[Federal Register Volume 85, Number 184 (Tuesday, September 22, 2020)]
[Rules and Regulations]
[Pages 59380-59388]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20844]
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DEPARTMENT OF AGRICULTURE
Office of the Secretary
7 CFR Part 9
[Docket ID: FSA-2020-0006]
RIN 0503-AA65
Coronavirus Food Assistance Program
AGENCY: Office of the Secretary, USDA.
ACTION: Final rule.
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SUMMARY: The Secretary of Agriculture is issuing this rule to provide
additional assistance under the Coronavirus Food Assistance Program
(CFAP) to agricultural producers who continue to be impacted by the
effects of the COVID-19 outbreak. This rule specifies the eligibility
requirements, payment calculations, and application procedures for a
second round of payments (CFAP 2). In addition, it also extends the
special payment limitation provisions to trusts and estates for CFAP 1
and amends the provisions regarding applicable year and direct
attribution of payments to members of legal entities that qualify for
the increased payment limitation.
DATES: Effective September 22, 2020.
FOR FURTHER INFORMATION CONTACT: William L. Beam; telephone: (202) 720-
3175; email: Bill.Beam@usda.gov. Persons with disabilities who require
alternative means for communication should contact the USDA Target
Center at (202) 720-2600 (voice).
SUPPLEMENTARY INFORMATION:
Background
In response to the COVID-19 outbreak, USDA implemented CFAP through
a final rule published in the Federal Register on May 21, 2020 (85 FR
30825-30835), with corrections published in the Federal Register on
June 12, 2020 (85 FR 35799-35800), July 10, 2020 (85 FR 41328-41330),
August 14, 2020 (85 FR 49593-49594), and documents published in the
Federal Register on May 22, 2020 (85 FR 31062-31065), June 12, 2020 (85
FR 35812), July 10, 2020 (85 FR 41321-41323), and August 14, 2020 (85
FR 49589-49593). The application period for the first round of CFAP
payments (referred to in this rule and hereinafter as CFAP 1) was May
26, 2020, through September 11, 2020.
In this final rule, USDA is implementing a second round of payments
under CFAP (CFAP 2) for producers of agricultural commodities who face
continuing market disruptions, low farm-level prices, and significant
marketing costs. These additional significant marketing costs are
associated with declines in demand, surplus production, and disruptions
to shipping patterns and the orderly marketing of commodities.
CFAP 2 will provide eligible producers with financial assistance
that gives them the ability to absorb increased marketing costs
associated with the COVID-19 outbreak. In accordance with 15 U.S.C.
714b, the Secretary is using funds of the Commodity Credit Corporation
(CCC) to assist producers with the purchase of materials and facilities
required in connection with the production and marketing of
agricultural commodities, with an estimated $13.21 billion being made
available. These funds will be used as authorized by sections 5(b),
(d), and (e) of the CCC Charter Act (15 U.S.C. 714c(b), (d), and (e)).
These authorities will be used to partially compensate producers for
on-going market disruptions and assist with the transition to a more
orderly marketing system by enabling them to:
Purchase materials and facilities required in connection
with the production and marketing of agricultural commodities;
Remove or dispose of surplus agricultural commodities; and
Develop new and additional markets, marketing facilities,
and uses for the commodities.
Funds available under 15 U.S.C. 714c(b), (d), and (e) cannot be
used to provide assistance for tobacco; however, tobacco will be
eligible for CFAP 2 with payments funded by remaining funds authorized
by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act;
Pub. L. 116-136).
Payments
CFAP 2 payments will be made for three categories of commodities:
1. Price trigger commodities (major commodities that meet a minimum
5-percent price decline over a specified time period);
2. Flat-rate crops; and
3. Sales commodities.
Eligible price trigger commodities include barley, corn, sorghum,
soybeans, sunflowers, upland cotton, wheat (all classes), broilers,
eggs, beef cattle, dairy, hogs and pigs, and lambs and sheep. Price
trigger commodities are commodities that had a 5 percent or greater
price decline due to COVID-19 in a comparison of the average price for
the week of January 13-17, 2020, and the average price for the week of
July 27-31, 2020. For price trigger crops, payments will be based on
eligible acres of the crop, which are the producer's share of 2020
determined acres if established by FSA, or reported acres on FSA-578 if
determined acres have not been established by FSA, excluding prevented
planting and experimental acres. Payments for price trigger crops will
be the greater of: (1) The eligible acres multiplied by a payment rate
of $15 per acre; or (2) the eligible acres multiplied by a nationwide
crop marketing percentage, multiplied by a crop-specific payment rate,
and then by
[[Page 59381]]
the producer's weighted 2020 Actual Production History (APH) approved
yield, or if the APH is not available, 85 percent of the 2019
Agriculture Risk Coverage-County Option (ARC-CO) benchmark yield for
that crop. For broilers and eggs, payments will be based on 75 percent
of the producer's 2019 production. For dairy, payments will be based on
April 1 to August 31, 2020, actual milk production and September 1,
2020, to December 31, 2020, estimated milk production (based on the
producer's daily average production from April 1 to August 31, 2020,
multiplied by the number of days the dairy operation commercially
markets milk from September 1, 2020, through December 31, 2020). For
price-triggered livestock, payments will be based on a fixed number of
head, which is defined as the lower of the maximum owned inventory of
eligible livestock, excluding breeding stock, on a date selected by the
eligible producer from April 16, 2020, through August 31, 2020, or a
specific number of head (4,546 head of cattle or 10,870 head of hogs).
In the payment calculation, the maximum number of head of cattle and
hogs, respectively, will be multiplied by the number of payment
limitations for the producer.
Flat-rate crops are crops that either do not meet the 5-percent
price decline trigger noted above or do not have data available to
calculate a price change, but will have CFAP 2 payments calculated
based on eligible acres of the crop planted in 2020, similar to price
trigger crops. Eligible flat-rate crops include alfalfa, Extra Long
Staple (ELS) cotton, oats, peanuts, and rice, as well as some crops
with relatively small acreage--such as amaranth grain, buckwheat,
canola, crambe (colwort), einkorn, emmer, flax, guar, hemp, indigo,
industrial rice, kenaf, Khorasan, millet, mustard, oats, peanuts,
quinoa, rice, sweet rice, wild rye, safflower, sesame, speltz, sugar
beets, sugarcane, teff, triticale, and rapeseed. For flat-rate crops,
payments will be computed by multiplying: (1) The producer's share of
reported or determined 2020 planted acres of the crop, excluding
prevented planted and experimental acres, by (2) $15 per acre.
The sales commodities category includes:
Aquaculture grown in a controlled environment;
Nursery crops and floriculture;
Other livestock (excluding breeding stock) not included
under the price trigger category that were grown for food, fiber, fur,
or feathers;
Other crops not included in the price trigger and flat-
rate categories, including tobacco;
Goat milk;
Mink (including pelts);
Mohair; and
Wool.
Payment calculations for the sales commodities will use a sales-
based approach based on five payment gradations associated with the
producer's 2019 sales of the commodity.
Payments cannot be calculated using the methods described above for
producers of broilers, eggs, and sales commodities who began farming in
2020 and had no 2019 production or sales. Payments for such producers
will be based on the producer's actual 2020 production or sales as of
the date the producer submits an application for payment.
Eligibility
Only commercially produced commodities are eligible.
Producer must be in the business of farming at the time of
application.
Hay, except alfalfa, and crops intended for grazing are ineligible
for CFAP 2 and will not receive a CFAP 2 payment. Crops with intended
uses of green manure and left standing are also ineligible.
Contract growers are ineligible for CFAP 2 and will not receive a
CFAP 2 payment.
Average Adjusted Gross Income Limitation and Payment Limitation
A person or legal entity, other than a joint venture or general
partnership, is ineligible for payments if the person's or legal
entity's average adjusted gross income (AGI), using the average of the
adjusted gross incomes for the 2016, 2017 and 2018 tax years, is more
than $900,000, unless at least 75 percent of that person's or legal
entity's average AGI is derived from farming, ranching, or forestry-
related activities. If at least 75 percent of the person's or legal
entity's AGI is derived from farming, ranching, or forestry-related
activities and the participant provides the required certification and
documentation, the person or legal entity is eligible to receive CFAP
payments up to the applicable payment limitation.
With respect to joint ventures and general partnerships, this AGI
provision will be applied to each member of the joint venture and
general partnership.
CFAP 2 payments are subject to a per person and legal entity
payment limitation of $250,000. This payment limitation is separate
from the CFAP 1 payment limitation, and it applies to the total amount
of CFAP 2 payments made with respect to all eligible commodities under
all three categories.
This rule also amends the special payment limitations in Sec.
9.7(e) for both CFAP 1 and CFAP 2. Previously, the special payment
limitation provisions applied to corporations, limited liability
companies, and limited partnerships. Those corporate entities may
receive up to $750,000 in CFAP 1 payments based on the number of
shareholders or members (not to exceed three shareholders or members)
who are contributing at least 400 hours of active personal labor or
active personal management or combination thereof with respect to the
operation of the corporate entity.
This change amends the CFAP general provisions to extend those
special payment limitation provisions to trusts and estates, allowing
them to be eligible for the optional payment limitation increase based
on the labor or management contributions of the beneficiaries or heirs
of such trusts and estates. Extending these provisions to trusts and
estates is necessary to recognize that, similar to members, partners,
and stockholders of corporate entities, beneficiaries and heirs of
trusts and estates may contribute at least 400 hours of active personal
labor or active personal management or a combination thereof.
Furthermore, trusts and estates are also affected by the price declines
caused by COVID-19.
This rule also changes the method by which payments under the
special payment limitation provisions are attributed to individuals and
legal entities for both CFAP 1 and CFAP 2. The increased CFAP payment
limitation for corporations, limited liability companies, limited
partnerships, trusts, and estates based on contributions of at least
400 hours of active personal labor or active personal management or
combination thereof is unlike the payment limitation under any other
program administered by FSA. FSA's method of attributing CFAP payments
based on ownership share of the legal entity in accordance with 7 CFR
1400.105, which applies to other FSA-administered programs subject to
payment limitation, creates inequity when the pay limit for the legal
entity is increased under the special provisions but not increased for
each member of the entity.
Under 7 CFR 1400.105 for attributing payments for most commodity
programs, the maximum amount that a legal entity could receive is
limited by the maximum amount each eligible member may receive
(directly or indirectly) based on ownership interest
[[Page 59382]]
in the legal entity, which is $250,000. For example, under current
attribution rules, a corporation that qualifies for the increased
limitation of $500,000 may only receive $450,000 when stockholders have
unequal ownership shares in the legal entity. In this example,
Stockholder A holds 60 percent ownership share and Stockholder B holds
40 percent ownership share. The payment to the legal entity is
determined by multiplying each stockholder's ownership interest by the
payment limitation of the corporation. (For Stockholder A, 60 percent x
$500,000 = $300,000 (not to exceed $250,000); for Stockholder B, 40
percent x $500,000 = $200,000). The maximum payment to the legal entity
in this case is $450,000 ($250,000 + $200,000). With the change to
attribution in this rule applicable to CFAP 1 and CFAP 2, the payment
to the legal entity qualifying for the increased payment limitation
will not be reduced for ownership share, except for ineligibility or
prior payments to a member, stockholder, partner, heir or beneficiary.
The correction in how FSA attributes and limits CFAP payments under the
special provisions to the members of the legal entity provides the
ability for the legal entity to receive the maximum amount, not to
exceed $500,000 or $750,000 as applicable, under the increased payment
limitation, regardless of the ownership interests of the members,
partners, and stockholders, beneficiaries, or heirs contributing at
least 400 hours of active personal labor or active personal management.
However, a member, stockholder, partner, beneficiary, or heir cannot
receive, directly or indirectly, more than $250,000 under each round of
payments (CFAP 1 and CFAP 2), regardless of whether payments attributed
to them are subject to the regular payment limitation or the special
increased limitations.
This rule removes ``2019'' as the applicable commodity year in
Sec. 9.7(e)(2)(ii) and (iii) because CFAP eligibility may be based on
2019 or 2020 production of the commodity, as specified in the
applicable payment calculations.
CFAP General Requirements
The general eligibility requirements that applied to CFAP 1 also
apply to CFAP 2, including requiring compliance with 7 CFR part 12,
``Highly Erodible Land and Wetland Conservation'' and 7 CFR part 1400
subpart E, ``Foreign Persons.'' Appeal regulations in 7 CFR parts 11
and 780 also apply to CFAP 2.
As under CFAP 1, there is no requirement to have crop insurance
coverage or coverage under the Noninsured Crop Disaster Assistance
Program (NAP) for an eligible CFAP commodity to be eligible for CFAP 2.
Application Process
FSA will be responsible for implementing CFAP 2. FSA will accept
CFAP 2 applications beginning September 21, 2020, and ending December
11, 2020. To apply for CFAP 2 payments, producers must submit a
completed CFAP 2 application either in person, by mail, email, or
facsimile to an FSA county office. A producer who applies must submit
additional documentation for eligibility, such as certifications of
compliance with adjusted gross income provisions and conservation
compliance activities; those additional documents and forms must be
submitted no later than 60 days from the date a producer signs the
application. Payments will not be made until all necessary eligibility
documentation is received, and will be reduced or not issued to the
individuals or members of the entity when the documentation is not
submitted timely. Producers who are applying for payment for price
trigger or flat-rate crops must file a report of all acreage for the
crop on FSA-578, Report of Acreage.
If supporting documentation is requested to verify the information
specified on the application, the producer must provide records that
substantiate the reported information. Examples of supporting
documentation include evidence provided by the producer that is used to
substantiate the acres, sales, inventory, or production reported,
including copies of receipts, ledgers of income, income statements of
deposit slips, veterinarian records, register tapes, invoices for
custom harvesting, and records to verify production costs,
contemporaneous measurements, truck scale tickets, or contemporaneous
diaries that are determined acceptable by USDA.
Provisions Requiring Refund to USDA
In the event that any application for a CFAP 2 payment resulted
from erroneous information reported by the producer, the payment will
be recalculated, and the producer must refund any excess payment to
USDA. If the error was the producer's error, the refund must include
interest \1\ to be calculated from the date of the disbursement to the
producer.
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\1\ The program interest rate is based on the CCC borrowing rate
in effect for the month the payment was disbursed.
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If USDA determines that the producer's application misrepresented
either the total amount or producer's share of the acres, production,
head of livestock, or sales, or if the CFAP 2 payment would exceed the
payment as calculated based on the correct share of the acres,
production, head of livestock, or sales, the application will be
disapproved and the participant must refund to USDA all CFAP 2 payments
made to the producer with interest from the date of disbursement.
Any required refunds must be resolved in accordance with debt
settlement regulations in 7 CFR part 3.
Other Changes
In addition to the changes necessary to implement CFAP 2, USDA is
moving definitions and payment calculation provisions that are specific
to CFAP 1 to a new subpart B. This change is for organizational
purposes only; this rule does not change those definitions and
provisions.
This rule also adds a definition of ``controlled environment'' in
Sec. 9.2. This definition is consistent with how the term has been
interpreted for the administration of CFAP 1 and for other FSA disaster
programs (see FSA handbook for CFAP 1 and the NAP handbook, found under
Disaster Assistance on the following web page: https://www.fsa.usda.gov/programs-and-services/laws-and-regulations/handbooks/index); it is added only to provide clarity.
Notice and Comment and Effective Date
The Administrative Procedure Act (5 U.S.C. 553(a)(2)) provides that
the notice and comment and 30-day delay in the effective date
provisions do not apply when the rule involves specified actions,
including matters relating to benefits. This rule governs CFAP for
payments to certain commodity producers and therefore falls within the
benefits exemption.
The Office of Management and Budget (OMB) designated this rule as
major under the Congressional Review Act (CRA), as defined by 5 U.S.C.
804(2). Section 808 of the CRA allows an agency to make a major
regulation effective immediately if the agency finds there is good
cause to do so. The beneficiaries of this rule have been significantly
impacted by the COVID-19 outbreak, which has resulted in significant
declines in demand and market disruptions. USDA finds that notice and
public procedure are contrary to the public interest. Therefore, even
though this rule is a major rule for purposes of the Congressional
Review Act, USDA is not
[[Page 59383]]
required to delay the effective date for 60 days from the date of
publication to allow for Congressional review. Accordingly, this rule
is effective upon publication in the Federal Register.
Executive Orders 12866, 13563, and 13777
Executive Order 12866, ``Regulatory Planning and Review,'' and
Executive Order 13563, ``Improving Regulation and Regulatory Review,''
direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). Executive Order 13563 emphasizes the importance
of quantifying both costs and benefits, of reducing costs, of
harmonizing rules, and of promoting flexibility. The requirements in
Executive Orders 12866 and 13563 for the analysis of costs and benefits
apply to rules that are determined to be significant. Further,
Executive Order 13777, ``Enforcing the Regulatory Reform Agenda,''
established a federal policy to alleviate unnecessary regulatory
burdens on the American people.
The Office of Management and Budget (OMB) designated this rule as
economically significant under Executive Order 12866, ``Regulatory
Planning and Review,'' and therefore, OMB has reviewed this rule. The
costs and benefits of this rule are summarized below. The full cost
benefit analysis is available on regulations.gov.
Cost Benefit Analysis Summary
CFAP 2 will provide producers with financial assistance that gives
them the ability to absorb increased marketing costs associated with
the COVID-19 outbreak. Producers will receive payments under the CCC
Charter Act (section 5(b), (d), and (e)) with an estimated $13.21
billion being made available (after payment limitations).
Producers will be compensated for on-going market disruptions and
to transition to a more orderly marketing system. Payments will assist
producers with the purchase of materials and facilities required in
connection with the production and marketing of agricultural
commodities, aid in the removal or disposition of surplus agricultural
commodities, and aid in the development of new and additional markets,
marketing facilities, and uses for such commodities.
For the price trigger commodities, the approach to calculating CFAP
2 payments is very similar to that used for CFAP 1 (which covered
Quarter 1 of 2020), although the focus now is on Quarter 2 through
Quarter 4 of calendar 2020. Payments are based on the price decline
calculated between mid-January and late-July and use an 80 percent
coverage factor. Where available, mid-January and late July futures
prices (for either the November or December contract) were used to
estimate the market's price expectations toward the end of calendar
2020. Future contracts are not traded for all crops with a price
trigger nor are they available for eggs, broilers, and lamb. For these
commodities, actual prices received in mid-January and late July are
used as a proxy. Depending on the yield for a given producer's crop in
this category, the payment may calculate to less than $15 per acre. In
such cases, the payment is raised to $15 per acre, which is the payment
for the flat-rate category discussed below.
Producers of the flat-rate commodities receive a $15 per-acre
payment based on their eligible 2020 acreage.
For the sales-based commodities, payment calculations will use a
sales-based approach, where producers are paid based on five payment
gradations associated with their 2019 sales. In addition, tobacco is a
sales-based commodity under CFAP 2 and a CARES Act payment will be
calculated using remaining CARES Act funds, not to exceed $100 million.
Estimated net payments to producers of $13.21 billion represent
benefits to producers, which is the government cost of CFAP 2. Outlays
are estimated at expected maximum levels.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by
the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA,
Pub. L. 104-121), generally requires an agency to prepare a regulatory
flexibility analysis of any rule whenever an agency is required by the
Administrative Procedure Act or any other law to publish a proposed
rule, unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
This rule is not subject to the Regulatory Flexibility Act because USDA
is not required by the Administrative Procedure Act or any other law to
publish a proposed rule for this rulemaking initiative.
Environmental Review
The environmental impacts of this final rule have been considered
in a manner consistent with the provisions of the National
Environmental Policy Act (NEPA), the regulations of the Council on
Environmental Quality (40 CFR parts 1500-1508), and because USDA will
be making the payments to producers the USDA regulations for compliance
with NEPA (7 CFR part 1b).
Although OMB has designated this rule as ``economically
significant'' under Executive Order 12866, ``. . . economic or social
effects are not intended by themselves to require preparation of an
environmental impact statement'' when not interrelated to natural or
physical environmental effects (see 40 CFR 1508.14). CFAP 2 was
designed to avoid skewing planting decisions. Producers continue to
make their planting and production decisions with the market signals in
mind, rather than any expectation of what a new USDA program might look
like. The discretionary aspects of CFAP 2 (for example, determining AGI
and payment limitations) were designed to be consistent with
established USDA and CCC programs and are not expected to have any
impact on the human environment, as CFAP 2 payments will only be made
after the commodity has been produced. Accordingly, the following
Categorical Exclusion in 7 CFR part 1b applies: 1b.3(2), which applies
to activities that deal solely with the funding of programs, such as
program budget proposals, disbursements, and the transfer or
reprogramming of funds. As such, the implementation of and
participation in CFAP 2 do not constitute major Federal actions that
would significantly affect the quality of the human environment,
individually or cumulatively. Therefore, an environmental assessment or
environmental impact statement for this regulatory action, will not be
prepared; this rule serves as documentation of the programmatic
environmental compliance decision for this federal action.
Executive Order 12372
Executive Order 12372, ``Intergovernmental Review of Federal
Programs,'' requires consultation with State and local officials that
would be directly affect by proposed Federal financial assistance. The
objectives of the Executive Order are to foster an intergovernmental
partnership and a strengthened Federalism, by relying on State and
local processes for State and local government coordination and review
of proposed Federal Financial assistance and direct Federal
development. For reasons specified in the final rule related notice to
7 CFR part 3015, subpart V (48 FR 29115, June 24, 1983), the programs
and activities within this rule are excluded from the
[[Page 59384]]
scope of Executive Order 12372, which requires intergovernmental
consultation with State and local officials.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, ``Civil
Justice Reform.'' This rule will not preempt State or local laws,
regulations, or policies unless they represent an irreconcilable
conflict with this rule. Before any judicial action may be brought
regarding the provisions of this rule, the administrative appeal
provisions of 7 CFR parts 11 and 780 must be exhausted.
Executive Order 13132
This rule has been reviewed under Executive Order 13132,
``Federalism.'' The policies contained in this rule do not have any
substantial direct effect on States, on the relationship between the
Federal government and the States, or on the distribution of power and
responsibilities among the various levels of government, except as
required by law. Nor does this rule impose substantial direct
compliance costs on State and local governments. Therefore,
consultation with the States is not required.
Executive Order 13175
This rule has been reviewed for compliance with Executive Order
13175, ``Consultation and Coordination with Indian Tribal
Governments.'' Executive Order 13175 requires Federal agencies to
consult and coordinate with Tribes on a government-to-government basis
on policies that have Tribal implications, including regulations,
legislative comments proposed legislation, and other policy statements
or actions that have substantial direct effects on one or more Indian
Tribes, on the relationship between the Federal Government and Indian
Tribes or on the distribution of power and responsibilities between the
Federal government and Indian Tribes.
USDA has assessed the impact of this rule on Indian Tribes and
determined that this rule does not, to our knowledge, have Tribal
implications that required Tribal consultation under Executive Order
13175. If a Tribe requests consultation, the USDA Office of Tribal
Relations (OTR) will ensure meaningful consultation is provided where
changes, additions, and modifications are not expressly mandated by
Congress.
Outside of Tribal consultation, USDA is working with Tribes to
provide information about CFAP 2 and other issues.
The Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Pub. L.
104-4) requires Federal agencies to assess the effects of their
regulatory actions on State local, and Tribal governments or the
private sector. Agencies generally must prepare a written statement,
including a cost benefit analysis, for proposed and final rules with
Federal mandates that may result in expenditures of $100 million or
more in any 1 year for State, local, or Tribal governments, in the
aggregate, or to the private sector. UMRA generally requires agencies
to consider alternatives and adopt the more cost effective or least
burdensome alternative that achieves the objectives of the rule. This
rule contains no Federal mandates, as defined in Title II of UMRA, for
State, local, and Tribal governments or the private sector. Therefore,
this rule is not subject to the requirements of sections 202 and 205 of
UMRA.
Federal Assistance Programs
The title and number of the Federal Domestic Assistance Program
found in the Catalog of Federal Domestic Assistance to which this rule
applies is Coronavirus Food Assistance Program 2 and 10.132.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995, FSA
submitted the CFAP 2 information collection request to OMB for
emergency approval. OMB approved the 6-month emergency information
collection.
E-Government Act Compliance
USDA is committed to complying with the E-Government Act to promote
the use of the internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
List of Subjects in 7 CFR Part 9
Agricultural commodities, Agriculture, Disaster assistance,
Indemnity payments.
For the reasons discussed above, this final rule amends 7 CFR part
9 as follows:
PART 9--CORONAVIRUS FOOD ASSISTANCE PROGRAM
0
1. The authority citation for part 9 continues to read as follows:
Authority: 15 U.S.C. 714b and 714c; and Division B, Title I,
Pub. L. 116-136.
Sec. Sec. 9.1 through 9.8 [Redesignated as Subpart A]
0
2. Redesignate Sec. Sec. 9.1 through 9.8 as subpart A and add a
heading for subpart A to read as follows:
Subpart A--General Provisions
0
3. In Sec. 9.1 amend paragraph (a) introductory text by adding two
sentences after the second sentence to read as follows:
Sec. 9.1 Applicability and administration
(a) * * * CFAP is being implemented through two rounds of payments,
with the first round (CFAP 1) determined as specified in subpart B of
this part, and the second round (CFAP 2) determined as specified in
subpart C of this part. To be eligible for CFAP payments, participants
must comply with all provisions under this subpart and the relevant
particular subpart for CFAP 1 or CFAP 2. * * *
* * * * *
0
4. Amend Sec. 9.2 by:
0
a. In the introductory text, removing the word ``CFAP'' and adding the
words ``this part'' in its place;
0
b. Removing the definitions of ``All other cattle'', ``Aquaculture'',
and ``Cattle raised or maintained for breeding purposes'';
0
c. Adding the definition of ``Controlled environment''; and
0
d. Removing the definitions of ``Crop'', ``Feeder cattle 600 pounds or
more'', ``Feeder cattle less than 600 pounds'', ``First quarter'',
``Lambs and yearlings'', ``Non-specialty crop'', ``Producer'', ``Second
quarter'', ``Slaughter cattle--fed cattle'', ``Slaughter cattle--mature
cattle'', ``Specialty crops'', and ``Unpriced''.
The addition reads as follows.
Sec. 9.2 Definitions.
* * * * *
Controlled environment means an environment in which everything
that can practicably be controlled by the producer with structures,
facilities, and growing media (including but not limited to water,
soil, or nutrients), is in fact controlled by the producer, as
determined by industry standards.
* * * * *
Sec. 9.3 [Amended]
0
5. In Sec. 9.3 amend paragraph (c) by removing the word ``Have'' and
adding the words ``For payments under Sec. 9.102 of this part, have''
in its place.
0
6. Amend Sec. 9.4 by revising paragraph (a) and adding paragraph (d)
to read as follows:
[[Page 59385]]
Sec. 9.4 Time and method of application.
(a) A completed application under this subpart must be submitted in
person, by mail, email, or facsimile to any FSA county office by the
close of business on:
(1) September 11, 2020, for payments issued under Sec. 9.102 of
this part; and
(2) December 11, 2020, for payments issued under Sec. 9.202 of
this part.
* * * * *
(d) A producer applying for assistance for a crop subject to Sec.
9.202(a) or (b) must file a report of all acreage of the crop on FSA-
578, Report of Acreage.
Sec. 9.5 [Redesignated as Sec. 9.102]
0
7. Redesignate Sec. 9.5 as Sec. 9.102.
Sec. 9.5 [Reserved]
0
8. Add and reserve a new Sec. 9.5.
0
9. Amend Sec. 9.7 by:
0
a. In paragraph (e)(1) adding the words ``under each of subparts B and
C'' after ``$250,000'' both times it appears;
0
b. Revising paragraphs (e)(2) and (3); and
0
c. In paragraph (h), removing ``September 11, 2020,'' and adding the
words ``the applicable date in Sec. 9.4(a)'' in its place.
The revisions read as follows.
Sec. 9.7 Miscellaneous provisions.
* * * * *
(e) * * *
(2)(i) The total amount of CFAP payments a corporation, limited
liability company, limited partnership, trust, or estate may receive is
$250,000 under each of subparts B and C unless the members, partners,
stockholders, beneficiaries, or heirs of the legal entity meet the
provisions of paragraphs (e)(2)(ii) or (iii) of this section.
(ii) The total amount of CFAP payments a corporation, limited
liability company, limited partnership, trust, or estate may receive is
$500,000 under each of subparts B and C if two different individual
persons who are members, partners, stockholders, beneficiaries, or
heirs of the legal entity each provided at least 400 hours of active
personal labor or active personal management or combination thereof
with respect to the production of commodities for which an application
or applications are made in accordance with this part.
(iii) The total amount of CFAP payments a corporation, limited
liability company, limited partnership, trust, or estate may receive is
$750,000 under each of subparts B and C if three different individual
persons who are members, partners, stockholders, beneficiaries, or
heirs of the legal entity each provided at least 400 hours of active
personal labor or active personal management or combination thereof
with respect to the production of commodities for which an application
or applications are made in accordance with this part.
(3)(i) Except for payments subject to the increased payment
limitation in (e)(2)(ii) and (e)(2)(iii) of this section, a CFAP
payment made to any legal entity will be attributed to individuals or
legal entities with an ownership interest in the legal entity in
accordance with Sec. 1400.105 of this title. Payments attributed to a
legal entity with an ownership interest in the legal entity will be
further attributed as provided in Sec. 1400.105 of this title. If the
legal entity does not qualify for an increased payment limitation under
(e)(2)(ii) or (iii) of this section and the total amount of CFAP
payments made directly or indirectly to an individual or legal entity
has met the applicable amount specified in paragraph (e)(1) of this
section, the payment to the legal entity will be reduced commensurate
with the amount of the ownership interest of the individual or legal
entity in the legal entity. CFAP payments subject to attribution under
this paragraph will be attributed to individuals and legal entities
until the attribution is made only to an individual except the
attribution will stop at the fourth level of ownership.
(ii) A payment subject to the increased payment limitation in
(e)(2)(ii) or (iii) of this section will be limited to the lesser of
the amount specified in either (e)(2)(ii) or (iii) of this section, or
the sum of the amount specified in (e)(1) of this section that each
eligible member, stockholder, partner, heir, or beneficiary of the
legal entity may receive, regardless of ownership share. Payments
attributed to a legal entity with an ownership interest in the legal
entity will be further attributed to individuals and legal entities
until the attribution is made only to an individual, except the
attribution will stop at the fourth level of ownership.
* * * * *
0
10. Add subpart B, consisting of Sec. 9.101 and newly redesignated
Sec. 9.102, to read as follows:.
Subpart B--CFAP 1
Sec.
9.101 Definitions.
9.102 Calculation of payments.
Sec. 9.101 Definitions.
The following definitions apply to this subpart. The definitions in
parts 718 and 1400 of this title also apply, except where they conflict
with the definitions in this section.
All other cattle means commercially raised or maintained bovine
animals not meeting the definition of another category of cattle in
this part, excluding beefalo, bison, and animals used for dairy
production or intended for dairy production.
Aquaculture means only those species as announced in a NOFA.
Cattle raised or maintained for breeding purposes means animals
commercially raised or maintained for use as either a sire or dam for
the production of livestock offspring or lactation.
Crop means non-specialty crops and specialty crops.
Feeder cattle 600 pounds or more means cattle weighing more than
600 pounds but less than the weight of slaughter cattle-fed cattle as
defined in this section.
Feeder cattle less than 600 pounds means cattle weighing less than
600 pounds.
First quarter means January, February, and March of 2020.
Lambs and yearlings means all sheep less than 2 years old.
Non-specialty crop means any of the following crops: Barley,
canola, corn, durum wheat, hard red spring wheat, millet, oats,
sorghum, soybeans, sunflowers, and upland cotton. The term excludes
crops intended for grazing.
Producer means a person or legal entity who shares in the risk of
producing a crop or livestock and who is entitled to a share in the
crop or livestock available for marketing or would have shared had the
crop or livestock been produced and marketed. A contract grower who
does not own the livestock, will be considered a producer if the
contract allows the grower to have risk in the livestock.
Second quarter means April, May, and June of 2020.
Slaughter Cattle--fed cattle means cattle with a weight of 1,200
pounds or more that are intended for slaughter.
Slaughter cattle--mature cattle means culled cattle raised or
maintained for breeding purposes, but which were removed from inventory
and are intended for slaughter.
Specialty crops means any of the following crops: Almonds; apples;
artichokes; asparagus; avocados; beans; blueberries; broccoli; cabbage;
cantaloupe; carrots; cauliflower; celery; corn, sweet; cucumbers,
eggplant; garlic; grapefruit; kiwifruit; lemons; lettuce, iceberg;
lettuce, romaine; mushrooms; onions, dry; onions, green; oranges;
papayas; peaches; pears; pecans;
[[Page 59386]]
peppers, bell type; peppers, other; potatoes; raspberries; rhubarb;
spinach; squash; strawberries; sweet potatoes; tangerines; taro;
tomatoes; walnuts; watermelons; and any crops for which funds are made
available. The term excludes crops intended for grazing.
Unpriced means not subject to an agreed-upon price in the future
through a forward contract, agreement, or similar binding document as
of January 15, 2020.
0
11. Add Subpart C, consisting of Sec. Sec. 9.201 through 9.202, to
read as follows:
Subpart C--CFAP 2
Sec.
9.201 Definitions.
9.202 Calculation of payments.
Sec. 9.201 Definitions.
The following definitions apply to this subpart. The definitions in
parts 718 and 1400 of this title also apply, except where they conflict
with the definitions in this section.
Aquaculture means any species of aquatic organisms grown as food
for human consumption, fish raised as feed for fish that are consumed
by humans, ornamental fish propagated and reared in an aquatic medium.
Eligible aquacultural species must be raised by a commercial operator
and in water in a controlled environment.
Breeding stock means:
(1) For cattle, bulls and cows;
(2) For hogs and pigs, boars and sows; and
(3) For lambs and sheep, rams and ewes.
Broilers includes any chicken that has been commercially produced
for meat purposes that has left the farm for slaughter, and not used
for laying or breeding purposes.
Eggs means dried, frozen, liquid, and shell eggs.
Experimental means a crop for which all of the following apply:
(1) The crop is planted for experimental purposes conducted under
the direct supervision of a State experiment station or commercial
company;
(2) Production of the crop is destroyed before harvest or used for
testing or other experimental purposes; and
(3) A representative of the State experiment station or the
commercial company certifies that any production harvested from the
experiment will not be marketed in any form.
Flat-rate crop means alfalfa, amaranth grain, buckwheat, canola,
cotton, Extra Long Staple (ELS) cotton, crambe (colewort), einkorn,
emmer, flax, guar, hemp, indigo, industrial rice, kenaf, khorasan,
millet, mustard, oats, peanuts, quinoa, rapeseed, rice, rice, sweet,
rice, wild, rye, safflower, sesame, speltz, sugar beets, sugarcane,
teff, and triticale. The term excludes hay, except alfalfa, and crops
with intended uses of grazing, green manure, or left standing.
Floriculture means cut flowers and cut greenery from annual and
perennial flowering plants grown in a container or controlled
environment for commercial sale. Floriculture is included in sales
commodities.
Fruits means any of the following fruits: Abiu, acerola (Barbados
cherry), achachairu, antidesma, apples, apricots, aronia (chokeberry),
atemoya (custard apple), bananas, blueberries, breadfruit, cacao,
caimito, calabaza melon, canary melon, canary seed, caneberries,
canistel, cantaloupes, carambola (star fruit), casaba melon, cherimoya
(sugar apple), cherries, Chinese bitter melon, citron, citron melon,
coconuts, cranberries, crenshaw melon, dates, donaqua (winter melon),
durian, elderberries, figs, genip, gooseberries, grapefruit, grapes,
ground cherrry, guamabana (soursop), guava, guavaberry, honeyberries,
honeydew, huckleberries, Israel melons, jack fruit, jujube,
juneberries, kiwiberry, kiwifruit, Korean golden melon, kumquats,
langsat, lemons, limequats, limes, longan, loquats, lychee, mangos,
mangosteen, mayhaw berries, mesple, mulberries, nectarines, oranges,
papaya, passion fruits, pawpaw, peaches, pears, pecans, pineapple,
pitaya (dragon fruit), plantain, plumcots, plums, pomegranates, prunes,
pummelo, raisins, rambutan, sapodilla, sapote, schizandra berries,
sprite melon, star gooseberry, strawberries, tangelos, tangerines,
tangors, wampee, watermelon, wax jamboo fruit, and wolfberry (goji).
Hemp means the plant species Cannabis sativa L. and any part of
that plant, including the seeds thereof and all derivatives, extracts,
cannabinoids, isomers, acids, salts, and salts of isomers, whether
growing or not, with a delta-9 tetrahydrocannabinol concentration of
not more than 0.3 percent on a dry weight basis, that is grown under a
license or other required authorization issued by the applicable
governing authority that permits the production of the hemp.
Horticulture means any of the following horticulture: Anise, basil,
cassava, chervil (Fresh parsley), chia, chicory (radicchio), cilantro,
cinnamon, curry leaves, galanga, ginger, ginseng, guayule, herbs, hops,
lotus root, marjoram, meadowfoam, mint, moringa, niger seed, oregano,
parsley, pennycress, peppermint, pohole, psyllium, rosemary, sage,
savory, shrubs (forbs), sorrel, spearmint, tangos, tea, thyme,
turmeric, vanilla, wasabi, water cress, and yu cha.
Ineligible commodities for CFAP 2 means any of the following
commodities: Birdsfoot and trefoil, clover, cover crop, fallow, forage
soybeans, forage sorghum, gardens (commercial and home), grass, kochia
(prostrata), lespedeza, milkweed, mixed forage, pelts (excluding mink),
perennial peanuts, pollinators, sunn hemp, vetch, and seed of
ineligible crops.
Nursery crops means decorative or nondecorative plants grown in a
container or controlled environment for commercial sale. Nursery crops
are included in sales commodities.
Other livestock means any of the following livestock: Animals
commercially raised for food, fur, fiber, or feathers, including
alpacas, bison, buffalo, beefalo, deer, ducks, elk, emus, geese, goats,
guinea pigs, llamas, mink, ostrich, pheasants, quail, rabbits,
reindeer, and turkey. It excludes all equine, breeding stock, companion
or comfort animals, pets, and animals raised for hunting or game
purposes.
Prevented planting means the inability to plant the intended crop
acreage with proper equipment by the final planting date for the crop
type because of a natural disaster.
Price trigger commodities means price trigger crops and price
trigger livestock and products as defined in this section.
Price trigger crops means any of the following crops: Barley, corn,
sorghum, soybeans, sunflowers, upland cotton, wheat (all classes),
excluding crops with an intended use of grazing, green manure, or left
standing.
Price trigger livestock and products means any of the following
livestock and products: Beef cattle, broilers, dairy (cow milk), eggs,
lambs, sheep, hogs, and pigs; excluding breeding stock.
Producer means a person or legal entity who shares in the risk of
producing a commodity. The term does not include contract growers.
Producers who are not in the business of farming at the time of
application are not considered eligible producers.
Sales-based commodities means, as defined in this section,
aquaculture, sales-based crops, nursery crops and floriculture, other
livestock, and the following commodities: Goat milk, mink (including
pelts); mohair, and wool.
Sales-based crops means ambrosia, arundo, camelina, cactus,
cardoon, fruits, honey, horticulture, maple sap, tobacco, tree nuts,
and vegetables. Fruits, horticulture, tree nuts, and vegetables are
defined in this section.
[[Page 59387]]
The term excludes crops with an intended use of grazing, green manure,
or left standing.
Tree nuts means any of the following tree nuts: Almonds, avocados,
carob, cashew, chestnuts, coffee, hazel nuts, jojoba, macadamia nuts,
noni, olives, persimmons, pine nuts, pistachios, quinces, and walnuts.
Vegetables means any of the following vegetables: Alfalfa sprouts,
aloe vera, artichokes, arugula (greens), asparagus, bamboo shoots,
batatas, bean sprouts, beans (including dry edible), beets, bok choy,
broccoflower, broccoli, broccolini, broccolo-cavalo, Brussel sprouts,
cabbage, calaloo, carrots, cauliflower, celeriac, celery, chickpea (see
beans, garbanzo), chives, collard greens, coriander, corn, sweet,
cucumbers, daikon, dandelion greens, dasheen (taro root, malanga),
dill, eggplant, endive, escarole, frisee, gailon (gai lein, Chinese
broccoli), garlic, gourds, greens, horseradish, Jerusalem artichokes
(sunchoke), kale, kohlrabi, leeks, lentils, lettuce, melongene,
mesculin mix, microgreens, mushrooms, okra, onions, parsnip, peas
(including dry edible), pejibaye (heart of palm), peppers, potatoes,
potatoes sweet, pumpkins, radicchio, radishes, rhubarb, rutabaga,
salsify (oyster plant), scallions, seed--vegetable, shallots, spinach,
squash, swiss chard, tannier, taro, tomatillos, tomatoes, truffles,
turnip top (greens), turnips, yam, and yautia (malanga);
Sec. 9.202 Calculation of payments.
(a) Payments for price trigger crops will be equal to the greater
of:
(1) Eligible acres of the crop multiplied by a rate of $15 per
acre; or
(2) Eligible acres of the crop multiplied by the applicable yield,
multiplied by the crop marketing percentage in Table 1 of paragraph (j)
of this section, multiplied by the crop payment rate in Table 1 of
paragraph (j) of this section.
(3) Under paragraph (a) of this section, eligible acres include the
producer's share of the determined acres, or reported acres if
determined acres are not present, of the crop planted for the 2020 crop
year, excluding prevented planted and experimental acres. For producers
who insured acres of the crop under a policy or plan of insurance under
the Federal Crop Insurance Act (7 U.S.C. 1501-1524), the yield will be
the average of the producer's 2020 actual production history (APH)
approved yield from all of the producer's insured acres nationwide. For
producers for whom FSA is unable to obtain a 2020 APH approved yield,
the yield will be the 2019 Agriculture Risk Coverage-County Option
(ARC-CO) benchmark yield multiplied by 85 percent. ARC-CO yields for
producers growing a crop in multiple counties will be weighted based on
the producer's crop acreage physically located in each county.
(b) Payments for flat-rate crops will be equal to eligible acres of
the crop multiplied by a rate of $15 per acre. Eligible acres include
the producer's share of the determined acres, or reported acres if
determined acres are not present, excluding prevented planted and
experimental acres.
(c) Payments for beef cattle will be equal to the lower of the
producer's maximum owned inventory of eligible beef cattle, excluding
breeding stock, on a date selected by the producer from April 16, 2020,
through August 31, 2020, or 4,546 head multiplied by the number of
payment limitations for the producer multiplied by a payment rate of
$55 per head.
(d) Payments for hogs and pigs will be equal to the lower of the
producer's maximum owned inventory of eligible hogs and pigs, excluding
breeding stock, on a date selected by the producer from April 16, 2020,
through August 31, 2020, or 10,870 head multiplied by the number of
payment limitations for the producer, multiplied by a payment rate of
$23 per head.
(e) Payments for lambs and sheep will be equal to the producer's
highest owned inventory of eligible lambs and sheep, excluding breeding
stock, on a date selected by the producer from April 16, 2020, through
August 31, 2020, multiplied by a payment rate of $27 per head.
(f)(1) Payments for broilers will be equal to 75 percent of the
producer's 2019 broiler production multiplied by a payment rate of
$1.01 per bird (head).
(2) Payments for broiler producers who began farming in 2020 and
had no production in 2019 will be calculated as provided in paragraph
(f)(1) of this section, except that the payments will be based on the
producer's actual 2020 broiler production as of the date the producer
submits an application for payment under this part.
(g)(1) Payments for dairy (cow milk) will be equal to the sum of
the following two calculations:
(i) The producer's total actual milk production from April 1, 2020,
to August 31, 2020, multiplied by the payment $1.20 per hundredweight;
and
(ii) The producer's estimated milk production from September 1,
2020, to December 31, 2020, based on the daily average production from
April 1, 2020, through August 31, 2020, multiplied by 122, multiplied
by a payment rate of $1.20 per hundredweight.
(2) Dairy operations that stop commercially marketing milk after
the date they apply for CFAP 2 but before December 31, 2020, must
notify FSA of the date they stop commercially marketing milk. Those
dairies are eligible only for a prorated payment under paragraph
(g)(1)(ii) of this section for the number of days the dairy operation
commercially markets milk from September 1, 2020, through December 31,
2020.
(h)(1) Payments for eggs will be equal to 75 percent of the
producer's 2019 egg production multiplied by the payment rate in Table
1 of paragraph (j) of this section.
(2) Payments for egg producers who began farming in 2020 and had no
production in 2019 will be calculated as provided in paragraph (h)(1)
of this section, except that the payments will be based on the
producer's actual 2020 egg production as of the date the producer
submits an application for payment under this part.
(i)(1) Payments for sales commodities will be equal to the sum of
the results for the following calculation for each 2019 sales range in
Table 2 of paragraph (j) of this section: the amount of the producer's
eligible sales within the specified range in calendar year 2019,
multiplied by the payment rate for that range in Table 2 of paragraph
(j) of this section. Eligible sales only includes sales of raw
commodities grown by the producer; the portion of sales derived from
adding value to the commodity, such as processing and packaging, and
from sales of products purchased for resale is not included in the
payment calculation unless determined eligible by the Secretary.
(2) Payments for producers of sales commodities who began farming
in 2020 and had no sales in 2019 will be calculated as provided in
paragraph (i)(1) of this section, except that the payments will be
based on the producer's actual 2020 sales as of the date the producer
submits an application for payment under this section.
(j) The payment rates in Tables 1 and 2 of this paragraph (j) will
be used to calculate CFAP payments:
[[Page 59388]]
Table 1 to Paragraph (j)--Payment Rates for Price Trigger Crops and Eggs
----------------------------------------------------------------------------------------------------------------
Crop marketing
Commodity Units percentage Payment rate
(percent) ($/unit)
----------------------------------------------------------------------------------------------------------------
Barley......................................................... bu 63 $0.54
Corn........................................................... bu 40 0.58
Cotton, Upland................................................. lb 46 0.08
Sorghum........................................................ bu 55 0.56
Soybean........................................................ bu 54 0.58
Sunflowers..................................................... lb 44 0.02
Wheat (all classes)............................................ bu 73 0.54
Shell Eggs..................................................... dozen n/a 0.05
Liquid Eggs.................................................... lb n/a 0.04
Dried Eggs..................................................... lb n/a 0.14
Frozen Eggs.................................................... lb n/a 0.05
----------------------------------------------------------------------------------------------------------------
Table 2 to Paragraph (j)--Payment Rates for Sales Commodities
------------------------------------------------------------------------
Percent
2019 Sales range payment
factor
------------------------------------------------------------------------
Up to $49,999........................................... 10.6
$50,000-$99,999......................................... 9.9
$100,000-$499,999....................................... 9.7
$500,000-$999,999....................................... 9.0
All sales over $1 million............................... 8.8
------------------------------------------------------------------------
(k) CFAP 2 payments will not be calculated or issued for ineligible
commodities.
Stephen L. Censky,
Vice Chairman, Commodity Credit Corporation, and Deputy Secretary, U.S.
Department of Agriculture.
[FR Doc. 2020-20844 Filed 9-18-20; 4:15 pm]
BILLING CODE 3410-05-P