SUPPLEMENTARY INFORMATION:

Background

ERP 2022 provided payments to eligible crop producers for losses due to qualifying disaster events including wildfires, hurricanes, floods, derechos, excessive heat, tornadoes, winter storms, freeze (including a polar vortex), smoke exposure, excessive moisture, qualifying drought, and related conditions that occurred in calendar year 2022. ERP 2022 was authorized by Title I of the Disaster Relief Supplemental Appropriations Act, 2023 (Division N of the Consolidated Appropriations Act, 2023; Pub. L. 117-328), which incorporated certain provisos from Title I of the Disaster Relief Supplemental Appropriations Act, 2022 (Division B of Pub. L. 117-43), including the tenth and eleventh provisos, which specify that:

• The total amount of payments received under ERP 2022 and applicable policies of crop insurance under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) or NAP under section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333) (minus any premiums or fees paid for such coverages) shall not exceed 90 percent of the loss as determined by the Secretary; and
• The total amount of payments received under ERP 2022 for producers who did not obtain a policy or plan of insurance for an insurable commodity for the applicable crop year under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) for the crop incurring the losses or did not file the required paperwork and pay the service fee by the applicable State filing deadline for a noninsurable commodity for the applicable crop year under NAP for the crop incurring the losses shall not exceed 70 percent of the loss as determined by the Secretary.

FSA announced ERP 2022 in a Notice of Funds Availability (NOFA) published in the Federal Register on October 31, 2023 (88 FR 74404), and the application period for ERP 2022 ended on August 14, 2024.^[1] FSA administered ERP 2022 in two tracks. Track 1 used a streamlined process with pre-filled application forms for producers who previously received a NAP payment or a Federal crop insurance indemnity for their loss. Track 2 provided payments for other eligible losses through a revenue-based approach for which producers submitted the information required to calculate a payment including their benchmark and disaster year revenue for all eligible crops. To apply for Track 2, producers were required to certify whether all eligible crops were insured or covered by NAP, and FSA used this certification to determine the ERP factor that was used when calculating their Track 2 payment. If a producer answered “yes” in Item 16 on the application form, an ERP factor of 90 percent was used, and if a producer answered “no”, an ERP factor of 70 percent was used to ensure that payments did not exceed the maximum ( printed page 52665) amount established in the tenth and eleventh provisos.

In certain instances, a producer answered “yes” in Item 16 on the application form, certifying that all eligible crops were insured or covered by NAP, even though they also grew another crop that was not insured or covered under NAP. In some instances, the producer had no (or minimal) revenue loss attributable to an eligible crop that was not insured or covered under NAP. As a result of these inaccurate certifications, the producer's payment was calculated using an incorrect ERP factor (90 percent, rather than 70 percent), resulting in an overpayment. The new de minimis provision in the Full-Year Continuing Appropriations and Extensions Act, 2025 (Pub. L. 119-4), discussed below, addresses these cases, where the revenue loss associated with the non-insured (or non-covered) crop was de minimis. If a producer's revenue loss attributable to non-insured (or non-covered) crops is de minimis, as defined below, the producer may retain their full ERP 2022 payment calculated using the 90 percent factor, which would otherwise be considered an overpayment.

Section 1207 of the Full-Year Continuing Appropriations and Extensions Act, 2025, amended Title I of division N of the Consolidated Appropriations Act, 2023 (Pub. L. 117-328) to specify that “the Secretary shall allow producers to retain payments not to exceed 90 percent of the producer's revenue losses (as determined by the Secretary) if the Secretary determines a de minimis amount, as defined by the Secretary, of a producer's revenue loss is attributable to crops for which the producer did not insure or obtain coverage under the Noninsured Crop Disaster Assistance Program under section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333).” This statutory provision only allows a producer to retain an ERP 2022 Track 2 payment that was previously issued; FSA is not reopening the ERP 2022 application period to accept new applications or allowing producers to amend previously filed ERP 2022 applications.

For the purpose of implementing this provision of the Full-Year Continuing Appropriations and Extensions Act, 2025, “a de minimis amount” means that a producer's revenue loss attributable to crops for which the producer did not insure or obtain NAP coverage is less than or equal to 10 percent of the total revenue loss for all eligible crops that was reported on the producer's ERP 2022 application.

Calculation

To determine the percentage of a producer's total revenue loss attributable to crops for which the producer did not insure or obtain NAP coverage, the revenue loss for those crops will be divided by a producer's total revenue loss for all eligible crops. The total revenue loss attributable to crops for which the producer did not insure or obtain NAP coverage is equal to the revenue for all eligible crops, as defined in the NOFA, for which the producer did not have Federal crop insurance or NAP coverage. The total revenue loss for all eligible crops is equal to a producer's benchmark year revenue minus their disaster year revenue, as specified in the NOFA (88 FR 74411).

Example 1: A producer reported a benchmark year revenue of $200,000 and a disaster year revenue of $100,000 on FSA-524, which equals a total revenue loss of $100,000 for all eligible crops, and the producer certified that all eligible crops were insured or covered by NAP. The producer grew several crops that were covered by a Federal crop insurance plan and suffered revenue losses. The producer also grew coastal hay, which was not insured or covered under NAP and did not suffer a revenue loss. The producer had no revenue loss attributable to an eligible crop that was not insured or covered under NAP; therefore, the producer may certify that that loss is de minimis and the producer may retain their Track 2 payment.

Example 2: A producer elected the tax year option (see 88 FR 74412) and reported a benchmark year revenue of $200,000 and a disaster year revenue of $100,000 on FSA-524, which equals a total revenue loss of $100,000 for all eligible crops, and certified that all eligible crops were insured or covered by NAP. The producer had insured and NAP-covered crops that suffered revenue losses. The producer also grew tomatoes, not covered by Federal crop insurance or NAP, that suffered a revenue loss. To determine whether the revenue loss for tomatoes was a de minimis amount, the producer will calculate the following:

Producer certified benchmark year revenue for tomatoes = Allowable gross revenue of $30,000 from sales of the crop

Producer certified disaster year revenue for tomatoes = Allowable gross revenue of $5,000 from sales of the crop

Revenue loss attributed to tomatoes = $30,000−$5,000 = $25,000

The revenue loss of $25,000 for tomatoes is equal to 25 percent of the total revenue loss for all eligible crops ($25,000 ÷ $100,000), which is above 10 percent; therefore, such revenue loss in this example is not considered a de minimis amount and the producer must return the overpayment that resulted from use of a 90 percent ERP factor rather than a 70 percent factor.

Example 3: A producer elected the expected revenue option (see 88 FR 74413) and reported a benchmark year revenue of $500,000 and a disaster year revenue of $200,000 on FSA-524, which equals a total revenue loss of $300,000 for all eligible crops, and certified that all eligible crops were insured or covered by NAP. The producer had insured crops that suffered revenue losses. The producer also grew coastal hay, not covered by Federal crop insurance or NAP, that suffered a revenue loss. To determine whether the revenue loss for coastal hay was a de minimis amount, the producer will calculate the following:

Benchmark year revenue for coastal hay = 100 expected acres × yield of 3.5 bales per acre × price of $75 = $26,250

Disaster year revenue for coastal hay = 100 acres × production of 2.5 bales × price of $75 = $18,750

Revenue loss attributed to coastal hay = $26,250−$18,750 = $7,500

The revenue loss of $7,500 for coastal hay is equal to 2.5 percent of the total revenue loss for all eligible crops ($7,500 ÷ $300,000), which is below 10 percent; therefore, such revenue loss in this example is considered a de minimis amount and the producer may retain their Track 2 payment.

Certification

FSA has identified ERP 2022 participants who previously received an ERP 2022 payment and certified that all eligible crops were insured or covered under NAP but also had eligible crops that did not meet that criteria. FSA will notify such producers of the opportunity to certify that their revenue loss attributable to crops for which they did not insure or obtain NAP coverage was a de minimis amount as defined in this notice. Any producers who believe they may be eligible to retain an overpayment under the provisions in this notice who do not receive notification from FSA are encouraged to contact their FSA county office. Producers may not submit new ERP 2022 applications or revise their previously filed applications.

Eligible producers must submit form FSA-524-C, De Minimis Revenue Loss Certification for Uninsured/Uncovered Crops, to their FSA county office within 60 calendar days of notification by FSA. Participants are required to retain ( printed page 52666) documentation in support of their certification for 3 years after the date it is submitted to FSA. All information provided to FSA for program eligibility and payment calculation purposes, including certification on FSA-524-C, is subject to spot check. If requested by FSA, producers must submit documentation to FSA to support their certification within 30 calendar days of the request.

If a producer certified in error that all eligible crops were insured or covered by NAP and their revenue loss for those crops is not de minimis, the producer must repay the overpayment that resulted from calculation of their payment using a 90 percent payment factor. FSA will recalculate the ERP 2022 payment using a 70 percent payment factor, and the producer must repay the overpayment amount as instructed in the notification.

Paperwork Reduction Act Requirements

The information collection request for ERP 2022, including producer notification and the use of form FSA-524-C as described in this notice, has been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act. The OMB control number for the approval is 0560-0316.

91 FR 52664