[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: 7CFR1465.25]

[Page 658]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER XIV--COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE
 
PART 1465_AGRICULTURAL MANAGEMENT ASSISTANCE--Table of Contents
 
                           Subpart B_Contracts
 
Sec.  1465.25  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 will give the participant a reasonable time, as 
determined by the State Conservationist, to correct the violation and 
comply with the terms of the contract and attachments thereto. If a 
participant continues in violation, the State Conservationist may 
terminate the AMA Program contract.
    (2) Notwithstanding the provisions of paragraph (a)(1) of this 
section, a contract termination shall be effective immediately upon a 
determination by the State Conservationist that the participant has 
submitted false information or filed a false claim, or engaged in any 
act for which a finding of ineligibility for payments is permitted under 
the provisions of Sec.  1465.35, 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 shall 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 part 1403 of this chapter. The State Conservationist has the option 
of requiring only partial refund of the payments received if the State 
Conservationist determines that a previously installed conservation 
practice can function independently, is not affected by the violation or 
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 life span of the practice.
    (2) If NRCS terminates a contract due to breach of contract or the 
participant voluntarily terminates the contract before any contractual 
payments have been made, the participant shall forfeit all rights for 
further payments under the contract and shall pay such liquidated 
damages as are prescribed in the contract. The State Conservationist 
will have the option to waive the liquidated damages depending upon the 
circumstances of the case.
    (3) When making all contract termination decisions, NRCS may reduce 
the amount of money owed by the participant by a proportion which 
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 
agrees based on NRCS's determination that termination is in the public 
interest.
    (5) In carrying out NRCS's role in this section, NRCS may consult 
with the local conservation district.