WAIS Document Retrieval[Code of Federal Regulations]
[Title 7, Volume 10]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1430]

[Page 495-507]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER XIV--COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE
 
PART 1430_DAIRY PRODUCTS

                Subpart A_Price Support Program for Milk

Sec.
1430.1 Definitions.
1430.2 Price support levels and purchase conditions.

               Subpart B_Milk Income Loss Contract Program

1430.200 Applicability.
1430.201 Administration.
1430.202 Definitions.
1430.203 Eligibility.
1430.204 Requesting benefits.
1430.205 Selection of starting month.
1430.206 Transition payments.
1430.207 Dairy operation payment quantity.
1430.208 Payment rate and dairy operation payment.
1430.209 Proof of marketings.
1430.210 MILC agents.
1430.211 Duration of contracts.
1430.212 Contract modifications.
1430.213 Reconstitutions.
1430.214 Violations.
1430.215 [Reserved]
1430.216 Contracts not in conformity with regulations.
1430.217 Offsets and withholdings.
1430.218 Assignments.
1430.219 Appeals.
1430.220 Misrepresentation and scheme or device.
1430.221 Estates, trusts, and minors.
1430.222 Death, incompetency, or disappearance.
1430.223 Maintenance and inspection of records.
1430.224 Refunds; joint and several liability.
1430.225 Violations of highly erodible land and wetland conservation 
          provisions.
1430.226 Violations regarding controlled substances.

Subpart C [Reserved]

             Subpart D_Dairy Market Loss Assistance Program

1430.500 Applicability.
1430.501 Administration.
1430.502 Definitions.
1430.503 Time and method for application.
1430.504 Eligibility.
1430.505 Proof of production.
1430.506 Payment rate and dairy operation payment.
1430.507 Misrepresentation and scheme or device.
1430.508 Maintaining records.
1430.509 Refunds; joint and several liability.
1430.510 New producers.
1430.511 Supplemental payments.

    Authority: 7 U.S.C. 7981 and 7982; 15 U.S.C. 714b and 714c.

                Subpart A_Price Support Program for Milk

    Source: 67 FR 64476, Oct. 18, 2002, unless otherwise noted.

Sec. 1430.1  Definitions.

    For purposes of this subpart, unless the context indicates 
otherwise, the following definitions shall apply:
    AMS means the Agricultural Marketing Service, USDA.
    CCC means the Commodity Credit Corporation, USDA.
    FSA means the Farm Service Agency, USDA.
    USDA means the United States Department of Agriculture.

[[Page 496]]

Sec. 1430.2  Price support levels and purchase conditions.

    (a)(1) The level of price support provided to farmers marketing milk 
containing 3.67 percent milkfat from dairy cows is $9.90 per 
hundredweight for calendar year 2002 through 2007.
    (2) Subject to paragraph (b) of this section, price support for milk 
will be made available through CCC purchases of butter, nonfat dry milk, 
and Cheddar cheese, offered subject to the terms and conditions of FSA's 
purchase announcements.
    (3) CCC purchase prices for dairy products will be announced by a 
USDA news release.
    (4) CCC may, by special announcement, offer to purchase other dairy 
products to support the price of milk.
    (5) Purchase announcements setting forth terms and conditions of 
purchase may be obtained upon request from CCC.
    (b)(1) The block cheese purchased shall be U.S. Grade A or higher, 
except that the moisture content shall not exceed 38.5 percent; the 
barrel cheese shall be U.S. Extra Grade, except that the moisture 
content shall not exceed 36.5 percent.
    (2) The nonfat dry milk purchased shall be U.S. Extra Grade, except 
that the moisture content shall not exceed 3.5 percent.
    (3) The butter purchased shall be U.S. Grade A or higher.
    (c) The products purchased shall be manufactured in the United 
States from milk produced in the United States and shall not have been 
previously owned by CCC.
    (d) Purchases will be made in carlot weights specified in the 
announcements. Grade and weights shall be evidenced by USDA-issued 
inspection certificates.

               Subpart B_Milk Income Loss Contract Program

    Source: 67 FR 64476, Oct. 18, 2002, unless otherwise noted.

Sec. 1430.200  Applicability.

    (a) This subpart governs the Milk Income Loss Contract Program. This 
program provides financial assistance to dairy operations in connection 
with milk production that is sold in the commercial market.

Sec. 1430.201  Administration.

    (a) This program is administered under the general supervision of 
the Executive Vice President, CCC, or a designee, and shall be carried 
out by Farm Service Agency (FSA) State and county committees and 
employees.
    (b) State and county committees, and their employees may not waive 
or modify any requirement of this subpart, except as provided in 
paragraph (e) of this section.
    (c) The State committee shall take any action required when not 
taken by the county committee, require correction of actions not in 
compliance, or require the withholding of any action that is not in 
compliance with this subpart.
    (d) The Executive Vice President, CCC, or a designee, may determine 
any question arising under the program or reverse or modify any decision 
of the State or county committee.
    (e) The Deputy Administrator, Farm Programs, FSA, may waive or 
modify program requirements where failure to meet such requirements does 
not adversely affect the operation of the Milk Income Loss Contract 
Program.
    (f) A representative of CCC may execute Milk Income Loss Contracts 
and related documents under the terms and conditions determined and 
announced by CCC. Any document not under such terms and conditions, 
including any purported execution before the date authorized by CCC, 
shall be null and void.

Sec. 1430.202  Definitions.

    The definitions in this section shall be applicable for all purposes 
of administering the Milk Income Loss Contract (MILC) program 
established by this subpart.
    CCC means the Commodity Credit Corporation of the Department.
    Class I Milk means milk, including milk components, classified as 
Class I milk under a Federal milk marketing order.
    Contract application means a Milk Income Loss Contract as executed 
on a form prescribed by CCC.

[[Page 497]]

    Contract application period means the date established by the Deputy 
Administrator for producers to apply for program benefits.
    County committee means the FSA county committee.
    County office means the FSA office responsible for administering FSA 
programs to farms located in a specific area in a state.
    Dairy operation means any person or group of persons who as a single 
unit as determined by CCC, produce and market milk commercially produced 
from cows and whose production facilities are located in the United 
States.
    Department or USDA means the United States Department of 
Agriculture.
    Deputy Administrator means the Deputy Administrator for Farm 
Programs (DAFP), FSA or a designee.
    Eligible production means milk that was produced by cows in the 
United States and marketed commercially anytime during the period of 
December 1, 2001, through September 30, 2005, up to a maximum of 2.4 
million pounds per dairy operation per fiscal year.
    Farm Service Agency or FSA means the Farm Service Agency of the 
Department.
    Federal Milk Marketing Order means an order issued under section 8c 
of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with 
amendments by the Agricultural Marketing Agreement Act of 1937.
    Fiscal Year means the year beginning October 1 (except December 1 
for fiscal year 2002) and ending the following September 30 and such 
that, for example, fiscal year 2003 will run from October 1, 2002 
through September 30, 2003.
    Hundredweight or cwt. means 100 pounds.
    Marketed commercially means sold to the market to which the dairy 
operation normally delivers whole milk and receives a monetary amount.
    MILC means the Milk Income Loss Contract program or the form upon 
which CCC and the producer agree to the terms of the payment to be made 
under the MILC program.
    Milk handler means the marketing agency to or through which the 
producer commercially markets whole milk.
    Milk marketing means a marketing of milk for which there is a 
verifiable sales or delivery record of milk marketed for commercial use.
    Participating State means each of the 50 States in the United States 
of America, including the District of Columbia, and the Commonwealth of 
Puerto Rico, or any other State, territory, or possession of the United 
States.
    Payment pounds means the pounds of milk production for which an 
operation is eligible to be paid under this subpart.
    Producer means any individual, group of individuals, partnership, 
corporation, estate, trust association, cooperative, or other business 
enterprise or other legal entity who is, or whose members are, a citizen 
of, or legal resident alien in the United States, and who directly or 
indirectly, as determined by the Secretary, shares in the risk of 
producing milk, and makes contributions (including land, labor, 
management, equipment, or capital) to the dairy farming operation of the 
individual or entity that are at least commensurate with the share of 
the individual or entity of the proceeds of this operation.
    Transition period means the period from December 1, 2001, until the 
time the dairy operation enters into MILC contract with CCC, provided 
that CCC may set such a deadline for the signing of the transition 
contract as it deems appropriate in order to accomplish the purposes of 
the contract.
    United States means the 50 States of the United States of America, 
the District of Columbia, and the Commonwealth of Puerto Rico, or any 
other State, territory, or possession of the United States.
    Verifiable production records means evidence that is used to 
substantiate the amount of production marketed and that can be verified 
by CCC through an independent source.

Sec. 1430.203  Eligibility.

    To be eligible to receive payments under this subpart, a dairy 
operation must:
    (a) Have produced milk in the United States and commercially 
marketed the

[[Page 498]]

milk produced anytime during the period of December 1, 2001, through 
September 30, 2005;
    (b) Enter into a MILC during the contract application period;
    (c) Agree to all terms and conditions in the MILC and those that are 
otherwise contained in this subpart and comply with instructions issued 
by CCC;
    (d) Provide proof of monthly milk production commercially marketed 
by all persons in the dairy operation during the contract period, to 
determine the total pounds of milk that will be converted to 
hundredweight (cwt.) used for payment;
    (e) Submit timely production evidence according to Sec. 1430.209;
    (f) Be actively engaged in the business of producing and marketing 
agricultural products at the time of signing the Milk Income Loss 
Contract.
    (g) In administering this program, the eligibility determination of 
``dairy operation'' shall be made in the same manner as Dairy Market 
Loss Assistance (DMLA) contracts in that State. New MILC operations must 
be unaffiliated with prior DMLA operations.

Sec. 1430.204  Requesting benefits.

    (a) A request for benefits or contract application, under this 
subpart must be submitted on a form as prescribed by the Agency. 
Contract applications shall be submitted to the FSA office serving the 
county where the dairy operation is located. Contract applications must 
be received by FSA by the close of business on the date established by 
the Deputy Administrator. Contract applications received after such date 
shall be disapproved.
    (b) The dairy operation requesting MILC benefits must certify the 
accuracy and truthfulness of the information in their contract 
application. All information provided is subject to verification by CCC. 
Refusal to allow CCC or any other agency of the Department to verify any 
information provided will result in disapproval.
    (c) Contract applications will be approved by execution by FSA and 
producer of a MILC. All persons who share in the risk of a dairy 
operation's total production must sign and certify the contract 
application.

Sec. 1430.205  Selection of starting month.

    (a) Except as provided in Sec. 1430.206 and beginning with the 2003 
Fiscal Year, a dairy operation that enters into a MILC, and does not 
want its payments to begin with the first month of the fiscal year, must 
designate the starting month that it desires CCC to begin making 
payments to them. The starting month must be selected on or before the 
15th of the month before the month for which payment is sought. A dairy 
operation cannot select a month for payment which:
    (1) Has already begun;
    (2) Has already passed; or
    (3) During which no milk was produced by the dairy operation.
    (b) Dairy operations may change the starting month on or before the 
first day of 15th of the month before the month previously selected. 
Otherwise, the starting month cannot be changed until the next Fiscal 
Year. If the selected starting month is never modified, it will remain 
the same throughout the duration of the contract.
    (c) MILC payments will be made consecutively to the dairy operation 
on a monthly basis after the starting month has been designated until 
the earlier of the following:
    (1) The maximum payment quantity is reached as determined in 
accordance with Sec. 1430.207; or
    (2) The end of the applicable Fiscal Year.
    (d)(1) Dairy operations that do not designate the month to begin 
receiving payments from CCC will be issued consecutive payments on a 
monthly basis, on marketed milk production beginning in the first month 
of the fiscal year, unless FSA is otherwise notified that selection will 
be made at a later date.
    (2) Dairy operations that desire payments to begin with the first 
month of the fiscal year will receive payments made by CCC consecutively 
on a monthly basis until the earlier of the following:
    (i) The maximum payment quantity is reached as determined in 
accordance with Sec. 1430.207; or
    (ii) The end of the applicable fiscal year.
    (e) All producers involved in the dairy operation must agree to the

[[Page 499]]

month designated. The dairy operation assumes the risk of not reaching 
the maximum payment quantity based on the month selected by the dairy 
operation. Payments will not be issued for past months for the sole 
purpose of reaching the maximum payment quantity.

Sec. 1430.206  Transition payments.

    (a) MILC program participants shall receive a payment calculated 
under Sec. 1430.208 on the quantity of eligible production marketed by 
the dairy operation during the period beginning December 1, 2001, and 
ending on the last day of the month preceding the month the operation's 
MILC is executed.
    (b) Transition payments are subject to the following:
    (1) The maximum payment quantity on eligible production, as 
described in Sec. 1430.207;
    (2) Consecutive monthly payments beginning on December 1, 2001, and 
if applicable the beginning of the fiscal year thereafter, until the 
earlier of the following is reached for a particular fiscal year:
    (i) The maximum applicable payment quantity is reached as determined 
in accordance with Sec. 1430.207; or
    (ii) The end of the applicable fiscal year.
    (c) With respect to the 2002 Fiscal Year, the dairy operation may 
elect to forgo their transition payment and choose to begin receiving 
payments in September, 2002 in accordance with Sec. 1430.205.
    (d) Notwithstanding any other provisions in this subpart, dairy 
operations that go out of business after December 1, 2001, may enter 
into a MILC with CCC for a transition payment on the quantity of 
eligible production marketed by the dairy operation during the 
transition period while the dairy operation was in business.

Sec. 1430.207  Dairy operation payment quantity.

    (a) The applicant's payment quantity of milk will be determined by 
CCC, based on the quantity of milk that was produced and commercially 
marketed by each dairy operation per fiscal year.
    (b) The maximum quantity of eligible production for which dairy 
operations are eligible for payment per any fiscal year, including any 
in the transition year, under this subpart shall be 2.4 million pounds 
(24,000 cwt.) per separate and distinct operation. In accordance with 
these regulations, the Deputy Administrator shall determine what is a 
separate and distinct operation and that decision shall be final.

Sec. 1430.208  Payment rate and dairy operation payment.

    (a) Payments under this subpart may be made to dairy operations when 
the Boston Class I milk price under the applicable Federal milk 
marketing order is below $16.94 per cwt. No payments will be made to 
dairy operations for marketings during the months that the Boston Class 
I milk price under the applicable milk marketing order exceeds $16.94.
    (b) A per-hundredweight payment rate will be determined for the 
applicable month by:
    (1) Subtracting from $16.94 the Class I milk price per cwt in 
Boston; and
    (2) Multiplying the difference, if positive, by 45 percent.
    (c) Each eligible dairy operation payment will be calculated, as 
determined by the Secretary, by:
    (1) Converting whole pounds of milk to hundredweight; and
    (2) Multiplying the payment rate determined in paragraph (b) of this 
section by the quantity of eligible production marketed by the operation 
during the applicable month as determined according to Sec. 1430.205 
and other provisions of these regulations.
    (d) Payments under this subpart may be made to a dairy operation 
only up to the first 2.4 million pounds of eligible milk production per 
applicable fiscal year, including any year in the transition period.
    (e) Dairy operations receiving benefits under this subpart, will 
receive payments on a monthly basis according to the MILC, to the extent 
practicable, not later than 60 days after the production evidence and 
all supporting documents for the applicable month are received by CCC. 
Payments issued by CCC later than 60 days after all production evidence 
and supporting documentation are received by CCC will be

[[Page 500]]

subject to prompt payment interest as allowed by law.

Sec. 1430.209  Proof of marketings.

    (a) A dairy operation entering into an MILC must, based on 
instructions issued by the Deputy Administrator, provide adequate proof 
of the dairy operation's eligible production during the months of each 
fiscal year designated in the MILC. The dairy operation must also 
provide proof that the eligible production was commercially marketed 
during the months beginning December 1, 2001, and ending September 30, 
2005. Evidence of milk production claimed for payment shall be provided 
to CCC with supporting documentation under paragraph (b) of this 
section. All information provided is subject to verification, spot 
check, and audit by FSA. Further verification information may be 
obtained from the dairy operation's milk handler or marketing 
cooperative if deemed necessary by CCC to verify provided information. 
Refusal to allow FSA or any other agency of the Department of 
Agriculture to verify any information provided will result in a 
determination of ineligibility for benefits under this subpart.
    (b) Eligible dairy operations marketing milk during the period 
specified in the MILC shall provide any available supporting documents 
from all producers in the dairy operation to assist CCC in verifying 
that the dairy operation produced and marketed milk commercially from 
the designated starting month and thereafter. Examples of supporting 
documentation include, but are not limited to: milk marketing payment 
stubs, tank records, milk handler records, daily milk marketings, copies 
of any payments received as compensation from other sources, or any 
other documents available to confirm the production and production 
history of the dairy operation. Producers may also be required to allow 
CCC to examine the herd of cattle as production evidence. If supporting 
documentation requested is not presented to CCC or FSA, the request for 
MILC benefits will be disapproved.

Sec. 1430.210  MILC agents.

    (a) MILC benefits may be disbursed by a dairy marketing cooperative 
that serves special groups or communities, such as an Amish or Mennonite 
community. Producers in such groups in a dairy operation may authorize 
an agent of a dairy cooperative or milk handler affiliated with such 
cooperative to obtain and disburse MILC benefits to the dairy operation.
    (b) The authorized MILC agent must on behalf of the dairy operation 
do the following:
    (1) Obtain an acceptable power of attorney or acceptable equivalent 
for the producers of the dairy operation that authorizes the agent to 
enter into an MILC contract;
    (2) Enter into a written agreement with CCC for approval to act as a 
MILC agent on a form prescribed by CCC;
    (3) Provide the dairy operation's monthly production evidence to the 
appropriate FSA office;
    (4) Disburse payment to the dairy operation in the producer's 
monthly milk check or in an otherwise approved manner.

Sec. 1430.211  Duration of contracts.

    (a) Except as provided in Sec. Sec. 1430.205 and 1430.206, or 
elsewhere in this subpart, contracts under this subpart entered into by 
producers in a dairy operation shall cover eligible production marketed 
by the producers in the dairy operation during the period beginning with 
the first day of the month the producers in the dairy operation enter 
into contract and ending on September 30, 2005.
    (b) If a dairy goes out of business during the contract period, the 
MILC will be terminated immediately, except as applicable to earned 
payments.

Sec. 1430.212  Contract modifications.

    (a) Producers in a dairy operation must notify FSA immediately of 
any changes that may affect their MILC. Changes include, but are not 
limited to changes to the starting month to receive payment for the next 
fiscal year, death of producer on the contract, new member joining the 
operation, member exiting the operation, transfer of shares by sale or 
other transfer action,

[[Page 501]]

or farm reconstitutions undertaken in accordance with Sec. 1430.213.
    (b) CCC may modify an MILC if such modifications are desirable to 
carry out purposes of the program or to facilitate the program's 
administration.

Sec. 1430.213  Reconstitutions.

    (a) A dairy operation receiving MILC benefits may reorganize or 
restructure such that the constitution or makeup of their operation is 
reconstituted in another organizational framework. However, any 
operation that changes after December 1, 2001, is subject to a review by 
FSA to determine if the operation was reorganized for the sole purpose 
of receiving multiple payments.
    (b) A dairy operation that FSA determines has reorganized solely to 
receive additional MILC payments will be in violation of its contract 
and dealt in accordance with Sec. 1430.214.
    (c) If during the contract period a change in the dairy operation 
occurs, the modification to the MILC will not take effect until the 
first day of the fiscal year following the month FSA received 
notification of the changes. Changes include but are not limited to any 
producer affiliated with a dairy operation that has an approved MILC 
with CCC forming a new dairy operation that is not formed solely to 
receive additional MILC payments.
    (d) Changes resulting in the following will take effect immediately 
upon notification to CCC, in accordance with Sec. 1430.212:
    (1) Increases or reductions of shareholders or producers and their 
corresponding share amounts in the dairy operation; or
    (2) Purchases of a new dairy operation by a producer or producers 
not affiliated with an existing dairy operation that has an approved 
MILC with CCC.

Sec. 1430.214  Violations.

    (a) If producers in a dairy operation violates the MILC or the 
requirements of this subpart, CCC may:
    (1) Terminate the MILC for the remainder of the fiscal year in which 
the violation occurs, and allow the producer to retain any payments 
received under the contract; or
    (2) Allow the MILC to remain in effect and require the producer to 
repay a portion of the payments received commensurate with the 
violation's severity, as CCC determines.
    (3) If the MILC is terminated under this section, the participant 
shall forfeit all rights to further MILC benefits and shall refund all 
or part of the payments received as CCC determines appropriate.
    (4) A producer or operation with a violation, as determined by CCC, 
shall refund all MILC funds disbursed under of this part. The remedies 
provided in this subpart shall be in addition to other civil, criminal, 
or administrative remedies which may apply.
    (b) A MILC is violated by the following actions:
    (1) Failure to comply with the terms and conditions of the MILC and 
addendum;
    (2) Reconstitutions of the dairy operation for the sole purpose of 
receiving multiple program benefits;
    (3) Failure to comply with highly erodible land conservation and 
wetland provisions of this 7 CFR part 12 or their successor regulations;
    (4) Failure to meet the definition of a dairy operation according to 
Sec. 1430.202;
    (5) Any action that tends to defeat the purpose of the program, as 
CCC determines.
    (c) The Deputy Administrator for Farm Programs (DAFP) of the Farm 
Service Agency may terminate any MILC by mutual agreement upon request 
of the participant if DAFP determines that termination is in the best 
interest of the public.
    (d) The DAFP may determine that failure of the dairy operation to 
perform the MILC does not warrant termination and may require the 
participant to refund part of the payments received or accept 
adjustments in the payment as the DAFP determines to be appropriate.

Sec. 1430.215  [Reserved]

Sec. 1430.216  Contracts not in conformity with regulations.

    If it is discovered that an MILC contract does not comply with this 
subpart as the result of a misunderstanding by someone who has signed 
the contract, the contract may be

[[Page 502]]

modified by mutual agreement. If the parties to the MILC cannot reach 
agreement for such modification, it shall be terminated and all payments 
paid or payable under the contract shall be forfeited or refunded to 
CCC, except as may otherwise be allowed under Sec. 1430.214.

Sec. 1430.217  Offsets and withholdings.

    CCC may offset or withhold any amount due CCC under this subpart 
under the provisions of part 1403 of this chapter or any successor 
regulations.

Sec. 1430.218  Assignments.

    Any producer may assign a payment to be made under this part in 
accordance with part 1404 of this chapter or successor regulations as 
designated by the Department.

Sec. 1430.219  Appeals.

    Any producer who is dissatisfied with a determination made pursuant 
to this subpart may request reconsideration or appeal of such 
determination under part 11 or 780 of this title.

Sec. 1430.220  Misrepresentation and scheme or device.

    (a) A dairy operation shall be ineligible for the MILC program if 
FSA determines that it knowingly:
    (1) Adopted a scheme or device that tends to defeat the purpose of 
this program;
    (2) Made any fraudulent representation; or
    (3) Misrepresented any fact affecting a determination under this 
program. CCC will take steps deemed necessary to protect the interests 
of the government.
    (b) Any funds disbursed to a producer or operation engaged in a 
misrepresentation, scheme, or device, shall be refunded to CCC. The 
remedies provided in this subpart shall be in addition to other civil, 
criminal, or administrative remedies which may apply.

Sec. 1430.221  Estates, trusts, and minors.

    (a) Program documents executed by producers legally authorized to 
represent estates or trusts will be accepted only if such producers 
furnish evidence of the authority to execute such documents.
    (b) A minor who is otherwise eligible for assistance under this part 
must also:
    (1) Establish that the right of majority has been conferred on the 
minor by court proceedings or by statute;
    (2) Show that a guardian has been appointed to manage the minor's 
property and the applicable program documents are executed by the 
guardian; or
    (3) Furnish a bond under which the surety guarantees any loss 
incurred for which the minor would be liable had the minor been an 
adult.

Sec. 1430.222  Death, incompetency, or disappearance.

    In the case of death, incompetency, disappearance or dissolution of 
a producer that is eligible to receive benefits under this part, such 
persons as are specified in part 707 of this title may receive such 
benefits, as determined appropriate by FSA.

Sec. 1430.223  Maintenance and inspection of records.

    (a) Producers approved for benefits under this program must maintain 
accurate records and accounts that will document that they meet all 
eligibility requirements specified herein, as may be requested by CCC or 
FSA. Such records and accounts must be retained for 3 years after the 
date of payment to the dairy operation under this program. Destruction 
of the records 3 years after the date of payment shall be the risk of 
the party undertaking the destruction.
    (b) At all times during regular business hours, authorized 
representatives of CCC, the Department, or the Comptroller General of 
the United States shall have access to the premises of the dairy 
operation in order to inspect the herd of cattle, examine, and make 
copies of the books, records, and accounts, and other written data as 
specified in paragraph (a) of this section.
    (c) Any funds disbursed pursuant to this part to any producers or 
operation who does not comply with the provisions of paragraphs (a) or 
(b) of this section, or who otherwise receives a payment for which they 
are not eligible, shall be refunded with interest.

[[Page 503]]

Sec. 1430.224  Refunds; joint and several liability.

    (a) In the event of an error on a MILC application, a failure to 
comply with any term, requirement, or condition for payment arising 
under the MILC application, or this subpart, all improper payments shall 
be refunded to CCC together with interest from the date payment was 
received through the date the refund is received by CCC.
    (b) All producers signing a dairy operation's application for 
payment as having an interest in the operation shall be jointly and 
severally liable for any refund, including related charges, that is 
determined to be due for any reason under the terms and conditions of 
the contract application and addendum or this part for such operation.

Sec. 1430.225  Violations of highly erodible land and wetland 
          conservation provisions.

    The provisions of part 12 of this title apply to this part.

Sec. 1430.226  Violations regarding controlled substances.

    The provisions of Sec. 718.11 of this title apply to this part.

Subpart C [Reserved]

             Subpart D_Dairy Market Loss Assistance Program

    Authority: Pub. L. 105-277, 112 Stat. 2681; Pub. L. 106-78, 113 
Stat. 1135; Pub. L. 106-387, 114 Stat. 1549.

    Source: 64 FR 24934, May 10, 1999, unless otherwise noted.

Sec. 1430.500  Applicability.

    This subpart establishes the Dairy Market Loss Assistance Program. 
The purpose of this program is to provide benefits to dairy operations 
under Public Law 105-277, 112 Stat. 2681; sections 805 and 825 of Public 
Law 106-78; and section 805 of Public Law 106-387 only, in order to 
provide financial assistance to dairy operations in connection with 
normal milk production that is sold on the commercial market.

[64 FR 24934, May 10, 1999, as amended at 65 FR 7956, Feb. 16, 2000; 66 
FR 15176, Mar. 15, 2001]

Sec. 1430.501  Administration.

    (a) The provisions of Sec. Sec. 1430.351, 1430.352, 1430.354, 
1430.355, and 1430.360 shall be applied to this subpart in the same 
manner as they are applied to the subpart in which they are located.
    (b) The provisions of Sec. Sec. 1430.1 through 1430.349, 1430.353, 
1430.356 through 1430.359, 1430.361 through 1430.362, and 1430.400 
through 1430.410 are not applicable to this subpart.
    (c) This subpart shall be administered by the Farm Service Agency 
(FSA) under the general direction and supervision of the Executive Vice 
President, CCC or designee. The program shall be carried out in the 
field by State and county FSA committees under the general direction and 
supervision of the State and county FSA committees.
    (d) State and county committees, and representatives and employees 
thereof, do not have the authority to modify or waive any of the 
provisions of the regulations in this subpart.
    (e) The State committee shall take any action required by this 
subpart which has not been taken by the county committee. The State 
committee shall also:
    (1) Correct, or require a county committee to correct, any action 
taken by such county committee which is not in accordance with the 
regulations of this subpart; or
    (2) Require a county committee to withhold taking any action which 
is not in accordance with the regulations of this subpart.
    (f) No delegation in this subpart to a State or county committee 
shall preclude the Executive Vice President, CCC, or a designee, from 
determining any question arising under the program or from reversing or 
modifying any determination made by a State or county committee.
    (g) The Deputy Administrator for Farm Programs, FSA, may authorize 
State and county committees to waive or modify deadlines and other 
program requirements in cases where timeliness or failure to meet such 
other requirements does not adversely affect the operation of the 
program.

[[Page 504]]

Sec. 1430.502  Definitions.

    The definitions set forth in this section shall be applicable for 
all purposes of administering the Dairy Market Loss Assistance Program 
established by this subpart.
    Application means the Dairy Market Loss Assistance Program Payment 
application, CCC-1040.
    Application period means April 12, 1999 through February 28, 2001.
    Base period means the calendar year, either 1997 or 1998, as 
selected by the dairy operation, during which milk was produced and 
marketed.
    Commodity Credit Corporation means the Commodity Credit Corporation.
    Dairy operation means any person or group of persons who as a single 
unit as determined by CCC, produce and market milk commercially produced 
from cows and whose production and facilities are located in the United 
States.
    Department means the United States Department of Agriculture.
    Deputy Administrator means the Deputy Administrator for Farm 
Programs (DAFP), Farm Service Agency (FSA) or a designee.
    Eligible production means milk that had been produced by cows in the 
United States and marketed commercially in the United States anytime 
during the 1997 and or 1998 calendar year, subject to a maximum of 
26,000 cwt per dairy operation.
    Farm Service Agency or FSA means the Farm Service Agency of the 
Department.
    Fourth quarter of 1998 means the period from October 1, 1998 through 
December 31, 1998.
    Marketed commercially means sold to the market to which the dairy 
operation normally delivers whole milk and receives a monetary amount.
    Milk handler means the marketing agency to or through which the 
producer commercially markets whole milk.
    Milk marketing means a marketing of milk for which there is a 
verifiable sales or delivery record of milk marketed for commercial use.
    Person means any individual, group of individuals, partnership, 
corporation, estate, trust, association, cooperative, or other business 
enterprise or other legal entity who is, or whose members are, a citizen 
or citizens of, or legal resident alien or aliens in the United States.
    Secretary means the Secretary of the United States Department of 
Agriculture or any other officer or employee of the Department who has 
been delegated the authority to act in the Secretary's stead with 
respect to the program established in this part.
    United States means the 50 States of the United States of America, 
the District of Columbia, and the Commonwealth of Puerto Rico.

[64 FR 24934, May 10, 1999, as amended at 65 FR 7956, Feb. 16, 2000; 66 
FR 15177, Mar. 15, 2001]

Sec. 1430.503  Time and method for application.

    (a) Dairy operations may obtain an application, Form CCC-1040 (Dairy 
Market Loss Assistance Program Payment Application), in person, by mail, 
by telephone, or by facsimile from any county FSA office. In addition, 
applicants may download a copy of the CCC-1040 at http://
www.fsa.usda.gov/dafp/psd/.
    (b) A request for benefits under this subpart must be submitted on a 
completed Form CCC-1040. The Form CCC-1040 should be submitted to the 
county FSA office serving the county where the dairy operation is 
located but, in any case, must be received by the county FSA office by 
the close of business on February 28, 2001. Applications not received by 
the close of business on February 28, 2001, will be disapproved as not 
having been timely filed and the dairy operation will not be eligible 
for benefits under this program.
    (c) All persons who share in the milk production of a dairy 
operation that marketed milk during the fourth quarter of 1998 must 
certify on the same CCC-1040 in order to obtain the total milk 
production of the dairy operation before the application is complete.
    (d) The dairy operation requesting benefits under this subpart must 
certify with respect to the accuracy and truthfulness of the information 
provided in their application for benefits. All information provided is 
subject to verification and spot checks by CCC. Refusal to allow CCC or 
any other

[[Page 505]]

agency of the Department of Agriculture to verify any information 
provided will result in a determination of ineligibility. Data furnished 
by the applicant will be used to determine eligibility for program 
benefits. Furnishing the data is voluntary; however, without it program 
benefits will not be approved. Providing a false certification to the 
Government is punishable by imprisonment, fines and other penalties.

[64 FR 24934, May 10, 1999, as amended at 65 FR 7956, Feb. 16, 2000; 66 
FR 15177, Mar. 15, 2001]

Sec. 1430.504  Eligibility.

    (a) To be eligible to receive cash payments under this subpart, a 
dairy operation must:
    (1) Have produced and marketed milk commercially in the United 
States anytime during the fourth quarter of 1998;
    (2) Indicate all milk commercially marketed by all persons in the 
dairy operation during calendar year 1997 and 1998 to establish the base 
period for determining the total pounds of milk that will be converted 
to hundredweight (cwt) used for payment; and
    (3) Apply for payments during the application period.
    (b) A dairy operation must submit a timely application and comply 
with all other terms and conditions of this subpart and those that are 
otherwise contained in the application to be eligible for benefits under 
this subpart.

Sec. 1430.505  Proof of production.

    (a) Dairy operations selected for spotchecks by CCC must, in 
accordance with instructions issued by the Deputy Administrator, provide 
adequate proof that the dairy operation was commercially marketing milk 
anytime during the fourth quarter of 1998. The dairy operation must also 
provide proof of production for the 1997 or 1998 calendar year to verify 
the base period. The documentary evidence of milk production claimed for 
payment shall be reported to CCC together with any supporting 
documentation under paragraph (b) of this section. The pounds of 1997 or 
1998 calendar year milk production must be documented using actual 
records.
    (b) All persons involved in such dairy operation marketing milk 
during the fourth quarter of 1998 shall provide any available supporting 
documents to assist the county FSA office in verifying that the dairy 
operation produced and marketed milk commercially during the fourth 
quarter of 1998 and the base period milk marketings indicated on Form 
CCC-1040. Examples of supporting documentation include, but are not 
limited to: tank records, milk handler records, milk marketing payment 
stubs, daily milk marketings, copies of any payments received as 
compensation from other sources, or any other documents available to 
confirm the production and production history of the dairy operation. In 
the event that supporting documentation is not presented to the county 
FSA office requesting the information, dairy operations will be 
determined ineligible for benefits.

Sec. 1430.506  Payment rate and dairy operation payment.

    (a) Payments under this subpart may be made to dairy operations only 
on the first 26,000 cwt of milk produced by them from cows in the United 
States actually marketed in the United States during the base period. A 
payment rate will be determined after the conclusion of the application 
period, and shall be calculated by:
    (1) Converting whole pounds of milk to cwt;
    (2) Totaling the eligible cwt (not to exceed 26,000 cwt) of milk 
marketed commercially during the base period from all approved 
applications; and
    (3) Dividing the amount available for Dairy Market Loss Assistance 
Program by the total eligible cwt submitted and approved for payment.
    (b) Each dairy operation payment will be calculated by multiplying 
the payment rate determined in paragraph (a) (3) of this section by the 
dairy operation's eligible production.
    (c) In the event that approval of all eligible applications would 
result in expenditures in excess of the amount available, CCC shall 
reduce the payment rate in such manner as CCC, in its sole discretion, 
finds fair and reasonable.

[[Page 506]]

Sec. 1430.507  Misrepresentation and scheme or device.

    (a) A dairy operation shall be ineligible to receive assistance 
under this program if it is determined by the State committee or the 
county committee to have:
    (1) Adopted any scheme or device which tends to defeat the purpose 
of this program;
    (2) Made any fraudulent representation; or
    (3) Misrepresented any fact affecting a program determination.
    (b) Any funds disbursed pursuant to this part to a dairy operation 
engaged in a misrepresentation, scheme, or device, or to any other 
person as a result of the dairy operation's actions, shall be refunded 
with interest together with such other sums as may become due. Any dairy 
operation or person engaged in acts prohibited by this section and any 
dairy operation or person receiving payment under this subpart shall be 
jointly and severally liable for any refund due under this section and 
for related charges. The remedies provided in this subpart shall be in 
addition to other civil, criminal, or administrative remedies which may 
apply.

Sec. 1430.508  Maintaining records.

    Dairy operations making application for benefits under this program 
must maintain accurate records and accounts that will document that they 
meet all eligibility requirements specified in this subpart and the 
pounds of milk marketed commercially during the fourth quarter of 1998 
and the base period. Such records and accounts must be retained for at 
least three years after the date of the cash payment to dairy operations 
under this program.

Sec. 1430.509  Refunds; joint and several liability.

    (a) In the event there is a failure to comply with any term, 
requirement, or condition for payment arising under the application, or 
this subpart, and if any refund of a payment to CCC shall otherwise 
become due in connection with the application, or this subpart, all 
payments made under this subpart to any dairy operation shall be 
refunded to CCC together with interest as determined in accordance with 
paragraph (c) of this section and late-payment charges as provided for 
in part 1403 of this chapter.
    (b) All persons listed on a dairy operation's application shall be 
jointly and severally liable for any refund, including related charges, 
which is determined to be due for any reason under the terms and 
conditions of the application or this subpart.
    (c) Interest shall be applicable to refunds required of the dairy 
operation if CCC determines that payments or other assistance were 
provided to the producer was not eligible for such assistance. Such 
interest shall be charged at the rate of interest which the United 
States Treasury charges CCC for funds, as of the date CCC made such 
benefits available. Such interest shall accrue from the date such 
benefits were made available to the date of repayment or the date 
interest increases as determined in accordance with applicable 
regulations. CCC may waive the accrual of interest if CCC determines 
that the cause of the erroneous determination was not due to any action 
of the dairy operation.
    (d) Interest determined in accordance with paragraph (c) of this 
section may be waived by CCC with respect to refunds required of the 
dairy operation because of unintentional misaction on the part of the 
dairy operation, as determined by CCC.
    (e) Late payment interest shall be assessed on all refunds in 
accordance with the provisions of, and subject to the rates prescribed 
in 7 CFR part 1403.
    (f) Dairy operations must refund to CCC any excess payments made by 
CCC with respect to such application.
    (g) In the event that a benefit under this subpart was provided as 
the result of erroneous information provided by any person, the benefit 
must be repaid with any applicable interest.

Sec. 1430.510  New producers.

    Notwithstanding other provisions of this subpart, producers who were 
new producers in 1999 or 2000 and not affiliated with other eligible 
producers may receive payments from sums made available after October 
27, 2000 based on their 1999 production levels or for 2000, on their 
production levels from

[[Page 507]]

October 1, 1999 through September 30, 2000.

[66 FR 15177, Mar. 15, 2001]

Sec. 1430.511  Supplemental payments.

    (a) Supplemental payments under Public Law 106-387 will be made 
available to dairy operations in connection with normal milk production 
that is sold on the commercial market.
    (b) For supplemental payments made under this section, the payment 
rate shall be $0.6468 per cwt.
    (c) For dairy operations that received a payment under sections 805 
and 825 of Public Law 106-78 on less than 12 months production, an 
annual production level will be calculated by subtracting from the dairy 
operation's production level for the period of October 1, 1999 through 
September 30, 2000 the production level on which previous payments were 
received.

[66 FR 15177, Mar. 15, 2001]