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Livestock Indemnity Program and General Provisions for Supplemental Agricultural Disaster Assistance ProgramsJul 02, 2009 (Agriculture Department Documents and Publications/ContentWorks via COMTEX) -- SUMMARY: This rule implements the general eligibility provisions for all the supplemental agricultural disaster assistance programs authorized by the Food, Conservation, and Energy Act of 2008 (2008 Farm Bill) and the specific requirements for the Livestock Indemnity Program (LIP). LIP provides disaster assistance for livestock losses. LIP applies only to livestock owners and contract growers that had losses due to livestock deaths in excess of normal mortality due to adverse weather during the calendar year, including losses due to hurricanes, floods, blizzards, disease, wildfires, extreme heat, and extreme cold. Eligible LIP losses must have occurred on or after January 1, 2008, and before October 1, 2011. This rule specifies how the LIP payments are calculated and when producers may apply for benefits. This rule also removes some outdated rules from the Code of Federal Regulations (CFR). DATES: Effective Date: July 13, 2009. FOR FURTHER INFORMATION CONTACT: Scotty Abbott, Production, Emergencies, and Compliance Division, Farm Service Agency (FSA), United States Department of Agriculture, STOP 0517, 1400 Independence Avenue, SW., Washington, DC 20250-0517; telephone (202) 720-7997; e-mail [email protected]. Persons with disabilities who require alternative means for communication (Braille, large print, audio tape, etc.) should contact the USDA Target Center at (202) 720 2600 (voice and TDD). SUPPLEMENTARY INFORMATION: This rule implements the general eligibility provisions for the supplemental agricultural disaster assistance programs authorized by the 2008 Farm Bill (Pub. L. 110-246). Sections 12033 and 15101 of the 2008 Farm Bill authorize the Secretary of Agriculture (Secretary) to assist producers who have had crop and livestock losses due to adverse weather. FSA will provide assistance through five different programs: * Livestock Indemnity Program (referred to as Livestock Indemnity Payments in the Farm Bill), * Livestock Forage Disaster Program (LFP), * Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish (ELAP), * Supplemental Revenue Assistance Payments Program (SURE) (which covers general crop production losses, but not those covered by LFP), and * Tree Assistance Program (TAP). This rule implements the first of these programs, LIP, in 7 CFR part 760, subpart E. The 2008 Farm Bill sets, however, common eligibility requirements for the programs. The general provisions for supplemental agricultural disaster assistance programs will be implemented in regulations in 7 CFR part 760, subpart B. Specific provisions for the other programs, LFP, SURE, ELAP, and TAP, will be implemented through separate rulemakings. Where practical, these programs will be implemented to be similar to previous ad hoc disaster assistance programs. For example, LIP will be similar to the previous LIP regulations that were in 7 CFR part 760, subpart E. Currently, for LIP, the 2008 Farm Bill authorizes the Secretary to assist eligible livestock producers on farms that have had livestock death losses in excess of the normal mortality due to adverse weather. The supplemental agricultural disaster assistance programs will be administered by FSA using funds from the Agricultural Disaster Relief Trust Fund established under section 902 of the Trade Act of 1974 (19 U.S.C. 2497a). The disaster assistance programs authorized by the 2008 Farm Bill are permanent or "standing" programs that have similar scope to the previous ad hoc programs. The programs are provided for in two separate places in the 2008 Farm Bill. First, there is section 12033, which adds a new section 531 to the Federal Crop Insurance Act (7 U.S.C. 1501-1524). Second, there is section 15101, which adds section 902 of the Trade Act of 1974. The provisions of the two sections as enacted were identical except that the Trade Act of 1974 provisions contained the trust fund provisions. Since then, there have been some amendments, but the two sections of the 2008 Farm bill are considered to be interchangeable for the purposes of this rule. General Eligibility Requirements Payment Limits The 2008 Farm Bill limits how much a producer may receive from FSA disaster assistance programs. In applying payment limitation for 2008, no person, as defined and determined by the regulations in 7 CFR part 1400 in effect for 2008, may receive more than $100,000: * Total per crop year under ELAP, LFP, LIP and SURE * Per program years under TAP. For 2009 through 2011, no person or legal entity (excluding a joint venture or general partnership), as defined and determined by the regulations in 7 CFR part 1400 may receive, directly or indirectly, more than $100,000: * Total per crop year under ELAP, LFP, LIP and SURE * Per program years under TAP. For this purpose, both indirect and direct benefits are counted by attribution. In the case of a legal entity, the same payment is attributed to the direct payee in the full amount and those that have an indirect interest to the amount of the interest. For example, under the attribution rules that applies to these programs, assume: * Corporation A is in line to receive a $100,000 SURE payment, * Corporation A is owned 50 percent by Individual A and 50 percent by Corporation B, and * Corporation B is owned by Individual B with a 30 percent interest and by Individual C with a 70 percent interest. If so, Corporation A, for payment limitation purposes would be considered to have received $100,000 and Individual C (who owns 70 percent of Corporation B, which owns half of Corporation A) would be considered to have indirectly benefitted by the amount of $35,000 (50 percent times 70 percent of the $100,000). Even though no part of the $100,000 was actually paid to Individual C, the amount of $35,000 would count against individual C's overall payment limitation from all sources and farms. Assume Individual C was already at the maximum payment limit, Individual C would not have been eligible to receive $35,000; as a result, the payment to Corporation A would be reduced by $35,000. The amount of any payment for which a participant may be eligible under any of these programs may be reduced by any amount received by the participant for the same or any similar loss from any Federal disaster assistance program. In applying the limitation on average adjusted gross income (AGI) for 2008, an individual or entity is ineligible for payment under ELAP, LFP, LIP, SURE, and TAP if the individual's or entity's average AGI exceeds $2.5 million for 2007, 2006, and 2005 under the provisions in 7 CFR part 1400 in effect for 2008. For 2009 through 2011, the average AGI limitation provisions in 7 CFR part 1400 applicable to Commodity Credit Corporation (CCC) commodity programs also apply to ELAP, LFP, LIP, SURE, and TAP. Specifically, as specified in the 2008 Farm Bill, for 2009 through 2011, a person or legal entity with an average adjusted gross nonfarm income, as defined in 7 CFR 1400.3, that exceeds $500,000 for the relevant period will not be eligible to receive payments under these programs. Likewise, if a person with an indirect interest in a legal entity has an average nonfarm AGI over $500,000, then the payment to the legal entity will be reduced as calculated based on the percent of interest in the legal entity receiving the payment. For example, continuing with the assumptions in the example above, if Individual B had an average AGI that was over the limit, then the payment to Corporation A will be reduced by 15 percent (Individual B's 30 percent interest in Corporation B times Corporation B's 50 percent interest in Corporation A). Payment and average AGI limits will be determined under regulations specified in 7 CFR part 1400 for Commodity Credit Corporation (CCC) commodity programs. The programs covered in this final rule are not CCC programs, but the CCC regulations in 7 CFR part 1400 are adopted for these programs. The relevant AGI period for these programs is the 3 calendar years that precede the program year involved. For livestock losses, the program year is the calendar year of the loss of the livestock. For SURE, the program year is the year that corresponds to the relevant crop year. The crop year concept in some limited cases can involve a loss that occurs in a different calendar year than the calendar year whose number corresponds to the crop year. For example, wheat for the 2009 crop year can be planted in the fall of 2008 and be lost during 2008. SURE payments related to such a loss would be made in calendar year 2009. The regulations in 7 CFR 1400.105 specify how payments will be attributed and how far the attribution will go. Attribution will be tracked through four levels of ownership in legal entities. The 2008 Farm Bill removed the previous "3 entity rule," so a person can now receive benefits attributed through an unlimited number of entities, subject to the payment limits and the rules of attribution described in this final rule and in 7 CFR part 1400. In addition to these limits, the 2008 Farm Bill imposes limitations of payments to foreign persons. Those limits are specified in the regulations in SEC 760.103. Risk Management Purchase Requirement --This is a summary of a Federal Register article originally published on the page number listed below-- Final rule. CFR Part: "7 CFR Part 760" RIN Number: "RIN 0560-AH95" Citation: "74 FR 31567" Federal Register Page Number: "31567" "Rules and Regulations" |