[Federal Register: October 31, 2006 (Volume 71, Number 210)]
[Rules and Regulations]
[Page 63668-63674]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31oc06-2]
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DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1430
RIN 0560-AH59
2005 Dairy Disaster Assistance Payment Program
AGENCIES: Commodity Credit Corporation, USDA.
ACTION: Final rule.
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SUMMARY: This rule sets forth the regulations for the 2005 Dairy
Disaster Assistance Payment Program. This program will assist dairy
producers by providing payments to those who suffered dairy production
and milk spoilage losses due to hurricanes or a related condition in
2005.
DATES: This rule is effective October 31, 2006.
FOR FURTHER INFORMATION CONTACT: Danielle Cooke, Price Support
Division, Farm Service Agency, United States Department of Agriculture,
STOP 0512, 1400 Independence Avenue, SW., Washington, DC 20250-0512.
Telephone: (202) 720-1919; e-mail: Danielle.Cooke@wdc.usda.gov.
SUPPLEMENTARY INFORMATION:
Notice and Comment
Section 3034 of the Emergency Agricultural Disaster Assistance Act
of 2006 (the 2006 Act) requires that the regulations necessary to
implement Title III of the 2006 Act, which includes the regulations for
this program, are to be promulgated without regard to the notice and
comment provisions of 5 U.S.C. 553 or the Statement of Policy of the
Secretary of Agriculture effective July 24, 1971 (36 FR 13804),
relating to notices of proposed rulemaking and public participation in
rulemaking. These regulations are thus issued as final.
Executive Order 12866
This final rule has been determined to be significant under
Executive Order 12866 and has been reviewed by the Office of Management
and Budget.
Regulatory Flexibility Act
The Regulatory Flexibility Act does not apply to this rule because
CCC is not required by 5 U.S.C. 553 or any other law to publish a
notice of proposed rulemaking with respect to the subject of this rule.
Environmental Assessment
The environmental impacts of this rule have been considered
consistent with the provisions of the National Environmental Policy Act
of 1969 (NEPA), 42 U.S.C. 4321 et seq., the regulations of the Council
on Environmental Quality (40 CFR parts 1500-1508), and FSA's
regulations for compliance with NEPA, 7 CFR part 799. To the extent
these authorities may apply, CCC has concluded that this rule is
categorically excluded from further environmental review as evidenced
by the completion of an environmental evaluation. No extraordinary
circumstances or other unforeseeable factors exist which would require
preparation of an environmental assessment or environmental impact
statement. A copy of the environmental evaluation is available for
inspection and review upon request.
Executive Order 12988
The rule has been reviewed in accordance with Executive Order
12998. This final rule preempts State laws to the extent such laws are
inconsistent with it. This rule is not retroactive. Before judicial
action may be brought concerning this rule, all administrative remedies
set forth at 7 CFR parts 11 and 780 must be exhausted.
Executive Order 12612
This rule does not have Federalism implications that warrant the
preparation of a Federalism Assessment. 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.
Executive Order 12372
This program is not subject to Executive Order 12372, which
requires 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
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) does
not apply to this rule because CCC is not required by 5 U.S.C. 553 or
any other law to publish a notice of proposed rulemaking for the
subject of this rule. Further, this rule contains no unfunded mandates
as defined in sections 202 and 205 of UMRA.
Paperwork Reduction Act of 1995
Section 3034 of the 2006 Act provides that the promulgation of
regulations and the administration of Title III of the 2006 Act shall
be made without regard to chapter 5 of title 44 of the Untied States
Code (the Paperwork Reduction Act). Accordingly, these regulations and
the forms and other information collection activities needed to
administer the program authorized by these regulations are not subject
to review by OMB under the Paperwork Reduction Act.
Government Paperwork Elimination Act
CCC is committed to compliance with the Government Paperwork
Elimination Act (GPEA) and the Freedom to E-File Act, which require
Government agencies in general, and FSA in particular, to provide the
public the option of submitting information or transacting business
electronically to the maximum extent possible. The forms and other
information collection activities required to be utilized by a person
subject to this rule are not yet fully implemented in a way that would
allow the public to conduct business with CCC electronically.
Accordingly, at this time, all forms required to be submitted under
this rule may be submitted to CCC by mail or FAX.
Background
Section 3014 of the 2006 Act requires the Secretary of Agriculture
to use $17 million to make payments to dairy producers for losses in
counties affected by 2005 hurricanes. Hurricanes Katrina, Ophelia,
Rita, and Wilma severely impacted dairy producers in certain areas of
the Gulf region of the United States during the months of August
through October of 2005. As a result, several dairy producers incurred
devastating decreases in production due to cattle losses and milk that
had to be dumped because of closed milk plants and damaged containment
equipment. Also, the loss of electricity, the shortage of fuel, and
infrastructure damage temporarily interrupted the flow of dairy
products to markets.
Pursuant to the legislation, this rule addresses the situation by
establishing a program similar to the 2004 Dairy Disaster Assistance
Payment (DDAP-I) Program authorized by section 103 of Division B of
Public Law 108-324, for dairy production and spoilage losses incurred
by producers in the southeastern region of the United States, due to
2004 Hurricanes Charley, Frances, Ivan, and Jeanne. The final rule for
DDAP-I was published on
[[Page 63669]]
September 26, 2005 (70 FR 56113). As with DDAP-I, the payments provided
by this rule will offset a portion of the per-pound losses dairy
producers have incurred commercially marketing milk in the United
States.
Dairy producers who suffered production losses and dairy spoilage
losses, as a result of Hurricanes Katrina, Ophelia, Rita, and Wilma
disaster, or a condition related to those hurricanes, may apply for
compensation for losses incurred during the 2005 calendar year.
Benefits will be provided to eligible dairy producers in those counties
declared a natural disaster by the Secretary of Agriculture or
designated a major disaster or emergency by the President of the United
States, who meet all program eligibility requirements, and are
subsequently approved for participation in the 2005 Dairy Disaster
Assistance Payment Program. This program is similar to a program
operated with respect to 2004 programs (DDAP-I) and will be referred to
as DDAP-II. Dairy producers in counties contiguous to a directly
eligible county are also eligible for DDAP-II benefits. Eligible dairy
producers will receive an immediate payment to help pay operating
expenses and meet other financial obligations.
To be eligible, dairy producers must have produced milk in the
United States during the 2005 calendar year as part of a dairy
operation located in a county declared a natural disaster in 2005, or a
contiguous county, because of Hurricane Katrina, Ophelia, Rita, or
Wilma. Losses and declarations associated with Hurricane Dennis or
other disasters are not covered. As a result of the hurricanes or
related condition, the producer must have suffered dairy production
losses and dairy spoilage losses in the eligible months. In addition,
adequate evidence of dairy production losses and dairy spoilage losses
must be provided to FSA to substantiate the losses suffered and
certified by each producer. Payments will be made according to a
formula and will be subject to funding and other limitations. Further,
payments will not be reduced as a result of payments from a milk buyer
or marketing cooperative for dumped or spoiled milk.
Applicants must apply for benefits during the sign-up period
announced by the Deputy Administrator for Farm Programs. At the close
of the sign-up period, the total production and spoilage losses from
all eligible applicants will be determined. Payment eligibilities will
be separately calculated on an operation by operation basis. An
individual may be involved in more than one operation. Payments to
eligible producers will be calculated by multiplying the eligible
pounds by the average price received for commercial milk production in
the affected areas during the eligible months. If the total amount of
available funding ($17 million, less any reserve established to account
for disputed claims) is insufficient to compensate eligible producers
for eligible losses, then CCC will pay losses at two levels in an
effort to more equitably distribute the limited funds and maximize the
effectiveness of the program.
Specifically, in case of inadequate funds for all eligible losses,
CCC will calculate each operation's overall quarterly percentage
reduction for the full disaster claim period that corresponds with the
applicable hurricane, from the calculated base for the operation for
the full quarter for the applicable hurricane. The disaster claim
period applicable to: (1) Hurricane Katrina and Hurricane Rita are the
months of August through December 2005; and (2) Hurricane Ophelia and
Hurricane Wilma are the months of October through December 2005. If a
reduced payment is needed due to funding constraints, calculated losses
over the applicable disaster claim period greater than 20 percent of a
producer's normal production will be paid at the maximum per-pound
payment rate. A loss over 20 percent in one or two of the eligible
months will not qualify for the maximum per-pound payment. Payments for
eligible losses below the 20-percent threshold will be made at a rate
that will exhaust the available funds that remain following payment of
eligible losses at the higher level. The 20 percent threshold mirrors
that of DDAP-I and some other disaster programs. An example of how the
apportionment might affect producers is set out below. If funds are
adequate for all eligible losses, all eligible producers will be paid
at the ``maximum rate'' which amounts to the average price received for
commercial milk production in their area during the applicable months
of August through December of 2005. The apportionment example is as
follows:
Example:
----------------------------------------------------------------------------------------------------------------
Producer A Producer B Producer C
(Louisiana) (Florida) (Alabama) Producer D (Texas)
----------------------------------------------------------------------------------------------------------------
Total Base Production........ 800,000 2,000,000 1,500,000 600,000
==================================================================================
Actual Production............ 485,000 1,820,000 1,070,000 490,000
Pounds Dumped or Spoiled..... 5,000 20,000 20,000 10,000
----------------------------------------------------------------------------------
Total Eligible `Loss..... 320,000 200,000 450,000 120,000
==================================================================================
20% of Base Production....... 160,000 400,000 300,000 120,000
Pounds of loss above 20% loss 160,000 0 150,000 0
level.
Payment Rate................. $0.1647/lb. $0.1819/lb. $0.1649/lb. $0.1419/lb.
DDAP for loss above 20%...... $26,352 $0 $24,735 $0
$0.12/lb. (example only).
----------------------------------------------------------------------------------
Total DDAP............... $45,552 $24,000 $60,735 $14,400
==================================================================================
Eligible Losses x average $52,704 $36,380 $74,205 $17,028
price.
Percent production loss 40 10 30 20
suffered.
Percent financial losses 86 66 82 85
recovered from DDAP.
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Dairy producers who have received a payment for the loss under the
Dairy Indemnity Payment Program (7 CFR part 760) shall be ineligible
for payments under this rule. Gross revenue and per-person payment
limits do not apply. Payments are subject to all requirements of the
regulations and program documents. Information provided on
[[Page 63670]]
applications and supporting documentation will be subject to
verification by FSA. False certifications by producers carry strict
penalties and FSA will verify applications with random spot-checks.
Dairy producers determined to have made any false certifications or
adopted any misrepresentation, scheme, or device that defeats the
program's purpose will be required to refund any payments issued under
this program with interest, and may be subject to other civil,
criminal, or administrative remedies. Payments will be made according
to a formula and will be subject to limitations. During the application
period, dairy producers may apply in person at FSA county offices
during regular business hours. Applications may also be submitted to
CCC by mail or FAX. Program applications may be obtained in person, by
mail, telephone, and facsimile from producers' designated FSA county
office or via the Internet at http://www.fsa.usda.gov/dafp/psd/.
List of Subjects in 7 CFR Part 1430
Dairy, Disaster assistance, Reporting and recordkeeping
requirements.
0
Accordingly, for the reasons set out in the preamble, 7 CFR part 1430
is amended as follows:
PART 1430--DAIRY PRODUCTS
0
1. The authority citation for part 1430 is revised to read as follows:
Authority: 7 U.S.C. 7981 and 7982; 15 U.S.C. 714b and 714c; Sec.
3014 of Pub. L. 109-234, 16 U.S.C. 3801 note, 120 Stat. 474.
0
2. Add subpart E to read as follows:
Subpart E--2005 Dairy Disaster Assistance Payment Program (DDAP-II)
Sec.
1430.300 Applicability.
1430.301 Administration.
1430.302 Definitions.
1430.303 Time and method of application.
1430.304 Eligibility.
1430.305 Proof of production.
1430.306 Determination of losses incurred.
1430.307 Rate of payment and limitations on funding.
1430.308 Availability of funds.
1430.309 Appeals.
1430.310 Misrepresentation and scheme or device.
1430.311 Death, incompetence, or disappearance.
1430.312 Maintaining records.
1430.313 Refunds; joint and several liability.
1430.314 Miscellaneous provisions.
Subpart E--2005 Dairy Disaster Assistance Payment Program II (DDAP-
II)
Sec. 1430.300 Applicability.
(a) Subject to the availability of funds, this subpart sets forth
the terms and conditions applicable to DDAP-II authorized by section
3014 of Public Law 109-234. Benefits are available to eligible United
States producers who have suffered in 2005 dairy production losses and
dairy spoilage losses in eligible counties as a result of Hurricanes
Katrina, Ophelia, Rita, and Wilma or conditions related to those
hurricanes.
(b) To be eligible for this program, a producer must have been a
milk producer in 2005 in a county declared a natural disaster by the
Secretary of Agriculture or declared a major disaster or emergency
designated by the President of the United States due to a 2005
hurricane or related condition thereof, or in a contiguous county to a
county that is directly eligible by way of a natural disaster
declaration. Only losses occurring in these counties are eligible for
payment under this program.
(c) Subject to the availability of funds, benefits shall be
provided by the Commodity Credit Corporation (CCC) to eligible dairy
producers. Additional terms and conditions may be set forth in the
payment application that must be executed by participants to receive a
disaster assistance payment for dairy production losses and dairy
spoilage losses.
(d) To be eligible for payments, producers must comply with the
provisions of, and their losses must meet the conditions of, this
subpart and any other conditions imposed by CCC.
Sec. 1430.301 Administration.
(a) DDAP-II shall be administered under the general supervision of
the Executive Vice President, CCC, or a designee, and shall be carried
out in the field by FSA State and county committees (State and county
committees) and FSA employees.
(b) State and county committees, and representatives and employees
thereof, do not have the authority to modify or waive any of the
provisions of the regulations of this subpart.
(c) The State committee shall take any action required by the
regulations of this subpart that has not been taken by the county
committee. The State committee shall also:
(1) Correct, or require the county committee to correct, any action
taken by such county committee that is not in accordance with the
regulations of this subpart; and
(2) Require a county committee to withhold taking any action that
is not in accordance with the regulations of this subpart.
(d) No provision of delegation in this subpart to a State or county
committee shall preclude the Executive Vice President, CCC, or a
designee, from determining any question arising under the program or
from reversing or modifying any determination made by the State or
county committee.
(e) The Deputy Administrator, Farm Programs, FSA, may authorize
State and county committees to waive or modify deadlines in cases where
lateness or failure to meet such requirements do not adversely affect
the operation of the 2005 Dairy Disaster Assistance Payment Program II
and does not violate statutory limitations on the program.
(f) Data furnished by the applicants is used to determine
eligibility for program benefits. Although participation in DDAP-II is
voluntary, program benefits are not provided unless the participant
furnishes all requested data.
Sec. 1430.302 Definitions.
The definitions in 7 CFR part 718 shall apply to this subpart
except to the extent they are inconsistent with the provisions of this
subpart. In addition, for the purpose of this subpart, the following
definitions shall apply.
Application means DDAP-II Application.
Application period means the time period established by the Deputy
Administrator for producers to apply for program benefits.
Base month means the base month for the particular 2005 hurricane
assigned in Sec. 1430.304.
CCC means the Commodity Credit Corporation of the Department.
Claim period means as assigned in this subpart the qualifying
months of calendar year 2005, following the base month, in which the
loss occurred.
County committee means the FSA county committee.
County office means the FSA office responsible for administering
FSA programs for farms located in a specific area in a State.
Dairy operation means any person or group of persons who, as a
single unit, as determined by CCC, produces and markets milk
commercially from cows and whose production facilities are located in
the United States.
Department or USDA means the United States Department of
Agriculture.
Deputy Administrator means the Deputy Administrator for Farm
Programs (DAFP), FSA, or a designee.
[[Page 63671]]
Farm Service Agency or FSA means the Farm Service Agency of the
Department.
Hundredweight or cwt. means 100 pounds.
Hurricane-affected county means a county included in the geographic
area covered by a natural disaster declaration related to Hurricane
Katrina, Hurricane Ophelia, Hurricane Rita, Hurricane Wilma or
conditions related to those hurricanes, and includes counties which
qualify because they are contiguous to a county that qualifies by a
natural disaster declaration.
Milk handler or cooperative means the marketing agency to, or
through which, the producer commercially markets whole milk.
Milk marketings means a marketing of milk for which there is a
verifiable sales or delivery record of milk marketed for commercial
use. In counting milk toward production amounts, dumped milk will not
be considered as marketed for commercial use. Such dumped milk shall be
counted toward production but will be accounted for separately from
milk that is marketed for normal commercial use as determined by the
Deputy Administrator. All production in the months for which loss
coverage is available will be counted in making determinations under
this part, as determined by the Deputy Administrator, with care to
avoid double counting, and with care to avoid a calculated loss that
overstates the actual losses. Adjustments may be made as appropriate to
accomplish these objectives.
Natural disaster declaration means a natural disaster declaration
issued by the Secretary of Agriculture during calendar year 2005 under
section 321(a) of the Consolidated Farm and Rural Development Act (7
U.S.C. 1961 (a)), or a major disaster or emergency designation by the
President of the United States during calendar year 2005 under the
Robert T. Stafford Disaster Relief and Emergency Assistance Act,
including declarations and designations by both the President and
Secretary made during calendar year 2006 for which a request was
pending as of December 31, 2005.
Payment pounds means the pounds of milk production from a dairy
operation for which the dairy producer is eligible to be paid under
this subpart.
Producer means any individual, group of individuals, partnership,
corporation, estate, trust association, cooperative, or other business
enterprise or other legal entity who is, or whose members are, citizens
of, or legal resident aliens in the United States, and who directly or
indirectly, as determined by the Secretary, share in the risk of
producing milk, and make contributions (including land, labor,
management, equipment, or capital) to the dairy farming operation of
the individual or entity.
Reliable production records means evidence provided by the producer
that is used to substantiate the amount of production reported when
verifiable records are not available, including copies of receipts,
ledgers of income, income statements of deposit slips, register tapes,
and records to verify production costs, contemporaneous measurements,
and contemporaneous diaries that are determined acceptable by the
county committee.
Starting base production means actual commercial production
marketed by the dairy operation during the base month applicable to the
2005 hurricane disaster, or alternative period established by the
Deputy Administrator.
Verifiable production records means evidence that is used to
substantiate the amount of production including any part marketed
normally, dumped, or otherwise disposed of, and that can be verified by
CCC through an independent source.
Sec. 1430.303 Time and method of application.
(a) Dairy producers may obtain an Application, in person, by mail,
by telephone, or by facsimile from any county FSA office. In addition,
applicants may download a copy of the Application at http://www.sc.egov.usda.gov
.
(b) A request for benefits under this subpart must be submitted on
a completed Application as defined in Sec. 1430.302. Applications and
any other supporting documentation shall be submitted to the FSA county
office serving the county where the dairy operation is located but, in
any case, must be received by the FSA county office by the close of
business on the date established by the Deputy Administrator. The
closing date shall be no sooner than November 30, 2006. Applications
not received by the close of business on such date will be disapproved
as not having been timely filed and the dairy producer will not be
eligible for benefits under this program.
(c) All persons who share in the risk of a dairy operation's total
production must certify to the information on the Application before
the Application is considered complete.
(d) Each dairy producer requesting benefits under this subpart must
certify to the accuracy and truthfulness of the information provided in
their application and any supporting documentation. All information
provided is subject to verification by CCC. Refusal to allow CCC or any
other agency of the Department of Agriculture to verify any information
provided will result in a denial of eligibility. Furnishing the
information is voluntary; however, without it program benefits will not
be approved.
Sec. 1430.304 Eligibility.
(a) Producers in the United States are eligible to receive
hurricane-related dairy disaster benefits under this part only if they
have suffered dairy production or dairy spoilage losses in 2005 as a
result of a hurricane disaster or related condition, in a hurricane-
affected county. To be eligible to receive payments under this subpart,
producers in a dairy operation must:
(1) Have produced and commercially marketed milk in the United
States and commercially marketed the milk produced during the 2005
calendar year;
(2) Be a producer on a dairy farm operation physically located in
an eligible county where dairy production and milk spoilage losses were
incurred as a result of 2005 hurricanes, or a related condition, in and
limiting their claims to losses occurring in those counties and
contiguous counties;
(3) Provide adequate proof, to the satisfaction of the County
Committee, of monthly milk production dumped and commercially marketed
by all persons in the eligible dairy operation during the base month
and claim period that corresponds with the applicable hurricane-related
disaster during the 2005 milk marketing year, or other period as
determined by CCC, to determine the total pounds of eligible losses
that will be used for payment; and
(4) Apply for payments during the application period established by
the Deputy Administrator.
(b) Payments may be made for losses suffered by an otherwise
eligible producer who is now deceased or is a dissolved entity if a
representative who currently has authority to enter into a contract for
the producer or the producer's estate signs the application for
payment. Proof of authority to sign for the deceased producer's estate
or a dissolved entity must be provided. If a producer is now a
dissolved general partnership or joint venture, all members of the
general partnership or joint venture at the time of dissolution or
their duly-authorized representatives must sign the application for
payment.
(c) Producers associated with a dairy operation must submit a
timely application and comply with terms and conditions of this
subpart, instructions
[[Page 63672]]
issued by CCC and instructions contained in the Application to be
eligible for benefits under this subpart.
(d) As a condition to receive benefits under this part, a producer
must have been in compliance with the Highly Erodible Land Conservation
and Wetland Conservation provisions of 7 CFR part 12 for the 2005
calendar year, as applicable, and must not otherwise be barred from
receiving benefits under 7 CFR part 12 or any other law or regulation.
(e) Payments are limited to losses in eligible counties, in
eligible months.
(f) All payments under this part are subject to the availability of
funds.
(g) Eligible losses are determined from the applicable base month
that corresponds to the hurricane disaster or related condition and
must have occurred during the claim periods applicable to the disaster
as follows:
(1) For Hurricane Katrina and Hurricane Rita the base month is July
2005 and the corresponding claim period are the 2005 calendar months of
August through December; and
(2) For Hurricane Ophelia and Hurricane Wilma the base month is
September 2005 and the corresponding claim period are the 2005 calendar
months of October through December.
Sec. 1430.305 Proof of production.
(a) Evidence of production is required to establish the commercial
marketing and production history of the dairy operation so that dairy
production and spoilage losses can be computed in accordance with Sec.
1430.306.
(b) A dairy producer must, based on the instructions issued by the
Deputy Administrator, provide adequate proof of the dairy operation's
commercial production, including any dumped production and dairy cow
purchases, for each month of the applicable base month and claim period
that corresponds with the applicable 2005 hurricane disaster or related
condition, and must specifically identify any production during the
applicable claim period that is dumped. If a month other than the
applicable base month is used for base creation purposes, records for
that month must be provided.
(1) A producer must certify and provide such proof as requested
that losses for which compensation is claimed were hurricane-related
and occurred in an eligible county in an eligible month.
(2) Additional supporting documentation may be requested by CCC as
necessary to verify production or spoilage losses and dairy herd
increases or decreases to the satisfaction of CCC.
(c) Adequate proof of production history of the dairy operation
under paragraph (b) of this section must be based on milk marketing
statements obtained from the dairy operation's milk handler or
marketing cooperative. Supporting documents may include, but are not
limited to: Tank records, milk handler records, daily milk marketings,
copies of any payments received from other sources for production or
spoilage losses, or any other documents available to confirm or adjust
the production history and losses incurred by the dairy operation.
(d) Adequate proof of dairy cow additions to the milking herd
during the eligible months can include, but is not limited to sales
receipts, invoices, State health certificates, or any other documents
available to confirm the cow purchases.
(e) If adequate proof of normally marketed production, dumped
production, and any other production for relevant periods is not
presented to the satisfaction of CCC, the request for benefits will be
rejected. In the case of a new producer that had no verifiable, actual,
commercial production marketed by the dairy operation during the
applicable base month, but which suffered eligible losses, an alternate
base period may be established by the Deputy Administrator.
Sec. 1430.306 Determination of losses incurred.
(a) Eligible payable losses are calculated on a dairy operation by
dairy operation basis and are limited to those occurring during the
applicable claim period, as provided by Sec. 1430.304(g), that
corresponds with the hurricane-related disaster. Specifically, dairy
production and spoilage losses incurred by producers under this subpart
are determined on the established history of the dairy operation's
actual commercial production marketed during the applicable claim
period that corresponds with the hurricane-related disaster, and actual
production dumped or otherwise not marketed during that same claim
period, as provided by the dairy operation consistent with Sec.
1430.305. Except as otherwise provided in these regulations, the
starting base production, as defined in Sec. 1430.302 and established
in Sec. 1430.304(g), is adjusted downward by a percentage determined
by CCC to determine the base production for the applicable claim period
that corresponds to the hurricane-related disaster. These adjustments
are made to account for the seasonal declines that can occur during the
months within the claim period. The base production for each of the
applicable claim period months is calculated by reducing the starting
base production of the applicable base month, or alternate month
approved by the Deputy Administrator for new producers, as follows:
(1) August 2005 base production is the starting base production
reduced by 8 percent;
(2) September 2005 base production is the starting base production
reduced by 17 percent;
(3) October 2005 base production is the starting base production
reduced by 11 percent. However, if losses occurred only as a result of
Hurricanes Ophelia and Wilma, for October 2005, base production is not
reduced.
(4) November 2005 base production is the starting base production
reduced by 6 percent, unless eligible losses occurred only as a result
of Hurricanes Ophelia and Wilma, in which case, for November 2005, base
production is not reduced.
(5) December 2005 base production is not reduced by a downward
adjustment percentage.
(b) The eligible dairy production losses for a dairy operation for
each of the claim period months of August through December 2005, as
applicable, will be:
(1) The new base production for the dairy operation calculated
under paragraph (a) of this section less,
(2) For each such month for each dairy operation, the total of:
(i) Actual commercially-marketed production (not counting dumped
production counted under paragraph (b)(1)(ii) of this section); plus
(ii) The pounds of milk production dumped (whether related to the
hurricane or not), or otherwise not commercially marketed (whether
related to the hurricane or not). For dumping losses to be eligible for
payment, however, they must, as with other program losses, be hurricane
related, as described under paragraphs (c) and (d) of this section.
(c) Actual production losses may be adjusted to the extent the
reduction in production is not certified by the producer to be the
result of the hurricane or is determined by CCC not to be hurricane-
related. Actual production, as adjusted, that exceeds the adjusted base
production will mean that the dairy operation incurred no eligible
production losses for the corresponding month as a result of the
hurricane disaster, and that the production level for that month does
not qualify for a production loss payment under this program.
[[Page 63673]]
(d) Eligible dairy spoilage losses incurred by producers under this
subpart for each of the months August through December 2005, as
applicable to the claim period that corresponds with the hurricane-
related disaster, will be determined based on actual milk produced in
those months that was dumped on the farm as a result of the 2005
hurricanes, or other related condition. Proper documentation of milk
dumped on the farm as a result of spoilage due to a hurricane must be
provided to CCC as provided in Sec. 1430.305.
(e) Calculated production losses may be adjusted by CCC based on
the monthly average of daily dairy cow additions or reductions to the
milking herd during the applicable claim period that corresponds with
the hurricane-related disaster, to account for production adjustments
as a result of dairy cow purchases, sales, or death losses. Production
adjustments can be calculated using the average number of dairy cows in
a dairy operation's milking herd and the average production per cow
during each applicable month. Per-cow production averages during the
applicable claim period months will be determined based on the actual
per-cow production average during the base month applicable to the
hurricane-related disaster and reduced downward according to the
seasonal decline percentages provided in paragraph (a) of this section,
to determine the total production that may be credited back to the
dairy operation's total production losses. To qualify for the
production adjustment credit:
(1) Producers in eligible dairy operations must report any
increases to the dairy cow milking herd during the applicable base
month and claim period that corresponds to the hurricane disaster
condition to the eligible hurricane.
(2) Adequate supporting documentation according to Sec. 1430.305
must be provided to the satisfaction of the COC to verify any claims of
herd increases during the eligible period.
(3) Any cows purchased during the eligible period that would
increase the dairy cow milking herd must have been to offset production
losses as a result of the 2005 hurricanes, or other related condition.
(f) Eligible production and spoilage losses as otherwise determined
under paragraphs (a) through (e) of this section are added together to
determine total eligible losses incurred by the dairy operation subject
to all other eligibility requirements as may be included in this part
or elsewhere.
(g) Payment on eligible dairy operation losses is calculated using
whole pounds of milk. No double counting is permitted, and only one
payment will be made for each pound of milk calculated as an eligible
loss after the distribution of the operation's eligible production loss
among the producers of the dairy operation according to Sec.
1420.307(b). Payments under this part will not be affected by any
payments for dumped or spoiled milk that the dairy operation may have
received from its milk handler, or marketing cooperative, or any other
private party.
(h) If a producer is eligible to receive payments under this part
and benefits under any other program administered by the Department of
Agriculture (USDA) for the same losses, the producer must choose
whether to receive the other program benefits or payments under this
part, but shall not be eligible for both. The limitation on multiple
benefits prohibits a producer from being compensated more than once for
the same losses. If the other USDA program benefits are not available
until after an application for benefits has been filed under this part,
the producer may, to avoid this restriction on such other benefits,
refund the total amount of the payment to the FSA administrative office
from which the payment was received.
Sec. 1430.307 Rate of payment and limitations on funding.
(a) Subject to the availability of funds, the payment rate for
eligible production and spoilage losses determined according to Sec.
1430.306 is, depending on the State, the amount set forth below which
is derived from the monthly Mailbox milk price for the Florida, the
Southeast, Western Texas or the Appalachian States Marketing Orders as
reported by the Agricultural Marketing Service. Maximum payment rates
for eligible losses for dairy operations located in specific states are
as follows:
(1) Florida--$18.19 per hundredweight ($0.1819 per pound), which is
averaged to account for the mailbox price during the months of August
2005 and October 2005 when the hurricane disasters occurred.
(2) Louisiana--$16.47 per hundredweight ($0.1647 per pound), which
is averaged to account for the mailbox price during the months of
August 2005 and September 2005 when the hurricane disasters occurred.
(3) Alabama, Arkansas, Georgia and Mississippi--$16.49 per
hundredweight ($0.1649 per pound).
(4) North Carolina--$15.39 per hundredweight ($0.1539 per pound).
(5) Texas--$14.19 per hundredweight ($0.1419 per pound).
(6) Tennessee--$15.38 per hundredweight ($0.1538 per pound).
(b) Subject to the availability of funds, each eligible dairy
operation's payment is calculated by multiplying the applicable payment
rate under paragraph (a) of this section by the operation's total
eligible losses. Where there are multiple producers in the dairy
operation, individual producers' payments are disbursed according to
each producer's share of the dairy operation's production as specified
in the Application.
(c) If the total value of losses claimed under paragraph (b) of
this section exceeds the $17 million available for DDAP-II, less any
reserve that may be created under paragraph (e) of this section, total
eligible losses of individual dairy operations that, as calculated as
an overall percentage for the full disaster claim period that
corresponds with the applicable hurricane-related disaster (not a
monthly average for any one month), are greater than 20 percent of the
total base production for those applicable claim period months will be
paid at the maximum rate under paragraph (a) of this section to the
extent available funding allows. A loss of over 20 percent in only one
or two of the eligible months does not itself qualify for the maximum
per-pound payment. Total eligible losses for a producer, as calculated
under Sec. 1430.306, of less than or equal to 20 percent during the
eligible claim period will then be paid at a rate determined by
dividing the eligible losses of less than 20 percent by the funds
remaining after making payments for all eligible losses above the 20-
percent threshold.
(d) In no event shall the payment exceed the value determined by
multiplying the producer's total eligible loss times the average price
received for commercial milk production in their area as defined in
paragraph (a) of this section.
(e) A reserve may be created to handle pending or disputed claims,
but claims shall not be payable once the available funding is expended.
Sec. 1430.308 Availability of funds.
The total available program funds shall be $17 million as provided
by section 3014 of Title III of Public Law 109-234.
Sec. 1430.309 Appeals.
Any producer who is dissatisfied with a determination made pursuant
to this subpart may request reconsideration or appeal of such
determination in
[[Page 63674]]
accordance with the appeal regulations set forth at 7 CFR parts 11 and
780. Appeals of determinations of ineligibility or payment amounts are
subject to the limitations in Sec. Sec. 1430.307 and 1430.308 and
other limitations as may apply.
Sec. 1430.310 Misrepresentation and scheme or device.
(a) In addition to other penalties, sanctions or remedies as may
apply, a dairy producer shall be ineligible to receive assistance under
this program if the producer is determined by CCC to have:
(1) Adopted any scheme or device that tends to defeat the purpose
of this program;
(2) Made any fraudulent representation; or
(3) Misrepresented any fact affecting a program determination.
(b) Any funds disbursed pursuant to this part to any person or
operation engaged in a misrepresentation, scheme, or device, must be
refunded with interest together with such other sums as may become due.
Any dairy operation or person engaged in acts prohibited by this
section and any dairy operation or person receiving payment under this
subpart shall be jointly and severally liable with other persons or
operations involved in such claim for benefits for any refund due under
this section and for related charges. The remedies provided in this
subpart shall be in addition to other civil, criminal, or
administrative remedies that may apply.
Sec. 1430.311 Death, incompetence, or disappearance.
In the case of death, incompetency, disappearance, or dissolution
of a person that is eligible to receive benefits in accordance with
this subpart, such alternate person or persons specified in 7 CFR part
707 may receive such benefits, as determined appropriate by CCC.
Sec. 1430.312 Maintaining records.
Persons applying for benefits under this program must maintain
records and accounts to document all eligibility requirements specified
herein. Such records and accounts must be retained for 3 years after
the date of payment to the dairy operations under this program.
Destruction of the records after such date shall be at the risk of the
party imposed with the recordkeeping requirements by this subpart.
Sec. 1430.313 Refunds; joint and several liability.
(a) Excess payments, payments provided as the result of erroneous
information provided by any person, or payments resulting from a
failure to comply with any requirement or condition for payment under
the application or this subpart, must be refunded to CCC.
(b) A refund required under this section shall be due with interest
determined in accordance with paragraph (d) of this section and late
payment charges as provided in 7 CFR part 1403.
(c) Persons signing a dairy operation's application as having an
interest in the operation shall be jointly and severally liable for any
refund and related charges found to be due under this section.
(d) In accord with parts 792 and 1403 of this title, interest shall
be applicable to any refunds required under this subpart. Such interest
shall be charged at the rate the United States Department of the
Treasury charges CCC for funds, and shall accrue from the date FSA or
CCC made the erroneous payment to the date of repayment.
(e) CCC may waive the accrual of interest if it determines that the
cause of the erroneous determination was not due to any action of the
person, or was beyond the control of the person committing the
violation. Any waiver is at the discretion of CCC alone.
Sec. 1430.314 Miscellaneous provisions.
(a) CCC may offset or withhold any amount due CCC under this
subpart in accordance with 7 CFR part 1403.
(b) Payments or any portion thereof due under this subpart shall be
made without regard to questions of title under State law and without
regard to any claim or lien against the livestock or property of any
kind, or proceeds thereof, in favor of the owner or any other creditor
except agencies and instrumentalities of the U.S. Government.
(c) Any producer entitled to any payment under this part may assign
any payments in accordance with the provisions of 7 CFR part 1404.
Signed at Washington, DC, on October 25, 2006.
Thomas B. Hofeller,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. E6-18247 Filed 10-30-06; 8:45 am]
BILLING CODE 3410-05-P