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65FR36549 Agricultural Disaster and Market Assistance, Part 1/4

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Archive-Name: gov/us/fed/nara/fed-register/2000/jun/08/65FR36549/part1
Posting-number: Volume 65, Issue 111, Page 36549, Part 1

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[Federal Register: June 8, 2000 (Volume 65, Number 111)]
[Rules and Regulations]
[Page 36549-36584]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08jn00-27]

[[Page 36549]]

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Part III

Department of Agriculture

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Commodity Credit Corporation

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7 CFR Part 1400 et al.

Agricultural Disaster and Market Assistance; Interim Final Rule

[[Page 36550]]

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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Parts 1400, 1411, 1427, 1439, 1464, 1479

RIN 0560-AG14

Agricultural Disaster and Market Assistance

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Interim rule and final rule.

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SUMMARY: This rule implements agricultural disaster and market
assistance provisions of the Agriculture, Rural Development, Food and
Drug Administration, and Related Agencies Appropriations Act, 2000 and
the Omnibus Consolidated Appropriations Act, 2000. It will implement
statutory provisions related to cottonseed market loss, a
competitiveness program for extra long staple (ELS) cotton, warehouse-
stored tobacco loss assistance, pasture recovery, oilseeds marketing
loss, livestock disaster assistance for contract growers and emergency
assistance for Harney County, Oregon. It will also define the base
quality for upland cotton, finalize existing regulations for the
Livestock Indemnity and American Indian Livestock Feed Programs and
reorganize all of the Emergency Livestock Assistance regulations to
remove obsolete regulations. Certain provisions of this rule will be
implemented as interim rules and others as final rules. See
SUPPLEMENTARY INFORMATION for details.

DATES: This rule is effective June 1, 2000, except for the amendments
to Sec. 1427.25, which is effective August 1, 2000.
Comments on the provisions of this interim rule related to
cottonseed assistance, the competitiveness program for ELS cotton, and
flood assistance for Harney County, Oregon must be received by July 10,
2000 to be assured of consideration. Comments on the information
collections for these programs must be received by August 7, 2000.

ADDRESSES: Comments on the regulations should be sent to: Tom Witzig,
Chief, Regulatory Review and Foreign Investment Disclosure Branch, Farm
Service Agency (FSA), U.S. Department of Agriculture, STOP 0540, 1400
Independence Ave., SW, Washington, DC, 20250-0540, telephone (202)205-
5851, or by e-mail to: tom__...@wdc.fsa.usda.gov. Comments can be
inspected in Room 6734 South Building, Washington, DC, between 7:30
a.m. and 4:30 p.m., Monday through Friday, except holidays. Comments on
the information collection should be sent to the Desk Officer for
Agriculture, Office of Information and Regulatory Affairs, Office of
Management and Budget, Washington, D.C. 20503 and to Tom Witzig at the
address above.

FOR FURTHER INFORMATION CONTACT: Tom Witzig, Chief, Regulatory Review
and Foreign Investment Disclosure Branch, FSA, USDA, STOP 0540, 1400
Independence Avenue, SW, Washington, D.C. 20250-0540, Telephone: (202)
205-5851; e-mail: tom__...@wdc.fsa.wdc.gov.

SUPPLEMENTARY INFORMATION:

Notice and Comment

Executive Order 12866

This final rule is issued in conformance with Executive Order 12866
and has been determined to be economically significant and has been
reviewed by the Office of Management and Budget. A cost-benefit
assessment was completed and is summarized after the background section
explaining the actions this rule will take.

Federal Assistance Programs

The titles and numbers of the Federal assistance programs, as found
in the Catalog of Federal Domestic Assistance, to which this final rule
applies are: Commodity Loan Deficiency Payments--10.051; Production
Flexibility Payments for Contract Commodities--10.055; Conservation
Reserve Program--10.069, Disaster Reserve Assistance--10.452.

Regulatory Flexibility Act

It has been determined that the Regulatory Flexibility Act is not
applicable to this rule because USDA is not required by 5 U.S.C. 553 or
any other provision of law to publish a notice of proposed rulemaking
with respect to the subject matter of this rule.

Environmental Evaluation

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

Executive Order 12372

This program is not subject to the provisions of Executive Order
12372, which require intergovernmental consultation with State and
local officials. See the notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115 (June 24, 1983).

Unfunded Mandates

The provisions of Title II of the Unfunded Mandates Reform Act of
1995 are not applicable to this rule because

[[Page 36551]]

the USDA is not required by 5 U.S.C. 553 or any other provision of law
to publish a notice of proposed rulemaking with respect to the subject
matter of this rule.

Small Business Regulatory Enforcement Fairness Act of 1996

Section 824 of Pub. L. 106-78 requires that the regulations
necessary to implement Title VIII, Subtitle A of Pub. L. 106-78 be
issued as soon as practicable and without regard to the notice and
comment provisions of 5 U.S.C. 553 or the Statement of Policy of the
Secretary of Agriculture effective July 24, 1971 (36 FR 13804) relating
to notices of proposed rulemaking and public participation in
rulemaking. It also requires that the Secretary use the provisions of 5
U.S.C. 808 (the Small Business Regulatory Enforcement Fairness Act
(SBREFA)), which provides that a rule may take effect at such time as
the agency may determine if the agency finds for good cause that public
notice is impracticable, unnecessary, or contrary to the public
purpose, and thus does not have to meet the requirements of Sec. 801 of
SBREFA requiring a 60-day delay for Congressional review of a major
regulation before the regulation can go into effect. This interim rule
is considered a major rule for the purposes of SBREFA. However, the
regulations for tobacco warehouse assistance, pasture recovery,
oilseeds assistance, and livestock assistance for contract growers
implement provisions of Subtitle A of Pub. L. 106-78. These regulations
affect the incomes of a large number of agricultural producers who have
been hit hard by natural disasters and poor market conditions.
Accordingly, because it would be contrary to the public interest to
delay those provisions of this rule, as expressed in Pub. L. 106-78,
they are issued as final and are effective immediately.
The provisions of this interim rule for cottonseed assistance, the
competitiveness program for ELS cotton, and flood assistance for Harney
County, Oregon are not exempt from the notice and comment or the
Congressional Review requirements. With respect to these items, for
which public comment will be sought, it has been determined that the
new regulations should be made effective immediately as in each one of
the cases further delay in making benefits available would delay
legislated emergency relief. In the case of the provision for extra
long staple cotton, the rule merely codifies a statutory formula for
relief. In the case of cottonseed payments, the rule will allow
recovery in a timely manner for damages that have already been
suffered, as will also be the case with the relief provide for Harney
County producers. The new regulations, however, are flexible enough to
allow the agency to suspend the new provisions for these three new
programs in the event that cause for doing so should appear in the
comments. In the meantime, however, should no such cause appear, making
the regulations effective will allow the regulations to proceed to be
used to provide what could be much needed and timely relief for the
parties involved, just as relief for others has been provided through a
number of other new programs provided for in recent legislation.
Likewise, with respect to the Small Business Regulatory Enforcement
Fairness Act (SBREFA), which allows for a pre-issuance Congressional
review period for some rules, it has been determined that this rule
should be made effective immediately on all of its provisions as a
delay in implementing the rule would be impracticable and contrary to
the public interest.

Paperwork Reduction Act

Section 824 of Pub. L. 106-78 requires that the regulations
implementing the provisions of Subtitle A, Title VIII of Pub. L. 106-78
are to be promulgated without regard to the Paperwork Reduction Act.
This means that the normal 60-day public comment period and OMB
approval of the information collections required by this rule are not
required before the regulations may be made effective. However, the 60-
day public comment period and OMB approval under the provisions of 44
U.S.C. chapter 35 are still required after the rule is published. The
provisions of this rule that are not mandated by Subtitle A are subject
to the normal requirements of the Paperwork Reduction Act. Those
provisions are cottonseed assistance, the competitiveness program for
ELS cotton, and flood assistance for Harney County, Oregon. Information
Collection Packages and requests for emergency approval for those
provisions have been submitted to OMB and are summarized as follows:.
Title: Emergency Assistance for Harney County, Oregon (7 CFR part
1478)
OMB Control Number: 0560-NEW
Type of Request: Approval of a new information collection.
Abstract: Emergency Assistance for Harney County, Oregon is
authorized under H.R. 3194, P.L. 106-113 (113 Stat. 1501). To determine
benefits due to eligible producers requesting assistance in accordance
with regulations, FSA proposes to use the CCC-454 (Flood Compensation
Program). The CCC-454 will be used to document the verification of loss
of production because of flooding in 1999.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 2 hours per producer.
Respondents: Producers of Harney County, Oregon
Estimated Number of Respondents: 40
Estimated Number of Responses per Respondents: 1
Estimated Total Annual Burden on Respondents: 80 hours
Copies of the information collection may be obtained from Helen
Smith, USDA-FSA-PECD, 1400 Independence Avenue, S.W., STOP 0517,
Washington, D.C. 20250-0515: Telephone (202) 720-7954 or e-mail
helen...@wdc.fsa.usda.gov.
Title: Cottonseed Payment Program Application/Certification
OMB Control Number: 0560-NEW
Type of Request: Approval of a new information collection.
Abstract: This new collection instrument is the application and
certification form to be used by cotton gins to request payments under
the Cottonseed Payment Program. The information requested will be used
to determine the national payment rate and to compute individual
program payment amounts for each applicant.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 40 minutes per producer.
Respondents: Cotton Gins
Estimated Number of Respondents: 1,100
Estimated Number of Responses per Respondent: 1
Estimated Total Annual Burden on Respondents: 733 hours
Copies of the information collection may be obtained from Gene
Rosera, USDA-FSA-PSD, 1400 Independence Avenue, S.W., STOP 0512,
Washington, D.C. 20250: Telephone (202) 720-8481 or e-mail
gene_...@wdc.fsa.usda.gov.
Title: ELS Cotton Competitiveness Payment Program
OMB Control Number: 0560-NEW
Type of Request: Approval of a new information collection
Abstract: This collection will enroll Extra Long Staple (ELS)
cotton exports and textile manufacturers in the ELS Cotton
Competitiveness Payment Program and allow them to report their activity
with respect to ELS cotton so that proper payments can be made to them.
The ELS competitive payment program was authorized by the Consolidated
Appropriations Act for

[[Page 36552]]

Fiscal Year 2000, Pub.L. 106-113, and was mandated to begin October 1,
1999. A method has been devised to determine each Tuesday whether a
payment should be made during the following Wednesday-through-Tuesday
week and rate per pound of any payment. In the period since October 1,
1999, were triggered only during the period April 4, 2000, through May
2, 2000. Clearance of CCC-1045A (ELS Cotton Exporter/Domestic User
Agreement) would facilitate enrollment of the exporters and textile
manufacturing firms who wish to participate.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 30 sminutes per respondent.
Respondents: Cotton Exports and Textile Manufacturers
Estimated Number of Respondents: 40
Estimated Number of Responses per Respondents: 58
Estimated Total Annual Burden on Respondents: 780 hours
Copies of the information collection may be obtained from Wayne
Bjorlie, USDA-FSA-EPAS, 1400 Independence Avenue, S.W., STOP 0515,
Washington, D.C. 20250-0515: Telephone (202) 720-7954 or e-mail
wayne_...@wdc.fsa.usda.gov.
Proposed topics for comments for each of the three information
collections are: (a) whether the collection of information is necessary
for the proper performance of the functions of the agency, including
whether the information will have practical utility; (b) the accuracy
of the agency's estimate of burden including the validity of the
methodology and assumptions used; (c) ways to enhance the quality,
utility, and clarity of the information to be collected; or (d) ways to
minimize the burden of the collection of information on those who are
to respond, including the use of appropriate automated, electronic,
mechanical or other technological collection techniques or other forms
of information technology.
Comments should be sent to the Desk Officer for Agriculture, Office
of Information and Regulatory Affairs, Office of Management and Budget,
Washington, D.C. 20503 and to Tom Witzig, USDA-FSA-ORAS, 1400
Independence Avenue, S.W., STOP 0540, Washington, D.C. 20250-0540:
Telephone (202) 205-5851 or e-mail tom_w...@wdc.fsa.usda.gov.

Background

This rule will implement requirements of the Agriculture, Rural
Development, Food and Drug Administration, and Related Agencies
Appropriations Act, 2000, (Pub. L. 106-78), and the Omnibus
Consolidated Appropriations Act, 2000 (Pub. L. 106-113) related to
agricultural disaster and market assistance for agricultural producers.
It will also implement several other provisions of those and other Acts
that are related to but not in themselves crop or market loss
assistance provisions. Crop and market assistance provisions of the
Acts that are being implemented are the Cottonseed Market Loss
Assistance Program, the competitiveness program for ELS cotton,
Warehouse-Stored Tobacco Loss Assistance, the Pasture Recovery Program,
the Oilseeds Program, emergency assistance for Harney County, Oregon,
and livestock assistance for contract growers. This rule will also
finalize the existing regulations for the Livestock Indemnity and
American Indian Livestock Feed Programs, reorganize 7 CFR 1439,
Livestock Disaster Assistance, and make clarifying amendments to 7 CFR
1400. Descriptions of this rule's provisions follow.

1. 7 CFR Part 1400--Payment Limitation and Payment Eligibility

Amendments are being made to 7 CFR part 1400 to supplement and
clarify the existing regulations for consistent and efficient
administration. The revisions are not considered significant in that no
additional requirements are imposed upon the producers and no
additional responsibilities are placed on the Farm Service Agency or
USDA to administer the provisions of this part. The table in
Sec. 1400.1(g) is being amended to include the applicable limitation on
cost-share payments for conservation practices under the Environmental
Quality Incentives Program (EQIP). Section 1400.2 is being amended to
include the requirement that all necessary forms be submitted and
applicable determinations made before any payments can be issued for
the programs subject to this part. The section is further amended to
include a provision for the review of the applicable forms and
information submitted by producers for the determination of compliance
with this part.

2. 7 CFR Part 1411--Oilseeds Program

Section 804 of Pub. L. 106-78 provides generally that the Secretary
shall use $475 million of funds of the Commodity Credit Corporation
(CCC) to make payments to producers of the 1999 crop of oilseeds who
are eligible to obtain a marketing assistance loan under Sec. 131 of
the Agricultural Market Transition Act (7 U.S.C. 7231). Section 804
further provides that a payment to producers on a farm under that
section for an oilseed shall be equal to the product obtained by
multiplying (1) the payment rate determined by the Secretary, by (2)
the acreage of the producers on the farm for the oilseed, as determined
under the statute, by (3) the producers' yield for the oilseed, as
determined under the statute. With respect to acreage, the statute
provided generally that the payment acreage of the producers on the
farm for an oilseed shall be equal to the greater of (1) the number of
acres planted to the oilseed by the producers on the farm during the
1997 crop year, as reported by the producers on the farm to the
Secretary (including any acreage reports that are filed late), or (2)
the number of acres planted to the oilseed by the producers on the farm
during the 1998 crop year, as reported by the producers on the farm to
the Secretary (including any acreage reports that are filed late). As
an exception, however, the statute provides that in the case of
producers on a farm that planted acreage to an oilseed during the 1999
crop year but did not plant that oilseed in the 1997 or 1998 crop
years, the acreage of such ``new'' producers for that oilseed shall be
equal to the number of acres planted to the oilseed by the producers on
the farm during the 1999 crop year, as reported by the producers on the
farm to the Secretary (including any acreage reports that are filed
late). With respect to yield, the statute provides that in the case of
soybeans, the yield of established eligible producers (those with 1999
production and production in 1997 or 1998) on a farm shall be equal to
the greatest of (1) the average county yield per harvested acre for
each of the 1994 through 1998 crop years, excluding the crop year with
the highest yield per harvested acre and the crop year with the lowest
yield per harvested acre, (2) the actual yield of the producer for the
1997 crop year; or (3) the actual yield of the producer for the 1998
crop year. For other oilseeds the statute provides that the yield of
established producers shall be equal to the greatest of (1) the average
national yield per harvested acre for each of the 1994 through 1998
crop years, excluding the crop year with the highest yield per
harvested acre and the crop year with the lowest yield per harvested
acre, (2) the actual yield of the producer for the 1997 crop year; or
(3) the actual yield of the producer for the 1998 crop year. For new
producers, for all oilseeds, the statute provides that the yield will
be the greater of (1) the average county yield per harvested acre for
each of the 1994 through 1998 crop

[[Page 36553]]

years, excluding the crop year with the highest yield per harvested
acre and the crop year with the lowest yield per harvested acre; or (2)
the actual yield of the producers on the farm for the 1999 crop.
Finally, the statute provides that to the maximum extent available, the
Secretary shall use data provided by the National Agricultural
Statistics Service to carry out the new program.
As provided in the legislation, only those producers who planted an
eligible oilseed for the 1999 crop year will be eligible for benefits
under this program and no more than $475 million may be expended,
subject further to such administrative deductions as may apply.
Benefits will be determined by multiplying the eligible producer's
payment acreage times the applicable yield by the applicable payment
rate. The final payment rate will be determined by the Secretary after
the sign-up period, to allow the Secretary to establish a rate that
will limit total payments to not more than the allocated amount.
Because proration can only be made if all claims are made in a timely
fashion, no late-filed applications will be permitted. Deadlines will
be announced by press release and information about the program will be
available at local Farm Service Agency offices.
If the producer is considered to be a ``new'' producer, the
producer's qualifying acreage will be all acreage planted by the
producer on all farms in which the producer has an interest for the
1999 crop, adjusted to reflect partial interests where there is more
than one producer on the same acreage. If the producer is considered to
be an ``established'' producer, the acreage, similarly adjusted for
partial interests, will be the producer's highest acreage use in 1997
or 1998 at all locations for that oilseed. In all cases, however, for
all oilseeds, the producer, in order to be eligible for payment, must
have actually planted that particular oilseed for the 1999 crop year.
Producers are eligible to receive payments on more than one oilseed so
long as the producer shared in the production of each such oilseed for
the 1999 crop year. A producer is considered to be a new producer of an
oilseed if the producer shared in the production of the oilseed for the
1999 crop year, but did not share in the production of the oilseed on
any farm for the 1998 or 1997 crop years. The producer is not
considered to be a new producer of an oilseed if the producer shared in
the production of an oilseed on any farm in which the producer had an
interest in the 1999 crop year, and shared in the production of that
specific oilseed in either or both of the 1998 or 1997 crop years.
Acreage not planted to an oilseed crop, even if that acreage was
approved as acreage for prevented-planting credit for some other
purpose (that is, was acreage on which planting was prevented by
circumstances beyond the producer's control, so called ``prevented-
planting acreage'') does not qualify for any benefit calculation under
this new program. That is, that acreage will not qualify the producer
for a payment.
With respect to yields, the Secretary will announce average soybean
yields for each county, and, for minor oilseeds, a national average
yield will be announced. Producers may substitute actual yields for
average yields and, if subject to a spot check, shall document oilseed
disposition on FSA-658 for all planted acres for the year in question
or by providing RMA documentation with proven yield information for all
of the planted acres in question. All documentation must be approved by
the county committee. New producers may receive an oilseed payment
based on the higher of the applicable average yield of the control
county for soybeans or national average yield for all other eligible
oilseeds, or the producer's actual yield for all acreage for the 1999
crop year (if established to the county committee's satisfaction). An
oilseed producer who is not a new producer may receive an oilseed
payment based on the higher of the applicable average yield for the
producer's control county, for soybeans or national average yield for
all other eligible oilseeds, or the higher actual yield for all the
producer's planted acreage of the oilseed for either the 1997 or 1998
crop year (regardless of which of those two years was used to set the
qualifying acreage).
As provided for in the statute, producers are entitled to receive a
payment amount equal to the result of multiplying the payment acreage,
times the payment yield, times the final payment rate determined by the
Secretary. All persons must meet all eligibility requirements and must,
to receive payments, be in compliance with the provisions for highly-
erodible land, wetland conservation, and with those regarding
controlled substances that are found in 7 CFR part 12 and 7 CFR 718.11.
Additionally, a producer who is determined to have intentionally
misrepresented any fact affecting a program determination will not be
entitled to oilseed payments and must refund all payments, plus
interest, and be subject to such other remedies as may be allowed by
law.
While the statute involved may be open to several interpretations
on significant questions, these rules are intended to provide for an
efficient administration of the program consistent with the provisions
of the statute itself. Thus, for example, while the references in the
legislation to producers ``on a farm'' could suggest that the program
was to be interpreted as allowing producers to qualify separately farm-
by-farm, rather than qualify on the basis of all farms in which they
have an interest, such an interpretation would produce a windfall for
some producers (at the expense of other producers) and would not seem
to be consistent with the intent of the statute to have producers share
in the program based on actual production levels. That is, while there
are references in the statute to ``producers on the farm'' the statute
does not itself specify that the calculation of production history will
be limited to what the producer produced on a particular farm. There is
a chance for a windfall with a different interpretation in that if a
farmer produced soybeans for 1997 and 1998 on two different farms in
rotation or otherwise, that farm would be able to receive a double
benefit if the producer could qualify for benefits for each farm
separately. Such a doubling of benefit would be to the detriment of
other soybean producers who are to share in the finite amount of money
available for the program, including those that maybe have grown an
equal amount of soybeans in 1997 and 1998 but did so on the same
``farm.''
Also, with respect to yields for new producers of oilseeds other
than soybeans, the statute does call for using a county average yield
if the producer cannot prove a higher yield. However, because county
data for these other oilseeds is limited, so as to raise doubts about
its reliability, national average data will be considered to establish
the county yield for these oilseeds unless there is adequate proof of a
county yield to the contrary, as determined by the local county
committee with State Committee approval.
Also, this rule contains a special rule with respect to powers of
attorney. In those instances in which, prior to the issuance of this
regulation, a producer has signed a power of attorney on an approved
FSA form FSA-211 for a person or entity indicating that such power
shall extend to ``all above programs'', without limitation, such power
will be considered to extend to this program unless within 14 days of
the issuance of this regulation the person granting the power shall
notify the local FSA office that the grantee of the power is not
authorized to handle transactions for this program for the grantor.
This will allow payments to be

[[Page 36554]]

made quickly and efficiently while also allowing a mechanism for the
grantor of the power to make program decisions directly.

3. 7 CFR Part 1427--Cottonseed Payment and Extra Long Staple Cotton
Competitiveness Payment Programs and Definition of Base Quality for
Upland Cotton

A. Cottonseed Market Assistance
Section 104(a) of Pub. L. 106-113 provides authority for the
Secretary to provide assistance to producers or first handlers of the
1999 crop of cottonseed. This authority is being used to implement a
new program because of the continuing low prices of cottonseed that, in
some cases, have been passed along to cotton producers in the form of
increased ginning fees. Specifically, in Pub. L. 106-113, Congress
provided that of the funds made available under Sec. 802 of Pub. L.
106-78 that were not otherwise needed to fully implement that section,
the Secretary may use up to $4.7 million to carry out title IX of Pub.
L. 106-78. Further, however, Congress provided that of the funds made
available under Sec. 802 of Pub. L. 106-78 (excluding any funds
authorized by to carry out title IX of Pub. L. 106-78) and under
Sec. 1111 of Pub. L. 105-277 not otherwise needed to fully implement
those sections, the Secretary may provide assistance to producers or
first-handlers for the 1999 crop of cottonseed. Both of those sections
provided for market loss assistance through the making of supplemental
payments to person with contracts under the Production Flexibility
Contract program operated by the Department. Finally, in this respect
the Congress provided that if any funds remained, the Secretary could
use the funds to provide for a new program for extra long staple
cotton, which is addressed later in this rule.
Consistent with the legislation, funding for the cottonseed program
is provided from a portion of the residual funds authorized for Pub. L.
106-78 and Pub. L. 105-277. Because outlays for this program will be
limited to a fixed amount, all payments will be made only after the
total eligible quantity of cottonseed can be determined from approved
applications.
The major provisions of this program are as follows. CCC will
announce an application period during which U.S. cotton gins may apply
for cottonseed payments based on the number of bales of cotton and
weight of lint ginned from the 1999 cotton crop.
At the close of the application period, based on the number of
bales for which payment is requested, CCC will estimate the total
national quantity of cottonseed for payment. The payment rate per ton
of cottonseed and payments to applicants will then be determined based
on total available program funds. The resulting payments to cotton gins
will not be subject to any per-person payment limitation. Applicants
must agree to share any payment received with the producer of the
cotton that was the basis of the payment to the extent that the effect
of low cottonseed prices was borne by the producer rather than the gin.
To the extent such funds will go to individual producers, those funds
will be considered to have been received by the applicant on behalf of
such producers. The recourse for producers dissatisfied with the
distribution by the gin will be to make use of whatever private civil
remedies they may possess against the gin. This distribution has been
settled upon in light of the impossibility of making timely,
reasonable, and effective individual determinations for each gin and
each bale of cotton as to how the effect of cottonseed prices was
actually distributed. This is consistent with the precise wording of
the statute, which appears to contemplate a distribution to gins alone.
In that regard, the statute allows for payments to gins ``or''
producers, rather than to gins ``and'' producers.
B. Extra Long Staple Cotton Competitiveness Payment Program
As indicated above, Congress authorized the use of a particular
source of funds for a cottonseed program and allowed any remaining
funds to be used for a new program for extra long staple cotton.
Specifically, within those limits, Congress provided for this new
program by adding a new section, 136A, to the Agricultural Market
Transition Act. That new section specifies that, within funding limits,
notwithstanding any other provision of law, during the period beginning
October 1, 1999, and ending July 31, 2003, the Secretary shall carry
out a program to maintain and expand the domestic use of extra long
staple cotton produced in the United States, to increase exports of
extra long staple cotton produced in the United States, and to ensure
that extra long staple cotton produced in the United States remains
competitive in world markets. Under the program, the statute provides,
the Secretary shall make payments available whenever (1) for a
consecutive 4-week period, the world market price for the lowest priced
competing growth of extra long staple cotton (adjusted to United States
quality and location and for other factors affecting the
competitiveness of such cotton), as determined by the Secretary, is
below the prevailing United States price for a competing growth of
extra long staple cotton; and (2) the lowest-priced competing growth of
extra long staple cotton (adjusted to United States quality and
location), as determined by the Secretary, is less than 134 percent of
the loan rate for extra long staple cotton. Further, Sec. 136 provides
that the Secretary shall make payments available under this section to
domestic users of extra long staple cotton produced in the United
States and exporters of extra long staple cotton produced in the United
States who enter into an agreement with CCC to participate in the
program. Payments are, by the statute, to be based on the amount of the
difference in the prices as determined for the last week of the
qualifying period multiplied by the amount of documented purchases by
domestic users and sales for export by exporters made in the week
following such 4-week period. Finally, the statute provides payments
shall be made through the issuance of cash or marketing certificates,
at the option of eligible recipients of the payments. As set out in the
statute and as implemented in the regulations provided for in this
rule, the program is designed so that payments would trigger in
response to a deterioration in the competitive position of U.S.-grown
ELS cotton in relation to foreign ELS cotton growths. If non-U.S.
prices move sufficiently lower, or if U.S. spot prices move
sufficiently higher, payments to exporters of U.S.-grown ELS cotton
would be triggered after four weeks during which the U.S. spot price
for a specific quality of ELS cotton exceeds the lowest adjusted
foreign price quotation for a comparable quality. Exporters then would
receive the payment on every eligible bale shipped while the program is
triggered. U.S. domestic mills also would receive the payment on every
eligible bale of U.S.-grown ELS cotton opened during that time.
C. Definition of Base Quality for Upland Cotton
A base quality for upland cotton must be defined so that a bale of
upland cotton showing any deviation from the base quality may be
properly valued for purpose of determining a loan rate under the
marketing assistance loan program for upland cotton. In an effort to
improve the quality of American raw cotton for spinning, the cotton
industry recommended a redefinition of base fiber strength and the
introduction of the length uniformity percentage for

[[Page 36555]]

purposes of the marketing loan. The regulation at 7 CFR 1427.25 is
being revised to conform to the schedule of loan premiums and discounts
for the 2000 crop. Beginning August 1, 2000, the definition of base
strength will be changed and a definition of base length uniformity
will be introduced. The changes bring the regulation and the loan
schedule back into balance, reestablishing the base quality at zero
premium/discount so that no additional program cost will result.

4. 7 CFR Part 1439--Emergency Livestock Assistance

A. Pasture Recovery Program
Section 805 of Pub. L. 106-78 provides that the Secretary shall use
$325 million of CCC funds to provide assistance directly to livestock
and dairy producers, in a manner determined appropriate by the
Secretary, to compensate the producers for economic losses incurred
during 1999. Further, in Sec. 825 of the same legislation Congress
provided that of the funds provided in Secs. 801 and 805 of that Act,
no less than $200 million in assistance would be required to be made in
the form of assistance to livestock producers for losses due to drought
or other natural disasters. In Sec. 801 of that Act, Congress, without
limitation to particular kinds of production, authorized the use of
$1.2 billion in Commodity Credit Corporation funds to make emergency
financial assistance available to producers on farms that have incurred
losses in a 1999 crop due to a disaster, as determined by the
Secretary. Pub. L. 106-113 appropriated an additional $186 million to
the sum provided for in Sec. 801 of Pub. L. 106-113.
Pursuant to the authority contained in Pub. L. No. 106-78, new
Livestock Indemnity and Livestock Assistance Programs for losses
incurred during 1999 were provided for in an omnibus rule published on
February 16, 2000 (65 FR 7942).
However, it has been further decided that additional relief should
be provided for livestock interests under the authority contained in
Pub. L. 106-78. To that end, this rule uses the authorities set forth
above to provide for a new Pasture Recovery Program (PRP) that is to be
included in 7 CFR part 1439 and will provide payments to owners and
operators of pasture land on which livestock is normally grazed who
suffered pasture losses due to drought during calendar year 1999.
Eligible producers must agree to reestablish the forage crop and
maintain the crop for three full years after the calendar year of
installation. PRP payments will be authorized only in counties
determined eligible for the most recent Livestock Assistance Program
and approved for assistance for 1999 losses due to drought under the
Emergency Conservation Program that is provided for in 7 CFR part 701.
For the land to be eligible, it must be established pasture land on
which livestock is normally grazed but that was so damaged or destroyed
by drought or related conditions that seeding is required to
reestablish a cover. Hayland and rangeland will not be eligible, nor
will land operated by the Federal or a State Government or a political
subdivisions of a State. To be an eligible recipient of program
benefits, the applicant must be an owner or operator of eligible land
damaged or destroyed in 1999 who normally grazes livestock on such land
and such applicant must be the person who will restore and maintain the
property for three full years after the calendar year of installation.
All conditions must be satisfied if a person is to be eligible for
a PRP payment. For example, if an owner leases pasture land to an
operator for grazing the operator's livestock, then the operator is
eligible for a PRP payment only if the operator reestablishes the
forage crop on the leased pasture land and has a lease and the
equipment necessary to maintain the forage crop for one full year after
the calendar year of installation. If an owner leases pasture land to
an operator who normally grazes the operator's livestock but the owner
agrees to reestablish the forage crop on the pasture land, then neither
the operator nor the owner are eligible for PRP benefits because
neither can meet all of the eligibility requirements. The owner is
ineligible because the owner does not normally graze livestock on the
pasture land, and the operator is ineligible because the operator did
not reestablish the forage crop on the pasture land. Other restrictions
will apply as well in the administration of the program. Among them,
the land must be in a county that was approved for participation in the
1999 Livestock Assistance Program (LAP), which was provided for by a
rule published on February 16, 2000, and that county must have had a
120-day payment period for purposes of the 1999 LAP. Further, the
county in which the land is located must be a county that, based on
1999 drought-induced losses, was approved for participation in the
Emergency Conservation Program (ECP) by virtue of an application
submitted prior to March 1, 2000. The ECP is provided for in 7 CFR part
701.
This program will be subject to the general provisions for
emergency livestock assistance programs found in what will now be
Subpart A of part 1439. That subpart is republished in this rule. That
subpart provides for limitations on payments that are effectively
adopted in this rule by not exempting the PRP from those provisions. In
addition limits on payments are provided in the rules themselves.
Accordingly, and in order to efficiently maximize the use of
program funds for those farmers most in need of relief, this new
program, like others in part 1439, will not be available to a person
whose annual gross revenue is in excess of $2.5 million. Further,
however, benefits are limited to $2,500 per ``person'' determined
according to the ``person'' determination regulations at 7 CFR part
1400 applicable to a number of other USDA programs.
In order to receive payments, applicants will be required to
certify that pasture land to be enrolled in the PRP was so damaged or
destroyed by drought or related conditions during calendar year 1999
that seeding is required to reestablish the forage crop. State Farm
Service Agency (FSA) committees will establish per-acre payment rates
equal to 50 percent of the eligible area's average cost of
reestablishing the approved forage crop on eligible pasture land not to
exceed $75 per acre. The FSA Deputy Administrator for Farm Programs may
approve higher per-acre payment rates not to exceed $125 per acre. In
no case will per-acre payment rates exceed $125 per acre. Seeding and
related fertilizing requirements will be required to be carried out
according to standards for agronomic practices and applicable
environmental laws and regulations. Payments may be issued upon
certification by the participant that approved practices to reestablish
the forage crop have been completed. Certifications are subject to spot
check by FSA.
Signup periods for this new program will be announced by CCC, but
are expected to be conducted no later than the spring 2000 planting
season for affected regions. It is expected that all seeding will be
required to be completed in calendar year 2000 by a date announced by
CCC. Because this new program is operated under authority contained in
Pub. L. 106-78, it is subject to the exemptions from rulemaking and
from the Paperwork Reduction Act that are contained in Pub. L. 106-78.

[[Page 36556]]

B. Livestock Indemnity Program for Contract Growers
Title I of Pub. L. 106-113 provided an additional $10 million for
the livestock assistance authorized by Sec. 805 of Pub. L. 106-78 and
specified that this additional amount could be used to provide
assistance to persons who raise livestock owned by other persons so as
to provide relief for income losses sustained with respect to such
livestock during 1999, if the Secretary finds that such losses are the
result of natural disasters. In order to make use of that authority, a
new subpart for 7 CFR part 1439 is provided for in this rule that will
establish regulations for such relief. The new Livestock Indemnity
Program for Contract Growers (CG-LIP) would provide benefits to
eligible livestock producers who, due to a natural disaster in calendar
year 1999, sustained a loss of income handling livestock in which they
did not have an ownership interest. The loss must have been suffered in
an area that was the subject of a Presidential or Secretarial disaster
declaration. Producers in contiguous counties that were not designated
as a disaster area are not eligible for benefits. Eligible livestock
for purposes of the program are beef and dairy cattle, sheep, goats,
swine, poultry (including egg-producing poultry), equine animals used
for food or in the production of food, and buffalo and beefalo when
maintained on the same basis as beef cattle. Such livestock must have
been handled pursuant to a contract between the producer and owner.
Applications for benefits must be submitted at the local county FSA
office by May 1, 2000, or such other date as established by CCC.
Livestock producers must provide adequate proof of loss and of the
corresponding reduction in income. Subject to the availability of
funds, payments shall be made in an amount determined by multiplying
the national payment rate for the livestock category as determined by
CCC by the qualifying loss. If the claims exceed the allotted funds,
claims may be prorated or otherwise adjusted to account for the limited
funds. For the same reasons as for the new Pasture Recovery Program,
the $2.5 million gross revenue test will apply, as will a $40,000 per-
person payment limit. FSA may, as needed, reduce benefits to avoid
duplication with other programs and may exclude those claimants who
were related to, or affiliated with the owners of the livestock so as
to limit the program to those contract producers who were truly
separate from the owners of the livestock and thus did not benefit
directly or indirectly from other livestock programs, which were owner-
focused.
C. General Revision of 7 CFR Part 1439
This rule also finalizes other amendments recently made to part
1439. In a final rule published on March 19, 1999 (64 FR 13497), part
1439 was generally reorganized. Also, that rule provided for a new LAP
program. Thereafter, an interim rule was published on August 31, 1999
(64 FR 47358), which provided for a new Flood Compensation Program
(FCP). Likewise, the FCP was codified in part 1439. That rule was
followed in turn by an interim rule published on November 1, 1999 (64
FR 58766), which provided for a new Livestock Indemnity Program. In the
meantime, as indicated, Pub. L. 106-78 was enacted, which allowed for
new relief for livestock interests and led to a new rule published on
February 16, 2000 (65 FR 7942) that updated the LIP and LAP regulations
so as to provide for the new LIP and LAP provisions.
The March 19, 1999 rule reorganizing part 1439 took into account
the existence of the regulations published on November 27, 1998 (63 FR
65524), creating, by an interim rule, the American Indian Livestock
Feed Program (AILFP), but did not finalize those regulations. Hence,
prior to this time, there have been three interim rules pending for
part 1439: (1) The AILFP rule of November 27, 1998, (2) the FCP rule of
August 31, 1999, and (3) the LIP rule of November 1, 1999. For all
three interim rules, the comment periods are closed and those rules are
made final in this rule.
With respect to comments, none were received for the LIP and FCP
rules. Accordingly, and on further review, no changes were needed in
those regulations. For the AILFP two comments were received. First, the
comments suggested that the benefits of the AILFP should not be limited
to tribal-governed land but should include non-dependent lands that are
now held by private persons but were formerly reservation. The AILFP is
a very limited program with very limited funds. This comment was not
adopted in light of the limited funds available and also because the
limitations contained in the program reflected the sovereign-to-
sovereign nature of this special program. Also, citing Executive Order
No. 13804, Sec. 3(b), a comment suggested that the tribes be
compensated for their AILFP efforts. This comment was not adopted
because the program is not a regulatory program but a voluntary program
to which the Executive Order does not apply. Also, however, on
reviewing the rule, it was determined that a definition of ``dependent
Indian community'' should be added. Under the interim rule, a
``dependent Indian community'' is one of the categories of land that
are considered under the rule to be ``tribal governed land.'' In this
new rule, that phrase would be defined to mean a limited category of
Indian lands that are neither reservations nor allotments and are found
by FSA to be: (a) Land set aside by the Federal Government for the use
of Indians as Indian land; and (b) under Federal superintendence.
With respect to the FCP, as all claims in that program are past
claims, there does not appear to be a good reason to republish the
regulations. Hence, they are removed by this rule, though such removal
will not affect any past, pending, or future claims under that program.
Also, with respect to the AILFP regulations, a provision has been added
to Sec. 1439.902 so that the regulations for that program will, except
for the change noted above, be the same as they were in substance
despite the reorganization of part 1439. Also, for consolidation
purposes, the LIP regulations have been renumbered. Conforming
amendments to existing rules have also been added as needed to reflect
the reorganization of part 1439. The language dealing with the
application deadline for the 1999 LAP program was changed because of
changed circumstances. Also at various places in the regulations
provisions have been added to make explicit that nothing in the
regulations will require expenditures for programs beyond that which is
deemed appropriate by CCC with respect to overall funding levels,
taking into account statutory limits.

5. 7 CFR Part 1464--Assistance for Losses of Certain Warehouse-Stored
Tobacco

Section 803 of Pub. L. 106-78 authorized the Secretary to use $328
million of CCC funds to make payments to States with tobacco producers
whose 1999 poundage quotas or acreage allotments for tobacco were
reduced from 1998 crop year levels due to a drop in the national
marketing quote or poundage quota for their kind of tobacco. In
addition, Pub. L. 106-78 made provision for a number of other programs,
which were implemented by a final rule published in the Federal
Register on February 16 (65 FR 7942). The provisions dealing with the
$328 million for tobacco producers were codified at 7 CFR Part 1464,
Subpart C. Those regulations call for the funds to be distributed by
the individual States with qualifying persons. This follows the
language of Sec. 803, which basically calls for the distribution of the
funds to

[[Page 36557]]

be made in the same way that state trusts are making $5 billion
available to tobacco growers using the so-called ``Phase II'' funds
made available by tobacco companies.
Section 803(c) of Pub. L. 106-78 defines those persons who were
eligible to receive the tobacco payments as being those persons who own
or operate, or produce tobacco on, a farm: (A) For which the quantity
of quota allotted to the farm under part I of subtitle B of title III
of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) was
reduced from the 1998 crop year to the 1999 crop year; and (B) that was
used for the production of tobacco during the 1998 or 1999 crop year.
As for the distribution of the funds and amounts, Sec. 803 called for
the funds to be distributed in the same way as the States were or are
distributing the so-called ``Phase II'' funds made available by tobacco
companies to producers through state trusts.
While Pub. L. 106-78 was being considered there was a series of
severe weather conditions in the flue-cured tobacco growing area of
North Carolina. In particular, there were three hurricanes that hit in
quick succession, leading to widespread flooding in that area. That
flooding destroyed some 1999-crop tobacco that had been delivered to
warehouses for sale by producers under the customary auction warehouse
system. Some of this tobacco had not yet, however, been sold at auction
and producers still held the risk of loss on that tobacco even though
the tobacco had been harvested and thus was not eligible for coverage
under the normal crop loss programs run by the Department.
Subsequently, Pub. L. 106-113, provided an additional $2.8 million
for tobacco assistance authorized by Sec. 803(c)(1) of Pub. L. 106-78
and provided ``that the definition of eligible persons in
Sec. 803(c)(2) of Pub. L. 106-78 shall include producers who have
suffered quality or quantity losses due to natural disasters on crops
harvested and placed in a warehouse and not sold.'' The quoted language
constitutes essentially the entirety of the statutory provision.
Literally, the new language would only seem to simply add an
additional amount to the $328 provided for in Sec. 803 without, as
such, changing the distribution method called for in Sec. 803, and
would seem to be limited to a technical adjustment of the eligibility
definition contained in Sec. 803(c)(3). However, the intent of the
language seems clearly, instead, given the background set forth above
and other factors, to provide relief to those flue-cured producers who
had tobacco that was still theirs in the flooded warehouses but that
was lost. This would follow from the nature of the language adopted,
from the timing of the bill and from the amount allotted. The original
$328 million roughly corresponded to a dollar per pound for all tobacco
that met the eligibility criteria of the original legislation and the
additional $2.8 million corresponds to roughly a dollar per pound for
the amount of producer tobacco that internal Department assessments
made prior to the passage of Pub. L. 106-113 indicated had been lost in
flue-cured warehouses in North Carolina as the result of the three
hurricanes. Damage of the kind covered by the legislation appears to be
limited to North Carolina. Furthermore, simply adding to the definition
of 803(c)(3) would not seem to be purposeful in and of itself if that
addition was not meant to indicate a separate kind of payment, since,
presumably all of the persons who lost tobacco in the warehouses during
the natural disaster were persons who already met the definition in
803(c)(3). Rather, the addition only appears to make sense as a method
of indicating a separate form of recovery for producers whose incomes
for the tobaccos covered by Sec. 803 were reduced by the warehouse
disasters caused by the floods. Of the tobaccos covered in Sec. 803
(those which, nationally, had reduced quotas or allotment for 1999),
the only tobacco that appears to have had any sort of widespread 1999-
crop loss in warehouses due to a natural disaster at or near the time
that Pub. L. 106-113 enacted was flue-cured tobacco.
In addition, there is a limited amount of funds made available by
Pub. L. 106-113, and no payment formula is specified. Accordingly there
is some discretion involved in deciding which claims to honor and how
the funds will be distributed. Further, timely decision must be made
about the distribution of the funds so that the universe of claims can
be determined and the funds apportioned.
To that end, this rule provides for the $2.8 million to be
distributed directly by the Department and provides that, except as
determined by the Deputy Administrator for Farm Program of the Farm
Service Agency upon petition, payable only on flue-cured tobacco and
only for those losses in North Carolina as a result of the recent
hurricanes. Because material damage appears to be limited to North
Carolina, normal signup will be limited to that State. However, there
are references in the rule to the ability of persons to petition the
Deputy Administrator for relief so as to provide the leeway necessary
in the event that there are meritorious circumstances of which the
Department is not aware that were widespread and that should be
considered to assure that all claims are reviewed. In all cases,
requests for relief must meet the deadlines provided for in the
regulations that are published in this rule.

6. 7 CFR Part 1479--Flood Assistance for Harney County, Oregon

In Pub. L. No. 106-113 Congress also provided that CCC could use up
to $1.09 million of its funds to provide emergency assistance to
producers on farms located in Harney County, Oregon, who suffered
flood-related crop and forage losses in 1999 and several previous years
and are expected to suffer continuing economic losses until the flood
waters recede. Congress provided that any amounts made available should
be for such losses for such years as determined appropriate by the
Secretary to compensate such producers for hay, grain, and pasture
losses due to the floods and for related economic losses.
General regulations for programs of this type are provided for in 7
CFR part 1478, 1999 Crop Disaster Program, published on February 16,
2000 (65 FR 7942), which was a new part intended to allow for a single-
year disaster program in accordance with Pub. L. 106-7.
The regulations set out in this rule will provide for Harney
County, in a new part, 7 CFR part 1479, compensation to producers whose
land was not usable from January 1, 1999 through December 31, 1999. To
be eligible for benefits, producers in Harney County, Oregon, must have
owned or leased land that was intended to be used for crop or forage
production or grazing during crop year 1999, and which was subject to
flooding January 1, 1999, through December 31, 1999, and for which it
is determined that due to flood-related losses, the land was unfit for
crop or forage production, or grazing, at all times during CY 1999.
Producers will be required to certify that the acreage was unable to be
used due to flooding. In the new program, no ``person'', as ``person''
is defined in the applicable regulations, will be able to receive over
$40,000 in program payments and no person can receive any payment if
that person's gross revenue for 1998 was in excess of $2.5 million.
These limits will also insure the most efficient use of funds for the
producers most in need. The applicant must be the owner or lessee of
the affected property under a binding lease during the 1999

[[Page 36558]]

crop year, and must still be the owner or lessee of the land. Other
restrictions apply as well, including a requirement that the land must
have been unusable for at least one other crop year in the years 1994
though 1998, and must be land that actually produced a crop, or that
was actually used for pasture, on or after 1990.
Unadjusted payment rates will be based on the average local rental
rates for crop land and pasture land, using, where possible, 5-year
data of the National Agricultural Statistics Service.

Cost-Benefit Assessment

Summary

Outlays under the programs implemented by this rule will total
approximately $616.5 million, of which approximately $604 million will
be direct payments to producers. The outlays for the Livestock
Indemnity Program and the American Indian Livestock Feed Program,
totaling $15.5 million, have, for the most part already been made, and
therefore do not represent a new funding commitment. The table
summarizes the outlays and the discussion following summarizes the
Cost/Benefit Assessments for each program.

Summary of Outlays
------------------------------------------------------------------------
Program Outlays
------------------------------------------------------------------------
Oilseeds Program............................................. \1\ 462.6
Cottonseed Payment Program................................... 74.0
ELS Cotton Competitiveness Program........................... \2\ 6.0
Pasture Recovery Program..................................... \3\ 40.0
Livestock Indemnity Program for Contract Growers............. \4\2.0
Finalization of Existing Livestock Regulations............... \5\ 15.5
Warehouse-Stored Tobacco Assistance.......................... 2.8
Harney Co., Ore. Emergency Assistance........................ 1.09
----------
Total.................................................... 603.99

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