Livestock Indemnity Program

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Parts 1414, 1415, 1416, 1434, 1437, 1439, 1468, 1477, 1479,

and 1489

RIN 0560-AF15

Livestock Indemnity Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This interim rule sets forth the terms and conditions of the

Livestock Indemnity Program as authorized by the 1997 Emergency

Supplemental Appropriations Act, which may be made available to

eligible livestock producers for livestock and poultry losses that

occurred as a result of natural disasters that occurred between October

1, 1996, and June 12, 1997, for which a Presidential or Secretarial

disaster was requested by June 12, 1997, and subsequently approved.

This rule also deletes obsolete program regulation as part of the

National Performance Review Initiative to eliminate unnecessary

regulations and improve those that remain in force.

DATES: Effective June 24, 1997. Comments must be received by July 24,

1997 in order to be assured of consideration.

ADDRESSES: Comments should be mailed to Diane Sharp, Director,

Compliance and Production Adjustment Division, Farm Service Agency,

United States Department of Agriculture, STOP 0517, 1400 Independence

Ave. S.W., Washington, D.C. 20013-2415. Telephone (202) 720-7641.

Access this interim rule on the Internet at: www.fsa.usda.gov.

FOR FURTHER INFORMATION CONTACT: Diane Sharp, (202) 720-7641.

SUPPLEMENTARY INFORMATION:

Executive Order 12766

This interim rule is issued in conformance with Executive Order

12866 and has been determined to be significant and has been reviewed

by the Office of Management and Budget.

Regulatory Flexibility Act

It has been determined that the Regulatory Flexibility Act is not

applicable to this rule because the Farm Service Agency (FSA) and the

Commodity Credit Corporation (CCC) are not required by 5 U.S.C. 553 or

any other provision of law to publish a notice of proposed rulemaking

with respect to the subject matter of this rule.

Environmental Evaluation

It has been determined by an environmental evaluation that this

action will have no significant impact on the quality of the human

environment. Therefore, neither an environmental assessment nor an

environmental impact statement is needed.

Executive Order 12988

This rule has been reviewed in accordance with Executive Order

12788. The provisions of this rule preempt State laws to the extent

such laws are inconsistent with the provisions of this rule. The

provisions of this rule are retroactive to October 1, 1996. Before any

judicial action may be brought concerning the provisions of this rule,

the administrative remedies must be exhausted.

Executive Order 12372

This program is not subject to the provisions of Executive Order

12372, which require intergovernmental consultation with State and

local officials. See the Notice related to 7 CFR part 3015, subpart V,

published at 48 FR 29115 (June 24, 1983).

Unfunded Mandates Reform Act of 1995

This rule contains no Federal mandates under the regulatory

provisions of Title II of the Unfunded Mandates Reform Act of 1995

(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 UMRA.

[[Page 33983]]

Small Business Regulatory Enforcement Fairness Act of 1996

Due to the need for immediate action and necessity in providing

payments for losses expeditiously, CCC has determined that, pursuant to

section 808 of the Small Business Regulatory Enforcement Fairness Act

of 1996, it is impracticable, unnecessary and contrary to the public

interest to require this rule to conform to the requirements of section

801 of that Act. Accordingly this rule is effective upon publication.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995, CCC will

submit an emergency information collection request (ICR) to OMB for the

approval of the Livestock Indemnity Program reports as necessary for

the proper functioning of the program.

Title: Livestock Indemnity Program.

OMB Control Number: 0560-0029.

Type of Request: Addendum to an existing Information Collection

Package.

Abstract: Persons who suffered livestock or poultry losses

according to this subpart, are required to provide information

regarding their livestock and poultry operation, losses that occurred,

and disposition of those losses. Documents to support their reported

interest in the animals may be required such as receipts for purchase

of the livestock or poultry, feed receipts, loan documents, or any

information that may verify their livestock or poultry possessions

prior to the reported loss. Evidence to support the number of losses

may be required such as rendering receipts, National Guard or FEMA

receipts, or any other evidence that may be available to support the

claim. Also, information regarding the qualifying gross revenues is

required for determining whether the $2,500,000 threshold for gross

income limitation is met. The information collection will be used by

the CCC to approve or determine the eligibility and amount of

assistance in accordance with this subpart. The CCC considers the

information collected to be essential to prudent eligibility and

assistance determinations. Failure to make sound decisions in providing

livestock indemnity program payments would result in large losses to

both the livestock and poultry owners and the Government, and weaken

the agricultural economy in the affected areas.

Estimate of Burden: Public reporting burden for this collection of

information is estimated to average 2 hours per response.

Respondents: Livestock and Poultry Producers.

Estimated Number of Respondents: 60,000.

Estimated Number of Responses per Respondent: 1.

Estimated Total Annual Burden on Respondents: 120,000 hours.

Proposed topics for comment include: (a) whether the collection of

information is necessary for the proper performance of the functions of

the agency, including whether the information will have practical

utility; (b) the accuracy of the agency's estimate of burden including

the validity of the methodology and assumptions used; (c) ways to

enhance the quality, utility and clarity of the information collected;

or (d) ways to minimize the burden of the collection of the information

on those who are to respond, including through the use of appropriate

automated, electronic, mechanical, or other technological collection

techniques or other forms of information technology. Comments should be

sent to the Desk Officer for Agriculture, Office of Information and

Regulatory Affairs, Office of Management and Budget, Washington, D.C.

20503 and to Diane Sharp, Director, Compliance and Production

Adjustment Division, Farm Service Agency, United States Department of

Agriculture, Stop 0517, 1400 Independence Ave. S.W., Washington, D.C.

20013-2415. Telephone (202) 720-7641.

Executive Order 12612

It has been determined that this rule does not have sufficient

Federalism implications 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.

Background

This interim rule sets forth the terms and conditions under which

livestock producers who suffered a loss as a result of a natural

disaster may apply for benefits to compensate for this loss. Congress

has mandated the Secretary through the CCC to make available up to $50

million received from the proceeds of the sale of grain held in the

disaster reserve established by the Agricultural Act of 1970, to

implement a livestock indemnity program. This interim final rule is

being added as a new subpart to part 1439, and specifically indicates

how this subpart will incorporate terms and conditions already in this

part.

Producers who seeks benefits under this subpart must file an

application for benefits during the sign-up period as determined by the

Deputy Administrator. As set forth in section 1439.801, benefits are

only available for losses that occurred between October 1, 1996, and

June 12, 1997, and those losses were the result of natural disasters

that occurred between October 1, 1996, and June 12, 1997, for which a

Presidential or Secretarial disaster was requested by June 12, 1997,

and subsequently approved. Only those livestock losses where the death

of the livestock was reasonably related to the disaster which prompted

the disaster declaration qualify for benefits under this subpart. Due

to the fact that losses will have already occurred and ex post facto

verification of the loss is in some instances impossible, the CCC will

use any available information to substantiate the loss and require the

producer to certify the accuracy of the information provided. As with

any government program under which individuals seek compensation from

the government, false certification carries strict penalties, and the

Department will spot-check and validate applications. The CCC through

the Farm Service Agency is charged with carrying out government

programs in a responsible manner and therefore, after applications have

been filed, the county committee will issue a decision on the

applications taking into consideration all of the information available

to them.

Losses to livestock have been extremely large and the amount that

Congress has appropriated is not sufficient to compensate all eligible

producers for 100 percent of the market value of the loss. Animal

categories and market values for the disaster period will be used in

the calculation of national payment rates. Normal mortality rates were

considered for each animal category. If the producer's loss is in

excess of the normal mortality rates for the animal category, as

established by CCC, the benefits will be paid at the national rate

established by CCC for those animal losses in excess of the normal

mortality rate. If the total calculated payments exceed the funding

made available under this program, a uniform national percentage will

be applied so the total outlays will not exceed the amount of funds

made available under this program.

Eligible livestock includes beef and dairy cattle, sheep, goats,

swine, poultry, (including egg-producing poultry), equine animals used

for food or in the production of food and beefalo and buffalo when

maintained on the same basis as beef cattle.

Livestock indemnity benefits will not be paid to persons with

annual gross receipts exceeding $2.5 million. Annual

[[Page 33984]]

gross receipts is defined as the person's gross receipts from farming

and ranching if the person receives more that 50 percent of gross

receipts from farming or ranching, or the total gross receipts from all

sources if the total gross receipts are less that 50 percent from

farming or ranching. Under this program, a maximum $50,000 payment

limitation applies for each person as defined in part 1400 of this

chapter.

List of Subjects

7 CFR Part 1414

Cotton, Feed grains, Price support programs, Reporting and

recordkeeping requirements, Rice, Soil conservation, Water resources,

Wheat.

7 CFR Part 1415

Administrative practice and procedure, Feed grains, Loan programs-

agriculture, price support programs, Reporting and recordkeeping

requirements, Soil conservation, Wheat.

7 CFR Part 1416

Administrative practice and procedure, Feed grains, Loan programs-

agriculture, Price support programs, Reporting and recordkeeping

requirements, Soil conservation, Wheat.

7 CFR Part 1434

Honey, Loan programs-agriculture, Price support programs, Reporting

and recordkeeping requirements, Warehouses.

7 CFR Part 1437

Agricultural commodities, Crop insurance, Disaster assistance,

Fraud, Penalties, Reporting and recordkeeping requirements.

7 CFR Part 1439

Animal feeds, Disaster assistance, Grant programs-agriculture,

Livestock, Reporting and recordkeeping requirements.

7 CFR Part 1468

Mohair, Price support programs, Reporting and recordkeeping

requirements, Wool.

7 CFR Part 1477

Agricultural commodities, Disaster assistance, Fraud, Grant

programs-agriculture, Reporting and recordkeeping requirements.

7 CFR Part 1479

Agricultural commodities, Disaster assistance, Grant programs-

agriculture.

7 CFR Part 1489

Exports, Loan porgrams-agriculture, Price support programs,

Tobacco.

Accordingly, 7 CFR part 1439 is amended as follows:

PART 1439--EMERGENCY LIVESTOCK ASSISTANCE

1. Part 1439 is amended by adding Subpart--Livestock Indemnity

Program (Secs. 1439.800 through 1439.810) to read as follows:

Subpart--Livestock Indemnity Program

Sec.

1439.800 [Reserved].

1439.801 Applicability.

1439.802 Administration.

1439.803 Definitions.

1439.804 Sign-up period.

1439.805 Proof of loss.

1439.806 Indemnity benefits.

1439.807 Availability of funds.

1439.808 Misrepresentation, scheme or device.

1439.809 Limitation on payments and income.

1439.810 Refunds to CCC; joint and several liability.

Authority: Pub. L. 105-18, 111 stat. 158.

Subpart--Livestock Indemnity Program

Sec. 1439.800 [Reserved]

Sec. 1439.801 Applicability.

This subpart sets forth the terms and conditions of the Livestock

Indemnity Program. Benefits shall be provided to eligible livestock

producers only in areas where a disaster occurred between October 1,

1996, and June 12, 1997 (inclusive), for which a Presidential

Designation or Secretarial Declaration was requested for the disaster

by June 12, 1997, and subsequently approved. Producers in counties that

were not designated, but rather were contiguous to declared States and

counties, are not eligible for benefits under this subpart. Benefits

will be provided with respect to eligible livestock where the death

occurred in the disaster areas between October 1, 1996, and June 12,

1997 (inclusive), and where the death of the livestock was reasonably

related to the disaster which prompted the disaster declaration as

determined by the Deputy Administrator or a designee. No payments will

be made under this subpart unless the livestock losses were caused by

the declared disaster and the disaster occurred between October 1,

1996, and June 12, 1997 (inclusive).

Sec. 1439.802 Administration.

(a) The provisions of Secs. 1439.2, 1439.12 , 1439.14, 1439.15 and

1439.18 through 1439.20 are applicable to this subpart.

(b) The provisions of Secs. 1439.1, 1439.4 through 1439.11,

1439.13, 1439.16, and 1439.21 through 1439.24, are not applicable to

this subpart.

(c) The provisions of Sec. 1439.17 (a) through (e) and (h) shall

apply to this subpart and Sec. 1439.17 (f) and (g) shall not apply to

this subpart.

(d) The provisions of Sec. 1439.3 shall apply as set forth in

Sec. 1439.803 of this subpart.

(e) Where extreme circumstances precluded the compliance with

Sec. 1439.804 due to circumstances beyond the applicant's control, the

county or State committee may request that relief be granted by the

Deputy Administrator under this section. Except for statutory

deadlines, the Deputy Administrator may waive or modify deadlines, and

other program requirements in cases where lateness or failure to meet

such other requirements does not adversely affect operation of the

program and where the applicant shows circumstances precluded their

compliance with the deadlines.

Sec. 1439.803 Definitions.

The definitions set forth in this section shall be applicable for

all purposes of administering the Livestock Indemnity Program of this

subpart. The terms defined in section 1439.3 of this title shall also

be applicable, except where those definitions conflict with the

definitions set forth in this subpart. The following terms shall have

the following meanings:

Deputy Administrator means the Deputy Administrator for Farm

Programs, Farm Service Agency (FSA), or a designee.

Eligible livestock means beef and dairy cattle, sheep, goats,

swine, poultry (including egg-producing poultry), equine animals used

for food or in the production of food and buffalo and beefalo when

maintained on the same basis as beef cattle.

Livestock producer means one who possesses a beneficial interest in

eligible livestock as defined in this subpart, have a financial risk in

the eligible livestock; and is a citizen of, or legal resident alien

in, the United States. A farm cooperative, private domestic

corporation, partnership, or joint operation in which a majority

interest is held by members, stockholders, or partners who are citizens

of, or legal resident aliens in, the United States, if such

cooperative, corporation, partnership, or joint operation owns or

jointly owns eligible livestock or poultry will be considered livestock

producers. Any Indian tribe (as defined in section 4(b) of the Indian

Self-Determination and Education Assistance Act and Education

Assistance Act); any Indian organization or entity chartered under

[[Page 33985]]

the Indian Reorganization Act or chartered under the Indian

Reorganization Act; any tribal organization under the Indian Self-

Determination and Education Assistance Act; and any economic enterprise

under the Indian Financing Act of 1974 will be considered livestock

producers.

Sec. 1439.804 Sign-up period.

(a) A request for benefits under this subpart must be submitted to

the Commodity Credit Corporation (CCC) at the Farm Service Agency

county office serving the county where the loss occurred. All requests

for benefits and supporting documentation must be filed in the county

office by July 25, 1997, or such other date as established by CCC.

(b) Data furnished by the applicants will be used to determine

eligibility for program benefits. Furnishing the data is voluntary;

however, without it program benefits will not be provided.

Sec. 1439.805 Proof of loss.

(a) Livestock producers must, in accordance with instructions

issued by the Deputy Administrator, provide adequate proof that the

loss of eligible livestock occurred in the area of Presidential

designation or Secretarial declaration and that the death of the

eligible livestock was reasonably related to the recognized natural

disaster. The documentary evidence of the loss, quantity of the loss

and type of eligible livestock claimed for payment shall be reported to

CCC together with any supporting documentation under paragraph (b) of

this section.

(b) The livestock producer shall provide any available supporting

documents that will assist the county committee in verifying the loss

and the quantity of eligible livestock that perished in the natural

disaster. Examples of the supporting documentation include, but are not

limited to: purchase records, veterinarian receipts, bank loan papers,

rendering truck certificates, Federal Emergency Management Agency and

National Guard records, auction barn receipts, and any other documents

available to confirm the presence of the livestock and the subsequent

losses. Certifications of third parties or the producer and other such

documentation as the county committee determines to be necessary in

order to verify the information provided by the producer may be

submitted, subject to review and approval by the county committee.

Failure to provide documentation that is satisfactory to the county

committee will result in disapproval of the application by the county

committee.

(c) In all circumstances, livestock producers shall certify the

accuracy of the information provided. As provided by various statutes,

providing a false certification to the government is punishable by

imprisonment, fines and other penalties. All information provided is

subject to verification and spot checks by the CCC.

Sec. 1439.806 Indemnity Benefits.

(a) Livestock indemnity payments for losses of eligible livestock

as determined by CCC are authorized to be made to livestock producers

who file an Application for Livestock Indemnity Program, Form CCC-661,

for the specific livestock category in accordance with instructions

issued by the Deputy Administrator, if the:

(1) Livestock producer submits an approved proof of loss according

to Sec. 1439.805; and

(2) County or State committee determines that because of an

eligible disaster condition the livestock producer had a loss in the

specific livestock category in excess of the normal mortality rate

established by CCC, based on the number of animals in the livestock

category that were in the producer's inventory at the time of the

disaster.

(b) If the number of losses in the animal category exceeds the

normal mortality rate established by CCC for such category, the loss of

eligible livestock that shall be used in making a payment shall be the

number of animal losses in the animal category that exceed the normal

mortality threshold established by CCC.

(c) Payments shall be made in an amount determined by multiplying:

the national payment rate for the livestock category as determined by

CCC by the amount specified in (b) of this section. Adjustments shall

apply in accordance with Sec. 1439.807.

(d) Payments which are earned by a person under the livestock

indemnity program may be assigned in accordance with the provisions of

7 CFR part 1404.

Sec. 1439.807 Availability of funds.

(a) A uniform percentage of the estimated calculated payment

amount, as determined by the Deputy Administrator, may be made prior to

establishing the total amount of claims submitted under this subpart

and determining whether a national percentage reduction is necessary to

remain within the appropriation under this subpart.

(b) In the event that the total amount of claims submitted under

this subpart exceeds the appropriation, each payment shall be reduced

by a uniform national percentage. Such payment reductions shall be

applied after the imposition of applicable payment limitation

provisions.

Sec. 1439.808 Misrepresentation, scheme or device.

No benefits under this subpart will be made to a person who is

determined by the State committee or the county committee to have:

(a) Adopted any scheme or other device which tends to defeat the

purpose of this program;

(b) Made any fraudulent representation; or

(c) Misrepresented any fact affecting a program determination.

Sec. 1439.809 Limitations on payments and income.

(a) No person, as determined in accordance with part 1400 of this

chapter may receive benefits under this subpart in excess of $50,000.

Any other benefits obtained under this part will not be included in the

calculation of the $50,000 for the application of this subpart.

(b) No person, as defined in Part 1400 of this chapter, as

applicable, with annual gross receipts in excess of $2.5 million for

the preceding tax year will be eligible for benefits under this

subpart. For the purpose of this determination, annual gross receipts

means with respect to a person who receives more than 50 percent of

such person's gross income from farming and ranching, the total gross

receipts received from such operations; and with respect to a person

who receives 50 percent or less of such person's gross receipts from

farming and ranching, the total gross receipts from all sources.

Sec. 1439.810 Refunds to CCC; joint and several liability.

(a) Section 1439.17 (a) through (e) shall apply to this subpart.

(b) Persons who are a party to the livestock indemnity program

application must refund to CCC any excess payments made by CCC with

respect to such application.

(c) In the event that a benefit under this subpart was established

as the result of erroneous information provided by any person, the

benefit must be repaid with any applicable interest.

PARTS 1414, 1415, 1416, 1434, 1437, 1468, 1477, 1479, AND 1489--

[REMOVED]

2. Parts 1414, 1415, 1416, 1434, 1437, 1468, 1477, 1479, and 1489

are removed.

[[Page 33986]]

Signed at Washington, DC, on June 19, 1997.

Bruce R. Weber,

Acting Executive Vice President, Commodity Credit Corporation.

[FR Doc. 97-16578 Filed 6-20-97; 12:52 pm]

BILLING CODE 3410-05-P