[Code of Federal Regulations]
[Title 7, Volume 10]
[Revised as of January 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1466.26]

[Page 626-627]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER XIV--COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE
 
PART 1466--ENVIRONMENTAL QUALITY INCENTIVES PROGRAM--Table of Contents
 
                    Subpart B--Contracts and Payments
 
Sec.  1466.26  Contract violations and termination.

    (a)(1) If NRCS determines that a participant is in violation of the 
terms of a contract or documents incorporated by reference into the 
contract, NRCS shall give the participant a reasonable time, as 
determined by NRCS, to correct the violation and comply with the terms 
of the contract and attachments thereto. If a participant continues in 
violation, NRCS may terminate the EQIP contract.
    (2) Notwithstanding the provisions of paragraph (a)(1) of this 
section, a contract termination shall be effective immediately upon a 
determination by NRCS that the participant has submitted false 
information or filed a false claim, or engaged in any act, scheme, or 
device for which a finding of ineligibility for payments is permitted 
under the provisions of Sec.  1466.35, or in a case in which the actions 
of the party involved are deemed to be sufficiently purposeful or 
negligent to warrant a termination without delay.
    (b)(1) If NRCS terminates a contract, the participant will forfeit 
all rights for future payments under the contract and shall refund all 
or part of the payments received, plus interest determined in accordance 
with 7 CFR part 1403. NRCS may exercise the option of requiring only 
partial refund of the payments received if a previously installed 
conservation practice can function independently, is not adversely 
affected by the violation or the absence of other conservation practices 
that would have been installed under the contract, and the participant 
agrees to operate and maintain the installed conservation practice for 
the lifespan of the practice.
    (2) If NRCS terminates a contract due to breach of contract or the 
participant voluntarily terminates the contract, the participant will 
forfeit all rights for further payments under the contract and shall pay 
such liquidated damages as are prescribed in the contract. NRCS will 
have the option to waive the liquidated damages, depending upon the 
circumstances of the case.
    (3) When making contract termination decisions, NRCS may reduce the 
amount of money owed by the participant by a proportion that reflects 
the good faith effort of the participant to comply with the contract or 
the hardships beyond the participant's control that have prevented 
compliance with the contract.
    (4) The participant may voluntarily terminate a contract if NRCS 
determines that termination is in the public interest.

[[Page 627]]

    (5) In carrying out its role in this section, NRCS may consult with 
the local conservation district.