receiving notice of such determination. A producer shall be deemed to have received notice of the determination if a letter, form or other document has been mailed or delivered to him which discloses such determination. The contracting officer or the designated SCS technician shall notify the producer of his decision in writing (by mailing or by delivery of the decision) within 15 days after the filing of the written request for reconsideration.

(2) If the producer is dissatisfied with the decision of the contracting officer or the designated SCS technician, he may, within 15 days after receiving written notice of the decision, file a written appeal with the State Conservationist. The State Conservationist shall notify the producer of his decision in writing (by mailing or by delivery of the decision) within 30 days after filing of the appeal. If the producer fails to request reconsideration of a determination by the contracting officer or designated SCS technician, or fails to appeal from a decision of the contracting officer or designated SCS technician, within the 15-day period, the determination or decision of the contracting officer or the designated SCS technician shall be final.

(3) The contracting officer or designated SCS technician may submit statements or briefs, including a review of the case, to the State Conservationist.

(b) Any dispute concerning a question of fact arising under the contract, except contract violations (which are governed by separate regulations in this subpart), which is not disposed of by written agreement after a reasonable time shall be referred to the State Conservationist for a decision. The State Conservationist shall notify the producer in writing (by mailing or delivery of the notice) that the matter will be considered on a date specified in the notice, which date shall be not less than 30 days subsequent to receiving the notice. If the producer files a request for such an opportunity within 15 days from receiving such notice, the producer will be afforded an opportunity to appear and present his views orally and to offer relevant evidence in support of his position. If the producer does not request an opportunity to appear and to present relevant evidence, the State Conservationist shall promptly proceed to consider the matter on the basis of such information as may be available to him, including statements or briefs of the authorized representatives of the

Secretary whose actions are in dispute. The State Conservationist shall notify the producer of his decision in writing by mailing or delivery of the decision.

(c) Any producer adversely affected may appeal to the Administrator, SCS, from a decision of the State Conservationist. A producer who wishes to take such action must file his appeal and any briefs or statements in the office of the Administrator, SCS, within 30 days from receiving notice of the decision of the State Conservationist. The State Conservationist may file a brief or statement in the office of the Administrator, SCS, within 15 days after the producer's brief or statement is received there. Such an appeal shall be limited to the issues or disputes and records before the State Conservationist. The State Conservationist shall submit the record before him, which will include his decision, to the Administrator, SCS. The Administrator, SCS, upon receipt of the record, will promptly as possible render a decision, which decision in writing shall be brought to the attention of the producer by mailing or delivery of the decision.

(d) Any producer adversely affected may appeal to the Secretary from a decision of the Administrator, SCS. A producer who wishes to take such action must file his appeal and any briefs or statements in the office of the Secretary within 30 days from receiving notice of the decision of the Administrator, SCS. The Administrator, SCS, may file a brief or statement in the office of the Secretary within 15 days after the producer's brief or statement is received there. Such an appeal shall be limited to the issues or disputes and records before the Administrator, SCS. The Administrator, SCS, shall submit the record before him, which will include his decision, to the Secretary. The Secretary, upon receipt of the record, will make a decision from which no appeal will lie in the Department. The producer shall be notified of this decision in writing.

(e) Whenever the regulations in this section require the filing of a document, it is deemed filed when received in the office of the individual concerned. § 601.24 Contract violations.

(a) The producer shall agree by signing a contract to forfeit all rights to further cost-share payments or grants under the contract and to refund all costshare payments or grants received thereunder, if the Secretary determines that

there has been a violation of the contract during the time the producer has control of the operating unit and that such violation is of such a nature as to warrant termination of the contract. The producer who signs the contract will be obligated to refund all cost-share payments and all cost-shares paid under authorizations.

(b) The producer shall agree by signing a contract to make refunds of costshare payments or grants received under the contract or to accept payment adjustments in the contract, if the Secretary determines that there has been a violation of the contract during the time the producer has control of the operating unit and that such violation is of such a nature as not to warrant termination of the contract. Payment adjustments may include decreasing the rate of a cost-share or deleting from the contract a cost-share commitment or withholding cost-share payments earned but not paid. The producer who signs the contract will be obligated to refund cost-share payments and cost-shares paid under authorizations.

§ 601.25 Contract violations procedure.

(a) This section prescribes the regulations for determining whether a violation of a contract has occurred and for the effect and result of such violation. The Secretary reserves the right upon notice to modify, amend, revise, or supplement any of the provisions of this section at any time: Provided, That such action shall not adversely affect any producer where determination or decision has been made and the producer has been officially notified thereof before such action is taken. No cost-share payment or cost-share shall be made pending the determination or decision as to whether a contract violation has occurred.

(b) If the contracting officer receives information indicating that a violation of a contract may have occurred but determines, without the issuance of a notice as provided in this section, with the approval of the State Conservationist, that no violation has occurred, or that the violation does not call for any forfeiture, refund or payment adjustment, no further action shall be taken.

(c) If all of the producers subject to a forfeiture, refund or payment adjustment agree in writing on a form prescribed by the Administrator, SCS, to accept such forfeiture, refund or pay

ment adjustment, no further proceeding under this section shall be undertaken. The contracting officer and the State Conservationist shall give approval to this agreement. The agreement shall specify what occurs to the contract.

(d) (1) If the State Conservationist believes, on information submitted by the contracting officer or otherwise, that a violation of a contract has occurred which would call for a forfeiture, refund or payment adjustment under the provisions of this section, written notice thereof, on a form prescribed by the Administrator, SCS, shall be given to each producer signatory to the contract.

(2) Notice to a producer under this section may be shown by (i) a written statement by an authorized representative of the Secretary that the notice was personally delivered to the producer; (ii) a written statement by a producer acknowledging receipt of the notice; and (iii) a post office return receipt (registered or certified mail) showing that the notice was delivered at the last address of the producer or showing that the notice could not be delivered to the producer at his last address because he had moved without a forwarding address, or because the producer refused to accept delivery at his last address, or because the last address does not exist. A producer under this section will be considered to have received the notice at the time of personal receipt, at the time of the delivery of a registered or certified letter, or at the time of the return of an undelivered registered or certified letter.

(3) The notice shall set forth the nature of the alleged violation and shall inform the producer that he will be given an opportunity to appear at a hearing before a person designated by the State Conservationist to conduct a hearing if he files a written request for such hearing in the local Soil Conservation Service office not later than 30 days after the time he received the notice. The producer shall be notified in writing by the hearing officer of the time, date and place set for the hearing. When practicable, the hearing will be held in the designated county where the operating unit is regarded as being located. If the producer does not file written request for a hearing, or does not appear at the appointed time or is not represented at a hearing so requested, he shall have no further right to a hearing before a hearing officer. However, a hear

ing officer already appointed may, in his discretion, permit such producer to appear before him. A request filed by any one producer with the local Soil Conservation Service office shall be deemed to be the request of all producers signatory to the contract.

(e) (1) The hearing before the hearing officer shall be held at the time and place and on the date set forth in the notice of the hearing to the producer.

(2) The hearing shall be conducted in the manner deemed most likely to obtain the facts relevant to the alleged violation. The hearing officer shall have full authority to confine the presentation of facts and evidence to pertinent matters and to exclude irrelevant, immaterial or unduly repetitious evidence, information or questions. In so doing, the hearing officer shall not be bound by the strict rules of evidence as required in courts of law. Witnesses may be sworn at the discretion of the hearing officer. The hearing shall be public.

(f) The producer, or his representative, at the hearing shall be given a full opportunity to present facts and information relevant to the alleged violation and may present oral or documentary evidence. Statements and evidence may be submitted at the hearing by the United States. Individuals not otherwise presented at the hearing to give information or evidence may, in the discretion of the hearing officer, be requested or permitted to give information or evidence. The hearing officer, in his discretion, may permit witnesses to be crossexamined, including those individuals called by him.

(g) The hearing officer shall provide for the making of a record at the hearing as will enable him to make a summary of the testimony received at the hearing if the producer and the State Conservationist agree. If the State Conservationist feels that the nature of the case is such as to make a transcript desirable or if the producer requests such a transcript a reasonable period prior to the time that the hearing begins, a transcript of the hearing shall be made. If a transcript is desired only by a producer, he will be required to provide for its preparation and for the payment of the expense thereof. If a transcript is desired by both the State Conservationist and the producer, the producer will be required to pay only the expense of a copy of the transcript. The remainder

of the expense will be paid by the United States.

(h) If, at the time scheduled for the hearing, the producer is absent and no appearance is made on his behalf, the hearing officer shall, after a lapse of such a period of time as he may consider proper and reasonable, close the hearing, or may, in his discretion, accept information and evidence submitted by others present for the hearing.

(i) In every case where a producer is sent a notice of an alleged violation pursuant to paragraph (d) of this section, except where the producer agrees to the forfeiture, refund or payment adjustment as provided in paragraph (c) of this section, the hearing officer shall furnish the State Conservationist with a written report setting forth his findings, conclusions, and recommendations. The report shall include the summary of testimony or transcript made of any hearing before the hearing officer and all other information which would be of aid to the State Conservationist in reaching his determination.

The

(j) The State Conservationist shall make a determination on the basis of the hearing officer's report and any other information available to him as to whether a violation of the contract has occurred, and, in accordance with the provisions of this section, the amount of the forfeiture, refund or payment adjustment. determination of the State Conservationist shall specifically state whether the violation is of such a nature as to warrant termination of the contract or that the violation does not warrant termination of the contract. Each producer who signed the contract shall be notified in writing of the determination reached by the State Conservationist.

(k) The State Conservationist may authorize or require the reopening of any hearing before a hearing officer for any reason at any time prior to his determination.

(1) Any producer adversely affected by a determination of the State Conservationist shall have the right of appeal to the Administrator, SCS. A producer who wishes to appeal to the Administrator, SCS must file in the office of the Administrator, SCS, his appeal. This appeal and any briefs or statements must be received in such office within 30 days after the producer has received notice of the determination of the State Conservationist. The State Conservationist may file a brief or statement in the office

of the Administrator, SCS, within 15 days after the producer's brief or statement is received there. Such an appeal shall be limited to the records and the issues made before the State Conservationist which records shall be submitted to the Administrator, SCS, by the State Conservationist. The Administrator,

SCS, will render his decision on the basis of the records before him and the issues presented by the appeal. The producer will be notified in writing of this decision.

(m) Any producer adversely affected may appeal to the Secretary from a decision of the Administrator, SCS. A producer who wishes to appeal to the Secretary from a decision of the Administrator, SCS, must file in the office of the Secretary his appeal. This appeal and any briefs or statements must be received in such office within 30 days after the producer has received notice of the decision of the Administrator, SCS. The Administrator, SCS, may file a brief or statement in the office of the Secretary within 15 days after the producer's brief or statement is received there. Such an appeal shall be limited to the records and the issues made before the Administrator, SCS, which records shall be submitted to the Secretary by the Administrator, SCS. The Secretary will make his decision from which no appeal will lie in the Department. This decision will be based upon the record before him and the issues presented by the appeal and the producer shall be notified in writing.

(n) If the determination or decision is that the violation is of such a nature as to warrant termination of the contract, the determination or decision shall state that the contract is terminated and that all rights to further cost-share payments or grants under the contract are forfeited and that all cost-share payments or grants received under the contract shall be refunded. The determination or decision will state the amount of the refund and how payment may be accomplished.

(0) If the determination or decision is that the violation is of such a nature as not to warrant termination of the contract, the producer may be required to make a refund of cost-share payments or grants or to accept payment adjustments. The determination or decision shall state the extent of refunds of costshare payments or grants or payment adjustments. In arriving at the extent of a refund of cost-share payments or grants or payment adjustments under

this section there will be considered (1) the extent of the violations; (2) whether the violation was deliberate or the result of negligence or was due to circumstances beyond the control of the producer; (3) the effect on the program if no refund or payment adjustment is required; (4) the extent to which the producer benefited by the violation; (5) the effect of the violation on the contract as a whole; and (6) other pertinent considerations including the appropriateness and reasonableness of the refund or payment adjustment.

§ 601.26 Assignments.

Assignments by any producer who may be entitled to any cost-share payment under the program are prohibited unless made in accordance with the provisions of section 203, Title 31, U.S.C., and any amendments thereto, and section 15, Title 41, U.S.C., and any amendments thereto.

§ 601.27 Cost-share payments not subject to claims.

Any cost-share payment, or portion thereof, due any producers hereunder shall be determined and allowed without deduction of claims for advances (except as provided in § 601.26 and except for indebtedness to the United States subject to set-off); and without regard to any claim or lien against any crop, or proceeds thereof, in favor of the owner of the operating unit or any other creditor.

§ 601.28 Filing of false claims.

No producer shall file a claim for a cost-share payment under the provisions of the program, including claim for a cost-share payment not carried out or for eligible conservation practices carried out in such a manner that they do not meet the required specifications therefor, and the filing of any such claim shall constitute a violation of the contract.

the office of the County ASC Committee, the compensation due such producer shall be set-off against such indebtedness. Indebtedness owing to the United States Department of Agriculture, or any agency thereof, shall be given first consideration. Set-offs made pursuant to this section shall not deprive the producer of any right to contest the justness of the indebtedness involved either by administrative appeal or by legal action. § 601.30 Compliance with regulatory

measures.

Producers who carry out conservation practices shall be responsible for obtaining the authorities, rights, easements or other approvals necessary to the carrying out and maintenance of the conservation practices in keeping with applicable laws and regulations. Producers shall save the United States harmless from any infringements upon the rights of others or from any failure to comply with applicable laws or regulations.

§ 601.31 Misuse of authorizations.

No producer shall knowingly use an authorization issued to him for obtaining conservation materials or services for a purpose other than for which it was issued and the misuse of the authorization shall constitute a contract violation. § 601.32

Access to operating unit and program records.

Any authorized representative of the Secretary, for the purpose of ascertaining the accuracy of any of the representations made in or in connection with or leading up to any contract entered into hereunder and the entering into any contract or the performance of the terms and conditions of such contract shall have the right to enter the operating unit at any reasonable time in order to measure the acreage, to render technical assistance, to inspect the work undertaken under any contract and to examine any program records pertaining to the operating unit and the producer shall furnish such information relating to the operating unit as may be requested by authorized representatives of the Secretary.

revision of any determination made by the contracting officer or the designated SCS technician in connection with the program except that the State Conservationist may not make a revision of any executed contract other than as may specifically be authorized herein.

§ 601.34 Effect on acreage allotment and marketing quota programs.

(a) Insofar as the acreage of cropland on any operating unit enters into the determination of acreage allotments and marketing quotas under the Agricultural Adjustment Act of 1938, as amended, the cropland acreage on the operating unit shall not be decreased during the period of any contract heretofore or hereafter entered into under this program by reason of any action taken for the purpose of carrying out such contract, and shall not be decreased, for such period after the expiration of the contract as is equal to the period of the contract, by reason of the maintenance of any change in land use from cultivated cropland to permanent vegetation carried out under the contract.

(b) The acreage on any operating unit which is diverted from the production of any commodity subject to acreage allotments or marketing quotas in order to carry out any contract heretofore or hereafter entered into under this program or in order to maintain, for such period after the expiration of the contract as is equal to the period of the contract, any change in land use from cultivated cropland to permanent vegetation carried out under the contract shall be considered as acreage devoted to the commodity for the purposes of establishing future State, county, and farm acreage allotments under the Agricultural Adjustment Act of 1938, as amended.

(c) In applying the provisions of paragraph (6) of Public Law 74, 77th Congress (7 U.S.C. 1340(6), and section 326(b) of the Agricultural Adjustment Act of 1938, as amended (7 U.S.C. 1326 (b)), relating to reduction of the storage amount of wheat, the acreage on any operating unit which is diverted from the production of wheat in order to carry out a contract shall be regarded as wheat acreage on the operating unit.

[22 F.R. 6851, Aug. 24, 1957, as amended at 23 FR. 6315, Aug. 16, 1958, 26 FR. 3627, Apr. 28, 1961]

PARTS 602-699 [RESERVED]