Karnal Bunt; Compensation for the 1997-1998 Crop Season

DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Part 301

[Docket No. 96-016-35]

RIN 0579-AA83

Karnal Bunt; Compensation for the 1997-1998 Crop Season

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: We are amending the Karnal bunt regulations to provide

compensation for certain growers, handlers, seed companies, owners of

grain storage facilities, flour millers, and participants in the

National Karnal Bunt Survey who incur losses and expenses because of

Karnal bunt in the 1997-1998 crop season. The payment of compensation

is necessary in order to reduce the economic impact of the Karnal bunt

regulations on affected wheat growers and other individuals, and to

help obtain cooperation from affected individuals in efforts to contain

and reduce the prevalence of Karnal bunt.

EFFECTIVE DATE: June 25, 1999.

FOR FURTHER INFORMATION CONTACT: Mr. Mike Stefan, Operations Officer,

Domestic and Emergency Operations, PPQ, APHIS, 4700 River Road Unit

134, Riverdale, MD 20737-1236; (301) 734-8247; or e-mail:

[email protected].

SUPPLEMENTARY INFORMATION:

Background

Karnal bunt is a fungal disease of wheat (Triticum aestivum), durum

wheat (Triticum durum), and triticale (Triticum aestivum X Secale

cereale), a hybrid of wheat and rye. Karnal bunt is caused by the smut

fungus Tilletia indica (Mitra) Mundkur and is spread by spores,

primarily through the movement of infected seed. In the absence of

measures taken by the Animal and Plant Health Inspection Service

(APHIS), U.S. Department of Agriculture (USDA), to prevent its spread,

the establishment of Karnal bunt in the United States could have

significant consequences with regard to the export of wheat to

international markets. The regulations regarding Karnal bunt are in 7

CFR 301.89-1 through 301.89-16 (referred to below as the regulations).

Among other things, the regulations define areas regulated for Karnal

bunt and restrict the movement of certain regulated articles, including

wheat seed and grain, from the regulated areas.

On December 17, 1998, we published a proposed rule in the Federal

Register (63 FR 69563-69569, Docket No. 96-016-31), to amend the

regulations to provide compensation for certain growers, handlers, seed

companies, owners of grain storage facilities, flour millers, and

participants in the National Karnal Bunt Survey who incurred losses and

expenses because of Karnal bunt in the 1997-1998 crop season. The

compensation we proposed was the same as we provided in the 1996-1997

crop season.

For areas under the first crop season of regulation in 1997-1998,

we proposed that growers, handlers, and seed companies would be

eligible for a maximum of $1.80 per bushel of positive-testing wheat.

For areas that were regulated in previous crop seasons, we proposed

that growers, handlers, and seed companies would be eligible for $.60

per bushel of positive-testing wheat. For owners of grain storage

facilities, we proposed to compensate for up to 50 percent of the

direct cost of decontamination of a grain storage facility, but

compensation would not exceed $20,000 per facility. For flour millers,

we proposed to compensate for the treatment of millfeed at the rate of

$35.00 per short ton of millfeed if APHIS required the millfeed to be

treated. For National Karnal Bunt Survey participants, we proposed to

compensate for positive-testing wheat at a maximum of $1.80 per bushel,

and for up to 50 percent of the direct cost of decontamination of grain

storage facilities, but not exceeding $20,000 per facility.

We solicited comments concerning our proposal for 60 days ending

February 16, 1999. We received seven comments by that date. They were

from wheat industry associations, wheat producers and handlers, State

departments of agriculture, and a food manufacturer. All of the

commenters recommended additions or revisions to the proposed

compensation. The comments are discussed below by topic.

In the proposed rule, we said that all regulated areas in the 1997-

1998 crop season were previously regulated areas, and would, therefore,

be eligible for the $.60 per bushel compensation rate. Two commenters

said that (1) the ``certification are'' established by APHIS in August

1998 is a ``first regulated crop season'' area and positive wheat from

that area should get at least $1.80 per bushel compensation, and (2)

the maximum $1.80 per bushel will not cover their losses, and we should

offer the same maximum of $2.50 per bushel that we offered in the 1995-

1996 crop season (the first year we regulated for Karnal bunt).

We are not making any changes to the proposed rule based on these

comments. However, we agree with the commenters that wheat from the

certification area that tested positive for Karnal bunt should be

eligible for up to $1.80 per bushel compensation under the provisions

for first regulated crop season areas. The certification area was

established by APHIS as an emergency measure in August 1998 when random

sampling of fields in Arizona showed there was a concentration of

positive fields in a specific area. APHIS drew a boundary around the

positive fields and called it a ``certification area.'' All of the

certification area was within the regulated area in Arizona. Most of

the fields within the certification area were classified as restricted

areas for seed; the remaining fields were classified as surveillance

areas. Under the regulations, wheat grain may move from restricted

areas for seed without testing. Wheat grain from surveillance areas

must be tested before movement from the area. When the certification

area was established in August 1998, APHIS required all wheat grain

that had not already moved out of the certification area to be tested

for bunted kernels before movement from the area.

Wheat grain growers and handlers from the portion of the

certification area

[[Page 34110]]

that was outside the surveillance areas did not expect restrictions on

the movement of their wheat grain at the time they made their planting

and contract decisions. It is consistent with the intent of the

compensation regulations to consider the certification area outside of

the surveillance areas to be under the first regulated crop season for

1997-1998. Therefore, growers, handlers, and seed companies who sold

positive-testing wheat from the certification area outside of the

surveillance areas will be eligible for up to $1.80 per bushel

compensation. Positive-testing wheat grain from the surveillance areas

within the certification area would be eligible for $.60 per bushel.

This decision does not require any change to the proposed regulations.

One commenter said that $.60 per bushel is inadequate to compensate

for losses from positive-testing breeder or foundation seed. Breeder

and foundation seed are stages in the seed production process that come

before the final stage of certified seed (certified seed is the seed

sold for planting). The commenter said that seed companies lost future

royalties from not being able to use positive-testing breeder or

foundation seed as stock for producing large quantities of certified

seed. The commenter also said that the contract price for foundation

seed is normally $27.00 per bushel. The commenter asked us to offer

higher compensation for breeder and foundation seed to cover these

losses.

We are not making any changes to the proposed rule based on this

comment. We have not compensated in the past for losses in future

royalties or for other losses at the early stages of seed production.

The loss in value of certified, market-ready seed is the most

quantifiable and direct loss associated with actions taken by APHIS to

prevent the spread of Karnal bunt. Many losses connected with seed in

other stages of production are less quantifiable and may have been

otherwise imposed by market forces, such as market demand and prices

over the long term.

One commenter said that we should offer the same $1.80 per bushel

compensation for all positive wheat, and not offer less ($.60 per

bushel) for wheat from previously regulated areas. We are not making

any changes based on this comment. We continue to believe it is

appropriate to provide a lower level of compensation to growers,

handlers, and seed companies from previously regulated areas. Growers,

handlers, and seed companies in areas under the first regulated crop

season would not have known that their area was to become regulated at

the time they made their planting and many of their contracting

decisions, and would not have been prepared for the loss in value of

their wheat due to Karnal bunt. Growers, handlers, and seed companies

in previously regulated areas knew they were in an area regulated for

Karnal bunt at the time they made planting and contracting decisions

for the 1997-1998 crop season. Understanding the restrictions, and

realizing they were planting in a higher risk area, they could have

chosen to alter their planting and contracting decisions to avoid

losses from positive wheat. We believe the proposed compensation

amounts are appropriate for the circumstances in each area.

Several commenters requested compensation for losses not addressed

in the proposed rule, such as demurrage charges, the cost of cleaning

contaminated railcars, and losses due to transportation delays caused

by the Karnal bunt regulations. We are not making any changes to the

proposed rule in response to these comments. We have not offered

compensation for these costs and losses in past crop seasons. However,

we have made a decision to provide some compensation for railcar

cleaning and demurrage costs that were incurred in the 1995-1996 crop

season due to the presence of Karnal bunt spores found in wheat in

railcars. We are not offering compensation for railcar cleaning and

demurrage costs for other crop seasons. Unlike handlers in later crop

seasons, handlers in the 1995-1996 crop season would not have been

prepared for potential costs associated with shipping wheat from the

newly quarantined area. At the time of the 1995-1996 wheat harvest in

Arizona, California, and New Mexico, the extent of Karnal bunt

infestation was not completely known. In addition, even though samples

were taken at the field level for testing, the testing did not reveal

all the positive wheat in the affected area. The result was that

significant quantities of positive wheat were commingled with negative

wheat in railcars, and, when samples were taken from railcars for

testing, high numbers of railcars with positive wheat were found. In

subsequent crop seasons, the areas at higher risk for Karnal bunt were

known, and handlers were able to take precautions to not commingle

wheat from higher risk areas with wheat from other areas or to not move

wheat from higher risk areas out of the regulated area.

During the 1995-1996 crop season, wheat in 22 railcars in

California and 416 railcars in Arizona tested positive for Karnal bunt

and the railcars were required to be cleaned, at an estimated cost of

$50 per car. The time taken to remove the positive wheat from and clean

the railcars often resulted in several days of demurrage charges, at a

cost of about $50 per car per day (demurrage is charged by a railcar

company to compensate for delays, such as if a handler fails to load or

unload freight within the time allowed) . We estimate that the total

cost of railcar cleaning and demurrage in the 1995-1996 crop season was

$750,000. APHIS will contact all eligible claimants with information on

how to submit claims.

The following comments did not address compensation and, therefore,

are not within the scope of the proposed rule. Nevertheless, they are

addressed below.

Two commenters said that Karnal bunt is not a dangerous plant pest,

and asked that we work with trading partners to advocate international

deregulation of Karnal bunt. We agree with the commenters that Karnal

bunt is a minor crop pest in that it produces little direct economic

loss to agricultural production. Research and information from USDA's

Agricultural Research Service and international scientists support this

view. However, international trading partners continue to consider

Karnal bunt a quarantine issue, jeopardizing exports of U.S. wheat.

Therefore, we continue to regulate the movement of wheat from areas

affected by Karnal bunt to protect our export markets, although we are

relieving restrictions on growers, handlers, and seed companies as

appropriate.

We have taken steps to address international views on appropriate

levels of protection against minor crop pests like Karnal bunt. In

cooperation with the North American Plant Protection Organization

(NAPPO), APHIS hosted an international symposium in 1997 to assess the

importance of bunt and smut diseases of wheat for quarantine purposes.

Following this symposium, at the request of NAPPO, the International

Plant Protection Convention Secretariat convened a science panel in

June 1998 to evaluate the issue of categorizing regulated pests that

have minor biological impacts, like Karnal bunt, for the purpose of

determining the appropriate strength of protective measures for these

types of pests. The science panel concluded that it was unnecessary and

inappropriate to create a specific category for pests that have minor

biological impact and that countries should rely on the current pest

risk analysis process (under the World Trade Organization ``Agreement

[[Page 34111]]

on the Application of Sanitary and Phytosanitary Measures'') as the

basis for determining the strength of protective measures. We are

continuing to work with our international trading partners to minimize

the impact of Karnal bunt on wheat trade.

One commenter asked that we deregulate the Bard-Winterhaven area in

California. One commenter asked that we address the issue of Mexico not

accepting wheat from parts of California outside the regulated areas.

We recently published a final rule that removes the Bard-Winterhaven

area in Imperial County, CA, from the regulations (see Docket No. 96-

016-36, 64 FR 23749-23754, published in the Federal Register on May 4,

1999). In regard to wheat exports to Mexico, we are working with the

Government of Mexico to establish mutually recognized criteria for

considering areas as free of Karnal bunt.

Therefore, for the reasons given in the proposed rule and in this

document, we are adopting the proposed rule as a final rule, without

change.

Effective Date

This is a substantive rule that provides compensation to persons

who experienced economic losses in the 1997-1998 crop season because of

the Karnal bunt regulations and emergency actions. Immediate action is

necessary to compensate for these losses. Therefore, pursuant to the

provisions of 5 U.S.C. 553, the Administrator of the Animal and Plant

Health Inspection Service finds good cause for making this rule

effective upon publication in the Federal Register.

Executive Order 12866 and Regulatory Flexibility Act

This rule has been reviewed under Executive Order 12866. The 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.

This final rule establishes compensation provisions for certain

growers, handlers, seed companies, owners of grain storage facilities,

flour millers, and participants in the National Karnal Bunt Survey to

mitigate losses and expenses incurred in the 1997-1998 crop season

because of the Karnal bunt regulations and emergency actions.

In accordance with Executive Order 12866, this analysis examines

the economic costs and benefits of providing such compensation. The

wheat industry within the regulated area is largely composed of

businesses that can be considered ``small'' according to guidelines

established by the Small Business Administration. Therefore, this

analysis also fulfills the requirements of the Regulatory Flexibility

Act (5 U.S.C. 601 et seq.), which require agencies to consider the

economic effects of rules on small entities.

Upon detection of Karnal bunt in Arizona in March 1996, Federal

quarantine and emergency actions were imposed to prevent the interstate

spread of the disease to other wheat producing areas in the United

States. The unexpected discovery of Karnal bunt and subsequent Federal

emergency actions disrupted the production and marketing flows of wheat

in the quarantined areas. We estimate that the impact of Karnal bunt

and subsequent Federal actions on the wheat industry totaled $44

million in the 1995-1996 crop season.

In order to alleviate some of the economic hardships and to ensure

full and effective compliance with the regulatory program, we offered

compensation in the 1995-1996 and 1996-1997 crop seasons to mitigate

certain losses to growers, handlers, seed companies, and other affected

persons in the areas regulated for Karnal bunt. The payment of

compensation is in recognition of the fact that, while benefits from

regulation accrue to a large portion of the wheat industry outside the

regulated areas, the regulatory burden falls predominately on a small

segment of the affected wheat industry within the regulated areas. The

compensation in this final rule for the 1997-1998 crop season is the

same as the compensation offered in the 1996-1997 crop season.

Under this final rule, growers, handlers, and seed companies will

be eligible for compensation for losses in the 1997-1998 crop season

due to wheat grain or seed that tested positive for Karnal bunt. Only

positive-testing wheat will be eligible for compensation because of the

lack of restrictions on the movement of negative-testing wheat. As in

the 1996-1997 crop season, we are offering different levels of

compensation depending on whether the wheat was grown in an area under

the first regulated crop season or in a previously regulated area. An

area in the first regulated crop season is an area that became

regulated for Karnal bunt after the 1997-1998 crop was planted. A

previously regulated area is an area that became regulated for Karnal

bunt before the 1997-1998 crop was planted.

For growers, handlers, and seed companies in previously regulated

areas, compensation for positive grain or seed will be $.60 per bushel.

Growers, handlers, and seed companies in areas under the first

regulated crop season will be eligible for compensation at a rate not

to exceed $1.80 per bushel. These compensation rates apply to both

wheat grain and seed. The difference in compensation rates reflects the

fact that affected entities in areas under the first regulated crop

season would not have known that their area was to become regulated for

Karnal bunt at the time that they made planting and contracting

decisions, and would not have been prepared for the loss in value of

their wheat due to Karnal bunt. Growers and handlers in previously

regulated areas knew they were in an area regulated for Karnal bunt at

the time that they made planting and contracting decisions for the

1997-1998 crop season. Given the restrictions, growers and handlers

could have chosen to alter planting or contract decisions to avoid

experiencing potential losses due to Karnal bunt.

We have completed testing of 1997-1998 harvest wheat from the

surveillance areas in Arizona, California, New Mexico, and Texas. The

amount of positive wheat from the surveillance areas is shown in the

table below. The table also shows levels of positive wheat from an area

called the certification area. The certification area was established

by APHIS as an emergency measure in August of 1998 when random sampling

of fields in Arizona showed there was a concentration of positive

fields in a specific area. As discussed in the response to comments in

this final rule, growers, handlers, and seed companies with positive

wheat from the certification area (not including surveillance areas

within the certification area) will be eligible for first regulated

crop season compensation (maximum of $1.80 per bushel). We have not

completed testing of wheat from the certification area outside of the

surveillance areas. Therefore, the amounts shown in the table below are

estimated based on the rate of infection we have found to date from the

certification area. It should be noted that, in the proposed rule, we

estimated that compensation for wheat grain and seed in the 1997-1998

crop season would total $87,000. The estimated total compensation in

the table below is significantly higher due to a higher than expected

infection rate and the higher rate of compensation for growers,

handlers, and seed companies in the certification area.

[[Page 34112]]

Compensation for Positive-Testing Wheat in the 1997-1998 Crop Season

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Total bushels Maximum Estimated

of wheat Positive compensation total

harvested wheat, bushels per bushel compensation

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Arizona, surveillance area...................... 1,577,858 284,042 $.60 $170,425

Arizona, certification area \1\................. 3,328,234 977,482 1.80 1,759,468

(estimated)

California...................................... 1,910,792 10,302 .60 6,181

New Mexico...................................... 318,000 0 .60 0

Texas........................................... 784,200 0 .60 0

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Totals...................................... 7,919,084 1,271,826 .............. 1,936,074

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\1\ We estimate that the field infection rate in the Arizona certification area in 1998 was 6.45 percent. The

amount of positive bushels in the Arizona certification area shown in this table does not reflect the field

infection rate in this area. This is due to the fact that positive wheat was commingled with negative wheat in

grain storage facilities in the certification area before it was known that the wheat was positive, resulting

in a higher infection rate per bushel.

This final rule also provides compensation for the decontamination

of grain storage facilities found with positive wheat, the treatment of

millfeed, and participants in the National Karnal Bunt Survey whose

wheat or grain storage facility is found to be positive for Karnal

bunt.

Compensation for decontamination of grain storage facilities will

be on a one-time-only basis for up to 50 percent of the cost of

decontamination, not to exceed $20,000 per facility. In the 1997-1998

crop season, only one grain storage facility was required to be

decontaminated.

Compensation for the cost of heat treating millfeed that APHIS

requires to be treated is at the rate of $35.00 per short ton of

millfeed. Under current regulations, APHIS requires heat treatment of

millfeed made from wheat that tested positive for Karnal bunt. In the

1997-1998 crop season, no positive wheat was used for milling;

therefore, no heat treatment of millfeed was required.

No new areas were regulated in the 1997-1998 crop season as a

result of the National Karnal Bunt Survey. Therefore, no one will be

eligible for compensation for National Karnal Bunt Survey participants

under this final rule. (As discussed previously, although no new areas

were regulated in the 1997-1998 crop season as a result of the National

Karnal Bunt Survey, producers within the certification area in Arizona

will be eligible for first regulated crop season compensation. The

additional restrictions imposed in the certification area in the 1997-

1998 crop season were not as a result of testing done for the National

Karnal Bunt Survey.)

There are approximately 18,000 acres within the areas regulated for

Karnal bunt where planting of wheat was prohibited in the 1997-1998

crop season. This rule does not contain provisions for compensating

growers in areas where wheat planting is prohibited, since many of

these growers rotate wheat with other crops that are not prohibited

from being planted. These growers generate revenue from these other

crops, effectively minimizing the impact of the prohibition on planting

wheat.

Growers and handlers of wheat grain and seed, and wheat seed

companies, are the entities most affected by this rule. We estimate

that there are a total of 712 wheat growers in the regulated areas: 378

in Arizona, 48 in California, 200 in New Mexico, and 86 in Texas. There

are 149 growers in surveillance areas, and 563 growers in regulated

areas lying beyond surveillance areas.1 Most of these

entities have total sales of less than $0.5 million, the Small Business

Administration's threshold for classifying wheat producers as small

entities. Accordingly, the economic effects of this rule will largely

be on small entities.

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\1\ The 149 growers in surveillance areas are distributed as

follows: 54 in Arizona, 27 in California, 68 in Texas, and none in

New Mexico. The 563 growers in regulated areas lying beyond

surveillance areas are distributed as follows: 324 in Arizona, 21 in

California, 200 in New Mexico, and 18 in Texas.

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We expect this rule will have a positive economic effect on all

affected entities, large and small. Compensation for the loss in value

of wheat that tests positive for Karnal bunt serves to encourage

compliance with testing requirements within the regulated area, thereby

aiding in the preservation of an important wheat growing region in the

United States. It also serves to encourage participation in the

National Karnal Bunt Survey.

Under these circumstances, the Administrator of the Animal and

Plant Health Inspection Service has determined that this action will

not have a significant economic impact on a substantial number of small

entities.

Executive Order 12372

This program/activity is listed in the Catalog of Federal Domestic

Assistance under No. 10.025 and is subject to Executive Order 12372,

which requires intergovernmental consultation with State and local

officials. (See 7 CFR part 3015, subpart V.)

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. This rule: (1) Preempts all State and local laws and

regulations that are inconsistent with this rule; (2) has no

retroactive effect; and (3) does not require administrative proceedings

before parties may file suit in court challenging this rule.

Paperwork Reduction Act

In accordance with section 3507(d) of the Paperwork Reduction Act

of 1995 (44 U.S.C. 3501 et seq.), the information collection or

recordkeeping requirements included in this final rule have been

approved by the Office of Management and Budget (OMB). The assigned OMB

control number is 0579-0140.

List of Subjects in 7 CFR Part 301

Agricultural commodities, Plant diseases and pests, Quarantine,

Reporting and recordkeeping requirements, Transportation.

Accordingly, we are amending 7 CFR part 301 as follows:

PART 301--DOMESTIC QUARANTINE NOTICES

1. The authority citation for part 301 continues to read as

follows:

Authority: 7 U.S.C. 147a, 150bb, 150dd, 150ee, 150ff, 161, 162,

and 164-167; 7 CFR 2.22, 2.80, and 371.2(c).

2. Section 301.89-15 is amended by revising the section heading,

the introductory text to the section, the

[[Page 34113]]

introductory text to paragraph (a), all of paragraph (b), the

introductory text to paragraph (c), and the last sentence of paragraph

(c)(2), to read as follows:

Sec. 301.89-15 Compensation for growers, handlers, and seed companies

in the 1996-1997 and 1997-1998 crop seasons.

Growers, handlers, and seed companies are eligible to receive

compensation from the United States Department of Agriculture (USDA)

for the 1996-1997 and 1997-1998 crop seasons to mitigate losses or

expenses incurred because of the Karnal bunt regulations and emergency

actions, as follows:

(a) Growers, handlers, and seed companies in areas under first

regulated crop season. Growers, handlers, and seed companies are

eligible to receive compensation for the loss in value of their wheat

in accordance with paragraphs (a)(1) and (a)(2) of this section if: the

wheat was grown in a State where the Secretary has declared an

extraordinary emergency; and, the wheat was grown in an area of that

State that became regulated for Karnal bunt after the crop was planted,

or for which an Emergency Action Notification (PPQ Form 523) was issued

after the crop was planted; and, the wheat was grown in an area that

remained regulated or under Emergency Action Notification at the time

the wheat was sold. Growers, handlers, and seed companies in areas

under the first regulated crop season are eligible for compensation for

1996-1997 crop season wheat or 1997-1998 crop season wheat (as

appropriate) and for wheat inventories in their possession that were

unsold at the time the area became regulated. The compensation provided

in this section is for wheat grain, certified wheat seed, and wheat

grown with the intention of producing certified wheat seed.

* * * * *

(b) Growers, handlers, and seed companies in previously regulated

areas. Growers, handlers, and seed companies are eligible to receive

compensation for the loss in value of their wheat in accordance with

paragraphs (b)(1) and (b)(2) of this section if: the wheat was grown in

a State where the Secretary has declared an extraordinary emergency;

and, the wheat was grown in an area of that State that became regulated

for Karnal bunt before the crop was planted, or for which an Emergency

Action Notification (PPQ Form 523) was issued before the crop was

planted; and, the wheat was grown in an area that remained regulated or

under Emergency Action Notification at the time the wheat was sold.

Growers, handlers, and seed companies in previously regulated areas are

eligible for compensation only for 1996-1997 or 1997-1998 crop season

wheat. The compensation provided in this section is for wheat grain,

certified wheat seed, and wheat grown with the intention of producing

certified wheat seed.

(1) Growers. Growers of wheat in a previously regulated area who

sell wheat that was tested by APHIS and found positive for Karnal bunt

prior to sale, or that was tested by APHIS and found positive for

Karnal bunt after sale and the price received by the grower is

contingent on the test results, are eligible to receive compensation at

the rate of $.60 per bushel of positive testing wheat.

(2) Handlers and seed companies. Handlers and seed companies who

sell wheat grown in a previously regulated area are eligible to receive

compensation only if the wheat was not tested by APHIS prior to

purchase by the handler, but was tested by APHIS and found positive for

Karnal bunt after purchase by the handler or seed company, as long as

the price to be paid by the handler or seed company is not contingent

on the test results. Compensation will be at the rate of $.60 per

bushel of positive testing wheat.

(c) To claim compensation. Compensation payments to growers,

handlers, and seed companies under paragraphs (a) and (b) of this

section will be issued by the Farm Service Agency (FSA). Claims for

compensation for the 1996-1997 crop season must be received by FSA on

or before October 8, 1998. Claims for compensation for the 1997-1998

crop season must be received by FSA on or before October 25, 1999. The

Administrator may extend the deadline, upon request in specific cases,

when unusual and unforeseen circumstances occur which prevent or hinder

a claimant from requesting compensation on or before these dates. To

claim compensation, a grower, handler, or seed company must complete

and submit to the local FSA county office the following documents:

* * * * *

(2) Growers. * * * Growers compensated under paragraph (b)(1) of

this section (previously regulated areas) whose wheat was not tested

prior to sale must submit documentation showing that the price paid to

the grower was contingent on test results (such as a copy of the

receipt for the final sale of the wheat or a copy of the contract the

grower has for the wheat, if this information appears on those

documents).

* * * * *

Sec. 301.89-16 [Amended]

3. Section 301.89-16 is amended as follows:

a. In the heading, by removing the words ``1996-1997 crop season''

and adding the words ``1996-1997 and 1997-1998 crop seasons'' in their

place.

b. In the introductory text, by removing the words ``1996-1997 crop

season'' and adding the words ``1996-1997 and 1997-1998 crop seasons''

in their place.

c. In paragraphs (a), (b), (c)(1), and (c)(2), by removing the last

two sentences in each paragraph and by adding three sentences in their

place to read as follows: ``Claims for compensation for the 1996-1997

crop season must be received by APHIS on or before October 8, 1998.

Claims for compensation for the 1997-1998 crop season must be received

by APHIS on or before October 25, 1999. The Administrator may extend

these deadlines upon written request in specific cases, when unusual

and unforeseen circumstances occur which prevent or hinder a claimant

from requesting compensation on or before these dates.''

Done in Washington, DC, this 18th day of June 1999.

Craig A. Reed,

Administrator, Animal and Plant Health Inspection Service.

[FR Doc. 99-16167 Filed 6-24-99; 8:45 am]

BILLING CODE 3410-34-P