[Title 7 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2007 Edition]
[From the U.S. Government Printing Office]
[[Page i]]
7
Parts 700 to 899
Revised as of January 1, 2007
Agriculture
________________________
Containing a codification of documents of general
applicability and future effect
As of January 1, 2007
With Ancillaries
Published by:
Office of the Federal Register
National Archives and Records
Administration
A Special Edition of the Federal Register
[[Page ii]]
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Table of Contents
Page
Explanation................................................. v
Title 7:
Subtitle B--Regulations of the Department of Agriculture
(Continued)
Chapter VII--Farm Service Agency, Department of
Agriculture 5
Chapter VIII--Grain Inspection, Packers and
Stockyard Administration (Federal Grain Inspection
Service), Department of Agriculture 217
Finding Aids:
Material Approved for Incorporation by Reference........ 375
Table of CFR Titles and Chapters........................ 377
Alphabetical List of Agencies Appearing in the CFR...... 395
List of CFR Sections Affected........................... 405
[[Page iv]]
----------------------------
Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 7 CFR 701.1 refers
to title 7, part 701,
section 1.
----------------------------
[[Page v]]
EXPLANATION
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
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parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
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HOW TO USE THE CODE OF FEDERAL REGULATIONS
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collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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(b) The matter incorporated is in fact available to the extent
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(c) The incorporating document is drafted and submitted for
publication in accordance with 1 CFR part 51.
Properly approved incorporations by reference in this volume are
listed in the Finding Aids at the end of this volume.
What if the material incorporated by reference cannot be found? If
you have any problem locating or obtaining a copy of material listed in
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the revision dates of the 50 CFR titles.
[[Page vii]]
REPUBLICATION OF MATERIAL
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Director,
Office of the Federal Register.
January 1, 2007.
[[Page ix]]
THIS TITLE
Title 7--Agriculture 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, 2007.
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.
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.
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 Ann Worley.
[[Page 1]]
TITLE 7--AGRICULTURE
(This book contains parts 700 to 899)
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SUBTITLE B--Regulations of the Department of Agriculture (Continued)
Part
chapter vii--Farm Service Agency, Department of Agriculture. 700
chapter viii--Grain Inspection, Packers and Stockyard
Administration (Federal Grain Inspection Service),
Department of Agriculture................................. 800
[[Page 3]]
Subtitle B--Regulations of the Department of Agriculture (Continued)
[[Page 5]]
CHAPTER VII--FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE
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Editorial Note: 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.
SUBCHAPTER A--AGRICULTURAL CONSERVATION PROGRAM
Part Page
701 Emergency Conservation Program and certain
related programs previously administered
under this part......................... 7
707 Payments due persons who have died,
disappeared, or have been declared
incompetent............................. 17
708 Record retention requirements--all programs. 19
SUBCHAPTER B--FARM MARKETING QUOTAS, ACREAGE ALLOTMENTS, AND PRODUCTION
ADJUSTMENT
714 Refunds of penalties erroneously, illegally,
or wrongfully collected................. 20
718 Provisions applicable to multiple programs.. 22
SUBCHAPTER C--REGULATIONS FOR WAREHOUSES
735 Regulations for the United States Warehouse
Act..................................... 45
743
[Reserved]
SUBCHAPTER D--SPECIAL PROGRAMS
750 Soil Bank [Note]............................ 59
760 Indemnity payment programs.................. 59
761 General and administrative.................. 83
762 Guaranteed farm loans....................... 84
764 Emergency farm loans........................ 127
770 Indian tribal land aquisition loans......... 137
771 Boll Weevil Era Dication Loan Program....... 141
772 Servicing minor program loans............... 144
773 Special Apple Loan Program.................. 150
774 Emergency Loan for Seed Producers Program... 154
780 Appeal regulations.......................... 157
781 Disclosure of foreign investment in
agricultural land....................... 164
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782 End-Use Certificate Program................. 170
783 Tree Assistance Program..................... 176
784 2004 ewe lamb replacement and retention
payment program......................... 179
785 Certified state mediation program........... 184
SUBCHAPTER E--PROVISIONS COMMON TO MORE THAN ONE PROGRAM
792 Debt settlement policies and procedures..... 191
795 Payment limitation.......................... 200
SUBCHAPTER F--PUBLIC RECORDS
798 Availability of information to the public... 207
SUBCHAPTER G--ENVIRONMENTAL PROTECTION
799 Environmental quality and related
environmental concerns--compliance with
the National Environmental Policy Act... 209
[[Page 7]]
SUBCHAPTER A_AGRICULTURAL CONSERVATION PROGRAM
PART 701_EMERGENCY CONSERVATION PROGRAM AND CERTAIN RELATED PROGRAMS
PREVIOUSLY ADMINISTERED UNDER THIS PART--Table of Contents
Sec.
701.1 Administration.
701.2 Definitions.
701.3 Scope.
701.4 Producer eligibility.
701.5 Land eligibility.
701.6-701.9 [Reserved]
701.10 Qualifying minimum cost of restoration.
701.11 Prohibition on duplicate payments.
701.12 Eligible ECP practices.
701.13 Submitting requests.
701.14 Onsite inspections.
701.15 Starting practices before cost-share request is submitted; non-
entitlement to payment; payment subject to the availability of
funds.
701.16 Practice approval.
701.17-701.20 [Reserved]
701.21 Filing payment application.
701.22 Eligibility to file for cost-share assistance.
701.23 Eligible costs.
701.24 Dividing cost-share among more than one participant.
701.25 Practices carried out with aid from ineligible persons.
701.26 Maximum cost-share percentage.
701.27 Maximum ECP payments per person.
701.28-701.30 [Reserved]
701.31 Maintenance and proper use of practices.
701.32 Failure to comply with program provisions.
701.33 Death, incompetency, or disappearance.
701.34 Appeals.
701.35 Compliance with regulatory measures.
701.36 Schemes and devices and claims avoidances.
701.37 Loss of control of property during the practice life span.
701.38-701.40 [Reserved]
701.41 Cost-share assistance not subject to claims.
701.42 Assignments.
701.43 Information collection requirements.
701.44 Agricultural Conservation Program (ACP) contracts.
701.45 Forestry Incentives Program (FIP) contracts.
701.50 2005 hurricanes.
701.51 Definitions.
701.52 Availability of funding.
701.53 Debris removal and water for livestock.
701.54 Oysters.
701.55 Nursery.
701.56 Poultry.
701.57 Private non-industrial forest land.
Authority: Pub. L. 95-334, 92 Stat. 420, 16 U.S.C. 2201 et. seq.;
Pub. L. 109-149, Division B, sec. 101.
Source: 69 FR 10302, Mar. 4, 2004, unless otherwise noted.
Sec. 701.1 Administration.
(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).
(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.
(c) State and county committees, and representatives and employees,
do not have authority to modify or waive any regulations in this part.
(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:
(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
(2) Require a county committee to withhold taking any action that is
not in accordance with this part.
(e) No provision or delegation herein to a State or county committee
shall
[[Page 8]]
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.
(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.
(g) The Deputy Administrator may limit the authority of state and
county committees to approve cost share in excess of specified amounts.
(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.
(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 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.
(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.
(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.
Sec. 701.2 Definitions.
(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.
(b) The following definitions shall apply to this part:
Agricultural producer 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.
Annual agricultural production means production of crops for food or
fiber in a commercial operation that occurs on an annual basis under
normal conditions.
Applicant means a person who has submitted to FSA a request to
participate in the ECP.
Cost-share payment 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.
Deputy Administrator means the Deputy Administrator for Farm
Programs, FSA, the ECP Program Manager, or designee.
Farmland means land devoted to agricultural production, including
land used for aquaculture, or other land as may be determined by the
Deputy Administrator.
Program year means the applicable Federal fiscal year.
Sec. 701.3 Scope.
(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.
(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.
(c) Payments may also be made under this part for:
[[Page 9]]
(1) Emergency water conservation or water enhancement measures
(including measures to assist confined livestock) during periods of
severe drought; and
(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.
(d) Payments under this part are subject to the availability of
appropriated funds and any limitations that may otherwise be provided
for by Congress.
Sec. 701.4 Producer eligibility.
(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 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.
(b) Federal agencies and States, including all agencies and
political subdivisions of a State, are ineligible to participate in the
ECP.
(c) All producer eligibility is subject to the availability of funds
and an application may be denied for any reason.
Sec. 701.5 Land eligibility.
(a) For land to be eligible, the Deputy Administrator must determine
that land that is the subject of the cost share:
(1) Will have new conservation problems caused as a result of a
natural disaster that, if not treated, would:
(i) Impair or endanger the land;
(ii) Materially affect the productive capacity of the land;
(iii) Represent unusual damage that, except for wind erosion, is not
of the type likely to recur frequently in the same area; and
(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.
(2) Be physically located in a county in which the ECP has been
implemented; and
(3) Be one of the following:
(i) Land expected to have annual agricultural production,
(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
(iii) A farm access road on which debris interfering with the normal
farming operation needs to be removed.
(b) Land is ineligible for cost share if the Deputy Administrator
determines that it is, as applicable:
(1) Owned or controlled by the United States;
(2) Owned or controlled by States, including State agencies or other
political subdivisions of a State;
(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;
(4) Adjacent to water impoundment reservoirs that are subject to
inundation when the reservoir is filled to capacity;
(5) Land on which levees or dikes are located;
(6) Subject to frequent damage or susceptible to severe damage
according to paragraph (c) of this section;
(7) Subject to flowage or flood easements and inundation when water
is released in normal operations;
(8) Between any levee or dike and a stream, river, or body of water,
including land between two or more levees or dikes;
(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;
[[Page 10]]
(10) In greenhouses or other confined areas, including but not
limited to, land in corrals, milking parlors, barn lots, or feeding
areas;
(11) Land on which poor farming practices, such as failure to farm
on the contour, have materially contributed to damaging the land;
(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
(13) Devoted to trees including, but not limited to, timber
production.
(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 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.
Sec. Sec. 701.6-701.9 [Reserved]
Sec. 701.10 Qualifying minimum cost of restoration.
(a) To qualify for assistance under Sec. 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.
(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.
(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.
[69 FR 10302, Mar. 4, 2004; 69 FR 22377, Apr. 26, 2004]
Sec. 701.11 Prohibition on duplicate payments.
(a) Duplicate payments. Participants are not eligible to receive
funding under the ECP for land on which the participant has or will
receive funding under:
(1) The Wetland Reserve Program (WRP) provided for in 7 CFR part
1467;
(2) The Emergency Wetland Reserve Program (EWRP) provided for in 7
CFR part 623;
(3) The Emergency Watershed Protection Program (EWP), provided for
in 7 CFR part 624, for the same or similar expenses.
(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.
(b) Refund. Participants who receive any duplicate funds, payments,
or benefits shall refund any ECP payments received.
[69 FR 10302, Mar. 4, 2004, as amended at 71 FR 30265, May 26, 2006]
Sec. 701.12 Eligible ECP practices.
(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.
(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.
(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.
[[Page 11]]
(d) Practice specifications shall represent the minimum levels of
performance needed to address the ECP need.
Sec. 701.13 Submitting requests.
(a) Subject to the availability of funds, the Deputy Administrator
shall provide for an enrollment period for submitting ECP cost-share
requests.
(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.
Sec. 701.14 Onsite inspections.
An onsite inspection must be made before approval of any request for
ECP assistance.
Sec. 701.15 Starting practices before cost-share request is submitted;
non-entitlement to payment; payment subject to the availability of funds.
(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.
(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:
(1) Considered and approved on a case-by-case basis in accordance
with instructions of the Deputy Administrator;
(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;
(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
(4) The practice was started no more than 60 days before the ECP
designation was approved for the applicable county office.
(c) Any action taken prior to approval of a claim is taken at the
producer's own risk.
(d) An application for relief may be denied for any reason.
(e) All payments under this part are subject to the availability of
funds.
Sec. 701.16 Practice approval.
(a) Requests shall be prioritized before approval based on factors
deemed appropriate by FSA, which include, but are not limited to:
(1) Type and degree of damage;
(2) Type of practices needed to address the problem;
(3) Availability of funds;
(4) Availability of technical assistance;
(5) Environmental concerns;
(6) Safety factors; or
(7) Welfare of eligible livestock.
(b) Requests for cost-share assistance may be approved if:
(1) Funds are available; and
(2) The requested practice is determined eligible.
Sec. Sec. 701.17-701-20 [Reserved]
Sec. 701.21 Filing payment application.
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.
(a) Completion of practice. 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.
(b) Proof of completion. 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.
(c) Payment request deadline. 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.
[[Page 12]]
Sec. 701.22 Eligibility to file for cost-share assistance.
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.
Sec. 701.23 Eligible costs.
(a) Cost-share assistance may be authorized for all reasonable costs
incurred in the completion of the practice, up to the maximums provided
in Sec. Sec. 701.26 and 701.27.
(b) Eligible costs shall be limited as follows:
(1) Costs for use of personal equipment shall be limited to those
incurred beyond the normal operation of the farm or ranch.
(2) Costs for personal labor shall be limited to personal labor not
normally required in the operation of the farm or ranch.
(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.
(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 considered to be
eligible costs for purposes of calculations made under this part.
(c) Costs shall not exceed the practice specifications in Sec.
701.12(d) for cost-share calculations.
(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.
(e) Total cost-share payments from all sources shall not exceed the
total of eligible costs of the practice to the applicant.
Sec. 701.24 Dividing cost-share among more than one participant.
(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.
(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.
(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.
Sec. 701.25 Practices carried out with aid from ineligible persons.
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.
Sec. 701.26 Maximum cost-share percentage.
(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.
(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.
[[Page 13]]
(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.
Sec. 701.27 Maximum ECP payments per person.
A person, as defined in part 1400 of this title, is limited to a
maximum cost-share of $200,000 per person, per disaster.
Sec. Sec. 701.28-701.30 [Reserved]
Sec. 701.31 Maintenance and proper use of practices.
(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.
(b) If a practice is not properly maintained for the established
life span, the participant may be required to refund 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.
Sec. 701.32 Failure to comply with program provisions.
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.
Sec. 701.33 Death, incompetency, or disappearance.
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.
Sec. 701.34 Appeals.
Part 11 of this title and part 780 of this chapter apply to
determinations made under this part.
Sec. 701.35 Compliance with regulatory measures.
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.
Sec. 701.36 Schemes and devices and claims avoidances.
(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.
(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.
(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
[[Page 14]]
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.
(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.
(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.
Sec. 701.37 Loss of control of the property during the practice life span.
In the event of voluntary or involuntary loss of control of the land
by the ECP cost-share recipient during the 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.
Sec. Sec. 701.38-701.40 [Reserved]
Sec. 701.41 Cost-share assistance not subject to claims.
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.
Sec. 701.42 Assignments.
Participants may assign ECP cost-share assistance payments, in whole
or in part, according to part 1404 of this title.
Sec. 701.43 Information collection requirements.
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.
Sec. 701.44 Agricultural Conservation Program (ACP) contracts.
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.
Sec. 701.45 Forestry Incentives Program (FIP) contracts.
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.
Sec. 701.50 2005 hurricanes.
In addition benefits elsewhere allowed by this part, claims related
to calendar year 2005 hurricane losses may be allowed to the extent
provided for in Sec. Sec. 701.50 through 701.57. Such claims under
those sections will be limited to losses in counties that were
[[Page 15]]
declared disaster counties by the President or the Secretary because of
2005 hurricanes and to losses to oyster reefs. Claims under Sec. Sec.
701.51 through 701.57 shall be subject to all normal ECP limitations and
provisions except as explicitly provided in those sections.
[71 FR 30265, May 26, 2006]
Sec. 701.51 Definitions.
The following definitions apply to Sec. Sec. 701.52 through 701.57:
Above-ground irrigation facilities means irrigation pipes,
sprinklers, pumps, emitters, and any other integral part of the above
ground irrigation system.
Barn means a structure used for the housing of animals or farm
equipment.
Commercial forest land means forest land with trees intended to be
harvested for commercial purposes that has a productivity potential
greater than or equal to 20 cubic feet per year of merchantable timber.
Date of loss means the date the hurricane damage occurred in
calendar year 2005.
Eligible county means any county that was declared a disaster county
by the President or the Secretary because of a calendar year 2005
hurricane, that otherwise meets the eligibility requirements of this
part.
Forest management plan means a plan of action and direction on
forest lands to achieve a set of results usually specified as goals or
objectives consistent with program policies prepared or approved by a
natural resource professional, such as a State forestry agency
representative.
Poultry house means a building used to house live poultry for the
purpose of commercial food production.
Private non-industrial forest land means rural commercial forest
lands with existing tree cover, or which are suitable for growing trees,
that are owned by a private non-industrial forest landowner as defined
in this section.
Private non-industrial forest landowner means, for purposes of the
ECP for forestry, an individual, group, association, corporation, Indian
tribe, or other legal private entity owning non-industrial private
forest land or who receives concurrence from the landowner for making
the claim in lieu of the owner, and for practice implementation and who
holds a lease on the land for a minimum of 10 years. Owners or lessees
principally engaged in the primary processing of raw wood products are
excluded from this definition. Owners of land leased to lessees who
would be excluded under the previous sentence are also excluded.
Shade house means a metal or wood structure covered by a material
used for shade purposes.
[71 FR 30265, May 26, 2006]
Sec. 701.52 Availability of funding.
Payments under Sec. Sec. 701.53 through 701.57 are subject to the
availability of funds under Public Law 109-149.
[71 FR 30265, May 26, 2006]
Sec. 701.53 Debris removal and water for livestock.
Subject to the other eligibility provisions of this part, an ECP
participant addressing damage in an eligible county from hurricanes
during calendar year 2005 may be allowed up to 90 percent of the
participant's actual cost or of the total allowable cost for cleaning up
structures such as barns, shade houses and above-ground irrigation
facilities, for removing poultry house debris, including carcasses, and
for providing water for livestock.
[71 FR 30265, May 26, 2006]
Sec. 701.54 Oysters.
(a) Notwithstanding Sec. 701.5(b), but otherwise subject to the
other eligibility provisions of this part except as provided explicitly
in this section, assistance may be made available under this section for
the eligible cost of refurbishing public or private oyster reefs damaged
in calendar year 2005 by a 2005 hurricane. Oyster bed refurbishing
consists of removing mud from public and private oyster beds, staking
out the leased areas, reestablishing the oyster beds using crushed
limestone, recycled oyster shells, or other available and suitable
approved cultch materials, reseeding the oyster beds, and related
actions approved by FSA.
(b) Notwithstanding Sec. 701.26, an ECP participant shall not
receive more than 90 percent of the participant's actual
[[Page 16]]
cost or of the total allowable cost described in paragraph (a) of this
section.
(c) The provisions of Sec. 701.26(c) limiting ECP payments to 50
percent of the agricultural value of the land do not apply to oyster bed
rehabilitation and refurbishing.
[71 FR 30265, May 26, 2006]
Sec. 701.55 Nursery.
(a) Subject to the other eligibility provisions of this part except
as provided explicitly in this section, assistance may be made available
in an eligible county under this section for the cost of removing
nursery debris such as nursery structures, shade houses, and above
ground irrigation facilities, where such debris was created in calendar
year 2005 by a 2005 hurricane.
(b) Notwithstanding Sec. 701.26, an otherwise eligible ECP
participant may be allowed up to 90 percent of the participant's actual
cost or of the total allowable cost for losses described in paragraph
(a) of this section.
[71 FR 30265, May 26, 2006]
Sec. 701.56 Poultry.
(a) Subject to the other eligibility provisions of this part except
as provided explicitly in this section, assistance may be allowed under
this section for uninsured losses in calendar year 2005 to a poultry
house in an eligible county due to a 2005 hurricane.
(b) Claimants under this section may be allowed an amount up to the
lesser of:
(1) The lesser of 50 percent of the participant's actual or the
total allowable cost of the reconstruction or repair of a poultry house,
or
(2) $50,000 per poultry house.
(c) The total amount of assistance provided under this section and
any indemnities for losses to a poultry house paid to a poultry grower,
may not exceed 90 percent of the total costs associated with the
reconstruction or repair of a poultry house.
(d) Poultry growers must provide information on insurance payments
on their poultry houses. Copies of contracts between growers and poultry
integrators may be required.
(e) Assistance under this section is limited to amounts necessary
for reconstruction and/or repair of a poultry house to the same size as
before the hurricane.
(f) Assistance is limited to poultry houses used to house poultry
for commercial enterprises. A commercial poultry enterprise is one with
a dedicated structure for poultry and a number of poultry that exceeds
actual non-commercial uses of poultry and their products at all times,
and from which poultry or related products are actually, and routinely,
sold in commercial quantities for food, fiber, or eggs. Unless otherwise
approved by FSA, a commercial quantity is a quantity per week that would
normally exceed $100 in sales.
(g) Poultry houses with respect to which claims are made under this
section must be reconstructed or repaired to meet current building
standards.
[71 FR 30265, May 26, 2006]
Sec. 701.57 Private non-industrial forest land.
(a) Subject to the other eligibility provisions of this part except
as provided explicitly in this section, assistance made available under
this section with respect to private, non-industrial forest land in an
eligible county for costs related to reforestations, rehabilitation, and
related measures undertaken because of losses in calendar year 2005
caused by a 2005 hurricane. To be eligible, a non-industrial private
forest landowner must have suffered a loss of, or damage to, at least 35
percent of forest acres on commercial forest land of the forest
landowner in a designated disaster county due to a 2005 hurricane or
related condition. The 35 percent loss shall be determined based on the
value of the land before and after the hurricane event.
(b) During the 5-year period beginning on the date of the loss, the
eligible private non-industrial forest landowner must:
(1) Reforest the eligible damaged forest acres in accordance with a
forest management plan approved by FSA that is appropriate for the
forest type where the forest management plan is developed by a person
with appropriate forestry credentials, as determined by the Deputy
Administrator;
[[Page 17]]
(2) Use the best management practices included in the forest
management plan; and
(3) Exercise good stewardship on the forest land of the landowner
while maintaining the land in a forested state.
(c) Notwithstanding Sec. 701.26, an ECP participant shall not
receive under this section more than 75 percent of the participant's
actual cost or of the total allowable cost of reforestation,
rehabilitation, and related measures.
(d) Payments under this section shall not exceed a maximum of $150
per acre for any acre.
(e) Requests will be prioritized based upon planting tree species
best suited to the site as stated in the forest management plan.
[71 FR 30265, May 26, 2006]
PART 707_PAYMENTS DUE PERSONS WHO HAVE DIED, DISAPPEARED, OR HAVE BEEN
DECLARED INCOMPETENT--Table of Contents
Sec.
707.1 Applicability.
707.2 Definitions.
707.3 Death.
707.4 Disappearance.
707.5 Incompetency.
707.6 Death, disappearance, or incompetency of one eligible to apply for
payment pursuant to the regulations in this part.
707.7 Form of application.
Authority: 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).
Source: 30 FR 6246, May 5, 1965, unless otherwise noted.
Sec. 707.1 Applicability.
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.
Sec. 707.2 Definitions.
``Person'' when relating to one who dies, disappears, or becomes
incompetent, prior to receiving payment, 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.
Sec. 707.3 Death.
(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:
(1) To the administrator or executor of the deceased person's
estate.
(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.
(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
[[Page 18]]
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.
(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.
(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.
(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.
(b) If any person who is entitled to payment under the above order
of precedence 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.
(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.
Sec. 707.4 Disappearance.
(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:
(1) The conservator or liquidator of his estate, if one be duly
appointed.
(2) The spouse.
(3) An adult son or daughter or grandchild for the benefit of his
estate.
(4) The mother or father for the benefit of his estate.
(5) An adult brother or sister for the benefit of his estate.
(6) Such person as may be authorized under State law to receive
payment for the benefit of his estate.
(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.
Sec. 707.5 Incompetency.
(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
[[Page 19]]
the United States, to one of the following in the order mentioned for
the benefit of the incompetent person:
(1) The spouse.
(2) An adult son, daughter, or grandchild.
(3) The mother or father.
(4) An adult brother or sister.
(5) Such person as may be authorized under State law to receive
payment for him (see standard procedure prescribed for the respective
region).
(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.
Sec. 707.6 Death, disappearance, or incompetency of one eligible to
apply for payment pursuant to the regulations in this part.
In case any person entitled to apply for a payment pursuant to the
provisions of Sec. 707.3, Sec. 707.4, Sec. 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
Sec. 707.3, Sec. 707.4, or Sec. 707.5, as the case may be.
Sec. 707.7 Form of application.
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 Sec. 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.
PART 708_RECORD RETENTION REQUIREMENTS_ALL PROGRAMS--Table of Contents
Authority: Sec. 4, 49 Stat. 164, secs. 7-17, 49 Stat. 1148, as
amended; 16 U.S.C. 590d, 590g-590q.
Sec. 708.1 Record retention period.
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.
[25 FR 105, Jan. 7, 1960. Redesignated at 26 FR 5788, June 29, 1961]
[[Page 20]]
SUBCHAPTER B_FARM MARKETING QUOTAS, ACREAGE ALLOTMENTS, AND PRODUCTION
ADJUSTMENT
PART 714_REFUNDS OF PENALTIES ERRONEOUSLY, ILLEGALLY, OR WRONGFULLY
COLLECTED--Table of Contents
Sec.
714.35 Basis, purpose, and applicability.
714.36 Definitions.
714.37 Instructions and forms.
714.38 Who may claim refund.
714.39 Manner of filing.
714.40 Time of filing.
714.41 Statement of claim.
714.42 Designation of trustee.
714.43 Recommendation by county committee.
714.44 Recommendation by State committee.
714.45 Approval by Deputy Administrator.
714.46 Certification for payment.
Authority: Secs. 372, 375, 52 Stat. 65, as amended, 66, as amended;
7 U.S.C. 1372, 1375.
Source: 35 FR 12098, July 29, 1970, unless otherwise noted.
Sec. 714.35 Basis, purpose, and applicability.
(a) Basis and purpose. 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.
(b) Applicability. 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.
Sec. 714.36 Definitions.
(a) General terms. 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.
(b) Other terms applicable to this part. The following terms shall
have the following meanings:
(1) ``Act'' means the Agricultural Adjustment Act of 1938, and any
amendments or supplements thereto.
(2) ``Claim'' means a written request for refund of penalty.
(3) ``Claimant'' means a person who makes a claim for refund of
penalty as provided in this part.
(4) ``County Office'' means the office of the Agricultural
Stabilization and Conservation County Committee.
(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.
(6) ``State office'' means the office of the Agricultural
Stabilization and Conservation State Committee.
Sec. 714.37 Instructions and forms.
The Deputy Administrator shall cause to be prepared and issued such
[[Page 21]]
instructions and forms as are necessary for carrying out the regulations
in the part.
Sec. 714.38 Who may claim refund.
Claim for refund may be made by:
(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.
(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.
(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.
(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.
(e) Any person who paid the penalty in whole or in part as a surety
on a bond given to secure the payment of penalties and has not been
reimbursed therefor.
(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.
Sec. 714.39 Manner of filing.
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.
Sec. 714.40 Time of filing.
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.
Sec. 714.41 Statement of claim.
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.
Sec. 714.42 Designation of trustee.
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.
Sec. 714.43 Recommendation by county committee.
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.
Sec. 714.44 Recommendation by State committee.
A representative of the State committee shall review each claim
referred by the county committee. If a claim is
[[Page 22]]
sent initially to the State committee, it shall be referred to the
appropriate county committee for recommendation as provided in Sec.
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.
Sec. 714.45 Approval by Deputy Administrator.
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
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.
Sec. 714.46 Certification for payment.
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.
PART 718_PROVISIONS APPLICABLE TO MULTIPLE PROGRAMS--Table of Contents
Subpart A_General Provisions
Sec.
718.1 Applicability.
718.2 Definitions.
718.3 State committee responsibilities.
718.4 Authority for farm entry and providing information.
718.5 Rule of fractions.
718.6 Controlled substance.
718.7 Furnishing maps.
718.8 Administrative county.
718.9 Signature requirements.
718.10 Time limitations.
718.11 Disqualification due to federal crop insurance fraud.
Subpart B_Determination of Acreage and Compliance
718.101 Measurements.
718.102 Acreage reports.
718.103 Prevented planted and failed acreage.
718.104 Late-filed and revised acreage reports.
718.105 Tolerances, variances, and adjustments.
718.106 Non-compliance and fraudulent acreage reports.
718.107 Acreages.
718.108 Measuring acreage including skip row acreage
718.109 Deductions.
718.110 Adjustments.
718.111 Notice of measured acreage.
718.112 Redetermination.
Subpart C_Reconstitution of Farms, Allotments, Quotas, and Bases
718.201 Farm constitution.
718.202 Determining the land constituting a farm.
718.203 County committee action to reconstitute a farm.
718.204 Reconstitution of allotments, quotas, and bases.
718.205 Substantive change in farming operation, and changes in related
legal entities.
718.206 Determining farms, tracts, allotments, quotas, and bases when
reconstitution is made by division.
718.207 Determining allotments, quotas, and bases when reconstitution is
made by combination.
Subpart D_Equitable Relief From Ineligibility
718.301 Applicability.
718.302 Definitions and abbreviations.
718.303 Reliance on incorrect actions or information.
718.304 Failure to fully comply.
718.305 Forms of relief.
718.306 Finality.
718.307 Special relief approval authority for State Executive Directors.
Authority: 7 U.S.C. 1311 et seq., 1501 et seq., 1921 et seq., 7201
et seq., 15 U.S.C. 714b.
[[Page 23]]
Source: 61 FR 37552, July 18, 1996, unless otherwise noted.
Subpart A_General Provisions
Source: 68 FR 16172, Apr. 3, 2003, unless otherwise noted.
Sec. 718.1 Applicability.
(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 establish procedures for measuring allotments and program
eligible acreage, and determining program compliance.
(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).
(c) State and county committees, and representatives and employees
thereof, do not have authority to modify or waive any regulations in
this part.
(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.
(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.
Sec. 718.2 Definitions.
Except as provided in individual parts of chapters VII and XIV of
this title, the following terms shall be as defined herein:
Administrative variance (AV) means the amount by which the
determined acreage of tobacco may exceed the effective allotment and be
considered in compliance with program regulations.
Allotment means an acreage for a commodity allocated to a farm in
accordance with the Agricultural Adjustment Act of 1938, as amended.
Allotment crop means any tobacco crop for which acreage allotments
are established pursuant to part 723 of this chapter.
Barley means barley that follows the standard planting and
harvesting practice of barley for the area in which the barley is grown.
Base acres means the quantity of acres established according to part
1413 of this title.
CCC means the Commodity Credit Corporation.
Combination means consolidation of two or more farms or parts of
farms, having the same operator, into one farm.
Common ownership unit means a distinguishable parcel of land
consisting of one or more tracts of land with the same owners, as
determined by FSA.
Constitution means the make-up of the farm before any change is made
because of change in ownership or operation.
Controlled substances means the term set forth in 21 CFR part 1308.
Corn 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.
County 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.
County committee means the FSA county committee.
Crop reporting date 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.
Cropland. (a) Means land which the county committee determines meets
any of the following conditions:
(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;
[[Page 24]]
(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;
(3) Is currently devoted to a one-row or two-row shelter belt
planting, orchard, or vineyard;
(4) Is in terraces that, were cropped in the past, even though they
are no longer capable of being cropped;
(5) Is in sod waterways or filter strips planted to a perennial
cover;
(6) Is preserved as cropland in accordance with part 1410 of this
title; or
(7) Is land that has newly been broken out for purposes of being
planted to a crop that the producer intends to, 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.
(b) Land classified as cropland shall be removed from such
classification upon a determination by the county committee that the
land is:
(1) No longer used for agricultural production;
(2) No longer suitable for production of crops;
(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;
(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
(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.
Current year 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.
Deputy Administrator means Deputy Administrator for Farm Programs,
Farm Service Agency, U.S. Department of Agriculture or their designee.
Determination 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.
Determined acreage 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.
Direct and counter-cyclical program (DCP) cropland 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.
Division means the division of a farm into two or more farms or
parts of farms.
Entity 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.
Extra Long Staple (ELS) Cotton 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:
(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,
[[Page 25]]
(2) The acreage is grown in a county designated as an ELS county by
the Secretary; and,
(3) The production from the acreage is ginned on a roller-type gin.
Family member means an individual to whom a person is related as
spouse, lineal ancestor, lineal descendant, or sibling, including:
(1) Great grandparent;
(2) Grandparent;
(3) Parent;
(4) Child, including a legally adopted child;
(5) Grandchild
(6) Great grandchildren;
(7) Sibling of the family member in the farming operation; and
(8) Spouse of a person listed in paragraphs (1) through (7) of this
definition.
Farm 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.
Farm inspection means an inspection by an authorized FSA
representative using aerial or ground compliance to determine the extent
of producer adherence to program requirements.
Farm number means a number assigned to a farm by the county
committee for the purpose of identification.
Farmland 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.
Field 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.
GIS 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.
GPS 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.
Grain sorghum 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.
Ground measurement means the distance between 2 points on the
ground, obtained by actual use of a chain tape, GPS with a minimum
accuracy level as determined by the Deputy Administrator, or other
measuring device.
Joint operation means a general partnership, joint venture, or other
similar business organization.
Landlord means one who rents or leases farmland to another.
Measurement service means a measurement of acreage or farm-stored
commodities performed by a representative of FSA and paid for by the
producer requesting the measurement.
Measurement service after planting means determining a crop or
designated acreage after planting but before the farm operator files a
report of acreage for the crop.
Measurement service guarantee 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.
Minor child means an individual who is under 18 years of age. State
court proceedings conferring majority on an individual under 18 years of
age will
[[Page 26]]
not change such an individual's status as a minor.
Nonagricultural commercial or industrial use means land that is no
longer suitable for producing annual or perennial crops, including
conserving uses, or forestry products.
Normal planting period 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.
Normal row width means the normal distance between rows of the crop
in the field, but not less than 30 inches for all crops.
Oats means oats that follows the standard planting and harvesting
practice of oats for the area in which the oats are grown.
Operator 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.
Owner means one who has legal ownership of farmland, including:
(1) Any agency of the Federal Government, however, such agency shall
not be eligible to receive any payment pursuant to such contract;
(2) One who is buying farmland under a contract for deed;
(3) One who has a life-estate in the property; or
(4) For purposes of enrolling a farm in a program authorized by
chapters VII and XIV of this title:
(i) One who has purchased a farm in a foreclosure proceeding; and
(A) The redemption period has not passed; and
(B) The original owner has not redeemed the property.
(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.
(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.
Partial reconstitution 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.
Participant means one who participates in, or receives payments or
benefits in accordance with any of the programs administered by FSA.
Pasture means land that is used to, or has the potential to, produce
food for grazing animals.
Person 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:
(1) Have a separate and distinct interest in the land or the crop
involved;
(2) Exercise separate responsibility for such interest; and
(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.
Producer 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.
[[Page 27]]
Quota means the pounds allocated to a farm for a commodity in
accordance with the Agricultural Adjustment Act of 1938, as amended.
Random inspection 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.
Reconstitution means a change in the land constituting a farm as a
result of combination or division.
Reported acreage means the acreage reported by the farm operator,
farm owner, farm producer, or their agent on a Form prescribed by the
FSA.
Required inspection 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.
Rice means rice that follows the standard planting and harvesting
practices of the area excluding sweet, glutinous, or candy rice such as
Mochi Gomi.
Secretary means the Secretary of Agriculture of the United States,
or a designee.
Sharecropper 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.
Skip-row or strip-crop planting means a cultural practice in which
strips or rows of the crop are alternated with strips of idle land or
another crop.
Staking and referencing means determining an acreage before planting
by:
(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.
Standard deduction 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.
State 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.
Subdivision 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.
Tenant means:
(1) One who rents land from another in consideration of the payment
of a specified amount of cash or amount of a commodity; or
(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.
Tolerance 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.
Tract means a unit of contiguous land under one ownership, which is
operated as a farm, or part of a farm.
Tract combination means the combining of two or more tracts if the
tracts have common ownership and are contiguous.
Tract division means the dividing of a tract into two or more tracts
because of a change in ownership or operation.
Turn-area 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).
Upland cotton 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.
Wheat 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.
[68 FR 16172, Apr. 3, 2003; 69 FR 250, Jan. 5, 2004]
[[Page 28]]
Sec. 718.3 State committee responsibilities.
(a) The State committee shall, with respect to county committees:
(1) Take any action required of the county committee, which the
county committee fails to take in accordance with this part;
(2) Correct or require the county committee to correct any action
taken by such committee, which is not in accordance with this part;
(3) Require the county committee to withhold taking any action which
is not in accordance with this part;
(4) Review county office rates for producer services to determine
equity between counties;
(5) Determine, based on cost effectiveness, which counties will use
aerial compliance methods and which counties will use ground measurement
compliance methods; or
(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.
(b) The State committee shall submit to the Deputy Administrator
requests to deviate from deductions prescribed in Sec. 718.108, or the
error amount or percentage for refunds of redetermination costs as
prescribed in Sec. 718.111.
Sec. 718.4 Authority for farm entry and providing information.
(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.
(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:
(1) All FSA and CCC program benefits for that farm shall be denied;
(2) The person preventing the farm inspection shall pay all costs
associated with the farm inspection;
(3) The entire crop production on the farm will be considered to be
in excess of the quota established for the farm; and
(4) For tobacco, the farm operator must furnish proof of disposition
of:
(i) All tobacco which is in addition to the production shown on the
marketing card issued with respect to such farm; and
(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 Sec. 718.109 of this part.
(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.
Sec. 718.5 Rule of fractions.
(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:
------------------------------------------------------------------------
Required decimal Computation Result
------------------------------------------------------------------------
Whole numbers...................... 6.49 (or less)........ 6
6.50 (or more)........ 7
Tenths............................. 7.649 (or less)....... 7.6
7.650 (or more)....... 7.7
Hundredths......................... 8.8449 (or less)...... 8.84
8.8450 (or more)...... 8.85
Thousandths........................ 9.63449 (or less)..... 9.634
9.63450 (or more)..... 9.635
0 thousandths...................... 10.993149 (or less)... 10.9931
10.993150 (or more)... 10.9932
------------------------------------------------------------------------
(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
[[Page 29]]
tenths of an acre, rounding all hundredths of an acre to the nearest
tenth.
Sec. 718.6 Controlled substance.
(a) The following terms apply to this section:
(1) USDA benefit means the issuance of any grant, contract, loan, or
payment by appropriated funds of the United States.
(2) Person means an individual.
(b) Notwithstanding any other provision of law, any person convicted
under Federal or State law of:
(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.
(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.
(c) USDA benefits subject to paragraph (b) of this section include:
(1) Any payments or benefits under the Direct and Counter Cyclical
Program (DCP) in accordance with part 1413 of this title;
(2) Any payments or benefits for losses to trees, crops, or
livestock covered under disaster programs administered by FSA;
(3) Any price support loan available in accordance with part 1464 of
this title;
(4) Any price support or payment made under the Commodity Credit
Corporation Charter Act;
(5) A farm storage facility loan made under section 4(h) of the
Commodity Credit Corporation Charter Act or any other Act;
(6) Crop Insurance under the Federal Crop Insurance Act;
(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
(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.
[68 FR 16172, Apr. 3, 2003; 69 FR 250, Jan. 5, 2004]
Sec. 718.7 Furnishing maps.
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.
Sec. 718.8 Administrative county.
(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.
(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.
(c) The State committee shall submit all requests to deviate from
regulations specified in this section to the Deputy Administrator.
Sec. 718.9 Signature requirements.
(a) When a program authorized by this chapter or Chapter XIV of this
[[Page 30]]
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.
(b) Except a husband or wife may not sign a document on behalf of a
spouse with respect to:
(1) Program document required to be executed in accordance with part
3 of this title;
(2) Easements entered into under part 1410 of this title;
(3) Power of attorney;
(4) Such other program documents as determined by FSA or CCC.
(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.
(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.
(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.
[68 FR 16172, Apr. 3, 2003; 69 FR 250, Jan. 5, 2004]
Sec. 718.10 Time limitations.
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.
Sec. 718.11 Disqualification due to federal crop insurance fraud.
(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:
(1) Title V of the FCIA.
[[Page 31]]
(2) The Agricultural Market Transition Act (7 U.S.C. 7201 et seq.),
including the Noninsured Crop Disaster Assistance Program under section
196 of that Act (7 U.S.C. 7333).
(3) The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.).
(4) The Commodity Credit Corporation Charter Act (15 U.S.C. 714 et
seq).
(5) The Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.).
(6) Title XII of the Food Security Act of 1985 (16 U.S.C. 3801 et
seq.).
(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.
(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.
(c) Other sanctions may also apply.
[68 FR 39448, July 2, 2003]
Subpart B_Determination of Acreage and Compliance
Source: 68 FR 16176, Apr. 3, 2003, unless otherwise noted.
Sec. 718.101 Measurements.
(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:
(1) After the established final reporting date for the applicable
crop, unless a late filed report is accepted as provided in Sec.
718.103;
(2) After the farm operator has furnished production evidence when
required for program administration purposes except as provided in this
subpart; or
(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.
(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.
(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.
(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.
Sec. 718.102 Acreage reports.
(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.
[[Page 32]]
(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;
(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;
(3) Participants in the programs governed by part 1410 of this title
must report the use of land enrolled in such programs;
(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;
(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;
(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.
(7) All producers requesting to report acreage as prevented planted
or failed must provide documentation to FSA where the farm is
administered that meets the provisions of Sec. 718.103.
(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.
[68 FR 16176, Apr. 3, 2003, as amended at 71 FR 13741, Mar. 17, 2006]
Sec. 718.103 Prevented planted and failed acreage.
(a) Prevented planting is the inability to plant an eligible crop
with proper equipment during the planting period as a result of an
eligible cause of loss, as determined by CCC. The eligible cause of loss
that prevented the planting must have:
(1) Occurred after a previous planting period for the crop;
(2) Occurred before the final planting date for the crop in the
applicable crop year or, in the case of multiple plantings, the harvest
date of the first planting in the applicable planting period, and
(3) Similarly affected other producers in the area, as determined by
CCC.
(b) To be approved by FSA as prevented planted acreage:
(1) The acreage must have been reported within 15 calendar days
after the latter of
(i) The occurrence of prevented planting, or
(ii) The end of the planting period;
(2) The acreage must have been prevented from being planted as the
result of a natural disaster and not a management decision; and
(3) The prevented planted acreage report must be acted on by the
COC. The COC will deny the acreage report if it is not satisfied with
the documentation provided.
(c) To receive prevented planted credit for acreage:
(1) The producer must show there was the intent to plant the acreage
by providing documentation of field preparation, seed purchase and any
other information that shows the acreage could have been planted and
harvested under normal weather conditions, and
(2) The producer must show that the amount of the prevented planted
acreage credit is consistent with prior years' planting history for the
farm.
(d) Eligible prevented planting acreage will be determined on the
basis of the producer's intent to plant the crop acreage and possession
of, or access to, resources to plant, grow, and harvest the crop, as
applicable.
(e) Prevented planting acreage credit is not provided on acreage
that had either a previous or subsequent crop planted on the acreage,
unless the COC determines that all of the following conditions are met:
(1) There is an established practice of planting two or more crops
for harvest on the same acreage in the same crop year;
(2) Both crops could have reached maturity if each planting was
harvested or would have been harvested;
[[Page 33]]
(3) Both the initial and subsequent planted crops were planted or
prevented-planted within the normal planting period for that crop; and
(4) Both the initial and subsequent planted crops meet all other
eligibility provisions of this part including good farming practices.
(f) Prevented planted acreage credit will not be given to crops
where the prevented-planted acreage was affected by drought, unless:
(1) On the final planting date for non-irrigated acreage, the area
that is prevented from being planted has insufficient soil moisture for
germination of seed and progress toward crop maturity because of a
prolonged period of dry weather, as determined by CCC; and
(2) Prolonged precipitation deficiencies exceeded the D2 level as
determined using the U.S. Drought Monitor; and
(3) Verifiable information is collected from sources whose business
or purpose it is to record weather conditions, as determined by CCC, and
including but not limited to the local weather reporting stations of the
U.S. National Weather Service.
(g) Prevented planted acreage credit under this part shall apply to
irrigated crops where the acreage was prevented from being planted due
to a lack of water resulting from drought conditions or contamination by
saltwater intrusion of an irrigation supply resulting from drought
conditions if there was not a reasonable probability of having adequate
water to carry out an irrigation practice.
(h) Acreage ineligible for prevented planting coverage includes, but
is not limited to acreage:
(1) Which planting history or conservation plans indicate would
remain fallow for crop rotation purposes;
(2) Used for conservation purposes or intended to be or considered
to have been left unplanted under any program administered by USDA,
including the Conservation Reserve and Wetland Reserve Programs; and
(3) Not planted because of a management decision.
(i) Failed acreage is acreage that was planted with the proper
equipment during the planting period but failed as a result of an
eligible cause of loss, as determined by CCC.
(j) To be approved by CCC as failed acreage the acreage must have
been reported as failed acreage before disposition of the crop, and the
acreage must have been planted under normal conditions but failed as the
result of a natural disaster and not a management decision. Producers
who file a failed acreage report must have the request acted on by the
COC. The COC will deny the acreage report if it is not satisfied with
the documentation provided.
(k) To receive failed acreage credit the producer must show all of
the following:
(1) That the acreage was planted under normal conditions using the
proper equipment with the intent to harvest the acreage.
(2) Provide documentation that the crop was planted using farming
practices consistent for the crop and area, but could not be brought to
harvest because of disaster-related conditions.
(l) The eligible cause for failed acreage must have:
(1) Occurred after the crop was planted, and
(2) Before the normal harvest date for the crop in the applicable
crop year or in the case of multiple plantings, the harvest date of the
first planting in the applicable planting period, and
(3) Other producers in the area were similarly affected as
determined by CCC.
(m) Eligible failed acreage will be determined on the basis of the
producer planting the crop under normal conditions with the expectation
to take the crop to harvest.
(n) Acreage ineligible for failed acreage credit includes, but is
not limited to acreage:
(1) Which was planted using methods that could not be considered
normal for the area and without the expectation of harvest;
(2) Used for conservation purposes or intended to be or considered
to have been un-harvested under any program administered by USDA,
including the Conservation Reserve and Wetland Reserve Programs; and
[[Page 34]]
(3) That failed because of a management decision.
[71 FR 13741, Mar. 17, 2006]
Sec. 718.104 Late-filed and revised acreage reports.
(a) Late-filed acreage reports may be accepted after the final
reporting date, and be considered timely filed, if both of the following
apply:
(1) The crop or identifiable crop residue is in the field, and
(2) The acreage has not already been determined by FSA.
(b) The farm operator filing a report late shall pay the cost of a
farm inspection unless FSA determines that failure to report in a timely
manner was beyond the producer's control.
(c) Revised acreage reports may be filed with respect to 2005 and
subsequent years to change the acreage reported if:
(1) The acreage has not already been determined by FSA; and
(2) Actual crop or residue is present in the field.
(d) Revised reports shall be filed and accepted:
(1) At any time for all crops if the crop or residue still exists in
the field for inspection to verify the existence and use made of the
crop, the lack of the crop, or a disaster condition affecting the crop;
and
(2) If the producer was in compliance with all other program
requirements at the reporting date.
[71 FR 13742, Mar. 17, 2006]
Sec. 718.105 Tolerances, variances, and adjustments.
(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
Sec. Sec. 718.102(b)(1), (b)(3) and (b)(5).
(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.
(c) Tolerance rules do not apply to:
(1) Program requirements of Sec. Sec. 718.102(b)(2), (b)(4) and
(b)(6);
(2) Official fields when the entire field is devoted to one crop;
(3) Those fields for which staking and referencing was performed and
such acreage was planted according to those measurements; or
(4) The adjusted acreage for farms using measurement after planting
which have a determined acreage greater than the marketing quota crop
allotment.
(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:
(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
(2) For dark air-cured and fire-cured tobacco, an acreage based on
the effective acreage allotment as provided in the table as follows:
------------------------------------------------------------------------
Administrative
Effective acreage allotment is within this range variance
------------------------------------------------------------------------
0.01 to 0.99......................................... 0.01
1.00 to 1.49......................................... 0.02
1.50 to 1.99......................................... 0.03
2.00 to 2.49......................................... 0.04
2.50 to 2.99......................................... 0.05
3.00 to 3.49......................................... 0.06
3.50 to 3.99......................................... 0.07
4.00 to 4.49......................................... 0.08
4.50 and up.......................................... 0.09
------------------------------------------------------------------------
(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.
(f) If the acreage report for a crop is outside the tolerance for
that crop:
(1) FSA may consider the requirements of Sec. Sec. 718.102 (b)(1),
(b)(3) and (b)(5) not to have been met, and;
(2) Participants may be ineligible for all or a portion of payments
or benefits
[[Page 35]]
subject to the requirements of Sec. Sec. 718.102 (b)(1), (b)(3) and
(b)(5).
Sec. 718.106 Non-compliance and fraudulent acreage reports.
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 Sec. Sec. 718.102 (b)(1),
(b)(3) and (b)(5):
(a) The county committee determines that the acreage report filed
according to Sec. Sec. 718.102 (b)(1), (b)(3) and (b)(5) is inaccurate,
and;
(b) A good-faith effort to accurately report the acreage was not
made because the report was knowingly and willfully falsified.
Sec. 718.107 Acreages.
(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.
(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.
(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.
Sec. 718.108 Measuring acreage including skip row acreage.
(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.
(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.
(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 using reasonable and
customary full production planting techniques.
(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.
(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.
Sec. 718.109 Deductions.
(a) Any contiguous area which is not devoted to the crop being
measured and which is not part of a skip-row pattern under Sec. 718.108
shall be deducted from the acreage of the crop if such area
[[Page 36]]
meets the following minimum national standards or requirements:
(1) A minimum width of 30 inches;
(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
(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.
(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.
(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.
Sec. 718.110 Adjustments.
(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:
(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
(2) Pays the cost of a farm inspection to determine the adjusted
acreage prior to the date the farm visit is made.
(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.
Sec. 718.111 Notice of measured acreage.
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.
Sec. 718.112 Redetermination.
(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
Sec. Sec. 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 be
undertaken in the manner prescribed by the Deputy Administrator. A
redetermination shall be used in lieu of any prior determination.
(b) The county committee shall refund the payment of the cost for a
redetermination when, because of an error in the initial determination:
(1) The appraised yield is changed by at least the larger of:
(i) Five percent or 5 pounds for cotton;
(ii) Five percent or 1 bushel for wheat, barley, oats, and rye; or
(iii) Five percent or 2 bushels for corn and grain sorghum; or
(2) The farm stored production is changed by at least the smaller of
3 percent or 600 bushels; or
(3) The acreage of the crop is:
(i) Changed by at least the larger of 3 percent or 0.5 acre; or
(ii) Considered to be within program requirements.
[[Page 37]]
Subpart C_Reconstitution of Farms, Allotments, Quotas, and Bases
Source: 68 FR 16178, Apr. 3, 2003, unless otherwise noted.
Sec. 718.201 Farm constitution.
(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:
(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;
(2) Land under a lease agreement of less than 1 year duration;
(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:
(i) All of the land is contiguous;
(ii) The land is located in counties that are contiguous in the same
State if:
(A) A burley or flue-cured tobacco quota is established for one or
more of the tracts; and
(B) The county committee determines that the tracts will be operated
as a single farming unit as set forth in Sec. 718.202; or
(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.
(4) Federally-owned land;
(5) State-owned wildlife lands unless the former owner has
possession of the land under a leasing agreement; and
(6) Land constituting a farm which is declared ineligible to be
enrolled in a program under the regulations governing the program; and
(7) For acreage base crops, land located in counties that are not
contiguous. However, this paragraph shall not apply if:
(i) Counties are divided by a river;
(ii) Counties do not touch because of a correction line adjustment;
or
(iii) The land is within 20 miles, by road, of other land that will
be a part of the farming unit.
(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.
(2) 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.
(c) A reconstitution of a farm either by division or by combination
shall be required whenever:
(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;
[[Page 38]]
(2) The farm was not properly constituted the previous time;
(3) An owner requests in writing that the land no longer be included
in a farm composed of tracts under separate ownership;
(4) The county committee determines that the farm was reconstituted
on the basis of false information;
(5) The county committee determines that tracts included in a farm
are not being operated as a single farming unit.
(d) Reconstitution shall not be approved if the county committee
determines that the primary purpose of the reconstitution is to:
(1) Circumvent the provisions of part 12 of this title; or
(2) Circumvent any other chapter of this title.
Sec. 718.202 Determining the land constituting a farm.
(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.
(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:
(1) Is a producer on a farm;
(2) Maintains a separate household from the parent or guardian;
(3) Personally carries out the farming activities; and
(4) Maintains a separate accounting for the farming operation.
(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.
(d) A life estate tenant shall be considered to be the owner of the
property for their life.
(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:
(1) Has a separate and distinct interest in the land or crop
involved;
(2) Exercises separate responsibility for the separate and distinct
interest; and
(3) Maintains funds and accounts separate from that of any other
individual or entity for the interest.
(f) The county committee shall require specific proof of ownership.
(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.
(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.
Sec. 718.203 County committee action to reconstitute a farm.
Action to reconstitute a farm may be initiated by the county
committee, the farm owner, or the operator with the concurrence of the
owner of the farm. Any request for a farm reconstitution shall be filed
with the county committee.
Sec. 718.204 Reconstitution of allotments, quotas, and bases.
(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.
(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.
(c) For tobacco farms, a reconstitution will be effective for the
current
[[Page 39]]
year for each crop for which the reconstitution is initiated before the
planting of such crop begins or would have begun.
(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.
Sec. 718.205 Substantive change in farming operation, and changes in
related legal entities.
(a) Land that is properly constituted as a farm shall not be
reconstituted if:
(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;
(2) The county committee determines that the primary purpose of the
request for reconstitution is to:
(i) Obtain additional benefits under one or more commodity programs;
(ii) Avoid damages or penalties under a contract or statute;
(iii) Correct an erroneous acreage report; or
(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.
(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.
(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:
(1) A corporation having more than 50 percent of the stock owned by
members of the same family living in the same household;
(2) Corporations having more than 50 percent of the stock owned by
stockholders common to more than one corporation; or
(3) Trusts in which the beneficiaries and trustees are family
members living in the same household.
(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.
Sec. 718.206 Determining farms, tracts, allotments, quotas, and bases
when reconstitution is made by division.
(a) The methods for dividing farms, tracts, allotments, quotas, and
bases in order of precedence, when applicable, are estate, designation
by landowner, contribution, cropland, DCP cropland, default, and
history. The proper method shall be determined on a crop by crop basis.
(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.
(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.
(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
[[Page 40]]
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.
(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.
(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.
(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.
(3) A landowner may designate a manner in which allotments, quotas,
and bases are divided according to this paragraph.
(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.
(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.
(4) The designation by landowner method is not applicable to crop
allotments or quotas which are restricted to 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.
(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.
(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
[[Page 41]]
and may be used when the provisions of paragraphs (b) and (c) of this
section do not apply.
(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.
(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.
(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:
(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
(ii) Obtains written consent of all owners to use the history
method.
(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.
(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.
(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.
(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:
(i) The owners agree in writing; and
(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.
(2) Farm program payment yields calculated for the resulting farms
of a division may be increased or decreased if 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 a farm program payment
yield on a resulting farm shall be offset by a corresponding decrease on
another resulting farm of the division.
(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:
(1) Among family members;
(2) By the estate method; and
(3) When no sale or change in ownership of land occurs; or
(4) With one resulting farm receiving all of the quota.
[[Page 42]]
Sec. 718.207 Determining allotments, quotas, and bases when
reconstitution is made by combination.
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 Sec. 718.204.
Subpart D_Equitable Relief From Ineligibility
Source: 67 FR 66307, Oct. 31, 2002, unless otherwise noted.
Sec. 718.301 Applicability.
(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 et seq.). 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 Sec. 718.307.
(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.
(c) Section 718.306 does not apply to a function performed under
either section 376 of the Consolidated Farm and Rural Development Act (7
U.S.C. 1921 et seq.), or a conservation program administered by the
Natural Resources Conservation Service of the United States Department
of Agriculture.
Sec. 718.302 Definitions and abbreviations.
In addition to the definitions provided in Sec. 718.2 of this part,
the following terms apply to this subpart:
Agricultural commodity means any agricultural commodity, food, feed,
fiber, or livestock that is subject to a covered program.
Covered program means a program specified in Sec. 718.301 of this
subpart.
FSA means the Farm Service Agency of the United States Department of
Agriculture.
OGC means the Office of the General Counsel of the United States
Department of Agriculture.
SED means, for activities within a particular state, the State
Executive Director of the United States Department of Agriculture, FSA,
for that state.
Sec. 718.303 Reliance on incorrect actions or information.
(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 Sec. 718.305.
(b) This section applies only to a participant who relied upon the
action of, 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.
Sec. 718.304 Failure to fully comply.
(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 Sec. 718.305 if
[[Page 43]]
the participant made a good faith effort to comply fully with the
requirements of the covered program.
(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.
Sec. 718.305 Forms of relief.
(a) The Administrator of FSA, Executive Vice President of CCC, or
their designee, may authorize a participant in a covered program to:
(1) Retain loans, payments, or other benefits received under the
covered program;
(2) Continue to receive loans, payments, and other benefits under
the covered program;
(3) Continue to participate, in whole or in part, under any contract
executed under the covered program;
(4) In the case of a conservation program, re-enroll all or part of
the land covered by the program; and
(5) Receive such other equitable relief as determined to be
appropriate.
(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.
Sec. 718.306 Finality.
(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:
(1) The participant has requested an administrative review of the
determination in accordance with part 780 of this chapter;
(2) The determination was based on misrepresentation, false
statement, fraud, or willful misconduct by or on behalf of the
participant;
(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
(4) The participant had reason to know that the determination was
erroneous.
(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.
Sec. 718.307 Special relief approval authority for State Executive
Directors.
(a) General nature of the special authority. 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 Sec. Sec. 718.303 and 718.304 as if the SED were the
final arbiter within the agency of such matters so long as:
(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;
(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
that SED under this special authority for errors during that year is
less than $20,000 (including in that calculation, any loan amount or
other benefit of any kind payable for that year and any other year);
(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;
(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.
(b) Report of the exercise of the power. 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
[[Page 44]]
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.
(c) Additional limits on the authority. The authority provided under
this section does not extend to:
(1) The administration of payment limitations under part 1400 of
this chapter (Sec. Sec. 1001 to 1001F of 7 U.S.C. 1308 et seq.);
(2) The administration of payment limitations under a conservation
program administered by the Secretary; or
(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 et seq.) as administered under 7 CFR part 12.
(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.
(e) Relation to other authorities. 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.
[[Page 45]]
SUBCHAPTER C_REGULATIONS FOR WAREHOUSES
PART 735_REGULATIONS FOR THE UNITED STATES WAREHOUSE
ACT--Table of Contents
Subpart A_General Provisions
Sec.
735.1 Applicability.
735.2 Administration.
735.3 Definitions.
735.4 Fees.
735.5 Penalties.
735.6 Suspension, revocation and liquidation.
735.7 Return of suspended or revoked certificates of licensing or
certificates of authorization.
735.8 Appeals.
735.9 Dispute resolution and arbitration of private parties.
735.10 Posting of certificates of licensing, certificates of
authorization or other USWA documents.
735.11 Lost or destroyed certificates of licensing, authorization or
agreements.
735.12 Safe keeping of records.
735.13 Information of violations.
735.14 Bonding and other financial assurance requirements.
Subpart B_Warehouse Licensing
735.100 Application.
735.101 Financial records and reporting requirements.
735.102 Financial assurance requirements.
735.103 Amendments to license.
735.104 Insurance requirements.
735.105 Care of agricultural products.
735.106 Excess storage and transferring of agricultural products.
735.107 Warehouse charges and tariffs.
735.108 Inspections and examinations of warehouses.
735.109 Disaster loss to be reported.
735.110 Conditions for delivery of agricultural products.
735.111 Fair treatment.
735.112 Terminal and futures contract markets
Subpart C_Inspectors, Samplers, Classifiers, and Weighers
735.200 Service licenses.
735.201 Agricultural product certificates; format.
735.202 Standards of grades for other agricultural products.
Subpart D_Warehouse Receipts
735.300 Warehouse receipt requirements.
735.301 Notification requirements.
735.302 Paper warehouse receipts.
735.303 Electronic warehouse receipts.
Subpart E_Electronic Providers
735.400 Administration.
735.401 Electronic warehouse receipt and USWA electronic document
providers.
735.402 Providers of other electronic documents.
735.403 Audits.
735.404 Schedule of charges and rates.
Authority: 7 U.S.C. 241 et seq.
Source: 67 FR 50763, Aug. 5, 2002, unless otherwise noted.
Subpart A_General Provisions
Sec. 735.1 Applicability.
(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.
(b) Additional terms and conditions may be set forth in applicable
licensing agreements, provider agreements and other documents.
(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.
Sec. 735.2 Administration.
(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.
(b) DACO may waive or modify the licensing or authorization
requirements or deadlines in cases where lateness or
[[Page 46]]
failure to meet such requirements does not adversely affect the
licensing or authorizations operated under the Act.
(c) DACO will provide affected licensees or authorized providers
with changes to their licensing or provider agreements before the
effective date.
(d) Licensing and authorization agreement updates will be available
at:
(1) DACO's USWA website, and
(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.
Sec. 735.3 Definitions.
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.
Access means the ability, when authorized, to read, change, and
transfer warehouse receipts or other applicable document information
retained in a central filing system.
Agricultural product 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.
Central filing system (CFS) 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.
Certificate 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.
Control of the facility means ultimate responsibility for the
operation and integrity of a facility by ownership, lease, or operating
agreement.
Department means the Department of Agriculture.
Electronic document 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.
Electronic warehouse receipt (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.
Examiner means an individual designated by DACO for the purpose of
examining warehouses or for any other activities authorized under the
Act.
Financial assurance means the surety or other financial obligation
authorized by DACO that is a condition of receiving a license or
authorization under the Act.
Force majeure 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.
Holder means a person that has possession in fact or by operation of
law of a warehouse receipt, USWA electronic document, or any electronic
document.
License means a license issued under the Act by DACO.
Licensing agreement 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.
Non-storage agricultural product 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.
Official Standards of the United States 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
[[Page 47]]
Grain Standards Act, (7 U.S.C. 1622) the Agricultural Marketing Act of
1946, or other applicable official United States Standards.
Other electronic documents (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.
Person means a person as set forth in 1 U.S.C. 1, a State; or a
political subdivision of a State.
Provider 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.
Provider agreement 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.
Receipt means a warehouse receipt issued in accordance with the Act,
including an electronic warehouse receipt.
Schedule of charges means the tariff or uniform rate or amount
charged by an authorized person for specific services offered or
rendered under the Act.
Schedule of fees 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.
Service license 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 Sec. 735.202, at the
specific warehouse license.
Stored agricultural products 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.
User means a person that uses a provider's CFS.
USWA electronic document 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.
Warehouse 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.
Warehouse capacity 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.
Warehouse operator means a person lawfully engaged in the business
of storing or handling agricultural products.
Warehousing activities and practices means any legal, operational,
managerial or financial duty that a warehouse operator has regarding an
agricultural product.
Sec. 735.4 Fees.
(a) FSA will assess persons covered by the Act fees to cover the
costs of administering the Act.
(b) Warehouse operators, licensees, applicants, or providers must
pay:
(1) An annual fee as provided in the applicable licensing or
provider agreement; and
(2) Fees that FSA assesses for specific services, examinations and
audits, or as provided in the applicable licensing or provider
agreement.
(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:
(1) Will be available at DACO's USWA Web site, or
(2) May be requested at the following address: Deputy Administrator,
Commodity Operations, Farm Service Agency, United States Department of
[[Page 48]]
Agriculture, STOP 0550, 1400 Independence Avenue, SW., Washington, DC
20250-0550.
(d) At the sole discretion of DACO, these fees may be waived.
Sec. 735.5 Penalties.
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 Sec. 735.8, a civil penalty:
(a) Of not more than $25,000 per violation, if an agricultural
product is not involved in the violation; or
(b) Of not more than 100 percent of the value of the agricultural
product, if an agricultural product is involved in the violation.
Sec. 735.6 Suspension, revocation and liquidation.
(a) DACO may, after an opportunity for a hearing as provided in
Sec. 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.
(b) The reasons for a suspension, revocation or liquidation under
this part include, but are not limited to:
(1) Failure to perform licensed or authorized services as provided
in this part or in the applicable licensing or provider agreement;
(2) Failure to maintain minimum financial requirements as provided
in the applicable licensing or provider agreement;
(3) Failure to submit a proper annual financial statement within the
established time period as provided in the applicable licensing or
provider agreement.
(4) Failure to maintain control of the warehouse or provider system.
(5) The warehouse operator or provider requests closure,
cancellation or liquidation. and
(6) Commission of fraud against FSA, any depositor, EWR or OED
holder or user, or any other function or operation under this part.
(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.
(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.
(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.
Sec. 735.7 Return of suspended or revoked certificates of licensing or
certificates of authorization.
(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.
(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
Sec. 735.8 Appeals.
(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.
(b) Any person who believes that they have been adversely affected
by a
[[Page 49]]
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.
(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:
(1) DACO will notify the person in writing of the nature of the
suspension, revocation or liquidation action;
(2) The person must notify DACO of any appeal of its action within
twenty-eight calendar days;
(3) The appeal and request must state whether:
(i) A hearing is requested,
(ii) The person will appear in person at such hearing, or
(iii) Such hearing will be held by telephone;
(4) DACO will provide the person a written acknowledgment of their
request to pursue an appeal;
(5) When a person requests an appeal and does not request a hearing
DACO will allow that person:
(i) To submit in writing the reasons why they believe DACO's
determination to be in error,
(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
(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;
(6) If the person requests to pursue an appeal and requests a
hearing, DACO will:
(i) Notify the person of the date of the hearing,
(ii) Determine the location of the hearing, when the person asks to
appear in person,
(iii) Notify the person of the location of the hearing,
(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
(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;
(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
(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.
Sec. 735.9 Dispute resolution and arbitration of private parties.
(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.
(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.
(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.
Sec. 735.10 Posting of certificates of licensing, certificates of
authorization or other USWA documents.
(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.
(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
[[Page 50]]
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.
(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.
Sec. 735.11 Lost or destroyed certificates of licensing, authorization
or agreements.
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.
Sec. 735.12 Safe keeping of records.
Each warehouse operator or provider must take necessary precautions
to safeguard all records, either paper or electronic format, from
destruction.
Sec. 735.13 Information of violations.
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.
Sec. 735.14 Bonding and other financial assurance requirements.
(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.
(b) Such bond or assurance must be for a period of not less than one
year and in such amount as required by DACO.
(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.
(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.
(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.
Subpart B_Warehouse Licensing
Sec. 735.100 Application.
(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:
(1) For a partnership, an executed partnership agreement; and
(2) For a corporation:
(i) Articles of incorporation certified by the Secretary of State of
the applicable State of incorporation;
(ii) Bylaws; and
(iii) Permits to do business; and
(3) For a limited partnership, an executed limited partnership
agreement; and
(4) For a limited liability company:
(i) Articles of organization or similar documents; and
(ii) Operating agreement or similar agreement.
(b) The warehouse facilities of an operator licensed under the Act
must, as determined by DACO, be:
[[Page 51]]
(1) Physically and operationally suitable for proper storage of the
applicable agricultural product or agricultural products specified in
the license;
(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
(3) Subject to the warehouse operator's control of the facility
including all contiguous storage space with respect to such facilities.
(c) As specified in individual licensing agreements, a warehouse
operator must:
(1) Meet the basic financial requirements determined by DACO; and
(2) Meet the net worth requirements determined by DACO;
(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.
(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:
(1) The largest bond or financial assurance;
(2) The greatest amount of net worth; and
(3) The greatest amount of fees.
Sec. 735.101 Financial records and reporting requirements.
(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.
(b) Warehouse operators must, annually, present a financial
statement as may be prescribed in the applicable licensing agreement to
DACO.
Sec. 735.102 Financial assurance requirements.
(a) Warehouse operators must file with DACO financial assurances
approved by DACO consisting of:
(1) A warehouse operator's bond; or
(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
(3) An irrevocable letter of credit issued in the favor of DACO with
a term of not less than two years; or
(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
(5) Other alternative instruments and forms of financial assurance
approved by DACO as may be prescribed in the applicable licensing
agreement.
(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.
Sec. 735.103 Amendments to license.
FSA will issue an amended license upon:
(a) Receipt of forms prescribed and furnished by DACO outlining the
requested changes to the license;
[[Page 52]]
(b) Payment of applicable licensing and examination fees;
(c) Receipt of bonding or other financial assurance if required in
the applicable licensing agreement; and
(d) Receipt of a report on the examination of the proposed
facilities pending inclusion or exclusion, if determined necessary by
DACO.
Sec. 735.104 Insurance requirements.
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.
Sec. 735.105 Care of agricultural products.
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.
Sec. 735.106 Excess storage and transferring of agricultural products.
(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.
(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.
Sec. 735.107 Warehouse charges and tariffs.
(a) A warehouse operator must not make any unreasonable or
exorbitant charge for services rendered.
(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.
Sec. 735.108 Inspections and examinations of warehouses.
(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.
(b) Routine and special inspections and examinations will be
unannounced.
(c) Warehouse operators must provide safe access to all storage
facilities.
(d) Warehouse operators must inform any agent of the Department,
upon arrival, of any hazard.
(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.
Sec. 735.109 Disaster loss to be reported.
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.
Sec. 735.110 Conditions for delivery of agricultural products.
(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:
(1) The holder of the warehouse receipt for the agricultural
product; or
(2) The person that deposited the agricultural product, if no
warehouse receipt has been issued.
(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.
(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.
(d) A warehouse operator must cancel each warehouse receipt
surrendered to
[[Page 53]]
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.
(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.
Sec. 735.111 Fair treatment.
(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:
(1) Of the kind, type, and quality customarily stored or handled in
the area in which the warehouse is located;
(2) Tendered to the warehouse operator in a suitable condition for
warehousing; and
(3) Tendered in a manner that is consistent with the ordinary and
usual course of business.
(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.
Sec. 735.112 Terminal and futures contract markets.
(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.
(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:
(1) An owner or employee of the licensed warehouse;
(2) The owner of, or an employee of the owner of, such agricultural
product deposited in any such licensed warehouse; or
(3) As may be prescribed in any applicable licensing or provider
agreement.
Subpart C_Inspectors, Samplers, Classifiers, and Weighers
Sec. 735.200 Service licenses.
(a) FSA may issue to a person a license for:
(1) Inspection of any agricultural product stored or handled in a
warehouse subject to the Act;
(2) Sampling of such an agricultural product;
(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;
(4) Weighing of such an agricultural product and certify the weight
of the agricultural product; or
(5) Performing two or more services specified in paragraphs (a)(1),
(a)(2), (a)(3) or (a)(4) of this section.
(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:
(1) The name, location and license number of the warehouses where
the applicant would perform such activities;
(2) A statement from the warehouse operator that the applicant is
competent and authorized to perform such activities at specific
locations; and
(3) Evidence that the applicant is competent to inspect, sample,
classify, according to grade or weigh the agricultural product.
(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.
Sec. 735.201 Agricultural product certificates; format.
Each inspection, grade, class, weight or combination certificate
issued under the Act by a licensee to perform such services must be:
(a) In a format prescribed by DACO;
[[Page 54]]
(b) Issued and maintained in a consecutive order; and
(c) As prescribed in the applicable licensing or provider agreement
and authorized by DACO.
Sec. 735.202 Standards of grades for other agricultural products.
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:
(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
(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.
Subpart D_Warehouse Receipts
Sec. 735.300 Warehouse receipt requirements.
(a) Warehouse receipts may be:
(1) Negotiable or non-negotiable;
(2) For a single unit, multiple units, identity preserved or
commingled lot; and
(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.
(b) The warehouse operator must:
(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;
(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;
(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;
(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;
(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;
(6) When issuing a warehouse receipt and purposefully omitting any
information, notate the blank to show such intent;
(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;
(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
(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.
(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
[[Page 55]]
face the number and the date of the original warehouse receipt may be
issued.
Sec. 735.301 Notification requirements.
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.
Sec. 735.302 Paper warehouse receipts.
Paper warehouse receipts must be issued as follows:
(a) On distinctive paper specified by DACO;
(b) Printed by a printer authorized by DACO; and
(c) Issued, identified and maintained in a consecutive order.
Sec. 735.303 Electronic warehouse receipts.
(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:
(1) Only issue EWR's through one FSA-authorized provider annually;
(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 Sec. 735.2(b);
(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;
(4) When using an authorized provider, issue and cancel all
warehouse receipts as EWR's;
(5) Cancel an EWR only when they are the holder of the warehouse
receipt;
(6) Be the holder of an EWR to correct information contained within
any required data field;
(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
(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.
(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:
(1) The holder of an EWR will be entitled to the same rights and
privileges as the holder of a paper warehouse receipt.
(2) Only the current holder of the EWR may transfer the EWR to a new
holder.
(3) The identity of the holder must be confidential and included as
information for every EWR.
(4) Only one person may be designated as the holder of an EWR at any
one time.
(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.
(6) An EWR may only be issued to replace a paper warehouse receipt
if requested by the current holder of the paper warehouse receipt.
(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.
(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.
[[Page 56]]
Subpart E_Electronic Providers
Sec. 735.400 Administration.
This subpart sets forth the regulations under which DACO may
authorize one or more electronic systems under which:
(a) Electronic documents relating to the shipment, payment, and
financing of the sale of agricultural products may be issued or
transferred; or
(b) Electronic receipts may be issued and transferred.
Sec. 735.401 Electronic warehouse receipt and USWA electronic document providers.
(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:
(1) Have and maintain a net worth as specified in the applicable
provider agreement;
(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 Sec. 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;
(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;
(4) For any entity that is not an individual, a document that
establishes proof of the existence, such as:
(i) For a partnership, an executed partnership agreement; and
(ii) For a corporation:
(A) Articles of incorporation certified by the Secretary of State of
the applicable State of incorporation;
(B) Bylaws; and
(C) Permits to do business; and
(iii) For a limited partnership, an executed limited partnership
agreement; and
(iv) For a limited liability company:
(A) Articles of organization or similar documents; and
(B) Operating agreement or similar agreement.
(5) Meet any additional financial requirements as set forth in the
applicable provider agreement;
(6) Pay user fees annually to FSA, as set and announced annually by
FSA prior to April 1 of each calendar year; and
(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.
(b) The provider agreement will contain, but not be limited to,
these basic elements:
(1) Scope of authority;
(2) Minimum document and warehouse receipt requirements;
(3) Liability;
(4) Transfer of records protocol;
(5) Records;
(6) Conflict of interest requirements;
(7) USDA common electronic information requirements;
(8) Financial requirements
(9) Terms of insurance policies or assurances;
(10) Provider's integrity statement;
(11) Security audits; and
(12) Submission, authorization, approval, use and retention of
documents.
(c) DACO may suspend or terminate a provider's agreement for cause
at any time.
(1) Hearings and appeals will be conducted in accordance with
procedures as set forth in Sec. Sec. 735.6 and 735.8.
(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.
(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.
(d) Each provider agreement will be automatically renewed annually
on
[[Page 57]]
April 30th as long as the provider complies with the terms contained in
the provider agreement, the regulations in this subpart, and the Act.
Sec. 735.402 Providers of other electronic documents.
(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:
(1) Have and maintain a net worth as specified in the applicable
provider agreement;
(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 Sec. 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;
(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;
(4) For any entity that is not an individual, a document that
establishes proof of the existence, such as:
(i) For a partnership, an executed partnership agreement; and
(ii) For a corporation:
(A) Articles of incorporation certified by the Secretary of State of
the applicable State of incorporation;
(B) Bylaws; and
(C) Permits to do business; and
(iii) For a limited partnership, an executed limited partnership
agreement; and
(iv) For a limited liability company:
(A) Articles of organization or similar documents; and
(B) Operating agreement or similar agreement.
(5) Meet any additional financial requirements as set forth in the
applicable provider agreement;
(6) Pay user fees annually to FSA, as set and announced annually by
FSA prior to April 1 of each calendar year; and
(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.
(b) The provider agreement will contain, but not be limited to,
these basic elements:
(1) Scope of authority;
(2) Minimum document and warehouse receipt requirements;
(3) Liability;
(4) Transfer of records protocol;
(5) Records;
(6) Conflict of interest requirements;
(7) USDA common electronic information requirements;
(8) Financial requirements;
(9) Terms of insurance policies or assurances;
(10) Provider's integrity statement;
(11) Security audits; and
(12) Submission, authorization, approval, use and retention of
documents.
(c) DACO may suspend or terminate a provider's agreement for cause
at any time.
(1) Hearings and appeals will be conducted in accordance with
procedures as set forth in Sec. Sec. 735.6 and 735.8.
(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.
(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.
(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.
[[Page 58]]
Sec. 735.403 Audits.
(a) No later than 120 calendar days following the end of the
provider's fiscal year, the provider authorized under Sec. Sec. 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.
(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.
Sec. 735.404 Schedule of charges and rates.
(a) A provider authorized under Sec. Sec. 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.
(b) Charges and rates assessed any user by the provider must be in
effect for a minimum period of one year.
(c) Providers must furnish FSA and all users a 60-calendar day
advance notice of their intent to change any charges and rates.
PART 743 [RESERVED]
[[Page 59]]
SUBCHAPTER D_SPECIAL PROGRAMS
PART 750_SOIL BANK--Table of Contents
Editorial Note: 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 Federal
Register citations affecting this part, see the ``List of CFR Sections
Affected, 1949-1963, 1964-1972, and 1973-1985,'' published in seven
separate volumes.
PART 760_INDEMNITY PAYMENT PROGRAMS--Table of Contents
Subpart A_Dairy Indemnity Payment Program
Program Operations
Sec.
760.1 Administration.
760.2 Definitions.
Payments to Dairy Farmers for Milk
760.3 Indemnity payments on milk.
760.4 Normal marketings of milk.
760.5 Fair market value of milk.
760.6 Information to be furnished.
760.7 Other requirements for affected farmers.
760.8 Application for payments for milk.
760.9 Other legal recourse.
Payments to Manufacturers Affected by Pesticides
760.20 Payments to manufacturers of dairy products.
760.21 Application for payments by manufacturers.
760.22 Information to be furnished by manufacturer.
760.23 Other requirements for manufacturers.
General Provisions
760.24 Limitation of authority.
760.25 Estates and trusts; minors.
760.26 Appeals.
760.27 Setoffs.
760.28 Overdisbursement.
760.29 Death, incompetency, or disappearance.
760.30 Records and inspection thereof.
760.31 Assignment.
760.32 Instructions and forms.
760.33 Availability of funds.
760.34 Paperwork Reduction Act assigned numbers.
Subpart B_General Provisions for the 2005 Section 32 Hurricane Disaster
Programs
760.101 Eligible counties, hurricanes and disaster periods.
760.102 Applicability.
760.103 Administration of HIP, FIP, LIP, and TIP.
760.104 Definitions.
760.105 Application for payment.
760.106 Limitations on payments and other benefits.
760.107 Appeals.
760.108 Offsets, assignments, and debt settlement.
760.109 Records and inspection thereof.
760.110 Refunds; joint and several liability.
760.111 Paperwork Reduction Act assigned number.
Subpart C_Hurricane Indemnity Program
760.201 Applicability.
760.202 Producer eligibility.
760.203 Payment calculation.
Subpart D_Feed Indemnity Program
760.301 Applicability.
760.302 Definitions.
760.303 Eligible livestock and producers.
760.304 Application process.
760.305 Payment calculation.
Subpart E_Livestock Indemnity Program
760.401 Applicability.
760.402 Definitions.
760.403 Eligible owners, contract growers and livestock.
760.404 Application process.
760.405 Payment calculation.
Subpart F_Tree Indemnity Program
760.501 Applicability.
760.502 Eligible producers and stands.
760.503 Application process.
760.504 Payment calculation.
Subpart G_Aquaculture Program
760.601 Funds availability.
Authority: 7 U.S.C. 612c; Pub. L. 106-387, 114 Stat. 1549; Pub. L.
107-76, 115 Stat. 704.
[[Page 60]]
Subpart A_Dairy Indemnity Payment Program
Authority: Pub. L. 106-387, 114 Stat. 1549, and Pub. L. 107-76, 115
Stat. 704.
Source: 43 FR 10535, Mar. 14, 1978, unless otherwise noted.
Program Operations
Sec. 760.1 Administration.
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.
Sec. 760.2 Definitions.
For purposes of this subject, the following terms shall have the
meanings specified:
(a) Secretary 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.
(b) FSA means the Farm Service Agency, U.S. Department of
Agriculture.
(c) Deputy Administrator means the Deputy Administrator for Farm
Programs, FSA.
(d) State committee means the FSA State committee.
(e) County committee means the FSA county committee.
(f) Pesticide 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.
(g) Chemicals or Toxic Substances means any chemical substance or
mixture as defined in the Toxic Substances Control Act (15 U.S.C. 2602).
(h) Nuclear Radiation or Fallout means contamination from nuclear
radiation or fallout from any source.
(i) Violating Substance means one or more of the items defined in
paragraphs (f), (g), and (h) of this section.
(j) Public agency means any Federal, State or local public
regulatory agency.
(k) Affected farmer means a person who produces whole milk which is
removed from the commerical market any time from:
(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
(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.
(l) Affected manufacturer 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.
(m) Milk handler 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.
(n) Person means an individual, partnership, association,
corporation, trust, estate, or other legal entity.
(o) Application period 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) Pay period 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 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.
[[Page 61]]
(q) Whole milk means milk as it is produced by cows.
(r) Commercial market 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.
(s) Removed from the commercial market 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.
(t) Payment subject to refund 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.
(u) Base period means the calendar month or 4-week period
immediately preceding removal of milk from the market.
[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; 71 FR 27190, May 10,
2006]
Payments to Dairy Farmers for Milk
Sec. 760.3 Indemnity payments on milk.
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 Sec. Sec. 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.
[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]
Sec. 760.4 Normal marketings of milk.
(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.
(b) Normal marketings for each pay period are based on the average
daily production during the base period.
(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.
(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.
[43 FR 10535, Mar. 14, 1978, as amended by Amdt. 1, 44 FR 36360, July
22, 1979]
Sec. 760.5 Fair market value of milk.
(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.
(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 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
[[Page 62]]
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.
(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.
Sec. 760.6 Information to be furnished.
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:
(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.
(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.
(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.
(d) The average number of cows milked during the base period and
during each pay period in the application.
(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.
(f) The amount of proceeds, if any, received by the affected farmer
from the marketing of whole milk produced during the application period.
(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.
(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.
(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.
[[Page 63]]
(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.
[43 FR 10535, Mar. 14, 1978, as amended by Amdt. 1, 44 FR 36360, June
22, 1979]
Sec. 760.7 Other requirements for affected farmers.
An indemnity payment for milk may be made under this subpart to an
affected farmer only under the following conditions:
(a) If the pesticide, chemical, or toxic substance, contaminating
the milk was used by the affected farmer, he established each of the
following:
(1) That the pesticide, chemical or toxic substance, when used, was
registered (if applicable) and approved for use as provided in Sec.
760.2(f);
(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;
(3) That the contamination of his milk was not otherwise his fault.
(b) If the pesticide, chemical, or toxic substance contaminating the
milk was not used by the affected farmer, he establishes each of the
following:
(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.
(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.
(3) The contamination of his milk was not otherwise his fault.
(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.
[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]
Sec. 760.8 Application for payments for milk.
The affected farmer or his legal representative, as provided in
Sec. Sec. 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 Sec. 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
Sec. 760.7. Such information shall be submitted on forms approved for
the purpose by the Deputy Administrator.
[43 FR 10535, Mar. 14, 1978, as amended at 51 FR 12986, Apr. 17, 1986;
52 FR 17935, May 13, 1987]
Sec. 760.9 Other legal recourse.
(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.
(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
[[Page 64]]
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: Provided, That the amount
of such refund shall not exceed the amount of other compensation
received by the farmer.
[Amdt. 1, 44 FR 36361, June 22, 1979]
Payments to Manufacturers Affected by Pesticides
Sec. 760.20 Payments to manufacturers of dairy products.
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.
Note: Manufacturers are not eligible for payment when dairy products
are contaminated by chemicals, toxic substances (other than pesticides)
or nuclear radiation or fallout.
[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]
Sec. 760.21 Application for payments by manufacturers.
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.
Sec. 760.22 Information to be furnished by manufacturer.
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:
(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.
(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.
(c) A record of the quantity of milk or butterfat used to produce
the product for which an indemnity payment is requested.
(d) The identity of any pesticide used by the affected manufacturer.
(e) Such other information as the Deputy Administrator may request
to enable him to make the determinations required in this subpart.
Sec. 760.23 Other requirements for manufacturers.
An indemnity payment may be made under this subpart to an affected
manufacturer only under the following conditions:
(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 Sec. 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.
(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.
(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:
Provided, That the amount of such refund shall not exceed the
[[Page 65]]
amount of other compensation received by the manufacturer.
[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]
General Provisions
Sec. 760.24 Limitation of authority.
(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.
(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:
(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.
(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.
Sec. 760.25 Estates and trusts; minors.
(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.
(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:
(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.
(2) [Reserved]
Sec. 760.26 Appeals.
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.
Sec. 760.27 Setoffs.
(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.
(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.
Sec. 760.28 Overdisbursement.
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.
Sec. 760.29 Death, incompetency, or disappearance.
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
[[Page 66]]
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.
[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]
Sec. 760.30 Records and inspection thereof.
(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, records, and accounts.
(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.
Sec. 760.31 Assignment.
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.
Sec. 760.32 Instructions and forms.
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.
[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]
Sec. 760.33 Availability of funds.
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.
(Approved by the Office of Management and Budget under control number
0560-0045)
[48 FR 40367, Sept. 7, 1983 and 49 FR 8906, Mar. 9, 1984]
Sec. 760.34 Paperwork Reduction Act assigned numbers.
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.
[49 FR 29564, July 23, 1984]
Subpart B_General Provisions for the 2005 Section 32 Hurricane Disaster
Programs
Source: 71 FR 27191, May 10, 2006, unless otherwise noted.
[[Page 67]]
Sec. 760.101 Eligible counties, hurricanes and disaster periods.
Producers who have suffered certain losses due to 2005 Hurricanes
Dennis, Katrina, Ophelia, Rita, and Wilma in the following counties
(eligible counties) are eligible to enroll in the programs made
available under subparts B through F of this part. The 'Disaster Period'
is the time period in which losses occurred that would be considered
eligible for the programs under subparts B through F of this part. Funds
for the programs in subparts B through G are made available under
section 32 of the Act of August 24, 1935, as amended (section 32).
[[Page 68]]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Disaster period
State County -------------------------------------------------------------------------------------------------------------
Dennis Katrina Ophelia Rita Wilma
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama........................................ Autauga.......................... 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Baldwin.......................... 7/10/05-9/8/05 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Bibb............................. .................... 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Butler........................... 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Chambers......................... 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Choctaw.......................... 7/10/05-9/8/05 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Clarke........................... 7/10/05-9/8/05 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Clay............................. 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Cleburne......................... 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Coffee........................... 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Colbert.......................... .................... 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Conecuh.......................... 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Covington........................ 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Crenshaw......................... 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Cullman.......................... .................... 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Dallas........................... 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Escambia......................... 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Geneva........................... 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Greene........................... 7/10/05-9/8/05 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Hale............................. 7/10/05-9/8/05 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Henry............................ 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Houston.......................... 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Jefferson........................ .................... 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Lamar............................ .................... 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Lauderdale....................... .................... 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Lowndes.......................... 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Macon............................ 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Marengo.......................... 7/10/05-9/8/05 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Marion........................... .................... 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Mobile........................... 7/10/05-9/8/05 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Monroe........................... 7/10/05-9/8/05 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Perry............................ 7/10/05-9/8/05 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Pickens.......................... .................... 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Pike............................. 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Randolph......................... 7/10/05-9/8/05 .................... .................... .................... ....................
Alabama........................................ Sumter........................... 7/10/05-9/8/05 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Tuscaloosa....................... 7/10/05-9/8/05 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Washington....................... 7/10/05-9/8/05 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Wilcox........................... 7/10/05-9/8/05 8/29/05-10/28/05 .................... .................... ....................
Alabama........................................ Winston.......................... .................... 8/29/05-10/28/05 .................... .................... ....................
[[Page 69]]
Florida........................................ Bay.............................. 7/10/05-9/8/05 8/24/05-10/23/05 .................... .................... ....................
Florida........................................ Brevard.......................... .................... .................... .................... .................... 10/23/05-12/22/05
Florida........................................ Broward.......................... .................... 8/24/05-10/23/05 .................... .................... 10/23/05-12/22/05
Florida........................................ Calhoun.......................... 7/10/05-9/8/05 .................... .................... .................... ....................
Florida........................................ Charlotte........................ .................... .................... .................... .................... 10/23/05-12/22/05
Florida........................................ Collier.......................... .................... 8/24/05-10/23/05 .................... .................... 10/23/05-12/22/05
Florida........................................ Dixie............................ 7/10/05-9/8/05 .................... .................... .................... ....................
Florida........................................ Escambia......................... 7/10/05-9/8/05 8/24/05-10/23/05 .................... .................... ....................
Florida........................................ Franklin......................... 7/10/05-9/8/05 8/24/05-10/23/05 .................... .................... ....................
Florida........................................ Gadsden.......................... 7/10/05-9/8/05 .................... .................... .................... ....................
Florida........................................ Glades........................... .................... .................... .................... .................... 10/23/05-12/22/05
Florida........................................ Gulf............................. 7/10/05-9/8/05 8/24/05-10/23/05 .................... .................... ....................
Florida........................................ Hardee........................... .................... .................... .................... .................... 10/23/05-12/22/05
Florida........................................ Hendry........................... .................... .................... .................... .................... 10/23/05-12/22/05
Florida........................................ Highlands........................ .................... .................... .................... .................... 10/23/05-12/22/05
Florida........................................ Holmes........................... 7/10/05-9/8/05 .................... .................... .................... ....................
Florida........................................ Indian River..................... .................... .................... .................... .................... 10/23/05-12/22/05
Florida........................................ Jackson.......................... 7/10/05-9/8/05 .................... .................... .................... ....................
Florida........................................ Jefferson........................ 7/10/05-9/8/05 .................... .................... .................... ....................
Florida........................................ Lee.............................. .................... .................... .................... .................... 10/23/05-12/22/05
Florida........................................ Leon............................. 7/10/05-9/8/05 .................... .................... .................... ....................
Florida........................................ Levy............................. 7/10/05-9/8/05 .................... .................... .................... ....................
Florida........................................ Liberty.......................... 7/10/05-9/8/05 .................... .................... .................... ....................
Florida........................................ Martin........................... .................... .................... .................... .................... 10/23/05-12/22/05
Florida........................................ Miami-Dade....................... .................... 8/24/05-10/23/05 .................... .................... 10/23/05-12/22/05
Florida........................................ Monroe........................... 7/10/05-9/8/05 8/24/05-10/23/05 .................... .................... 10/23/05-12/22/05
Florida........................................ Okaloosa......................... 7/10/05-9/8/05 8/24/05-10/23/05 .................... .................... ....................
Florida........................................ Okeechobee....................... .................... .................... .................... .................... 10/23/05-12/22/05
Florida........................................ Palm Beach....................... .................... .................... .................... .................... 10/23/05-12/22/05
Florida........................................ St. Lucie........................ .................... .................... .................... .................... 10/23/05-12/22/05
Florida........................................ Santa Rosa....................... 7/10/05-9/8/05 8/24/05-10/23/05 .................... .................... ....................
Florida........................................ Sarasota......................... .................... .................... .................... .................... 10/23/05-12/22/05
Florida........................................ Taylor........................... 7/10/05-9/8/05 .................... .................... .................... ....................
Florida........................................ Wakulla.......................... 7/10/05-9/8/05 .................... .................... .................... ....................
Florida........................................ Walton........................... 7/10/05-9/8/05 8/24/05-10/23/05 .................... .................... ....................
Florida........................................ Washington....................... 7/10/05-9/8/05 .................... .................... .................... ....................
Louisiana...................................... Acadia........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Allen............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Ascension........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Assumption....................... .................... 8/29/05-10/28/05 .................... .................... ....................
Louisiana...................................... Avoyelles........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Beauregard....................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Bienville........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Bossier.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
[[Page 70]]
Louisiana...................................... Caddo............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Calcasieu........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Caldwell......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Cameron.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Catahoula........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Claiborne........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Concordia........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... De Soto.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... East Baton Rouge................. .................... 8/29/05-10/28/05 .................... .................... ....................
Louisiana...................................... East Carroll..................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... East Feliciana................... .................... 8/29/05-10/28/05 .................... .................... ....................
Louisiana...................................... Evangeline....................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Franklin......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Grant............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Iberia........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Iberville........................ .................... 8/29/05-10/28/05 .................... .................... ....................
Louisiana...................................... Jackson.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Jefferson........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Jefferson Davis.................. .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Lafayette........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Lafourche........................ .................... 8/29/05-10/28/05 .................... .................... ....................
Louisiana...................................... La Salle......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Lincoln.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Livingston....................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Madison.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Morehouse........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Natchitoches..................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Orleans.......................... .................... 8/29/05-10/28/05 .................... .................... ....................
Louisiana...................................... Ouachita......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Plaquemines...................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Pointe Coupee.................... .................... 8/29/05-10/28/05 .................... .................... ....................
Louisiana...................................... Rapides.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Red River........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Richland......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Sabine........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... St. Bernard...................... .................... 8/29/05-10/28/05 .................... .................... ....................
Louisiana...................................... St. Charles...................... .................... 8/29/05-10/28/05 .................... .................... ....................
Louisiana...................................... St. Helena....................... .................... 8/29/05-10/28/05 .................... .................... ....................
Louisiana...................................... St. James........................ .................... 8/29/05-10/28/05 .................... .................... ....................
[[Page 71]]
Louisiana...................................... St. John the Baptist............. .................... 8/29/05-10/28/05 .................... .................... ....................
Louisiana...................................... St. Landry....................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... St. Martin....................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... St. Mary......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... St. Tammany...................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Tangipahoa....................... .................... 8/29/05-10/28/05 .................... .................... ....................
Louisiana...................................... Tensas........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Terrebonne....................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Union............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Vermilion........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Vernon........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... Washington....................... .................... 8/29/05-10/28/05 .................... .................... ....................
Louisiana...................................... Webster.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... West Baton Rouge................. .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... West Carroll..................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Louisiana...................................... West Feliciana................... .................... 8/29/05-10/28/05 .................... .................... ....................
Louisiana...................................... Winn............................. .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Adams............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Alcorn........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Amite............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Attala........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Benton........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Bolivar.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Calhoun.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Carroll.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Chickasaw........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Choctaw.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Claiborne........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Clarke........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Clay............................. .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Coahoma.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Copiah........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Covington........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... De Soto.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Forrest.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Franklin......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... George........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Greene........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Grenada.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Hancock.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Harrison......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Hinds............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
[[Page 72]]
Mississippi.................................... Holmes........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Humphreys........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Issaquena........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Itawamba......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Jackson.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Jasper........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Jefferson........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Jefferson Davis.................. .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Jones............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Kemper........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Lafayette........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Lamar............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Lauderdale....................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Lawrence......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Leake............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Lee.............................. .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Leflore.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Lincoln.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Lowndes.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Madison.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Marion........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Marshall......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Monroe........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Montgomery....................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Neshoba.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Newton........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Noxubee.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Oktibbeha........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Panola........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Pearl River...................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Perry............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Pike............................. .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Pontotoc......................... .................... 8/29/05-10/28/05 .................... .................... ....................
Mississippi.................................... Prentiss......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Quitman.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Rankin........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Scott............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Sharkey.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Simpson.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Smith............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
[[Page 73]]
Mississippi.................................... Stone............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Sunflower........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Tallahatchie..................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Tate............................. .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Tippah........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Tishomingo....................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Tunica........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Union............................ .................... 8/29/05-10/28/05 .................... .................... ....................
Mississippi.................................... Walthall......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Warren........................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Washington....................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Wayne............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Webster.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Wilkinson........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Winston.......................... .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Yalobusha........................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
Mississippi.................................... Yazoo............................ .................... 8/29/05-10/28/05 .................... 9/23/05-11/22/05 ....................
North Carolina................................. Brunswick........................ .................... .................... 9/11/05-11/10/05 .................... ....................
North Carolina................................. Carteret......................... .................... .................... 9/11/05-11/10/05 .................... ....................
North Carolina................................. Craven........................... .................... .................... 9/11/05-11/10/05 .................... ....................
North Carolina................................. Dare............................. .................... .................... 9/11/05-11/10/05 .................... ....................
North Carolina................................. Hyde............................. .................... .................... 9/11/05-11/10/05 .................... ....................
North Carolina................................. Jones............................ .................... .................... 9/11/05-11/10/05 .................... ....................
North Carolina................................. New Hanover...................... .................... .................... 9/11/05-11/10/05 .................... ....................
North Carolina................................. Onslow........................... .................... .................... 9/11/05-11/10/05 .................... ....................
North Carolina................................. Pamlico.......................... .................... .................... 9/11/05-11/10/05 .................... ....................
North Carolina................................. Pender........................... .................... .................... 9/11/05-11/10/05 .................... ....................
Texas.......................................... Angelina......................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Brazoria......................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Chambers......................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Cherokee......................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Fort Bend........................ .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Galveston........................ .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Gregg............................ .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Hardin........................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Harris........................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Harrison......................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Houston.......................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Jasper........................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Jefferson........................ .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Liberty.......................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Marion........................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Montgomery....................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Nacogdoches...................... .................... .................... .................... 9/23/05-11/22/05 ....................
[[Page 74]]
Texas.......................................... Newton........................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Orange........................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Panola........................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Polk............................. .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Rusk............................. .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Sabine........................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... San Augustine.................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... San Jacinto...................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Shelby........................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Trinity.......................... .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Tyler............................ .................... .................... .................... 9/23/05-11/22/05 ....................
Texas.......................................... Walker........................... .................... .................... .................... 9/23/05-11/22/05 ....................
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[[Page 75]]
Sec. 760.102 Applicability.
(a) This part establishes the terms and conditions under which the
following programs will be administered for 2005 hurricanes in eligible
counties:
(1) Hurricane Indemnity Program (HIP);
(2) Feed Indemnity Program (FIP);
(3) Livestock Indemnity Program (LIP);
(4) Tree Indemnity Program (TIP); and
(5) Aquaculture grants to States.
(b) The amount that may be expended for payments under subparts B
through G of this part shall not exceed the amount of Section 32 funds
made available by the Secretary for the administration of these
programs.
(c) To be eligible for payments under these programs, producers must
comply with all applicable provisions under subparts B through G of this
part and with any other conditions imposed by FSA or, in the case of
State grants, by the State.
Sec. 760.103 Administration of HIP, FIP, LIP, and TIP.
(a) These programs are administered under the general supervision of
the Administrator, FSA.
(b) FSA representatives do not have authority to modify or waive any
of the provisions of the regulations of subparts B through F of this
part.
(c) The State FSA committee shall take any action required by the
regulations of subparts B through F of this part that the county FSA
committee has not taken. The State committee shall also:
(1) Correct, or require a county committee to correct, any action
taken by such county committee that is not in accordance with the
regulations of subparts B through F of this part; or
(2) Require a county committee to withhold taking any action that is
not in accordance with subparts B through F of this part.
(d) No provision or delegation to a State or county FSA committee
shall preclude the Administrator, FSA, Deputy Administrator for Farm
Programs, FSA or a designee or other such person, from determining any
question arising under the program or from reversing or modifying any
determination made by a State or county FSA committee.
Sec. 760.104 Definitions.
The following definitions in this section apply to the programs in
subparts B through G of this part. The terms defined in part 718 of this
chapter and parts 1400 and 1437 of this title shall also be applicable,
except where they conflict with the definitions set forth in this
section.
Application means the `2005 Hurricane Disaster Programs Application'
form.
Application period means the date established by the Deputy
Administrator for producers to apply for program benefits.
Bush means a thick densely branched woody shrub grown for the
production of an annual crop for commercial market for human
consumption.
Commercial use means used in the operation of a business activity
engaged in as a means of livelihood for profit by the eligible producer.
Crop insurance means an insurance policy reinsured by the Federal
Crop Insurance Corporation under the provisions of the Federal Crop
Insurance Act, as amended.
Farming operation means a business enterprise engaged in the
production of agricultural products.
Fruit tree means a woody perennial plant having a single main trunk,
commonly exceeding 10 feet in height and usually devoid of branches
below, but bearing a head of branches and foliage or crown of leaves at
the summit that is grown for the production of an annual crop, including
nuts, for commercial market for human consumption.
Owner means one who had legal ownership of the trees, bushes, vines,
or livestock for which benefits are being requested under subparts B
through F, on the day such plant or livestock perished or suffered
losses due to an eligible hurricane as set forth Sec. 760.101.
Stand means a contiguous acreage of the same crop of trees, bushes,
or vines, and excludes container-grown crops.
Tier means the geographic bands of damage generally correlating to
the severity of damage caused by the maximum sustained winds of the
applicable hurricanes.
[[Page 76]]
Vine means a plant from which an annual fruit crop is produced for
commercial market for human consumption, such as grape, kiwi, or passion
fruit, that has a flexible stem supported by climbing, twining, or
creeping along a surface.
Sec. 760.105 Application for payment.
(a) A producer who applies for any program under subparts B through
F shall file an application and any required supporting documentation in
the county FSA office serving the county where the eligible loss
occurred; or in the case of FIP, where the eligible livestock were
physically located on the applicable date.
(b) The application must be filed during the application period
announced by FSA.
(c) Payments may be made for eligible losses suffered by an eligible
producer who is now deceased or is a dissolved entity if a
representative who currently has authority to enter into a contract for
the producer signs the application for payment. Proof of authority to
sign for the deceased producer or dissolved entity must be provided. If
a producer is now a dissolved general partnership or joint venture, all
members of the general partnership or joint venture at the time of
dissolution or their duly authorized representatives must sign the
application for payment.
(d) Data furnished by the applicant will be used to determine
eligibility for program benefits. Furnishing the data is voluntary;
however, without all required data program benefits will not be approved
or provided.
(e) A minor child shall be eligible to apply for program benefits so
long as all eligibility requirements are met and one of the following
conditions exist:
(1) The right of majority has been conferred upon the minor by court
proceedings or statute;
(2) A guardian has been appointed to manage the minor's property,
and the applicable program documents are executed by the guardian; or
(3) A bond is furnished under which a surety guarantees any loss
incurred for which the minor would be liable had the minor been an
adult.
Sec. 760.106 Limitations on payments and other benefits.
(a) Separate payment limitations apply to HIP, FIP, LIP, and TIP. No
`person' as determined under part 1400 of this title shall receive more
than $80,000 under each of these programs.
(b) An individual or entity whose adjusted gross income is in excess
of $2.5 million, as determined under part 1400 of this title, shall not
be eligible to receive benefits under this part for HIP, FIP, LIP, and
TIP.
(c) As a condition to receive benefits under subparts B through F, a
producer must have been in compliance with the provisions of parts 12
and 718 of this title for the 2005 crop year and must not otherwise be
barred from receiving benefits under any law.
(d) An individual or entity determined to be a foreign person under
part 1400 of this title shall not be eligible to receive benefits under
subparts B through F of this part.
Sec. 760.107 Appeals.
The appeal regulations set forth at parts 11 and 780 of this title
apply to determinations made pursuant to subparts B through F of this
part.
Sec. 760.108 Offsets, assignments, and debt settlement.
(a) Except as provided in paragraph (b) of this section, any payment
or portion thereof to any producer shall be made without regard to
questions of title under State law and without regard to any claim or
lien against the commodity, and or proceeds thereof, in favor of the
owner or any other creditor except agencies of the U.S. Government. The
regulations governing offsets and withholdings found at part 792 of this
chapter apply to payments made under subparts B through F of this part.
(b) Any producer entitled to any payment may assign any payments in
accordance with regulations governing the assignment of payments found
at part 1404 of this title.
Sec. 760.109 Records and inspection thereof.
Producers receiving payments under the programs in subparts B
through F
[[Page 77]]
or any other person who furnishes information for the purposes of
enabling such producer to receive a payment under subparts B through F
of this part 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. Producers receiving
payments or any other person who furnishes such information to FSA shall
permit authorized representatives of USDA and the General Accounting
Office during regular business hours to inspect, examine, and to allow
such persons to make copies of such books, records, and to enter upon,
inspect and verify all applicable livestock and acreage in which the
applicant has an interest for the purpose of confirming the accuracy of
the information provided by the applicant.
Sec. 760.110 Refunds; joint and several liability.
In the event there is a failure to comply with any term,
requirement, or condition for payment or assistance arising under
subparts B through F of this part, and if any refund of a payment to FSA
shall otherwise become due in connection with this part, all payments
made in regard to such matter shall be refunded to FSA together with
interest and late-payment charges as provided for in part 792 of this
chapter.
Sec. 760.111 Paperwork Reduction Act assigned number.
The information collection required to support the regulations of
subparts B through F of this part has been approved by OMB and assigned
OMB control number 0560-0257.
Subpart C_Hurricane Indemnity Program
Source: 71 FR 27191, May 10, 2006, unless otherwise noted.
Sec. 760.201 Applicability.
This subpart sets forth the terms and conditions applicable to the
Hurricane Indemnity Program (HIP). Benefits will be provided under this
subpart to producers who have received a crop insurance indemnity from
the Risk Management Agency (RMA) based on the associated loss criteria
set forth in Sec. 760.202(a)(1) as provided to FSA by RMA; and to
producers who have received Noninsured Crop Disaster Assistance Program
(NAP) payments under part 1437 of this title based on the provisions of
Sec. 760.202(a)(1). HIP benefits will be provided under this subpart to
eligible producers who suffered losses due to hurricanes as set forth in
Sec. 760.101.
Sec. 760.202 Producer eligibility.
A producer who applies for benefits under this subpart will be
eligible to receive a payment if both of the following apply:
(a) The producer received a crop insurance indemnity from RMA or a
NAP payment under part 1437 of this title for crop losses:
(1) In an eligible county;
(2) Recorded by RMA or FSA as being due to an eligible hurricane and
the loss occurred during a disaster period as set forth in Sec.
760.101; and
(3) Were due to any of the following causes of loss:
(i) Excessive moisture, precipitation, and/or rain;
(ii) Flood;
(iii) Excessive wind;
(iv) Cyclone;
(v) Tornado;
(vi) Hurricane or tropical depression;
(vii) Storm surge; and/or
(viii) Salinity due to salt water intrusion.
(b) An application is filed in accordance with Sec. 760.105.
Sec. 760.203 Payment calculation.
The disaster benefits under this subpart will be equal to the
smaller of:
(a) 30 percent of the RMA crop insurance indemnity or 30 percent of
the NAP payment for eligible crop losses according to Sec.
760.202(a)(1), and adding the crop insurance premium for the indemnity
as outlined in Sec. 760.202(a)(1); or
(b) 95 percent of the expected value of the crop in the absence of a
disaster, as determined by RMA for insured crops, using information from
the crop policy; and by FSA for NAP crops, using the producer's price
and yield, minus the following:
[[Page 78]]
(1) The value of the production as counted by RMA for insured crops
to establish the indemnity and by FSA for NAP crops to establish the NAP
payment,
(2) The crop's eligible indemnity or NAP payment for eligible crop
losses determined in accordance with Sec. 760.202(a)(1),
(3) And adding the crop insurance premium for the indemnity as
outlined in Sec. 760.202(a)(1).
Subpart D_Feed Indemnity Program
Source: 71 FR 27191, May 10, 2006, unless otherwise noted.
Sec. 760.301 Applicability.
This subpart sets forth the terms and conditions applicable to the
Feed Indemnity Program (FIP). FIP benefits will be provided under this
subpart to eligible owners and cash lessees, but not both, for the same
livestock, for feed losses or increased feed costs that occurred in
eligible counties during the disaster period as set forth in Sec.
760.101.
Sec. 760.302 Definitions.
The following definitions are applicable for all purposes of
administering FIP.
Adult beef bulls means male bovine animals that were at least 2
years old and used for breeding purposes on the beginning date of the
applicable disaster period as set forth in Sec. 760.101.
Adult beef cows means female bovine animals that had delivered one
or more offspring before the beginning date of the applicable disaster
period as set forth in Sec. 760.101. A first-time bred beef heifer
shall also be considered an adult beef cow if it was pregnant on the
beginning date of the applicable disaster period as set forth in Sec.
760.101.
Adult buffalo and beefalo bulls means male animals of those breeds
that were at least 2 years old and used for breeding purposes on the
beginning date of the applicable disaster period as set forth in Sec.
760.101.
Adult buffalo and beefalo cows means female animals of those breeds
that had delivered one or more offspring before the beginning date of
the applicable disaster period as set forth in Sec. 760.101. A first-
time bred buffalo or beefalo heifer shall also be considered to be an
adult buffalo or beefalo cow if it was pregnant on the beginning date of
the applicable disaster period as set forth in Sec. 760.101.
Adult dairy bulls means male bovine animals of a breed used for
producing milk for human consumption that were at least 2 years old and
used for breeding dairy cows on the beginning date of the applicable
disaster period as set forth in Sec. 760.101.
Adult dairy cows means female bovine animals used for the purpose of
providing milk for human consumption, that had delivered one or more
offspring before the beginning date of the applicable disaster period as
set forth in Sec. 760.101. A first-time bred dairy heifer shall also be
considered an adult dairy cow if it was pregnant on the beginning date
of the applicable disaster period as set forth in Sec. 760.101.
Deer means domesticated ruminant mammals of the genus Cervus having
two large and two small hooves on each foot.
Goats means domesticated, ruminant mammals of the genus Capra,
including Angora goats.
Horses means domesticated horses, and does not include donkeys,
mules or other large solid-hoofed herbivorous mammals.
Non-adult beef cattle means male, female or neutered male bovine
animals that weighed 500 pounds or more on the beginning date of the
applicable disaster period as set forth in Sec. 760.101, but do not
meet the definition of adult beef cows or bulls.
Non-adult buffalo/beefalo means male, female or neutered male
animals of those breeds that weighed 500 pounds or more on the beginning
date of the applicable disaster period as set forth in Sec. 760.101,
but do not meet the definition of an adult buffalo or beefalo cow or
bull.
Non-adult dairy cattle means male, female or neutered male bovine
livestock, of a breed used for the purpose of providing milk for human
consumption, that weighed 500 pounds or more on the beginning date of
the applicable disaster period as set forth in Sec. 760.101, but do not
meet the definition adult dairy cows or bulls.
[[Page 79]]
Sheep means domesticated, ruminant mammals of the genus Ovis.
Sec. 760.303 Eligible livestock and producers.
(a) To be considered eligible, livestock must meet all the following
conditions:
(1) Be adult or non-adult dairy cattle, beef cattle, buffalo,
beefalo, horses, sheep, goats or deer as defined in Sec. 760.302;
(2) Been physically located in an eligible county on the beginning
date of the applicable disaster period as set forth in Sec. 760.101;
(3) Been maintained for commercial use as part of a farming
operation on the beginning date of the applicable disaster period as set
forth in Sec. 760.101;
(4) Not have been produced and maintained for reasons other than
commercial use as part of a farming operation. Such excluded uses
include, but are not limited to wild free roaming animals or animals
used for recreational purposes, such as pleasure, hunting, pets, or for
show.
(b) To be considered an eligible livestock producer, both of the
following conditions must be met:
(1) Owned or cash-leased, but not both for the same livestock,
eligible livestock on the beginning date of the applicable disaster
period as provided in Sec. 760.101; and
(2) Suffered a feed loss or an increased feed cost during the
applicable disaster period as set forth in Sec. 760.101. The feed must
have been for the eligible livestock.
Sec. 760.304 Application process.
(a) Applicants must submit a completed application certifying to the
feed loss or increased feed cost, current physical location of livestock
in inventory, physical location of claimed livestock on the beginning
date of the applicable disaster period as set forth in Sec. 760.101,
and any other supporting documentation for FSA to determine the
eligibility of the applicant.
(b) Supporting evidence may include quantity and kind of livestock
for which benefits are being requested, including but not limited to,
purchase records, veterinarian records, bank or other loan papers,
rendering truck receipts, Federal Emergency Management Agency and
National Guard records, written contracts, production records, Internal
Revenue Service (IRS) records, property tax records, private insurance
documents, and any other verifiable documents available to confirm the
existence of the claimed livestock.
Sec. 760.305 Payment calculation.
(a) FIP payments are calculated by multiplying the national payment
rate for each of the following livestock categories by the number of
eligible livestock in each category. The payment rate represents the
cost of the amount of corn needed to maintain 1 animal unit for a
specified period of time.
(b) The eligible livestock categories are:
(1) Adult beef cows or bulls;
(2) Non-adult beef cattle;
(3) Adult buffalo or beefalo cows or bulls;
(4) Non-adult buffalo or beefalo;
(5) Adult dairy cows or bulls;
(6) Non-adult dairy cattle;
(7) Goats;
(8) Sheep;
(9) Horses; and
(10) Deer.
Subpart E_Livestock Indemnity Program
Source: 71 FR 27191, May 10, 2006, unless otherwise noted.
Sec. 760.401 Applicability.
(a) This subpart sets forth the terms and conditions applicable to
the Livestock Indemnity Program (LIP). Benefits will be provided under
this subpart to eligible livestock owners and contract growers, but not
both for the same livestock loss, for certain livestock deaths that
occurred in eligible counties during the disaster period as set forth in
Sec. 760.101.
(b) Eligible livestock owners and contract growers will be
compensated in accordance with Sec. 760.405 for eligible livestock
deaths that occurred in eligible counties during the disaster period as
set forth in Sec. 760.101.
[[Page 80]]
Sec. 760.402 Definitions.
The following definitions are applicable for all purposes of
administering LIP.
Adult beef bull means a male bovine animal that was at least 2 years
old and used for breeding purposes before it died.
Adult beef cow means a female bovine animal that had delivered one
or more offspring before dying. A first-time bred beef heifer shall also
be considered an adult beef cow if it was pregnant at the time it died.
Adult buffalo and beefalo bull means a male animal of those breeds
that were at least 2 years old and used for breeding purposes before it
died.
Adult buffalo and beefalo cow means a female animal of those breeds
that had delivered one or more offspring before dying. A first-time bred
buffalo or beefalo heifer shall also be considered an adult buffalo or
beefalo cow if it was pregnant at the time it died.
Adult dairy bull means a male bovine animal of a breed used for
producing milk for human consumption that was at least 2 years old and
used for breeding dairy cows before it died.
Adult dairy cow means a female bovine animal used for the purpose of
providing milk for human consumption that had delivered one or more
offspring before dying. A first-time bred dairy heifer shall also be
considered an adult dairy cow if it was pregnant at the time it died.
Buck means a male goat.
Contract means, with respect to contracts for the handling of
livestock, a written agreement between a livestock owner and another
individual or entity setting the specific terms, conditions and
obligations of the parties involved regarding the production of
livestock or livestock products.
Deer means a domesticated ruminant mammal of the genus Cervus having
two large and two small hooves on each foot.
Doe means a female goat.
Equine animal means a domesticated horse, mule or donkey.
Ewe means a female sheep.
Goat means a domesticated, ruminant mammal of the genus Capra,
including Angora goats. Goats will be further delineated by sex (bucks
and does) and age (kids).
Kid means a goat less than 1 year old.
Lamb means a sheep less than 1 year old.
Non-adult beef cattle means male, female or neutered male bovines
that do not meet the definition of adult beef cows or bulls. Non-adult
beef cattle is further delineated by weight categories of less than 400
pounds, and 400 pounds or more at the time they died.
Non-adult buffalo or beefalo means a male, female or neutered male
animal of those breeds that do not meet the definition of adult buffalo/
beefalo cow or bull. Non-adult buffalo or beefalo is further delineated
by weight categories of less than 400 pounds, and 400 pounds or more at
the time of death.
Non-adult dairy cattle means male, female or neutered male bovine
livestock, of a breed used for the purpose of providing milk for human
consumption, that do not meet the definition of adult dairy cows or
bulls. Non-adult dairy cattle is further delineated by weight categories
of less than 400 pounds, and 400 pounds or more at the time they died.
Poultry means domesticated chickens, turkeys, ducks and geese.
Poultry will be further delineated by sex, age and purpose of
production, as determined by FSA.
Ram means a male sheep.
Sheep means domesticated, ruminant mammals of the genus Ovis. Sheep
will be further delineated by sex (rams and ewes) and age (lambs).
Swine means domesticated omnivorous pigs, hogs, and boars. Swine
will be further delineated by sex and weight as determined by FSA.
Sec. 760.403 Eligible owners, contract growers and livestock.
(a) To be considered eligible, a livestock owner must have had legal
ownership of the eligible livestock on the day the livestock died.
(b) To be considered eligible, a contract grower on the day the
livestock died must have had:
(1) A written agreement with the owner of eligible livestock setting
the specific terms, conditions and obligations of the parties involved
regarding the production of livestock; and
[[Page 81]]
(2) Control of the livestock that died.
(c) To be considered eligible, livestock must meet all the
following:
(1) Be adult or non-adult dairy cattle, beef cattle, buffalo,
beefalo, equine, sheep, goats, swine, poultry or deer.
(2) Perished as a direct result of an applicable disaster, in an
eligible county and during the applicable disaster period as set forth
in Sec. 760.101;
(3) Been maintained for commercial use as part of a farming
operation on the day they died; and before dying;
(4) Not have been produced or maintained for reasons other than
commercial use as part of a farming operation, including but not limited
to wild free roaming animals or animals used for recreational purposes,
such as pleasure, hunting, pets, or for show.
Sec. 760.404 Application process.
(a) Applicants must submit a completed application, documentary
evidence of loss, current physical location of livestock in inventory,
physical location of claimed livestock at the time of death, and any
other supporting documentation necessary for FSA to determine
eligibility.
(b) Applicants must provide adequate proof that the death of the
eligible livestock occurred during the applicable disaster period, and
the death was a direct result of the applicable disaster, as set forth
in Sec. 760.101.
(c) The quantity and kind of livestock that died as a direct result
of the applicable disaster may be documented by purchase records,
veterinarian records, bank or other loan papers, rendering truck
receipts, Federal Emergency Management Agency and National Guard
records, written contracts, production records, IRS records, property
tax records, private insurance documents, and any other verifiable
documents available to confirm the presence and subsequent death of the
livestock.
(d) Certifications of livestock deaths by third parties may be
accepted only if both the following conditions are met:
(1) The livestock owner or livestock contract grower, as applicable,
certifies in writing:
(i) That there is no other documentation of death available; and
(ii) The number of livestock, by category as determined by the
Deputy Administrator, in inventory at the time the applicable disaster
occurred; and
(2) The third party certifying to the claimed deaths by the
livestock owner or contract grower must provide their telephone number
and address, and certify in writing to all the following:
(i) Specific details about their knowledge of the livestock deaths;
(ii) Their affiliation to the livestock owner or contract grower;
(iii) The accuracy of the deaths claimed by the livestock owner or
contract grower; and
(iv) Other details necessary for FSA to determine the certification
acceptable.
Sec. 760.405 Payment calculation.
(a) Under LIP, separate payment rates are established for eligible
livestock owners and eligible contract growers in accordance with
paragraphs (b) and (c) of this section. LIP payments are calculated by
multiplying the national payment rate, as determined in paragraphs (b)
and (c) of this section, by the number of eligible livestock in each
category, as provided in paragraph (d) of this section. The payment
calculated for an eligible contract grower for an eligible livestock
category shall be reduced by the amount of any compensation received
from the contractor for the loss of income from the dead livestock.
(b) The LIP payment rate for eligible livestock owners is based on
75 percent of the average fair market value of the livestock.
(c) The LIP payment rates for eligible contract growers is based on
75 percent of the average income loss sustained by the contract grower
with respect to the dead livestock.
(d) The categories of eligible livestock are as follows:
(1) Adult beef cows;
(2) Adult beef bulls;
(3) Non-adult beef cattle;
(4) Adult buffalo or beefalo cows;
(5) Adult buffalo or beefalo bulls;
(6) Non-adult buffalo/beefalo;
(7) Adult dairy cows;
(8) Adult dairy bulls;
(9) Non-adult dairy cattle;
[[Page 82]]
(10) Swine, sows, boars, barrows, gilts over 150 pounds;
(11) Swine, sows, boars, barrows, gilts 50 to 150 pounds;
(12) Swine, feeder pigs under 50 pounds;
(13) Goats, bucks;
(14) Goats, does;
(15) Goats, kids;
(16) Sheep, rams;
(17) Sheep, ewes;
(18) Sheep, lambs;
(19) Deer;
(20) Chickens, layers, roasters;
(21) Chickens, broilers, pullets;
(22) Chickens, chicks;
(23) Turkeys, toms, fryers, roasters;
(24) Turkeys, poults;
(25) Ducks;
(26) Ducks, ducklings;
(27) Geese, goose;
(28) Geese, gosling; and
(29) Equine.
Subpart F_Tree Indemnity Program
Source: 71 FR 27191, May 10, 2006, unless otherwise noted.
Sec. 760.501 Applicability.
(a) This subpart sets forth the terms and conditions applicable to
the Tree Indemnity Program (TIP). Benefits will be provided under this
subpart for eligible fruit trees, bushes, and vines that were lost or
damaged during the disaster period as set forth in Sec. 760.101.
(b) Compensation will be based on expenses incurred for replanting,
rehabilitation, cleanup, and debris removal.
(c) No benefits shall be provided when the loss:
(1) Occurred in any county other than an eligible county, or
(2) Was not the result of an eligible disaster as set forth in Sec.
760.101.
Sec. 760.502 Eligible producers and stands.
(a) An eligible fruit tree, bush, and/or vine producer is one who
bears financial responsibility and who has incurred costs of at least
$90 per acre for replanting, rehabilitation, cleanup, or debris removal,
excluding crop production.
(b) An eligible stand must:
(1) Be physically located in an eligible county;
(2) Have been impacted during an eligible disaster as set forth in
Sec. 760.101; and
(3) Be grown for commercial use.
Sec. 760.503 Application process.
(a) Applicants must submit a completed application and report of
acreage identifying the geographic location and number of acres in the
disaster-affected stand of claimed fruit trees, bushes, and vines
according to part 718 of this chapter, and any other supporting
documentation for FSA to determine the eligibility of the applicant.
(b) Applicants must certify and provide adequate proof that the
expenses incurred to eligible fruit trees, bushes, or vines occurred
during the applicable disaster period and that the loss or damage was a
direct result of the applicable disaster, as set forth in Sec. 760.101.
(c) The quantity and kind of fruit trees, bushes, or vines that died
or were damaged as a result of the applicable disaster may be documented
by purchase records, bank or other loan papers, Federal Emergency
Management Agency and National Guard records, IRS records, property tax
records, private insurance documents, and any other verifiable documents
available to confirm the presence and subsequent loss or expenses
incurred of said fruit trees, bushes, or vines.
Sec. 760.504 Payment calculation.
(a) TIP payments shall be calculated by multiplying the following
national payment rate for the applicable tier by the number of eligible
acres, excluding but not limited to such things as drainage ditches and
canals, in a stand of fruit trees, bushes, or vines by the producer's
share in such crop:
(1) Tier I--$750;
(2) Tier II--$300;
(3) Tier III--$200; and
(4) Tier IV--$90.
(b) If the actual expenses incurred for damage are greater than the
value associated with the tier based on the location of the stand, the
applicant may submit documentation to FSA to request the stand be placed
in the next lower-numbered tier which represents a
[[Page 83]]
greater level of loss and a higher payment rate. Regardless of the
expenses incurred the stand can only be placed in the next lower-
numbered tier.
Subpart G_Aquaculture Program
Sec. 760.601 Funds availability.
FSA will provide block grants to the states of Alabama, Florida,
Louisiana, Mississippi, North Carolina and Texas where aquaculture was
adversely affected by the hurricanes as set forth in Sec. 760.201 for
those States. Producers in eligible counties in those states who raise
aquaculture species in a controlled environment as part of a farming
operation and who have not received assistance under other disaster
programs for the same aquaculture losses may be eligible for these
funds. Funds provided by a State to a farming operation under such a
grant shall not exceed $80,000.
[71 FR 27191, May 10, 2006]
PART 761_GENERAL AND ADMINISTRATIVE--Table of Contents
Subpart A_General Provisions
Sec.
761.1-761.6 [Reserved]
761.7 Appraisals.
761.8 Loan limitations.
Authority: 5 U.S.C. 301, 7 U.S.C. 1989.
Source: 64 FR 62567, Nov. 17, 1999, unless otherwise noted.
Sec. Sec. 761.1-761.6 [Reserved]
Sec. 761.7 Appraisals.
(a) General. This section describes requirements for:
(1) Real estate and chattel appraisals made in connection with the
making and servicing of direct Farm Loan Program and nonprogram loans;
and,
(2) Appraisal reviews conducted on appraisals made in connection
with the making and servicing of direct and guaranteed Farm Loan Program
and nonprogram loans.
(b) Definitions.
Administrative appraisal review means a review of an appraisal to
determine if the appraisal:
(1) Meets applicable Agency requirements; and
(2) Is accurate outside the requirements of standard 3 of USPAP.
Agency means the Farm Service Agency, including its employees and
state and area committee members, and any successor agency.
Farm Loan Programs (FLP) loans 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).
Technical appraisal review means a review of an appraisal to
determine if such appraisal meets the requirements of USPAP pursuant to
standard 3 of USPAP.
USPAP (Uniform Standards of Professional Appraisal Practice) 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.
(c) Appraisal standards--(1) Real estate. 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.
(2) Chattel. 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.
(d) Use of an existing real estate appraisal. The Agency may use an
existing real estate appraisal to reach a loan making or servicing
decision under either of the following conditions:
(1) The appraisal was completed within the previous 12 months and
the Agency determines that:
(i) The appraisal meets the provisions of this section and the
applicable Agency loan making or servicing requirements, and
[[Page 84]]
(ii) Current market values have remained stable since the appraisal
was completed; or
(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.
(e) Appraisal reviews--(1) Real estate appraisals. With respect to a
real estate appraisal, the Agency may conduct a technical appraisal
review or an administrative appraisal review, or both.
(2) Chattel appraisals. With respect to a chattel appraisal, the
Agency may conduct an administrative appraisal review.
[64 FR 62567, Nov. 17, 1999; 64 FR 69322, Dec 10, 1999; 65 FR 14433,
Mar. 17, 2000]
Sec. 761.8 Loan limitations.
(a) Dollar limits. The outstanding principal balances for a farm
loan applicant or anyone who will sign the promissory note cannot exceed
any of the following:
(1) Farm Ownership loans, Beginning Farmer Down payment loans and
Soil and Water loans:
(i) Direct--$200,000;
(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);
(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);
(2) Operating loans:
(i) Direct--$200,000;
(ii) Guaranteed--$700,000 (for fiscal year 2000 and increased each
fiscal year in accordance with paragraph (b) of this section);
(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);
(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);
(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;
(5) Emergency loans--$500,000;
(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.
(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.
(c) Line of credit advances. 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.
[66 FR 7566, Jan. 24, 2001, as amended at 67 FR 41312, June 18, 2002]
PART 762_GUARANTEED FARM LOANS--Table of Contents
Sec.
762.1-762.100 [Reserved]
762.101 Introduction.
762.102 Abbreviations and definitions.
762.103 Full faith and credit.
762.104 Appeals.
762.105 Eligibility and substitution of lenders.
762.106 Preferred and certified lender programs.
762.107-762.109 [Reserved]
762.110 Loan application.
762.111-762.119 [Reserved]
762.120 Loan applicant eligibility.
762.121 Loan purposes.
762.122 Loan limitations.
[[Page 85]]
762.123 Insurance and farm inspection requirements.
762.124 Interest rates, terms, charges, and fees.
762.125 Financial feasibility.
762.126 Security requirements.
762.127 Appraisal requirements.
762.128 Environmental and special laws.
762.129 Percent of guarantee and maximum loss.
762.130 Loan approval and issuing the guarantee.
762.131-762.139 [Reserved]
762.140 General servicing responsibilities.
762.141 Reporting requirements.
762.142 Servicing related to collateral.
762.143 Servicing distressed accounts.
762.144 Repurchase of guaranteed portion from a secondary market holder.
762.145 Restructuring guaranteed loans.
762.146 Other servicing procedures.
762.147 Servicing shared appreciation agreements.
762.148 Bankruptcy.
762.149 Liquidation.
762.150 Interest assistance program.
762.151-762.158 [Reserved]
762.159 Pledging of guarantee.
762.160 Assignment of guarantee.
Authority: 5 U.S.C. 301, 7 U.S.C. 1989.
Source: 64 FR 7378, Feb. 12, 1999, unless otherwise noted.
Sec. Sec. 762.1-762.100 [Reserved]
Sec. 762.101 Introduction.
(a) Scope. 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.
(b) Policy. 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.
(c) Lender list and classification. (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.
(2) Lenders who participate in the Agency guaranteed loan program
will be classified into one of the following categories:
(i) Standard Eligible Lender under Sec. 762.105,
(ii) Certified Lender, or
(iii) Preferred Lender under Sec. 762.106.
(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.
(d) Type of guarantee. 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.
(e) Termination of loan guarantee. The loan guarantee will
automatically terminate as follows:
(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;
(2) Upon payment of a final loss claim; or
(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.
Sec. 762.102 Abbreviations and definitions.
(a) Abbreviations.
ALP--Approved lender program
CLP--Certified lender program
CONACT--Consolidated Farm and Rural Development Act (7 U.S.C. 1921
et seq.)
EPA--Environmental Protection Agency
EIS--Environmental impact statement
[[Page 86]]
EM--Emergency loans
FO--Farm ownership loans
FSA--Farm Service Agency
OL--Operating loans
PLP--Preferred lender program
SW--Soil and water
USDA--United States Department of Agriculture
(b) Definitions.
Additional security. Collateral in excess of that needed to fully
secure the loan.
Agency. The Farm Service Agency, including its employees and state
and area committee members, and any successor agency.
Allonge. An attachment or an addendum to a note.
Applicant. 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.
Aquaculture. The husbandry of aquatic organisms in a controlled or
selected environment. An aquatic organism is any fish, amphibian,
reptile, or aquatic 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.
Assignment of guaranteed portion. 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.
Average farm customers. 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.
Basic Security. 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.
Beginning farmer or rancher. A beginning farmer or rancher is an
individual or entity who:
(1) Meets the loan eligibility requirements for OL or FO assistance,
as applicable, in accordance with this subpart;
(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;
(3) Will materially and substantially participate in the operation
of the farm or ranch:
(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.
(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;
(4) Agrees to participate in any loan assessment and financial
management programs required by Agency regulations;
(5) Does not own real farm or ranch property or who, directly or
through interests in family farm entities, owns
[[Page 87]]
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;
(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
(7) In the case of an entity:
(i) All the members are related by blood or marriage; and
(ii) All the stockholders in a corporation are beginning farmers or
ranchers.
Borrower. 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.
Capital leases. 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:
(1) The lease transfers ownership of the property to the lessee at
the end of the lease term.
(2) The lessee has the right to purchase the property for
significantly less than its market value at the end of the lease.
(3) The term of the lease is at least 75 percent of the estimated
economic life of the leased property.
(4) The present value of the minimum lease payments equals or
exceeds 90 percent of the fair market value of the leased property.
Cash flow budget. A projection listing all anticipated cash inflows
(including all farm income, nonfarm income and all loan advances) and
all cash outflows (including all farm and nonfarm debt service and other
expenses) to be incurred by the borrower during the period of the
budget. Cash flow budgets for loans under $50,000 do not require income
and expenses itemized by categories. Cash flow budgets for loans under
$125,000 do not require income and expenses itemized by categories. It
may also be prepared with a breakdown of cash inflows and outflows for
each month of the review period and includes the expected outstanding
operating credit balance for the end of each month. The latter type is
referred to as a ``monthly cash flow budget''.
Collateral. Property pledged as security for a loan to ensure
repayment of an obligation.
Conditional commitment. The Agency's commitment to the lender that
the material it has submitted is approved subject to the completion of
all conditions and requirements contained therein.
Consolidation. The combination of outstanding principal and interest
balance of two or more OL loans.
Controlled. When a director or employee has more than a 50 percent
ownership in the entity or, the director or employee, together with
relatives of the director or employee, have more than a 50 percent
ownership.
Cooperative. An entity which has farming as its purpose and whose
members have agreed to share the profits of the farming enterprise. The
entity must be recognized as a farm cooperative by the laws of the State
in which the entity will operate a farm.
Cosigner. A party who joins in the execution of a promissory note to
assure its repayment. The cosigner becomes jointly and severally liable
to comply with the terms of the note. In the case of an entity
applicant, the cosigner cannot be a member, partner, joint operator, or
stockholder of the entity.
[[Page 88]]
County average yield. The historical average yield for a commodity
in a particular political subdivision, as determined or published by a
government entity or other recognized source.
Debt writedown. To reduce the amount of the borrower's debt to that
amount that is determined to be collectible based on an analysis of the
security value and the borrower's ability to pay.
Deferral. A postponement of the payment of interest or principal or
both. Principal may be deferred in whole or in part, interest may only
be partially deferred.
Depreciation and amortization expenses. An annual allocation of the
cost or other basic value of tangible capital assets, less salvage
value, over the estimated life of the unit (which may be a group of
assets), in a systematic and rational manner.
Direct loan. A loan serviced by the Agency as lender.
Entity. Cooperatives, corporations, partnerships, joint operations,
trusts, or limited liability companies.
Family farm. A farm which:
(1) Produces agricultural commodities for sale in sufficient
quantities so that it is recognized in the community as a farm rather
than a rural residence;
(2) Provides enough agricultural income by itself, including rented
land, or together with any other dependable income to enable the
borrower to:
(i) Pay necessary family living and operating expenses;
(ii) Maintain essential chattel and real property; and
(iii) Pay debts;
(3) Is managed by:
(i) The borrower when a loan is made to an individual; or,
(ii) The members, stockholders, partners, or joint operators
responsible for operating the farm when a loan is made to an entity;
(4) Has a substantial amount of the labor requirement for the farm
and nonfarm enterprise provided by:
(i) The borrower and the borrower's immediate family for a loan made
to an individual; or
(ii) The members, stockholders, partners, or joint operators
responsible for operating the farm, along with the families of these
individuals, for a loan made to an entity; and
(5) May use a reasonable amount of full-time hired labor and
seasonal labor during peak load periods.
Family living expenses. Any withdrawals from income to provide for
needs of family members.
Family members. The immediate members of the family residing in the
same household with the individual borrower, or, in the case of an
entity, with the operator.
Farm. A tract or tracts of land, improvements, and other
appurtenances which are used or will be used in the production of crops,
livestock, or aquaculture products for sale in sufficient quantities so
that the property is recognized as a farm rather than a rural residence.
The term ``farm'' also includes any such land and improvements and
facilities used in a nonfarm enterprise. It may also include the
residence which, although physically separate from the farm acreage, is
ordinarily treated as part of the farm in the local community.
Feasible plan. A plan is feasible when a borrower or applicant's
cash flow budget indicates that there is sufficient cash inflow to pay
all cash outflow each year during the term of the loan. If a loan
approval or restructuring action exceeds one production cycle and the
planned cash flow budget is atypical due to cash or inventory on hand,
new enterprises, carryover debt, atypical planned purchases, important
operating changes, or other reasons, a cash flow budget must be prepared
that reflects a typical cycle. If the request is for only one cycle, a
feasible plan for only one cycle is required for approval.
Fish. Any aquatic, gilled animal commonly known as ``fish'' as well
as mollusks, or crustaceans (or other invertebrates) produced under
controlled conditions (that is, feeding, tending, harvesting, and such
other activities as are necessary to properly raise and market the
products) in ponds, lakes, streams, artificial enclosures, or similar
holding areas.
Fixture. An item of personal property attached to real estate in
such a way that it cannot be removed without defacing or dismantling the
structure, or
[[Page 89]]
substantially damaging the structure itself.
Graduation. The Agency's determination that a borrower of a direct
loan, is financially stable enough to refinance that loan with a
commercial lender with or without a guarantee.
Guaranteed loan. A loan made and serviced by a lender for which the
Agency has entered into a lenders agreement and for which the Agency has
issued a loan note guarantee. This term also includes lines of credit
except where otherwise indicated.
Hazard insurance. Includes fire, windstorm, lightning, hail,
explosion, riot, civil commotion, aircraft, vehicles, smoke, builder's
risk, public liability, property damage, flood or mudslide, workers
compensation, or any similar insurance that is available and needed to
protect the security, or that is required by law.
Holder. The person or organization other than the lender who holds
all or a part of the guaranteed portion of an Agency guaranteed loan but
who has no servicing responsibilities. When the lender assigns a part of
the guaranteed loan to an assignee by way of execution of an assignment
form, the assignee becomes a holder.
In-house expenses. Expenses associated with credit management and
loan servicing by the lender and the lender's contractor. In-house
expenses include, but are not limited to: employee salaries, staff
lawyers, travel, supplies, and overhead.
Interest assistance agreement. The signed agreement between the
Agency and the lender setting forth the terms and conditions of the
interest assistance.
Interest assistance anniversary date. Date on which interest
assistance reviews and claims will be effective. This date is
established by the lender. Once established, it will not change unless
the loan is restructured.
Interest assistance review. The yearly review process which includes
an analysis of the borrower or applicant's farming operation and need
for continued interest assistance, completion of the needs test and
request for continuation of interest assistance.
Joint operation. Individuals that have agreed to operate a farm or
farms together as a business unit. The real and personal property may be
owned separately or jointly by the individuals.
Land development. Items such as terracing, clearing, leveling,
fencing, drainage and irrigation systems, ponds, forestation, permanent
pastures, perennial hay crops, basic soil amendments, and other items of
land improvements which conserve or permanently enhance productivity.
Lender. The organization making and servicing the loan or advancing
and servicing the line of credit which is guaranteed under the
provisions of Agency regulations. The lender is also the party
requesting a guarantee.
Lender's agreement. The appropriate Agency form executed by the
Agency and the lender setting forth the loan responsibilities of the
lender and agency when the loan guarantee is issued.
Lien.A legally enforceable hold or claim on the property of another
obtained as security for the repayment of indebtedness or an encumbrance
on property to enforce payment of an obligation.
Liquidation expenses. The cost of an appraisal, due diligence
evaluation, environmental assessment, outside attorney fees and other
costs incurred as a direct result of liquidating the security for the
guaranteed loan. Liquidation fees do not include in-house expenses.
Loan or line of credit agreement. A document which contains certain
lender and borrower agreements, conditions, limitations, and
responsibilities for credit extension and acceptance in a loan format
where loan principal balance may fluctuate throughout the term of the
document.
Loan applicant. The party applying to a lender for a guaranteed loan
or line of credit.
Loan transaction. Any loan approval or servicing action.
Loss claim. A request made to the Agency by a lender to receive a
reimbursement based on a percentage of the lender's loss on a loan
covered by an Agency guarantee.
Loss rate. The net amount of guaranteed OL, FO, and SW loss claims
paid on loans made in the past 7 years divided by the total loan amount
of OL, FO, and SW made in the past 7 years.
[[Page 90]]
Major deficiency. A deficiency that directly affects the soundness
of the loan.
Majority interest. Any individual or a combination of individuals
owning more than a 50 percent interest in a cooperative, corporation,
joint operation, or partnership.
Market value. The amount which an informed and willing buyer would
pay an informed and willing, but not forced, seller in a completely
voluntary sale.
Minor deficiency. A deficiency that violates Agency regulations, but
does not affect the soundness of a loan.
Mortgage. A legal instrument giving the lender a security interest
or lien on real or personal property of any kind.
Negligent servicing. The failure to perform those services which
would be considered normal industry standards of loan management or
failure to comply with any servicing requirement of this subpart or the
lenders agreement or the guarantee. The term includes the concept of a
failure to act or failure to act timely consistent with actions of a
reasonable lender in loan making, servicing, and collection.
Net farm operating income. The gross income generated by a farming
operation annually, minus all yearly operating expenses (including
withdrawals from entities for living expenses), operating loan interest,
interest on term debt and capital lease payments, and depreciation and
amortization expenses. Net farm operating income does not include off-
farm income and social security taxes, carryover debt and delinquent
interest.
Net recovery value. The market value of the security property
assuming that it will be acquired by the lender, and sold for its
highest and best use, less the lender's costs of property acquisition,
retention, maintenance, and liquidation.
Nonessential asset. Assets in which the borrower has an ownership
interest that do not contribute an income to pay essential family living
expenses or maintain a sound farming operation, and are not exempt from
judgment creditors.
Normal income security. All security not considered basic security.
Partnership. Any entity consisting of two or more individuals who
have agreed to operate a farm as one business unit. The entity must be
recognized as a partnership by the laws of the State in which the entity
will operate and must be authorized to own both real estate and personal
property and to incur debts in its own name.
Potential liquidation value. The amount of the lender's protective
bid at the foreclosure sale. Potential liquidation value is determined
by an independent appraiser using comparables from other forced
liquidation sales.
Present value. The present worth of a future stream of payments
discounted to the current date.
Presidentially-designated emergency. A major disaster or emergency
designated by the President under the Robert T. Stafford Disaster Relief
and Emergency Assistance Act (42 U.S.C. 5121 et seq.)
Primary security. The minimum amount of collateral needed to fully
secure a proposed loan.
Principals of borrowers. Includes owners, officers, directors,
entities and others directly involved in the operation and management of
a business.
Protective advances. Advances made by a lender to protect or
preserve the collateral itself from loss or deterioration. Protective
advances include but are not limited to:
(1) Payment of delinquent taxes,
(2) Annual assessments,
(3) Ground rents,
(4) Hazard or flood insurance premiums against or affecting the
collateral,
(5) Harvesting costs,
(6) Other expenses needed for emergency measures to protect the
collateral.
Recapture. The amount that a guaranteed lender is entitled to
recover from a guaranteed loan borrower in consideration for the lender
writing down a portion of their guaranteed loan debt when that loan was
secured by real estate and that real estate increases in value. Also,
the act of collecting shared appreciation.
Related by blood or marriage. Individuals who are connected to one
another
[[Page 91]]
as husband, wife, parent, child, brother, or sister.
Relative. An individual or spouse and anyone having the following
relationship to either: parent, son, daughter, sibling, stepparent,
stepson, stepdaughter, stepbrother, stepsister, half brother, half
sister, uncle, aunt, nephew, niece, grandparent, granddaughter,
grandson, and the spouses of the foregoing.
Rescheduling. To rewrite the rates and terms of a single note or
line of credit agreement.
Restructuring. Changing terms of a debt through either a
rescheduling, deferral, or writedown or a combination thereof.
Security. Property of any kind subject to a real or personal
property lien. Any reference to ``collateral'' or ``security property''
shall be considered a reference to the term ``security.''
Shared appreciation agreement. An agreement between a guaranteed
lender and borrower that requires a borrower that has received a write
down on a guaranteed loan secured by real estate to repay the lender
some or all of the writedown received, based on a percentage of any
increase in the value of that real estate at some future date, if
certain conditions exist.
State. The major political subdivision of the United States and the
organization of program delivery for the Agency.
Subordination. A document executed by a lender to relinquish their
priority of lien in favor of another lender that provides the other
lender with a priority right to collect a debt of a specific dollar
amount from the sale of the same collateral.
Subsequent loans. Any loans processed by the Agency after an initial
loan has been made to the same borrower.
Transfer and assumption. The conveyance by a debtor to an assuming
party of the assets, collateral, and liabilities of the loan in return
for the assuming party's binding promise to pay the debt outstanding.
Typical plan. A projected income and expense statement listing all
anticipated cash flows for a typical 12-month production cycle;
including all farm and nonfarm income and all expenses (including debt
service) to be incurred by the borrower during such period.
Unaccounted for security. Items, as indicated on the lender's loan
application, request for guarantee, or any interim agreements provided
to the Agency, that are security for the guaranteed loan that were
misplaced, stolen, sold, or otherwise missing, where replacement
security was not obtained or the proceeds from their sale have not been
applied to the loan.
United States. The United States itself, each of the several States,
the Commonwealth of Puerto Rico, the Virgin Islands of the United
States, Guam, American Samoa, and the Commonwealth of the Northern
Mariana Islands.
Veteran. Any person who served in the military, naval, or air
service during any war as defined in section 101(12) of title 38, United
States Code.
[64 FR 7378, Feb. 12, 1999, as amended at 66 FR 7567, Jan. 24, 2001; 68
FR 7695, Feb. 18, 2003; 69 FR 5262, Feb. 4, 2004; 70 FR 56107, Sept. 26,
2005]
Sec. 762.103 Full faith and credit.
(a) Fraud and misrepresentation. The loan guarantee constitutes an
obligation supported by the full faith and credit of the United States.
The Agency may contest the guarantee only in cases of fraud or
misrepresentation by a lender or holder, in which:
(1) The lender or holder had actual knowledge of the fraud or
misrepresentation at the time it became the lender or holder, or
(2) The lender or holder participated in or condoned the fraud or
misrepresentation.
(b) Lender violations. The loan guarantee cannot be enforced by the
lender, regardless of when the Agency discovers the violation, to the
extent that the loss is a result of:
(1) Violation of usury laws;
(2) Negligent servicing;
(3) Failure to obtain the required security; or,
(4) Failure to use loan funds for purposes specifically approved by
the Agency.
(c) Enforcement by holder. The guarantee and right to require
purchase will be directly enforceable by the holder even if:
[[Page 92]]
(1) The loan guarantee is contestable based on the lender's fraud or
misrepresentation; or
(2) The loan note guarantee is unenforceable by the lender based on
a lender violation.
Sec. 762.104 Appeals.
(a) The loan applicant or borrower and lender must jointly execute
the written request for review of an alleged adverse decision made by
the Agency. However, in cases where the Agency has denied or reduced the
amount of the final loss payment, the decision may be appealed by the
lender only.
(b) A decision made by the lender adverse to the borrower is not a
decision by the Agency, whether or not concurred in by the Agency, and
may not be appealed.
(c) The lender or Agency may request updated information from the
borrower to implement an appeal decision.
(d) Appeals will be handled in accordance with parts 11 and 780 of
this title.
Sec. 762.105 Eligibility and substitution of lenders.
(a) General. To participate in FSA guaranteed farm loan programs, a
lender must meet the eligibility criteria in this part. The standard
eligible lender must demonstrate eligibility and provide such evidence
as the Agency may request.
(b) Standard eligible lender eligibility criteria. (1) A lender must
have experience in making and servicing agricultural loans and have the
capability to make and service the loan for which a guarantee is
requested;
(2) The lenders must not have losses or deficiencies in processing
and servicing guaranteed loans above a level which would indicate an
inability to properly process and service a guaranteed agricultural
loan.
(3) A lender must be subject to credit examination and supervision
by an acceptable State or Federal regulatory agency;
(4) The lender must maintain an office near enough to the
collateral's location so it can properly and efficiently discharge its
loan making and loan servicing responsibilities or use Agency approved
agents, correspondents, branches, or other institutions or persons to
provide expertise to assist in carrying out its responsibilities. The
lender must be a local lender unless it:
(i) Normally makes loans in the region or geographic location in
which the loan applicant's operation being financed is located, or
(ii) Demonstrates specific expertise in making and servicing loans
for the proposed operation.
(5) The lender, its officers, or agents must not be debarred or
suspended from participation in Government contracts or programs or be
delinquent on a Government debt.
(c) Substitution of lenders. A new eligible lender may be
substituted for the original lender, upon the original lender's
concurrence, under the following conditions:
(1) The Agency approves of the substitution in writing by executing
a modification of the guarantee to identify the new lender, the amount
of debt at the time of the substitution and any new loan terms if
applicable.
(2) The new lender agrees in writing to:
(i) Assume all servicing and other responsibilities of the original
lender and to acquire the unguaranteed portion of the loan;
(ii) Execute a lender's agreement if one is not in effect;
(iii) [Reserved]
(iv) Give any holder written notice of the substitution. If the rate
and terms are changed, written concurrence from the holder is required.
(3) The original lender will:
(i) Assign their promissory note, lien instruments, loan agreements,
and other documents to the new lender.
(ii) If the loan is subject to an existing interest assistance
agreement, submit a request for subsidy for the partial year that it has
owned the loan.
(d) Lender name or ownership changes. (1) When a lender begins doing
business under a new name or undergoes an ownership change the lender
will notify the Agency.
(2) The lender's CLP or PLP status is subject to reconsideration
when ownership changes.
[[Page 93]]
(3) The lender will execute a new lender's agreement when ownership
changes.
[64 FR 7378, Feb. 12, 1999, as amended at 66 FR 7567, Jan. 24, 2001]
Sec. 762.106 Preferred and certified lender programs.
(a) General. (1) Lenders who desire PLP or CLP status must prepare a
written request addressing:
(i) The States in which they desire to receive PLP or CLP status and
their branch offices which they desire to be considered by the Agency
for approval; and
(ii) Each item of the eligibility criteria for PLP or CLP approval
in this section, as appropriate.
(2) The lender may include any additional supporting evidence or
other information the lender believes would be helpful to the Agency in
making its determination.
(3) The lender must send its request to the Agency State office for
the State in which the lender's headquarters is located.
(4) The lender must provide any additional information requested by
the Agency to process a PLP or CLP request if the lender continues with
the approval process.
(b) CLP criteria. The lender must meet the following requirements to
obtain CLP status:
(1) Qualify as a standard eligible lender under Sec. 762.105;
(2) Have a lender loss rate not in excess of the maximum CLP loss
rate established by the Agency and published periodically in a Federal
Register Notice. The Agency may waive the loss rate criteria for those
lenders whose loss rate was substantially affected by a disaster as
defined in part 1945, subpart A, of this title.
(3) Have proven an ability to process and service Agency guaranteed
loans by showing that the lender:
(i) Submitted substantially complete and correct guaranteed loan
applications; and
(ii) Serviced all guaranteed loans according to Agency regulations;
(4) Have made the minimum number of guaranteed OL, FO, or Soil and
Water (SW) loans established by the Agency and published periodically in
a Federal Register Notice.
(5) Not be under any regulatory enforcement action such as a cease
and desist order, written agreement, or an appointment of conservator or
receiver, based upon financial condition;
(6) Designate a qualified person or persons to process and service
Agency guaranteed loans for each of the lender offices which will
process CLP loans. To be qualified, the person must meet the following
conditions:
(i) Have attended Agency sponsored training in the past 12 months or
will attend training in the next 12 months; and
(ii) Agree to attend Agency sponsored training each year;
(7) Use forms acceptable to the Agency for processing, analyzing,
securing, and servicing Agency guaranteed loans and lines of credit;
(c) PLP criteria. The lender must meet the following requirements to
obtain PLP status:
(1) Meet the CLP eligibility criteria under this section.
(2) Have a credit management system, satisfactory to the Agency,
based on the following:
(i) The lender's written credit policies and underwriting standards;
(ii) Loan documentation requirements;
(iii) Exceptions to policies;
(iv) Analysis of new loan requests;
(v) Credit file management;
(vi) Loan funds and collateral management system;
(vii) Portfolio management;
(viii) Loan reviews;
(ix) Internal credit review process;
(x) Loan monitoring system; and
(xi) The board of director's responsibilities.
(3) Have made the minimum number of guaranteed OL, FO, or SW loans
established by the Agency and published periodically in a Federal
Register Notice.
(4) Have a lender loss rate not in excess of the rate of the maximum
PLP loss rate established by the Agency and published periodically in a
Federal Register Notice. The Agency may waive the loss rate criteria for
those
[[Page 94]]
lenders whose loss rate was substantially affected by a disaster as
defined in part 1945, subpart A, of this title.
(5) Show a consistent practice of submitting applications for
guaranteed loans containing accurate information supporting a sound loan
proposal.
(6) Show a consistent practice of processing Agency guaranteed loans
without recurring major or minor deficiencies.
(7) Demonstrate a consistent, above average ability to service
guaranteed loans based on the following:
(i) Borrower supervision and assistance;
(ii) Timely and effective servicing; and
(iii) Communication with the Agency.
(8) Designate a person or persons, either by name, title, or
position within the organization, to process and service PLP loans for
the Agency.
(d) CLP and PLP approval. (1) If a lender applying for CLP or PLP
status is or has recently been involved in a merger or acquisition, all
loans and losses attributed to both lenders will be considered in the
eligibility calculations.
(2) The Agency will determine which branches of the lender have the
necessary experience and ability to participate in the CLP or PLP
program based on the information submitted in the lender application and
on Agency experience.
(3) Lenders who meet the criteria will be granted CLP or PLP status
for a period not to exceed 5 years.
(4) PLP status will be conditioned on the lender carrying out its
credit management system as proposed in its request for PLP status and
any additional loan making or servicing requirements agreed to and
documented the PLP lender's agreement. If the PLP lender's agreement
does not specify any agreed upon process for a particular action, the
PLP lender will act according to regulations governing CLP lenders.
(e) Monitoring CLP and PLP lenders. CLP and PLP lenders will provide
information and access to records upon Agency request to permit the
Agency to audit the lender for compliance with these regulations.
(f) Renewal of CLP or PLP status. (1) PLP or CLP status will expire
within a period not to exceed 5 years from the date the lender's
agreement is executed, unless a new lender's Agreement is executed.
(2) Renewal of PLP or CLP status is not automatic. A lender must
submit a written request for renewal of a lender's agreement with PLP or
CLP status which includes information:
(i) Updating the material submitted in the initial application; and,
(ii) Addressing any new criteria established by the Agency since the
initial application.
(3) PLP or CLP status will be renewed if the applicable eligibility
criteria under this section are met, and no cause exists for denying
renewal under paragraph (g) of this section.
(g) Revocation of PLP or CLP status. (1) The Agency may revoke the
lender's PLP or CLP status at any time during the 5 year term for cause.
(2) Any of the following instances constitute cause for revoking or
not renewing PLP or CLP status:
(i) Violation of the terms of the lender's agreement;
(ii) Failure to maintain PLP or CLP eligibility criteria. The Agency
may allow a PLP lender with a loss rate which exceeds the maximum PLP
loss rate, to retain its PLP status for a two-year period, if:
(A) The lender documents in writing why the excessive loss rate is
beyond their control;
(B) The lender provides a written plan that will reduce the loss
rate to the PLP maximum rate within two years from the date of the plan,
and
(C) The Agency determines that exceeding the maximum PLP loss rate
standard was beyond the control of the lender. Examples include, but are
not limited to, a freeze with only local impact, economic downturn in a
local area, drop in local land values, industries moving into or out of
an area, loss of access to a market, and biological or chemical damage.
(D) The Agency will revoke PLP status if the maximum PLP loss rate
is not met at the end of the two-year period, unless a second two year
extension is granted under this subsection.
[[Page 95]]
(iii) Knowingly submitting false or misleading information to the
Agency;
(iv) Basing a request on information known to be false;
(v) Deficiencies that indicate an inability to process or service
Agency guaranteed farm loan programs loans in accordance with this
subpart;
(vi) Failure to correct cited deficiencies in loan documents upon
notification by the Agency;
(vii) Failure to submit status reports in a timely manner;
(viii) Failure to use forms, or follow credit management systems
(for PLP lenders) accepted by the Agency; or
(ix) Failure to comply with the reimbursement requirements of Sec.
762.144(c)(7).
(3) A lender which has lost PLP or CLP status must be reconsidered
for eligibility to continue as a Standard Eligible Lender (for former
PLP and CLP lenders), or as a CLP lender (for former PLP lenders) in
submitting loan guarantee requests. They may reapply for CLP or PLP
status when the problem causing them to lose their status has been
resolved.
[64 FR 7378, Feb. 12, 1999; 64 FR 38298, July 16, 1999, as amended at 70
FR 56107, Sept. 26, 2005; 71 FR 43957, Aug. 3, 2006]
Sec. Sec. 762.107-762.109 [Reserved]
Sec. 762.110 Loan application.
(a) Loans for $125,000 or less. All lenders except PLP lenders will
submit the following items:
(1) A complete application for loans of $125,000 or less must, at
least, consist of:
(i) The application form;
(ii) Loan narrative;
(iii) Balance sheet;
(iv) Cash flow budget;
(v) Credit report;
(vi) A plan for servicing the loan.
(2) In addition to the minimum requirements, the lender will perform
at least the same level of evaluation and documentation for a guaranteed
loan that the lender typically performs for non-guaranteed loans of a
similar type and amount.
(3) The $125,000 threshold includes any single loan, or package of
loans submitted for consideration at any one time. A lender must not
split a loan into two or more parts to meet the threshold thereby
avoiding additional documentation.
(4) The Agency may require lenders with a lender loss rate in excess
of the rate for CLP lenders to assemble additional documentation from
paragraph (b) of this section.
(b) Loans over $125,000. A complete application for loans over
$50,000 will consist of the items required in paragraph (a) of this
section plus the following:
(1) Verification of income;
(2) Verification of debts over $1,000;
(3) Three years financial history;
(4) Three years of production history (for standard eligible lenders
only);
(5) Proposed loan agreements; and,
(6) If construction or development is planned, a copy of the plans,
specifications, and development schedule.
(c) Applications from PLP lenders. Notwithstanding paragraphs (a)
and (b) of this section, a complete application for PLP lenders will
consist of at least:
(1) An application form;
(2) A loan narrative; and
(3) Any other items agreed to during the approval of the PLP
lender's status and contained in the PLP lender agreement.
(d) Submitting applications. (1) All lenders must compile and
maintain in their files a complete application for each guaranteed loan.
See paragraphs (a), (b), and (c) of this section.
(2) The Agency will notify CLP lenders which items to submit to the
Agency.
(3) PLP lenders will submit applications in accordance with their
agreement with the Agency for PLP status.
(4) CLP and PLP lenders must certify that the required items, not
submitted, are in their files.
(5) The Agency may request additional information from any lender or
review the lender's loan file as needed to make eligibility and approval
decisions.
(e) Incomplete applications. If the lender does not provide the
information needed to complete its application by the deadline
established in an Agency request for the information, the application
will be considered withdrawn by the lender.
[[Page 96]]
(f) Conflict of interest. (1) When a lender submits the application
for a guaranteed loan, the lender will inform the Agency in writing of
any relationship which may cause an actual or potential conflict of
interest.
(2) Relationships include:
(i) The lender or its officers, directors, principal stockholders
(except stockholders in a Farm Credit System institution that have stock
requirements to obtain a loan), or other principal owners having a
financial interest (other than lending relationships in the normal
course of business) in the loan applicant or borrower.
(ii) The loan applicant or borrower, a relative of the loan
applicant or borrower, anyone residing in the household of the loan
applicant or borrower, any officer, director, stockholder or other owner
of the loan applicant or borrower holds any stock or other evidence of
ownership in the lender.
(iii) The loan applicant or borrower, a relative of the loan
applicant or borrower, or anyone residing in the household of the loan
applicant or borrower is an Agency employee.
(iv) The officers, directors, principal stockholders (except
stockholders in a Farm Credit System institution that have stock
requirements to obtain a loan), or other principal owners of the lender
have substantial business dealings (other than in the normal course of
business) with the loan applicant or borrower.
(v) The lender or its officers, directors, principal stockholders,
or other principal owners have substantial business dealings with an
Agency employee.
(3) The lender must furnish additional information to the Agency
upon request.
(4) The Agency will not approve the application until the lender
develops acceptable safeguards to control any actual or potential
conflicts of interest.
[64 FR 7378, Feb. 12, 1999, as amended at 68 FR 7695, Feb. 18, 2003]
Sec. Sec. 762.111-762.119 [Reserved]
Sec. 762.120 Loan applicant eligibility.
Loan applicants must meet all of the following requirements to be
eligible for a guaranteed OL or a guaranteed FO:
(a) Agency loss. (1) Except as provided in paragraph (a)(2) of this
section, the applicant, and anyone who will execute the promissory note,
has not caused the Agency a loss by receiving debt forgiveness on all or
a portion of any direct or guaranteed loan made under the authority of
the CONACT by debt write-down or write-off; compromise, adjustment,
reduction, or charge-off under the provisions of section 331 of the
CONACT; discharge in bankruptcy; or through payment of a guaranteed loss
claim on:
(i) More than three occasions on or prior to April 4, 1996; or
(ii) Any occasion after April 4, 1996.
(2) The applicant may receive a guaranteed OL to pay annual farm and
ranch operating and family living expenses, provided the applicant meets
all other requirements for the loan, if the applicant and anyone who
will execute the promissory note:
(i) Received a write-down under section 353 of the CONACT;
(ii) Is current on payments under a confirmed reorganization plan
under chapter 11, 12, or 13 of title 11 of the United States Code; or
(iii) Received debt forgiveness on not more than one occasion after
April 4, 1996, resulting directly and primarily from a Presidentially-
designated emergency for a county or contiguous county in which the
applicant operates. Only applicants who were current on all existing
direct and guaranteed FSA loans prior to the beginning date of the
incidence period for a Presidentially-designated emergency and received
debt forgiveness on that debt within three years after the designation
of such emergency meet this exception.
(b) Delinquent Federal debt. The loan applicant, and anyone who will
execute the promissory note, is not delinquent on any Federal debt,
other than a debt under the Internal Revenue Code of 1986. (Any debt
under the Internal Revenue Code of 1986 may be considered by the lender
in determining cash flow and creditworthiness.)
(c) Outstanding judgments. The loan applicant, and anyone who will
execute the promissory note, have no outstanding unpaid judgment
obtained by
[[Page 97]]
the United States in any court. Such judgments do not include those
filed as a result of action in the United States Tax Courts.
(d) Citizenship. (1) The applicant must be a citizen of the United
States, a United States non-citizen national, or a qualified alien
under applicable Federal immigration laws. For an entity applicant, the
majority interest of the entity must be held by members who are United
States citizens, United States non-citizen nationals, or qualified
aliens under applicable Federal immigration laws.
(2) United States non-citizen nationals and qualified aliens must
provide the appropriate documentation as to their immigration status as
required by the United States Department of Homeland Security, Bureau of
Citizenship and Immigration Services.
(e) Legal capacity. The loan applicant and all borrowers on the loan
must possess the legal capacity to incur the obligations of the loan.
(f) False or misleading information. The loan applicant, in past
dealings with the Agency, must not have provided the Agency with false
or misleading documents or statements.
(g) Credit history. (1) The individual or entity loan applicant and
all entity members must have acceptable credit history demonstrated by
debt repayment.
(2) A history of failures to repay past debts as they came due when
the ability to repay was within their control will demonstrate
unacceptable credit history.
(3) Unacceptable credit history will not include:
(i) Isolated instances of late payments which do not represent a
pattern and were clearly beyond their control; or,
(ii) Lack of credit history.
(h) Test for credit. (1) The loan applicant is unable to obtain
sufficient credit elsewhere without a guarantee to finance actual needs
at reasonable rates and terms.
(2) The potential for sale of any significant nonessential assets
will be considered when evaluating the availability of other credit.
(3) Ownership interests in property and income received by an
individual or entity loan applicant, and any entity members as
individuals will be considered when evaluating the availability of other
credit to the loan applicant.
(i) For OLs:
(1) The individual or entity loan applicant must be an operator of
not larger than a family farm after the loan is closed.
(2) In the case of an entity borrower:
(i) The entity must be authorized to operate, and own if the entity
is also an owner, a farm in the State or States in which the farm is
located; and
(ii) If the entity members holding a majority interest are related
by marriage or blood, at least one member of the entity must operate the
family farm; or,
(iii) If the entity members holding a majority interest are not
related by marriage or blood, the entity members holding a majority
interest must also operate the family farm.
(j) For FOs:
(1) The individual must be the operator and owner of not larger than
a family farm after the loan is closed.
(2) In the case of an entity borrower:
(i) The entity must be authorized to own and operate a farm in the
state or states in which the farm is located; and
(ii) If the entity members holding a majority interest are related
by marriage or blood, at least one member of the entity also must
operate the family farm and at least one member of the entity or the
entity must own the family farm; or,
(iii) If the entity members holding a majority interest are not
related by marriage or blood, the entity members holding a majority
interest must operate the family farm and the entity members holding a
majority interest or the entity must own the family farm.
(k) For entity loan applicants. Entity loan applicants must meet the
following additional eligibility criteria:
(1) Each entity member's ownership interest may not exceed the
family farm definition limits;
(2) The collective ownership interest of all entity members may
exceed the family farm definition limits only if the following
conditions are met:
(i) All of the entity members are related by blood or marriage;
[[Page 98]]
(ii) All of the members are or will be operators of the entity; and,
(iii) The majority interest holders of the entity must meet the
requirements of paragraphs (d), (f), (g), and (i) through (j) of this
section;
(3) The entity must be controlled by farmers or ranchers engaged
primarily and directly in farming or ranching in the United States after
the loan is made; and
(4) The entity members are not themselves entities.
(l) Neither the applicant nor any entity member has been convicted
of planting, cultivating, growing, producing, harvesting, or storing a
controlled substance under Federal or state law within the last five
crop years. ``Controlled substance'' is defined at 21 CFR 1308.
Applicants must certify on the application that it and its members, if
an entity, have not been convicted of such a crime within the relevant
period. If the lender uses the lender's Agency approved forms, the
certification may be an attachment to the form.
[64 FR 7378, Feb. 12, 1999, as amended at 68 FR 62223, Nov. 3, 2003; 69
FR 5262, Feb. 4, 2004]
Sec. 762.121 Loan purposes.
(a) Operating Loan purposes. (1) Loan funds disbursed under an OL
guarantee may only be used for the following purposes:
(i) Payment of costs associated with reorganizing a farm or ranch to
improve its profitability;
(ii) Purchase of livestock, including poultry, and farm or ranch
equipment or fixtures, quotas and bases, and cooperative stock for
credit, production, processing or marketing purposes;
(iii) Payment of annual farm or ranch operating expenses, examples
of which include feed, seed, fertilizer, pesticides, farm or ranch
supplies, repairs and improvements which are to be expensed, cash rent
and family subsistence;
(iv) Payment of scheduled principal and interest payments on term
debt provided the debt is for authorized FO or OL purposes;
(v) Other farm and ranch needs;
(vi) Payment of costs associated with land and water development for
conservation or use purposes;
(vii) Refinancing indebtedness incurred for any authorized OL
purpose, when the lender and loan applicant can demonstrate the need to
refinance;
(viii) Payment of loan closing costs;
(ix) Payment of costs associated with complying with Federal or
State-approved standards under the Occupational Safety and Health Act of
1970 (29 U.S.C. 655, 667). This purpose is limited to applicants who
demonstrate that compliance with the standards will cause them
substantial economic injury; and
(x) Payment of training costs required or recommended by the Agency.
(2) Loan funds under a line of credit may be advanced only for the
following purposes:
(i) Payment of annual operating expenses, family subsistence, and
purchase of feeder animals;
(ii) Payment of current annual operating debts advanced for the
current operating cycle; (Under no circumstances can carry-over
operating debts from a previous operating cycle be refinanced);
(iii) Purchase of routine capital assets, such as replacement of
livestock, that will be repaid within the operating cycle;
(iv) Payment of scheduled, non-delinquent, term debt payments
provided the debt is for authorized FO or OL purposes.
(v) Purchase of cooperative stock for credit, production, processing
or marketing purposes; and
(vi) Payment of loan closing costs.
(b) Farm ownership loan purposes. Guaranteed FO are authorized only
to:
(1) Acquire or enlarge a farm or ranch; examples include, but are
not limited to, providing down payments, purchasing easements for the
loan applicant's portion of land being subdivided, and participating in
the beginning farmer downpayment FO program under part 1943, subpart A,
of this title;
(2) Make capital improvements; examples include, but are not limited
to, the construction, purchase, and improvement of a farm dwelling,
service buildings and facilities that can be made fixtures to the real
estate, (Capital improvements to leased land may be financed subject to
the limitations in Sec. 762.122);
[[Page 99]]
(3) Promote soil and water conservation and protection; examples
include the correction of hazardous environmental conditions, and the
construction or installation of tiles, terraces and waterways;
(4) Pay closing costs, including but not limited to, purchasing
stock in a cooperative and appraisal and survey fees; and
(5) Refinancing indebtedness incurred for authorized FO and OL
purposes, provided the lender and loan applicant demonstrate the need to
refinance the debt.
(c) Highly erodible land or wetlands conservation. Loans may not be
made for any purpose which contributes to excessive erosion of highly
erodible land or to the conversion of wetlands to produce an
agricultural commodity. A decision by the Agency to reject an
application for this reason may be appealable. An appeal questioning
whether the presence of a wetland, converted wetland, or highly erodible
land on a particular property must be filed directly with the USDA
agency making the determination in accordance with the agency's appeal
procedures.
(d) Judgment debts. Loans may not be used to satisfy judgments
obtained in the United States District courts. However, Internal Revenue
Service judgment liens may be paid with loan funds.
Sec. 762.122 Loan limitations.
(a) OL term limitations. (1) No guaranteed OL shall be made to any
loan applicant after the 15th year that a loan applicant, or any
individual signing the promissory note, received a direct or guaranteed
OL.
(2) Notwithstanding paragraph (c)(1) of this section, if a borrower
had any combination of direct or guaranteed OL closed in 10 or more
prior calendar years prior to October 28, 1992, eligibility to receive
new guaranteed OL is extended for 5 additional years from October 28,
1992, and the years need not run consecutively. However, in the case of
a line of credit, each year in which an advance is made after October
28, 1992, counts toward the 5 additional years. Once determined
eligible, a loan or line of credit may be approved for any authorized
term.
(b) Leased land. When FO funds are used for improvements to leased
land the terms of the lease must provide reasonable assurance that the
loan applicant will have use of the improvement over its useful life, or
provide compensation for any unexhausted value of the improvement if the
lease is terminated.
(c) Tax-exempt transactions. The Agency will not guarantee any loan
made with the proceeds of any obligation the interest on which is
excluded from income under section 103 of the Internal Revenue Code of
1986. Funds generated through the issuance of tax-exempt obligations may
not be used to purchase the guaranteed portion of any Agency guaranteed
loan. An Agency guaranteed loan may not serve as collateral for a tax-
exempt bond issue.
(d) Floodplain restrictions. The Agency will not guarantee any loan
to purchase, build, or expand buildings located in a special 100 year
floodplain as defined by FEMA flood hazard area maps unless flood
insurance is available and purchased.
[64 FR 7378, Feb. 12, 1999; 64 FR 38298, July 16, 1999, as amended at 66
FR 7567, Jan. 24, 2001]
Sec. 762.123 Insurance and farm inspection requirements.
(a) Insurance. (1) Lenders must require borrowers to maintain
adequate property, public liability, and crop insurance to protect the
lender and Government's interests.
(2) By loan closing, loan applicants must either:
(i) Obtain at least the catastrophic risk protection (CAT) level of
crop insurance coverage, if available, for each crop of economic
significance, as defined by part 402 of this title, or
(ii) Waive eligibility for emergency crop loss assistance in
connection with the uninsured crop. EM loan assistance under part 1945,
subpart D, of this title is not considered emergency crop loss
assistance for purposes of this waiver and execution of the waiver does
not render the borrower ineligible for EM loans.
(3) Loan applicants must purchase flood insurance if buildings are
or will be located in a special flood hazard area as defined by FEMA
flood hazard
[[Page 100]]
area maps and if flood insurance is available.
(4) Insurance, including crop insurance, must be obtained as
required by the lender or the Agency based on the strengths and
weaknesses of the loan.
(b) Farm inspections. Before submitting an application the lender
must make an inspection of the farm to assess the suitability of the
farm and to determine any development that is needed to make it a
suitable farm.
[64 FR 7378, Feb. 12, 1999, as amended at 70 FR 56107, Sept. 26, 2005]
Sec. 762.124 Interest rates, terms, charges, and fees.
(a) Interest rates. (1) The interest rate on a guaranteed loan or
line of credit may be fixed or variable as agreed upon between the
borrower and the lender. The lender may charge different rates on the
guaranteed and the non-guaranteed portions of the note. The guaranteed
portion may be fixed while the unguaranteed portion may be variable, or
vice versa. If both portions are variable, different bases may be used.
(2) If a variable rate is used, it must be tied to a rate
specifically agreed to between the lender and borrower in the loan
instruments. Variable rates may change according to the normal practices
of the lender for its average farm customers, but the frequency of
change must be specified in the loan or line of credit instrument.
(3) Neither the interest rate on the guaranteed portion nor the
unguaranteed portion may exceed the rate the lender charges its average
agricultural loan customer. At the request of the Agency, the lender
must provide evidence of the rate charged the average agricultural loan
customer. This evidence may consist of average yield data, or documented
administrative differential rate schedule formulas used by the lender.
(4) Interest must be charged only on the actual amount of funds
advanced and for the actual time the funds are outstanding. Interest on
protective advances made by the lender to protect the security will be
charged at the note rate but limited to paragraph (a)(3) of this
section.
(5) The lender and borrower may collectively obtain a temporary
reduction in the interest rate through the interest assistance program
in accordance with Sec. 762.150.
(b) OL terms. (1) Loan funds or advances on a line of credit used to
pay annual operating expenses will be repaid when the income from the
year's operation is received, except when the borrower is establishing a
new enterprise, developing a farm, purchasing feed while feed crops are
being established, or recovering from disaster or economic reverses.
(2) The final maturity date for each loan cannot exceed 7 years from
the date of the promissory note or line of credit agreement. Advances
for purposes other than for annual operating expenses will be scheduled
for repayment over the minimum period necessary considering the loan
applicant's ability to repay and the useful life of the security, but
not in excess of 7 years.
(3) All advances on a line of credit must be made within 5 years
from the date of the Loan Guarantee.
(c) FO terms. Each loan must be scheduled for repayment over a
period not to exceed 40 years from the date of the note or such shorter
period as may be necessary to assure that the loan will be adequately
secured, taking into account the probable depreciation of the security.
(d) Balloon installments under loan note guarantee. Balloon payment
terms are permitted on FO or OL subject to the following:
(1) Extended repayment schedules may include equal, unequal, or
balloon installments if needed on any guaranteed loan to establish a new
enterprise, develop a farm, or recover from a disaster or an economical
reversal.
(2) Loans with balloon installments must have adequate collateral at
the time the balloon installment comes due. Crops, livestock other than
breeding livestock, or livestock products produced are not sufficient
collateral for securing such a loan.
(3) The borrower must be projected to be able to refinance the
remaining debt at the time the balloon payment comes due based on the
expected financial condition of the operation, the depreciated value of
the collateral, and the principal balance on the loan.
[[Page 101]]
(e) Charges and Fees. (1) The lender may charge the loan applicant
and borrower fees for the loan provided they are no greater than those
charged to unguaranteed customers for similar transactions. Similar
transactions are those involving the same type of loan requested (for
example, operating loans or farm real estate loans).
(2) Late payment charges (including default interest charges) are
not covered by the guarantee. These charges may not be added to the
principal and interest due under any guaranteed note or line of credit.
However, late payment charges may be made outside of the guarantee if
they are routinely made by the lender in similar types of loan
transactions.
(3) Lenders may not charge a loan origination and servicing fee
greater than 1 percent of the loan amount for the life of the loan when
a guaranteed loan is made in conjunction with a down payment FO for
beginning farmers under part 1943, subpart A, of this title.
Sec. 762.125 Financial feasibility.
(a) General. (1) Notwithstanding any other provision of this
section, PLP lenders will follow their internal procedures on financial
feasibility as agreed to by the Agency during PLP certification.
(2) The loan applicant's proposed operation must project a feasible
plan as defined in Sec. 762.102(b).
(3) For standard eligible lenders, the projected income and expenses
of the borrower and operation used to determine a feasible plan must be
based on the loan applicant's proven record of production and financial
management.
(4) For CLP lenders, the projected income and expenses of the
borrower and the operation must be based on the loan applicant's
financial history and proven record of financial management.
(5) For those farmers without a proven history, a combination of any
actual history and any other reliable source of information that are
agreeable with the lender, the loan applicant, and the Agency will be
used.
(6) The cash flow budget analyzed to determine a feasible plan must
represent the predicted cash flow of the operating cycle.
(7) Lenders must use price forecasts that are reasonable and
defensible. Sources must be documented by the lender and acceptable to
the Agency.
(8) When a feasible plan depends on income from other sources in
addition to income from owned land, the income must be dependable and
likely to continue.
(9) The lender will analyze business ventures other than the farm
operation to determine their soundness and contribution to the
operation. Guaranteed loan funds will not be used to finance a nonfarm
enterprise. Nonfarm enterprises include, but are not limited to: raising
earthworms, exotic birds, tropical fish, dogs, or horses for nonfarm
purposes; welding shops; boarding horses; and riding stables.
(10) When the loan applicant has or will have a cash flow budget
developed in conjunction with a proposed or existing Agency direct loan,
the two cash flow budgets must be consistent.
(b) Estimating production. (1) Standard eligible lenders must use
the best sources of information available for estimating production in
accordance with this subsection when developing cash flow budgets.
(2) Deviations from historical performance may be acceptable, if
specific to changes in operation and adequately justified and acceptable
to the Agency.
(3) For existing farmers, actual production for the past 3 years
will be utilized.
(4) For those farmers without a proven history, a combination of any
actual history and any other reliable source of information that are
agreeable with the lender, the loan applicant, and the Agency will be
used.
(5) When the production of a growing commodity can be estimated, it
must be considered when projecting yields.
(6) When the loan applicant's production history has been so
severely affected by a declared disaster that an accurate projection
cannot be made, the following applies:
(i) County average yields are used for the disaster year if the loan
applicant's disaster year yields are less than the
[[Page 102]]
county average yields. If county average yields are not available, State
average yields are used. Adjustments can be made, provided there is
factual evidence to demonstrate that the yield used in the farm plan is
the most probable to be realized.
(ii) To calculate a historical yield, the crop year with the lowest
actual or county average yield may be excluded, provided the loan
applicant's yields were affected by disasters at least 2 of the previous
5 consecutive years.
(c) Refinancing. Loan guarantee requests for refinancing must ensure
that a reasonable chance for success still exists. The lender must
demonstrate that problems with the loan applicant's operation that have
been identified, can be corrected, and the operation returned to a sound
financial basis.
[64 FR 7378, Feb. 12, 1999, as amended at 66 FR 7567, Jan. 24, 2001]
Sec. 762.126 Security requirements.
(a) General. (1) The lender is responsible for ensuring that proper
and adequate security is obtained and maintained to fully secure the
loan, protect the interest of the lender and the Agency, and assure
repayment of the loan or line of credit.
(2) The lender will obtain a lien on additional security when
necessary to protect the Agency's interest.
(b) Guaranteed and unguaranteed portions. (1) All security must
secure the entire loan or line of credit. The lender may not take
separate security to secure only that portion of the loan or line of
credit not covered by the guarantee.
(2) The lender may not require compensating balances or certificates
of deposit as means of eliminating the lender's exposure on the
unguaranteed portion of the loan or line of credit. However,
compensating balances or certificates of deposit as otherwise used in
the ordinary course of business are allowed for both the guaranteed and
unguaranteed portions.
(c) Identifiable security. The guaranteed loan must be secured by
identifiable collateral. To be identifiable, the lender must be able to
distinguish the collateral item and adequately describe it in the
security instrument.
(d) Type of security. (1) Guaranteed loans may be secured by any
property if the term of the loan and expected life of the property will
not cause the loan to be undersecured.
(2) For loans with terms greater than 7 years, a lien must be taken
on real estate.
(3) Loans can be secured by a mortgage on leasehold properties if
the lease has a negotiable value and is subject to being mortgaged.
(4) The lender or Agency may require additional personal and
corporate guarantees to adequately secure the loan. These guarantees are
separate from, and in addition to, the personal obligations arising from
members of an entity signing the note as individuals.
(e) Lien position. All guaranteed loans will be secured by the best
lien obtainable. Provided that:
(1) Any chattel-secured guaranteed loan must have a higher lien
priority (including purchase money interest) than an unguaranteed loan
secured by the same chattels and held by the same lender.
(2) Junior lien positions are acceptable only if the total amount of
debt with liens on the security, including the debt in junior lien
position, is less than or equal to 85 percent of the value of the
security. Junior liens on crops or livestock products will not be relied
upon for security unless the lender is involved in multiple guaranteed
loans to the same borrower and also has the first lien on the
collateral.
(3) When taking a junior lien, prior lien instruments will not
contain future advance clauses (except for taxes, insurance, or other
reasonable costs to protect security), or cancellation, summary
forfeiture, or other clauses that jeopardize the Government's or the
lender's interest or the borrower's ability to pay the guaranteed loan,
unless any such undesirable provisions are limited, modified, waived or
subordinated by the lienholder for the benefit of the Agency and the
lender.
(f) Additional security, or any loan of $10,000 or less may be
secured by the best lien obtainable on real estate without title
clearance or legal services normally required, provided the lender
believes from a search of the county records that the loan applicant
[[Page 103]]
can give a mortgage on the farm and provided that the lender would, in
the normal course of business, waive the title search. This exception to
title clearance will not apply when land is to be purchased.
(g) Multiple owners. If security has multiple owners, all owners
must execute the security documents for the loan.
(h) Exceptions. The Deputy Administrator for Farm Loan Programs has
the authority to grant an exception to any of the requirements involving
security, if the proposed change is in the best interest of the
Government and the collection of the loan will not be impaired.
[64 FR 7378, Feb. 12, 1999, as amended at 70 FR 56107, Sept. 26, 2005]
Sec. 762.127 Appraisal requirements.
(a) General. The Agency may require a lender to obtain an appraisal
based on the type of security, loan size, and whether it is primary or
additional security. Except for authorized liquidation expenses, the
lender is responsible for all appraisal costs, which may be passed on to
the borrower, or a transferee in the case of a transfer and assumption.
(b) Exception. Notwithstanding other provisions of this section, an
appraisal is not required for any additional security, or for loans of
$50,000 or less if a strong equity position exists.
(c) Chattel appraisals. A current appraisal (not more than 12 months
old) of primary chattel security is generally required on all loans. An
appraisal for loans or lines of credit for annual production purposes
that are secured by crops is only required when a guarantee is requested
late in the current production year and actual yields can be reasonably
estimated. The appraised value of chattel property will be based on
public sales of the same, or similar, property in the market area. In
the absence of such public sales, reputable publications reflecting
market values may be used. Appraisal reports may be on the Agency's
appraisal of chattel property form or on any other appraisal form
containing at least the same information. Chattel appraisals will be
performed by appraisers who possess sufficient experience or training to
establish market (not retail) values as determined by the Agency.
(d) Real estate appraisals. A current real estate appraisal is
required when real estate will be primary security. Agency officials may
accept an appraisal that is not current if there have been no
significant changes in the market or on the subject real estate and the
appraisal was either completed within the past 12 months or updated by a
qualified appraisal if not completed within the past 12 months.
(1) Appraiser qualifications. On loan transactions of $250,000 or
less, the lender must demonstrate to the Agency's satisfaction that the
appraiser possesses sufficient experience or training to estimate the
market value of agricultural property. On loan transactions greater than
$250,000, which includes principal plus accrued interest through the
closing date, the appraisal must be completed by a State certified
general appraiser.
(2) Appraisals. Real estate appraisals must be completed in
accordance with the Uniform Standards of Professional Appraisal
Practice. Appraisals may be either a complete or limited appraisal
provided in a self-contained or summary format. Restricted reports, as
defined in the Uniform Standards of Professional Appraisal Practice, are
not acceptable.
[64 FR 7378, Feb. 12, 1999, as amended at 64 FR 62568, Nov. 17, 1999; 65
FR 14433, Mar. 17, 2000]