[Code of Federal Regulations]
[Title 7, Volume 10]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1412.305]

[Page 395-396]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER XIV--COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE
 
PART 1412_DIRECT AND COUNTER-CYCLICAL PROGRAM AND PEANUT QUOTA BUYOUT 
 
   Subpart C_Establishment of Yields for Direct and Counter-Cyclical 
                                Payments
 
Sec.  1412.305  Incorrect or false production evidence.

    (a) If production evidence is false or incorrect, as determined by 
the county committee, the county committee shall determine whether the 
owner or producer submitting the production evidence for a farm acted in 
good faith or took action to defeat the purpose of the program.
    (b)(1) If the county committee determines the production evidence 
submitted is false, incorrect, or unacceptable, and the owner or 
producer who submitted the evidence did not act in good faith or took 
action to defeat the purpose of the program, the county committee shall:
    (i) Require a refund of all direct and counter-cyclical payments 
earned for the farm for the first year such payments were made;
    (ii) Reduce the counter-cyclical payment yields for all crops on the 
farm to equal the direct payment yield for all crops except oilseeds. 
For all oilseeds on the farm, both the direct and counter-cyclical 
payment yields shall be reduced to 75 percent of the county average 
yield as determined in accordance with Sec.  1412.302(b)(4). That yield 
shall then be reduced by the applicable direct payment yield factor in 
accordance with Sec.  1412.302(a)(1); and
    (iii) Subject to paragraph (a)(2)(i) of this section, require a 
refund of an amount equal to the following for each covered commodity 
and peanuts for each year the false, incorrect or unacceptable yield was 
used to make payments under the contract:
    (A) The sum of the direct and counter-cyclical payments made using 
the false, incorrect or unacceptable evidence, minus
    (B) The sum of the direct and counter-cyclical payments that would 
have been made based on the yields established in paragraph (b)(1)(ii) 
of this section.
    (2) Notwithstanding paragraph (b)(1) of this section, if the county 
committee determines that the production evidence submitted is false, 
incorrect, or unacceptable, and the owner or producer who submitted the 
evidence did not act in good faith or took action to defeat the purpose 
of the program, the Deputy Administrator may take further action, 
including but not limited to any or all of the following:
    (i) Make a further yield reduction for part or all of the covered 
commodities and peanuts on the farm;
    (ii) Make further payment reductions or refunds;
    (iii) Determine that the owner or producer who submitted the 
evidence is ineligible for participation in future contracts; or
    (iv) Take other legal action.
    (c) If the county committee determines the production evidence 
submitted is false, incorrect, or unacceptable, and the owner or 
producer who submitted the evidence acted in good faith and did not take 
action to defeat the purpose of the program, the county committee shall:

[[Page 396]]

    (1) Correct the counter-cyclical yield for the applicable crop to 
equal the yield that would have been calculated in accordance with Sec.  
1412.303 based on accurate production evidence; and
    (2) Require a refund of an amount equal to the following for each 
covered commodity and peanuts for each year the false, incorrect or 
unacceptable yield was used to make payments under the contract:
    (i) The sum of the direct and counter-cyclical payments made using 
the false, incorrect or unacceptable evidence, minus
    (ii) The sum of the direct and counter-cyclical payments that would 
have been made based on the yields established in paragraph (c)(1) of 
this section.