Noninsured Crop Disaster Assistance Program

SUMMARY: The Federal Crop Insurance Corporation (``FCIC'') hereby

revises and makes final its regulations to provide a noninsured crop

disaster assistance program (``NAP'') to protect producers of crops for

which insurance is not available. NAP provides a level of protection

that, in most respects, is comparable to the catastrophic risk

protection program offered to producers of insurable crops.

EFFECTIVE DATE: February 22, 1996.

FOR FURTHER INFORMATION CONTACT: For further information and a copy of

the Regulatory Impact Analysis to the noninsured crop disaster

assistance program, contact Diana Moslak, Federal Crop Insurance

Corporation, Regulatory and Procedural Development Staff, U.S.

Department of Agriculture, Washington, D.C. 20250. Telephone (202) 720-

0713.

SUPPLEMENTARY INFORMATION:

Executive Order 12866 and Departmental Regulation 1512-1

This action has been reviewed under United States Department of

Agriculture (``USDA'') procedures established by Executive Order 12866

and Departmental Regulation 1512-1. This action constitutes a review as

to the need, currency, clarity, and effectiveness of these regulations

under those procedures. The sunset review date established for these

regulations is May 1, 2000.

This rule has been determined to be ``significant'' for the

purposes of Executive Order 12866 and, therefore, has been reviewed by

the Office of Management and Budget (``OMB'').

Regulatory Impact Analysis

A Regulatory Impact Analysis has been completed and is available to

interested persons at the address listed above. In summary, the

analysis finds that the final NAP rule incorporates three significant

changes when compared with the interim rule. First, the final NAP rule

defines an ``area'' for NAP triggering purposes as at least 320,000

acres, at least $80 million crop value, or the county, as determined by

the Manager, FCIC. The interim rule used only the 320,000-acre and $80

million value mechanisms. Second, the final rule allows different types

or varieties of a crop or commodity to be treated as separate eligible

crops. Previously, all types and varieties were treated as a single

eligible crop. Third, the interim rule only provided NAP coverage for

seeded forage crops. The final rule expands NAP coverage to include

both seeded and native forage, except on state and Federal lands where

NAP coverage is restricted to seeded forage.

Increasing the choices for defining NAP areas by adding a ``county-

level'' option, providing greater flexibility in the definition of a

crop, providing coverage for both seeded and native forage, and

including the retroactivity provisions will increase NAP outlays. Some

offset is provided by language that requires a five-producer minimum in

the definition of a NAP area. The expected annual outlays under these

regulations are about $95 million to $145 million, averaging $120

million. The cost associated with the forage issue depends on the

future of the Livestock Feed Program, as discussed in the analysis.

Although expected to result in higher Federal outlays, these

changes are designed to improve the equity in NAP payments among

growers. Experience in 1995 and interim rule comments indicate that

various areas and crop types would not receive NAP payments under the

interim rule, despite significant losses. In addition, some producers

may not have received payments due to perils that were omitted from the

crop insurance policy.

The improvements in equity are associated with changes in

administrative costs. Program administration will likely be easier for

FSA offices with the county designation added to the list of area

definition options. However, additional administrative costs will be

associated with the determination of losses by crop type, as well as

the determination of losses qualifying for payment due to NAP coverage

of both seeded and native forage.

Paperwork Reduction Act of 1995

This final rule amends the information collection requirements

previously approved by OMB under OMB control number 0563-0016 through

May 31, 1998. This rule increases the producer (respondent) audience

participation due to increased availability for NAP assistance for

seeded and native forage. This coverage excludes native forage on any

federal or state owned lands, and any crops for which insurance is

available in the county, that is affected by natural disaster and is

not insurable under the producer's crop insurance policy. All of the

forms cleared under OMB control number 0563-0016 represent the required

forms to determine eligibility and losses qualifying for payment due to

NAP coverage.

Revised reporting estimates and requirements for usage of OMB

control number 0563-0016 will be submitted to OMB for approval under

the provisions of 44 U.S.C. 35. Public comments are due by April 22,

1996.

The title of this information collection is ``Noninsured Crop

Disaster Assistance Program, Claim For Indemnity, Field Inspection And

Appraisal Requirements.'' The information requested is required for

proper administration of the Noninsured Crop Disaster Assistance

Program. The burden for the NAP Program is reported on an as needed

basis when disaster situations arise. The reporting burden for this

collection of information is estimated to average 42 minutes per

response for each of the 8.5 responses from approximately 15,172,500

respondents. The total annual burden on the public for this information

collection is 10,620,750 hours.

The comment period for information collections under the Paperwork

Act of 1995 continues through April 22, 1996. Comments are requested on

the

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following aspects of the Information Collection: (a) Whether the

proposed collection of information is necessary for the proper

performance of the functions of the agency, including whether the

information shall have practical utility; (b) the accuracy of the

agency's estimate of the burden of the proposed collection of

information; (c) ways to enhance the quality, utility, and clarity of

the information to be collected; and (d) ways to minimize the burden of

the collection of information on respondents, including through the use

of automated collection techniques or other forms of information

technology.

Comments should be submitted to the Desk Officer for Agriculture,

Office of Information and Regulatory Affairs, Office of Management and

Budget (OMB), Washington, D.C. 20503 and to Bonnie Hart, Advisory and

Corporate Operations Staff, Regulatory Review Group, Farm Service

Agency, U.S. Department of Agriculture, Washington, D.C. 20250. Copies

of the information collection may be obtained from Bonnie Hart at the

above address. Telephone (202) 690-2857.

Executive Order 12612

It has been determined under section 6(a) of Executive Order 12612,

Federalism, that this rule does not have sufficient federalism

implication to warrant the preparation of a Federalism Assessment. The

provisions contained in this rule will not have a substantial direct

effect on states or their political subdivisions, or on the

distribution of power and responsibilities among the various levels of

government.

Regulatory Flexibility Act

This regulation will not have a significant impact on a substantial

number of small entities. Most producers will be able to certify to

their historical production levels at the time of application based on

existing records, or they may elect to base their initial coverage on

transitional or assigned yields. The amount of data collected from

applicants will only be that needed to establish an acceptable yield,

determine the number of acres planted, and determine the eligibility of

the producer, crop, and acreage. The information required and time of

collection is statutory. Therefore, this action is determined to be

exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C.

Sec. 605) and no Regulatory Flexibility Analysis was prepared.

Federal Assistance Program

This program is listed in the Catalog of Federal Domestic

Assistance under No. 10.450.

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.

Executive Order 12778

The Office of the General Counsel has determined that these

regulations meet the applicable standards provided in sections 2(a) and

2(b)(2) of Executive Order 12778. The provisions of this rule will

preempt state and local laws to the extent such state and local laws

are inconsistent herewith. The administrative appeal provisions

published at 7 CFR part 780 and 7 CFR part 11, must be exhausted before

any judicial action may be brought regarding the provisions of this

regulation. The provisions of this rule that are not more restrictive

than the interim rule will be effective retroactive to May 18, 1995,

the date of publication of the interim rule. The provision in

Sec. 404.13 regarding the requirement that an ``area'' consist of a

minimum of five producers before it can be approved is not effective

retroactively.

Environmental Evaluation

This action is not expected to have any significant impact on the

quality of the human environment, health, and safety. Therefore,

neither an Environmental Assessment nor an Environmental Impact

Statement is needed.

National Performance Review

This regulatory action is being taken as part of the National

Performance Review program to eliminate unnecessary or duplicative

regulations and improve those that remain in force.

Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Pub. L.

104-4, establishes requirements for Federal agencies to assess the

effects of their regulatory actions on State, local, and tribal

governments and the private sector. Under section 202 of the UMRA, FCIC

generally must prepare a written statement, including a cost-benefit

analysis, for proposed and final rules with ``Federal mandates'' that

may result in expenditures to State, local, or tribal governments, in

the aggregate, or to the private sector, of $100 million or more in any

one year. When such a statement is needed for a rule, section 205 of

the UMRA generally requires FCIC to identify and consider a reasonable

number of regulatory alternatives and adopt the least costly, more

cost-effective or least burdensome alternative that achieves the

objectives of the rule.

This rule contains no Federal mandates (under the regulatory

provisions of Title II of the UMRA) for State, local, and tribal

governments or the private sector. Thus, this rule is not subject to

the requirements of sections 202 and 205 of the UMRA.

Background

On October 13, 1994, the Federal Crop Insurance Act was amended by

the Federal Crop Insurance Reform Act of 1994 (``Act''). This

regulation provides the provisions necessary to carry out the

noninsured crop disaster assistance program (``NAP'') requirements of

the Act. NAP replaces the Disaster Payment Program (7 CFR part 1477)

and the Tree Assistance Program (7 CFR part 1478).

On May 18, 1995, FCIC published an interim rule in the Federal

Register at 60 FR 26669 to add provisions to implement NAP. Following

publication of that interim rule, the public was afforded 60 days to

submit written comments, data, and opinions. On August 7, 1995, FCIC

extended the comment period for the NAP regulations to August 18, 1995

(60 FR 40055). The comments received and FCIC responses are as follows:

Comment: Sec. 404.5(b) Thirty-six comments received from state FSA

offices recommended that section 404.5(b) be amended to allow the

Administrator of FSA to review and approve or disapprove the state FSA

committee recommendation of area eligibility.

Response: The Act specifies that FCIC will make determinations of

area eligibility. The provision will not be changed.

Comment: Sec. 404.5(c) Thirty-six comments received from state FSA

offices recommended that section 404.5(c) be amended to allow county

and State FSA committees to establish yields and prices.

Response: The Act specifies that FCIC shall establish yields and

prices. The provision will not be changed.

Comment: Sec. 404.7(e) Five comments, two from trade associations

and three from other interested parties, were received suggesting that

the definition of ``Aquacultural species'' contained in section

404.7(e) be changed to allow aquaculture on lands that are not

[[Page 7195]]

privately owned or in waters that are not a ``controlled environment.''

One comment from an interested party requested clarification of

``private property in water in a controlled environment'' stating that

fish are grown for human consumption in privately owned net pens

(property) in sea water which is controlled by the net pens but owned

by the nation or state. The state leases the bedlands under the cages

to the private operator so that the cages can be set in place and

moored. FCIC was urged to reconsider the proposed definition to

explicitly allow caged fish and shellfish operations on state leased

lands and waters.

Response: The definition provides for coverage of aquaculture that

is produced in a controlled aquacultural environment. A controlled

environment may include net pens on leased lands provided that the

lease vests in the lessee all the rights and benefits of ownership of

the leased land and does not merely provide a license to gather the

aquacultural species found in the pen. Therefore, the provision will

not be changed.

Comment: Sec. 404.7(e) Two comments were received, one from a state

government office and one from a trade association, stating that the

definition of ``Aquacultural species'' excludes ornamental fish and

aquatic plant industries from the NAP. The state government official

recommended that section 404.7(e) be changed to include nonfood farm-

raised fish and aquatic plants.

Response: The Act limits NAP to crops produced for food or fiber.

The provision will not be changed.

Comment: Sec. 404.7(l) Four comments received from trade

associations stated that many floricultural, nursery, turfgrass sod,

and tree crops are produced in ``crop years'' ranging over several

``calendar years.'' The trade associations suggested that the

definition of ``crop year'' contained in section 404.7(l) be amended to

clarify that losses occurring in a given calendar year will be covered

even though the plant may not be harvested (or be ready to harvest)

during that given year.

Response: The definition has been modified to clarify and explain

how crops produced over multiple calendar years will be eligible for

NAP.

Comment: Sec. 404.7(n) Four comments received from trade

associations requested clarification of the definition of ``Eligible

crop'' contained in section 404.7(n) which states in part that ``In the

case of a crop that historically has multiple plantings in the same

crop year that are planted or are prevented from being planted on the

same or different acreage will be considered different crops for

determining NAP payments. This does not apply to a replacement crop.''

The trade associations stated that it is their interpretation that this

provision is to provide that a loss is ineligible for NAP coverage even

if the grower harvests other plantings in the same year.

Response: The definition has been modified to clarify that each

planting of a crop with multiple plantings in the same crop year will

be considered as a separate crop eligible for NAP payments.

Comment: Sec. 404.7(p) One comment received from an USDA agency

suggested that the definition of ``FCIC'' contained in section 404.7(p)

be changed to reflect FCIC as a separate and distinct corporate entity.

Response: By definition, FCIC is a separate and distinct corporate

entity. Therefore, no change is required.

Comment: Sec. 404.7(q) One comment received from a trade

association suggested that the definition of ``good farming practices''

contained in section 404.7(q) be changed to include alternative farming

practices and innovations that are supported by research or practice

appropriate to the type of farming undertaken.

Response: The definition allows alternative farming practices and

innovations that are supported by data from the Cooperative State

Research, Education, and Extension Service (CSREES). Therefore, no

change is required.

Comment: Sec. 404.7(r) and (ee) One comment was received from a

state FSA office regarding the definitions for ``Harvested'' which

excludes harvest by grazing except for ``Seeded pasture'' which is

limited to ``an annual crop intended for use as grazing only by

domestic animals,'' contained in sections 404.7(r) and 404.7(ee),

respectively. The state FSA official expressed concern that these

definitions exclude nearly all forage crops harvested by grazing. The

state FSA official suggested that eligibility for noninsured crop

disaster assistance be based on crop yields and losses, not the method

of harvest, and that grazing not be excluded from the ``Harvest''

definition.

Response: With respect to the definition of ``Harvested,'' the

intent is to define the term to include only those means of removing

the crop that result in costs being incurred by the producer. Section

404.9(c) authorizes FCIC to reduce the NAP payment as a result of costs

not incurred by the producer, such as harvesting. Because grazing does

not result in a cost to the producer, it is not considered as

``harvested''. With respect to the definition of ``Seeded pasture,''

FCIC has changed the term to ``Forage'' to include both seeded and

native forage crops that are harvested or grazed. Grazed forage will be

eligible for NAP payments at reduced rates. Forage is defined as land

covered with grass or other vegetation, produced under such range

management practices as are necessary to sustain sufficient quality and

quantity of grass or vegetation each year to be suitable for grazing or

mechanical harvest to feed livestock in a commercial operation. NAP

coverage for forage on any Federal or state owned lands is restricted

to seeded forage.

Comment: Sec. 404.7(r) One comment received from a congressional

office stated that the definition of ``Harvested'' contained in section

404.7(r) is silent on disaster assistance to producers of crops that

are harvested over multiple years and recommended a provision be added

to embrace disaster assistance for crops harvested over multiple years.

Response: The paragraph has been modified to clarify when crops

produced and harvested over multiple years are considered harvested.

Comment: Sec. 404.7(v) Two comments received from aquaculture

producers recommended that the NAP provisions cover loss of fish due to

storms causing low pressure and heaving, hot humidity; cloudy weather

causing low oxygen; high temperatures causing loss of appetite; drought

causing water evaporation and stale water; diseases; and failure of

equipment or down power lines due to lightening, storms, or wind

stopping the aeration of oxygen.

Response: To qualify for NAP assistance, the Act provides that

losses of the noninsured commodity be attributable to drought, flood,

or other natural disaster, as determined by the Secretary. The

definition of natural disaster has been modified to include eligible

crop losses that may be attributable to damaging weather or adverse

natural occurrences and related conditions.

Comment: Sec. 404.7(y) Two comments were received regarding the

definition of ``Prevented planting'' contained in section 404.7(y) as

follows:

(1) One comment received from a USDA state office requested

clarification of the definition of ``Prevented planting'' contained in

section 404.7(y) which states in part, ``The natural disaster that

caused the prevented planting may occur prior to the planting period

for the crop in the area, but must not occur earlier than the planting

period for such crop the prior crop year.'' The state government

official suggested that section 404.7(y) be

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amended to specify whether a natural disaster that occurred in one year

and carried over into the next year will receive NAP coverage.

(2) One comment received from a trade association stated that the

requirement that ``most producers in the surrounding area must have

also been unable to plant the eligible crop in order for a producer to

be eligible for a NAP payment'' may impose an additional requirement

not supported by the Act especially when a producer is otherwise

eligible for NAP benefits and can show that planting was not feasible

due to a natural disaster. The trade association suggested that this

requirement be deleted from the definition of ``Prevented planting.''

Response: The definition has been modified to allow for the

coverage of prevented planting when the cause of the prevented planting

occurred after the final planting date of the previous crop year and

before the final planting date of the crop year for which a NAP payment

is requested. For crops with multiple plantings in 1 crop year, the

cause of the prevented planting must occur after the planting of the

previous planting period and before the final planting date of the

current planting period. Further the paragraph has been amended to

eliminate the requirement that most producers in the surrounding area

must have also been unable to plant the eligible crop or other crops

during the same planting period in order for a producer to be eligible

for a prevented planting payment.

Comment: Sec. 404.9(c) Five comments were received regarding

section 404.9(c) which specifies that ``FCIC will adjust the NAP

payment rate for crops that are produced with significant and variable

expenses that are not incurred because the crop acreage was prevented

from being planted or planted but not harvested'' as follows:

(1) Four comments received from trade associations suggested

section 404.9(c) be clarified by providing the criteria to be used in

determining potential reductions in the NAP payment rate for costs not

incurred by the producer as a result of the crop acreage being

prevented from planting or planted but not harvested The trade

associations also suggested that the regulations specify the person or

office ultimately responsible for making the NAP payment rate reduction

determinations as it relates specifically to specialty crops.

(2) One comment received from a USDA agency suggested that the rule

include specifics for calculating the adjustment in the NAP payment

rate and that the method used be similar to those included in the 1994

ad hoc disaster program.

Response: The Act requires the development of a payment rate for a

crop that is produced with a significant and variable harvesting

expense that takes into consideration the stage of the crop at the time

of loss; for example, not planted, planted but not harvested, or

harvested. Because of all the variations that exist between crops, it

is not possible to list all the factors that affect the costs

associated with producing all crops. FCIC will approve all variable

payment factors whether applicable to specialty or other crops. The

method used in determining payments under the 1994 ad hoc disaster

program will be taken into consideration.

Comment: Sec. 404.11(a) Fifty-four comments, one from a

congressional office, fourteen from producers, one from a trade

association, one from a county FSA committee, one from a state FSA

committee, and thirty-six from state FSA offices, were received

requesting section 404.11(a) be changed to allow NAP benefits for seed

crops, specifically grass, clover, alfalfa and legume seed crops and

any other crop grown commercially for seed. The one comment received

from the state FSA committee stated that legislation does not

specifically exclude seed crops which are ultimately used for the

production of crops for human consumption or livestock feed and,

therefore, should be added to the list of crops eligible for NAP

benefits.

Response: The Act specifies that the term ``eligible crop'' will

include each commercial crop or other agricultural commodity (except

livestock) that is produced for food or fiber. Seed crops are not

produced for food or fiber. Further, the Act specifically included the

exceptions to the food or fiber requirement. Crops not specifically

included in the exception are not eligible for NAP. The provision will

not be changed.

Comment: Sec. 404.11(a) One comment received from a producer

suggested that section 404.11(a) be changed to allow NAP payments by

crop type rather than treating as a single eligible crop all types and

varieties of a crop. This producer stated that the farmer who raises

several types of a crop, as opposed to a farmer who raises only one

type, may not qualify for a NAP payment if one type does not meet the

50 percent individual loss requirement. The producer also questioned

whether crops such as tomatoes, basil, or flowers grown in a greenhouse

would be eligible for NAP because pumpkins used for decoration are not

covered by NAP, but flowers are, and whether indian corn, strawberry

corn, or blue corn are eligible crops under the NAP. The producer

recommended all crops and corn grown outside be eligible for NAP

payment.

Response: The paragraph has been revised to allow FCIC to treat

different types and varieties of a crop or commodity as separate

eligible crops provided they have significantly different prices or

yields. The determination of whether a crop is eligible for NAP

payments is not based on whether a crop is grown indoors or outdoors.

The Act specified that crops grown for food or fiber, or included on

the list of exceptions, are eligible regardless of where grown. This

provision will not be changed.

Comment: Sec. 404.11(a)(3) One comment received from a timber

producer requested section 404.11(a)(3) be changed to include walnut

trees planted for timber purposes as a crop eligible for NAP benefits.

Response: FCIC cannot expand the list of crops eligible for NAP

payments beyond those crops designated by the Act. The provision will

not be changed.

Comment: Sec. 404.11(a) One comment was received from a FSA

district director regarding sections which specify that eligible crops

are those crops grown for food and fiber and then lists additional

crops such as floriculture, ornamental nursery crops, Christmas trees,

turfgrass sod, and industrial crops as eligible crops for NAP benefits.

The FSA district director suggested that all of the exceptions to the

crops produced for food or fiber be deleted or the provisions be

broadened to include all crops produced for commercial purposes.

Response: The named crops, in addition to crops produced for food

or fiber, are specified by the Act and, therefore, must be included.

Further, the list of named crops cannot be expanded beyond those

specified in the Act.

Comment: Sec. 404.11(b)(3) One comment was received from a USDA

agency regarding section 404.11(b)(3) which provides for NAP payments

in the case of delayed plantings caused by a natural disaster. The USDA

agency official states that since the Act provides ``that an eligible

crop means each commercial crop or other agricultural commodity (except

livestock) for which the Catastrophic Risk Protection (CAT) Plan of

Insurance is not available, and that is produced for food or fiber,''

there are no statutory exceptions. The USDA agency official recommends

that if a crop is insurable under CAT, there should be no exceptions to

cover losses from delayed plantings for NAP crops.

Response: The commentator may have misinterpreted the provision. A

crop

[[Page 7197]]

that is not insurable under CAT because the natural disaster causing

the damage was not an insurable cause of loss under CAT may be covered

for the natural disaster under NAP, provided that all the other

eligibility requirements are satisfied.

Comment: Sec. 404.11(b)(6) Four comments were received from trade

associations requesting FCIC to clarify the exemption contained in

section 404.11(b)(3). The trade associations stated that the Clean

Water Act and the swampbuster provisions provide exemptions from many

of the features of current wetlands policy that affect agriculture.

Perennial specialty crops were excluded from exemption resulting in

discrimination against a large segment of American agriculture without

any environmental benefit or preservation of wetlands. To avoid a

similar situation, the trade associations requested the FCIC to clarify

the exemption contained in this section to ensure past problems are not

repeated and that specialty crops are not inappropriately excluded from

NAP benefits.

Response: The regulations at section 12.5 of this title,

incorporated into this rule by reference, contain the exceptions

authorized by the Secretary for all USDA programs. It would be

inappropriate for a clarification of section 12.5 to appear in this

rule.

Comment: Sec. 404.13 Sixty-three comments, fifteen from producers,

three from trade associations, three from state government offices, two

from congressional offices, one from a county FSA office, one from a

county FSA committee, one from a state FSA committee, one from a

district director, and thirty-six from state FSA offices, were received

regarding section 404.13 which specifies the minimum area of 320,000

acres or a geographical area with a minimum average value of at least

$80 million for all crops produced annually and other interrelated

provisions contained in section 404.19.

(1) Fifteen comments received from producers, two from trade

associations, three from state government offices, one from a

congressional office, one from a county FSA office, one from a county

FSA committee, one from a state FSA committee, one from a district

director, and thirty-six from state FSA offices stated that the minimum

area requirement (320,000 acres or $80 million value) contained in

section 404.13 coupled with the 35 percent area-wide yield loss

requirement contained in section 404.19(c) is excessively large.

(2) One comment received from a producer recommended elimination of

the area stating that if a small farm is wiped out by hail damage and

the 35 percent area loss does not trigger, the farmer could possibly

lose 100 percent of his crop with no compensation. One FSA district

director stated that a producer would not be covered under the NAP for

crop losses resulting from isolated storms such as hailstorms or

thunderstorms. The FSA district director also stated that NAP

discriminates against producers of noninsured crops because of the

unavailability of insurance coverage in some states.

(3) Thirty-six comments received from state FSA offices recommended

elimination of the area if statutorily permissible. If not statutorily

permissible, the state FSA offices recommended the county FSA committee

with state FSA committee concurrence be given the authority to

delineate an area (with no minimum acreage) based on the agriculture in

the county and the natural disaster affected area. One of the state FSA

offices recommended using certain towns in determining the disaster

area and states and suggested that ``no disaster be smaller than a

single town and none larger than where the disaster actually

occurred.'' Another state FSA office stated that the 35 percent area

loss requirement is not comparable to the catastrophic level of

protection and recommended a smaller minimum area size or elimination

of the area and reconsideration of the 35 percent area loss

requirement.

(4) One comment received from a producer recommended the regional

FSA office define an area.

(5) One comment received from a producer recommended that FSA

committees decide if there is a payable loss.

(6) Three comments received from state government officials, one

from a county FSA office, and one from a state FSA committee

recommended the area be modified to provide assistance to localized

areas that cannot meet the minimum area and area eligibility

requirements.

(7) One comment received from a county FSA committee recommended

the NAP be administered more like the CAT whereby eligibility is on an

individual unit basis.

(8) One comment received from a trade association stated that the

current provisions for defining an ``area'' are too burdensome. The

trade association suggested the ``area'' be defined as a county with

added exceptions to address situations wherein part of one county and

part of another county could constitute an ``area.''

(9) One comment received from a congressional office stated that

producers should not be denied coverage because an insufficient number

of producers in the vicinity suffered similar losses. The comment

suggested that section 404.13(d) be changed to allow eligibility for

NAP benefits to be determined by local circumstances defined by the

county FSA committee so as not to use acreage to deny NAP coverage for

small diversified agricultural operations.

Response: The Act requires the average yield in the ``area'' be

reduced by at least 35 percent before a crop is eligible for NAP

payments. An area cannot be defined as a farm or town and comply with

the intent of NAP, which is to provide protection against widespread

disasters, not individual losses. The requirement that there be an area

affected by a disaster and the amount of loss cannot be changed

administratively. However, in response to comments received, the

provision will be amended for clarity and changed to include ``county''

as an option when defining the area. In order to maintain program

consistency, FCIC will continue to determine the expected area yield,

the approved yields, and approve the ``area'' designation. To ensure

program integrity, this section is also being amended to require that

an approved area within the United States consist of a minimum of five

producers of crops for which the area is designated.

Comment: Sec. 404.15(b) One comment received from a trade

association suggested section 404.15(b) be expanded to include special

yield determination examples for organic and nonorganic and sustainable

and traditional farming practices.

Response: FCIC is authorized to make yield adjustments based on

different farming practices, which would include organic and

nonorganic. Irrigated and nonirrigated are merely used as examples.

However, the provision will be revised to avoid the perception that

only irrigated and nonirrigated practices shall be considered.

Comment: Sec. 404.15(d) One comment was received from a state

government official regarding section 404.15(d) which states in part

that ``Approved yields for the eligible crop will be based on the

producer's actual production history in accordance with the provisions

of 7 CFR part 400, subpart G.'' The state government official states

that to require the submission of 4 consecutive years production for

producers who may have had a disaster in 2 consecutive years is not

fair. The state government official recommended

[[Page 7198]]

that section 404.15(d) be amended to allow a producer who has more than

4 consecutive years of production records on noninsured crops to submit

production records for any 4 of those years.

Response: The Act requires that approved yields be based on the

producers actual production history over a period of at least the

previous 4 consecutive years of production records and not more than 10

consecutive years of production records. Producers can only use

assigned yields when records are not available. If the producer has had

a disaster, production records will be available. Therefore, this

provision will not be changed.

Comment: Sec. 404.15(g) Three comments were received regarding

section 404.15(g) as follows:

(1) One comment received from a producer recommended section

404.15(g) be amended to allow the FSA committee to determine the

production records a producer must submit.

(2) One comment received from a trade association recommended

section 404.15(g) be amended to include some intent to defraud or

deceive when assessing criminal and civil actions against the producer

for failure to provide adequate records.

(3) One comment was received from a state FSA committee

recommending that section 404.15(g)(2) be changed to delete for use as

adequate records ``contemporaneous measurements, truck scale tickets,

contemporaneous diaries, etc.'' Justification for this change was that

such production information is not an adequate record for use in yield

determination, is not verifiable, and makes administering the program

more difficult. The state FSA committee suggested that unless the

producer can provide verifiable production evidence, this production

information not be considered as an adequate record for use in yield

determination.

Response: Producers are not required to submit a specific type of

record. The rule simply provides examples of record that may be

considered acceptable to FCIC for the purposes of substantiating claims

for NAP payments or yield certification. FCIC will consider all

available sources of information including recommendations from county

and state FSA committees; however, FCIC will make the determination as

to whether the documentation provided is adequate. The applicable

criminal and civil sanctions have an intentional or wilful requirement

with respect to the providing of false or inaccurate information,

including a false claim that records exist. In response to the

comments, the paragraph has been revised to require the producers to

submit records that are acceptable to FCIC. If the information is not

reliable or verifiable, the records will not be considered acceptable.

No other change to the provision will be made.

Comment: Sec. 404.17(b)(6) One comment was received from a producer

recommending section 404.17(b)(6) be changed to require the producer to

report planting dates only for those crops planted after the final

acreage reporting date and to allow the county FSA committee to

determine whether a producer planted late.

Response: It has been determined that if the acreage report does

not contain a certification as to the date the crop being reported was

planted, it will be difficult to determine if the crop was planted

after the final acreage reporting date or final planting date

established for insurance purposes. Information as to the date of

planting should be readily available when the acreage report for the

crop is filed. Accordingly, the paragraph is not changed.

Comment: Sec. 404.17(b)(8) One comment was received from a producer

recommending section 404.17(b)(8) be changed to allow a producer to

prove yields at the application for NAP benefits date rather than at

acreage reporting date.

Response: Because NAP payments are based on the actual production

history of the producer, it is necessary to require producers to

annually report the acreage and production of crops. Further, such

information will be used to develop insurance products for those crops

for which insurance is currently not available. Producers unable to

provide adequate documentation of their yield will have a yield

assigned in accordance with section 519 of the Act.

Comment: Two comments from trade associations were received

regarding section 404.19(a). The comments are as follows:

(1) One comment received from a trade association suggested section

404.19(a) address the standards the Secretary will use in determining

the natural disasters eligible for NAP payments. The trade association

raises this issue in light of complaints that sustainable and

alternative practices have been treated unfairly in the past.

(2) One comment received from a trade association suggested section

404.19(a)(3) address the standards that will be used to exclude NAP

assistance for the failure of the producer to follow good farming

practices. According to the trade association sustainable and

alternative agricultural practices are frequently and erroneously

labeled as not ``good farming practices'' simply because they may be

different from the traditional approach in the area. The trade

association suggested section 404.19(a)(3) provide specificity on this

point and provide producers with guidance as to what evidence they

should present in order to show that their alternative methods were

appropriate.

Response: The definition of ``natural disaster'' has been clarified

to include both weather related and other natural occurrences or their

consequences which may cause or accelerate the destruction or

deterioration of a crop. Further, the definition of ``good farming

practices'' allows alternative farming practices and innovations that

are supported by data from the Cooperative State Research, Education,

and Extension Service (CSREES). Therefore, a change is not required.

Comment: Sec. 404.19(c)(1) Six comments, five from trade

associations and one from a state FSA committee, were received

regarding section 404.19(c)(1) which specifies that ``The quantity will

not be reduced for any quality consideration unless a zero value is

established.'' One trade association recommended section 404.19(c)(1)

be changed to include quality adjustment for hay crops in the disaster

calculation for NAP payment. Four trade associations recommended FCIC

develop a more flexible approach that focuses on the value of the

damaged but not ``dead'' crop and whether the crop will be marketable

in the future at a reasonable price. The state FSA committee

recommended the same quality loss guidelines provided under CAT be also

available to producers under the NAP.

Response: Many of the crops eligible for quality adjustments under

the crop insurance program have generally accepted grades and standards

upon which to base such adjustments. There are no such generally

accepted grades and standards for most NAP crops. Therefore, no change

is made.

Comment: Seven comments, one from a state government official, one

from a producer, one from a FSA district director, and four from trade

associations, were received regarding section 404.19(c)(2). The

comments are as follows:

(1) One comment was received from a state government official

regarding section 404.19(c)(2) which states that ``A prevented planting

NAP payment will be made if the producer is prevented from planting

more than thirty-five percent (35%) of the total eligible acreage

intended for planting to the eligible crop.'' The state government

[[Page 7199]]

official recommended the provision be changed to specify the percentage

of guarantee that will be paid to a producer. The state government

official suggested the guarantee be specified at a rate of not less

than 65 percent for producers who are prevented entirely from planting

a crop.

(2) Two comments, one from a producer and one from an FSA district

director, were received regarding section 404.19(c)(2)(A) which states

that ``Eligible crop acreage will not exceed 100% of the simple average

of the number of acres planted to the crop by the producer in the loss

area during the years used to determine the approved yield, unless FCIC

has previously agreed in writing to approve acreage exceeding this

limit.'' The producer requested FCIC reconsideration of this provision

in light of crop rotations and the planting of other crops. The FSA

district director stated the provision discriminates against producers

of noninsured crops because a producer of an insured crop is not

subject to this restriction.

(3) Four comments were received from trade associations regarding

section 404.19(2)(D)(i) which specifies that NAP payments for prevented

planting will not be available for ``tree crops and other perennials.''

The trade associations stated it is arbitrary and capricious to exclude

turfgrass sod, floricultural, and ornamental nursery crops as

perennials ineligible for NAP prevented planting. Because many of these

crops can be produced in a period ranging from a few months to several

years, depending upon the area of the country and a wide variety of

agronomic considerations, the trade associations suggested a more

flexible approach be developed by FCIC.

Response: Section 519(d)(1) of the Act limits the production

eligible for payment to less than 50 percent of the producer's approved

yield. Section 404.23 is added to specify how losses will be paid to

producers eligible for prevented planting or reduced yield NAP

payments. In Sec. 404.19, paragraphs (c)(2) (A), (B), and (C) have been

deleted and acreage which was prevented from planting due to a natural

disaster, and the producer can prove was intended to be planted, may be

eligible for NAP payments. Tree crops and perennials may be eligible

for prevented planting NAP payments provided the producer can prove

adequate resources were available, or on order, to plant, grow, and

harvest the crop, if applicable.

Comment: Sec. 404.21(a). Two comments, one from a state FSA

committee and one from a trade association were received regarding

section 404.21(a) which specifies that ``Any person with a share in the

eligible crop who would be entitled to a NAP payment must make

application and provide a notice of damage or loss within 15 calendar

days after the occurrence of the prevented planting (the end of the

planting period) or damage to the crop.'' The state FSA committee

stated that the 15-day notification is too limiting and suggested the

provision be changed to allow for a 30- or 45-day notification period.

The trade association also stated that the 15-day notice of damage was

too restrictive.

Response: The time period for providing notice of loss is

comparable to the insurance requirement and allows for timely

inspection of the damaged crop, if necessary. Longer time periods may

make it difficult to accurately assess the extent of the damage and

prevent the producer from destroying the crop and putting the acreage

to another use.

Comment: Sec. 404.27(a). One comment received from a state

government official suggested that section 404.27(a) be amended by

replacing the words ``erroneously represented'' with the words

``knowingly misrepresented''. Justification for this change was that

the provision implies that a farmer who unwittingly benefited from

another's action could face cruel and unduly harsh penalties due to

acts of which he or she was totally unaware.

Response: The paragraph has been clarified to replace ``erroneously

represented'' with ``misrepresented.'' Further, the paragraph has been

revised to require that producers ``knowingly'' adopt, participate, or

benefit from a scheme or device to conform to the requirement of the

Act.

Comment: Sec. 404.27(c)(2). One comment received from a trade

association suggested section 404.27(c)(2) be amended to include the

``knowing'' or ``intentional'' submission of false information.

Response: Since section 404.27(a) has already been revised to

require a ``knowing'' adoption, participation, or benefiting from the

scheme or device, a change is not required here.

Comment: Sec. 404.29(a). One comment received by a trade

association suggested section 404.29(a) include a provision to provide

for refund of monies by the producer as a result of an FCIC error and

that such provision not require the producer to pay interest or pay the

money back ``on demand.'' The trade association suggested that after a

set period of time FCIC should not be allowed to recompute and correct

its own mistakes and should within that set period of time establish an

equitable repayment schedule agreed upon by the parties involved.

Response: There is a statute of limitation that governs the period

within which FCIC can bring an action to recover funds that are owed to

it. Further, since NAP is a government funded program, payments cannot

be made or retained that are not authorized by law.

Comment: Sec. 404.33. Two comments, one from a state government

official and one from a trade association, were received regarding

section 404.33 as follows:

(1) One comment from a state government official suggested that

this section be amended by removing the words ``The appeal,

reconsideration, or review of all determinations made under this part .

. .'' and inserting in its place the words ``Any determination made by

the agency, which the producer believes to be adverse to his or her

participation in the program, can be appealed, reconsidered, or

reviewed by the agency.'' The state government official also suggested

that the words ``must be in accordance with part 780 of this title or

the regulations promulgated by the National Appeals Division, whichever

is applicable'' be replaced with a new paragraph to read as follows:

``All appeals will be heard under the new regulations that are

published for the National Appeals Division, including the right of a

producer to participate in mediation with the agency. If the appeal is

in a state with a certified mediation program, then the agency must

notify the producer in writing, of his or her right to mediation.''

(2) One comment received from a trade association suggested this

section include appeal rights through the National Appeals Division on

whether the designation of an area is appealable. The trade association

also suggested that these regulations provide more specific guidance in

keeping with the National Appeals Division regulations particularly

notice provisions, timeframes, and any informal appeal options.

Response: Since the National Appeals Division has specific

jurisdictional requirements, no change is necessary. Further, the Act

requires that informal appeal processes in effect on the date of its

enactment remain in effect and producers are provided their choice of

forums. Mediation is available under 7 CFR part 780. Rules of general

applicability are not appealable and the area designation is a rule of

general applicability. Since the notice, timeframe, and informal appeal

options

[[Page 7200]]

are specifically stated in the referenced part and regulation, it would

be redundant to include them here.

Comment: One comment received from an USDA agency recommended that

participation in the NAP be linked to other price support, production

adjustment, conservation programs, and the CAT program. Justification

for this change was to provide equitable treatment to all producers and

to be consistent with the Act which requires the FCIC to establish a

NAP program to provide coverage equivalent to the CAT program.

Response: The Agency determined that it would not require linkage

between CAT and NAP unless specifically required by the Act.

Comment: One comment received from a USDA agency recommended an

administrative fee similar to the CAT program be charged producers

prior to the time they receive benefits under the NAP. Justification

for this charge was to ensure fair and equitable treatment of all

producers and to help cover administrative costs for delivering the

program.

Response: The comment cannot be implemented because the Act does

not authorize collection of fees from NAP producers.

Comment: One comment received from a USDA agency suggested that a

producer should have a history of growing the crop in order to receive

NAP benefits. Justification for this change was to ensure that a

producer has the knowledge, expertise, and intent to produce the crop.

Response: This suggestion would have the affect of penalizing new

producers. FSA's operating procedure delegates to the county committees

the responsibility of determining that good farming practices were used

in producing the crop. If good farming practices were not used or the

producer cannot prove that a crop was intended for planting, the

producer is ineligible for NAP payments.

Comment: One comment received from a USDA agency recommended limits

be placed on producers from receiving NAP benefits on acreages that

substantially increased over the previous year's planting.

Justification for this change was to help prevent producers from

significantly expanding planted acres on certain crops on the basis of

the NAP benefits available.

Response: The Act does not provide for limiting NAP benefits if a

producer increases acreage of a crop. The Act only limits the use of

assigned yields when the crop acreage in the county has significantly

increased from previous years.

Comment: One comment received from a trade association stated that

since producers must file annual acreage reports it is imperative that

they be notified on the availability of NAP. The trade association

suggested post-disaster sign-up for the first few years of this

program.

Response: The Act requires producers to annually provide records of

previous years acreage, yield, and production. Further, producers are

required to file acreage reports showing the current crop years planted

and prevented planted acreage. These requirements cannot be changed.

Under the Act, producers are not required to submit an application for

payment until the application deadline, which occurs after the loss has

occurred.

With the exception of a few minor editorial or technical

corrections, other changes made by FCIC are as follows:

(1) Removed the reference to the definitions for actual yield,

adjusted yield, and replacement crop at Sec. 404.7(b), (c), and (dd)

because those terms are not relevant to this program;

(2) Removed the reference to the definition for master yield at

Sec. 404.7(u) because there are no master yields under NAP;

(3) Added a definition for CAT, FSA, NASS; and NAP in Sec. 404.7

for clarity;

(4) Added a definition for ornamental nursery crop at Sec. 404.7 to

clarify which nursery crops are covered;

(5) Added a provision to Sec. 404.11 which makes NAP assistance

available for any crop for which insurance is available in the county,

that is affected by natural disaster that is not insurable under the

producer's crop insurance policy for clarity even though such coverage

was available under the interim rule;

(6) Revised Sec. 404.13 for clarity, added ``county'' as an option

for area designations, and require a minimum number of producers for

NAP areas within the United States;

(7) Added Sec. 404.23 to clarify how NAP payments are calculated

and redesignated the remaining sections accordingly.

Good cause is shown to make this rule effective upon public filing

with the Federal Register, and without the 30-day period required by

the Administrative Procedure Act. The interim rule implemented the NAP

requirements mandated by the amendments to the Federal Crop Insurance

Act by the Federal Crop Insurance Reform Act of 1994. This final rule

needs expedited implementation in order to facilitate the processing of

pending applications for NAP benefits. Therefore, good cause is shown

to make this rule effective in less than 30 days after publication.

List of Subjects in 7 CFR Part 404

Agricultural commodities, Disaster assistance, Reporting and

recordkeeping requirements.

Final Rule

Accordingly, 7 CFR Part 404 is revised to read as follows:

PART 404--NONINSURED CROP DISASTER ASSISTANCE PROGRAM--REGULATIONS

FOR THE 1995 AND SUCCEEDING CROP YEARS

Sec.

404.1 General statement.

404.3 Applicability.

404.5 Administration.

404.7 Definitions.

404.9 Coverage.

404.11 Eligibility.

404.13 Area.

404.15 Yield determinations.

404.17 Acreage report.

404.19 Loss requirements.

404.21 Application for payment and notice of loss.

404.23 Payments for reduced yield and prevented planting.

404.25 Multiple benefits.

404.27 Payment and income limitations.

404.29 Misrepresentation, scheme and device, and fraud.

404.31 Refunds to the Corporation.

404.33 Cumulative liability.

404.35 Appeals.

404.37 Exemption from levy.

404.39 Estates, trusts, and minors.

404.41 Death, incompetence, or disappearance.

404.43 OMB control numbers.

Authority: 7 U.S.C. 1506(l), 1506(p).

Sec. 404.1 General statement.

The Federal Crop Insurance Act, as amended by the Federal Crop

Insurance Reform Act of 1994, requires the Federal Crop Insurance

Corporation to implement a noninsured crop disaster assistance program

to provide eligible producers of eligible crops with protection

comparable to the catastrophic risk protection plan of crop insurance.

NAP is designed to help reduce production risks faced by producers of

crops for which Federal crop insurance under the Act is not available.

NAP will reduce financial losses that occur when natural disasters

cause a catastrophic loss of production or prevented planting of an

eligible crop. Payment eligibility is based on an expected yield for

the area and the producer's approved yield based on actual production

history, or a transitional yield if sufficient production records are

not available. Production for both the applicable area expected yield

and the individual

[[Page 7201]]

producer approved yield for the unit must fall below specified

percentages in order to be eligible for payments under this part.

Sec. 404.3 Applicability.

The provisions contained in this part are applicable to each

eligible producer and each eligible crop, acreage, or cause of loss for

which CAT coverage is not otherwise available.

Sec. 404.5 Administration.

(a) The NAP program will be administered under the general

supervision of the FCIC, and will be carried out through state and

county committees and offices of the Farm Service Agency, or other

local USDA offices as designated by FCIC.

(b) The state FSA committee will, in accordance with this part,

recommend the geographical size and shape of the area where a natural

disaster has occurred, and whether the area eligibility requirement has

been satisfied. The recommendation of eligibility must be approved by

FCIC.

(c) FCIC will determine all yields and prices under this part.

(d) No delegation herein to a state or county FSA committee will

preclude the FCIC Manager from determining any question arising under

NAP or from reversing or modifying any determination made by a state or

county FSA committee.

Sec. 404.7 Definitions.

Act--The Federal Crop Insurance Act as amended. (7 U.S.C. 1501 et

seq.)

Actual production history--Refer to 7 CFR part 400, subpart G,

except that the terms of subpart G will read as follows when referring

to NAP:

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

Insurance Terms NAP Terms

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

Agent..................................... Local office representative

Claim..................................... Application for payment

claim for indemnity....................... Application for payment

Indemnity payment......................... NAP payment

Insurable acreage......................... Eligible acreage

Insurable cause........................... Natural disaster

Insurable crop............................ Eligible crop

Insurance company......................... Provider

Insurance purposes........................ NAP purposes

Insured................................... Eligible producer

Insured producer.......................... Eligible producer

Uninsurable acreage....................... Ineligible acreage

Uninsurable production.................... Ineligible production

Uninsured cause of loss appraisal......... Assigned production

Uninsured production...................... Ineligible production

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

APH--Actual production history.

Approved yield--An APH yield calculated and approved by FCIC, used

to determine any NAP payment in accordance with 7 CFR part 400, subpart

G.

Aquacultural species--Any species of aquatic organism grown as food

for human consumption or fish raised as feed for fish that are consumed

by humans, and which is propagated and reared in an aquatic medium by a

commercial operator on private property in water in a controlled

environment.

Area--The geographic region recommended by the state FSA committee,

and approved by FCIC in accordance with Sec. 404.13, where a natural

disaster has occurred which may qualify producers in the area for NAP

payments.

Assigned yield--A yield assigned for a crop year in the base

period, in accordance with 7 CFR part 400, subpart G, if the producer

does not file an acceptable production report by the production

reporting date.

Average market price--The price, or dollar equivalent on an

appropriate basis; for example, pound, bushel, ton, for an eligible

crop established by FCIC for determining NAP payments. Such price will

be on a harvested basis without the inclusion of transportation,

storage, processing, packing, marketing or other post-harvest expenses

and will be based, in part, on historical data.

CAT--A catastrophic risk protection plan of insurance offered by

FCIC authorized under section 508(b) of the Act and 7 CFR part 402.

CCC--The Commodity Credit Corporation.

County expected yield--The eligible crop yield established by the

State FSA committee and approved by FCIC for the county. Such yield

information may be obtained from NASS, CSREES, credible nongovernmental

studies, yields in similar areas, and similar reference material. For

planted annual crops, such yield will be based on the acreage planted

for harvest.

Crop year--The period of time within which the crop is normally

grown and designated by the calendar year in which the crop is normally

harvested in the area. For crops harvested over two calendar years, the

crop year will be the calendar year in which the majority of the crop

would have been harvested. For crops grown over more than two calendar

years, each year in the growing period will be considered as a separate

crop year designated by the calendar year in which the crop sustained a

loss. For crops for which CAT is available, the crop year will be as

defined by CAT.

CSREES--The Cooperative State Research, Education, and Extension

Service.

Eligible crop--An agricultural commodity for which CAT is not

available and which is commercially produced for food or fiber as

specified in this part. Eligible crop shall also include floricultural,

ornamental nursery, and Christmas tree crops, turfgrass sod, and

industrial crops. In the case of a crop that historically has multiple

plantings in the same crop year that are planted or are prevented from

being planted, each planting may be considered a different crop for

determining NAP payments. In the case of a crop that has different

varieties or types, each variety or type may be considered a separate

crop for determining NAP payments, if FCIC determines there is a

significant difference in price or yield between the varieties or

types.

Expected area yield--The eligible crop yield established and

approved by FCIC for the geographic area.

Forage--Land covered with grass or other vegetation, produced under

such range management practices as are necessary to sustain sufficient

quality and quantity of grass or vegetation each year to be suitable

for grazing or mechanical harvest to feed livestock in a commercial

operation. NAP benefits for forage produced on any Federal or state

owned lands are available only for seeded forage.

FCIC--The Federal Crop Insurance Corporation, a wholly owned

Government corporation within the Farm Service Agency (FSA), United

States Department of Agriculture.

FSA--Formerly the Consolidated Farm Service Agency; now the Farm

Service Agency of the United States Department of Agriculture.

Good farming practices--The cultural practices generally used in

the area for the crop to make normal progress toward maturity and

produce at least the individual unit approved yield. The practices are

normally those recognized by CSREES as compatible with agronomic and

weather conditions in the area.

Harvested--A single harvest crop is considered harvested when the

producer has, by hand or mechanically, removed the crop from the field.

Crops with multiple harvests in one year or harvested over multiple

years are considered harvested when the producer has, by hand or

mechanically, removed at least one mature crop from the field. The crop

is considered harvested once it is taken off the field and placed in a

truck or other conveyance. (Exceptions: Hay is considered harvested

when in the bale, whether removed from the field or not. Grazing is not

considered harvesting for

[[Page 7202]]

the purpose of determining a payment rate factor.)

Livestock--Any farm or other animal excluding aquacultural species

and, including but not limited to domestic avian, ruminant, equine, and

swine species grown or maintained for any purpose.

Local office--The FSA office or other USDA office designated by

FCIC.

NASS--The National Agricultural Statistics Service, an agency of

the United States Department of Agriculture.

Native forage--Grass or other vegetation occurring naturally

without seeding.

Natural disaster--Means damaging weather, including but not limited

to drought, hail, excessive moisture, freeze, tornado, hurricane,

excessive wind, or any combination thereof; or adverse natural

occurrence such as earthquake, flood, or volcanic eruption; or related

condition, including but not limited to heat, insect infestation, or

disease, which occurs as a result of an adverse natural occurrence or

damaging weather occurring prior to or during harvest that directly

causes, accelerates, or exacerbates the destruction or deterioration of

an eligible crop, as determined by the Secretary.

NAP--The noninsured crop disaster assistance program.

Operator--The person who is in general control of the farming

operation on the farm during the crop year.

Ornamental nursery crop--A decorative plant grown in a container or

controlled environment for commercial sale.

Person--A person as defined in 7 CFR part 1497, subpart B.

Prevented planting--The inability to plant a crop with proper

equipment during the planting period for the crop or commodity. A

producer must prove that the producer intended to plant the eligible

crop and that such crop could not be planted due to natural disaster

reasonably related to the basis for the area designation under

Sec. 404.13, as determined by the FCIC Manager. The natural disaster

that caused the prevented planting must have occurred after the final

planting date for the previous crop year and before the final planting

date for the crop year in which a request for NAP payment was made. For

crops with multiple plantings in a single crop year and one crop has

been harvested, the natural disaster must occur, after the harvest of

the harvested crop and before the end of the planting period for the

next planting of the crop.

Producer--A person who, as owner, landlord, tenant, or

sharecropper, is entitled to share in the production from the eligible

commodity or in the proceeds thereof.

Production report--A written record showing the commodity's annual

production and used to determine the producer's yield for NAP purposes.

The report contains yield history by unit, if applicable, including

planted acreage for annual crops, eligible acreage for perennial crops,

and harvested and FCIC appraised production for the previous crop

years. This report must be supported by verifiable written records,

measurement of farm-stored production, or by other records of

production approved by FCIC. Information contained in an application

for payment is considered a production report for the unit for the crop

year for which the application was filed.

Qualifying gross revenues means:

(1) With respect to a person who receives more than 50 percent of

such person's gross income from farming, ranching, and forestry

operations, the annual gross income for the calendar year from such

operations; and

(2) With respect to a person who receives 50 percent or less of

such person's gross income from farming, ranching, and forestry

operations, the person's total gross income from all sources.

Reseeded or replanted crop--The same crop planted on the same

acreage after the first planting of the crop has failed.

Seeded forage--Acreage which is mechanically seeded with grasses or

other vegetation at regular intervals, at least every 7 years, in

accordance with good farming practices.

Share--The producer's percentage of interest in the eligible crop

as an owner, operator, or tenant at the beginning of the crop year. For

the purposes of determining eligibility for NAP payments, the

producer's share will not exceed the producer's share at the earlier of

the time of loss or the beginning of harvest. Acreage or interest

attributed to a spouse, child, or member of the same household may be

considered part of the producer's share unless considered a separate

person.

Transitional NAP yield (``T'' Yield)--An estimated yield based on

the county expected yield adjusted for individual producers as

determined by FCIC. The T-yield will be used in the approved yield

calculation process when less than four consecutive crop years of

actual or assigned yields are available. (See APH).

Unit--For the noninsured crop disaster assistance program, all

acreage of the eligible crop in the county for the crop year:

(1) In which the person has 100 percent crop share; or

(2) Which is owned by one person and operated by another person on

a share basis.

(Example: If, in addition to the land the person owns, the person

rents land from five landlords, three on a crop share basis and two on

a cash basis, the person would be entitled to four units, one unit for

each crop share lease and one unit which includes the two cash leases

and the land owned by the person.) Land rented for cash, a fixed

commodity payment, or any consideration other than a share in the crop

on such land will be considered as owned by the lessee. No unit other

than that stated herein will be permitted.

Sec. 404.9 Coverage.

(a) Producers who are eligible to receive NAP payments for crop

years 1995 through 1998 will receive coverage against loss in yield

greater than 50 percent of the producer's approved yield for the

eligible crop payable at 60 percent of the established average market

price for the crop.

(b) Producers who are eligible to receive NAP payments after crop

year 1998 will receive coverage against loss in yield greater than 50

percent of the producer's approved yield for the eligible crop payable

at 55 percent of the established average market price for the crop.

(c) FCIC will adjust the NAP payment rate for crops that are

produced with significant and variable expenses that are not incurred

because the crop acreage was prevented from being planted or planted

but not harvested.

(d) NAP payments will be determined by unit based on the production

of all acreage of that crop (planted and eligible prevented from being

planted) in the unit.

(e) Each producer's NAP payment will be based on the producer's

share of the eligible crop.

Sec. 404.11 Eligibility.

Eligible crops under this part will be any commercial agricultural

crop, commodity, or acreage of a commodity grown for food or fiber for

which CAT is not available under 7 CFR part 402 unless excluded by

paragraph (b) of this section. Different types or varieties of a crop

or commodity may be treated as a separate eligible crop, if FCIC

determines there is a significant difference in price or yield.

(a) NAP payments will be made available for:

(1) Any commercial crop grown for food;

(2) Any commercial crop planted and grown for livestock

consumption,

[[Page 7203]]

including but not limited to grain and forage crops;

(3) Any commercial crop grown for fiber, excluding trees grown for

wood, paper, or pulp products;

(4) Any commercially produced aquacultural species;

(5) Floriculture crops;

(6) Ornamental nursery crops;

(7) Christmas tree crops;

(8) Turfgrass sod;

(9) Industrial crops; and

(10) Any crop, for which crop insurance under the Act is available

in the county, that is affected by a natural disaster that is not

insurable under the producer's crop insurance policy.

(b) NAP payments will not be available:

(1) For losses of livestock or their by-products;

(2) To any person who has qualifying gross revenues in excess of $2

million;

(3) For any acreage in any area for any crop for which CAT is

available, unless the loss was caused by a natural disaster that is not

covered under CAT and all other eligibility requirements for NAP are

satisfied;

(4) To any person who, in accordance with chapter VII of 7 CFR and

section 1764 of the Food Security Act of 1985, has been convicted under

Federal or state law of planting, cultivating, growing, producing,

harvesting or storing a controlled substance in any applicable crop

year;

(5) Producing an agricultural commodity in any crop year on a field

on which highly erodible land is predominant, unless the person is

exempt under the provisions of Sec. 12.5 of this title; or

(6) Producing an agricultural commodity in any crop year on

converted wetland, unless the person is exempt under the provisions of

Sec. 12.5 of this title.

(c) Any tenant, landlord, or producer on the unit separate from the

person determined to be ineligible under this provision will remain

eligible for NAP payments for their share of the crop unless such

tenant, landlord, or producer on the unit is:

(1) Also convicted of planting, cultivating, growing, producing,

harvesting or storing a controlled substance;

(2) Also in violation of chapter XII of the Food Security Act of

1985 and the regulations issued thereunder; or

(3) Otherwise determined by FCIC to be ineligible for NAP payments.

Sec. 404.13 Area.

(a) For the purposes of this part, acreage affected by a natural

disaster, or any adjustment thereto, will be included in the area

recommended by the state FSA committee and submitted to FCIC for

approval, regardless of whether the commodity produced on the affected

acreage suffered a loss.

(b) Except for eligible areas identified in paragraph (f) of this

section, an approved area shall include at least five producers of

crops on separate and distinct farms for which the area has been

approved for the payment of NAP benefits. Notwithstanding this

provision, FCIC may approve an area having fewer than five producers if

the Manager determines that such area will suffer significant economic

consequences as a result of the disaster.

(c) An area may be designated as follows:

(1) A county;

(2) Aggregated acreage that is at least 320,000 acres; or

(3) Aggregated acreage with not less than $80 million average value

for all crops produced annually.

(d) If the aggregated acreage affected by the natural disaster does

not meet the minimum requirement specified in paragraph (c)(2) or (3)

of this section, the aggregated acreage will be expanded by adding

acres from around the affected acreage, until the minimum requirement

is met.

(e) The area may not be defined in any manner that intentionally

includes or excludes producers or crops.

(f) In lieu of the paragraph (a) and (c) of this section, for

eligible areas outside the United States, the area shall include 10 or

more producers of the crop. Notwithstanding this provision, FCIC may

approve an area outside the 50 United States having fewer than 10

producers of the crop for which the area is requested if the Manager

determines that such area will suffer significant economic consequences

as a result of the disaster.

Sec. 404.15 Yield determinations.

(a) FCIC will establish expected area yields for eligible crops for

each county or area for which the NAP is available, using available

information, which may include, but is not limited to, NASS data,

CSREES records, credible nongovernment studies, yields in similar

areas, and reported approved yield data. For planted annual crops, such

yields will be based on the acreage planted for harvest.

(b) FCIC may make county yield adjustments taking into

consideration different yield variations due to different farming

practices in the county such as: irrigated, nonirrigated, organic,

nonorganic; different types and varieties of a crop; and intended use.

(c) In establishing expected area yields for eligible crops:

(1) If the approved area corresponds to a single county, the

expected area yield will be the yield established by FCIC for that

county, including any adjustments permitted by this section; or

(2) If the approved area encompasses portions of a county or more

than one county, the expected area yield will be the weighted average

of the yields established by FCIC for those counties in the area,

including any adjustments permitted by this section.

(3) FCIC may adjust expected area yields if:

(i) The cultural practices, including the age of the planting or

plantings, are different from those used to establish the yield.

(ii) The expected area yield established on a state or county level

is determined to be incorrect for the area.

(d) FCIC will establish approved yields for purposes of providing

assistance under this part. Approved yields for the eligible crop will

be based on the producer's actual production history in accordance with

the provisions of 7 CFR part 400, subpart G.

(e) The approved yield established for the producer for the year in

which the NAP payments are offered will be equal to the average of the

consecutive crop year yields, as established by FCIC, reported and

certified of that producer for that eligible crop.

(f) If a producer receives an assigned yield for a year of natural

disaster because production records were not submitted by the

production reporting deadline, the producer will be ineligible to

receive an assigned yield for the year of the next natural disaster

unless adequate production records for the eligible crop from the

previous one or more years, as applicable, are provided to the local

office. The producer shall receive a zero yield for those years the

producer is ineligible to receive an assigned yield.

(g) FCIC will select certain producers on a random or targeted

basis and require those selected to provide records acceptable to FCIC

to support the information provided. Producers may also be required to

support the yield certification at the time of loss adjustment or on

post-audit. Each certification must be supported by records acceptable

to FCIC. Failure to produce records acceptable to FCIC will result in

FCIC establishing the yield in accordance with APH and may subject the

producer to criminal and civil false claims actions under various

Federal statutes as well as refund of any amount received. In addition,

sanctions as set

[[Page 7204]]

out at 7 CFR part 400, subpart R may be imposed for false

certification. Records acceptable to FCIC may include:

(1) commercial receipts, settlement sheets, warehouse ledger

sheets, or load summaries if the eligible crop was sold or otherwise

disposed of through commercial channels provided the records are

reliable or verifiable; and

(2) such documentary evidence as is necessary in order to verify

the information provided by the producer if the eligible crop has been

sold, fed to livestock, or otherwise disposed of other than through

commercial channels such as contemporaneous measurements, truck scale

tickets, and contemporaneous diaries, provided the records are reliable

or verifiable.

(h) Any producer who has a contract to receive a guaranteed payment

for production, as opposed to delivery, of an eligible crop will have

the production adjusted upward by the amount of the production

corresponding to the amount of the contract payment received.

(i)(1) Producers will not be eligible to receive an assigned yield

if the acreage of the crop in a county for the crop year has increased

by more than 100 percent over any year in the preceding seven crop

years, unless:

(i) The producer provides adequate records of production costs,

acres planted, and yield for the crop year for which NAP payments are

being sought.

(ii) FCIC determines that the records provided under this paragraph

are inadequate, FCIC may require proof that the eligible crop could

have been marketed at a reasonable price had the crop been harvested.

(2) The provisions of this section will not apply if:

(i) The crop has been inspected prior to the occurrence of a loss

by a third party acceptable to FCIC; or

(ii) The FSA county executive director, with concurrence of the FSA

state director, makes a recommendation for an exemption from the

requirements and such recommendation is approved by FCIC.

Sec. 404.17 Acreage report.

(a) Producers must file one or more acreage reports annually at the

local office no later than the date specified by FCIC for each crop the

producer will want made eligible for the NAP program. The acreage

report may be filed by the farm operator. Any producer will be bound by

the acreage report filed by the farm operator unless the producer files

a separate acreage report prior to the acreage reporting date.

(b) That acreage report must include all of the following

information:

(1) All acreage in the county of the eligible crop (for each

planting in the event of multiple planting) in which the producer has a

share;

(2) The producer's share at the time of planting or the beginning

of the crop year;

(3) The FSA farm serial numbers;

(4) The crop, practice, and intended use;

(5) All persons sharing in the crop (including the identity of any

person having a substantial beneficial interest in the crop (refer to 7

CFR part 400, subpart Q) and the person's employer identification

number or social security number, if the person wishes to receive any

payment under the Act);

(6) The date the crop was planted;

(7) Acreage prevented from being planted; and

(8) Production from the previous crop year. (For example: The

producer reported the crop acreage planted in 1995. The producer must

then report the 1995 production for that acreage by the 1996 acreage

reporting date for the crop.)

(c) A person's failure to submit the required information by the

designated acreage reporting dates may result in the denial of NAP

payments. If there is a change of ownership, operation, or share within

the farming operation after the acreage reporting date, the local

office must be notified not later than 30 calendar days after the

change and proof of the change must be provided in order to maintain

eligibility for payments under this part.

Sec. 404.19 Loss requirements.

(a) To qualify for payment under this part, the loss or prevented

planting of the eligible crop must be due to a natural disaster as

defined at Sec. 404.7.

(b) NAP assistance will not cover losses due to:

(1) The neglect or malfeasance of the producer;

(2) The failure of the producer to reseed or replant to the same

crop in the county where it is customary to reseed or replant;

(3) The failure of the producer to follow good farming practices

for the commodity and practice;

(4) Water contained or released by any governmental, public, or

private dam or reservoir project, if an easement exists on the acreage

affected for the containment or release of the water;

(5) Failure or breakdown of irrigation equipment or facilities; or

(6) Except for tree crops and perennials, inadequate irrigation

resources at the beginning of the crop year.

(c) A producer of an eligible crop will not receive NAP payments

unless the projected average or actual yield for the crop, or an

equivalent measurement if yield information is not available, in the

area falls below 65 percent of the expected area yield. Once this area,

and all other, eligibility requirements have been satisfied:

(1) A reduced yield NAP payment will be made to a producer if the

total quantity of the eligible crop that the producer is able to

harvest on the unit is less than 50 percent of the approved yield for

the crop due to natural disaster reasonably related to the basis for

the area designation under Sec. 404.13, as determined by the FCIC

Manager, factored for the share of the producer for the crop.

Production from the entire unit will be used to determine whether the

producer qualifies for a NAP payment. The quantity will not be reduced

for any quality consideration unless a zero value is established.

(2) A prevented planting NAP payment will be made if the producer

is prevented from planting more than 35 percent of the total eligible

acreage intended for planting to the eligible crop. Producers must have

intended to plant the crop and prove that they were prevented from

planting the crop due to natural disaster reasonably related to the

basis for the area designation under Sec. 404.13 and the producer may

be required to prove that such producer had the resources available to

plant, grow, and harvest the crop, as applicable.

(d) NAP payments for prevented planting will not be available for:

(1) Tree crops and other perennials, unless the producer can prove

resources were available to plant, grow, and harvest the crop, as

applicable;

(2) Land which planting history or conservation plans indicate

would remain fallow for crop rotation purposes; or

(3) Land used for conservation purposes or intended to be or

considered to have been left unplanted under any program administered

by USDA.

Sec. 404.21 Application for payment and notice of loss.

(a) Any person with a share in the eligible crop who would be

entitled to a NAP payment must provide a notice of damage or loss

within 15 calendar days after the occurrence of the prevented planting

(the end of the planting period) or recognizable damage to the crop.

For the 1995 crop year only, the notice must be filed within the later

of July 3, 1995, or 15 days after the occurrence of the prevented

planting or damage to the crop. The notice must be filed at the local

office serving the area

[[Page 7205]]

where the producer's unit is located. The farm operator may provide the

notice for all producers with an interest in the crop. All producers on

a farm will be bound by the operator's filing or failure to file the

application for payment unless the individual producers elect to timely

file their notice.

(b) Applications for NAP payments must be filed, on our form, by

the applicant with the local office no later than the first acreage

reporting date for the crop in the crop year immediately following the

crop year in which the loss occurred.

(1) If the producer chooses not to harvest the crop, all eligible

acres and crop units for which the producer intends to make an

application for payment must be left intact until the units have been

appraised or released by an FCIC loss adjuster.

(2) If the producer harvests the crop, the producer must provide

such documentary evidence of crop production as FCIC may require which

may include leaving representative samples of the crop for inspection.

(c) Failure to make timely application or to supply the required

documentary evidence shall result in the denial of NAP payments.

(d) Payments under this part may be assigned by the eligible

producer only on our form and such assignment is effective only when

approved by FCIC. Failure of FCIC to make payment in accordance with

such assignment will not give rise to any liability on the part of FCIC

to the assignee.

Sec. 404.23 Payments for reduced yields and prevented planting.

In the event that the area loss requirement has been satisfied for

the crop and either:

(a) The producer has sustained a loss in yield in excess of 50

percent of the producer's approved yield established for the crop the

NAP low yield payment will be determined by:

(1) Multiplying the producer's approved yield by the total eligible

acreage planted to the eligible crop;

(2) Multiplying the product of paragraph (a)(1) of this section by

50 percent;

(3) Subtracting the total production from the total eligible

acreage from the result in paragraph (a)(2) of this section;

(4) Multiplying the product of paragraph (a)(3) of this section by

the producer's share of the eligible crop;

(5) Multiplying the result of paragraph (a)(4) of this section by

the applicable payment factor in accordance with Sec. 404.9(c);

(6) Multiplying the result in paragraph (a)(5) of this section by :

(i) For the 1995 through 1998 crop years, 60 percent of the average

market price, as determined by FCIC, or any comparable coverage, as

determined by FCIC: or

(ii) For the 1999 and subsequent years, 55 percent of the average

market price, as determined by FCIC, or any comparable coverage, as

determined by FCIC; or

(b) The producer has been unable to plant at least 35 percent of

the acreage intended for the eligible crop, the NAP payment will be

determined by:

(1) Multiplying the producer's acreage intended to be planted to

the eligible crop by 35 percent;

(2) Subtracting the result in (b)(1) of this section from the

number of eligible prevented planting acres as determined in

Sec. 404.19 (c) (2);

(3) Multiplying the result of (b)(2) of this section by the

producer's share of the eligible crop;

(4) Multiplying the producer's approved yield by the result of

(b)(3) of this section;

(5) Multiplying the result of (b)(4) of this section by the

approved prevented planting payment factor in accordance with

Sec. 404.9(c);

(6) Multiplying the result of (b)(5) of this section by:

(i) For the 1995 through 1998 crop years, 60 percent of the average

market price, as determined by FCIC, or any comparable coverage, as

determined by FCIC: or

(ii) For the 1999 and subsequent years, 55 percent of the average

market price, as determined by FCIC, or any comparable coverage, as

determined by FCIC.

Sec. 404.25 Multiple benefits.

(a) If a producer is eligible to receive NAP payments under this

part and benefits under any other program administered by the Secretary

for the same crop loss, the producer must choose whether to receive the

other program benefits or NAP payments. The producer is not eligible

for both. Such election does not relieve the producer from the

requirements of making a production and acreage report.

(b) Applicable programs include, but are not limited to, the

Emergency Livestock Feed Assistance Program and any other program

determined by FCIC to compensate the producer for the same crop loss.

Sec. 404.27 Payment and income limitations.

NAP payments made to eligible producers are subject to the

following provisions:

(a) For the purpose of making such payments, the term ``producer''

will be considered to mean the term ``person'' as determined in

accordance with 7 CFR part 1497, subpart B.

(b) No person shall receive payments for a crop year under this

part in excess of $100,000.

(c) A person who has qualifying gross revenues in excess of $2

million for the previous calendar year shall not be eligible to receive

NAP payments under this part.

(d) Simple interest on payments to the producer which are delayed

will be computed on the net payments ultimately found to be due, from

and including the 61st day after the latter of the date the producer

signs, dates, and submits a properly completed application for payment

on the designated form, the date disputed applications are adjudicated,

or the date the area is approved for NAP payments. Interest will be

paid unless the reason for failure to timely pay is due to the

producer's failure to provide information or other material necessary

for the computation or payment. The interest rate will be that

established by the Secretary of the Treasury under section 12 of the

Contract Disputes Act of 1978 (41 U.S.C. 611), and published in the

Federal Register semiannually on or about January 1 and July 1 of each

year and may vary with each publication.

Sec. 404.29 Misrepresentation, scheme and device, and fraud.

(a) If FCIC determines that any producer has misrepresented any

fact or has knowingly adopted, participated in, or benefitted from, any

scheme or device that has the effect of defeating, or is designed to

defeat the purpose of this part, such producer will not be eligible to

receive any payments applicable to the crop year for which the scheme

or device was adopted.

(b) If any misrepresentation, scheme or device, or practice has

been employed for the purpose of causing FCIC to make a payment which

FCIC otherwise would not make under this part:

(1) FCIC will withhold all or part of the payment that would

otherwise be due.

(2) All amounts paid by FCIC to any such producer, applicable to

the crop year in which the offense occurred, must be refunded to FCIC

together with interest and other amounts as determined in accordance

with this part.

(3) FCIC may impose such other penalties or administrative

sanctions as authorized by section 506(n) of the Federal Crop Insurance

Act, as amended

[[Page 7206]]

or available under 7 CFR part 400, subpart R.

(c) Scheme and device may include, but is not limited to:

(1) Concealing any information having a bearing on the application

of the rules of this part;

(2) Submitting false information to the FCIC or any county or state

FSA committee; or

(3) Creating fictitious entities for the purpose of concealing the

interest of a person in the farming operation.

Sec. 404.31 Refunds to the Corporation.

(a) In the event that there is a failure to comply with any term,

requirement, or condition for payment made in accordance with this

part, or the payment was established as a result of erroneous

information provided by any person, or was erroneously computed, all

such payments or overpayments will be refunded to FCIC on demand,

together with interest.

(b) Interest will accrue in accordance with the provisions of 7 CFR

Sec. 1403.9.

(c) Interest on any amount due the FCIC found to have been received

by the producer as a result of fraud, misrepresentation, scheme or

device, or presenting a false application for payment will start on the

date the producer received the payment.

(d) Recovery of delinquent debts and set off will be in accordance

with 7 CFR part 1403.

(e) If FCIC determines it is necessary to contract with a

collection agency or to employ an attorney to assist in collection, the

producer will pay all the expenses of collection.

(f) All amounts paid will be applied first to the payment of

expense of collection, second to the reduction of any penalties which

may have been assessed, then to the reduction of accrued interest, then

to the reduction of the principal balance.

Sec. 404.33 Cumulative liability.

(a) The liability of any producer for any payment or refunds, which

is determined in accordance with this part to be due to FCIC, will be

in addition to any other liability of such producer under any civil or

criminal fraud statute or any other statute or provision of law

including, but not limited to, 18 U.S.C. 286, 287, 371, 641, 1001;

1014, and 31 U.S.C. 3729.

(b) All producers on the unit receiving payments under this part

will be jointly and severally liable to repay any unearned NAP

payments.

Sec. 404.35 Appeals.

The appeal, reconsideration, or review of all determinations made

under this part, except the designation of an area for which there is

no appeal rights because it is determined a rule of general

applicability, must be in accordance with part 780 of this title.

Sec. 404.37 Exemption from levy.

Any payment that is due any person under this part will be made

without regard to questions of title under state law and without regard

to any attachment, levy, garnishment, or any other legal process

against the crop, and the proceeds thereof, which may be asserted by

any creditor, except statutory liens of the United States.

Sec. 404.39 Estates, trusts, and minors.

(a) Program documents executed by persons legally authorized to

represent estates or trusts will be accepted only if such person

furnishes evidence of the authority to execute such documents.

(b) A minor who is otherwise eligible will be eligible for NAP

payments under this part only if such person meets one of the following

requirements:

(1) The minor establishes that the right of majority has been

conferred on the minor by court proceedings or by 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 the surety guarantees any loss

incurred for which the minor would be liable had the minor been an

adult.

Sec. 404.41 Death, incompetence, or disappearance.

In the case of death, incompetence or disappearance, of any person

who is eligible to receive NAP payments in accordance with this part,

such payments will be disbursed in accordance with part 707 of this

title.

Sec. 404.43 OMB control numbers.

These regulations amend the information collection requirements

previously approved by the Office of Management and Budget (``OMB'')

under OMB control number 0563-0016.

Done in Washington, D.C., on February 22, 1996.

Suzette M. Dittrich,

Acting Manager, Federal Crop Insurance Corporation.

[FR Doc. 96-4411 Filed 2-22-96; 3:00 pm]

BILLING CODE 3410-FA-P