Flood Compensation Program

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1439

RIN 0560-AF57

Flood Compensation Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule provides relief for a special Flood Compensation

Program for farmers in certain counties affected by long-term flooding.

Twelve million dollars have been made available from proceeds from a

disaster reserve under section 813 of the Agricultural Act of 1970.

Another thirty million dollars have been made available using funds

under section 1102(c) of the Agriculture, Rural Development, Food and

Drug Administration, and Related Appropriations Act, 1999 (1999 Act).

Farmers can, subject to certain payment limits, receive payment for the

loss of the use of cropland or pastureland in eligible counties during

the period from October 1, 1997 through September 30, 1998. The county

must have been declared a disaster area under a Presidential

Declaration or Secretarial Designation during a period specified in the

rules and land on at least one farm in the county must be cropland or

pasture land that was flooded sometime after October 1, 1992. Other

limitations also apply. Applicants for assistance must own or have a

binding cash lease on the property and have owned it or leased it

continuously since October 1, 1997. These rules are designed to address

circumstances where changes in bodies of water may have produced

widespread losses that might not otherwise generate assistance under

other programs. At least $12 million of the total $42 million will be

reserved for livestock producers because of the special needs of such

producers.

DATES: Effective August 26, 1999. Comments on this rule must be

received by September 27, 1999 in order to be assured of consideration.

Comments on the information collection must be received by October 25,

1999 in order to be assured of consideration.

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

Production, Emergencies, and Compliance Division, Farm Service Agency,

United States Department of Agriculture, STOP 0517, 1400 Independence

Avenue, SW, Washington, DC 20250-0517, telephone (202) 720-7641, e-mail

Diane__S[email protected]da.gov. Comments may be inspected in the Office

of the Director, PECD, Farm Service Agency (FSA), USDA, Room 4752 South

Building, Washington, DC, between 7:30 a.m. and 4:30 p.m., Monday

through Friday, except holidays.

FOR FURTHER INFORMATION CONTACT: Helen Smith, at the above address,

(202) 720-6601.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This interim rule is issued in conformance with Executive Order

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

reviewed by the Office of Management and Budget (OMB).

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

environment nor an adverse effect on human health on any population.

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

12988. The provisions of this rule preempt State laws to the extent

such laws are inconsistent with the provisions of this rule. Before any

judicial action may be brought concerning provisions of this rule,

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.

Paperwork Reduction Act

Information will be collected for the program provided for in this

notice. The information collected will be used to operate the Flood

Compensation Program. In accordance with the Paperwork Reduction Act,

the Commodity Credit Corporation will submit an emergency information

collections request to OMB for approval of the Flood Compensation

Program reports as necessary for the proper functioning of the program.

Title: Flood Compensation Program.

OMB Control Number: 0560--New.

Type of Request: Request for approval of a New Information

Collection.

Abstract: Producers must have land in counties declared a disaster

area by a Presidential Declaration or Secretarial Designation during

the period January 1, 1997, through August 1, 1998, as a result of

damage due to severe flooding or excess moisture in order to be

eligible

[[Page 47359]]

for benefits. Approval for benefits is contingent upon a determination

that due to flooding or excess moisture the land was unfit for crop

production, haying, grazing, or other agricultural production at all

times during FY 1998. Producers will be required to certify the fields

and acres that were unfit for crop production, haying, grazing, or

other agricultural production at times during FY 1998 due to the

flooding or excess moisture. The information collection will be used to

determine the eligibility and amount of assistance. The information

collection is essential to eligibility and assistance determinations.

Estimate of Burden: Public reporting burden for this collection of

information is estimated to average 1 hour per response.

Respondents: Producers.

Estimated Number of Respondents: 6,500.

Estimated Number of Responses per Respondent: 1.

Estimated Total Annual Burden on Respondents: 6,500 hours.

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

information is necessary for the proper performance of the function 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;

and (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, DC 20503 and to Diane Sharp, Director, Production,

Emergencies, and Compliance Division, Farm Service Agency, United

States Department of Agriculture, STOP 0517, 1400 Independence Avenue

SW, Washington, DC 20250-0517, 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.

Section 1133 of the 1999 Act exempts implementation of section 1102

from public rule-making. Although this rule is based on another

authority as well (section 813 of the Agricultural Act of 1970 (7

U.S.C. 1427a)), in order to be consistent with the 1999 Act, to allow

immediate acceptance of applications, and to assure that relief is made

available promptly, this rule is made effective immediately with a 30-

day comment period. Further delay would, for the reasons given, be

contrary to the public interest. Likewise, to the extent that any

statute requires Congressional review prior to implementation, it is

determined that delay for such review would be contrary to the public

interest.

Background

This interim rule sets forth the terms and conditions of the Flood

Compensation Program (FCP) established by the Secretary of Agriculture

to be carried out through the Commodity Credit Corporation (CCC) by the

Farm Service Agency (FSA) of the Department of Agriculture (USDA). On

June 12, 1996, Congress passed a Concurrent Resolution (S. Con. Res.

63), which addresses the Secretary's authority to dispose of

commodities held in the disaster reserve established under section 813

of the Agricultural Act of 1970 (7 U.S.C. 1427a). The Concurrent

Resolution suggests that the proceeds of the reserve be used for the

benefit of livestock producers whose ability to maintain livestock is

adversely affected by disaster conditions, such as prolonged drought or

flooding. Accordingly, the Secretary designated $12 million received

from the sale of commodities previously held in the disaster reserve to

compensate livestock producers whose flooded land was previously used

in the production of feed or grazing for livestock.

In addition, section 1102(c) of the Agriculture, Rural Development,

Food and Drug Administration, and Related Agencies Appropriations Act,

1999 (Pub. L. 105-277) (1999 Act) appropriated funds to the Secretary

``to make assistance available to producers on a farm who have incurred

multiyear losses (as defined by the Secretary) in the 1998 and

preceding crops of a commodity due to disasters.'' Of that

appropriation, the Secretary has designated $30 million for the FCP

established by this subpart. Accordingly, a total of $42 million is

made available to carry out the FCP.

The rule is designed to focus on counties with generalized flooding

problems since 1992, due to, for example, the expansion of the

boundaries of natural bodies of water such as Devil's Lake in North

Dakota and Day County and surrounding counties in South Dakota. Such

flooding can change the basic character of the land and render the land

ineligible for other benefits or for enrollment in programs like the

Conservation Reserve Program (CRP). Generalized conditions of that sort

can produce tertiary effects in the local community and accordingly,

problems such as those in Devil's Lake have been the source of

considerable attention and concern with respect to the exercise of

discretionary authorities that may be available to the Secretary of

Agriculture. The rule is addressed to those situations and is designed

to focus on recent losses caused by flooding that may have occurred in

the recent past, much as in the generalized disaster program provided

for in section 1102 of the 1999 Act. Hence, the regulations set out in

this notice would provide compensation to eligible producers whose land

was not usable in the period from October 1, 1997 through September 30,

1998. To assure severe enough general conditions to accord with the

intent of this program, the rules provide further that a county will be

eligible for the program only if the county was declared a disaster

area during the period January 1, 1997 through August 1, 1998 due to

losses caused by flooding or excess moisture. Also, the county must

have been experiencing such losses since 1992 in order to identify

places where the problem is a long-term problem, but one that involves

increasing losses due to increased flooding.

General Rules for programs of this type are provided in part 1439,

which was revised in total by a rule published on March 19, 1999 (64 FR

13497). In the new program, no person, as defined in the applicable

regulations, may receive over $40,000, and no person may receive any

payment if that person's gross revenue for 1998, as determined in

conformity with the rules, exceeded $2.5 million. The applicant must be

the owner or lessee under a binding lease of cropland or pastureland

that was engulfed after 1992, must have owned or leased the land

continuously since October 1, 1997 and must still be the owner or

lessee of the land. Other restrictions apply as well.

Also, this rule modifies the March 19, 1999 rule that, in addition

to providing the general provisions for part 1439, set out specific

rules for a general Livestock Assistance Program (LAP). The LAP rule

indicated that LAP payments would be in addition to other payments

received under other programs. That rule has

[[Page 47360]]

been changed in this rule to avoid the possibility of over-compensation

for the same losses. Specifically, 1439.101(c) is amended so that,

unless otherwise specified in some other authority, there will not be

such double payment unless specifically approved for reasons of equity

by the agency.

Because livestock producers don't generally have access to the same

programs as other producers and because of the concern expressed in the

1996 resolution, at least $12 million of the total $42 million provided

in the new program set out in this rule will be reserved for persons

who, during the time set in the regulations, were livestock producers,

even if it becomes necessary to prorate benefits due to claims in

excess of available funds. Unadjusted payment rates will be based on

the average local rental rates for crop land and pasture land, using,

where possible, National Agricultural Statistical Service data.

List of Subjects in 7 CFR Part 1439

Animal feed, Disaster assistance, Flooded land, Livestock programs,

Reporting and recordkeeping requirements.

Accordingly, 7 CFR part 1439 is amended as follows:

PART 1439--EMERGENCY LIVESTOCK ASSISTANCE

1. The authority citation for 7 CFR part 1439 is revised to read as

follows:

Authority: 7 U.S.C. 1427a; 15 U.S.C. 714b and 714c; Sec. 1102,

Pub. L. 105-277, 122 Stat. 2681.

Sec. 1439.101 [Amended].

2. Section 7 CFR 1439.101(c) is revised by removing the word

``eligible'' and adding the phrase ``not eligible'' in its place.

3. Part 1439 is amended by adding a new subpart entitled

``Subpart--1998 Flood Compensation Program (FCP)'', to read as follows:

Subpart--1998 Flood Compensation Program

Sec.

1439.201 Applicability.

1439.202 Administration.

1439.203 Definitions.

1439.204 Application process.

1439.205 County committee determinations of general applicability.

1439.206 Eligible producers, eligible land and loss criteria.

1439.207 Producer eligibility.

1439.208 Calculation of assistance.

1439.209 Availability of funds.

Subpart--1998 FLood Compensation Progam

Sec. 1439.201 Applicability.

This subpart sets forth the terms and conditions applicable to the

1998 Flood Compensation Program (FCP). Benefits will be provided to

eligible livestock and non-livestock producers in the United States but

only in counties where long term flooding occurred, and that were

subsequently approved by the Deputy Administrator for Farm Programs as

eligible counties.

Sec. 1439.202 Administration.

This subpart shall be administered as set forth in Sec. 1439.2 of

this part.

Sec. 1439.203 Definitions.

Terms in this part shall have the same meanings as are assigned by

those defined in Sec. 1439.3 and Sec. 718.2 of this title. In addition,

for purposes of this part and notwithstanding any contrary definitions

in this part or part 718:

Application means Form CCC-454, Flood Compensation Program

Application. Form CCC-454 is available at county FSA offices.

FCP means the Flood Compensation Program provided for in this part.

FY 1998 means the period from October 1, 1997 through September 30,

1998.

Livestock means beef and dairy cattle, buffalo and beefalo (when

maintained in the same manner as beef cattle), sheep, goats, swine,

poultry, and equine animals used commercially for human food or kept

for the production of food or fiber on the owner's farm.

NASS means The National Agricultural Statistics Service.

Sec. 1439.204 Application process.

(a) Producers must submit a completed application prior to the

close of business on July 2, 1999, or other such date as established by

the Deputy Administrator. The application and any supporting

documentation shall be submitted to the county office with

administrative authority over a producer's eligible flooded land or to

the county office that maintains the farm records for the producer.

(b) Producers shall certify as to the accuracy of all the

information contained in the application, and provide any other

information to CCC that the County Office or Committee deems necessary

to determine the producer's eligibility.

Sec. 1439.205 County committee determinations of general

applicability.

(a)(1) County Committees in counties declared or designated a

disaster area by a Presidential Declaration or Secretarial Designation

during the period January 1, 1997, through August 1, 1998, because of

severe flooding or excessive moisture shall determine whether that

county has at least one farm with land used for the production of

crops, feed, seed, or other agricultural use prior to October 1, 1992,

on which both of the following apply:

(i) Land on the farm that otherwise would have been used for crops

or for pasture was inaccessible or incapable of production at all times

during FY 1998 due to flooding; and

(ii) Land on the farm has been subject to continuous flooding that

began any time during FY 1993 and continued through FY 1998.

(2) In making this determination, the County committee shall use

what it considers to be the best information available, including but

not limited to: Extension Service, Natural Resources Conservation

Service, aerial photography, rainfall data, and general knowledge of

losses due to flooding

(b) Having made an affirmative determination under paragraph (a),

the county committee shall, if it is also determined that cropland or

pastureland in the county was incapable of crop production during FY

1998 because of new or increased continuous flooding that occurred

since FY 1992, submit to the Deputy Administrator for Farm Programs,

with State Committee concurrence, a memorandum of request for

affirmance of the county as an eligible county for purposes of this

part. That request shall be accompanied by a copy of applicable

notification of disaster declaration or designation, and copies of

certification maps and acreage reports from one farm in the county that

indicate continuous flooding occurred on the farm that began no later

than October 1, 1993. Upon affirmance by the Deputy Administrator or

designee after review, the county shall be considered to be an

``eligible county'' for purposes of this part.

(c) With respect to each eligible county, the county committee for

that county shall establish separate payment rates for cropland and

pasture land. These rates shall be reviewed by the State Committee and

shall be equal to the estimated five-year average for all land of each

type in the county. The State Committee may take into account rates

established for the Conservation Reserve Program operated under 7 CFR

part 1410 and ensure, subject to paragraph (d), that the rates are

comparable. The Deputy Administrator shall review and may adjust the

rates for reasonableness and consistency.

(d) Except as provided by the Deputy Administrator, payment rates

shall be established based on NASS data in the

[[Page 47361]]

States for which NASS has established rental rates on a county-by-

county basis for 1998.

Sec. 1439.206 Eligible producers, eligible land, and loss criteria.

(a) The flooded land for which a producer requests benefits must be

within the physical boundary of an eligible county. Producers in

unapproved counties contiguous to an eligible county may not receive

benefits under this subpart.

(b) To be eligible for benefits under this subpart, a producer in

an eligible county must have a tract of land that meets all the

following criteria:

(1) The land is cropland or pasture land used for the production of

feed for livestock (haying, grazing, or feed grain production) or other

agricultural use in one or more years during the period beginning

October 1, 1991, through September 30, 1997;

(2) The land was inaccessible or unfit for crop production,

grazing, or haying because of flooding or excess moisture during all of

the period beginning October 1, 1997, through September 30, 1998;

(3) The land has been owned or leased under a binding cash lease by

the producer continuously since October 1, 1997;

(4) The land is a contiguous parcel of land with an area equal to

one acre or more;

(5) The land was not, except as determined by the Deputy

Administrator, the subject of, nor will be the subject of, any other

Federal payment for activities or lack of activity during the period

October 1, 1997, through September 30, 1998, whether or not disaster-

related, with the exception of the production flexibility contract

(PFC) program payments received under part 1412 of this chapter. This

prohibition includes but is not limited to other payments under this

part; the Conservation Reserve Program, part 1410 of this chapter; the

Wetlands Reserve Program, part 1467 of this chapter; or any Emergency

Watershed Protection Program or Federal Easement Program that prohibits

crop production or grazing.

(c) On Form CCC-454 producers shall be required to certify on each

farm the number of flooded cropland and non-cropland acres for the farm

in 1998 and the number of flooded cropland and non-cropland acres in

1992. To establish the acreage eligible for payment, flooded land

certified for 1992 shall be subtracted from the flooded land certified

for 1998 for each applicable type. The difference will be the acreages

of cropland and non-cropland subject to flooding and eligible for FCP

payment, except that the difference may be adjusted as needed to

ensure, to the extent practicable, an accurate estimate of the net

increased flooding on the farm after October 1, 1993.

(d) All determinations as to the amount of land eligible for

enrollment and compensation under this subpart are subject to approval

by the county committee.

(e) The county committee may use any available documentation to

make the determinations under paragraphs (b) and (c) of this section,

including but not limited to: maps, slides, precipitation data, water

table levels and disaster reports.

Sec. 1439.207 Producer eligibility.

(a) At least $12 million in payments under this part shall be

reserved for livestock producers. For this purpose, a livestock

producer is a person who, on the applicable farm, meets the definition

of livestock producer set out in Sec. 1439.3 during the period

beginning January 1, 1993 and ending with the ending date of the

Presidential disaster designation that qualified the county for this

program.

(b) Payments under this subpart shall be subject to the provisions

of Sec. 1439.1 through Sec. 1439.12, and their successor regulations,

except as otherwise provided in this subpart.

(c) No person (as defined and determined under part 1400 of this

chapter) may receive more than $40,000 under this subpart.

(d) No person (as defined and determined under part 1400 of this

chapter) will be eligible for payment under this subpart if that

person's annual gross receipts for the most recent tax year preceding

the crop year for which benefits are requested were in excess of $2.5

million. That determination shall be made in the manner provided for in

Sec. 1439.11.

(e) The following entities are not eligible for benefits under this

subpart:

(1) State or local governments or subdivisions thereof; or

(2) Any individual or entity who is a foreign person as determined

in accordance with the provisions of Sec. 1400.501 and Sec. 1400.502 of

this chapter.

Sec. 1439.208 Calculation of Assistance.

(a) The unadjusted value of FCP assistance determined with respect

to the flooded land in an eligible county for each producer may not

exceed the amount obtained by adding paragraphs (b) and (c) of this

section.

(b) For each eligible producer with respect to the applicable

qualifying cropland, the established local payment rate for cropland

will be multiplied by the number of qualifying acres, as determined by

the County Committee in accordance with instructions from the Deputy

Administrator.

(c) For each eligible producer with respect to the applicable

qualifying non-cropland, the established local payment rate for non-

cropland will be multiplied by the number of qualifying acres, as

determined by the County Committee in accordance with instructions from

the Deputy Administrator.

Sec. 1439.209 Availability of Funds.

In the event that the total amount of claims submitted under this

subpart exceeds the $42 million appropriated for FCP, each payment

shall be reduced by a uniform national percentage except as needed to

assure sufficient payment to livestock producers as provided for in

this part. Such payment reductions shall be after the imposition of

applicable payment limitation provisions.

Signed in Washington, DC, on August 26, 1999.

Parks Shackelford,

Executive Vice President, Commodity Credit Corporation.

[FR Doc. 99-22626 Filed 8-26-99; 4:24 pm]

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