Trade Mitigation Program, 36456-36464 [2019-15700]

Agencies

• DEPARTMENT OF AGRICULTURE
• Commodity Credit Corporation

[Federal Register Volume 84, Number 145 (Monday, July 29, 2019)]
[Rules and Regulations]
[Pages 36456-36464]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15700]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1409

RIN 0560-AI51


Trade Mitigation Program

AGENCY: Commodity Credit Corporation, Agricultural Marketing Service, 
Food and Nutrition Service, and Farm Service Agency, USDA.

ACTION: Final rule.

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SUMMARY: The Commodity Credit Corporation (CCC) is revising the 
regulations to implement a Trade Mitigation Program (TMP) for producers 
of 2019 agricultural commodities that have been significantly impacted 
by trade actions of foreign governments resulting in the loss of 
exports. As part of TMP, the Market Facilitation Program (MFP) 
regulation specifies the eligibility requirements, payment 
calculations, and application procedures. The details for specific 
commodities and the relevant application start dates will be announced 
in applicable notices of funds availability (NOFAs). As part of TMP, 
the Expanded Domestic Commodity Donation Program (EDCDP) regulation 
specifies disposition of surplus commodities through outlets not 
currently used in existing Food and Nutrition Service (FNS) programs, 
the application process, eligibility, and use of grants or cooperative 
agreements. The details for specific commodities and conditions will be 
announced in applicable notices of commodity availability (NOCAs). This 
rule adds new subparts to the TMP regulation to address the 2019 
agricultural commodities.

DATES: Effective: July 29, 2019.

FOR FURTHER INFORMATION CONTACT: For information related to FSA, 
contact William L. Beam; telephone: (202) 720-3175; email: 
[email protected]. Persons with disabilities who require alternative 
means for communication should contact the USDA Target Center at (202) 
720-2600 (voice). For information related to FNS, contact: Laura 
Castro; telephone: (703) 305-2680; email: [email protected].

SUPPLEMENTARY INFORMATION:

[[Page 36457]]

Background

    The imposition of tariffs by other countries on U.S. agricultural 
products has been and continues to disrupt the marketing of 
agricultural commodities and are outside of the control of the 
agricultural producers who are being negatively impacted. In response 
to the trade actions of foreign governments resulting in the loss of 
exports, the President has pledged that up to $16 billion in financial 
assistance will be made available for certain agricultural commodities. 
This assistance will be made available under section 5 of the CCC 
Charter Act (15 U.S.C. 714c) for the 2019 crop year. This section 
authorizes CCC to assist in the disposition of surplus commodities and 
to increase the domestic consumption of agricultural commodities by 
expanding or aiding in the expansion of domestic markets or by 
developing or aiding in the development of new and additional markets, 
marketing facilities, and uses for such commodities.
    The MFP regulation in 7 CFR part 1409 was implemented initially for 
2018 agricultural commodities. The MFP regulation specifies the 
eligibility requirements, payment calculations, and application 
procedures. This rule expands the regulation, revising the title to 
``Trade Mitigation Program,'' moving the prior regulation into a new 
subpart A and adding new subparts B and C to address the 2019 
agricultural commodities. Some of the ways in which the program is 
being implemented for the 2019 agricultural commodities is consistent 
with the implementation for the 2018 agricultural commodities. There 
are expected to be new participants; therefore, we are revising the 
regulations in 7 CFR part 1409 to provide the entire program regulation 
in the new subparts, instead of revising individual portions of the 
2018 regulation. Subparts A and B provide the 2018 and 2019 MFP 
regulations, respectively, and subpart C provides the EDCDP 
regulations. The Farm Service Agency (FSA) will administer subparts A 
and B on behalf of CCC and FNS and the Agricultural Marketing Service 
(AMS) will administer subpart C on behalf of CCC.
    The 2019 MFP payments constitute one portion of financial 
assistance to farmers of up to $14.5 billion. The 2019 MFP payments 
will aid producers in the disposition of surplus commodities and aid in 
the expansion of domestic markets or aid in the development of new and 
additional markets and uses for the specific crops or commodities that 
are negatively impacted by trade actions of foreign governments. The 
2019 MFP payments will provide producers with financial assistance that 
gives them the ability to absorb some of the additional costs from 
having to delay or reorient marketing of the new crop due to the trade 
actions of foreign governments resulting in the loss of exports. The 
determination of commodities that are included in MFP and specific 
program requirements applicable to the commodities, such as enrollment 
periods, will be announced in the applicable NOFAs published in the 
Federal Register.
    In 2018, under section 5(d) of the CCC Charter Act, CCC acquired 
surpluses of some of the commodities impacted by the imposition of 
tariffs by other countries on U.S. agricultural products. Those 
commodities were offered to State agencies and eligible recipient 
agencies primarily in The Emergency Food Assistance Program (TEFAP), 
which is administered by FNS. In reviewing the use of TEFAP to provide 
the surplus commodities to food and nutrition assistance outlets, CCC 
has determined, taking into account the commodities and products that 
are currently subject to the trade actions of foreign governments 
resulting in the loss of exports, greater flexibility in the use of 
surplus commodities may be warranted than the flexibility provided 
under TEFAP if existing distribution channels are unable to absorb the 
commodities provided. Section 5(e) of the CCC Charter Act provides that 
CCC may increase the domestic consumption of agricultural commodities 
(other than tobacco) by expanding or aiding in the expansion of 
domestic markets or by developing or aiding in the development of new 
and additional markets, marketing facilities, and uses for such 
commodities. Surplus commodities which are acquired at market prices 
under section 5(d) will continue to be provided through TEFAP and other 
FNS Food Distribution Programs, and FNS will continue to work with 
States to use current operational flexibilities to ensure maximum 
distribution through the existing infrastructure. However, given the 
variety of potential products and capacity of organizations that States 
currently use to distribute food through FNS' food distribution 
programs, there may be a need for CCC to provide food to other outlets 
outside of existing FNS programs. States have discretion to choose 
agencies that distribute food from FNS' food distribution programs; 
therefore, there may be entities with sufficient operational capacity 
that are not currently participating in FNS' nutrition assistance 
programs that would be capable of distributing these foods to low-
income individuals. To provide CCC with maximum flexibility in the 
event that the current distribution system is unable to use the 
commodities acquired, this rule adds a subpart C to 7 CFR part 1409 to 
specify the process by which CCC will notify the public through notices 
of commodity eligibility published in the Federal Register and on the 
FNS website. These notices will specify:
    1. The types of surplus commodities available for use in accordance 
with section 5(d);
    2. Entities that may receive such commodities and related financial 
assistance, if any, from CCC for use in distribution and handling;
    3. Terms and conditions applicable to the use of the commodities; 
and
    4. The process for submitting an application to receive such 
commodities.
    Should EDCDP need to be used, it is not expected to divert 
currently participating organizations or food resources from existing 
FNS programs. This is because the significant amount of administrative 
funding that FNS currently provides to existing organizations would not 
be available to support the much smaller pool of organizations expected 
to receive food through EDCDP. In addition, EDCDP is designed to be 
implemented only if currently existing FNS program organizations are 
unable to absorb the commodities. FNS and AMS will work to ensure that 
the administration of EDCDP includes standards for food safety, 
administrative oversight and accountability.

TMP Subpart B Description

    MFP will be available to producers of those commodities determined 
by the Secretary to have been adversely affected by the trade actions 
of foreign governments resulting in the loss of exports.
    The 2019 MFP payment rates and units of measure will be in effect 
no later than July 29, 2019. USDA will continue to monitor the 
situation with respect to adverse effects felt by American commodity 
producers as a result of trade actions of foreign governments resulting 
in the loss of exports and will determine whether additional assistance 
is necessary at a later date, considering additional available data and 
updated methodologies.

Producer Eligibility Requirements

    Under MFP, CCC will provide payments to producers of those

[[Page 36458]]

commodities determined by the Secretary to have been adversely affected 
by the trade actions of foreign governments resulting in the loss of 
exports. Participation in other CCC programs is not a prerequisite to 
participate in MFP.

Non-Specialty Crops

    For the purposes of MFP for 2019, agricultural commodities referred 
to as ``non-specialty crops'' include: Alfalfa hay, barley, canola, 
corn, crambe, dried beans, dry peas, extra long staple cotton, 
flaxseed, lentils, long grain and medium grain rice, millet, mustard 
seed, oats, peanuts, rapeseed, rye, safflower, sesame seed, small and 
large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica 
rice, triticale, upland cotton, and wheat. If warranted, additional 
non-specialty crops may be included in MFP in which case the 
availability of assistance will be specified in a NOFA published in the 
Federal Register. Generally, payments will be available to those 
producers who:
    1. Have an ownership interest in the 2019 crop of any non-specialty 
crop that was planted; and
    2. Would have had such an interest in the crop but were prevented 
from planting the crop due to adverse weather but were able to plant a 
CCC approved cover crop on such acreage.
    All applicants must have reported to FSA on form FSA-578, ``Report 
of Acreage'' (acreage report) the acreage planted to these crops for 
the 2019 crop year by the applicable acreage reporting dates. Producers 
who did not file a 2019 acreage report by applicable acreage reporting 
dates must file a ``late filed'' acreage report under existing FSA 
procedures. Similarly, producers who were prevented from planting a 
crop by the final acreage reporting date must submit a ``late filed'' 
acreage report regarding the CCC approved cover crop that was planted.
    The payment rate used by CCC to issue payments will be on a county-
by-county basis and will take into account the degree of impact in a 
county on producers of non-specialty crops from the trade actions of 
foreign governments on U.S. agricultural products resulting in the loss 
of exports. The payment rate for a county may be found at 
www.fsa.usda.gov.
    Producers of non-specialty crops will receive payments based on 
2019 planted acres of non-specialty crops multiplied by the payment 
rate for the relevant county. As specified in the applicable NOFA, 
payments may be adjusted by CCC if 2019 planted acres on a farm exceed 
2018 planted acres to non-specialty crops, if the trade situation 
changes, or if CCC determines such adjustments are warranted.

Specialty Crops, Dairy, and Livestock

    Producers of specialty crops that are specified in the applicable 
NOFA will receive a payment based on 2019 bearing acres of the 
specialty crops multiplied by the payment rate for the relevant 
specialty crop. Specialty crops include the following crops: Almonds, 
cranberries, cultivated ginseng, fresh grapes, fresh sweet cherries, 
hazelnuts, macadamia nuts, pecans, pistachios, and walnuts. If 
warranted, additional specialty crops may be included in MFP as 
specified in the applicable NOFA published in the Federal Register.
    Producers of dairy and livestock that are specified in the 
applicable NOFA will receive a payment calculated on production, 
similar to the manner in which MFP payments were calculated in 2018 as 
specified in 7 CFR part 1409 (now subpart A).

Adjusted Gross Income and Payment Limitation Requirements

    The average adjusted gross income (AGI) limitations specified in 7 
CFR part 1400 apply to MFP. No person or legal entity (excluding a 
joint venture or general partnership), as defined and determined under 
7 CFR part 1400 may receive, directly or indirectly, more than $250,000 
in MFP payments for each crop year as specified in the applicable NOFA. 
The application of the payment limitation will be specified in the 
NOFA. For example, certain commodities may have a combined payment 
limitation.
    For the $250,000 annual payment limit, payments will be determined 
through current attribution rules used in other CCC agricultural 
programs. The regulations in 7 CFR 1400.105 specify how payments are 
attributed; the total payment amount is attributed to a person by 
taking into account the direct and indirect ownership interests of the 
person in a legal entity that is eligible to receive payments. In the 
case of a legal entity, the same payment is attributed to the direct 
payee in the full amount and to those that have an indirect interest to 
the amount of that indirect interest.
    A person or legal entity is ineligible for payments if the person's 
or legal entity's AGI for the applicable program year is more than 
$900,000 unless at least 75 percent of the person or legal entity's 
average AGI is derived from farming, ranching, or forestry related 
activities. If at least 75 percent of the person or legal entity's 
average AGI is derived from farming, ranching, or forestry related 
activities and the participant provides the required certification and 
documentation, the person or legal entity, other than a joint venture 
or general partnership, is eligible to receive 2019 MFP payments, 
directly or indirectly up to the payment limit, as discussed above. The 
relevant years used to calculate average AGI are the 3 consecutive tax 
years immediately preceding the year before the payment year, which 
will be the crop year, or the marketing year for livestock or dairy. 
For example, for 2019 the relevant years to calculate AGI are the 2015, 
2016 and 2017 tax years.
    In addition to having a share in the commodity, to be eligible for 
an MFP payment for non-specialty crops, each applicant is required to 
be a person or legal entity who was actively engaged in farming, as 
provided in 7 CFR 1409.3, in the 2019 crop year.

Payment Calculations

    The payment calculations for specific commodities will be specified 
in the applicable NOFA.

MFP General Requirements

    Producers will apply to receive an MFP payment using the MFP 
application form. Such producers must comply with the provisions of 7 
CFR part 1409 and any applicable NOFA published in the Federal Register 
by CCC.
    General requirements that apply to other CCC programs also apply to 
MFP including compliance with the provisions of 7 CFR part 12, ``Highly 
Erodible Land and Wetland Conservation,'' during the year for which 
assistance is made available.
    Federal, State, and local governments are not eligible for MFP 
payments.
    The regulations at 7 CFR part 1400 Subpart E are applicable to the 
eligibility of foreign persons.
    There is no requirement to have crop insurance coverage or coverage 
under the Noninsured Crop Disaster Assistance Program (NAP) to be 
eligible for participation in MFP.
    Appeal regulations specified in 7 CFR parts 11 and 780 apply. MFP 
commodity eligibility and other matters of general applicability that 
are not in response to, or result from, an individual set of facts in 
an individual participant's application for payment are not matters 
that can be appealed.

Application Process

    To apply for MFP, each applicant must submit a complete ``Market 
Facilitation Program 2019 (MFP 2019) Application'' (form CCC-913) 
either in person, by mail, email, or facsimile to

[[Page 36459]]

an FSA county office, or through www.farmers.gov. For many crops, FSA 
possesses the producer share data from the applicable crop year's 
acreage report for producers who participate in other FSA-administered 
CCC programs. For crops, the applicant's crop share interest on an MFP 
application cannot be greater than the crop share interest as reported 
on the acreage report. FSA will verify and confirm the applicant's crop 
share interest reported on the MFP application by comparing it to the 
applicant's crop share interest as reported on that farm's acreage 
report for the applicable crop year.
    For livestock, the application will include number of head 
(production) and ownership share information as provided in the 
applicable NOFA. For dairy, the application will include the amount of 
historical production as provided in the applicable NOFA.
    If FSA decides it is necessary to confirm the planting of the 
commodity, the applicant will be required to submit evidence upon 
request, such as seed receipts, custom harvesting receipts, bale gin 
lists, or purchase or sales receipts. In addition, the applicant must 
provide supporting documentation for the amount of production as 
specified in the applicable NOFA.

Documentation for MFP Applications

    FSA will require producer specific documentation of the amount of 
production for all dairy and livestock, as applicable.

MFP Payments

    The payments will be provided in up to 3 payments. The first 
payment will be up to 50 percent of the total calculated payment. CCC 
will determine if any further payments are warranted. If CCC determines 
that a second payment is warranted, it will be up to 75 percent of the 
total calculated payment less the amount received in the first payment 
and the second payment period will begin in November 2019. If CCC 
determines that a final payment is warranted, it will be for up to the 
remaining amount of the total calculated payment, unless otherwise 
adjusted by CCC, and the last payment period will begin in January 
2020.

Provisions Requiring Refund to CCC

    In the event that any application for an MFP payment resulted from 
erroneous information reported by the producer, the payment will be 
recalculated, and the participant must refund any excess payment to 
CCC; if the error was the applicant's error, the refund must include 
interest to be calculated from the date of the disbursement to the MFP 
participant. If, for whatever reason, FSA determines that the applicant 
misrepresented either the total amount or producer's share of the crop, 
head of livestock, or production, or if the MFP payment would exceed 
the participant's correct payment, the application will be disapproved 
and the full MFP payment for that crop or livestock for that 
participant will be required to be refunded to CCC with interest from 
the date of disbursement. If any corrections to the ownership interest 
in the crop are made to the acreage report after the MFP application 
deadline, and would have resulted in a lower MFP payment, the applicant 
will be required to refund the difference with interest from date of 
disbursement.

TMP Subpart C Description

    Subpart C establishes EDCDP under which CCC may provide to eligible 
non-profit entities surplus commodities CCC has acquired in response to 
trade actions taken by foreign governments resulting in the loss of 
exports. The types and quantities of commodities made available under 
subpart C depend to a large extent upon the ability of CCC to use such 
commodities through existing domestic feeding programs administered by 
FNS. EDCDP is intended to provide commodities to low income 
individuals, primarily through eligible entities not participating in 
existing FNS food distribution programs.

Effective Date and Notice and Comment

    The Administrative Procedure Act (5 U.S.C. 553) provides that the 
notice and comment and 30-day delay in the effective date provisions do 
not apply when the rule involves specified actions, including matters 
relating to benefits. This rule governs the program for payments to 
certain agricultural commodity producers and thus falls within that 
exemption. Due to the nature of the rule and the need to implement the 
regulations expeditiously to provide assistance to agricultural 
producers, CCC 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, CCC is not required to 
delay the effective date for 60 days from the date of publication to 
allow for Congressional review. Therefore, this rule is effective upon 
publication in the Federal Register.

Executive Orders 12866, 13563, 13771 and 13777

    Executive Order 12866, ``Regulatory Planning and Review,'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review,'' 
direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 13563 emphasized the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility. Executive Order 13777, 
``Enforcing the Regulatory Reform Agenda,'' established a federal 
policy to alleviate unnecessary regulatory burdens on the American 
people.
    The Office of Management and Budget (OMB) designated this rule as 
economically significant under Executive Order 12866, and therefore, 
OMB has reviewed this rule. The costs and benefits of this rule are 
summarized below. The full cost benefit analysis is available in the 
docket on regulations.gov.
    OMB guidance in M-17-21, dated April 5, 2017, specifies that 
``transfer rules'' are not covered by Executive Order 13771, ``Reducing 
Regulation and Controlling Regulatory Costs.'' Transfer rules are 
Federal spending regulatory actions that cause only income transfers 
between taxpayers and program beneficiaries. Therefore, this is 
considered a transfer rule by OMB and is not covered by Executive Order 
13771.

Cost Benefit Analysis Summary

    The 2019 MFP payments will provide producers with financial 
assistance that gives them the ability to absorb some of the additional 
costs from having to delay or reorient marketing of the 2019 crop due 
to the trade actions of foreign governments resulting in the loss of 
exports. Payment calculations for specific commodities are specified in 
the applicable NOFA. In general, for non-specialty crops, a single 
average payment rate per acre will be determined for each county, based 
on fixed average planted acres and yields for non-specialty crops in 
each county and the assessed amount of damage calculated due to trade 
actions of foreign governments resulting in the loss of exports for 
these crops. The total number of acres used to calculate a MFP payment 
on a farm is equal to 2019 reported planted acreage for a farm not to 
exceed the sum of planted acres and prevented planted acres of non-
specialty crops on the farm in 2018, and available acreage from 2018 
expired Conservation Reserve Program contracts. The use of a

[[Page 36460]]

single county-wide payment rate per acre for all non-specialty crops 
will minimize cross-commodity production distortions and better account 
for cross-commodity market effects from disrupted trade, which are the 
basis for the payments relating to specific crops or commodities that 
are negatively impacted by actions of foreign governments. For 
specialty crops, 2019 MFP payments will be based on 2019 bearing acres 
of each specialty crop multiplied by the payment rate for the relevant 
specialty crop and the relevant state. For dairy and hogs, 2019 MFP 
payments will be made in a similar manner to payments made under the 
2018 MFP--production of the commodity (hundredweight or number of 
animals) times the applicable national payment rate per unit for the 
commodity.
    USDA has revised estimation of the impacts of the trade actions of 
foreign governments resulting in the loss of exports based on a longer-
term analysis of U.S. commodity exports to affected markets than was 
used for the 2018 MFP. The revised method better accounts for the 
longer than expected duration of trade retaliation. USDA estimates that 
for TMP, MFP payments will total up to $14.5 billion and purchases of 
surplus commodities and food products will total up to $1.4 billion. 
The payments and purchases represent benefits to producers, which is 
the cost to the government for TMP.

Regulatory Flexibility Act

    The Regulatory Flexibility Act generally requires an agency to 
prepare a regulatory flexibility analysis of any rule whenever an 
agency is required by the Administrative Procedure Act or any other law 
to publish a proposed rule, unless the agency certifies that the rule 
will not have a significant economic impact on a substantial number of 
small entities. This rule is not subject to the Regulatory Flexibility 
Act because CCC is not required by Administrative Procedure Act or any 
law to publish a proposed rule for this rulemaking.

Environmental Review

    The environmental impacts of this final rule have been considered 
in a manner consistent with the provisions of the National 
Environmental Policy Act (NEPA), the regulations of the Council on 
Environmental Quality (40 CFR parts 1500-1508), and the FSA regulation 
for compliance with NEPA (7 CFR part 799).
    While 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'' (40 CFR 1508.14), when not interrelated to natural 
or physical environmental effects. TMP was designed to avoid skewing 
planting decisions one way or another. Farmers continue to make their 
planting and production decisions with the market signals in mind, 
rather than any expectation of a new USDA program might or might not 
look like. The discretionary aspects of TMP (for example, determining 
AGI and payment limitations) were designed to be consistent with 
established FSA and CCC programs and are not expected to have any 
impact to the human environment, as MFP payments will only be made 
after the commodity has been reported for non-specialty or specialty 
crops and produced for dairy and livestock. Accordingly, the following 
Categorical Exclusions in 7 CFR part 799.31 apply: Sec.  
799.31(b)(6)(iii) applies to financial assistance to supplement income, 
manage the supply of agricultural commodities, or influence the cost 
and supply of such commodities; Sec.  799.31(b)(6)(iv) applies to 
individual farm participation in FSA-administered programs where no 
ground disturbance or change in land use occurs as a result of the 
proposed action or participation; and Sec.  799.31(b)(6)(vi) applies to 
``safety net'' programs administered by FSA. No Extraordinary 
Circumstances (Sec.  799.33) exist. Additionally, as specified in 7 CFR 
1b.4, FNS is categorically excluded. As such, the implementation of TMP 
and the participation in TMP do not constitute major Federal actions 
that would significantly affect the quality of the human environment, 
individually or cumulatively. Therefore, CCC will not prepare an 
environmental assessment or environmental impact statement for this 
regulatory action and this rule serves as documentation of the 
programmatic environmental compliance decision for this federal action.

Executive Order 12372

    Executive Order 12372, ``Intergovernmental Review of Federal 
Programs,'' requires consultation with State and local officials that 
would be directly affected by proposed Federal financial assistance. 
The objectives of the Executive Order are to foster an 
intergovernmental partnership and a strengthened Federalism, by relying 
on State and local processes for State and local government 
coordination and review of proposed Federal Financial assistance and 
direct Federal development. For reasons specified in the final rule 
related notice to 7 CFR part 3015, subpart V (48 FR 29115, June 24, 
1983), the programs and activities within this rule are excluded from 
the scope of Executive Order 12372 which requires intergovernmental 
consultation with State and local officials.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, ``Civil 
Justice Reform.'' This rule will not preempt State or local laws, 
regulations, or policies unless they represent an irreconcilable 
conflict with this rule. The rule will not have retroactive effect. 
Before any judicial action may be brought regarding the provisions of 
this rule, the administrative appeal provisions of 7 CFR parts 11 and 
780 must be exhausted.

Executive Order 13132

    This rule has been reviewed under Executive Order 13132, 
``Federalism.'' The policies contained in this rule do not have any 
substantial direct effect on States, on the relationship between the 
Federal government and the States, or on the distribution of power and 
responsibilities among the various levels of government, except as 
required by law. Nor does this rule impose substantial direct 
compliance costs on State and local governments. Therefore, 
consultation with the States is not required.

Executive Order 13175

    This rule has been reviewed 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 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.
    The USDA's Office of Tribal Relations (OTR) has assessed the impact 
of this rule on Indian Tribes and determined that this rule does not, 
to our knowledge, have Tribal implications that required Tribal 
consultation under Executive Order 13175. If a Tribe requests 
consultation, FSA and CCC will work with OTR to ensure meaningful 
consultation is provided where changes, additions, and modifications 
are not expressly mandated by legislation.

[[Page 36461]]

The Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires Federal agencies to assess the effects of their regulatory 
actions on State, local, and Tribal governments or the private sector. 
Agencies generally must prepare a written statement, including a cost 
benefit analysis, for proposed and final rules with Federal mandates 
that may result in expenditures of $100 million or more in any 1 year 
for State, local, or Tribal governments, in the aggregate, or to the 
private sector. The 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 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.

E-Government Act Compliance

    CCC is committed to complying with the E-Government Act, to promote 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.

Federal Assistance Programs

    The title and number of the Federal Domestic Assistance Program 
found in the Catalog of Federal Domestic Assistance to which this rule 
applies is 10.123--Market Facilitation Program.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act, the information 
collection request that supports MFP was submitted to OMB for emergency 
approval. OMB approved the 6-month emergency information collection. 
FSA will merge the approved information collection burden under OMB 
control number 0560-0292.
    If, in the course of implementing the EDPCP, either FNS or AMS 
determine that there are new information collection requirements, they 
will request approval from OMB.

List of Subjects in 7 CFR Part 1409

    Agriculture, Agricultural commodities, Reporting and recordkeeping 
requirements.

    For the reasons discussed in the preamble, CCC amends 7 CFR part 
1409 as follows:

PART 1409--TRADE MITIGATION PROGRAM

0
1. The authority citation for part 1409 continues to read as follows:

    Authority: 15 U.S.C. 714b and 714c.


0
2. Revise the heading for part 1409 to read as set forth above.


Sec. Sec.  1409.1 through 1409.7  [Redesignated as Subpart A]

0
3. Redesignate Sec. Sec.  1409.1 through 1409.7 as subpart A and add a 
heading for subpart A to read as follows:

Subpart A--2018 Market Facilitation Program (MFP)


Sec.  1409.1  [Amended]

0
4. In Sec.  1409.1, remove ``part'' and add ``subpart'' in its place 
and at the end of the first sentence, add the words ``for 2018 crops''.

0
5. Add subpart B, consisting of Sec. Sec.  1409.101 through 1409.107, 
to read as follows:

Subpart B--2019 Market Facilitation Program (MFP)

Sec.
1409.101 Applicability.
1409.102 Definitions.
1409.103 Producer eligibility requirements.
1409.104 Method of application.
1409.105 Calculation of payments.
1409.106 Eligibility subject to verification.
1409.107 Miscellaneous provisions.


Sec.  1409.101  Applicability.

    This subpart specifies the eligibility requirements and payment 
calculations for the MFP for 2019 agricultural commodities. MFP will 
provide payments with respect to agricultural commodities that have 
been impacted by trade actions of foreign governments resulting in the 
loss of exports. Any specific program requirements for a commodity will 
be specified in a notice of funding availability published by the 
Commodity Credit Corporation (CCC) in the Federal Register.


Sec.  1409.102  Definitions.

    The following definitions apply to MFP. The definitions in 7 CFR 
part 718 and parts 1400 and 1421 of this chapter apply, except where 
they conflict with the definitions in this section.
    Application means the MFP application form.
    Commodity means an agricultural commodity produced in the United 
States intended to be marketed for commercial purposes that has been 
designated as eligible for payments under MFP.
    County payment rate means the per acre value determined by: 
Historical acres and yields of non-specialty crops planted in that 
county and the amount of damage calculated due to trade actions of 
foreign governments resulting in the loss of exports represented as a 
per unit (for example, bushel or pound).
    Crop means the non-specialty crops and specialty crops.
    Crop year means:
    (1) For insurable crops, the crop year as defined according to the 
applicable crop insurance policy; and
    (2) For NAP covered crops, the crop year as provided in part 1437 
of this chapter.
    MFP means the Market Facilitation Program funded by CCC and 
administered by the Farm Service Agency (FSA).
    NOFA means a notice of funds availability published by CCC in the 
Federal Register that specifies terms and conditions of MFP that are 
applicable to a specific commodity.
    Non-specialty crop means any of the following crops: Alfalfa hay, 
barley, canola, corn, crambe, dried beans, dry peas, extra long staple 
cotton, flaxseed, lentils, long grain and medium grain rice, millet, 
mustard seed, oats, peanuts, rapeseed, rye, safflower, sesame seed, 
small and large chickpeas, sorghum, soybeans, sunflower seed, temperate 
japonica rice, triticale, upland cotton, and wheat. If warranted, 
additional non-specialty crops may be included in MFP in which case the 
availability of assistance will be specified in a NOFA published in the 
Federal Register.
    Producer means a livestock producer, dairy producer, or a producer 
of a crop as defined in 7 CFR 718.2.
    Specialty crops means any of the following crops: Almonds, 
cranberries, cultivated ginseng, fresh grapes, fresh sweet cherries, 
hazelnuts, macadamia nuts, pecans, pistachios, and walnuts. If 
warranted, additional specialty crops may be included in MFP in which 
case the availability of assistance will be specified in a NOFA 
published in the Federal Register.


Sec.  1409.103  Producer eligibility requirements.

    (a) To be eligible for an MFP payment, a producer must meet all of 
the requirements in this part and the NOFA that is applicable to the 
commodity.
    (b) A producer's share in the crop must be reported for the 2019 
crop year on form FSA-578, Report of Acreage, submitted to FSA, and 
must be on file in the FSA county office by the applicable reporting 
dates, or no later than the date specified in the applicable NOFA.
    (c) For non-specialty crops, except as determined by CCC, each 
applicant

[[Page 36462]]

must be a person or legal entity who was actively engaged in farming, 
as provided in part 1400 of this chapter.
    (d) For livestock and dairy, a producer must have had an ownership 
interest in livestock or dairy production during the applicable time 
period established by CCC in the applicable NOFA.


Sec.  1409.104  Method of application.

    (a) To apply for a payment, the producer must submit an MFP 
application on the form designated by CCC to an FSA county office.
    (b) In the event that the producer does not submit documentation in 
response to any request of CCC to support the producer's application or 
documentation furnished does not show the producer had ownership in the 
commodity as claimed, the application for that commodity will be 
disapproved.
    (c) A request for a payment will not be approved by CCC until all 
the applicable eligibility provisions have been met and the producer 
has submitted all required forms and supporting documentation. In 
addition to the completed application form, if the following forms and 
documentation are not on file in the FSA county office or are not 
current for the 2019 crop year of the crop or applicable year for the 
commodity for which MFP has been announced as available, the producer 
must also submit:
    (1) A farm operating plan for an individual or legal entity as 
provided in part 1400 of this chapter;
    (2) An average adjusted gross income statement for the applicable 
year entity as provided in part 1400 of this chapter;
    (3) A highly erodible land conservation and wetland conservation 
certification as provided in part 12 of this title;
    (4) For non-specialty and specialty crops, an acreage report for 
the applicable crop year as provided in 7 CFR part 718; and
    (5) For dairy and livestock, verifiable records that substantiate 
the amount of production as specified in the applicable NOFA.


Sec.  1409.105  Calculation of payments.

    (a) For non-specialty crops, the payment under this subpart will be 
calculated by multiplying the county payment rate by the 2019 reported 
planted acreage for a farm not to exceed the sum of planted and 
prevented planted acres of non-specialty crops on the farm in 2018, and 
available acreage from 2018 expired Conservation Reserve Program 
contracts. Producers' payments may be adjusted as determined by CCC and 
as detailed in the applicable NOFA.
    (b) For non-specialty prevented planted crops followed by a CCC 
approved cover crop, the payment rate will be $15 per acre.
    (c) For dairy and livestock, the payment under this subpart will be 
calculated by multiplying the total production of the commodity times 
the producer's eligible share of the commodity times the payment rate 
for that commodity, as provided for in a subsequent NOFA.
    (d) For specialty crops, the payment under this subpart will be 
calculated by multiplying 2019 bearing acres of the specialty crop by 
the payment rate for the relevant specialty crop.
    (e) For MFP payments:
    (1) The first payment will be up to 50 percent of the total 
calculated payment.
    (2) CCC will determine if any further payments are warranted. If 
CCC determines that a second payment is warranted, it will be up to 75 
percent of the total calculated payment less the amount received in the 
first payment and the second payment period will begin in November 
2019.
    (3) If CCC determines that a final payment is warranted, it will be 
for up to the remaining amount of the total calculated payment, unless 
otherwise adjusted by CCC, and the last payment period will begin in 
January 2020.


Sec.  1409.106  Eligibility subject to verification.

    (a) Producers approved for participation in MFP are required to 
retain documentation in support of their application for 3 years after 
the date of approval.
    (b) Producers must submit documentation to CCC as requested to 
substantiate an application.
    (c) Producers receiving payments or any other person who furnishes 
such information to CCC must permit authorized representatives of USDA 
or the General Accounting Office during regular business hours to 
inspect, examine, and to allow such representatives to make copies of 
such books, records, or other items for the purpose of confirming the 
accuracy of the information provided by the producer.


Sec.  1409.107  Miscellaneous provisions.

    (a) If an MFP 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 to CCC 
with interest calculated from the date of the disbursement of the 
payment.
    (b) The refund of any payment to CCC is in addition to liability 
under any other provision of law including, but not limited to: 18 
U.S.C. 286, 287, 371, 641, 651, 1001, and 1014; 15 U.S.C. 714; and 31 
U.S.C. 3729.
    (c) The regulations in 7 CFR parts 11 and 780 part 1400 of this 
chapter apply to determinations under this subpart.
    (d) Any payment under this part 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.
    (e) The $900,000 average AGI limitation provisions in part 1400 of 
this chapter relating to limits on payments for persons or legal 
entities, excluding joint ventures and general partnerships, apply to 
each applicant for MFP unless at least 75 percent of the person or 
legal entity's average AGI is derived from farming, ranching or 
forestry related activities. If at least 75 percent of the person or 
legal entity's average AGI is derived from farming, ranching, or 
forestry related activities, the person or legal entity, other than a 
joint venture or general partnership, is eligible to receive 2019 MFP 
payments up to the $250,000 payment limitation specified in the 
applicable NOFA. The average AGI will be calculated for a person or 
legal entity based on the 3 complete tax years that precede the year 
for which the payment is made (for the 2019 crop year or marketing year 
for livestock and dairy the tax years are 2015, 2016, and 2017).
    (f) No person or legal entity, excluding a joint venture or general 
partnership, as determined by the rules in part 1400 of this chapter 
may receive, directly or indirectly, more than $250,000 in payments as 
specified in the applicable NOFA.
    (g) The direct attribution provisions in part 1400 of this chapter 
apply to MFP. Under those rules, any payment to any legal entity will 
also be considered for payment limitation purposes to be a payment to 
persons or legal entities with an interest in the legal entity or in a 
sub-entity. If any such interested person or legal entity is over the 
payment limitation because of direct payment or their indirect 
interests or a combination thereof, then the payment to the actual 
payee will be reduced commensurate with the amount of the interest of 
the interested person in the payee. If anyone with a direct or indirect 
interest in a legal entity or sub-entity of a payee entity exceeds the 
AGI levels that would allow a producer to directly receive an MFP 
payment, then the MFP payment to the actual payee will be reduced 
commensurately with that interest.
    (h) For the purposes of the effect of lien on eligibility for 
Federal programs (28 U.S.C. 3201(e)), CCC waives the restriction on 
receipt of funds under

[[Page 36463]]

MFP but only as to beneficiaries who, as a condition of such waiver, 
agree to apply the MFP payments to reduce the amount of the judgment 
lien.
    (i) The provisions of 7 CFR 718.304, ``Failure to Fully Comply,'' 
do not apply to this part.

0
6. Add subpart C, consisting of Sec. Sec.  1409.201 through 1409.207, 
to read as follows:
Subpart C--Expanded Domestic Commodity Donation Program (EDCDP)
Sec.
1409.201 Applicability.
1409.202 Definitions.
1409.203 Application process.
1409.204 Award process.
1409.205 Execution of agreement.
1409.206 Eligibility subject to verification.
1409.207 Miscellaneous provisions.

Subpart C--Expanded Domestic Commodity Donation Program (EDCDP)


Sec.  1409.201  Applicability.

    (a) This subpart specifies the process for eligible non-profit 
entities to receive commodities from the Commodity Credit Corporation 
(CCC) that CCC has acquired in response to trade actions taken by 
foreign governments resulting in the loss of exports. The types and 
quantities of commodities made available under this subpart, if any, is 
dependent upon the ability of CCC to use such commodities through 
existing domestic feeding programs administered by the Food and 
Nutrition Service (FNS). In the event that these domestic feeding 
programs are unable to use the commodities acquired by CCC, EDCDP is 
intended to provide the remaining commodities to low income 
individuals, primarily through eligible entities not participating in 
existing FNS food distribution programs.
    (b) CCC, as specified in the applicable Notice of Commodity 
Availability, will use grants and cooperative agreements to conduct the 
Expanded Domestic Commodity Donation Program (EDCDP).
    (c) The Food and Nutrition Service and the Agricultural Marketing 
Service will administer the EDCDP on behalf of CCC.


Sec.  1409.202  Definitions.

    Commodity means an agricultural commodity produced in the United 
States intended to be marketed for commercial purposes.
    Eligible entity means an incorporated nonprofit entity that is 
operating for religious, charitable, or educational purposes, and does 
not provide net earnings to or operate in any other manner that inures 
to the benefit of any officer, employee, or shareholder of the entity 
as defined in section 22 of the Child Nutrition Act of 1966 (42 U.S.C. 
1791) and meets the requirements of Sec.  1409.203.
    Notice of Commodity Availability (NOCA) means the notice published 
by CCC specifying: The types of commodities available for use under 
this subpart; the terms and conditions that are in addition to the 
requirements of this subpart regarding approved uses of such 
commodities; the requirements a non-profit entity must meet to be an 
eligible entity; and whether funds will be made available by CCC 
regarding storage, handling, transportation and other administrative 
costs.


Sec.  1409.203  Application process.

    (a) A non-profit entity that seeks approval for participation in 
EDCDP, as specified in the applicable NOCA must submit to the U.S. 
Department of Agriculture office identified in the NOCA:
    (1) The application form;
    (2) A copy of the entity's 501(c)(3) tax exempt status letter from 
the Internal Revenue Service (IRS);
    (3) A copy of the entity's most recent IRS Form-990; and
    (4) Any other supporting documents specified in the NOCA.
    (b) After CCC has determined that the entity has met all 
eligibility requirements, the eligible entity may be considered for 
participation in EDCDP. After approval by CCC, the eligible entity must 
execute the applicable grant or cooperative agreement presented by CCC.


Sec.  1409.204  Award process.

    (a) CCC intends to make awards to responsive applicants able to 
fully meet the requirements of the program subject to the priority 
criteria outlined below.
    (b) To the extent that it is unable to make awards to all fully 
qualified applicants due to the limited quantity of commodities that 
will be available under this subpart, CCC reserves the right to both 
make awards on a prorated basis and to prioritize awards on the 
criteria listed below. CCC will consider the following factors in 
accepting offers for participation:
    (1) The extent to which an eligible entity is already a participant 
in existing FNS administered programs with priority placed upon those 
entities that are not participating in such programs;
    (2) The ability of the eligible entity to receive, store, and 
distribute at least 20,000 pounds of food per shipment and any other 
requirements as outlined in the NOCA, as determined by CCC, to 
successfully implement the proposed program activity;
    (3) The eligible entity's operational and financial capability to 
receive and distribute commodities provided by CCC under this subpart;
    (4) The scope of the proposed program activity in terms of its 
intended use of such commodities in low income areas, as determined by 
CCC using United States Census Bureau data and information available 
from federal means tested programs; and
    (5) Any other criteria specified in the NOCA.
    (c) An eligible entity may submit only one program proposal in 
response to a NOCA for the same geographic area.


Sec.  1409.205   Execution of agreement.

    CCC will enter into a grant or cooperative agreement with an 
eligible entity regarding the entity's approved program proposal. The 
eligible entity may not assign or delegate any required action or 
responsibility of the entity except as provided in the applicable grant 
or cooperative agreement. Any modification of the grant or cooperative 
agreement must be made with the written approval of CCC.


Sec.  1409.206   Eligibility subject to verification.

    (a) Eligible entities participating in EDCDP are required to retain 
documentation relating to the EDCDP for 3 years after the date of 
approval of the grant or cooperative agreement. However, records 
pertaining to claims or audits that remain unresolved in this period of 
time must be retained until such actions have been resolved.
    (b) Eligible entities participating in EDCDP must permit authorized 
representatives of the U.S. Department of Agriculture or the General 
Accounting Office during regular business hours to inspect, examine, 
and to allow such representatives to make copies of such books, 
records, or other items for the purpose of confirming the accuracy of 
the information provided by such entity.


Sec.  1409.207  Miscellaneous provisions.

    (a) An eligible entity must comply with the provisions of:
    (1) 2 CFR Chapters I and II (Office of Management and Budget 
Government-wide Guidance for Grants and Agreements);
    (2) 2 CFR parts 200 and 400 (Uniform Administrative Requirements, 
Cost Principles, and Audit Requirements for Federal Awards);
    (3) 2 CFR part 415 (General Program Administrative Regulations); 
and
    (4) 2 CFR part 418 (New Restrictions on Lobbying).
    (b) An eligible entity that does not comply with the terms of the 
applicable

[[Page 36464]]

grant or cooperative agreement is subject to the provisions of: 18 
U.S.C. 286, 287, 371, 641, 651, 1001, and 1014; 15 U.S.C. 714; and 31 
U.S.C. 3729.

Stephen Censky,
Deputy Secretary, Vice Chairman, Commodity Credit Corporation.
[FR Doc. 2019-15700 Filed 7-25-19; 11:15 am]
BILLING CODE 3410-05-P