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Rule2023-00005

Pandemic Assistance Programs and Agricultural Disaster Assistance Programs

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Published

January 11, 2023

Effective

January 11, 2023

Issuing agencies

Agriculture DepartmentFarm Service AgencyCommodity Credit Corporation

Abstract

This rule announces Phase 2 of the Emergency Relief Program (ERP), which provides assistance to producers who suffered crop losses due to wildfires, hurricanes, floods, derechos, excessive heat, winter storms, freeze (including a polar vortex), smoke exposure, excessive moisture, and qualifying droughts occurring in calendar years 2020 and 2021. It also announces Pandemic Assistance Revenue Program (PARP), a new program that provides support for agricultural producers impacted by the COVID-19 pandemic. In addition, this rule makes changes to the Coronavirus Food Assistance Program (CFAP); the Emergency Conservation Program (ECP); the Emergency Forest Restoration Program (EFRP); the Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program (ELAP); the Livestock Forage Disaster Program (LFP); the Livestock Indemnity Program (LIP); the Noninsured Crop Disaster Assistance Program (NAP); and general payment eligibility provisions. This rule also makes a technical correction to the Biomass Crop Assistance Program (BCAP).

Full Text

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<title>Federal Register, Volume 88 Issue 7 (Wednesday, January 11, 2023)</title>
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[Federal Register Volume 88, Number 7 (Wednesday, January 11, 2023)]
[Rules and Regulations]
[Pages 1862-1892]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-00005]

[[Page 1861]]

Vol. 88

Wednesday,

No. 7

January 11, 2023

Part IV

Department of Agriculture

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Office of the Secretary

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7 CFR Part 9

Farm Service Agency

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7 CFR Parts 701 and 760

Commodity Credit Corporation

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7 CFR Parts 1400, 1416, 1437, et. al.

Pandemic Assistance Programs and Agricultural Disaster Assistance
Programs; Rule

Federal Register / Vol. 88, No. 7 / Wednesday, January 11, 2023 /
Rules and Regulations

[[Page 1862]]

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DEPARTMENT OF AGRICULTURE

Office of the Secretary

7 CFR Part 9

Farm Service Agency

7 CFR Parts 701 and 760

Commodity Credit Corporation

7 CFR Parts 1400, 1416, 1437, and 1450

[Docket ID: USDA-2021-0012]
RIN 0503-AA75

Pandemic Assistance Programs and Agricultural Disaster Assistance
Programs

AGENCY: Commodity Credit Corporation (CCC), Farm Service Agency (FSA),
and Office of the Secretary, Department of Agriculture (USDA).

ACTION: Final rule.

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SUMMARY: This rule announces Phase 2 of the Emergency Relief Program
(ERP), which provides assistance to producers who suffered crop losses
due to wildfires, hurricanes, floods, derechos, excessive heat, winter
storms, freeze (including a polar vortex), smoke exposure, excessive
moisture, and qualifying droughts occurring in calendar years 2020 and
2021. It also announces Pandemic Assistance Revenue Program (PARP), a
new program that provides support for agricultural producers impacted
by the COVID-19 pandemic. In addition, this rule makes changes to the
Coronavirus Food Assistance Program (CFAP); the Emergency Conservation
Program (ECP); the Emergency Forest Restoration Program (EFRP); the
Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish
Program (ELAP); the Livestock Forage Disaster Program (LFP); the
Livestock Indemnity Program (LIP); the Noninsured Crop Disaster
Assistance Program (NAP); and general payment eligibility provisions.
This rule also makes a technical correction to the Biomass Crop
Assistance Program (BCAP).

DATES:
Effective date: January 11, 2023.
Comment due date: For PARP, ECP, and ERP, we will consider comments
on the information collection requirements under the Paperwork
Reduction Act that we receive by March 13, 2023.

ADDRESSES: We invite you to submit comments on the information
collection requirements. You may submit comments by any of the
following methods:
<bullet> Federal eRulemaking Portal: Go to: <a href="http://www.regulations.gov">www.regulations.gov</a> and
search for docket ID USDA-2021-0012. Follow the online instructions for
submitting comments.
<bullet> Mail, Hand-Delivery, or Courier: Director, Safety Net
Division, FSA, USDA, 1400 Independence Avenue SW, Stop 0510,
Washington, DC 20250-0522. In your comment, specify the docket ID USDA-
2021-0012.
Comments will be available for inspection online at <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Copies of the information collection may be
requested by contacting Kathy Sayers or Shanita Landon, respectively
(see FOR FURTHER INFORMATION CONTACT below). You may also send comments
to the Desk Officer for Agriculture, Office of Information and
Regulatory Affairs, Office of Management and Budget, Washington, DC
20503.

FOR FURTHER INFORMATION CONTACT: For CFAP, ERP, ELAP, LFP, LIP, NAP,
PARP, and PARP information collection activity, and payment
eligibility, Kathy Sayers; telephone: (202) 720-6825; email:
<a href="/cdn-cgi/l/email-protection#cda6acb9a5b4e3beacb4a8bfbe8db8bea9ace3aaa2bb">[email&#160;protected]</a>. For ECP, EFRP, and BCAP, Shanita Landon;
telephone: (202) 690-1612; email: <a href="/cdn-cgi/l/email-protection#205348414e4954410e4c414e444f4e60555344410e474f56">[email&#160;protected]</a>. Persons with
disabilities who require alternative means for communication should
contact the USDA Target Center at (202) 720-2600 (voice).

SUPPLEMENTARY INFORMATION:

Background

This rule announces ERP Phase 2 and PARP, a new program. In
addition, this rule amends the CFAP regulations to provide an
additional CFAP 2 payment for underserved producers; \1\ makes
clarifying changes based on previously implemented provisions of the
Consolidated Appropriations Act, 2021 (CAA); and amends the payment
provisions for producers of swine. It also updates provisions for and
makes technical changes to the regulations for BCAP, ECP, ELAP, LFP,
LIP, NAP, and payment eligibility provisions of 7 CFR part 1400, as
described in this document.
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\1\ Throughout this document, the term ``underserved farmer or
rancher'' refers to a beginning farmer or rancher, limited resource
farmer or rancher, socially disadvantaged farmer or rancher, or
veteran farmer or rancher.
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ERP Phase 2

Division B, Title I, of the Extending Government Funding and
Delivering Emergency Assistance Act (Pub. L. 117- 43) provides $10
billion for necessary expenses related to losses of crops (including
milk, on-farm stored commodities, crops prevented from planting in 2020
and 2021, and harvested adulterated wine grapes), trees, bushes, and
vines, as a consequence of droughts, wildfires, hurricanes, floods,
derechos, excessive heat, winter storms, freeze (including a polar
vortex), smoke exposure, quality losses of crops, and excessive
moisture occurring in calendar years 2020 and 2021. FSA previously
announced ERP Phase 1 through a notice of funds availability on May 18,
2022 (87 FR 30164-30172),\2\ which provided assistance for crop, tree,
bush, and vine losses through a streamlined process with pre-filled
applications using data already on file with FSA or the Risk Management
Agency (RMA), as a result of the producer previously receiving a NAP
payment or a crop insurance indemnity. This rule provides the
eligibility requirements, application process, and payment calculations
for ERP Phase 2, which is intended to address eligible crop losses not
included in ERP Phase 1.\3\ ERP Phase 2 provides assistance for
necessary expenses related to both production and quality losses of
eligible crops. Where loss information is not already on file with FSA
or RMA through NAP or Federal crop insurance, and therefore included in
ERP Phase 1, FSA has determined that the best approximation of such
losses is a producer's decrease in gross revenue, which will reflect
losses in both production and quality without requiring the more
extensive calculations and documentation required under previous
programs addressing crop losses due to disaster events.\4\ Using a
decrease in gross revenue in the calculation of ERP Phase 2 payments
also captures a producer's loss due to a qualifying disaster event
regardless of whether the loss occurs before harvest or after harvest
while the

[[Page 1863]]

crop is in storage, further streamlining the delivery of assistance.
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\2\ A clarification to the notice of funds availability for ERP
Phase 1 was published on August 18, 2022 (87 FR 50828-50830).
\3\ Additional assistance authorized by the Extending Government
Funding and Delivering Emergency Assistance Act for losses to milk
and livestock will be announced in subsequent documents to be
published in the Federal Register. FSA previously announced Phase 1
of the Emergency Livestock Relief Program (ELRP), which provided
payments to producers who faced increased supplemental feed costs as
a result of forage losses due to a qualifying drought or wildfire in
calendar year 2021 on April 4, 2022 (87 FR 19465-19470).
\4\ Assistance for crop losses that occurred prior to harvest
due to disaster events in the 2018 and 2019 calendar years was
provided through two separate programs: the Wildfires and Hurricanes
Indemnity Program Plus (WHIP+) for production losses, and the
Quality Loss Adjustment (QLA) Program for quality losses.
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Decreases in gross revenue are strongly correlated to crop
production and quality losses due to disaster events. Gross revenue is
essentially the aggregation of the value of all of a producer's crops,
and a decrease in gross revenue in a year when a producer suffered a
loss due to a disaster event reflects the producer's crop losses
resulting from decreased production or from obtaining a lower price due
to a reduction in quality for that year. Previous FSA disaster
assistance programs have similarly been based on a producer's loss of
value compared to their expected value, using payment calculations
based on crop acres, price, and yield (or inventory and price for value
loss crops) as a way to estimate the value of a crop. While ERP Phase 2
uses a different calculation than previous disaster assistance programs
to capture that value loss, it accounts for crop losses in a
streamlined way that minimizes the burden on producers and improves
efficiency of application processing by FSA county offices.

ERP Phase 2 Eligibility

To be eligible for ERP Phase 2, a producer must have suffered a
loss of an eligible crop due in whole or in part to a qualifying
disaster event that occurred in the 2020 or 2021 calendar year
(referred to as the ``disaster year''). Qualifying disaster events
include wildfires, hurricanes, floods, derechos, excessive heat, winter
storms, freeze (including a polar vortex), smoke exposure, excessive
moisture, qualifying drought, and related conditions occurring in
calendar years 2020 and 2021. ``Qualifying drought'' means an area
within the county was rated by the U.S. Drought Monitor as having a
drought intensity of D2 (severe drought) for 8 consecutive weeks or D3
(extreme drought) or higher level for any period of time during the
applicable calendar year.
To receive a payment for ERP Phase 2, the eligible crop loss must
have resulted in a decrease of allowable gross revenue, as described in
the next section of this document. ``Eligible crop'' for ERP Phase 2
means a crop, including eligible aquaculture, that is produced in the
United States as part of a farming operation and is intended to be
commercially marketed. It excludes crops for grazing, aquatic species
that do not meet the definition of aquaculture, Cannabis sativa L. and
any part of that plant that does not meet the definition of hemp, and
timber.
For ERP, ``producer'' refers to a person or legal entity who was
entitled to a share in the eligible crop available for marketing or
would have shared had the eligible crop been produced and marketed. In
addition, to be eligible for ERP Phase 2, a producer must be one of the
following:
(1) Citizen of the United States;
(2) Resident alien, which for purposes of this subpart means
``lawful alien'' as defined in 7 CFR part 1400;
(3) Partnership organized under State Law;
(4) Corporation, limited liability company, or other organizational
structure organized under State law; or
(5) Indian Tribe or Tribal organization, as defined in section 4(b)
of the Indian Self-Determination and Education Assistance Act (25
U.S.C. 5304).

ERP Phase 2 Allowable Gross Revenue

In general, ERP Phase 2 payments are based on the difference in
allowable gross revenue between a benchmark year (2018 or 2019),
reflective of a typical year, as elected by the producer, intended to
represent a typical year of revenue for the producer's operation, and
the applicable disaster year (2020 or 2021). For the purposes of ERP
Phase 2, ``allowable gross revenue'' includes revenue from:
<bullet> Sales of eligible crops produced by the producer, which
includes sales resulting from value added through post-production
activities (for example, sales of jam from the processing of
strawberries) that were reportable on IRS Schedule F;
<bullet> Sales of eligible crops a producer purchased for resale
that had a change in characteristic due to the time held (for example,
a plant purchased at a size of 2 inches and sold as an 18-inch plant
after 4 months), less the cost or other basis of such eligible crops;
<bullet> The taxable amount of cooperative distributions directly
related to the sale of the eligible crops produced by the producer;
<bullet> Benefits under the following agricultural programs: 2017
Wildfires and Hurricanes Indemnity Program (WHIP), Agriculture Risk
Coverage (ARC) and Price Loss Coverage (PLC), Biomass Crop Assistance
Program (BCAP), Loan Deficiency Payment (LDP) program, marketing loan
gains (MLG) under the Marketing Assistance Loan (MAL) program, 2018 and
2019 Market Facilitation Programs (MFP), Seafood Trade Relief Program
(STRP), and the On-Farm Storage Loss Program;
<bullet> CCC loans, if treated as income and reported to IRS;
<bullet> Crop insurance proceeds, minus the amount of
administrative fees and premiums;
<bullet> NAP payments, minus the amount of service fees and
premiums;
<bullet> ELAP payments for an aquaculture crop;
<bullet> Payments issued through grant agreements with FSA for
losses of eligible crops;
<bullet> Grants from the Department of Commerce, National Oceanic
and Atmospheric Administration, and State program funds providing
direct payments for the loss of eligible crops or the loss of revenue
from eligible crops;
<bullet> Other revenue directly related to the production of
eligible crops that IRS requires the producer to report as income;
<bullet> For the applicable disaster year only, ERP Phase 1
payments issued to another person or entity for the producer's share of
an eligible crop, regardless of the tax year in which the payment would
be reported to IRS; \5\ and
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\5\ ERP Phase 1 allowed producers who received pre-filled
application forms to indicate shares in the crop. In some cases,
payment for a producer's share of a crop may have been issued to a
different person or entity than the producer applying for a related
revenue loss under ERP Phase 2. Applications for ERP Phase 2 must
include any ERP Phase 1 payments issued to another person or entity
for the producer's share of an eligible crop in order to prevent
duplicate benefits being issued for the same loss.
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<bullet> For the benchmark year only, 2018, 2019 and 2020 WHIP+ and
QLA payments.
The allowable gross revenue will be based on the year for which the
revenue would be reported for the purpose of filing a tax return.
Producers who file or would be eligible to file a joint tax return will
certify their allowable gross revenue based on what it would have been
had they filed taxes separately for the applicable year.
If a producer decreased their operation capacity in a disaster
year, as compared to the benchmark year, the producer must certify to
an adjusted benchmark revenue on form FSA-521 that represents the
producer's reasonably expected allowable gross revenue for the disaster
year prior to the impact of the qualifying disaster event. A producer
may also certify to an adjusted benchmark revenue on form FSA-521 if
the producer did not have a full year of benchmark allowable gross
revenue or expanded their operation capacity in a disaster year,
compared to their benchmark year. If requested by FSA, producers are
required to submit documentation to support these adjustments within 30
calendar days of the request. The documentation to support an
adjustment due to a change in operation capacity must show that

[[Page 1864]]

the adjustment to the producer's benchmark revenue is due to an:
<bullet> Addition or decrease in production capacity of the farming
operation;
<bullet> Increase or decrease in the use of existing production
capacity; or
<bullet> Physical alterations that were made to existing production
capacity.
Change in production capacity does not include crop rotation from
year to year, changes in farming practices such as converting from
conventional tillage to no-till, or increasing the rate of fertilizers
or chemicals.
If a producer began farming in 2020 or 2021 and did not have
allowable gross revenue in a benchmark year, the producer may certify
to an adjusted benchmark allowable gross revenue on form FSA-521 that
represents what had been the producer's reasonably expected disaster
year revenue prior to the impact of the qualifying disaster event. If
requested by FSA, documentation required to support a producer's
certification must be provided within 30 calendar days of FSA's
request, or the producer will be considered ineligible for ERP Phase 2.
Acceptable documentation must be generated in the ordinary course of
business and dated prior to the impact of the disaster event and
includes, but is not limited to:
<bullet> Financial documents such as a business plan or cash flow
statement that demonstrate an expected level of revenue;
<bullet> Sales contracts or purchase agreements; and
<bullet> Documentation supporting production capacity, use of
existing production capacity, or physical alterations that demonstrate
production capacity.
FSA is providing an optional form, FSA-521A, Continuation Sheet for
Emergency Relief Program (ERP) Adjusted Revenue, to help producers
calculate their adjusted benchmark revenue if they are certifying to an
adjustment on FSA-521.
In addition to providing their allowable gross revenue for the
benchmark and disaster years, producers will certify to the percentage
of their expected allowable gross revenue from specialty and high value
crops and the percentage from other crops for the applicable disaster
year on their application form. This information is used in the payment
calculation to determine the amount applied to the separate payment
limitations for specialty and high value crops and for all other crops,
as described later in this document. The percentages certified must be
equal to the percentages that the producer would have reasonably
expected for the disaster year if the qualifying disaster event had not
occurred. For ERP Phase 2 purposes, ``specialty crop'' has the same
meaning as in ERP Phase 1.\6\ A crop may be considered a high value
crop based on either the crop itself, or how the crop is marketed. High
value crop includes any eligible crop not specifically identified as a
specialty crop or listed in the definition of ``other crop'' (that is,
cotton, peanuts, rice, feedstock, and any crop grown with an intended
use of grain, silage, or forage), and it also includes any eligible
crop, regardless of whether the crop is identified as a specialty crop
or listed in the definition of ``other crop,'' if the crop is a direct
market crop, organic crop, or a crop grown for a specific market in
which specialized products can be sold resulting in an increased value
compared to the typical market for the crops (for example, soybeans
intended for tofu production), as determined by the Deputy
Administrator for Farm Programs (Deputy Administrator).
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\6\ As defined for ERP Phase 1, ``specialty crops'' means
fruits, tree nuts, vegetables, culinary herbs and spices, medicinal
plants, and nursery, floriculture, and horticulture crops. This
includes common specialty crops identified by USDA's Agricultural
Marketing Service at <a href="https://www.ams.usda.gov/services/grants/scbgp/specialty-crop">https://www.ams.usda.gov/services/grants/scbgp/specialty-crop</a> and other crops as designated by the Deputy
Administrator for Farm Programs.
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Applying for ERP Phase 2

A completed FSA-521, Emergency Relief Program (ERP) Phase 2
Application, must be submitted to any FSA county office by the close of
business on the date announced by the Deputy Administrator.
Applications may be submitted in person or by mail, email, facsimile,
or other methods announced by FSA.
Producers must also submit the following forms if not already on
file with FSA within 60 days of the ERP Phase 2 application deadline:
(1) Form AD-2047, Customer Data Worksheet, for new customers or
existing customers who need to update their customer profile;
(2) Form FSA-521A, Continuation Sheet for Emergency Relief Program
(ERP) Adjusted Revenue, if applicable;
(3) Form CCC-860, Socially Disadvantaged, Limited Resource,
Beginning and Veteran Farmer or Rancher Certification, applicable for
the program year or years for which the producer is applying for ERP;
\7\
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\7\ An individual who has filed CCC-860 certifying their status
as a socially disadvantaged, beginning, or veteran farmer or rancher
for a prior program year is not required to submit a subsequent CCC-
860 certifying their status for a later program year because an
individual's status as socially disadvantaged would not change in
different years, and their certification as a beginning or veteran
farmer or rancher includes the relevant date needed to determine for
what program years the status would apply. An entity that has filed
CCC-860 certifying its status as a socially disadvantaged,
beginning, or veteran farmer or rancher for a prior program year is
not required to submit a subsequent certification of its status for
a later program year unless the entity's status has changed due to
changes in membership. Because a producer's status as a limited
resource farmer or rancher may change annually depending on the
producer's direct and indirect gross farm sales, those producers
must submit CCC-860 for each applicable program year.
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(4) Form CCC-901, Member Information for Legal Entities, if
applicable;
(5) Form CCC-902, Farm Operating Plan for an individual or legal
entity as provided in 7 CFR part 1400;
(6) Form FSA-510, Request for an Exception to the $125,000 Payment
Limitation for Certain Programs, accompanied by a certification from a
certified public accountant or attorney as to that person or legal
entity's certification, for a legal entity and all members of that
entity, for each applicable program year, including the legal entity's
members, partners, or shareholders, as provided in 7 CFR part 1400; and
(7) Form AD-1026, Highly Erodible Land Conservation (HELC) and
Wetland Conservation (WC) Certification, for the ERP Phase 2 applicant
and applicable affiliates as provided in 7 CFR part 12.
If requested by FSA, the producer must provide additional
documentation that establishes the producer's eligibility for ERP Phase
2. If supporting documentation is requested, the documentation must be
submitted to FSA within 30 calendar days from the request or the
application will be disapproved by FSA. FSA may request supporting
documentation to verify information provided by the producer and the
producer's eligibility including, but not limited to, the producer's:
(1) Allowable gross revenue as reported on the ERP Phase 2
application;
(2) Percentages of the expected allowable gross revenue from
specialty and high value crops and other crops; and
(3) Ownership share in the agricultural commodities.

ERP Phase 2 Payment Calculation

Although producers will be able to apply for both the 2020 and 2021
disaster years, as applicable, on one form, ERP Phase 2 payments will
be calculated separately for each disaster year. If a producer
indicates that they have expected revenue for both specialty and high
value crops and other crops for a disaster year, a payment will be
calculated separately for specialty

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and high value crops and other crops for a disaster year.
To determine a producer's ERP Phase 2 payment amount, FSA will
calculate:
(1) The ERP factor of 70 percent \8\ multiplied by the producer's
benchmark year allowable gross revenue, adjusted according to 7 CFR
760.1903, if applicable, minus
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\8\ The Extending Government Funding and Delivering Emergency
Assistance Act provides that the total amount of payments cannot
exceed 70 percent of the loss for producers who did not obtain
federal crop insurance or NAP coverage for the crop incurring the
losses.
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(2) The producer's disaster year allowable gross revenue; minus
(3) The sum of the producer's net ERP Phase 1 payments for the 2020
program year, if the calculation is for the 2020 disaster year, or for
the 2021 and 2022 \9\ program years, if the calculation is for the 2021
disaster year; minus
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\9\ For ERP Phase 1, the program year was based on the crop
year, as defined in the applicable crop insurance policy or NAP
provisions, and 2022 was included because a qualifying disaster
event occurring in the 2021 calendar year may have caused a loss of
a crop during the 2022 crop year. The program year for ERP Phase 2
is based on the disaster year (2020 or 2021) because the payment is
based on a producer's allowable gross revenue, which may include
revenue from multiple crops.
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(4) The sum of the producer's net CFAP payments (excluding payments
for contract producer revenue), net 2020 WHIP+ payments, and net 2020
Quality Loss Adjustment (QLA) Program payments, if the calculation is
for the 2020 disaster year; and
(5) Multiplied by the percentage of the expected disaster year
revenue for specialty and high value crops or other crops, as
applicable.
ERP Phase 2 payments are subject to the availability of funds. FSA
will issue an initial payment equal to the lesser of:
<bullet> The amount calculated as described above; or
<bullet> A maximum initial payment of $2,000.
If a producer has also received a payment under ERP Phase 1, FSA
will reduce the producer's initial ERP Phase 2 payment amount by
subtracting their ERP Phase 1 gross payment amount.\10\ If total
calculated payments exceed the total funding available for ERP Phase 2,
the ERP Factor may be adjusted and the final payment amounts will be
prorated to stay within the amount of available funding. If there are
insufficient funds, a differential of 15 percent will be used for
underserved producers similar to ERP Phase 1, but with a cap at the
statutory maximum of 70 percent.\11\ For example, if the ERP Factor is
set at 50 percent, the factor used for underserved producers will be 65
percent, but if the factor is set at 55 percent or higher, the factor
for underserved producers will be capped at 70 percent. An initial
payment to a producer will not be recalculated or reduced if the total
calculated ERP Phase 2 factored payment for that producer is less than
the initial payment amount.
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\10\ If the producer's ERP Phase 1 payment is equal to or
exceeds the producer's initial ERP Phase 2 payment amount, the
producer will not receive an initial ERP Phase 2 payment.
\11\ FSA calculates payments based on a higher payment factor
for underserved farmers and ranchers (or specific groups included in
that term) in several programs, such as ECP, ELAP, and the Tree
Assistance Program. FSA has also used higher payment factors for
these producers in several recently announced programs: the Food
Safety Certification for Specialty Crops Program, the Organic and
Transitional Education and Certification Program, ELRP Phase 1, and
ERP Phase 1. In addition, NAP provides a reduced service fee and
premium for underserved farmers and ranchers. This approach supports
the equitable administration of FSA programs, as underserved farmers
and ranchers are more likely to lack financial reserves and access
to capital that would allow them to cope with losses due to
unexpected events outside of their control.
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If a producer receives additional assistance through CFAP or ERP
Phase 1 after a producer's ERP Phase 2 payment is calculated, the
producer's ERP Phase 2 payment will be recalculated and the producer
must refund any resulting overpayment.

ERP Phase 2 Payment Limitation and Attribution

As required by the Extending Government Funding and Delivering
Emergency Assistance Act and consistent with 7 CFR 760.1507, the
payment limitation for ERP is determined by the producer's average
adjusted gross farm income (income from activities related to farming,
ranching, or forestry). Specifically, if the producer's average
adjusted gross farm income is less than 75 percent of the producer's
average adjusted gross income (AGI) for the 3 taxable years preceding
the most immediately preceding complete tax year, a producer, other
than a joint venture or general partnership, cannot receive, directly
or indirectly, more than $125,000 in payments for specialty crops and
high value crops \12\ and $125,000 in payment for all other crops
under:
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\12\ High value crops were not defined in ERP Phase 1;
therefore, only ERP Phase 1 payments to specialty crops, as defined
in the ERP Phase 1 notice, will be counted toward the increased
payment limitation for specialty and high value crops.
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(1) ERP Phase 1 for program year 2020 and ERP Phase 2 for program
year 2020, combined; and
(2) ERP Phase 1 for program years 2021 and 2022 \13\ and ERP Phase
2 for program year 2021, combined.
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\13\ For ERP Phase 1, the program year was based on the crop
year, as defined in the applicable crop insurance policy or NAP
provisions, and 2022 was included because a qualifying disaster
event occurring in the 2021 calendar year may have caused a loss of
a crop during the 2022 crop year. The program year for ERP Phase 2
is based on the disaster year (2020 or 2021) because the payment is
based on a producer's allowable gross revenue, which may include
revenue from multiple crops.
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If at least 75 percent of the producer's average AGI is derived
from farming, ranching, or forestry related activities and the producer
provides the required certification and documentation, as discussed
below, the producer, other than a joint venture or general partnership,
is eligible to receive, directly or indirectly, up to:
(1) $900,000 for specialty crops and high value crops combined for:
(i) ERP Phase 1 for program year 2020 and ERP Phase 2 for program
year 2020, combined; and
(ii) ERP Phase 1 for program years 2021 and 2022 and ERP Phase 2
for program year 2021, combined; and
(2) $250,000 for all other crops for:
(i) ERP Phase 1 for program year 2020 and ERP Phase 2 for program
year 2020, combined; and
(ii) ERP Phase 1 for program years 2021 and 2022 and ERP Phase 2
for program year 2021, combined.
The relevant tax years for establishing a producer's AGI and
percentage derived from farming, ranching, or forestry related
activities are:
(1) 2016, 2017, and 2018 for program year 2020; and
(2) 2017, 2018, and 2019 for program year 2021.
To receive more than $125,000 in ERP payments, producers must
submit form FSA-510, accompanied by a certification from a certified
public accountant or attorney as to that person or legal entity's
certified AGI. If a producer requesting the increased payment
limitation is a legal entity, all members of that entity must also
complete form FSA-510 and provide the required certification according
to the direct attribution provisions in 7 CFR 1400.105, ``Attribution
of Payments.'' If a legal entity would be eligible for the increased
payment limitation based on the legal entity's average AGI derived from
farming, ranching, or forestry related activities but a member of that
legal entity either does not complete a form FSA-510 and provide the
required certification or is not eligible for the increased payment
limitation, the payment to the legal entity will be reduced for the
limitation applicable to the share of the ERP Phase 2 payment
attributed to that member.
If a producer files form FSA-510 and the accompanying certification
after their ERP Phase 2 payment is issued but

[[Page 1866]]

before the deadline announced by FSA, FSA will process the form FSA-510
and issue the additional payment amount if a maximum initial payment
amount has not been reached.
A payment made to a legal entity will be attributed to those
members who have a direct or indirect ownership interest in the legal
entity, unless the payment of the legal entity has been reduced by the
proportionate ownership interest of the member due to that member's
ineligibility. Attribution of payments made to legal entities will be
tracked through four levels of ownership in legal entities as described
in Sec. 760.1906.
Like other programs administered by FSA, payments made to an Indian
Tribe or Tribal organization, as defined in section 4(b) of the Indian
Self-Determination and Education Assistance Act (25 U.S.C. 5304), will
not be subject to payment limitation.

ERP Phase 2 Miscellaneous Provisions

If an ERP Phase 2 payment resulted from erroneous information
provided by a producer, or any person acting on their behalf, the
payment will be recalculated and the producer must refund any excess
payment with interest calculated from the date of the disbursement of
the payment. If FSA determines that the producer intentionally
misrepresented information provided on the producer's application, the
application will be disapproved and the producer must refund the full
amount of any payments to FSA with interest from the date of
disbursement.

ERP Phase 2 Requirement To Purchase Crop Insurance or NAP Coverage

All producers who receive ERP Phase 2 payments are statutorily
required to purchase federal crop insurance, or NAP coverage where crop
insurance is not available, for the next 2 available crop years (Pub.
L. 117-43, 135 STAT. 357) as described in this section and as
determined by the Secretary. To identify which crops suffered losses
that resulted in a revenue loss due to a qualifying disaster event,
producers must complete form FSA-522, Crop Insurance and/or NAP
Coverage Agreement. For each of those crops, a producer must file an
acreage report and obtain federal crop insurance or NAP, as may be
applicable:
(1) At a coverage level equal to or greater than 60 percent for
insurable crops; or
(2) At the catastrophic level or higher for NAP crops.
The timing for the requirement to purchase federal crop insurance
or NAP for the next 2 available crop years will be determined from the
date a producer receives an ERP payment and may vary depending on the
timing and availability of crop insurance or NAP for a producer's
particular crops. The final crop year to purchase crop insurance or NAP
coverage to meet the second year of coverage for this requirement is
the 2026 crop year.
In situations where federal crop insurance is unavailable for a
crop, a producer must obtain NAP coverage. Section 1001D of the Food
Security Act of 1985 (1985 Farm Bill) provides that a person or entity
with an AGI greater than $900,000 is not eligible to participate in
NAP; however, producers with an AGI greater than $900,000 are eligible
for ERP. To reconcile this restriction in the 1985 Farm Bill and the
requirement to obtain NAP or crop insurance coverage, a producer may
meet the purchase requirement by purchasing Whole-Farm Revenue
Protection (WFRP) crop insurance coverage, if eligible, or they may pay
the applicable NAP service fee despite their ineligibility for a NAP
payment. In other words, the service fee must be paid even though no
NAP payment may be made because the AGI of the person or entity exceeds
the 1985 Farm Bill limitation.
If both federal crop insurance and NAP coverage are unavailable for
a crop, the producer must obtain WFRP crop insurance coverage, if
eligible.
For all crops listed on form FSA-522, any producer who has the crop
or crop acreage in subsequent years and who fails to obtain the 2 years
of crop insurance or NAP coverage required as specified in this
document, must refund the full amount of any ERP Phase 2 payments with
interest from the date of disbursement. Any producer who does not plant
a crop listed on form FSA-522 in a year for which this requirement
applies is not subject to the crop insurance or NAP purchase
requirement for the crop for that year.
Producers who received an ERP Phase 1 payment for a crop are not
required to obtain additional years of crop insurance or NAP coverage
for that crop, to the extent the producer is already complying with the
requirement in connection with an ERP Phase 1 payment, if they also
receive an ERP Phase 2 payment for a loss associated with that crop.

PARP

Secretary Tom Vilsack announced the USDA Pandemic Assistance for
Producers initiative on March 24, 2021. Through that initiative, USDA
is reaching a broader set of producers than in previous COVID-19
assistance programs, with a specific focus on strengthening outreach to
underserved producers and communities and small and medium agricultural
operations. PARP, a new program administered by FSA, is part of that
initiative.
PARP will use funding authorized by the Consolidated Appropriations
Act, 2021 (CAA; Pub. L. 116-260), which provides funding to prevent,
prepare for, and respond to the COVID-19 pandemic by providing support
for agricultural producers, growers, and processors impacted by
coronavirus. This rule establishes PARP to respond to the COVID-19
pandemic by providing support for eligible producers of agricultural
commodities who suffered an eligible revenue loss in calendar year 2020
due to the COVID-19 pandemic. PARP is intended to provide assistance to
a wide variety of agricultural producers, including those who produced
agricultural commodities that were not eligible for CFAP 1 and 2 (7 CFR
part 9).
For PARP, ``producer'' refers to a person or legal entity
(including a general partnership or joint venture) who was in the
business of farming to produce an agricultural commodity in calendar
year 2020, and who was entitled to a share in the agricultural
commodity available for marketing or would have shared had the
agricultural commodity been produced and marketed. ``Producer'' also
includes cattle feeder operations, which were not eligible for CFAP 1
and CFAP 2. To be eligible for PARP, a producer must:
<bullet> Have been in the business of farming during at least part
of the 2020 calendar year; and
<bullet> Have had at least a 15 percent decrease in ``allowable
gross revenue'' \14\ for the 2020 calendar year, as compared to:
---------------------------------------------------------------------------

\14\ ``Allowable gross revenue'' is explained later in this
section of this document.
---------------------------------------------------------------------------

[cir] The 2018 or 2019 calendar year (similar to the benchmark year
for ERP Phase 2), reflective of a typical year, as elected by the
producer, if they received allowable gross revenue during the 2018 or
2019 calendar years; or
[cir] The producer's expected 2020 allowable gross revenue, if the
producer had no allowable gross revenue in 2018 and 2019.\15\
---------------------------------------------------------------------------

\15\ PARP provides assistance to participants whose allowable
gross revenue for the 2020 calendar year was at or below 85 percent
of the ``benchmark'' allowable gross revenue. This uses the same
maximum level of coverage available under RMA's Whole Farm Revenue
Program (WFRP), coverage that requires 15 percent or more decrease
in revenue to trigger a payment.
---------------------------------------------------------------------------

In addition, to be eligible for PARP, a producer must be one of the
following:

[[Page 1867]]

<bullet> A citizen of the United States;
<bullet> A resident alien, which for purposes of this subpart means
``lawful alien'' as defined in 7 CFR part 1400;
<bullet> A partnership organized under State Law;
<bullet> A corporation, limited liability company, or other
organizational structure organized under State law;
<bullet> An Indian Tribe or Tribal organization, as defined in
section 4(b) of the Indian Self-Determination and Education Assistance
Act (25 U.S.C. 5304); or
<bullet> A foreign person or foreign entity who meets all
requirements as described in 7 CFR part 1400.
For PARP, ``agricultural commodity'' means a crop, aquaculture,
livestock, livestock byproduct, or other animal or animal byproduct
that is produced as part of a farming operation and is intended to be
commercially marketed. It includes only commodities produced in the
United States, and commodities produced outside the United States by a
producer located in the United States and marketed inside the United
States. It excludes:
<bullet> Wild free-roaming animals;
<bullet> Horses and other animals used or intended to be used for
racing or wagering;
<bullet> Aquatic species that do not meet the definition of
aquaculture;
<bullet> Cannabis sativa L. and any part of that plant that does
not meet the definition of hemp; and
<bullet> Timber.
As provided in Sec. 9.304, allowable gross revenue for PARP
includes revenue from:
<bullet> Sales of agricultural commodities produced by the
producer, including the sales resulting from value added through post-
production activities (for example, sales of jam from the processing of
strawberries);
<bullet> Sales of agricultural commodities a producer purchased for
resale, less the cost or other basis of such commodities;
<bullet> The taxable amount of cooperative distributions directly
related to the sale of the agricultural commodities produced by the
producer;
<bullet> Benefits under certain federal agricultural programs and
disaster programs (excluding conservation programs, CFAP 1 and 2, 2020
program year ERP, the Pandemic Livestock Indemnity Program (PLIP), and
the Spot Market Hog Pandemic Program (SMHPP));
<bullet> CCC loans, if treated as income and reported to IRS;
<bullet> Crop insurance proceeds;
<bullet> Payments issued through grant agreements with FSA for
losses of agricultural commodities;
<bullet> Grants from the Department of Commerce, National Oceanic
and Atmospheric Administration and State program funds providing direct
payments for the loss of agricultural commodities or the loss of
revenue from agricultural commodities;
<bullet> Revenue from raised breeding livestock;
<bullet> Revenue earned as a cattle feeder operation;
<bullet> Other revenue directly related to the production of
agricultural commodities that IRS requires the producer to report as
income; and
<bullet> For 2020 allowable gross revenue, payments under the
Pandemic Market Volatility Assistance Program regardless of the
calendar year in which the payment was received.
An optional worksheet is available to assist producer's in
computing their revenue from the sources listed above. Producers who
file or would be eligible to file a joint tax return will certify their
revenue based on what their revenue would have been had they filed
taxes separately for the applicable year. Revenue earned as a contract
producer of an agricultural commodity is not included in allowable
revenue for PARP.
If a producer did not have a full year of revenue for 2018 or 2019
or physically expanded their operation in 2020, the producer may
certify to an adjusted 2018 or 2019 allowable gross revenue on form
FSA-1122A. Producers must provide documentation to support the adjusted
amount within 30 calendar days of submitting their PARP application.
The documentation must show that the producer added production capacity
to the farming operation, increased the use of existing production
capacity, or made physical alterations to existing production capacity
that would have resulted in increased revenue in 2020. Increases in
production capacity do not include crop rotation from year to year,
changes in farming practices such as converting from conventional
tillage to no-till, or increasing the rate of fertilizers or chemicals.
If a producer did not have allowable gross revenue in 2018 and 2019
but was in the business of farming in 2020, the producer must certify
on form FSA-1122A as to what had been their reasonably expected 2020
allowable gross revenue prior to the impact of the COVID-19 pandemic.
Producers must provide documentation to support their expected 2020
allowable gross revenue within 30 days of submitting their PARP
application. Acceptable documentation must be generated in the ordinary
course of business and dated prior to the impact of the COVID-19
pandemic and includes, but is not limited to, financial documents such
as a business plan or cash flow statement that demonstrates an expected
level of revenue; sales contracts or purchase agreements; and
documentation supporting production capacity, use of existing
production capacity, or physical alterations that demonstrate
production capacity.

PARP Application Process

FSA will accept PARP applications until the date announced by the
Deputy Administrator. To apply for PARP, producers must submit a
complete FSA-1122, Pandemic Assistance Revenue Program Application, in
person, by mail, email, facsimile, or other method announced by FSA to
any FSA county office.\16\ Applicants must also submit all of the
following items, if not previously filed with FSA:
---------------------------------------------------------------------------

\16\ The FSA county office locator can be found through the
``Find Your Local Service Center'' section on: <a href="https://www.farmers.gov/">https://www.farmers.gov/</a>.
---------------------------------------------------------------------------

<bullet> Form AD-2047, Customer Data Worksheet, for new customers
or existing customers who need to update their customer profile;
<bullet> Form CCC-860, Socially Disadvantaged, Limited Resource,
Beginning and Veteran Farmer or Rancher Certification, applicable for
the 2020 program year, if the applicant is an underserved farmer or
rancher; \17\
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\17\ For PARP, socially disadvantaged groups include the
following: American Indians or Alaskan Natives, Asians or Asian-
Americans, Blacks or African Americans, Hispanics or Hispanic
Americans, Native Hawaiians or other Pacific Islanders, and women.
Form CCC-860 is not required for underserved farmers and ranchers to
receive a payment; however, failure to submit form CCC-860 will
result in an producer's payment being calculated using a lower
payment factor. Also, see footnote 7.
---------------------------------------------------------------------------

<bullet> Form CCC-901, Member Information for Legal Entities, if
applicable;
<bullet> Form CCC-902, Farm Operating Plan for an individual or
legal entity as provided in 7 CFR part 1400;
<bullet> Form CCC-941, Average Adjusted Gross Income (AGI)
Certification and Consent to Disclosure of Tax Information, for the
2020 program year for the producer, including the legal entity's
members, partners, shareholders, heirs, or beneficiaries as provided in
7 CFR part 1400;
<bullet> Form FSA-1123, Certification of 2020 Adjusted Gross
Income, if applicable;
<bullet> Form FSA-1122A, Pandemic Assistance Revenue Program (PARP)
Application, if applicable;
<bullet> Form AD-1026, Highly Erodible Land Conservation (HELC) and
Wetland Conservation (WC) Certification, for the

[[Page 1868]]

PARP applicant and applicable affiliates as provided in 7 CFR part 12.
The required eligibility forms specified above must be submitted no
later than 60 days from the PARP application deadline. When the
producer does not timely submit the required eligibility forms, or when
a member of a legal entity who is required to submit AD-1026 has not
done so, FSA will not issue a payment to the producer. When any other
required eligibility forms are not timely submitted for a member of a
legal entity, FSA will reduce the payment based on that member's
ownership share of the legal entity.
In addition, producers must provide documentation within 30
calendar days of submitting the FSA-1122, if applicable, to verify:
<bullet> The producer's certified expected 2020 allowable gross
revenue; and
<bullet> The physical expansion of a producer's operation in 2020.
If requested by FSA, the producer must provide additional
documentation that establishes the producer's eligibility for PARP. If
any supporting documentation is requested, the documentation must be
submitted to FSA within 30 days from the request or the application
will be disapproved by FSA.

PARP Payment Calculation

The PARP payment calculation is based on the difference in a
producer's revenue compared to a prior ``benchmark'' year. Producers
who had allowable gross revenue in 2018 or 2019 will elect which of
those years is most reflective of a typical year to use as a benchmark
for the purposes of calculating a PARP payment. FSA will determine the
result of the producer's 2018 or 2019 allowable gross revenue, minus
the producer's 2020 allowable gross revenue, multiplied by a payment
factor. The adjusted 2018 or 2019 allowable gross revenue, as described
above, will be used for producers who did not have a full year of
revenue for 2019 or increased their operation size in 2020. The payment
factor will be 90 percent for underserved farmers and ranchers who have
filed CCC-860 certifying their status for the 2020 program year.\18\
The payment rate for all other producers will be 80 percent. The PARP
payment will be equal to the result of that calculation minus any 2020
program year ERP payments and pandemic assistance received by the
producer under CFAP 1 and 2 (not including any CFAP 2 payments for
contract producer revenue), PLIP, and SMHPP. If a producer receives
assistance through any of those programs after their PARP payment is
calculated, their PARP payment will be recalculated and the producer
must refund any resulting overpayment to FSA.
---------------------------------------------------------------------------

\18\ See footnotes 7 and 11.
---------------------------------------------------------------------------

If a producer was in the business of farming in 2020 but did not
have allowable gross revenue in 2018 and 2019, then the payment
calculation will be equal to the producer's expected 2020 allowable
gross revenue minus the producer's actual 2020 allowable gross revenue,
multiplied by a payment factor of 90 percent for underserved farmers
and ranchers who have filed the form CCC-860, or 80 percent for all
other producers. As described above, the PARP payment will be equal to
the result of that calculation minus any assistance received by the
producer under CFAP 1 and 2 (not including any CFAP 2 payments for
contract producer revenue), 2020 program year ERP, PLIP, and SMHPP, and
the PARP payment will be recalculated if the producer receives
additional payments under those programs. Those producers must provide
documentation to support their certification of their expected 2020
allowable gross revenue within 30 days of submitting their PARP
application or they will be ineligible for payment.
PARP payments will be issued after the application period ends.
PARP payments are subject to the availability of funds and may be
factored if total calculated payments exceed the available funding.
PARP payments are not subject to offset.

PARP Payment Limitation, Average AGI Limitation, and Attribution

PARP payments are subject to a per person or legal entity payment
limitation of $125,000. USDA may establish a lower maximum payment
amount per person, legal entity, or member of a joint venture or
general partnership after the application period has ended if
calculated payment amounts exceed available funding. Similar to the
manner in which payment limitations are applied in the major commodity
and disaster assistance programs administered by FSA, payments will be
attributed to an individual through the direct attribution process used
in those programs. The total payment amount of PARP payments attributed
to an individual will be determined by taking into account the direct
and indirect ownership interests of the individual in all legal
entities participating in PARP.
A producer, other than a joint venture or general partnership, is
ineligible for payments if the producer's average AGI, using the
average of the adjusted gross incomes for the 2016, 2017, and 2018 tax
years, is more than $900,000, unless the producer's AGI for 2020 is
$900,000 or less. To be eligible for payment, a producer whose average
AGI for 2016, 2017, and 2018 exceeds $900,000 but whose 2020 AGI is
$900,000 or less must submit form FSA-1123 and provide a certification
from a licensed CPA or attorney affirming the producer's 2020 AGI is
not more than $900,000. With respect to joint ventures and general
partnerships, this AGI provision will be applied to each member of the
joint venture and general partnership.
To be eligible for payment and facilitate administration of payment
limitation, payment attribution, AGI, and rules applicable to foreign
persons, producers that are a legal entity must provide the names,
addresses, valid taxpayer identification numbers, and ownership share
of each person or each legal entity that holds or acquires a direct or
indirect ownership interest in the legal entity. Payments to a legal
entity will be reduced in proportion to a member's ownership share in
cases where a person or legal entity holds less than a 10 percent
direct or indirect ownership interest and fails to provide a taxpayer
identification number to USDA.

PARP General Requirements

General requirements that apply to other FSA-administered commodity
programs also apply to PARP, including compliance with the provisions
of 7 CFR part 12, ``Highly Erodible Land and Wetland Conservation.''
The regulations in 7 CFR part 1400, subpart E, are applicable to
foreign persons and legal entities containing members, stockholders, or
partners who are not U.S. citizens or resident aliens that own more
than 10 percent of the legal entity. In order for a foreign person to
receive a PARP payment, the person must provide land, capital, and a
substantial amount of active personal labor to the farming operation,
as required by Sec. 1400.401(a), and comply with the other
requirements of subpart E.
Additionally, United States Federal, State, and local governments
(including public schools) are not eligible for PARP payments.
Appeal regulations specified in 7 CFR parts 11 and 780 and
equitable relief and finality provisions in 7 CFR part 718, subpart D,
apply to determinations under PARP. The determination of matters of
general applicability that are not in response to, or result from, an
individual set of facts in an individual

[[Page 1869]]

producer's application for payment are not matters that can be
appealed. Such matters of general applicability include, but are not
limited to, eligibility criteria, the payment calculation, and payment
rates.
In the event that any application for a PARP payment resulted from
erroneous information reported by the producer, the payment will be
recalculated, and the producer must refund any excess payment to USDA,
including interest to be calculated from the date of the disbursement
to the producer. If FSA determines that the producer intentionally
misrepresented information provided on their application, the
application will be disapproved and the producer must refund the full
payment to FSA with interest from the date of disbursement. Any
required refunds must be resolved in accordance with debt settlement
regulations in 7 CFR part 3.

CFAP

USDA established CFAP to assist producers of agricultural
commodities marketed in 2020 who faced continuing market disruptions,
reduced farm-level prices, and increased production and marketing costs
due to COVID-19 under authority provided by the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act; Pub. L. 116-136) and
sections 5(b), (d), and (e) of the CCC Charter Act (15 U.S.C. 714c(b),
(d), and (e)). USDA implemented CFAP through two rounds of payments
(CFAP 1 and CFAP 2), administered by FSA. CFAP 1 was implemented
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 September 21, 2020 (85
FR 59174-59175), 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). USDA
implemented CFAP 2 through a final rule published in the Federal
Register on September 22, 2020 (85 FR 59380-59388). USDA also published
a final rule in the Federal Register on January 19, 2021 (86 FR 4877-
4883), to provide additional assistance for certain commodities under
CFAP 1 and CFAP 2, but suspended implementation of that rule on January
20, 2021, to allow further evaluation of the assistance offered through
CFAP. A final rule published on August 27, 2021 (86 FR 48013-48018),
revised the CFAP 2 application deadline, amended provisions for
contract producers, and allowed producers of sales-based commodities to
use 2018 sales for their payment calculation.
FSA is issuing an additional CFAP 2 payment to underserved farmers
and ranchers.\19\ These payments will be issued under the same
authority as the producers' previous CFAP 2 payments, using CCC funds
as authorized by sections 5(b), (d), and (e) of the CCC Charter Act (15
U.S.C. 714c(b), (d), and (e)), except for payments for tobacco which
will use remaining funds authorized by the CARES Act. As provided in
Sec. 9.203(p), the additional payment will be equal to 15 percent of a
producer's previous CFAP 2 payment, subject to CFAP 2 payment
limitation provisions in Sec. 9.7.\20\ Contract producers are not
eligible for this additional payment because CFAP 2 payments to
contract producers were authorized and funded through the CAA, which
specified that those payments could ``cover not more than 80 percent of
revenue losses.'' Previous CFAP 2 payments to contract producers were
already calculated to have covered 80 percent of contract producers'
revenue losses.
---------------------------------------------------------------------------

\19\ See footnote 11.
\20\ This additional CFAP payment is similar to FSA's
administration of ELRP Phase 1 and ERP Phase 1, which provided a 15
percent increase for payments to underserved producers and Congress
has directed for underserved producers in some permanent disaster
programs a 15 percent higher payment rate (Emergency Livestock
Assistance Program or Emergency Conservation Program). Consistent
with those programs, 15 percent has been determined as the increased
rate for underserved producers.
---------------------------------------------------------------------------

As specified in Sec. 9.4(e), CCC-860, Socially Disadvantaged,
Limited Resource, Beginning and Veteran Farmer or Rancher
Certification, must be on file with FSA with a certification applicable
for the 2020 program year to receive the additional payment.\21\
Producers who have not previously certified to their status for the
2020 program year may submit CCC-860 until the date announced by the
Deputy Administrator to be eligible for the additional payment.
---------------------------------------------------------------------------

\21\ See footnote 7 for an explanation of how long an
underserved producer's certification remains valid and the
requirement to file CCC-860 in subsequent years.
---------------------------------------------------------------------------

The final rule published on January 19, 2021, included a provision
for an additional CFAP 1 payment for hog and pig inventory owned
between April 16, 2020, and May 14, 2020, based on a rate of $17 per
head. USDA suspended implementation of that provision and, after
further review, USDA has determined that it will not issue the
additional CFAP 1 payment for hog and pig inventory. To provide
assistance to hog producers, FSA implemented the Spot Market Hog
Pandemic Program (SMHPP), which provided targeted assistance to
producers who sold hogs through a spot market sale from April 16, 2020,
through September 1, 2020, the period in which those producers faced
the greatest reduction in market prices due to the COVID-19 pandemic.
Producers of hogs and pigs may also be eligible for PARP as previously
discussed in this rule if they suffered an eligible revenue loss in
2020.
FSA previously implemented mandatory provisions of CAA that provide
additional assistance for producers of cattle, price trigger crops, and
flat-rate crops. Cattle payments are based on inventory owned between
April 16, 2020, to May 14, 2020, based on a producer's previously filed
CFAP 1 application, multiplied by the following payment rates per head:
$14.75 for slaughter cattle--mature cattle, $63 for slaughter cattle--
fed cattle, $7 for feeder cattle less than 600 pounds, $25.50 for
feeder cattle 600 pounds or more, and $17.25 for all other cattle.
Payments for flat-rate and price-trigger crops, as defined in Sec.
9.201, are equal to the eligible acres of the crop included on a
producer's CFAP 2 application, multiplied by a payment rate of $20 per
eligible acre. This rule amends the payment calculations for cattle in
Sec. 9.102(c), price trigger crops in Sec. 9.203(a), and flat-rate
crops in Sec. 9.203(b) for consistency with CAA to reflect these
additional payments. FSA already issued these payments and producers
were not required to take any additional action to qualify. These
payments were subject to existing CFAP payment limitations and
eligibility requirements.
This rule amends the general CFAP provisions to clarify how FSA
will handle applications when the taxpayer identification number for a
person or legal entity that holds a direct or indirect ownership
interest in a business structure is not provided to USDA. To receive a
CFAP payment, a person or legal entity must provide their name,
address, and taxpayer identification number to USDA. In addition,
consistent with most other FSA programs, a legal entity must provide
the name, taxpayer identification number, address and ownership share
of each person or legal entity that holds or acquires a direct or
indirect ownership interest in the legal entity; however, the previous
CFAP rules did not specify how the failure to provide such information
would affect the producer's payment eligibility. Previously, FSA had
implemented this requirement by determining that the

[[Page 1870]]

producer was ineligible for payment. Rather than determining the
producer ineligible for payment, in cases where a person or legal
entity holding less than 10 percent direct or indirect ownership
interest does not submit a taxpayer identification number, FSA will
reduce the producer's payment in proportion to a member's ownership
share when the taxpayer identification number for a person or legal
entity that holds a direct or indirect ownership interest of less than
10 percent at, or above, the fourth level of ownership in the business
structure is not provided to USDA as provided in Sec. 9.7(i).
Additionally, a legal entity will not be eligible to receive payment
when a valid taxpayer identification number for a person or legal
entity that holds a direct or indirect ownership interest of 10 percent
or greater at, or above the fourth level of ownership in the business
structure is not provided to USDA as provided in Sec. 9.7(i). USDA is
making this change because many farm operations suffered sales losses
and had increased marketing costs in 2020 due to the COVID-19 pandemic,
and the ability to receive a partial CFAP payment will assist those
operations in managing those losses and costs. USDA is not reopening
the CFAP application period; this change only affects how FSA will
process CFAP applications currently on file.
This rule also updates references throughout 7 CFR part 9, subparts
A through C, to refer specifically to those subparts rather than part 9
due to the addition of subpart D for PARP.

ECP, EFRP, and BCAP

The Agricultural Credit Act of 1978 (16 U.S.C. 2201), amended by
section 2403 of the Agriculture Improvement Act of 2018 (Pub. L. 115-
334), authorizes ECP, and generally authorizes payments to farmers and
ranchers to rehabilitate farmland damaged by certain natural disasters
and to implement emergency water conservation measures in periods of
severe drought. The ECP regulations are in 7 CFR part 701, subpart B.
Prior to this rule, land owned or controlled by the United States
or States, including State agencies or other political subdivisions,
was specified in the regulation as ineligible for cost share. This rule
amends the general ECP provision at Sec. 701.105 to allow eligibility
of that land under certain conditions. The intent of this change is to
allow producers who lease Federal and State land the opportunity to
participate in ECP. This is consistent with the previous operational
policy, which allowed payments as specified in the FSA Handbook 1-
ECP.\22\
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\22\ See <a href="https://www.fsa.usda.gov/internet/FSA_File/1-ecp_r06_a01.pdf">https://www.fsa.usda.gov/internet/FSA_File/1-ecp_r06_a01.pdf</a>.
---------------------------------------------------------------------------

This rule also corrects a typographical error in a section number
to redesignate Sec. 718.128 to be Sec. 701.128. Prior to this rule,
the ECP regulation authorized advance payment only for fence repair or
replacement. This rule further amends Sec. 701.128 to allow advance
payments for all ECP practices. Consistent with the authorization for
fence repair or replacement, ECP will provide advance payments of up to
25 percent of the cost for all ECP practices before the restoration is
carried out. In the event this cost share assistance is not spent
within 60 calendar days of being issued, the participant will be
required to refund the advance cost-share payment. To reflect these
changes, we are revising the section heading of Sec. 701.128 to
``Advance Payment.''
Additionally, this rule clarifies the duplicate benefits provisions
in Sec. 701.111. The language was modified to further define
parameters surrounding restoration activities being performed on the
same piece of land. This will ensure that other Federal program-related
benefits do not cover the same or similar expenses so as to create
duplicative payments on the same piece of land and that any other
Federal cost-share payments would not result in paying more than is
authorized for ECP.
This rule also makes minor technical amendments to the existing ECP
and EFRP regulations. Specifically, this rule:
<bullet> Adds the definition of ``Socially disadvantaged farmer or
rancher'' and, within that definition, defines ``Socially disadvantaged
group'' in Sec. 701.2 to be consistent with the definition (7 U.S.C.
2279(a)) used in its authorizing legislation instead of defaulting to
using the definition in Sec. 718.2 and makes the same technical
correction in Sec. 1450.2 for the BCAP regulation;
<bullet> Removes outdated provisions, specifically removing: 7 CFR
701.44, 701.45, and 701.150 through 701.157;
<bullet> Adds the definition for ``Forestland,'' removes the
definition of ``Commercial forestland,'' and corrects the definition of
``Non-industrial private forestland'' to remove the words ``commercial
forest'' in Sec. 701.102.
<bullet> Recognizes Public Law 117-180, the Continuing
Appropriations and Ukraine Supplemental Appropriations Act, 2023,
Division G, section 104(k)(3)(A) authorizing 100 percent Federal
assistance for the cost of damages to producers associated with the
``Hermit's Peak/Calf Canyon'' Fire. This rule is amending the
regulations in 7 CFR 701.126, 701.127, and 701.226 to authorize the
Secretary to waive the maximum limitations to the maximum extent
otherwise allowed by law.

Supplemental Agricultural Disaster Assistance Programs

This rule makes discretionary changes to ELAP, LFP, and LIP to
amend what is considered eligible livestock. Previously, livestock that
were maintained for pleasure, roping, pets, or show were ineligible
under ELAP, LFP, and LIP. This rule removes those restrictions in
Sec. Sec. 1416.104, 1416.204, and 1416.304 because FSA recognizes that
animals maintained in a commercial operation for those purposes have
value and could be available for marketing from the farm. In addition,
FSA is clarifying that horses and other animals used or intended to be
used for racing or wagering are considered ineligible livestock for
ELAP, LFP, and LIP.
This rule also amends Sec. Sec. 1416.104 and 1416.204 to remove
the restriction on ostrich eligibility for LFP and ELAP. FSA is making
this change because ostriches satisfy more than 50 percent of their net
energy requirement through the consumption of growing forage grasses
and legumes; therefore, they are considered ``grazing animals,'' as
defined in Sec. Sec. 1416.102 and 1416.202, for the purpose of LFP and
ELAP. This change is effective for the 2022 program year for both LFP
and ELAP. ELAP requires a notice of loss to be filed within 30 days of
when the loss is first apparent. Because that deadline may have passed
for producers' 2022 losses related to ostriches that occurred prior to
publication of this rule, FSA is extending the deadline for those
notices of loss through February 10, 2023.
This rule removes and reserves Sec. 1416.5, which provides policy
related to equitable relief determinations under ELAP, LFP, LIP, and
the Tree Assistance Program (TAP). These programs are already subject
to the general equitable relief provisions in 7 CFR part 718, subpart
C; therefore, the provisions in Sec. 1416.5 are unnecessary. Equitable
relief for these programs will be administered in a manner that is
consistent with other FSA programs to which part 718 applies. This rule
also makes minor clarifications and technical corrections to the
definition of ``eligible loss condition'' in Sec. 1416.102 and to
Sec. Sec. 1416.103(a), 1416.103(d)(6), 1416.304(c)(3), 1416.305(g),
and 1416.305(i).

NAP

FSA is amending the NAP regulations to update provisions related to

[[Page 1871]]

applications for coverage. This rule updates the definition of
``application for coverage'' and 7 CFR 1437.7(a) to reflect that the
application for coverage may be filed in any FSA county office, rather
than only in the producer's administrative county. The definition of
``application for coverage'' is also amended to provide flexibility as
FSA reviews ways to streamline the application process for underserved
farmers and ranchers who are eligible for catastrophic coverage without
paying a service fee.
Following the change to the regulation, FSA intends to designate
the CCC-860 to be an application for catastrophic coverage for NAP if
filed before the deadline for application for the coverage period. The
catastrophic coverage for underserved producers, once in effect, will
be treated as continuous coverage for all eligible crops as long as the
producer's certification is valid.\23\ Once the applicable status
expires, a producer will need to apply for NAP coverage by the deadline
and pay the applicable service fee. Many underserved producers have
previously filed a certification of their underserved status with FSA,
and those producers will be considered as having timely applied for
catastrophic coverage for the 2022 crop year if the certification was
filed before the deadline for application for the NAP coverage period.
---------------------------------------------------------------------------

\23\ See footnote 7 for an explanation of how long an
underserved producer's certification remains valid and the
requirement to file CCC-860 in subsequent years.
---------------------------------------------------------------------------

As provided in 7 CFR 1437.2(e), the Deputy Administrator may
authorize State and county committees to waive or modify deadlines in
cases where lateness or failure to meet such other requirements does
not adversely affect the operation of NAP; therefore, FSA is amending 7
CFR 1437.6(a) to remove an unnecessary provision related to
applications filed after the deadline. This rule also makes minor
clarifications in 7 CFR 1437.7.

Payment Eligibility

Notification of interest requirements in Sec. 1400.107 provide
that an entity is ineligible for any payment under any program listed
in Sec. 1400.1, including certain programs administered by the Natural
Resources Conservation Service (NRCS), when the names and taxpayer
identification numbers for members holding an ownership interest in the
legal entity are not provided to FSA. FSA has determined for the
programs that it administers that prohibiting payments to a legal
entity when member information is provided for some, but not all
members, may adversely impact a farm operation's sustainability during
times when farm program payments may be a large portion of the farm's
income. FSA recognizes that names, addresses, valid taxpayer
identification numbers, and ownership shares are important elements
necessary to facilitate administration of FSA's rules for payment
eligibility and establishing maximum payment limitations for each
program. However, if a valid taxpayer identification number is not
provided for a member of a legal entity, FSA is still able to make
applicable determinations of eligibility and establish a maximum
payment limitation for the legal entity and its other members.
With this rule change, for programs administered by FSA, FSA will
reduce the payment to a legal entity in proportion to a member's
ownership share in cases where a person or legal entity holding less
than a 10 percent direct or indirect ownership interest fails to
provide a valid taxpayer identification number, instead of prohibiting
any payment to the legal entity. Additionally, a legal entity will not
be eligible to receive payment when a valid taxpayer identification
number for a person or legal entity that holds a direct or indirect
ownership interest of 10 percent or greater, at or above the fourth
level of ownership in the business structure, is not provided to USDA.
This change will allow the legal entity to earn a partial payment based
on the ownership shares of the members whose valid taxpayer
identification numbers are submitted in cases where a member or members
holding less than a 10 percent interest do not submit a valid taxpayer
identification number.
NRCS has determined that such change in the notification
requirements is not appropriate for the programs it administers. Unlike
the intended purposes of FSA program payments, NRCS conservation
program payments are not intended to provide economic support,
including in times of disaster, to keep operations economically viable.
Rather, they are payments made to reimburse a participant for costs
incurred by a participant to voluntarily implement conservation
practices and activities or payments made for the conveyance of a
conservation easement. Therefore, for the programs NRCS administers,
the participant is ineligible to receive any payment specified in Sec.
1400.1(a)(7) or as NRCS provides in individual program regulations if
the participant fails to provide: (1) the name, address, valid taxpayer
identification number, and ownership share of each person; or (2) the
name, address, valid taxpayer identification number, and ownership
share of each legal entity, that holds or acquires an ownership
interest in the legal entity.
For programs administered by FSA that are subject to the provisions
of Sec. 1400.107, this change will be effective for the current and
subsequent program years. FSA is also making this change retroactive to
the 2020 program year, subject to funding availability, because many
farm operations suffered income losses in 2020 due to the COVID-19
pandemic, and the ability to receive a partial payment under the
applicable programs will assist those operations in managing those
losses. FSA is not reopening sign up periods for programs with payments
that could be affected by this change; it will only affect the way
payments are processed for legal entities that previously filed
applications. Because the notification of interest provisions are
general provisions that are applicable to part 1400, subparts B, C, E,
and F, FSA is also moving the notification of interest requirement from
Sec. 1400.107 in subpart B, Payment Limitation, to Sec. 1400.10 in
subpart A, General Provisions.

Notice and Comment and Effective Date

The Administrative Procedure Act (APA, 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 or contracts. This rule governs
pandemic assistance and disaster assistance payments to certain
commodity producers and therefore falls within the benefits exemption
for ERP, PARP, ECP, BCAP, and the disaster assistance programs.
As specified in 7 U.S.C. 9091, the regulations to implement the
ELAP, LIP, LFP, and NAP are:
<bullet> Exempt from the notice and comment provisions of 5 U.S.C.
553, and
<bullet> Exempt from the Paperwork Reduction Act (44 U.S.C. chapter
35).
As specified in 16 U.S.C. 3648, the regulations to implement EFRP
are exempt from the Paperwork Reduction Act (44 U.S.C. chapter 35).
This rule is exempt from the regulatory analysis requirements of
the Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by the
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
The requirements for the regulatory flexibility analysis in 5 U.S.C.
603 and 604 are specifically tied to the requirement for a proposed
rule by section 553 or any other law; in

[[Page 1872]]

addition, the definition of rule in 5 U.S.C. 601 is tied to the
publication of a proposed rule.
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 and disaster events, 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 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 and 13563

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 emphasized 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.
The Office of Management and Budget (OMB) designated this rule as
economically significant under Executive Order 12866 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
<a href="http://regulations.gov">regulations.gov</a>.

Cost Benefit Analysis Summary

The cost-benefit analysis covers the unrelated programs or program
changes, which are included in this rule, that largely address pandemic
assistance or natural disaster assistance.
The accompanying rule announces Phase 2 of the Emergency Relief
Program (ERP), which addresses eligible crop losses not included in ERP
Phase 1. ERP is authorized in the Extending Government Funding and
Delivering Emergency Assistance Act (Pub. L. 117- 43), which provided
$10 billion for expenses related to losses of crops (including milk,
on-farm stored commodities, crops prevented from planting in 2020 and
2021, and harvested adulterated wine grapes), trees, bushes, and vines,
as a consequence of droughts, wildfires, hurricanes, and other events
occurring in calendar years 2020 and 2021. Targeted outlays for ERP
Phase 2 are $1.2 billion; a pro-rate in payments is likely as gross
outlays are projected at $1.5 billion (see Table 1).
Two programs--including a new pandemic assistance program and
additional assistance for underserved producers--address COVID-19
losses. Prior rules associated with the COVID-19 pandemic, CFAP 1, CFAP
2, and CFAP 2: Producers of Sales-Based Commodities and Contract
Producers, assisted producers of agricultural commodities marketed in
2020 who faced continuing market disruptions, reduced farm-level
prices, and increased production and marketing costs due to COVID-19.
The additional costs are associated with declines in demand, surplus
production, or disruptions to shipping patterns and marketing channels.
In implementing the pandemic related programs, USDA determined that
additional assistance was necessary:
<bullet> PARP will assist producers with revenue loss resulting
from the COVID-19 pandemic for eligible agricultural commodities.
Payments will be made on a whole farm basis and not on a commodity-by-
commodity basis. The aggregate allocation for PARP is targeted at $250
million; a pro-rate in payments is likely as gross outlays are
projected at $2.7 billion (Table 1).
<bullet> CFAP 2 recipients who are underserved (beginning, limited
resource, socially disadvantaged, and veteran farmers and ranchers),
excluding contract producers, will receive a 15-percent top-up payment.
Net outlays are estimated at $325 million (Table 1). As few underserved
producers are likely to have AGI issues or reach the payment limit,
gross and net outlays are assumed to be identical.
The other changes relate to existing FSA programs or requirements:
<bullet> Expanded Eligibility of Animals in Livestock Disaster
Programs--This rule makes discretionary changes to ELAP, LFP, and LIP
to amend the definition of eligible livestock. Previously, animals that
contributed to the commercial viability of an operation and were
maintained for the purposes of pleasure, roping, hunting, pets, or
show, as well as animals intended for consumption by an owner, lessee,
or contract grower, were ineligible for ELAP, LFP, and LIP. This rule
removes those restrictions. Estimated net outlays (accounting for AGI
considerations, payment limits, and other reductions) are $17.7 million
annually.
<bullet> Flexibility in Non-Insured Crop Disaster Assistance
Program (NAP) Enrollment for Underserved Producers--FSA is updating NAP
provisions regarding program flexibilities for underserved producers.
For example, the ``application of coverage'' is amended to provide
flexibility as FSA reviews ways to streamline the application process
for underserved farmers and ranchers. Net outlays are estimated at $4.3
million annually (identical to the gross outlay estimate).
<bullet> Notification of Interest Changes--Prior to this rule, a
legal entity was ineligible for farm programs when the names and valid
taxpayer identification numbers for all members holding an ownership
interest in the entity were not provided to USDA. Now, a legal entity
can receive a partial payment in cases where a person or legal entity
holding less than a 10 percent direct or indirect ownership interest
fails to provide a taxpayer identification number. Net outlays are
estimated at $3.7 million annually.
<bullet> ECP Expansion to Public Lands (that is, Federally- and
State-owned Land)--ECP provides payments to farmers and ranchers to
rehabilitate farmland damaged by certain natural disasters and to
implement emergency water conservation measures in periods of severe
drought. ECP eligibility on public lands has not been included in the
regulation until now. ECP coverage of public lands has been FSA policy,
as specified in the FSA handbook, for many years, however, and FSA
staff in the field have provided ECP assistance to both public and
private lands since at least the 1990s. As a result, no increase in net
outlays is expected.
<bullet> ECP and EFRP and the Hermit's Peak/Calf Canyon Fire--
Section 104(3)(A) of the Continuing Appropriations and Ukraine
Supplemental Appropriations Act, 2023 authorizes the Federal government
to pay 100 percent of the ECP and Emergency Forest Restoration Program
(EFRP) cost for damage associated with the Hermit's Peak/Calf Canyon
Fire. This fire burned over 340,000 acres from April 2022 to June 2022
and was the largest wildfire in recorded history in New Mexico. The
cost-share rate for both ECP and EFRP, prior to this legislation, was
generally 75 percent regardless of location. The legislation

[[Page 1873]]

applies only to the locale of the Hermit's Peak/Calf Canyon Fire. The
expected net cost is $22.5 million for FY 2023.
Gross outlays for these items are estimated at $4.5 billion (see
Table 1). After taking into account AGI considerations and payment
limitations, as well as the targeted caps on ERP Phase 2 and PARP
spending, net outlays are estimated at $1.8 billion. ERP Phase 2
accounts for about two-thirds of expected total net outlays.
FSA will administer all programs in Table 1. Producers must fill
out paperwork to participate in these programs, and the associated
administrative costs are estimated at $18.4 million. Note that ERP
Phase 2, PARP, and the Hermit's Peak/Calf's Canyon ECP/EFRP fire item
use exclusively appropriated funds.

Table 1--Estimated Gross and Net Outlays for the Pandemic Assistance and Agricultural Disaster Assistance
Programs Rule for FY 2023
----------------------------------------------------------------------------------------------------------------
Gross estimated Net estimated Implementing
Item outlays in 2023 outlays agency Funding source
----------------------------------------------------------------------------------------------------------------
Item 1--Emergency Relief $1.504 billion $1.2 billion..... FSA.............. Extending Government
Program (ERP) Phase 2. \a\. Funding and
Delivering Emergency
Assistance Act.
Item 2--PARP................... $2.662 billion 250 million...... FSA.............. CAA.
\b\.
Item 3--15 Percent Top-Up for 325 million...... 325 million...... FSA.............. CCC net transfer
Underserved Recipients of CFAP except for the
2 Payments. tobacco portion,
which is from the
CARES Act.
Item 4--Recreational Animals 19.5 million..... 17.7 million..... FSA.............. CCC.
and Livestock Disaster
Programs.
Item 5--Flexibility in NAP 4.3 million...... 4.3 million...... FSA.............. CCC.
Enrollment for Underserved
Producers \d\.
Item 6--Notification of 3.7 million...... 3.7 million...... FSA.............. CCC.
Interest Changes.
Item 7--ECP and Public Lands... No change in cost No change in cost FSA.............. CCC.
Item 8--ECP and EFRP and the 24.2 million..... 22.5 million..... FSA.............. Continuing
Hermit's Peak/Calf's Canyon Appropriations and
Fire \c\. Ukraine Supplemental
Appropriations Act,
2023.
--------------------------------------
Total...................... 4.54 billion..... 1.82 billion.....
----------------------------------------------------------------------------------------------------------------
\a\ This estimate uses the 50-percent loss scenario. Note that both 2020 and 2021 losses are expected to be paid
in FY 2023. The significant difference between gross and net outlays is because the targeted amount for ERP
Phase 2 spending is $1.2 billion.
\b\ This estimate represents the most plausible scenario but, as discussed below, gross estimated outlays could
be considerably higher. Note that the significant difference between gross and net outlays is because the
targeted amount for PARP spending is $250 million.
\c\ The difference between the gross and net amount is due to adjusted gross income (AGI) considerations,
payment limitations, and other reductions.
\d\ This estimate uses the 20 percent increase-in-participation scenario.
Note: Benefits associated with items 4 through 7 continue in FY 2023 and in perpetuity in each FY beyond.
Payments associated with Items 1, 2, 3, and 8 are assumed to be paid in FY 2023 and to not continue beyond.

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, 42 U.S.C. 4321-4347), 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
regulation 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 1502.16(b)). The pandemic
assistance and disaster assistance programs were 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.
This rule includes discretionary amendments for ECP and EFRP.
Accordingly, the discretionary provisions of this action are covered by
the Categorical Exclusion, in 7 CFR 799.31(b)(2)(iii) for minor
amendments or revisions to previously approved actions and Sec.
799.31(b)(3)(i), for the issuance of minor technical corrections to
regulations.
The rule implements discretionary amendments for BCAP, CFAP, ELAP,
LIP, LFP, NAP, and PARP. The discretionary aspects are to improve
administration of the programs and clarify existing program
requirements. The change to BCAP is a technical clarification and does
not alter the impacts or alternatives previously considered in the BCAP
Programmatic Environmental Impact Statement and Record of Decision
dated June 2010. FSA is providing the disaster assistance under ELAP,
LIP, LFP, and NAP to eligible producers. The discretionary provisions
would not alter any environmental impacts resulting from implementing
the mandatory changes to those programs. Accordingly, these
discretionary aspects are coved by the following Categorical Exclusion:
in 7 CFR 799.31(b)(6)(vi) safety net programs administrated by FSA. ERP
Phase 2 is a new regulation, which is a benefit program providing
assistance after specific natural disasters; therefore, similar to the
other programs discussed in this paragraph, ERP Phase 2 has similar
discretionary aspects that are coved by the following Categorical
Exclusion: in 7 CFR 799.31(b)(6)(vi) safety net programs administrated
by FSA.
Through this review, FSA determined that the proposed discretionary
changes in this rule fit within the categorical exclusions listed
above. Categorical exclusions apply when no extraordinary circumstances
(Sec. 799.33) exist. Therefore, as this rule presents only
discretionary amendments that will not have an impact to the human
environments, individually or cumulatively, FSA will not prepare an

[[Page 1874]]

environmental assessment or environmental impact statement for this
rule; this rule serves as documentation of the programmatic
environmental compliance decision for this federal action.

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. For the payment eligibility regulation
changes, payments will be adjusted retroactively, starting in January
2020, as discussed above in the Payment Eligibility section, above. For
the ELAP regulation changes, payments will be made retroactively
starting at January 1, 2021, as discussed in the Cost Benefit Analysis
Summary section, above. Before any judicial actions may be brought
regarding the provisions of this rule, the administrative appeal
provisions of 7 CFR parts 11 and 780 are to be exhausted.

Executive Order 13175

This rule has been reviewed in accordance with the requirements of
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 or 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 at this time. 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 law. Outside of Tribal consultation, USDA is working with
Tribes to provide information about pandemic assistance, agricultural
disaster assistance, and other issues.

Unfunded Mandates

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 of State, local, and Tribal governments or the
private sector. Agencies generally must prepare a written statement,
including cost benefits 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 titles and numbers of the Federal Domestic Assistance Programs
found in the Catalog of Federal Domestic Assistance to which this rule
applies are:

10.051--Commodity Loans and Loan Deficiency Payments
10.054--Emergency Conservation Program
10.069--Conservation Reserve Program
10.087--Biomass Crop Assistance Program
10.088--Livestock Indemnity Program
10.089--Livestock Forage Disaster Program
10.091--Emergency Assistance for Livestock, Honeybees, and Farm-Raised
Fish Program
10.092--Tree Assistance Program
10.112--Price Loss Coverage
10.113--Agriculture Risk Coverage
10.130--Coronavirus Food Assistance Program 1
10.132--Coronavirus Food Assistance Program 2
10.143--Pandemic Assistance Revenue Program
10.451--Noninsured Assistance
10.912--Environmental Quality Incentives Program
10.917--Agricultural Management Assistance
10.964--Emergency Relief Program

Paperwork Reduction Act

As noted above, the regulations to implement the EFRP, ELAP, LIP,
LFP, and NAP changes are exempt from PRA as specified in 7 U.S.C.
9091(c)(2)(B) and 16 U.S.C. 3846(b)(1).
For ECP and BCAP, there are no changes to the information
collection activities approved by OMB under control number 0560-0082.
In accordance with the Paperwork Reduction Act of 1995, the PARP
information collection activity was submitted to OMB for emergency
approval. FSA will collect and evaluate the application and other
required paperwork from the producers for PARP. The forms are described
above in the PARP Application Process section. Following the 60-day
public comment period provided by this rule, FSA intends to request 3-
year OMB approval to cover the PARP information collection request.
Title: PARP.
OMB Control Number: 0560-New.
Type of Request: New Collection.
Abstract: This information collection is required to support PARP
information collection activities to provide payments to eligible
producers who, with respect to their agricultural commodities, have
been impacted by the effects of the COVID-19 pandemic. The information
collection is necessary to evaluate the application and other required
paperwork for determining the producer's eligibility and assist in the
producer's payment calculations. The forms are included in the request.
For the following estimated total annual burden on respondents, the
formula used to calculate the total burden hour is the estimated
average time per response multiplied by the estimated total annual
responses.
Estimate of Respondent Burden: Public reporting burden for this
information collection is estimated to average 0.51385 hours per
response, including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collections of information.
Type of Respondents: Producers or farmers.
Estimated Annual Number of Respondents: 313,901.
Estimated Number of Responses per Respondent: 1.6550.
Estimated Total Annual Responses: 519,506.
Estimated Average Time per Response: 0.51385 hours.
Estimated Annual Burden on Respondents: 266,947 hours.
Also, FSA is requesting comments from all interested individuals
and organizations on a new information collection associated with ERP
Phase 1 and 2. The emergency request was approved for the ERP Phase 1
using OMB control number 0560-0309. The emergency request was approved
for the ERP Phase 2 using temporary OMB control number. The ERP Phase 2
will be merged with the approved 0560-0309 information collection
request. ERP is for the producers who suffered

[[Page 1875]]

losses of crops, trees, bushes, and vines due to wildfires, hurricanes,
floods, derechos, excessive heat, winter storms, freeze (including a
polar vortex), smoke exposure, excessive moisture, qualifying drought,
and related conditions occurring in calendar years 2020 and 2021. FSA
needs to disburse the payments to the eligible producers to cover the
losses of crops, trees, bushes and vines, and the payments will
seriously assist the producers not to consider making business
decisions to lose the farm business.
Title: ERP Phase 2.
Type of Request: New.
Abstract: ERP is for the producers who suffered losses of crops,
trees, bushes, and vines due to wildfires, hurricanes, floods,
derechos, excessive heat, winter storms, freeze (including a polar
vortex), smoke exposure, excessive moisture, qualifying drought, and
related conditions occurring in calendar years 2020 and 2021. FSA needs
to disburse the payments to the eligible producers to cover the losses
of crops, trees, bushes and vines, and the payments will seriously
assist the producers not to consider making business decisions to lose
the farm business.
For the following estimated total annual burden on respondents, the
formula used to calculate the total burden hour is the estimated
average time per response multiplied by the estimated total annual
responses.
Estimate of Respondent Burden: Public reporting burden for this
information collection is estimated to average 0.54492 hours per
response, including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collections of information.
Type of Respondents: Producers or farmers.
Estimated Annual Number of Respondents: 48,402.
Estimated Number of Responses per Respondent: 2.085.
Estimated Total Annual Responses: 100,918.
Estimated Average Time per Response: 0.54492 hours.
Estimated Annual Burden on Respondents: 54,992 hours.
Also, FSA is requesting comments from all interested individuals
and organizations on a new information collection associated with CFAP
2. The emergency request was approved under a temporary OMB control
number and will merge with CFAP 2 under the OMB control number 0560-
0297.
Title: CFAP 2.
Type of Request: New.
Abstract: This information collection is required to support CFAP 2
information collection activities to provide payments to eligible
producers who, with respect to their agricultural commodities, have
been impacted by the effects of the COVID-19 pandemic. The information
collection is necessary to evaluate the application and other required
paperwork for determining the producer's eligibility and assist in the
producer's payment calculations.
For the following estimated total annual burden on respondents, the
formula used to calculate the total burden hour is the estimated
average time per response multiplied by the estimated total annual
responses.
Estimate of Respondent Burden: Public reporting burden for this
information collection is estimated to average 0.0999 hours per
response, including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collections of information.
Type of Respondents: Producers or farmers.
Estimated Annual Number of Respondents: 96,973.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Responses: 96,973.
Estimated Average Time per Response: 0.0999 hours.
Estimated Annual Burden on Respondents: 9,697 hours.
FSA is requesting comments on all aspects of this information
collection to help FSA to:
(1) Evaluate whether the collection of information is necessary for
the proper performance of the functions of FSA, including whether the
information will have practical utility;
(2) Evaluate the accuracy of the FSA's estimate of burden including
the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology.
All comments received in response to this document, including names
and addresses when provided, will be a matter of public record.
Comments will be summarized and included in the submission for Office
of Management and Budget approval.

USDA Non-Discrimination Policy

In accordance with Federal civil rights law and U.S. Department of
Agriculture (USDA) civil rights regulations and policies, USDA, its
Agencies, offices, and employees, and institutions participating in or
administering USDA programs are prohibited from discriminating based on
race, color, national origin, religion, sex, gender identity (including
gender expression), sexual orientation, disability, age, marital
status, family or parental status, income derived from a public
assistance program, political beliefs, or reprisal or retaliation for
prior civil rights activity, in any program or activity conducted or
funded by USDA (not all bases apply to all programs). Remedies and
complaint filing deadlines vary by program or incident.
Persons with disabilities who require alternative means of
communication for program information (for example, braille, large
print, audiotape, American Sign Language, etc.) should contact the
responsible Agency or USDA TARGET Center at (202) 720-2600 or (844)
433-2774 (toll-free nationwide). Additionally, program information may
be made available in languages other than English.
To file a program discrimination complaint, complete the USDA
Program Discrimination Complaint Form, AD-3027, found online at <a href="https://www.usda.gov/oascr/how-to-file-a-program-discrimination-complaint">https://www.usda.gov/oascr/how-to-file-a-program-discrimination-complaint</a> and
at any USDA office or write a letter addressed to USDA and provide in
the letter all the information requested in the form. To request a copy
of the complaint form, call (866) 632-9992. Submit your completed form
or letter to USDA by mail to: U.S. Department of Agriculture, Office of
the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW,
Washington, DC 20250-9410 or email: <a href="/cdn-cgi/l/email-protection#baf5fbf9facfc9dedb94ddd5cc">[email&#160;protected]</a>.
USDA is an equal opportunity provider, employer, and lender.

List of Subjects

7 CFR Part 9

Agricultural commodities, Agriculture, Disaster assistance,
Indemnity payments.

7 CFR Part 701

Disaster assistance, Environmental protection, Forests and forest
products, Grant programs--agriculture, Grant programs--natural
resources, Reporting and recordkeeping requirements, Rural

[[Page 1876]]

areas, Soil conservation, Water resources, Wildlife.

7 CFR Part 760

Dairy products, Indemnity payments, Reporting and recordkeeping
requirements.

7 CFR Part 1400

Agriculture, Grant programs--agriculture, Loan programs--
agriculture, Natural resources, Price support programs.

7 CFR Part 1416

Administrative practice and procedure, Agriculture, Disaster
assistance, Fruits, Livestock, Nursery stock, Seafood.

7 CFR Part 1437

Acreage allotments, Agricultural commodities, Crop insurance,
Disaster assistance, Fraud, Penalties, Reporting and recordkeeping
requirements.

7 CFR Part 1450

Administrative practice and procedure, Agriculture, Energy,
Environmental protection, Grant programs-agriculture, Natural
resources, Reporting and recordkeeping requirements, Technical
assistance.
For the reasons discussed above, this final rule amends 7 CFR parts
9, 701, 760, 1400, 1416, 1437, and 1450 as follows:

PART 9--PANDEMIC ASSISTANCE PROGRAMS

0
1. The authority citation for part 9 continues to read as follows:

Authority: 15 U.S.C. 714b and 714c; Division B, Title I, Pub.
L. 116-136, 134 Stat. 505; and Division N, Title VII, Subtitle B,
Chapter 1, Pub. L. 116-260.

0
2. Revise the heading for part 9 to read as set forth above.

Subpart A--CFAP General Provisions

0
3. Revise the heading for subpart A to read as set forth above.

Sec. 9.1 [Amended]

0
4. Amend Sec. 9.1 as follows:
0
a. In paragraph (a) introductory text, remove the words ``This part
specifies'' and add ``Subparts A through C of this part specify'' in
their place, and remove the words ``payment made under this part'' and
add ``CFAP payment'' in their place;
0
b. In paragraph (c), remove the words ``this part'' each time they
appear and add ``subparts A through C of this part'' in their place;
and
0
c. In paragraph (d), remove words ``the programs of this part'' and add
``CFAP'' in their place.

0
5. Amend Sec. 9.2 as follows:
0
a. In the introductory text, remove the words ``this part'' and add
``subparts A through C of this part'' in its place;
0
b. In the definition of ``NOFA'', remove the words ``under this part'';
and
0
c. Add a definition for ``Ownership interest'' in alphabetical order.
The addition reads as follows:

Sec. 9.2 Definitions.

* * * * *
Ownership interest means to have either legal ownership interest or
beneficial ownership interest in a legal entity. For the purposes of
administering CFAP, a person or legal entity that owns a share or stock
in a legal entity that is a corporation, limited liability company,
limited partnership, or similar type entity, and shares in the profits
or losses of such entity is considered to have an ownership interest in
such legal entity. A person or legal entity that is a beneficiary of a
trust or heir of an estate who benefits from the profits or losses of
such entity is also considered to have an ownership interest in such
legal entity.
* * * * *

Sec. 9.3 [Amended]

0
6. Amend Sec. 9.3 as follows:
0
a. In paragraph (a), remove the words ``this part'' and add ``subparts
A through C of this part'' in their place; and
0
b. In paragraph (b)(2), remove the words ``this part means'' and add
``subparts A through C of this part means'' in its place.

0
7. Amend Sec. 9.4 by adding paragraph (e) to read as follows:

Sec. 9.4 Time and method of application.

* * * * *
(e) To receive an additional payment under Sec. 9.203(p), a
producer must submit form CCC-860, Socially Disadvantaged, Limited
Resource, Beginning and Veteran Farmer or Rancher Certification, with a
certification applicable to the 2020 program year by the date announced
by the Deputy Administrator.

0
8. Amend Sec. 9.7 as follows:
0
a. In paragraphs (b), (c), (d), and (e)(2)(ii) and (iii), add the words
``subparts A through C of'' before the words ``this part'' each time
they appear;
0
b. In paragraph (h), remove the words ``This part applies'' and add
``Subparts A through C of this part apply'' in their place; and
0
c. Add paragraph (i).
The addition reads as follows.

Sec. 9.7 Miscellaneous provisions.

* * * * *
(i) To be eligible to receive a CFAP payment and facilitate
administration of paragraphs (d) and (e) of this section, a person or
legal entity must provide their name, address, and taxpayer
identification number to USDA. In addition, a legal entity must provide
the name taxpayer identification number, address and ownership share of
each person or legal entity that holds or acquires a direct or indirect
ownership interest in the legal entity. CFAP payments to a legal entity
will be reduced in proportion to a member's ownership share when the
taxpayer identification number for a person or legal entity that holds
less than a 10 percent direct or indirect ownership interest at, or
above, the fourth level of ownership in the business structure is not
provided to USDA. Additionally, a legal entity will not be eligible to
receive CFAP payments when a valid taxpayer identification number for a
person or legal entity that holds a direct or indirect ownership
interest of 10 percent or greater, at or above the fourth level of
ownership in the business structure, is not provided to USDA.

Subpart B--CFAP 1

Sec. 9.101 [Amended]

0
9. Amend Sec. 9.101, in the definition of ``All other cattle'', by
removing the word ``part'' and adding ``subpart'' in its place.

0
10. Amend Sec. 9.102 as follows:
0
a. In paragraph (c) introductory text, remove the word ``two'' and add
``three'' in its place;
0
b. In paragraph (c)(1), remove the word ``and'';
0
c. In paragraph (c)(2), remove the period and add ``; and'' at the end
of the paragraph;
0
d. Add paragraph (c)(3);
0
e. In paragraph (d) introductory text, remove the word ``three'' and
add ``two'' in its place;
0
f. In paragraph (d)(1), add the word ``and'' at the end of the
paragraph;
0
g. In paragraph (d)(2), remove ``; and'' and add a period in its place;
and
0
h. Remove paragraph (d)(3).
The addition reads as follows.

Sec. 9.102 Calculation of payments.

* * * * *
(c) * * *
(3) Cattle inventory owned between April 16, 2020, to May 14, 2020,
multiplied by:
(i) $14.75 for slaughter cattle--mature cattle;

[[Page 1877]]

(ii) $63 for slaughter cattle--fed cattle;
(iii) $7 for feeder cattle less than 600 pounds;
(iv) $25.50 for feeder cattle 600 pounds or more; and
(v) $17.25 for all other cattle.
* * * * *

Subpart C--CFAP 2

0
11. In Sec. 9.201, add definitions for ``Beginning farmer or
rancher'', ``Limited resource farmer or rancher'', ``Socially
disadvantaged farmer or rancher'', ``Underserved farmer or rancher'',
and ``Veteran farmer or rancher'' in alphabetical order to read as
follows:

Sec. 9.201 Definitions.

* * * * *
Beginning farmer or rancher means a farmer or rancher who has not
operated a farm or ranch for more than 10 years and who materially and
substantially participates in the operation. For a legal entity to be
considered a beginning farmer or rancher, at least 50 percent of the
interest must be beginning farmers or ranchers.
* * * * *
Limited resource farmer or rancher means a farmer or rancher:
(1) Who is a person whose:
(i) Direct or indirect gross farm sales did not exceed $180,300 in
each calendar year for 2017 and 2018 (the relevant years for the 2020
program year); and
(ii) Total household income was at or below the national poverty
level for a family of four in each of the same two previous years
referenced in paragraph (1)(i) of this definition; \24\ or
---------------------------------------------------------------------------

\24\ Limited resource farmer or rancher status can be determined
using a website available through the Limited Resource Farmer and
Rancher Online Self Determination Tool through Natural Resources
Conservation Service at <a href="https://lrftool.sc.egov.usda.gov">https://lrftool.sc.egov.usda.gov</a>.
---------------------------------------------------------------------------

(2) That is an entity and all members who hold an ownership
interest in the entity meet the criteria in paragraph (1) of this
definition.
* * * * *
Socially disadvantaged farmer or rancher means a farmer or rancher
who is a member of a group whose members have been subjected to racial,
ethnic, or gender prejudice because of their identity as members of a
group without regard to their individual qualities. For entities, at
least 50 percent of the ownership interest must be held by individuals
who are members of such a group. Socially disadvantaged groups include
the following and no others unless approved in writing by the Deputy
Administrator:
(1) American Indians or Alaskan Natives;
(2) Asians or Asian-Americans;
(3) Blacks or African Americans;
(4) Hispanics or Hispanic Americans;
(5) Native Hawaiians or other Pacific Islanders; and
(6) Women.
* * * * *
Underserved farmer or rancher means a beginning farmer or rancher,
limited resource farmer or rancher, socially disadvantaged farmer or
rancher, or veteran farmer or rancher.
* * * * *
Veteran farmer or rancher means a farmer or rancher:
(1) Who has served in the Armed Forces (as defined in 38 U.S.C.
101(10) \25\) and:
---------------------------------------------------------------------------

\25\ The term ``Armed Forces'' means the United States Army,
Navy, Marine Corps, Air Force, Space Force, and Coast Guard,
including the reserve components.
---------------------------------------------------------------------------

(i) Has not operated a farm or ranch for more than 10 years; or
(ii) Has obtained status as a veteran (as defined in 38 U.S.C.
101(2) \26\) during the most recent 10-year period; or
---------------------------------------------------------------------------

\26\ The term ``veteran'' means a person who served in the
active military, naval, air, or space service, and who was
discharged or released under conditions other than dishonorable.
---------------------------------------------------------------------------

(2) That is an entity and at least 50 percent of the ownership
interest is held by members who meet the criteria in paragraph (1) of
this definition.
* * * * *

Sec. 9.202 [Amended]

0
12. Amend Sec. 9.202 as follows:
0
a. In paragraph (a), remove the words ``this part'' and add the words
``subpart A of this part and this subpart'' in their place; and
0
b. In paragraphs (b)(4) and (d)(2), remove the words ``this part'' and
add the words ``subpart A of this part and this subpart'' in their
place.

0
13. Amend Sec. 9.203 as follows:
0
a. Add paragraph (a)(5);
0
b. In paragraph (b), add a sentence at the end of the paragraph;
0
c. In paragraphs (f)(2) and (h)(2), remove the word ``part'' and add
the word ``subpart'' in its place; and
0
d. Add paragraph (p).
The additions read as follows.

Sec. 9.203 Calculation of payments.

(a) * * *
(5) An additional payment will be issued for price trigger crops
equal to the eligible acres of the crop multiplied by a payment rate of
$20 per acre.
(b) * * * An additional payment will be issued for flat-rate crops
equal to the eligible acres of the crop multiplied by a payment rate of
$20 per acre.
* * * * *
(p) An additional payment equal to 15 percent of a producer's CFAP
2 payment calculated according to paragraphs (a) through (k) of this
section will be issued to producers who have certified their status as
an underserved farmer or rancher, applicable to the 2020 program year,
on CCC-860, Socially Disadvantaged, Limited Resource, Beginning and
Veteran Farmer or Rancher Certification.

0
14. Add subpart D, consisting of Sec. Sec. 9.301 through 9.310, to
read as follows:
Subpart D--Pandemic Assistance Revenue Program
Sec.
9.301 Applicability and administration.
9.302 Definitions.
9.303 Producer eligibility requirements.
9.304 Allowable gross revenue.
9.305 Time and method of application.
9.306 Payment calculation.
9.307 Adjusted gross income limitation, payment limitation, and
attribution.
9.308 Eligibility subject to verification.
9.309 Miscellaneous provisions.
9.310 Perjury.

Subpart D--Pandemic Assistance Revenue Program

Sec. 9.301 Applicability and administration.

(a) This subpart specifies the eligibility requirements and payment
calculations for the Pandemic Assistance Revenue Program (PARP). FSA is
administering PARP to respond to the COVID-19 pandemic by providing
support for eligible producers of agricultural commodities who suffered
an eligible revenue loss in calendar year 2020 due to the COVID-19
pandemic. To be eligible for PARP payments, participants must comply
with all provisions under this subpart.
(b) PARP is administered under the general supervision and
direction of the Administrator, Farm Service Agency (FSA).
(c) The FSA State committee will take any action required by this
subpart that an FSA county committee has not taken. The FSA State
committee will also:
(1) Correct, or require an FSA county committee to correct, any
action taken by such county FSA committee that is not in accordance
with the regulations of this subpart; or
(2) Require an FSA county committee to withhold taking any action
that is not in accordance with this subpart.
(d) No provision or delegation to an FSA State or county committee
will preclude the FSA Administrator, the Deputy Administrator, or a
designee or other such person, from determining any question arising
under the programs of this subpart, or from reversing or

[[Page 1878]]

modifying any determination made by an FSA State or county committee.
(e) The Deputy Administrator has the authority to permit State and
county committees to waive or modify deadlines (except deadlines
specified in a law) and other requirements or program provisions not
specified in law, in cases where lateness or failure to meet such other
requirements or program provisions do not adversely affect operation of
PARP.

Sec. 9.302 Definitions.

The following definitions apply to this subpart. The definitions in
part 1400 of this title apply, except where they conflict with the
definitions in this section.
2017 WHIP means the 2017 Wildfires and Hurricanes Indemnity Program
under 7 CFR part 760, subpart O.
Agricultural commodity means a crop, aquaculture, livestock,
livestock byproduct, or other animal or animal byproduct that is
produced as part of a farming operation and is intended to be
commercially marketed. It includes only commodities produced in the
United States, or produced outside the United States by a producer
located in the United States and marketed inside the United States. It
excludes:
(1) Wild free-roaming animals;
(2) Horses and other animals used or intended to be used for racing
or wagering;
(3) Aquatic species that do not meet the definition of aquaculture;
(4) Cannabis sativa L. and any part of that plant that does not
meet the definition of hemp; and
(5) Timber.
Applicable pandemic assistance includes payments received directly
by an applicant under the following programs:
(1) The Coronavirus Food Assistance Program (CFAP);
(2) The Pandemic Livestock Indemnity Program (PLIP); and
(3) The Spot Market Hog Pandemic Program (SMHPP).
Application means the PARP application form.
Aquaculture means any species of aquatic organisms grown as food
for human or livestock consumption or for industrial or biomass uses,
fish raised as feed for fish that are consumed by humans, and
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.
ARC and PLC means the Agriculture Risk Coverage (ARC) and Price
Loss Coverage (PLC) programs under 7 CFR part 1412.
BCAP means the Biomass Crop Assistance Program under 7 CFR part
1450.
Beginning farmer or rancher means a farmer or rancher who has not
operated a farm or ranch for more than 10 years and who materially and
substantially participates in the operation. For a legal entity to be
considered a beginning farmer or rancher, at least 50 percent of the
interest must be beginning farmers or ranchers.
Cattle feeder operation means an operation that intensely feeds
cattle on behalf of another person or entity for finishing purposes and
is compensated based on feed, yardage, or weight gain of the cattle.
CCC means the Commodity Credit Corporation.
CFAP means the Coronavirus Food Assistance Program 1 and 2 under 7
CFR part 9, subparts A through C, excluding assistance for contract
producers specified in Sec. 9.203(l) through (o).
Contract producer means a producer who grows or produces an
agricultural commodity under contract for or on behalf of another
person or entity. The contract producer does not have ownership in the
commodity and is not entitled to a share from sales proceeds of the
commodity. The term ``contract producer'' does not include cattle
feeder operations.
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.
County means the county or parish of a state. For Alaska, Puerto
Rico, and the Virgin Islands, a county is an area designated by the
State committee with the concurrence of the Deputy Administrator.
County committee means the FSA county committee.
Crop insurance means an insurance policy reinsured by Federal Crop
Insurance Corporation under the provisions of the Federal Crop
Insurance Act, as amended, or a private plan of insurance.
Deputy Administrator means Deputy Administrator for Farm Programs,
Farm Service Agency, U.S. Department of Agriculture, or their designee.
DMC means the Dairy Margin Coverage Program under 7 CFR part 1430,
subpart D.
ELAP means the Emergency Assistance for Livestock, Honeybees, and
Farm-Raised Fish Program under 7 CFR part 1416, subpart B.
ERP means the Emergency Relief Program, which was administered in 2
phases:
(1) ERP Phase 1, administered according to the notice of funds
availability published in the Federal Register on May 18, 2022 (87 FR
30164-30172) and the clarification to the notice of funds availability
that was published on August 18, 2022 (87 FR 50828-50830); and
(2) ERP Phase 2, administered according to 7 CFR part 760, subpart
S.
Farming operation means a business enterprise engaged in the
production of agricultural products, commodities, or livestock,
operated by a person, legal entity, or joint operation, and that is
eligible to receive payments, directly or indirectly, under this
subpart. A person or legal entity may have more than one farming
operation if the person or legal entity is a member of one or more
legal entity or joint operation.
Foreign entity means a corporation, trust, estate, or other similar
organization that has more than 10 percent of its beneficial interest
held by individuals who are not:
(1) Citizens of the United States; or
(2) Lawful aliens possessing a valid Alien Registration Receipt
Card.
Foreign person means any person who is not a citizen or national of
the United States or who is admitted into the United States for
permanent residence under the Immigration and Nationality Act and
possesses a valid Alien Registration Receipt Card issued by the United
States Citizenship and Immigration Services, Department of Homeland
Security.
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.
IRS means the Department of Treasury, Internal Revenue Service.
LDP means the Loan Deficiency Payment programs in 7 CFR parts 1421,
1425, 1427, 1434, and 1435.
Legal entity means a corporation, joint stock company, association,
limited partnership, irrevocable trust, estate, charitable
organization, or other similar organization including any such
organization participating in a business structure as a partner in a
general partnership, a participant in a joint venture, a grantor of a
revocable trust,

[[Page 1879]]

or as a participant in a similar organization. A business operating as
a sole proprietorship is considered a legal entity.
Limited resource farmer or rancher means a farmer or rancher:
(1) Who is a person whose:
(i) Direct or indirect gross farm sales did not exceed $180,300 in
each calendar year for 2017 and 2018 (the relevant years for the 2020
program year); and
(ii) Total household income was at or below the national poverty
level for a family of four in each of the same two previous years
referenced in paragraph (1)(i) of this definition; \1\ or
---------------------------------------------------------------------------

\1\ Limited resource farmer or rancher status can be determined
using a website available through the Limited Resource Farmer and
Rancher Online Self Determination Tool through Natural Resources
Conservation Service at <a href="https://lrftool.sc.egov.usda.gov">https://lrftool.sc.egov.usda.gov</a>.
---------------------------------------------------------------------------

(2) That is an entity and all members who hold an ownership
interest in the entity meet the criteria in paragraph (1) of this
definition.
LFP means the Livestock Forage Disaster Program under CFR part
1416, subpart C.
LIP means the Livestock Indemnity Program under 7 CFR part 1416,
subpart D.
Minor child means a person who is under 18 years of age as of June
1, 2020.
MFP means the 2018 Market Facilitation Program under 7 CFR part
1409, subpart A, and the 2019 Market Facilitation Program under 7 CFR
part 1409, subpart B.
Milk Loss Program means the Milk Loss Program under 7 CFR part 760,
subpart Q.
MLG means a marketing loan gain under the Marketing Assistance Loan
programs in 7 CFR parts 1421, 1425, 1427, 1434, and 1435.
MPP-Dairy means the Margin Protection Program for Dairy under 7 CFR
part 1430, subpart A.
NAP means the Noninsured Crop Disaster Assistance Program under
section 196 of the Federal Agriculture Improvement and Reform Act of
1996 (7 U.S.C. 7333) and 7 CFR part 1437.
On-Farm Storage Loss Program means the On-Farm Storage Loss Program
under 7 CFR part 760, subpart P.
Ownership interest means to have either legal ownership interest or
beneficial ownership interest in a legal entity. For the purposes of
administering PARP, a person or legal entity that owns a share or stock
in a legal entity that is a corporation, limited liability company,
limited partnership, or similar type entity where members hold a legal
ownership interest and shares in the profits or losses of such entity
is considered to have an ownership interest in such legal entity. A
person or legal entity that is a beneficiary of a trust or heir of an
estate who benefits from the profits or losses of such entity is also
considered to have a beneficial ownership interest in such legal
entity.
Person means an individual, natural person and does not include a
legal entity.
PLIP means the Pandemic Livestock Indemnity Program announced in
the notice of funds availability published on July 19, 2021 (86 FR
37990-37994).
PMVAP means the Pandemic Market Volatility Assistance Program
administered by USDA's Agricultural Marketing Service.
Producer means a person or legal entity who was in the business of
farming to produce an agricultural commodity in calendar year 2020, and
who was entitled to a share in the agricultural commodity available for
marketing or would have shared had the agricultural commodity been
produced and marketed. For PARP, ``producer'' also includes cattle
feeder operations.
Socially disadvantaged farmer or rancher means a farmer or rancher
who is a member of a group whose members have been subjected to racial,
ethnic, or gender prejudice because of their identity as members of a
group without regard to their individual qualities. For entities, at
least 50 percent of the ownership interest must be held by individuals
who are members of such a group. Socially disadvantaged groups include
the following and no others unless approved in writing by the Deputy
Administrator:
(1) American Indians or Alaskan Natives;
(2) Asians or Asian-Americans;
(3) Blacks or African Americans;
(4) Hispanics or Hispanic Americans;
(5) Native Hawaiians or other Pacific Islanders; and
(6) Women.
TAP means the Tree Assistance Program under 7 CFR part 1416,
subpart E.
SMHPP means the Spot Market Hog Pandemic Program announced in the
notice of funds availability published on December 14, 2021 (86 FR
71003-71007).
STRP means the Seafood Trade Relief Program announced in the notice
of funds availability published on September 14, 2020 (85 FR 56572-
56575).
Underserved farmer or rancher means a beginning farmer or rancher,
limited resource farmer or rancher, socially disadvantaged farmer or
rancher, or veteran farmer or rancher.
United States means all 50 States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, and any other
territory or possession of the United States.
Veteran farmer or rancher means a farmer or rancher:
(1) Who has served in the Armed Forces (as defined in 38 U.S.C.
101(10) \2\) and:
---------------------------------------------------------------------------

\2\ The term ``Armed Forces'' means the United States Army,
Navy, Marine Corps, Air Force, Space Force, and Coast Guard,
including the reserve components.
---------------------------------------------------------------------------

(i) Has not operated a farm or ranch for more than 10 years; or
(ii) Has obtained status as a veteran (as defined in 38 U.S.C.
101(2) \3\) during the most recent 10-year period; or
---------------------------------------------------------------------------

\3\ The term ``veteran'' means a person who served in the active
military, naval, air, or space service, and who was discharged or
released under conditions other than dishonorable.
---------------------------------------------------------------------------

(2) That is an entity and at least 50 percent of the ownership
interest is held by members who meet the criteria in paragraph (1) of
this definition.
WHIP+ means the Wildfires and Hurricanes Indemnity Program Plus
under 7 CFR part 760, subpart O.

Sec. 9.303 Producer eligibility requirements.

(a) To be eligible for PARP, a producer must:
(1) Have been in the business of farming in the 2020 calendar year;
(2) Have had at least a 15 percent decrease in allowable gross
revenue for the 2020 calendar year, as compared to the:
(i) Actual allowable gross revenue for the 2018 or 2019 calendar
year, whichever is reflective of a typical year, as elected by the
producer, if the producer had allowable gross revenue in the 2018 or
2019 calendar year; or
(ii) Producer's expected allowable gross revenue for the 2020
calendar year, if the producer had no allowable gross revenue for the
2018 and 2019 calendar years; and
(3) Meet all other requirements for eligibility under this subpart.
(b) To be eligible for a PARP payment, a producer must be a:
(1) Citizen of the United States;
(2) Resident alien, which for purposes of this subpart means
``lawful alien'' as defined in part 1400 of this title;
(3) Partnership organized under State Law;
(4) Corporation, limited liability company, or other organizational
structure organized under State law;
(5) Indian Tribe or Tribal organization, as defined in section 4(b)
of the Indian Self-Determination and Education Assistance Act (25
U.S.C. 5304); or

[[Page 1880]]

(6) Foreign person or foreign entity who meets all requirements as
described in 7 CFR part 1400.

Sec. 9.304 Allowable gross revenue.

(a) For the purposes of this subpart, ``allowable gross revenue''
includes revenue from:
(1) Sales of agricultural commodities produced by the producer,
including sales resulting from value added through post-production
activities;
(2) Sales of agricultural commodities a producer purchased for
resale that had a change in characteristic due to the time held (for
example, a plant purchased at a size of 2 inches and sold as an 18-inch
plant after 4 months), less the cost or other basis of such
commodities;
(3) The taxable amount of cooperative distributions directly
related to the sale of the agricultural commodities produced by the
producer;
(4) Benefits under the following agricultural programs: ARC and
PLC, BCAP, DMC, LDP, MFP, MLG, and MPP-Dairy;
(5) CCC loans, if treated as income and reported to IRS;
(6) Crop insurance proceeds;
(7) Federal disaster program payments under the following programs:
2017 WHIP, ELAP, LFP, LIP, NAP, Milk Loss Program, On-Farm Storage Loss
Program, STRP, TAP, and WHIP+;
(8) Payments issued through grant agreements with FSA for losses of
agricultural commodities;
(9) Grants from the Department of Commerce, National Oceanic and
Atmospheric Administration and State program funds providing direct
payments for the loss of agricultural commodities or the loss of
revenue from agricultural commodities;
(10) Revenue from raised breeding livestock;
(11) Revenue earned as a cattle feeder operation;
(12) Other revenue directly related to the production of
agricultural commodities that IRS requires the producer to report as
income and
(13) For 2020 allowable gross revenue, payments PMVAP regardless of
the calendar year in which the payment was received.
(b) Allowable gross revenue does not include revenue from sources
other than those listed in paragraph (a) of this section, including but
not limited to, revenue from:
(1) Applicable pandemic assistance;
(2) Sales of commodities that are excluded from ``agricultural
commodities,''
(3) Resale items not held for characteristic change;
(4) Income from a pass-through entity such as an S Corp or limited
liability company;
(5) Conservation program payments;
(6) Any pandemic assistance payments that were not intended to
compensate for the loss of agricultural commodities or the loss of
revenue from agricultural commodities due to the pandemic (for example,
payments to provide assistance with the cost of purchasing personal
protective equipment, retrofitting facilities for worker and consumer
safety, shifting to online sales platforms, transportation, worker
housing, or medical costs);
(7) Custom hire income;
(8) Net gain from hedging or speculation;
(9) Wages, salaries, tips, and cash rent;
(10) Rental of equipment or supplies; and
(11) Acting as a contract producer of an agricultural commodity.
(c) If a producer did not have a full year of revenue for 2018 or
2019, or increased their production capacity in 2020 compared to 2018
or 2019, the producer may certify to an adjusted 2018 or 2019 allowable
gross revenue on form FSA-1122A. Increases in production capacity do
not include changes due to crop rotation from year to year, changes in
farming practices such as converting from conventional tillage to no-
till, or increasing the rate of fertilizers or chemicals. Documentation
required to support such an adjustment must be provided within 30
calendar days of submitting their PARP application and demonstrate that
the producer:
(1) Had the production capacity to support the expected full year
revenue;
(2) Added production capacity to the farming operation;
(3) Increased the use of existing production capacity; or
(4) Made physical alterations to existing production capacity.
(d) If a producer did not have allowable gross revenue in 2018 and
2019, the producer must certify on form FSA-1122A as to what had been
their reasonably expected 2020 allowable gross revenue prior to the
impact of the COVID-19 pandemic. Documentation required to support the
producer's certification must be provided within 30 calendar days of
submitting the producer's PARP application. Acceptable documentation
must be generated in the ordinary course of business and dated prior to
the impact of the COVID-19 pandemic and includes, but is not limited
to:
(1) Financial documents such as a business plan or cash flow
statement that demonstrate an expected level of revenue;
(2) Sales contracts or purchase agreements; and
(3) Documentation supporting production capacity, use of existing
production capacity, or physical alterations that demonstrate
production capacity.
(e) A producer who does not provide acceptable documentation
described in paragraph (c) or (d) of this section within 30 calendar
days of submitting their application is not eligible for an adjustment
to their 2019 allowable gross revenue or to have their payment
calculated using an expected 2020 allowable gross revenue, as
applicable.
(f) Except as provided in paragraph (a)(13) of this section, the
allowable gross revenue for a specific calendar year will be based on
the calendar year in which that revenue was received by the producer.
(g) Producers who file or would file a joint tax return will
certify their allowable gross revenue based on what it would have been
had they filed taxes separately for the applicable year.

Sec. 9.305 Time and method of application.

(a) A completed PARP application under this subpart must be
submitted to any FSA county office by the close of business on the date
announced by the Deputy Administrator. Applications may be submitted in
person or by mail, email, facsimile, or other methods announced by FSA.
(b) Failure of an individual, entity, or a member of an entity to
submit the following payment limitation and payment eligibility forms
within 60 days from the PARP application deadline, may result in no
payment or a reduced payment:
(1) Form AD-2047, Customer Data Worksheet, for new customers or
existing customers who need to update their customer profile;
(2) Form FSA-1122A, PARP Application, if applicable;
(3) Form CCC-860, Socially Disadvantaged, Limited Resource,
Beginning and Veteran Farmer or Rancher Certification, if applicable;
(4) Form CCC-901, Member Information for Legal Entities, if
applicable;
(5) Form CCC-902 Farm Operating Plan for an individual or legal
entity as provided in 7 CFR part 1400;
(6) Form CCC-941, Average Adjusted Gross Income (AGI) Certification
and Consent to Disclosure of Tax Information, for the 2020 program year
for the person or legal entity, including the legal entity's members,
partners, or shareholders, as provided in 7 CFR part 1400;

[[Page 1881]]

(7) Form FSA-1123, Certification of 2020 Adjusted Gross Income
(AGI), if applicable; and
(8) Form AD-1026, Highly Erodible Land Conservation (HELC) and
Wetland Conservation (WC) Certification, for the PARP applicant and
applicable affiliates as provided in 7 CFR part 12.
(c) If requested by USDA, the producer must provide additional
documentation that establishes the producer's eligibility for PARP. If
supporting documentation is requested, the documentation must be
submitted to USDA within 30 calendar days from the request or the
application will be disapproved by USDA. FSA may request supporting
documentation to verify information provided by the producer and their
eligibility including, but not limited to, the producer's:
(1) Allowable gross revenue reported on the PARP application; and
(2) Ownership share in the agricultural commodities.

Sec. 9.306 Payment calculation.

(a) If the producer's allowable gross revenue for 2020 decreased by
at least 15 percent compared to the producer's allowable gross revenue
for 2018 or 2019, as elected by the producer:
(1) FSA will calculate:
(i) The producer's 2018 or 2019 allowable gross revenue, as elected
by the producer and as adjusted according to Sec. 9.304(c), if
applicable; minus
(ii) The producer's 2020 allowable gross revenue; multiplied by
(iii) A payment factor of:
(A) Ninety (90) percent for underserved farmers or ranchers, who
have submitted form CCC-860 certifying they meet the definition for at
least one of the applicable groups; or
(B) Eighty (80) percent for all other producers; and
(2) The producer's PARP payment will be equal to the result of the
calculation in paragraph (a)(1) of this section minus the producer's
applicable pandemic assistance, and 2020 program year ERP payments.
(b) If a producer did not have allowable gross revenue in 2018 and
2019 and the producer's allowable gross revenue for 2020 decreased by
at least 15 percent compared to the producer's expected 2020 allowable
gross revenue:
(1) FSA will calculate:
(i) The producer's expected 2020 allowable gross revenue, as
specified in Sec. 9.304(d), minus
(ii) The producer's actual 2020 allowable gross revenue;
(iii) Multiplied by a payment factor of:
(A) 90 percent for underserved farmers or ranchers who have
submitted form CCC-860 certifying they meet the definition for at least
one of the applicable groups; or
(B) 80 percent for all other producers; and
(2) The producer's PARP payment will be equal to the result of the
calculation in paragraph (b)(1) of this section minus the producer's
applicable pandemic assistance, and 2020 program year ERP payments.
(c) If a producer receives assistance through 2020 program year ERP
or any program included under applicable pandemic assistance after
their PARP payment is calculated, their PARP payment will be
recalculated and the producer must refund any resulting overpayment.
(d) Payments calculated according to this section are subject to
the availability of funds and may be factored if total calculated
payments exceed the available funding.

Sec. 9.307 Adjusted gross income limitation, payment limitation, and
attribution.

(a) To be eligible to receive a PARP payment and facilitate
administration of paragraphs (b) through (f) of this section, a person
or legal entity must provide their name, address, valid taxpayer
identification number, and ownership share to USDA. In addition, a
legal entity must provide the name, address, valid taxpayer
identification number, and ownership share of each person or legal
entity, that holds or acquires a direct or indirect ownership interest
in the legal entity. PARP payments to a legal entity will be reduced in
proportion to a member's ownership share when a valid taxpayer
identification number for a person or legal entity that holds less than
a 10 percent direct or indirect ownership interest, at or above the
fourth level of ownership in the business structure, is not provided to
USDA. Additionally, a legal entity will not be eligible to receive PARP
payments when a valid taxpayer identification number for a person or
legal entity that holds a direct or indirect ownership interest of 10
percent or greater, at or above the fourth level of ownership in the
business structure, is not provided to USDA.
(b) The $900,000 average adjusted gross income limitation
provisions in 7 CFR part 1400 relating to limits on income for persons
or legal entities, including members of legal entities, joint ventures,
and general partnerships applies to PARP. The average adjusted gross
income will be calculated for a person or legal entity based on the
2016, 2017, and 2018 tax years. If the person's or legal entity's
average adjusted gross income exceeds $900,000, the applicant is
ineligible for PARP except as provided in paragraph (c) of this
section.
(c) A person or legal entity that does not meet the average
adjusted gross income requirements described in paragraph (b) of this
section, may otherwise meet the adjusted gross income requirements,
provided the person's or legal entity's 2020 adjusted gross income, as
defined under 26 U.S.C. 62 or comparable measure, is not more than
$900,000. Except for general partnerships and joint ventures, a PARP
applicant that is a person or legal entity, including members holding
an ownership interest in the legal entity, is required to:
(1) Certify, on a form that is approved for that purpose by the
Deputy Administrator, that their 2020 adjusted gross income or
comparable measure is not more than $900,000; and
(2) Submit a certification from a licensed CPA or attorney
affirming the person's or legal entity's 2020 adjusted gross income is
not more than $900,000.
(d) Members of general partnerships and joint ventures not meeting
the income requirements described in paragraph (b) of this section may
otherwise meet the income requirements, provided the member's 2020
adjusted gross income, as defined under 26 U.S.C. 62 or comparable
measure, is not more than $900,000. The member is required to provide
the information described in paragraphs (c)(1) and (2) of this section.
(e) A person or legal entity other than a joint venture or general
partnership cannot receive, directly or indirectly, more than $125,000
under PARP. USDA may establish a lower maximum payment amount per
person, legal entity, or member of a joint venture or general
partnership after the application period has ended if calculated
payment amounts exceed available funding. Payments made to a PARP
applicant who is a joint operation, including a joint venture or a
general partnership, may not exceed the amount determined by
multiplying $125,000 (or the reduced maximum payment limitation, if
applicable) by the number of persons or legal entities that comprise
the first-level membership of the joint operation.
(f) A PARP payment made to a legal entity will be considered in
combination with other PARP payments attributed to every person or
legal entity with a direct or indirect ownership interest in the legal
entity. The maximum limitation described in paragraph (e) of this
section for a legal entity is determined based on payments to the legal
entity and members who are an individual person or a legal entity. If a
member's combined PARP payments

[[Page 1882]]

reach the maximum payment limitation when summed from all businesses in
which the person or legal entity has an ownership interest, then
subsequent payments to the legal entity will be reduced by the
proportionate ownership interest of the member. A payment to a legal
entity will be attributed to those members who have a direct or
indirect ownership interest in the legal entity, unless the payment of
the legal entity has been reduced by the proportionate ownership
interest of the member due to that member's ineligibility. Attribution
of payments made to legal entities will be tracked through four levels
of ownership in legal entities as follows:
(1) First level of ownership: Any payment made to a legal entity
that is owned in whole or in part by a person will be attributed to the
person in an amount that represents the direct ownership interest in
the first-level or payment legal entity;
(2) Second level of ownership: Any payment made to a first-level
legal entity that is owned in whole or in part by another legal entity
(referred to as a second-level legal entity) will be attributed to the
second-level legal entity in proportion to the ownership of the second-
level legal entity in the first-level legal entity; if the second-level
legal entity is owned in whole or in part by a person, the amount of
the payment made to the first-level legal entity will be attributed to
the person in the amount that represents the indirect ownership in the
first-level legal entity by the person;
(3) Third and fourth levels of ownership: Except as provided in the
second-level ownership in paragraph (f)(2) of this section and in the
fourth level of ownership in paragraph (f)(4) of this section, any
payments made to a legal entity at the third and fourth levels of
ownership will be attributed in the same manner as specified in
paragraph (f)(2) of this section; and
(4) Fourth-level of ownership: If the fourth level of ownership is
that of a legal entity and not that of a person, a reduction in payment
will be applied to the first-level or payment legal entity in the
amount that represents the indirect ownership in the first level or
payment legal entity by the fourth-level legal entity.
(g) Payments made to a PARP applicant that is an Indian Tribe or
Tribal organization, as defined in the section 4(b) of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 5304), are not
subject to:
(1) AGI requirements described in paragraphs (b) through (d) of
this section;
(2) Payment limitation described in paragraph (e) of this section;
and
(3) Attribution of payments described in paragraph (f) of this
section.
(h) Payments made directly or indirectly to a person who is a minor
child will not be combined with the earnings of the minor child's
parent or legal guardian.

Sec. 9.308 Eligibility subject to verification.

(a) Producers who are approved for participation in PARP are
required to retain documentation in support of their application for 3
years after the date of approval.
(b) Participants receiving PARP payments must permit authorized
representatives of USDA or the Government Accountability Office, during
regular business hours, to enter the agricultural operation and to
inspect, examine, and to allow representatives to make copies of books,
records, or other items for the purpose of confirming the accuracy of
the information provided by the participant.

Sec. 9.309 Miscellaneous provisions.

(a) If a PARP payment resulted from erroneous information provided
by a producer, or any person acting on their behalf, the payment will
be recalculated and the producer must refund any excess payment with
interest calculated from the date of the disbursement of the payment.
(b) If FSA determines that the producer intentionally
misrepresented information provided on their application, the
application will be disapproved and the producer must refund the full
payment to FSA with interest from the date of disbursement.
(c) Any required refunds must be resolved in accordance with part 3
of this title.
(d) The regulations in 7 CFR part 718, subpart D, and 7 CFR parts
11 and 780 apply to determinations made under this subpart.
(e) A producer, whether a person or legal entity that either fails
to timely provide all required documentation or fails to satisfy any
eligibility requirement for PARP, is not eligible to receive PARP
payments, directly or indirectly. A PARP payment to an eligible legal
entity applicant whose member(s) either fails to timely provide all
required documentation or fails to satisfy any eligibility requirement
for PARP will be reduced proportionate to that member's ownership
interest in the legal entity.
(f) Any payment under this subpart will be made without regard to
questions of title under State law and without regard to any claim or
lien against the commodity or proceeds from the sale of the commodity.
The regulations governing offsets in part 3 of this title do not apply
to payments made under this subpart.
(g) For the purposes of the effect of a lien on eligibility for
Federal programs (28 U.S.C. 3201(e)), USDA waives the restriction on
receipt of funds under PARP but only as to beneficiaries who, as a
condition of the waiver, agree to apply the PARP payments to reduce the
amount of the judgment lien.
(h) The provisions in 7 CFR 718.3, 718.4, 718.5, 718.6, 718.8,
718.9, 718.10, and 718.11 are applicable to multiple programs and apply
to PARP.
(i) In addition to any other Federal laws that apply to PARP, the
following laws apply: 15 U.S.C. 714; 18 U.S.C. 286, 287, 371, and 1001.

Sec. 9.310 Perjury.

In either applying for or participating in PARP, or both, the
producer is subject to laws against perjury and any resulting penalties
and prosecution, including, but not limited to, 18 U.S.C. 1621. If the
producer willfully makes and represents as true any verbal or written
declaration, certification, statement, or verification that the
producer knows or believes not to be true, in the course of either
applying for or participating in PARP, or both, then the producer may
be guilty of perjury and, except as otherwise provided by law, may be
fined, imprisoned for not more than 5 years, or both, regardless of
whether the producer makes such verbal or written declaration,
certification, statement, or verification within or without the United
States.

PART 701--EMERGENCY CONSERVATION PROGRAM, EMERGENCY FOREST
RESTORATION PROGRAM, AND CERTAIN RELATED PROGRAMS PREVIOUSLY
ADMINISTERED UNDER THIS PART

0
15. The authority citation for part 701 continues to read as follows:

Authority: 16 U.S.C. 2201-2206; Sec. 101, Pub. L. 109-148, 119
Stat. 2747; and Pub. L. 111-212, 124 Stat. 2302.

Subpart A--General

0
16. Amend Sec. 701.2 in paragraph (b) as follows:
0
a. Remove the definition of ``Commercial forest land'';
0
b. Add the definition of ``Forestland'' in alphabetical order;
0
c. In a definition for ``Nonindustrial private forest land'', remove
the words ``commercial forest''; and

[[Page 1883]]

0
d. Add a definition for ``Socially disadvantaged farmer or rancher'' in
alphabetical order.
The additions read as follows:

Sec. 701.2 Abbreviations and definitions.

* * * * *
(b) * * *
Forestland means land that is at least 120 feet wide and 1 acre in
size and at least 10 percent covered by live trees of any size.
* * * * *
Socially disadvantaged farmer or rancher means a farmer or rancher
who is a member of a socially disadvantaged group. A socially
disadvantaged group is a group whose members have been subjected to
racial or ethnic prejudice because of their identity as members of a
group without regard to their individual qualities.

Sec. Sec. 701.44 and 701.45 [Removed and Reserved]

0
17. Remove and reserve Sec. Sec. 701.44 and 701.45.

Subpart B--Emergency Conservation Program

0
18. Amend Sec. 701.105 as follows:
0
a. Remove paragraphs (b)(1) and (2);
0
b. Redesignate paragraphs (b)(3) through (13) as paragraphs (b)(1)
through (11), respectively;
0
c. Add paragraph (d).
The addition reads as set forth below.

Sec. 701.105 Land eligibility.

* * * * *
(d) Additional provisions making Government-owned land eligible is
specified in Sec. 701.106.

0
19. Add Sec. 701.106 to read as follows:

Sec. 701.106 Government-owned land.

(a) State-owned land. When land is owned by a State, whether it is
eligible for cost share is as specified in this paragraph (a) in
addition to the requirements in Sec. 701.105.
(1) If an eligible person or legal entity has a lease for the
State-owned land that allows cost share, and files a cost share request
for the State-owned land, the land is eligible for cost share if, as
determined by FSA, the:
(i) Eligible person or legal entity will directly benefit from the
practice; or
(ii) The land will remain in agricultural production throughout the
established practice life span.
(2) If an eligible person or legal entity files a cost-share
request for State-owned land, the land is ineligible for cost share if,
as determined by FSA, the:
(i) Practice is for the primary benefit of the State or State
agencies; or
(ii) Eligible person or legal entity is prohibited by the lease
from accepting cost-share.
(b) Federally-owned farmland. When land is federally owned, whether
it is eligible for cost-share is as specified in this paragraph (a), in
addition to the requirements in Sec. 701.105.
(1) If an eligible person or legal entity files a cost-share
request on federally owned farmland, the land is eligible if all of the
following apply:
(i) An eligible private person or legal entity is farming or
ranching the farmland;
(ii) An eligible person or legal entity has a lease that does not
prohibit cost-share;
(iii) The practice will primarily benefit nearby or adjacent
privately owned farmland of the eligible person or legal entity
performing the practice;
(iv) A person or legal entity performing the practice has
authorization from a Federal agency to install and maintain the
practice;
(v) The Federal land is the most practical location for the
eligible practice; and
(vi) During a drought, the practice will primarily benefit the
livestock owned or managed by the eligible person or legal entity
performing the practice.
(2) If an eligible person or legal entity files a cost share
request on federally-owned land, the land is ineligible if the
practices performed on these lands are for the benefit of land owned by
a Federal agency.
(c) Federal or State agency. For the purposes of this subpart,
private persons or legal entities exclude Federal and State agencies.

0
20. Amend Sec. 701.111 by revising paragraph (a) to read as follows:

Sec. 701.111 Prohibition on duplicate payments.

(a) Duplicate payments. Participants are not eligible to receive
funding under ECP on the same piece of land for which the participant
has or will receive funding under any other Federal or State program
that covers the same or similar expenses so as to create duplicate
payments, or, in effect, a higher rate of cost share than is allowed
under this part.
* * * * *

0
21. Amend Sec. 701.126 by adding paragraph (d) to read as follows.

Sec. 701.126 Maximum cost-share percentages.

* * * * *
(d) The Secretary may waive the maximum limitations described in
paragraphs (a) through (c) of this section to the maximum extent
allowed by law.

0
22. Amend Sec. 701.127 by designating the undesignated paragraph as
paragraph (a) and adding paragraph (b) to read as follows.

Sec. 701.127 Maximum ECP payments per person or legal entity.

* * * * *
(b) The Secretary may waive the maximum limitations described in
paragraph (a) of this section to the maximum extent allowed by law.

0
23. Amend Sec. 701.128 by revising the section heading and paragraph
(a) to read as follows.

Sec. 701.128 Advance payment.

(a) With respect to a payment to an agricultural producer for any
eligible ECP practice, the agricultural producer has the option of
receiving up to 25 percent of the projected payment, determined based
on the applicable percentage of the fair market value of the cost of
the practice, as determined by FSA, before the agricultural producer
carries out the restoration.
* * * * *

Sec. Sec. 701.150 through 701.157 [Removed]

0
25. Remove Sec. Sec. 701.150 through 701.157.

Subpart C--Emergency Forest Restoration Program

0
26. Amend Sec. 701.226 by adding paragraph (c) to read as follows.

Sec. 701.226 Maximum cost-share percentages.

* * * * *
(c) The Secretary may waive the maximum limitations described in
paragraphs (a) and (b) of this section to the maximum extent allowed by
law.

Farm Service Administration

Chapter VII

PART 760--INDEMNITY PAYMENT PROGRAMS

0
27. The authority citation for part 760 is revised to read as follows:

Authority: 7 U.S.C. 4501 and 1531; 16 U.S.C. 3801, note; 19
U.S.C. 2497; Title III, Pub. L. 109-234, 120 Stat. 474; Title IX,
Pub. L. 110-28, 121 Stat. 211; Sec. 748, Pub. L. 111-80, 123 Stat.
2131; Title I, Pub. L. 115-123, 132 Stat. 65; Title I, Pub. L. 116-
20, 133 Stat. 871; Division B, Title VII, Pub. L. 116-94, 133 Stat.
2658; and Division B, Title I, Pub. L. 117- 43, 135 Stat. 344.

0
28. Add subpart S to read as follows.
Subpart S--Emergency Relief Program
Sec.

[[Page 1884]]

760.1900 Applicability and administration.
760.1901 Definitions.
760.1902 Producer eligibility requirements.
760.1903 Allowable gross revenue.
760.1904 Time and method of application.
760.1905 Payment calculation.
760.1906 Payment limitation and attribution.
760.1907 Eligibility subject to verification.
760.1908 Miscellaneous provisions.
760.1909 Perjury.
760.1910 Requirement to purchase crop insurance or NAP coverage.

Subpart S--Emergency Relief Program

Sec. 760.1900 Applicability and administration.

(a) This subpart specifies the eligibility requirements and payment
calculations for Phase 2 of the Emergency Relief Program (ERP). ERP
provides payments to producers who suffered eligible crop losses due to
qualifying disaster events, which include wildfires, hurricanes,
floods, derechos, excessive heat, winter storms, freeze (including a
polar vortex), smoke exposure, excessive moisture, qualifying drought,
and related conditions occurring in calendar years 2020 and 2021.\1\ To
be eligible for ERP Phase 2 payments, participants must comply with all
provisions under this subpart.
---------------------------------------------------------------------------

\1\ ERP Phase 1 was administered according to the notice of
funds availability published in the Federal Register on May 18, 2022
(87 FR 30164-30172). A clarification to the notice of funds
availability for ERP Phase 1 was published on August 18, 2022 (87 FR
50828-50830).
---------------------------------------------------------------------------

(b) ERP is administered under the general supervision and direction
of the Administrator, Farm Service Agency (FSA).
(c) The FSA State committee will take any action required by this
subpart that an FSA county committee has not taken. The FSA State
committee will also:
(1) Correct, or require an FSA county committee to correct, any
action taken by such county FSA committee that is not in accordance
with the regulations of this subpart; or
(2) Require an FSA county committee to withhold taking any action
that is not in accordance with this subpart.
(d) No provision or delegation to an FSA State or county committee
will preclude the FSA Administrator, the Deputy Administrator, or a
designee or other such person, from determining any question arising
under the programs of this subpart, or from reversing or modifying any
determination made by an FSA State or county committee.
(e) The Deputy Administrator has the authority to permit State and
county committees to waive or modify deadlines (except deadlines
specified in a law) and other requirements or program provisions not
specified in law, in cases where lateness or failure to meet such other
requirements or program provisions do not adversely affect operation of
ERP.

Sec. 760.1901 Definitions.

The following definitions apply to this subpart. The definitions in
parts 718 and 1400 of this title apply, except where they conflict with
the definitions in this section.
2017 WHIP means the 2017 Wildfires and Hurricanes Indemnity Program
under 7 CFR part 760, subpart O.
Administrative fee means the amount an insured producer paid for
catastrophic risk protection, and additional coverage for each crop
year as specified in the applicable crop insurance policy.
Application means the ERP Phase 2 application form.
Aquaculture means any species of aquatic organisms grown as food
for human or livestock consumption or for industrial or biomass uses,
fish raised as feed for fish that are consumed by humans, and
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.
ARC and PLC means the Agriculture Risk Coverage (ARC) and Price
Loss Coverage (PLC) programs under 7 CFR part 1412.
Average adjusted gross farm income means the average of the person
or legal entity's adjusted gross income derived from farming, ranching,
or forestry operations for the 3 taxable years preceding the most
immediately preceding complete taxable year.
(1) If the resulting average adjusted gross farm income is at least
66.66 percent of the average adjusted gross income of the person or
legal entity, then the average adjusted gross farm income may also take
into consideration income or benefits derived from the following:
(i) The sale of equipment to conduct farm, ranch, or forestry
operations; and
(ii) The provision of production inputs and services to farmers,
ranchers, foresters, and farm operations.
(2) The relevant tax years are:
(i) For the 2020 program year, 2016, 2017, and 2018; and
(ii) For the 2021 program year, 2017, 2018, and 2019.
Average adjusted gross income means the average of the adjusted
gross income as defined under 26 U.S.C. 62 or comparable measure of the
person or legal entity. The relevant tax years are:
(1) For the 2020 program year, 2016, 2017, and 2018; and
(2) For the 2021 program year, 2017, 2018, and 2019.
BCAP means the Biomass Crop Assistance Program under 7 CFR part
1450.
Beginning farmer or rancher means a farmer or rancher who has not
operated a farm or ranch for more than 10 years and who materially and
substantially participates in the operation. For a legal entity to be
considered a beginning farmer or rancher, at least 50 percent of the
interest must be beginning farmers or ranchers.
Benchmark revenue means allowable gross revenue for the benchmark
year. If a producer began farming in 2020 or 2021 and did not have
allowable gross revenue in either 2018 or 2019, the benchmark revenue
is the producer's reasonably expected allowable gross revenue for the
disaster year prior to the impact of the qualifying disaster event.
Benchmark year means the 2018 or 2019 tax year, as elected by the
producer.
Buy-up NAP coverage means NAP coverage at a payment amount that is
equal to an indemnity amount calculated for buy-up coverage computed
under section 508(c) or (h) of the Federal Crop Insurance Act and equal
to the amount that the buy-up coverage yield for the crop exceeds the
actual yield for the crop.
Catastrophic coverage has the same meaning as in 7 CFR 1437.3.
CCC means the Commodity Credit Corporation.
Certifying agent means a private or governmental entity accredited
by the USDA Secretary for the purpose of certifying a production,
processing, or handling operation as organic.
CFAP means the Coronavirus Food Assistance Program 1 and 2 under 7
CFR part 9, subparts A through C, excluding assistance for contract
producers specified in Sec. 9.203(l) through (o).
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.
County means the county or parish of a state. For Alaska, Puerto
Rico, and the Virgin Islands, a county is an area designated by the
State committee with the concurrence of the Deputy Administrator.
County committee means the FSA county committee.
Coverage level means the percentage determined by multiplying the
elected yield percentage under a crop insurance

[[Page 1885]]

policy or NAP coverage by the elected price percentage.
Crop insurance means an insurance policy reinsured by the Federal
Crop Insurance Corporation under the provisions of the Federal Crop
Insurance Act, as amended.
Crop insurance indemnity means the payment to a participant for
crop losses covered under crop insurance administered by RMA in
accordance with the Federal Crop Insurance Act (7 U.S.C. 1501-1524).
Deputy Administrator means Deputy Administrator for Farm Programs,
Farm Service Agency, U.S. Department of Agriculture, or their designee.
Direct market crop means a crop sold directly to consumers without
the intervention of an intermediary such as a registered handler,
wholesaler, retailer, packer, processor, shipper, or buyer (for
example, a crop sold at a farmer's market or roadside stand), excluding
crops sold for livestock consumption.
Disaster year means the calendar year in which the qualifying
disaster event occurred (that is, 2020 or 2021).
Disaster year revenue means the allowable gross revenue for:
(1) The 2020 or 2021 tax year, as elected by the producer, for the
2020 disaster year; and
(2) The 2021 or 2022 tax year, as elected by the producer, for the
2021 disaster year.
(3) Producers must choose consecutive tax years if they are
applying for both the 2020 and 2021 disaster years (that is, they may
choose 2020 tax year revenue for the 2020 disaster year, and 2021 tax
year revenue for the 2021 disaster year; or they may choose 2021 tax
year revenue for the 2020 disaster year, and 2022 tax year revenue for
the 2021 disaster year).
ELAP means the Emergency Assistance for Livestock, Honeybees, and
Farm-Raised Fish Program under part 1416, subpart B, of this title.
Eligible crop means a crop, including eligible aquaculture, that is
produced in the United States as part of a farming operation and is
intended to be commercially marketed. It excludes:
(1) Crops for grazing;
(2) Aquatic species that do not meet the definition of aquaculture;
(3) Cannabis sativa L. and any part of that plant that does not
meet the definition of hemp; and
(4) Timber.
Farming operation means a business enterprise engaged in the
production of agricultural products, commodities, or livestock,
operated by a person, legal entity, or joint operation, and that is
eligible to receive payments, directly or indirectly, under this
subpart. A person or legal entity may have more than one farming
operation if the person or legal entity is a member of one or more
legal entity or joint operation.
FCIC means the Federal Crop Insurance Corporation, a wholly owned
Government Corporation of USDA, administered by RMA.
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.
High value crop means:
(1) Any eligible crop not specifically identified as a specialty
crop or listed in the definition of ``other crop''; and
(2) Any eligible crop, regardless of whether it is identified as a
specialty crop or listed in the definition of ``other crop,'' if the
crop is a direct market crop, organic crop, or a crop grown for a
specific market in which specialized products can be sold resulting in
an increased value compared to the typical market for the crops (for
example, soybeans intended for tofu production), as determined by the
Deputy Administrator.
Income derived from farming, ranching, and forestry operations
means income of an individual or entity derived from:
(1) Production of crops, specialty crops, and unfinished raw
forestry products;
(2) Production of livestock, aquaculture products used for food,
honeybees, and products derived from livestock;
(3) Production of farm-based renewable energy;
(4) Selling (including the sale of easements and development
rights) of farm, ranch, and forestry land, water or hunting rights, or
environmental benefits;
(5) Rental or lease of land or equipment used for farming,
ranching, or forestry operations, including water or hunting rights;
(6) Processing, packing, storing, and transportation of farm,
ranch, forestry commodities including renewable energy;
(7) Feeding, rearing, or finishing of livestock;
(8) Payments of benefits, including benefits from risk management
practices, crop insurance indemnities, and catastrophic risk protection
plans;
(9) Sale of land that has been used for agricultural purposes;
(10) Payments and benefits authorized under any program made
available and applicable to payment eligibility and payment limitation
rules;
(11) Income reported on Internal Revenue Service (IRS) Schedule F
or other schedule used by the person or legal entity to report income
from such operations to the IRS;
(12) Wages or dividends received from a closely held corporation,
Interest Charge Domestic International Sales Corporation (IC-DISC), or
legal entity comprised entirely of family members when more than 50
percent of the legal entity's gross receipts for each tax year are
derived from farming, ranching, or forestry activities as defined in
this document; and
(13) Any other activity related to farming, ranching, and forestry,
as determined by the Deputy Administrator.
IRS means the Department of Treasury, Internal Revenue Service.
LDP means the Loan Deficiency Payment programs in 7 CFR parts 1421,
1425, 1427, 1434, and 1435.
Legal entity means a corporation, joint stock company, association,
limited partnership, irrevocable trust, estate, charitable
organization, or other similar organization including any such
organization participating in a business structure as a partner in a
general partnership, a participant in a joint venture, a grantor of a
revocable trust, or as a participant in a similar organization. A
business operating as a sole proprietorship is considered a legal
entity.
Limited resource farmer or rancher means a farmer or rancher:
(1) Who is a person whose:
(i) Direct or indirect gross farm sales did not exceed:
(A) $180,300 in each calendar year for 2017 and 2018 (the relevant
years for the 2020 program year); or
(B) $179,000 in each of the 2018 and 2019 calendar years for the
2021 program year;
and
(ii) Total household income was at or below the national poverty
level for a family of four in each of the same two previous years
referenced in paragraph (1)(i) of this definition; \1\ or
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[[Page 1886]]

(2) That is an entity and all members who hold an ownership
interest in the entity meet the criteria in paragraph (1) of this
definition.
LFP means the Livestock Forage Disaster Program under CFR part
1416, subpart C.
MLG means marketing loan gains under the Marketing Assistance Loan
program provisions in 7 CFR parts 1421, 1425, 1427, 1434, and 1435.
Minor child means a person who is under 18 years of age as of June
1, 2020.
MFP means the 2018 Market Facilitation Program under 7 CFR part
1409, subpart A, and the 2019 Market Facilitation Program under 7 CFR
part 1409, subpart B.
NAP means the Noninsured Crop Disaster Assistance Program under
section 196 of the Federal Agriculture Improvement and Reform Act of
1996 (7 U.S.C. 7333) and 7 CFR part 1437.
On-Farm Storage Loss Program means the On-Farm Storage Loss Program
under 7 CFR part 760, subpart P.
Organic crop means a crop that is organically produced consistent
with section 2103 of the Organic Foods Production Act of 1990 (7 U.S.C.
6502) and grown on acreage certified by a certifying agent as
conforming to organic standards specified in 7 CFR part 205.
Other crop means cotton, peanuts, rice, feedstock, and any crop
grown with an intended use of grain, silage, or forage, unless the crop
meets the requirements in paragraph (2) of the definition of ``high
value crop.''
Ownership interest means to have either legal ownership interest or
beneficial ownership interest in a legal entity. For the purposes of
administering ERP Phase 2, a person or legal entity that owns a share
or stock in a legal entity that is a corporation, limited liability
company, limited partnership, or similar type entity where members hold
a legal ownership interest and shares in the profits or losses of such
entity is considered to have an ownership interest in such legal
entity. A person or legal entity that is a beneficiary of a trust or
heir of an estate who benefits from the profits or losses of such
entity is also considered to have a beneficial ownership interest in
such legal entity.
Person means an individual, natural person and does not include a
legal entity.
Premium means the premium paid by the producer for crop insurance
coverage or NAP buy-up coverage levels.
Producer means a person or legal entity who was entitled to a share
in the eligible crop available for marketing or would have shared had
the eligible crop been produced and marketed.
Program year means:
(1) For ERP Phase 2, the disaster year; and
(2) For all other programs, the program year as defined in the
applicable program provisions.
Qualifying disaster event means wildfires, hurricanes, floods,
derechos, excessive heat, winter storms, freeze (including a polar
vortex), smoke exposure, excessive moisture, qualifying drought, and
related conditions.
Qualifying drought means an area within the county was rated by the
U.S. Drought Monitor as having a drought intensity of D2 (severe
drought) for eight consecutive weeks or D3 (extreme drought) or higher
level for any period of time during the applicable calendar year.
Related condition means damaging weather and adverse natural
occurrences that occurred concurrently with and as a direct result of a
specified qualifying disaster event. Related conditions include, but
are not limited to:
(1) Excessive wind that occurred as a direct result of a derecho;
(2) Silt and debris that occurred as a direct and proximate result
of flooding;
(3) Excessive wind, storm surges, tornados, tropical storms, and
tropical depressions that occurred as a direct result of a hurricane;
and
(4) Excessive wind and blizzards that occurred as a direct result
of a winter storm.
Socially disadvantaged farmer or rancher means a farmer or rancher
who is a member of a group whose members have been subjected to racial,
ethnic, or gender prejudice because of their identity as members of a
group without regard to their individual qualities. For entities, at
least 50 percent of the ownership interest must be held by individuals
who are members of such a group. Socially disadvantaged groups include
the following and no others unless approved in writing by the Deputy
Administrator:
(1) American Indians or Alaskan Natives;
(2) Asians or Asian-Americans;
(3) Blacks or African Americans;
(4) Hispanics or Hispanic Americans;
(5) Native Hawaiians or other Pacific Islanders; and
(6) Women.
Specialty crops means fruits, tree nuts, vegetables, culinary herbs
and spices, medicinal plants, and nursery, floriculture, and
horticulture crops. This includes common specialty crops identified by
USDA's Agricultural Marketing Service at <a href="https://www.ams.usda.gov/services/grants/scbgp/specialty-crop">https://www.ams.usda.gov/services/grants/scbgp/specialty-crop</a> and other crops as designated by
the Deputy Administrator.
Substantial beneficial interest (SBI) has the same meaning as
specified in the applicable crop insurance policy. For the purposes of
ERP Phase 1, Federal crop insurance records for ``transfer of coverage,
right to indemnity'' are considered the same as SBIs.
STRP means the Seafood Trade Relief Program announced in the notice
of funds availability published on September 14, 2020 (85 FR 56572-
56575).
Underserved farmer or rancher means a beginning farmer or rancher,
limited resource farmer or rancher, socially disadvantaged farmer or
rancher, or veteran farmer or rancher.
United States means all 50 States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, and any other
territory or possession of the United States.
U.S. Drought Monitor means the system for classifying drought
severity according to a range of abnormally dry to exceptional drought.
It is a collaborative effort between Federal and academic partners,
produced on a weekly basis, to synthesize multiple indices, outlooks,
and drought impacts on a map and in narrative form. This synthesis of
indices is reported by the National Drought Mitigation Center at <a href="http://droughtmonitor.unl.edu">http://droughtmonitor.unl.edu</a>.
Veteran farmer or rancher means a farmer or rancher:
(1) Who has served in the Armed Forces (as defined in 38 U.S.C.
101(10) \2\) and:
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Sec. 760.1902 Producer eligibility requirements.

(a) To be eligible for ERP Phase 2, a producer must have suffered a
loss in

[[Page 1887]]

disaster year allowable gross revenue, as compared to the benchmark
allowable gross revenue, due to necessary expenses associated with
losses of eligible crops due in whole or in part to a qualifying
disaster event that occurred in the 2020 or 2021 calendar year.
(b) To be eligible for an ERP Phase 2 payment, a producer must be
a:
(1) Citizen of the United States;
(2) Resident alien, which for purposes of this subpart means
``lawful alien'' as defined in part 1400 of this title;
(3) Partnership organized under State Law;
(4) Corporation, limited liability company, or other organizational
structure organized under State law; or
(5) Indian Tribe or Tribal organization, as defined in section 4(b)
of the Indian Self-Determination and Education Assistance Act (25
U.S.C. 5304).

Sec. 760.1903 Allowable gross revenue.

(a) For the purposes of this subpart, ``allowable gross revenue''
includes revenue from:
(1) Sales of eligible crops produced by the producer, which
includes sales resulting from value added through post-production
activities that were reportable on IRS Schedule F;
(2) Sales of eligible crops a producer purchased for resale that
had a change in characteristic due to the time held (for example, a
plant purchased at a size of 2 inches and sold as an 18-inch plant
after 4 months), less the cost or other basis of such eligible crops;
(3) The taxable amount of cooperative distributions directly
related to the sale of the eligible crops produced by the producer;
(4) Benefits under the following agricultural programs: 2017 WHIP,
ARC and PLC, BCAP, LDP, MLG, MFP, the On-Farm Storage Loss Program, and
STRP;
(5) CCC loans, if treated as income and reported to IRS;
(6) Crop insurance proceeds for eligible crops, minus the amount of
administrative fees and premiums;
(7) NAP payments for eligible crops, minus the amount of service
fees and premiums;
(8) ELAP payments for an aquaculture crop;
(9) Payments issued through grant agreements with FSA for losses of
eligible crops;
(10) Grants from the Department of Commerce, National Oceanic and
Atmospheric Administration and State program funds providing direct
payments for the loss of eligible crops or the loss of revenue from
eligible crops;
(11) Other revenue directly related to the production of eligible
crops that IRS requires the producer to report as income;
(12) For the disaster year only, ERP Phase 1 payments issued to
another person or entity for the producer's share of an eligible crop,
regardless of the tax year in which the payment would be reported to
IRS; and
(13) For the benchmark year only, 2018, 2019 and 2020 WHIP+ and QLA
payments.
(b) Allowable gross revenue does not include revenue from sources
other than those listed in paragraph (a) of this section, including but
not limited to, revenue from:
(1) Federal assistance programs not included in paragraph (a) of
this section;
(2) Sales of livestock, animal by-products, and any commodities
that are excluded from ``eligible crops'';
(3) Resale items not held for characteristic change;
(4) Income from a pass-through entity such as an S Corp or limited
liability company;
(5) Conservation program payments;
(6) Any pandemic assistance payments that were not for the loss of
eligible crops or the loss of revenue from eligible crops;
(7) Custom hire income;
(8) Net gain from hedging or speculation;
(9) Wages, salaries, tips, and cash rent;
(10) Rental of equipment or supplies; and
(11) Acting as a contract producer of an agricultural commodity.
(c) A producer is required to certify to an adjusted allowable
gross revenue for the benchmark year on FSA-521 if the producer had a
decreased operation capacity in a disaster year for which they are
applying for ERP Phase 2, compared to the benchmark year.
(d) A producer may certify to an adjusted allowable gross revenue
for the benchmark year on FSA-521 if either of the following apply:
(1) The producer did not have a full year of revenue for 2018 or
2019; or
(2) The producer had expanded their operation capacity in a
disaster year for which they are applying for ERP Phase 2, compared to
the benchmark year.
(e) Change in operation capacity does not include crop rotation
from year to year, changes in farming practices such as converting from
conventional tillage to no-till, or increasing the rate of fertilizers
or chemicals. If requested by FSA, producers are required to submit
documentation to FSA to support adjustments described in paragraphs (c)
and (d) of this section within 30 calendar days of the request. The
documentation to support an adjustment due to a change in operation
capacity must show that the adjustment to the producer's benchmark
revenue is due to an:
(1) Addition or decrease in production capacity of the farming
operation;
(2) Increase or decrease in the use of existing production
capacity; or
(3) Physical alterations that were made to existing production
capacity.
(f) If a producer began farming in 2020 or 2021 and did not have
allowable gross revenue in a benchmark year, the producer may certify
to an adjusted benchmark allowable gross revenue on form FSA-521 that
represents what had been the producer's reasonably expected disaster
year revenue prior to the impact of the qualifying disaster event. If
requested by FSA, documentation required to support a producer's
certification must be provided within 30 calendar days of FSA's
request, or the producer will be considered ineligible for ERP Phase 2.
Acceptable documentation must be generated in the ordinary course of
business and dated prior to the impact of the disaster event and
includes, but is not limited to:
(1) Financial documents such as a business plan or cash flow
statement that demonstrate an expected level of revenue;
(2) Sales contracts or purchase agreements; and
(3) Documentation supporting production capacity, use of existing
production capacity, or physical alterations that demonstrate
production capacity.
(g) The allowable gross revenue will be based on the year for which
the revenue would be reported for the purpose of filing a tax return,
except for the ERP Phase 1 payments specified in paragraph (a)(12) of
this section.
(h) Producers who file or would be eligible to file a joint tax
return will certify their allowable gross revenue based on what it
would have been had they filed taxes separately for the applicable
year.
(i) On form FSA-521, for each applicable disaster year, producers
must indicate the percentage of their allowable gross revenue from
specialty and high value crops and the percentage from other crops. The
percentages certified must be equal to the percentages that the
producer would have reasonably expected to receive for the disaster
year if not for the qualifying disaster event.

[[Page 1888]]

Sec. 760.1904 Time and method of application.

(a) A completed FSA-521, Emergency Relief Program (ERP) Phase 2
Application, must be submitted to the producer's recording county
office by the close of business on the date announced by the Deputy
Administrator. Applications may be submitted in person or by mail,
email, facsimile, or other methods announced by FSA.
(b) Failure of an individual, entity, or a member of an entity to
submit the following payment limitation and payment eligibility forms
within 60 days from the date of the ERP Phase 2 application deadline,
may result in no payment or a reduced payment:
(1) Form AD-2047, Customer Data Worksheet, for new customers or
existing customers who need to update their customer profile;
(2) Form CCC-860, Socially Disadvantaged, Limited Resource,
Beginning and Veteran Farmer or Rancher Certification, applicable for
the program year or years for which the producer is applying for ERP;
(3) Form CCC-901, Member Information for Legal Entities, if
applicable;
(4) Form CCC-902, Farm Operating Plan for an individual or legal
entity as provided in 7 CFR part 1400;
(5) Form FSA-510, Request for an Exception to the $125,000 Payment
Limitation for Certain Programs, accompanied by a certification from a
certified public accountant or attorney as to that person or legal
entity's certification, for a legal entity and all members of that
entity, for each applicable program year, including the legal entity's
members, partners, or shareholders, as provided in 7 CFR part 1400; and
(6) Form AD-1026, Highly Erodible Land Conservation (HELC) and
Wetland Conservation (WC) Certification, for the ERP Phase 2 applicant
and applicable affiliates as provided in 7 CFR part 12.
(c) If requested by FSA, the producer must provide additional
documentation that establishes the producer's eligibility for ERP Phase
2. If supporting documentation is requested, the documentation must be
submitted to FSA within 30 calendar days from the request or the
application will be disapproved by FSA. FSA may request supporting
documentation to verify information provided by the producer and the
produce's eligibility including, but not limited to, the producer's:
(1) Allowable gross revenue reported on the ERP Phase 2
application;
(2) Percentages of the expected allowable gross revenue from:
(i) Specialty and high value crops; and
(ii) Other crops; and
(3) Ownership share in the agricultural commodities.

Sec. 760.1905 Payment calculation.

(a) ERP Phase 2 payments will be calculated separately for each
disaster year. If a producer indicates that they have expected revenue
for both specialty and high value crops and other crops for a disaster
year, a payment will be calculated separately for:
(1) Specialty and high value crops; and
(2) Other crops.
(b) To determine a producer's ERP Phase 2 payment amount, FSA will
calculate:
(1) The producer's benchmark year allowable gross revenue, adjusted
according to 7 CFR 760.1903, if applicable, multiplied by the ERP
factor of 70 percent; minus
(2) The producer's disaster year allowable gross revenue; minus
(3) The sum of the producer's net ERP Phase 1 payments for the 2020
program year, if the calculation is for the 2020 disaster year, or for
the 2021 and 2022 program years

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