[Federal Register Volume 63, Number 216 (Monday, November 9, 1998)]
[Rules and Regulations]
[Pages 60203-60204]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29898]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
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Federal Register / Vol. 63, No. 216 / Monday, November 9, 1998 /
Rules and Regulations
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DEPARTMENT OF AGRICULTURE
Farm Service Agency
7 CFR Part 737
RIN 0560-AD92
Tobacco Warehouses
AGENCY: Farm Service Agency, USDA.
ACTION: Final rule.
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SUMMARY: This final rule amends the regulations governing tobacco
warehouses under the United States Warehouse Act (USWA). A proposed
rule was published in the July 28, 1995, Federal Register (60 FR
38766). On June 20, 1997, a final rule covering only administrative
changes to various commodity regulations was published in the Federal
Register (62 FR 33539). Included in that final rule were two
administrative changes which had been included in the tobacco warehouse
proposed rule. Therefore, this final rule does not address those two
administrative changes. In the proposed rule the Farm Service Agency
(FSA) proposed excluding tobacco auction warehouses from USWA licensing
requirements. This final rule adopts the position taken in the proposed
rule and excludes those tobacco auction warehouses from licensure under
the USWA. FSA has determined that it is not necessary to define
``warehouse'' as suggested in the proposed rule. The USWA, as amended
(7 U.S.C. 241 et seq.), provides the Secretary of Agriculture with the
discretion to establish a voluntary licensing program for public
warehouses that store agricultural commodities under a bailment
relationship with its depositors. Accordingly, the Secretary will
exercise this discretion and through FSA will discontinue licensing
tobacco auction warehouses under the USWA and all licenses issued to
tobacco auction warehouses covered by this rule will be
administratively canceled by Secretarial determination on October 31,
1999. October 31, 1999, was selected as the effective date so as to
allow the affected tobacco auction warehouses sufficient notice and
time to seek a State license or changes in State law to the extent that
this rule may have an effect on warehouse rates. In addition, this
final rule makes some minor ``housekeeping'' amendments.
EFFECTIVE DATE: November 9, 1998.
FOR FURTHER INFORMATION CONTACT:
Steve Gill, Director, Warehouse and Inventory Division, Farm Service
Agency, STOP 0553, 1400 Independence Avenue, S.W., Washington, DC
20250-0553; telephone 202-720-2121 or FAX 202-690-3123, e-mail:
Steve__Gill@wdc.fsa.usda.gov.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This final rule has been determined to be not significant for the
purposes of Executive Order 12866 and therefore has not been reviewed
by the Office of Management and Budget (OMB).
Executive Order 12988
This final rule has been reviewed in accordance with Executive
Order 12988. The provisions of this final rule do not preempt State
laws, are not retroactive, and do not involve administrative appeals.
Environmental Evaluation
It has been determined by an environmental evaluation that this
action will not have a significant impact on the quality of the human
environment. Therefore, neither an Environmental Assessment nor an
Environmental Impact Statement is needed.
Executive Order 12612
It has been determined that this rule is consistent with the
Federalism principles espoused in Executive Order 12612, and does not
warrant the preparation of a Federalism Assessment.
Executive Order 12372
This program/activity is not subject to the provisions of Executive
Order 12372, which requires intergovernmental consultation with State
and local officials. See the notice related to 7 CFR part 3015, subpart
V, published at 48 FR 29115 (June 24, 1983).
Paperwork Reduction Act
The amendments set forth in this final rule do not affect
information collection or recordkeeping requirements.
Regulatory Flexibility Act
It has been determined that the Regulatory Flexibility Act is not
applicable to this final rule because this rule will not have a
significant effect on a substantial number of small businesses.
Licensing under the USWA is strictly voluntary on the warehouse
operator's part.
Unfunded Mandate Reform Act of 1995
This rule contains no Federal mandates under the regulatory
provisions of Title II of the Unfunded Mandates Reform Act of 1995
(UMRA) for State, local, and tribal governments or the private sector.
Thus, this rule is not subject to the requirements of sections 202 and
205 of the UMRA.
Background
The USWA, as amended (7 U.S.C. Sec. 241 et seq.), provides that the
Secretary of Agriculture may issue a license for the conduct of public
warehouses that store agricultural commodities. The USWA is
implemented, as it pertains to tobacco warehouses, by regulations at 7
CFR part 737 and is administered by FSA. Approximately, 1,500 entities
hold licenses under the USWA to store one or more of eight different
agricultural commodities. Presently, there are six tobacco auction
warehouses licensed under the USWA.
Summary of Comments
A proposed rule was published in the Federal Register (60 FR 38766)
on July 28, 1995. The proposed rule excluded tobacco auction warehouse
from licensure under the USWA. Comments from interested parties were
due on or before August 28, 1995. A total of 3,242 comments were
received from 14 different sectors as follows: 2 Cotton Associations; 1
Chamber of Commerce; 15 Farm Bureaus; 20 Grain Warehouse Associations;
1 High School (FFA Chapter); 60 Interested Parties; 1 Legal Counsel; 3
Law Makers (State or Federal); 3,113 Tobacco Producers; 7 State
Agriculture Departments; 3 Stabilization Corporations; 4 Tobacco
Producer Associations; 5 Tobacco Warehouse Associations; and 7 Tobacco
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Warehouses. Of the above comments 2,964 were against the proposed rule,
275 were in favor of the proposed rule and 3 had no opinion. Of the
comments received in opposition to the proposal, 2,236 were in the form
of preprinted postcards that were submitted by tobacco producers in
Virginia.
Producers not in favor of the proposed rule expressed confidence in
the security offered by the USWA and therefore, asked that tobacco
warehouses to which they deliver tobacco be allowed to remain licensed
under the USWA. Producers in favor of the proposed rule expressed a
common concern about the charges assessed by warehouses licensed under
the USWA.
The primary functions of tobacco auction warehouses are currently
regulated by several USDA agencies. Tobacco auction warehouses approved
by the Agricultural Marketing Service (AMS) and FSA may sell producer-
owned and dealer-owned tobacco. AMS strictly regulates the manner in
which the tobacco must be presented for sale and graded for sale.
Further, AMS regulations include detailed recordkeeping requirements.
Further, AMS has representatives on-site during all sales of tobacco.
In addition, the Agricultural Adjustment Act of 1938, as amended,
and the Agricultural Act of 1949, as amended, strictly regulate the
sale of tobacco. The Commodity Credit Corporation (CCC) and FSA
regulate auction warehouses through the Tobacco Marketing Quota and
Price Support Programs they administer. These regulations are codified
at 7 CFR part 723 and 1464. Under these regulations, CCC and FSA
require that warehouse operators retain detailed records of all tobacco
handled by them. The tobacco and the transactions associated with it
must be tracked and recorded from the time the tobacco is brought into
the warehouse by producers, to the time it leaves the warehouse.
The type and level of regulation by AMS, CCC, and FSA are unique to
tobacco auction warehouses. Producers who believe they have not been
treated fairly by the warehouse operator may seek relief directly from
the on-site representatives of the various Government Agencies. If such
allegations are confirmed, under the provisions of 7 CFR parts 723 and
1464, CCC or FSA has the right to take appropriate actions against the
tobacco auction warehouse to protect the interests of producers.
Accordingly, because tobacco auction warehouses are sufficiently
regulated by other USDA regulations, and involve sales, primarily,
rather than storage, FSA will discontinue licensing tobacco auction
warehouses under the USWA. Additionally, those licenses currently held
by tobacco auction warehouse operators will be administratively
canceled by Secretarial determination effective October 31, 1999.
List of Subjects in 7 CFR Part 737
Administrative practice and procedure, Agricultural Commodities,
Surety Bonds, Tobacco, Warehouses.
Accordingly, the provisions of 7 CFR part 737 are amended as
follows:
PART 737--TOBACCO WAREHOUSES
1. The authority citation for part 737 continues to read as
follows:
Authority: 7 U.S.C. 241 et seq.
2. Section 737.2 is amended by revising the introductory text and
paragraph (j) to read as follows:
Sec. 737.2 Terms defined.
For the purposes of this part, unless otherwise provided, the
following terms shall mean:
* * * * *
(j) Warehouseman. Any person lawfully engaged in the business of
storing tobacco and holding a warehouse license.
* * * * *
3. Section 737.4 is revised to read as follows:
Sec. 737.4 Grounds for not issuing license.
A license for the conduct of a warehouse shall not be issued if it
be found by the Secretary, or his designated representative, that the
warehouse is not suitable for the proper storage of tobacco, that the
warehouseman is insolvent or is incompetent to conduct such warehouse
in accordance with the act and the regulations in this part, or that
there is any other sufficient reason within the purposes of the act for
not issuing such license. Further, a license shall not be issued for
any place to which tobacco is delivered by the producers or their
agents for the purposes of obtaining CCC price support advances and for
the display and auction of tobacco.
4. Section 737.34 is revised to read as follows:
Sec. 737.34 Package arrangement.
(a) Each warehouseman shall arrange the packages of tobacco so that
the identification number thereon as required by Sec. 737.33 is
visible, readily accessible, and arranged so as to permit an accurate
check thereof, unless waived in writing by the Administrator.
(b) If, at any time, a warehouseman shall be offered tobacco in
such quantity for storage so as to exceed the capacity of this
warehouse, as shown in his license, he shall not accept such tobacco
until he has first secured authority through an amended license, and
after such authority has been granted the warehouseman shall continue
to arrange the tobacco in accordance with paragraph (a) of this
section.
Signed at Washington, DC, on November 3, 1998.
Keith Kelly,
Administrator, Farm Service Agency.
[FR Doc. 98-29898 Filed 11-6-98; 8:45 am]
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