Appeal Procedures, 43262-43270 [05-14767]

Agencies

• DEPARTMENT OF AGRICULTURE
• Farm Service Agency

[Federal Register Volume 70, Number 143 (Wednesday, July 27, 2005)]
[Rules and Regulations]
[Pages 43262-43270]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-14767]


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DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 780

RIN 0560-AG88


Appeal Procedures

AGENCY: Farm Service Agency, USDA.

ACTION: Interim final rule.

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SUMMARY: The Farm Service Agency (FSA) is amending the regulations for 
informal agency appeals to make conforming and clarifying changes 
regarding FSA procedures.

DATES: Effective Date: This rule is effective August 26, 2005. Written 
comments via letter, facsimile, or Internet are invited from interested 
individuals and organizations and must be received on or before 
September 26, 2005, in order to be assured of consideration.

ADDRESSES: FSA invites interested persons to submit comments on this 
interim final rule. Comments may be submitted by any of the following 
methods:
    E-Mail: Send comments to Tal--Day@wdc.usda.gov. Include ``Part 
780'' in the subject line of the message.
     Fax: Submit comments by facsimile transmission to: 202/
690-3003.
     Mail: Send comments to: H. Talmage Day, Appeals and 
Litigation Staff, Farm Service Agency, United States Department of 
Agriculture, 1400 Independence Avenue, SW., AG STOP 0570, Washington, 
DC 20250-0570.
     Hand Delivery or Courier: Deliver comments to: H. Talmage 
Day, Appeals and Litigation Staff, Farm Service Agency, United States 
Department of Agriculture, 1400 Independence Avenue, SW., Room 6722-S, 
Washington, DC 20250-0570.
     Federal eRulemaking Portal: Go to https://
www.regulations.gov. Follow the online instructions for submitting 
comments.

FOR FURTHER INFORMATION CONTACT: H. Talmage Day at the above address or 
202/690-3297.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    The Office of Management and Budget (OMB) has determined this rule 
is not significant for the purposes of Executive Order 12866; 
therefore, this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    This rule does not constitute a collection of information under the 
Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35).

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
establishes requirements for Federal agencies to assess the effects of 
their regulatory actions on State, local, and tribal governments and 
the private sector. This rule contains no Federal mandates (under the 
regulatory provisions of title II of the 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 the UMRA.

[[Page 43263]]

Executive Order 12612

    It has been determined under section 6(a) of Executive Order 12612, 
Federalism, that this rule does not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment. The 
provisions contained in this rule will not have a substantial direct 
effect on States or their political subdivisions or on the distribution 
of power and responsibilities among the various levels of government.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601, 
FSA has determined that there will not be a significant economic impact 
on a substantial number of small entities. From experience, relatively 
few program decisions result in any form of appeal proceeding provided 
for in this rule. This rule codifies and clarifies existing procedures 
and deadlines applicable in agency informal appeals, but will not make 
fewer individuals eligible for any FSA program, nor will it increase 
the costs of compliance with program regulations for any participant. 
Similarly, this rule does not change any substantive provisions of the 
programs covered by this rule or limit options otherwise available to 
participants in covered programs. Accordingly, pursuant to section 
605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605 (b), the Agency 
certifies that this rule will not have a significant economic impact on 
a substantial number of small entities.

Executive Order 12372

    These regulations are not subject to the provisions of Executive 
Order 12372, which require intergovernmental consultation with State 
and local officials. See the notice related to 7 CFR part 3015, subpart 
V, published at 48 FR 29115, June 24, 1983.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, on Civil 
Justice Reform. The provisions of this rule are not retroactive. The 
provisions of this rule preempt State and local laws to the extent such 
State and local laws are inconsistent. Generally, all administrative 
appeal provisions, including those published at 7 CFR part 11, must be 
exhausted before any action for judicial review may be brought in 
connection with the matters that are the subject of this rule.

Environmental Evaluation

    The environmental impacts of this rule have been considered 
consistent with the provisions of the National Environmental Policy Act 
of 1969 (NEPA), 42 U.S.C. 4321 et seq., the regulations of the Council 
on Environmental Quality, 40 CFR parts 1500-1508, and the FSA 
regulations for compliance with NEPA, 7 CFR parts 799 and 1940, subpart 
G. FSA completed an environmental evaluation and concluded the rule 
requires no further environmental review. No extraordinary 
circumstances or other unforeseeable factors exist which would require 
preparation of an environmental assessment or environmental impact 
statement. A copy of the environmental evaluation is available for 
inspection and review upon request.

Background and Purpose

    On December 29, 1995, the Office of the Secretary published an 
interim final rule (60 FR 67298-67319) to implement Title II, Subtitle 
H, of the Federal Crop Insurance Reform and Department of Agriculture 
Reorganization Act of 1994 (Reorganization Act), Pub. L. 103-354, 7 
U.S.C. 6995, setting forth interim procedures for appeals of adverse 
decisions by USDA agency officials to the National Appeals Division 
(NAD). The interim final rule also included conforming changes to 
regulations governing agency informal appeals, including 7 CFR part 
780.
    NAD published its final rule in the Federal Register on June 23, 
1999 (64 FR 33367-33378). At that time, the Secretary expressly noted 
that the final rule for NAD did not contain rules for agency appeal 
procedures and that those rules would be published separately by the 
respective agencies.
    Section 275 of the Reorganization Act provided for the Secretary to 
maintain the FSA informal appeals process that preceded the 1994 
legislation. The rules in 7 CFR part 780 do that. This rule amends FSA 
informal appeal regulations to make clarifying changes and improvements 
to those rules to ensure better administration and conformity to 
existing laws.
    The rule specifically reflects changes and additions to the current 
interim rule to document in regulations existing policies governing 
reconsideration of adverse decisions as a feature of the informal 
appeals process and policies governing mediation as an alternative 
dispute resolution technique in the informal appeals process. This rule 
also establishes a procedure for administrative review by State 
Executive Directors of local adverse determinations that certain issues 
are not appealable and makes other conforming changes required by other 
legislation, including limitations on judicial review of State 
Executive Director decisions on equitable relief as provided for in 
Section 1613 of the Farm Security and Rural Investment Act of 2002 
(2002 Act), Pub. L. 107-171, 7 U.S.C. 7996. The changes and additions 
are incorporated in a general edit and reorganization of part 780 as 
set out in this rule. While this rule is exempt from the requirement 
for publication for prior public notice and comment because it is a 
rule of agency procedure and practice, the Agency will accept public 
comments for 60 days after publication of this rule.
    As a general matter, the goal of FSA's informal appeals process is 
to maximize opportunity for resolution within FSA of disputes with 
participants that result from adverse program decisions. FSA's aim and 
expectation is that disputes with participants regarding adverse 
decisions can, for the most part, be resolved through further reviews 
within FSA. It is FSA's experience that only the most difficult 
disputes proceed to further appeals before NAD.

Dispute Resolution Procedures

    FSA's informal appeals process provides a range of alternative 
procedures for dispute resolution. Program disputes in FSA vary 
significantly in complexity, sums at stake, and feasibility of 
resolution through discovery of additional alternatives or additional 
information. The availability of alternative procedures is, therefore, 
central to FSA's goal to achieve just, speedy, and inexpensive 
determinations in program disputes. As defined in the regulations (7 
CFR 780.2), participants with rights in the appeals process include any 
individual or entity who has applied for, or whose right to participate 
in or receive, a payment, loan, loan guarantee, or other benefit in 
accordance with any program of FSA to which the regulations in this 
part apply is directly affected by a decision of FSA. The term may 
include anyone meeting this definition regardless of whether the 
participant in a particular proceeding is an appellant, an interested 
party, or a third party respondent. The term does not include 
individuals or entities whose disputes arise under the programs 
excluded in the definition of ``participant'' set out in the NAD rules 
of procedure found in 7 CFR part 11.
    The regulations provide for the following dispute resolution 
procedures in the agency informal appeals process consistent with 
current practice:
    Reconsideration: subsequent consideration by the same level 
decision maker or reviewing authority. Reconsideration affords a means 
to clarify Agency determinations and

[[Page 43264]]

consider additional facts. Any decision on reconsideration will 
constitute a new decision for purposes of running of the time 
limitations for any subsequent appeal within FSA or to NAD.
    County Committee and State Committee appeals: subsequent 
consideration by a county or State committee established under Section 
8(b)(5) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 
590h(b)(5)). The decision of an employee of a county committee must be 
taken before the county committee before any other appeal procedure is 
available, either within FSA's informal appeals process or through 
appeal to NAD.
    Alternative dispute resolution (ADR) procedures: This rule 
incorporates specific guidelines for mediation of program disputes that 
have to date been operative as generally applicable agency policy. Part 
785 of 7 CFR provides for certification of and grants to State 
mediation programs that meet requirements of that part. When a 
certified mediation program is operating in a State, mediation is made 
available through that program. Mediation in a State without a 
certified mediation program is made available by the State FSA office. 
A request for mediation in a State without a certified mediation 
program must be submitted to the State Executive Director. If a 
participant makes a request for some other form of ADR, FSA will 
consider the request in good faith.
    The regulations continue to provide for reservations of authority 
to permit representatives of FSA and the Commodity Credit Corporation 
(CCC) to correct errors in data entered on program contracts, loan 
agreements and other program documents and the results of the 
computations or calculations made pursuant to the contract or the 
agreement. Likewise, nothing in the regulations precludes the 
Secretary, Administrator, Executive Vice President of CCC, the Chief of 
NRCS, if applicable, or a designee, from determining at any time any 
question arising under the programs within their respective authority 
or from reversing or modifying any decision made by FSA, its State or 
county committees, or CCC.
    The decisions of the Administrator and Deputy Administrators are 
outside FSA's appeals process and, therefore, are not decisions subject 
to mediation, reconsideration, or further appeal within FSA. Although 
such decisions are final for purposes of appeal to NAD, in exceptional 
cases the Administrator or a Deputy Administrator may exercise 
discretion to reconsider or to refer a matter to mediation. Any 
decision on reconsideration or appeal within FSA will constitute a new 
decision for purposes of running of the time limitation for any 
subsequent appeal to NAD.

Adverse Program Decisions

    Section 274 of the 1994 Reorganization Act, 7 U.S.C. 6994, Notice 
and Opportunity for Hearing, requires FSA to provide written notice of 
an adverse decision and notice of appeal rights no later than 10 
working days after the decision is made. Accordingly, this rule 
provides that FSA will endeavor to mail or personally deliver written 
notice of a decision to a participant no later than 10 working days 
after FSA renders a decision.

Appealable and Non-Appealable Decisions

    Not all decisions that affect program participants afford them the 
option for reconsideration, mediation, or appeal. Decisions made 
pursuant to statutory provisions or implementing regulations that are 
not dependent upon a unique set of facts are generally not appealable. 
For example, the determination whether a participant is a beginning 
farmer for purposes of sales of farmland that has been taken into 
inventory by FSA is not appealable because appeal is barred by 7 U.S.C. 
1985. In general, any decision based on a program provision or program 
policy, or on a statutory or regulatory requirement that is applicable 
to all similarly situated participants is not appealable under these 
rules. Issues of fact regarding the applicability of a general rule, 
however, may be appealable. A letter transmitting an FSA decision that 
is determined not to be appealable will, as a general rule, set forth 
the facts on which the decision was based and will document that those 
facts are not in dispute.
    Similarly, decisions of FSA State Executive Directors or others on 
equitable relief made under the regulations implementing Section 1613 
of the 2002 Act are discretionary decisions that do not afford 
participants any rights of appeal within FSA or any right to judicial 
review. However, the underlying program decisions are appealable within 
FSA; and the final agency program decision under the applicable 
regulations and any denial of equitable relief under other authority, 
generally, is appealable to NAD.
    In addition, requirements and conditions of participation that are 
designated by law to be developed by agencies other than FSA are not 
appealable through the procedures in this rule except as may involve 
the Department's Natural Resources Conservation Service under some 
circumstances as addressed in the rule. Examples of such requirements 
or conditions include flood plain determinations, archaeological and 
historic area preservation requirements, and designations of areas that 
have been determined to be inhabited by endangered species. As an 
additional safeguard in the agency appeals process, this rule provides 
an additional option to allow a participant to seek an administrative 
review by the State Executive Director when a program decision has been 
determined not to be appealable. It is in the interest of participants 
and FSA that program disputes be resolved by persons with expertise in 
agency programs whenever feasible. This provision for administrative 
review by the State Executive Director will afford participants another 
opportunity to avail themselves of FSA's informal appeals process. This 
option is in addition to a participant's right to seek an appealability 
review by the NAD Director in accordance with 7 CFR part 11.

Implementation of Final Decisions in Appeals

    As a general matter, a decision in an FSA informal appeal will be 
implemented within 30 days after the period for appeal of the decision 
has run, i.e., 30 days after the agency decision becomes a final 
decision of USDA. Implementation is understood to require that the next 
step to be taken in the matter will be initiated by the agency within 
the required period, but not necessarily completed. Additional time may 
be required, for example, to obtain updated financial or other 
information relating to eligibility or feasibility, to obtain a new 
appraisal, or to reassess any wetland features on a tract of farmland. 
This policy is consistent with implementation of final decisions in NAD 
appeals under 7 CFR 11.12.
    Decisions can only be implemented to the extent otherwise allowed 
by law. For example, how the decision in an appeal may be implemented 
will sometimes depend upon the availability of funds. If funds are not 
available, a decision may not cause a payment to be issued immediately 
to a participant, notwithstanding a successful appeal. In such 
circumstances, the appeal is effective to resolve issues of a 
participant's compliance with the appealed program requirements. In an 
instance where Congress later appropriates additional funding for 
assistance under the subject program, or in future programs 
establishing the same

[[Page 43265]]

requirement, provided a participant's circumstances remain unchanged, 
FSA may effect payment.

Mediation

    Mediation is a technique that can assist FSA, program participants 
and applicants, and other interested parties in resolving issues 
arising in FSA adverse decisions. As defined in Sec.  780.2, mediation 
means a technique for resolution of disputes in which a mediator 
assists disputing parties in voluntarily reaching mutually agreeable 
settlement of issues within the laws, regulations, and the agency's 
generally applicable program policies and procedures, but in which the 
mediator has no authoritative decision making power.
    Similarly, a mediator is defined to mean a neutral individual who 
functions specifically to aid the parties in a dispute during a 
mediation process. The regulations also set out a minimum requirement 
for mediator qualification that mediators must satisfy to be eligible 
to mediate an adverse decision in a State without a certified mediation 
program. The requirement incorporates, where applicable, the 
qualification requirements established in the law of the State where 
the adverse decision would be mediated, if the State has established 
mediator qualification requirements in statutory law or regulations, 
and otherwise prescribes a minimum requirement. These definitions are 
consistent with definitions in the FSA Certified State Mediation 
Program regulations at 7 CFR part 785. The rule also explains as a 
requirement of impartiality that a mediator may not have served as an 
advocate or representative for any party in the mediation and may not 
so serve thereafter in a proceeding related to the mediated dispute.
    In States with certified mediation programs, the mediation process 
may encompass a number of activities in addition to intake and 
scheduling of mediations to prepare participants for mediation. A 
certified State's mediation process may involve, for example, iterative 
rounds of financial counseling assistance to participants in efforts to 
develop a feasible plan for a farming operation before any session or 
sessions with a mediator. Nothing in this rule operates to limit the 
scope of a mediation process or the number of sessions that may be 
involved in the single mediation of an adverse decision, including the 
issues of fact material to an adverse decision.
    When mediation is available in the informal appeals process, FSA's 
adverse decision letters will advise participants how to exercise that 
option. In States with a mediation program certified under 7 CFR part 
785, adverse decision letters will provide guidance on how the 
participant may contact the certified mediation program to request 
mediation. In States without a certified mediation program, adverse 
decision letters will instruct participants to direct requests for 
mediation to the State Executive Director when mediation is an 
available option. If a qualified mediator is available and accepted by 
the participant, FSA will notify third parties and interested parties 
of the mediation. If no qualified mediator is available, FSA will not 
participate in mediation, but will attend any meeting of creditors 
requested by a participant to the extent that it may be required under 
part 1951, subpart S, of this title or any successor regulation.
    This rule provides that FSA is obligated to participate in good 
faith in mediation under the auspices of a State-certified mediation 
program when applicable. In that regard, the rule provides that FSA 
will endeavor to:
     Designate a person to represent FSA in the mediation;
     Define the FSA representative's authority to bind FSA to 
agreements reached in the mediation;
     Instruct FSA's representative to ensure that any agreement 
reached during, or as a result of, the mediation is consistent with the 
statutory and regulatory provisions and generally applicable program 
policies and is mutually agreed to in writing by all affected parties;
     Authorize FSA's representative to assist in identifying 
and exploring additional options that may resolve the dispute;
     Assist as necessary in making pertinent records available 
for review and discussion during the mediation;
     Direct FSA's representative in the mediation to forward 
any written agreement proposed in mediation to the appropriate FSA 
official for approval; and
     Timely consider dispute resolution proposals requiring 
actions or approvals under broader authority than is vested in the 
representative in the mediation.
    The foregoing specifications reflect a difference between the 
function of mediation in private disputes and public program disputes 
that FSA believes is essential for understanding the role and potential 
of mediation as a means for resolving agency program disputes. In 
contrast to private disputes, the ultimate issue in mediation of an 
agency program dispute is usually whether one or more parties to the 
mediation meets, or can meet, program requirements that are set forth 
in regulations. Parties mediating a regulatory program dispute are not 
free to make their own law, and mediation of these disputes should not 
be perceived as a means to obtain a result not otherwise obtainable 
under statute, regulations, or generally applicable agency policy and 
program procedure. Hence, while mediation, unlike some other forms of 
ADR, emphasizes assistance to parties in developing alternatives, the 
alternatives developed in mediation of an FSA program dispute must be 
feasible and consistent with statutory and regulatory requirements and 
FSA's generally applicable interpretations of them. Within these 
constraints, FSA believes that mediation of program disputes can 
produce benefits when the mediation reveals additional relevant facts 
and new points of view. Examples of activities that may productively 
occur during an FSA program mediation include identifying alternative 
means for a participant to comply with regulatory requirements, 
exploring alternative mitigation strategies when a wetland has been 
converted, or considering possible changes in a farming operation or 
additional resources that may be made available to meet the farming 
operation's financial requirements. In addition, when other private 
parties are involved, for example, other creditors, the mediation may 
assist in identifying potential flexibility in the positions of these 
private parties as in a purely private mediation. In other cases, the 
mediation may simply clarify the basis for a decision.
    The features distinguishing mediation of a regulatory program 
dispute are reasons that FSA believes that attendance at a mediation of 
a representative with final authority to bind FSA is not essential to 
effective mediation of agency program disputes. In addition, such a 
procedure would be impractical in many situations. For example, it 
would be unworkable to have county and/or State committees attend 
mediation sessions. As a matter of sound management policy, FSA will 
consistently endeavor to ensure that the representative designated for 
FSA in any mediation is a person with appropriate knowledge of the 
legal parameters implicated in the program dispute.
    This rule does not establish guidelines for mediations that may 
occur in advance of any decision that is appealable under this rule. As 
a general matter, FSA believes that mediation is most likely to be 
productive when an adverse decision has been issued that presents clear 
issues to challenge and

[[Page 43266]]

resolve. Also, the early stages in FSA decision-making when an issue 
may be defined for mediation ensure that mediation is available in the 
agency informal appeals process at a very early stage. As an example, 
under existing farm loan regulations, participants have a means to 
obtain decisions at an early stage of difficulty. FSA loan servicing 
regulations afford borrowers a means to be considered for relief as 
financially distressed borrowers before a delinquency has occurred. 
Similarly, participants seeking new farm loans or refinancing may 
likewise obtain decisions on eligibility without submitting a complete 
loan application. Also, it is in participants' interests that their 
requests for loans be submitted before outstanding loans have gone 
delinquent.
    In farm commodity and marketing assistance and conservation 
programs, mediation in advance of any adverse decision is much more 
rarely likely to be productive. In the Conservation Reserve Program, 
for example, the regulatory requirements that will determine 
eligibility for a future sign-up cannot be anticipated until guidelines 
are published. Similarly, in commodity assistance programs, while 
general criteria of eligibility tend to persist in successively 
authorized assistance programs, the exact conditions under which 
assistance will be made available frequently depend on details of 
enacted legislation that cannot be accurately projected before 
legislation is signed. Notwithstanding, in certain limited cases, where 
it is clear that only one issue will be in dispute and some resolution 
seems clearly feasible, e.g., because of potential flexibility in 
positions of third parties, mediation may be considered by FSA to 
expedite progress toward a favorable resolution of the initial 
administrative request. If mediation occurs in advance of an adverse 
decision, mediation on that issue will not again be offered to a 
participant as an option in the informal appeals process.
    This rule is consistent with 7 CFR 11.5(c)(2) of the NAD Rules of 
Procedure, which states that a participant may request mediation or any 
other method of alternative dispute resolution at any time prior to a 
NAD hearing. If a participant lodges such a request after having filed 
an appeal with NAD, provided such a request is lodged within 30 days of 
the date the participant receives the adverse decision, FSA will 
participate in such a mediation in good faith provided the decision 
under appeal is not a decision by an official in FSA's national office 
and the matter has not been mediated.
    Consistent with the Administrative Dispute Resolution Act, 5 U.S.C. 
574, and the regulations in this part, mediations will be handled with 
a concern for confidentiality. During the course of a mediation, it is 
anticipated that FSA's representative may need to communicate with 
other agency officials. Such communications are not inconsistent with 
the requirement that mediations be confidential. Restrictions on 
confidentiality may vary with the circumstances in a particular 
mediation. As a general matter, participants will not require other 
parties' consents to disclose information in a mediation to agents 
furnishing confidential services to a participant, e.g., attorneys, 
accountants, or other agents bound to furnish services under a duty of 
confidentiality. A participant may, in any event, obtain other parties' 
consent to contemplated disclosures.

List of Subjects in 7 CFR Part 780

    Administrative practice and procedure, Agricultural commodities, 
Agriculture, Farmers, Federal aid programs, Loan programs, Price 
support programs, Soil conservation, Wetlands.


0
For the reasons stated in the preamble, FSA revises 7 CFR part 780 to 
read as follows:

PART 780--APPEAL REGULATIONS

Sec.
780.1 General.
780.2 Definitions.
780.3 Reservations of authority.
780.4 Applicability.
780.5 Decisions that are not appealable.
780.6 Appeal procedures available when a decision is appealable.
780.7 Reconsideration.
780.8 County committee appeals.
780.9 Mediation.
780.10 State committee appeals.
780.11 Appeals of NRCS determinations.
780.12 Appeals of penalties assessed under the Agricultural Foreign 
Investment Disclosure Act of 1978.
780.13 Verbatim transcripts.
780.14 [Reserved]
780.15 Time limitations.
780.16 Implementation of final agency decisions.
780.17 Judicial review.

    Authority: 5 U.S.C. 301 and 574; 7 U.S.C. 6995; 15 U.S.C. 714b 
and 714c; 16 U.S.C. 590h.


Sec.  780.1  General.

    This part sets forth rules applicable to appealability reviews, 
reconsiderations, appeals and alternative dispute resolution procedures 
comprising in aggregate the informal appeals process of FSA. FSA will 
apply these rules to facilitate and expedite participants' submissions 
and FSA reviews of documentary and other evidence material to 
resolution of disputes arising under agency program regulations.


Sec.  780.2  Definitions.

    For purposes of this part:
    1994 Act means the Federal Crop Insurance Reform and Department of 
Agriculture Reorganization Act of 1994 (Pub. L. 103-354).
    Adverse decision means a program decision by an employee, officer, 
or committee of FSA that is adverse to the participant. The term 
includes any denial of program participation, benefits, written 
agreements, eligibility, etc., that results in a participant receiving 
less funds than the participant believes should have been paid or not 
receiving a program benefit to which the participant believes the 
participant was entitled.
    Agency means FSA and its county and State committees and their 
personnel, CCC, NRCS, and any other agency or office of the Department 
which the Secretary may designate, or any successor agency.
    Agency record means all documents and materials maintained by FSA 
that are related to the adverse decision under review that are compiled 
and reviewed by the decision-maker or that are compiled in the record 
provided to the next level reviewing authority.
    Appeal means a written request by a participant asking the next 
level reviewing authority within FSA to review a decision. However, 
depending on the context, the term may also refer to a request for 
review by NAD.
    Appealability review means review of a decision-maker's 
determination that a decision is not appealable under this part. That 
decision is, however, subject to review according to Sec.  780.5 or 7 
CFR part 11 to determine whether the decision involves a factual 
dispute that is appealable or is, instead, an attempt to challenge 
generally applicable program policies, provisions, regulations, or 
statutes that were not appealable.
    Appellant means any participant who appeals or requests 
reconsideration or mediation of an adverse decision in accordance with 
this part or 7 CFR part 11.
    Authorized representative means a person who has obtained a Privacy 
Act waiver and is authorized in writing by a participant to act for the 
participant in a reconsideration, mediation, or appeal.
    CCC means the Commodity Credit Corporation, a wholly owned 
Government corporation within USDA.
    Certified State means, in connection with mediation, a State with a 
mediation program, approved by the

[[Page 43267]]

Secretary, that meets the requirements of 7 CFR part 785.
    Confidential mediation means a mediation process in which neither 
the mediator nor parties participating in mediation will disclose to 
any person oral or written communications provided to the mediator in 
confidence, except as allowed by 5 U.S.C. 574 or 7 CFR part 785.
    County committee means an FSA county or area committee established 
in accordance with section 8(b) of the Soil Conservation and Domestic 
Allotment Act (16 U.S.C. 590h(b)).
    Determination of NRCS means a decision by NRCS made pursuant to 
Title XII of the Food Security Act of 1985 (16 U.S.C. 3801 et seq.), as 
amended.
    FSA means the Farm Service Agency, an agency within USDA.
    Final decision means a program decision rendered by an employee or 
officer of FSA pursuant to delegated authority, or by the county or 
State committee upon written request of a participant. A decision that 
is otherwise final shall remain final unless the decision is timely 
appealed to the State committee or NAD. A decision of FSA made by 
personnel subordinate to the county committee is considered ``final'' 
for the purpose of appeal to NAD only after that decision has been 
appealed to the county committee under the provisions of this part.
    Hearing means an informal proceeding on an appeal to afford a 
participant opportunity to present testimony, documentary evidence, or 
both to show why an adverse decision is in error and why the adverse 
decision should be reversed or modified.
    Implement means the taking of action by FSA, NRCS, or CCC that is 
necessary to effectuate fully and promptly a final decision.
    Mediation means a technique for resolution of disputes in which a 
mediator assists disputing parties in voluntarily reaching mutually 
agreeable settlement of issues within the laws, regulations, and the 
agency's generally applicable program policies and procedures, but in 
which the mediator has no authoritative decision making power.
    Mediator means a neutral individual who functions specifically to 
aid the parties in a dispute during a mediation process.
    NAD means the USDA National Appeals Division established pursuant 
to the 1994 Act.
    NAD rules means the NAD rules of procedure published at 7 CFR part 
11, implementing title II, subtitle H of the 1994 Act.
    Non-certified State means a State that is not approved to 
participate in the certified mediation program under 7 CFR part 785, or 
any successor regulation.
    NRCS means the Natural Resources Conservation Service of USDA.
    Participant means any individual or entity who has applied for, or 
whose right to participate in or receive, a payment, loan, loan 
guarantee, or other benefit in accordance with any program of FSA to 
which the regulations in this part apply is affected by a decision of 
FSA. The term includes anyone meeting this definition regardless of 
whether, in the particular proceeding, the participant is an appellant 
or a third party respondent. The term does not include individuals or 
entities whose claim(s) arise under the programs excluded in the 
definition of ``participant'' published at 7 CFR 11.1.
    Qualified mediator means a mediator who meets the training 
requirements established by State law in the State in which mediation 
services will be provided or, where a State has no law prescribing 
mediator qualifications, an individual who has attended a minimum of 40 
hours of core mediator knowledge and skills training and, to remain in 
a qualified mediator status, completes a minimum of 20 hours of 
additional training or education during each 2-year period. Such 
training or education must be approved by USDA, by an accredited 
college or university, or by one of the following organizations: State 
Bar of a qualifying State, a State mediation association, a State 
approved mediation program, or a society of dispute resolution 
professionals.
    Reconsideration means a subsequent consideration of a program 
decision by the same level of decision-maker or reviewing authority.
    Reviewing authority means a person or committee assigned the 
responsibility of making a decision on reconsideration or an appeal 
filed by a participant in accordance with this part.
    State committee means an FSA State committee established in 
accordance with Section 8(b) of the Soil Conservation and Domestic 
Allotment Act (16 U.S.C. 590h(b)) including, where appropriate, the 
Director of the Caribbean Area FSA office for Puerto Rico and the 
Virgin Islands.
    State Conservationist means the NRCS official in charge of NRCS 
operations within a State, as set forth in part 600 of this title.
    State Executive Director means the executive director of an FSA 
State office with administrative responsibility for a FSA State office 
as established under the Reorganization Act.
    USDA means the U.S. Department of Agriculture.
    Verbatim transcript means an official, written record of 
proceedings in an appeal hearing or reconsideration of an adverse 
decision appealable under this part.


Sec.  780.3  Reservations of authority.

    (a) Representatives of FSA and CCC may correct all errors in data 
entered on program contracts, loan agreements, and other program 
documents and the results of the computations or calculations made 
pursuant to the contract or agreement. FSA and CCC will furnish 
appropriate notice of such corrections when corrections are deemed 
necessary.
    (b) Nothing contained in this part shall preclude the Secretary, or 
the Administrator of FSA, Executive Vice President of CCC, the Chief of 
NRCS, if applicable, or a designee, from determining at any time any 
question arising under the programs within their respective authority 
or from reversing or modifying any decision made by a subordinate 
employee of FSA or its county and State committees, or CCC.


Sec.  780.4  Applicability.

    (a)(1) Except as provided in other regulations, this part applies 
to decisions made under programs and by agencies, as set forth herein:
    (i) Decisions in programs administered by FSA to make, guarantee or 
service farm loans set forth in chapters VII and XVIII of this title 
relating to farm loan programs;
    (ii) Decisions in those domestic programs administered by FSA on 
behalf of CCC through State and county committees, or itself, which are 
generally set forth in chapters VII and XIV of this title, or in part 
VII relating to conservation or commodities;
    (iii) Appeals from adverse decisions, including technical 
determinations, made by NRCS under title XII of the Food Security Act 
of 1985, as amended;
    (iv) Penalties assessed by FSA under the Agricultural Foreign 
Investment Disclosure Act of 1978, 5 U.S.C. 501 et seq.;
    (v) Decisions on equitable relief made by a State Executive 
Director or State Conservationist pursuant to section 1613 of the Farm 
Security and Rural Investment Act of 2002, Pub. L. 107-171; and
    (vi) Other programs to which this part is made applicable by 
specific program regulations or notices in the Federal Register.
    (2) The procedures contained in this part may not be used to seek 
review of statutes or regulations issued under

[[Page 43268]]

Federal law or review of FSA's generally applicable interpretations of 
such laws and regulations.
    (3) For covered programs, this part is applicable to any decision 
made by an employee of FSA or of its State and county committees, CCC, 
the personnel of FSA, or CCC, and by the officials of NRCS to the 
extent otherwise provided in this part, and as otherwise may be 
provided in individual program requirements or by the Secretary.
    (b) With respect to matters identified in paragraph (a) of this 
section, participants may request appealability review, 
reconsideration, mediation, or appeal under the provisions of this 
part, of decisions made with respect to:
    (1) Denial of participation in a program;
    (2) Compliance with program requirements;
    (3) Issuance of payments or other program benefits to a participant 
in a program; and
    (4) Determinations under Title XII of the Food Security Act of 
1985, as amended, made by NRCS.
    (c) Only a participant directly affected by a decision may seek 
administrative review under Sec.  780.5(c).


Sec.  780.5  Decisions that are not appealable.

    (a) Decisions that are not appealable under this part shall include 
the following:
    (1) Any general program provision or program policy or any 
statutory or regulatory requirement that is applicable to similarly 
situated participants;
    (2) Mathematical formulas established under a statute or program 
regulation and decisions based solely on the application of those 
formulas;
    (3) Decisions made pursuant to statutory provisions that expressly 
make agency decisions final or their implementing regulations;
    (4) Decisions on equitable relief made by a State Executive 
Director or State Conservationist pursuant to Section 1613 of the Farm 
Security and Rural Investment Act of 2002, Pub. L. 107-171;
    (5) Decisions of other Federal or State agencies;
    (6) Requirements and conditions designated by law to be developed 
by agencies other than FSA.
    (7) Disapprovals or denials because of a lack of funding.
    (8) Decisions made by the Administrator or a Deputy Administrator.
    (b) A participant directly affected by an adverse decision that is 
determined not to be subject to appeal under this part may request an 
appealability review of the determination by the State Executive 
Director of the State from which the underlying decision arose in 
accordance with Sec.  780.15.
    (c) Decisions that FSA renders under this part may be reviewed by 
NAD under part 11 of this title to the extent otherwise allowed by NAD 
under its rules and procedures. An appealability determination of the 
State Executive Director in an administrative review is considered by 
FSA to be a new decision.


Sec.  780.6  Appeal procedures available when a decision is appealable.

    (a) For covered programs administered by FSA for CCC, the following 
procedures are available:
    (1) Appeal to the county committee of decisions of county committee 
subordinates;
    (2) Reconsideration by the county committee;
    (3) Appeal to the State committee;
    (4) Reconsideration by the State committee;
    (5) Appeal to NAD;
    (6) Mediation under guidelines specified in Sec.  780.9.
    (b) For decisions in agricultural credit programs administered by 
FSA, the following procedures are available:
    (1) Reconsideration under Sec.  780.7;
    (2) Mediation under Sec.  780.9;
    (3) Appeal to NAD.
    (c) For programs and regulatory requirements under Title XII of the 
Food Security Act of 1985, as amended, to the extent not covered by 
paragraph (a) of this section, the following procedures are available:
    (1) Appeal to the county committee;
    (2) Appeal to the State committee;
    (3) Mediation under Sec.  780.9;
    (4) Appeal to NAD.


Sec.  780.7  Reconsideration.

    (a) A request for reconsideration under this part must be submitted 
in writing by a participant or by a participant's authorized 
representative and addressed to the FSA decision maker as may be 
instructed in the adverse decision notification.
    (b) A participant's right to request reconsideration is waived if, 
before requesting reconsideration, a participant:
    (1) Has requested and begun mediation of the adverse decision;
    (2) Has appealed the adverse decision to a higher reviewing 
authority in FSA; or
    (3) Has appealed to NAD.
    (c) Provided a participant has not waived the right to request 
reconsideration, FSA will consider a request for reconsideration of an 
adverse decision under these rules except when a request concerns a 
determination of NRCS appealable under the procedures in Sec.  780.11, 
the decision has been mediated, the decision has previously been 
reconsidered, or the decision-maker is the Administrator, Deputy 
Administrator, or other FSA official outside FSA's informal appeals 
process.
    (d) A request for reconsideration will be deemed withdrawn if a 
participant requests mediation or appeals to a higher reviewing 
authority within FSA or requests an appeal by NAD before a request for 
reconsideration has been acted upon.
    (e) The Federal Rules of Evidence do not apply to reconsiderations. 
Proceedings may be confined to presentations of evidence to material 
facts, and evidence or questions that are irrelevant, unduly 
repetitious, or otherwise inappropriate may be excluded.
    (f) The official decision on reconsideration will be the decision 
letter that is issued following disposition of the reconsideration 
request.
    (g) A decision on reconsideration is a new decision that restarts 
applicable time limitations periods under Sec.  780.15 and part 11 of 
this title.


Sec.  780.8  County committee appeals.

    (a) A request for appeal to a county committee concerning a 
decision of a subordinate of the county committee must be submitted by 
a participant or by a participant's authorized representative in 
writing and must be addressed to the office in which the subordinate is 
employed.
    (b) The Federal Rules of Evidence do not apply to appeals to a 
county committee. However, a county committee may confine presentations 
of evidence to material facts and may exclude evidence or questions 
that are irrelevant, unduly repetitious, or otherwise inappropriate.
    (c) The official county committee decision on an appeal will be the 
decision letter that is issued following disposition of the appeal.
    (d) Deliberations shall be in confidence except to the extent that 
a county committee may request the assistance of county committee or 
FSA employees during deliberations.


Sec.  780.9  Mediation.

    (a) Any request for mediation must be submitted after issuance of 
an adverse decision but before any hearing in an appeal of the adverse 
decision to NAD.
    (b) An adverse decision and any particular issues of fact material 
to an adverse decision may be mediated only once:

[[Page 43269]]

    (1) If resolution of an adverse decision is not achieved in 
mediation, a participant may exercise any remaining appeal rights under 
this part or appeal to NAD in accordance with part 11 of this title and 
NAD procedures.
    (2) If an adverse decision is modified as a result of mediation, a 
participant may exercise any remaining appeal rights as to the modified 
decision under this part or appeal to NAD, unless such appeal rights 
have been waived pursuant to agreement in the mediation.
    (c) Any agreement reached during, or as a result of, the mediation 
process shall conform to the statutory and regulatory provisions 
governing the program and FSA's generally applicable interpretation of 
those statutes and regulatory provisions.
    (d) FSA will participate in mediation in good faith and to do so 
will take steps that include the following:
    (1) Designating a representative in the mediation;
    (2) Instructing the representative that any agreement reached 
during, or as a result of, the mediation process must conform to the 
statutes, regulations, and FSA's generally applicable interpretations 
of statutes and regulations governing the program;
    (3) Assisting as necessary in making pertinent records available 
for review and discussion during the mediation; and
    (4) Directing the representative to forward any written agreement 
proposed in mediation to the appropriate FSA official for approval.
    (e) Mediations will be treated in a confidential manner consistent 
with the purposes of the mediation.
    (f) For requests for mediation in a Certified State, if the factual 
issues implicated in an adverse decision have not previously been 
mediated, notice to a participant of an adverse decision will include 
notice of the opportunity for mediation, including a mailing address 
and facsimile number, if available, that the participant may use to 
submit a written request for mediation.
    (1) If the participant desires mediation, the participant must 
request mediation in writing by contacting the certified mediation 
program or such other contact as may be designated by FSA in an adverse 
decision letter. The request for mediation must include a copy of the 
adverse decision to be mediated.
    (2) Participants in mediation may be required to pay fees 
established by the mediation program.
    (3) A listing of certified State mediation programs and means for 
contact may be found on the FSA Web site at https://www.udsa.gov/fsa/
dispute-mediation.htm.
    (g) For requests for mediation in a Non-certified State, if the 
factual issues implicated in an adverse decision have not previously 
been mediated, notice to a participant of an adverse decision will, as 
appropriate, include notice of the opportunity for mediation, including 
the mailing address of the State Executive Director and a facsimile 
number, if available, that the participant may use to submit a written 
request for mediation.
    (1) It is the duty of the participant to contact the State 
Executive Director in writing to request mediation. The request for 
mediation must include a copy of the adverse decision to be mediated.
    (2) If resources are available for mediation, the State Executive 
Director will select a qualified mediator and provide written notice to 
the participant that mediation is available and the fees that the 
participant will incur for mediation.
    (3) If the participant accepts such mediation, FSA may give notice 
of the mediation to interested parties and third parties whose 
interests are known to FSA.
    (h) Mediation will be considered to be at an end on that date set 
out in writing by the mediator or mediation program, as applicable, or 
when the participant receives written notice from the State Executive 
Director that the State Executive Director believes the mediation is at 
an impasse, whichever is earlier.
    (i) To provide for mediator impartiality:
    (1) No person shall be designated as mediator in an adverse program 
dispute who has previously served as an advocate or representative for 
any party in the mediation.
    (2) As a condition of retention to mediate in an adverse program 
dispute under this part, the mediator shall agree not to serve 
thereafter as an advocate or representative for a participant or party 
in any other proceeding arising from or related to the mediated 
dispute, including, without limitation, representation of a mediation 
participant before an administrative appeals entity of USDA, or any 
other Federal Government department.


Sec.  780.10  State committee appeals.

    (a) A request for appeal to the State committee from a decision of 
a county committee must be submitted by a participant or by a 
participant's authorized representative in writing and addressed to the 
State Executive Director.
    (b) A participant's right to appeal a decision to a State committee 
is waived if a participant has appealed the adverse decision to NAD 
before requesting an appeal to the State Committee.
    (c) If a participant requests mediation or requests an appeal to 
NAD before a request for an appeal to the State Committee has been 
acted upon, the appeal to the State Committee will be deemed withdrawn.
    (d) The Federal Rules of Evidence do not apply in appeals to a 
State committee. Notwithstanding, a State committee may confine 
presentations of evidence to material facts and exclude evidence or 
questions as irrelevant, unduly repetitious, or otherwise 
inappropriate.
    (e) The official record of a State committee decision on an appeal 
will be the decision letter that is issued following disposition of the 
appeal.
    (f) Deliberations shall be in confidence except to the extent that 
a State committee may request the assistance of FSA employees during 
deliberations.


Sec.  780.11  Appeals of NRCS determinations.

    (a) Notwithstanding any other provision of this part, a 
determination of NRCS issued to a participant pursuant to Title XII of 
the Food Security Act of 1985, as amended, including a wetland 
determination, may be appealed to the county committee in accordance 
with the procedures in this part.
    (b) If the county committee hears the appeal and believes that the 
challenge to the NRCS determination is not frivolous, the county 
committee shall refer the case with its findings on other issues to the 
NRCS State Conservationist to review the determination, or may make 
such a referral in advance of resolving other issues.
    (c) A decision of the county committee not to refer the case with 
its findings to the NRCS State Conservationist may be appealed to the 
State Committee.
    (d) The county or State committee decision must incorporate, and be 
based upon, the results of the NRCS State Conservationist's review and 
subsequent determination.


Sec.  780.12  Appeals of penalties assessed under the Agricultural 
Foreign Investment Disclosure Act of 1978.

    (a) Requests for appeals of penalties assessed under the 
Agricultural Foreign Investment Disclosure Act of 1978 must be 
addressed to: Administrator, Farm Service Agency, Stop 0572, 1400 
Independence Avenue, SW., Washington, DC 20250-0572.
    (b) Decisions in appeals under this section are not subject to

[[Page 43270]]

reconsideration and are administratively final.


Sec.  780.13  Verbatim transcripts.

    (a) Appellants and their representatives are precluded from making 
any electronic recording of any portion of a hearing or other 
proceeding conducted in accordance with this part. Appellants 
interested in obtaining an official recording of a hearing or other 
proceeding may request a verbatim transcript in accordance with 
paragraph (b) of this section.
    (b) Any party to an appeal or request for reconsideration under 
this part may request that a verbatim transcript be made of the hearing 
proceedings and that such transcript be made the official record of the 
hearing. The party requesting a verbatim transcript shall pay for the 
transcription service, provide a copy of the transcript to FSA free of 
charge, and allow any other party in the proceeding desiring to 
purchase a copy of the transcript to order it from the transcription 
service.


Sec.  780.14  [Reserved]


Sec.  780.15  Time limitations.

    (a) To the extent practicable, no later than 10 business days after 
an agency decision maker renders an adverse decision that affects a 
participant, FSA will provide the participant written notice of the 
adverse decision and available appeal rights.
    (b) A participant requesting an appealability review by the State 
Executive Director of an agency decision made at the county, area, 
district or State level that is otherwise determined by FSA not to be 
appealable must submit a written request for an appealability review to 
the State Executive Director that is received no later than 30 calendar 
days from the date a participant receives written notice of the 
decision.
    (c) A participant requesting reconsideration, mediation or appeal 
must submit a written request as instructed in the notice of decision 
that is received no later than 30 calendar days from the date a 
participant receives written notice of the decision.
    (d) Notwithstanding the time limits in paragraphs (b) and (c) of 
this section, a request for an appealability review, reconsideration, 
or appeal may be accepted if, in the judgment of the reviewing 
authority with whom such request is filed, exceptional circumstances 
warrant such action. A participant does not have the right to see an 
exception under this paragraph. FSA's refusal to accept an untimely 
request is not appealable.
    (e) Decisions appealable under this part are final unless review 
options available under this part or part 11 are timely exercised.
    (1) Whenever the final date for any requirement of this part falls 
on a Saturday, Sunday, Federal holiday, or other day on which the 
pertinent FSA office is not open for the transaction of business during 
normal working hours, the time for submission of a request will be 
extended to the close of business on the next working day.
    (2) The date when an adverse decision or other notice pursuant to 
these rules is deemed received is the earlier of physical delivery by 
hand, by facsimile with electronic confirmation of receipt, actual 
stamped record of receipt on a transmitted document, or 7 calendar days 
following deposit for delivery by regular mail.


Sec.  780.16  Implementation of final agency decisions.

    To the extent practicable, no later than 30 calendar days after an 
agency decision becomes a final administrative decision of USDA, FSA 
will implement the decision.


Sec.  780.17  Judicial review.

    (a) Decisions of the Administrator in appeals under this part from 
Agriculture Foreign Investment Disclosure Act penalties are 
administratively final decisions of USDA.
    (b) The decision of a State Executive Director or State 
Conservationist on equitable relief made under Sec.  718.307 of this 
title is administratively final and also not subject to judicial 
review.

    Signed at Washington, DC, on July 7, 2005.
James R. Little,
Administrator, Farm Service Agency.
[FR Doc. 05-14767 Filed 7-26-05; 8:45 am]
BILLING CODE 3410-05-P