lease if it meets any one of the following criteria:</P>
              <P>(1) The lease transfers ownership of the property to the lessee at the end of the lease term.</P>
        