98-6060. Amendment to the Tobacco Marketing Quota Regulations  

  • [Federal Register Volume 63, Number 46 (Tuesday, March 10, 1998)]
    [Rules and Regulations]
    [Pages 11581-11585]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 98-6060]
    
    
    
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    Rules and Regulations
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    Federal Register / Vol. 63, No. 46 / Tuesday, March 10, 1998 / Rules 
    and Regulations
    
    [[Page 11581]]
    
    
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    DEPARTMENT OF AGRICULTURE
    
    Farm Service Agency
    
    7 CFR Part 723
    
    RIN 0560-AE96
    
    
    Amendment to the Tobacco Marketing Quota Regulations
    
    AGENCY: Farm Service Agency, USDA.
    
    ACTION: Final rule.
    
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    SUMMARY: This rule adopts as final, with minor technical changes, the 
    proposed rule published in the Federal Register on March 21, 1997 (62 
    FR 13546). The rule amends the tobacco marketing quota regulations to: 
    Provide for making quota ``inequity adjustments'' on a ``common 
    ownership unit'' basis rather than strictly on a ``farm'' basis; 
    eliminate unduly restrictive deadlines for the mailing of certain quota 
    notices; permit, for burley and flue-cured tobacco, disaster transfers 
    to be made by cash lessees, from cash rented farms, without the owner's 
    signature; provide greater flexibility in the setting of penalty 
    amounts for burley and flue-cured tobacco producer violations; 
    eliminate a provision that requires yearly publication in the Federal 
    Register of routine penalty computations; remove regulations governing 
    the 1994-calendar year only ``domestic marketing assessment'', which 
    was applicable to the use by certain cigarette manufacturers of set 
    percentages of domestic tobacco; codify certain routine statutory 
    provisions concerning, and penalties related to, setting burley and 
    flue-cured tobacco national marketing quotas; and add several technical 
    changes, including changes to reflect a recent reorganization of the 
    Department of Agriculture.
    
    EFFECTIVE DATE: March 10, 1998.
    
    FOR FURTHER INFORMATION CONTACT: Joe Lewis, Jr., Agricultural Program 
    Specialist, Tobacco and Peanuts Division, Farm Service Agency, United 
    States Department of Agriculture (USDA), 1400 Independence Avenue, SW, 
    STOP 0514, Washington, DC 20250-0514, telephone 202-720-0795.
    
    SUPPLEMENTARY INFORMATION:
    
    Executive Order 12866
    
        This rule has been determined to be not significant and therefore 
    was not reviewed by OMB under Executive Order 12866.
    
    Regulatory Flexibility Act
    
        The Regulatory Flexibility Act is not applicable to this final rule 
    since the Farm Service Agency (FSA) is not required by 5 U.S.C. 553 or 
    any other provision of law to publish a notice of proposed rule making 
    with respect to the subject matter of this rule.
    
    Federal Assistance Program
    
        The title and number of the Federal Assistance Program, as found in 
    the Catalog of Federal Domestic Assistance, to which this rule applies 
    are: Commodity Loans and Purchases--10.0514.
    
    Environmental Evaluation
    
        It has been determined by an environment evaluation that this 
    action will have no significant impact on the quality of the human 
    environment. Therefore, neither an environmental assessment nor an 
    environmental impact statement is needed.
    
    Executive Order 12372
    
        This 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).
    
    Executive Order 12988
    
        This final rule has been reviewed in accordance with Executive 
    Order 12988. The provisions of this final rule are not retroactive and 
    preempt State laws to the extent that such laws are inconsistent with 
    the provisions of this rule. Before any legal action is brought 
    regarding determinations made under provisions of 7 CFR part 723, the 
    administrative appeal provisions set forth at 7 CFR part 780 and 7 CFR 
    part 711, as applicable, must be exhausted.
    
    Paperwork Reduction Act
    
        This final rule does not contain new or revised information 
    collection requirements that require approval by OMB under the 
    Paperwork Reduction Act (44 U.S.C. 3507 et seq). The information 
    collections required in 7 CFR part 723 have previously been cleared 
    under OMB control number 0560-0058.
    
    Discussion of Comments
    
        Thirty comments were received from the public in response to the 
    proposed rule which was published in the Federal Register at 62 FR 
    13546 (March 21, 1997). Twenty-eight were from tobacco producers, one 
    from a State farm organization and one from a college student. Only one 
    comment was unfavorable and it expressed concern about the health 
    issues of tobacco which are beyond the scope of this proceeding. 
    Accordingly, the rule has been amended with technical changes for 
    clarity and those corrections include new cross references in 723.309 
    and in 723.410 to 723.409 as amended in the rule. The latter specifies 
    that where more than one party is responsible for the mis-marketing of 
    tobacco, all parties are ultimately jointly liable for the remittance 
    of the penalty amount to the government if the party who is normally 
    assigned the duty of making the payment fails to make the payment. 
    Also, to avoid any controversy and make clear that the rule is all-
    encompassing, certain references have been changed to specify that any 
    party, regardless of how they would normally classify themselves, that 
    aids in the mis-marketing of suspicious tobacco can be liable for 
    remitting the penalty amount to FSA. This is not an expansion of the 
    rule as any such aid would permit such a person to be considered a 
    ``dealer'' in tobacco within the meaning of the rule.
    
    List of Subjects in 7 CFR Part 723
    
        Acreage allotments, Dealers, Domestic cigarette manufactures, 
    Marketing quotas, Penalties, Tobacco.
    
        For the reasons set forth in the preamble, 7 CFR part 723 is 
    amended as follows:
    
    PART 723--TOBACCO
    
        1. The authority citation for 7 CFR part 723 continues to read as 
    follows:
    
    
    [[Page 11582]]
    
    
        Authority: 7 U.S.C. 1301, 1311-1314, 1314-1, 1314b, 1314b-1, 
    1314b-2, 1314c, 1314d, 1314e, 1314f, 1314i, 1315, 1316, 1362, 1363, 
    1372-75, 1377-1379, 1421, 1445-1 and 1445-2.
    
        2. Section 723.104 is amended by adding definitions for ``common 
    ownership unit'', ``Farm Service Agency'', and ``FSA'' in their proper 
    alphabetical order to read as follows:
    
    
    Sec. 723.104  Definitions.
    
    * * * * *
        Common ownership unit. A common ownership unit is a distinguishable 
    part of a farm, consisting of one or more tracts of land with the same 
    owners, as determined by FSA.
    * * * * *
        Farm Service Agency. An agency within the U.S. Department of 
    Agriculture.
    * * * * *
        FSA. The Farm Service Agency.
    * * * * *
        3. Section 723.210 is amended by adding a new paragraph (d) to read 
    as follows:
    
    
    Sec. 723.210  Corrections of errors and adjusting inequities in acreage 
    allotments and marketing quotas for old farms.
    
    * * * * *
        (d) Making certain adjustments on a common ownership unit basis. 
    Notwithstanding other provisions of this section, inequity adjustments 
    may be allotted by common ownership unit rather than by farm when it is 
    determined by the county FSA committee that the making of the 
    allocation on that basis provides greater equity.
    
    
    Sec. 723.213  [Amended]
    
        4. Section 723.213 is amended by removing paragraph (c) and 
    redesignating paragraph (d) as paragraph (c).
        5. Section 723.216 is amended by revising paragraphs (a) 
    introductory text, (a)(2)(ii)(A) and (a)(2)(iii)(A) to read as follows:
    
    
    Sec. 723.216  Transfers of tobacco acreage allotment or marketing quota 
    by sale, lease, or owner.
    
        (a) General. The allotment or quota established for a farm may be 
    transferred to another farm to the extent provided for in this section. 
    For transfers by sale, common ownership units on a farm may be 
    considered to be separate farms. Transfers are not permitted for cigar 
    binder (types 54 and 55) tobacco allotments.
        (1) * * *
        (2) * * *
        (ii) * * *
        (A) Leases. The owner and operator of the transferring farm and the 
    owner or operator of the receiving farm. For leases made under the 
    disaster provisions of this section, the signature of the owner of the 
    transferring farm will not be required if the FSA determines that the 
    farm is cash leased for the current crop year and that the owner does 
    not share in the crop.
        (B) * * *
        (iii) * * *
        (A) Leases. The owner of the transferring farm and the owner or 
    operator of the receiving farm. For leases made under the disaster 
    provisions of this section, the signature of the owner of the 
    transferring farm will not be required if the FSA determines that the 
    farm is cash leased for the current crop year and that the owner does 
    not share in the crop.
    * * * * *
    
    
    723.308   [Amended]
    
        6. Section 723.308 is amended by adding ``and announced annually'' 
    after ``determined'' in the first sentence and removing the second 
    sentence.
    
    
    Sec. 723.309  [Amended]
    
        7. The introductory text in Sec. 723.309 is amended by adding the 
    words ``Subject to any additional requirements or provisions for 
    remittances which are contained in Sec. 723.409 of this part'', before 
    the words ``The persons to pay.''
        8. Section 723.409 is amended by revising the heading, paragraphs 
    (a), (b), (e)(1), (e)(2) introductory text, and (f) and by removing 
    paragraph (g), to read as follows:
    
    
    Sec. 723.409  Producer violations, penalties, false identification 
    collections and remittances by dealers, buyers, handlers, warehouses, 
    and other parties; related issues.
    
        (a) Generally--(1) Circumstances in which penalties are due. A 
    penalty shall be due on all marketings from a farm which are:
        (i) In excess of the applicable quota or allotment;
        (ii) Made without a valid marketing card;
        (iii) Made under circumstances where a buyer or dealer, or their 
    agents, know, or have reason to know, that the tobacco was, or is, 
    marketed in a manner which by itself or in combination with other 
    marketings is designed to, or has the effect of, defeating the purposes 
    of the tobacco price support and production adjustment program, 
    avoiding marketing quota limitations, or otherwise avoiding provisions 
    of this part or part 1464 of this title;
        (iv) Falsely identified; or,
        (v) Marketings for which the producer or other party fails to make 
    a proper account as required by the provisions of this part.
        (2) Amount of the penalty. The amount of the penalty shall be the 
    amount computed by multiplying the penalty rate by the penalty 
    quantity.
        (3) Penalty rate. The penalty rate for purposes of this section is 
    that rate which is computed as the penalty rate per pound for the 
    applicable kind of tobacco under Sec. 723.308, except to the extent 
    that a converted penalty rate may be used as provided for in this 
    section.
        (4) Penalty quantity. The penalty quantity for purposes of this 
    section is the quantity of tobacco that is determined by the county FSA 
    committee subject to the Director's review to be subject to penalty, 
    provided further that:
        (i) For burley and flue-cured tobacco, the penalty quantity for 
    purposes of this section shall be the amount of marketings from the 
    farm in excess of 103 percent of the farm's effective marketing quota 
    for that year, except that if the violation involves false 
    identification or a failure to account for tobacco, the FSA may, in its 
    discretion, depending on the nature of the violations, use as the 
    penalty quantity an amount up to 25 percent of the farm's effective 
    marketing quota plus 100 percent of the farm yield on any excess 
    acreage for the farm (acreage planted in excess of the allotted acres, 
    as estimated or determined).
        (ii) For tobacco other than burley and flue-cured tobacco, the 
    penalty quantity shall be the amount of marketings from the farm in 
    excess of the farm's marketing quota provided further, that in order to 
    aid in the collection of the penalty the FSA may endeavor, to the 
    extent practicable, to apply the penalty to all of the farm's marketing 
    by converting the full penalty rate to a converted proportionate 
    penalty rate which rate may be identified on the producer's marketing 
    card and collected and remitted accordingly. In making the calculation 
    of the converted penalty rate, the agency shall take into account any 
    carryover tobacco applicable for the farm. If an erroneous penalty rate 
    is shown on the marketing card, then the
    
    [[Page 11583]]
    
    producer of the tobacco and the producer who marketed the tobacco shall 
    be liable for any balance due.
        (5) Limitations on reduced penalty quantities. No penalty shall be 
    assessed at less than the maximum amount unless it is determined by the 
    county FSA committee, with the concurrence of the State FSA committee, 
    that all of the following exist with respect to such violation:
        (i) The violation was inadvertent and unintentional;
        (ii) All of the farm's production has been accounted for and there 
    are no excess marketings for which there are penalties outstanding;
        (iii) The records for all involved farms have been corrected to 
    show the marketings involved; and
        (iv) The false identification or failure to account did not give 
    the producer an advantage under the program.
        (6) Effect of improper, invalid, deceptive or unaccounted for 
    marketings on penalty quantity calculation. Any marketing made without 
    a valid marketing card, falsely identified, or unaccounted for in 
    accordance with the requirements of this part, or made under 
    circumstances which are designed to, or have the effect of, defeating 
    the purpose of the tobacco marketing quota and price support program, 
    avoiding any limitation on marketings, avoiding a penalty, or avoiding 
    compliance with, or the requirements of, any regulation under this part 
    or under part 1464 of this title, shall be considered an excess 
    marketing of tobacco. Further, such marketings shall, unless shown to 
    the satisfaction of the county FSA committee to be otherwise, be 
    considered, where relevant, to be in excess of 103 percent of the 
    applicable marketing quota for the farm, and shall be subject to a 
    penalty at the full penalty rate for each pound so marketed.
        (7) Pledging of tobacco by an ineligible producer. In addition to 
    any other circumstances in which a penalty may be assessed under this 
    part, the marketing or pledging for a price support loan of any tobacco 
    when the producer is not considered to be an ``eligible producer'' 
    under the provisions of part 1464 of this title, shall be considered to 
    be a false identification of tobacco and shall be dealt with 
    accordingly. This remedy shall be in addition to all others as may 
    apply.
        (8) Failures to make certain reports. If any producer who 
    manufactures tobacco products from tobacco produced by such person or 
    another fails to make the report required by Sec. 723.408(f) or 
    otherwise required by this part, or makes a false report, such producer 
    shall be deemed to have failed to account for the disposition of 
    tobacco produced on the farm(s) involved. The filing of a report by a 
    producer under Sec. 723.408 of this part which the State FSA committee 
    finds to be incomplete or incorrect shall constitute a failure to 
    account for the disposition of tobacco produced on the farm.
        (b) Special provisions for tobacco buyers, dealers, handlers, 
    warehouse operators and others who acquire, handle, or facilitate the 
    marketing of tobacco. Notwithstanding the provisions of paragraph (a) 
    of this section and other provisions of this part:
        (1) Unless such amount has been remitted by another in accord with 
    the provisions of this part, a dealer, buyer, warehouse operator or 
    other person handling tobacco shall collect, and remit to FSA, an 
    amount equal to the full penalty rate provided for in Sec. 723.208 
    times the quantity of tobacco involved where the tobacco is not 
    identified with a valid producer or dealer card, the tobacco is sold 
    under suspicious circumstances, or when there is reason to suspect that 
    the tobacco may be subject to a penalty for any reason or may be 
    marketed in derogation of the goals and purposes of the tobacco support 
    program. For purposes of the preceding sentence ``handling'' shall 
    include any services provided with respect to the tobacco, and any 
    facilitation of the marketing of tobacco regardless of the level or 
    amount of contact, if any, that the party may actually have with the 
    tobacco.
        (2) The amount of the penalty required to be collected may be 
    deducted from the proceeds due a seller and all parties chargeable 
    under paragraph (b)(1) of this section shall be jointly and severally 
    liable for insuring that the monies are remitted to FSA except to the 
    extent that the Director shall allow for an exemption to facilitate the 
    marketing of tobacco, or for some other reason.
        (3) The collection and remittance of penalty shall be in addition 
    to any other obligations that such person may have to collect other 
    amounts, including other penalties or assessments due on such 
    marketings.
        (4) If a penalty is collected and remitted by a buyer, dealer, or 
    warehouse operator that is shown not to be due or only partially due, 
    then the overpayment shall be refunded to the appropriate party. It is 
    the responsibility of the person that collected the penalty and the 
    person that sold the tobacco involved to show to the satisfaction of 
    the FSA that such penalty is not due in the full amount collected.
        (c) * * *
        (e) * * *
        (1) For amounts of $100 or less, the county FSA committee, and
        (2) For amounts over $100, the county FSA committee with approval 
    of the State FSA committee determines that each of the following 
    conditions is applicable:
        (i) * * *
        (f) Refusal to contribute required assessments. A marketing penalty 
    at the full rate per pound is due on each pound of tobacco marketed 
    from a farm when the farm operator or producers refuse to pay no-net-
    cost or marketing assessments as provided in part 1464 of this title. 
    In all such cases, the farm from which the tobacco has been produced 
    shall be considered to have a marketing quota of zero pounds and an 
    allotment of zero acres.
        9. In Sec. 723.410 the introductory text is revised to read as 
    follows:
    
    
    Sec. 723.410  Penalties considered to be due from warehouse operators, 
    dealers, buyers, and others excluding the producer.
    
        Subject to any additional requirements or provisions for 
    remittances which are contained in Sec. 723.409 of this part, any 
    marketing of tobacco under one of the following conditions shall be 
    considered to be a marketing of excess tobacco.
    * * * * *
        10. Part 723 subpart E is revised to read as follows:
    
    Subpart E--Establishing Burley and Flue-Cured Tobacco National 
    Marketing Quotas
    
    Sec.
    723.501  Scope.
    723.502  Definitions.
    723.503  Establishing the quotas.
    723.504  anufacturer's intentions; penalties.
    
    
    Sec. 723.501  Scope.
    
        This subpart sets out regulations for setting annual national 
    marketing quotas for burley and flue-cured tobacco based on the 
    purchase intentions of certain manufacturers of cigarettes and on other 
    factors. It also sets out penalty provisions for manufacturers who fail 
    to purchase, within the tolerances set in this part, the amount of 
    domestic tobacco, by kind, reflected in the stated intention as 
    accounted for in accordance with this subpart.
    
    
    Sec. 723.502  Definitions.
    
        In addition to the definitions set forth at Sec. 723.104, the 
    definitions set forth in this section shall be applicable for purposes 
    of administering the provisions of this subpart.
        CCC. The Commodity Credit Corporation, an instrumentality of the 
    USDA.
    
    [[Page 11584]]
    
        Domestic manufacturer. A domestic manufacturer of cigarettes.
        Domestic manufacturer of cigarettes. A manufacturer, who as 
    determined by the Director, produces and sells more than 1 percent of 
    the cigarettes produced and sold in the United States annually.
        Price support inventory. The inventory of tobacco which, with 
    respect to a particular kind of tobacco, has been pledged as collateral 
    for a price support loan made by CCC through a producer-owned 
    cooperative marketing association.
        Producer owned cooperative marketing associations. Those 
    associations or their successors, which by law act as agents for 
    producers for price support loans for tobacco, and which were, as of 
    January 1, 1996, for burley and flue-cured tobacco, the Burley Tobacco 
    Growers Cooperative Association, the Burley Stabilization Corporation, 
    and the Flue-Cured Tobacco Cooperative Stabilization Corporation.
        Unmanufactured tobacco. Stemmed and unstemmed leaf tobacco, stems, 
    trimmings, and scrap tobacco.
    
    
    Sec. 723.503  Establishing the quotas.
    
        (a) General. Subject to the 3-percent adjustment provided for in 
    paragraph (b) of this section, the annual marketing quotas for burley 
    and flue-cured tobacco shall be calculated for each marketing year for 
    each kind separately as follows:
        (1) Domestic manufacturer purchase intentions. First, for each kind 
    and year, the Director shall calculate the aggregate relevant purchaser 
    intentions as declared or set under this section.
        (2) Exports. Next, the Director shall add to the total determined 
    under paragraph (a)(1) of this section the amount which is equal to the 
    Director's determination of the average quantity of exported domestic 
    leaf tobacco of the applicable kind for the past 3 marketing years. For 
    this purpose, exports include unmanufactured tobacco only, including, 
    but not limited to, stemmed and unstemmed leaf tobacco, stems, 
    trimmings, and scrap tobacco, and excludes tobacco contained in 
    manufactured products including, but not limited to, cigarettes, 
    cigars, smoking tobacco, chewing tobacco, snuff and semi-processed bulk 
    smoking tobacco. The quantity of exports for the most recent year, as 
    needed, may be estimated.
        (3) Reserve stock level adjustment. The Director may then adjust 
    the total calculated by adding the sums of paragraphs (a)(1) and (a)(2) 
    of this section, by making such adjustment which the Director, in his 
    discretion, determines necessary to maintain inventory levels held by 
    producer loan associations for burley and flue-cured tobacco at the 
    reserve stock level. For burley tobacco, the reserve stock level for 
    these purposes is the larger of 50 million pounds farm sales weight or 
    15 percent of the previous year's national marketing quota. For flue-
    cured tobacco, the reserve stock level for these purposes is the larger 
    of 100 million pounds farm sales weight or 15 percent of the previous 
    year's national marketing quota. Any adjustment under this clause shall 
    be discretionary taking into account supply conditions; however, for 
    burley tobacco no downward adjustment under this clause may exceed the 
    larger of 35 million pounds (farm sales weight) or 50 percent of the 
    amount by which loan inventories exceed the reserve stock level.
        (b) Additional 3-percent adjustment. The amount otherwise 
    calculated under paragraph (a) of this section may be adjusted by the 
    Director by 3 percent of the total. This adjustment is discretionary 
    and may be made irrespective of whether any adjustment has been made 
    under paragraph (a)(3) of this section and may be made to the extent 
    the Director deems such an adjustment is in the best interest of the 
    program.
        (c) Dates of announcement. For flue-cured tobacco, the quota 
    determination should be announced by December 15 preceding the 
    marketing year. For burley, the announcement should be made by February 
    1 preceding the marketing year.
    
    
    Sec. 723.504  Manufacturers' intentions; penalties.
    
        (a) Generally. Each domestic manufacturer shall, for each marketing 
    year, for burley and flue-cured tobacco separately, submit a statement 
    of its intended purchases of eligible tobacco by the date prescribed in 
    paragraph (d) of this section; further, at the end of the marketing 
    year, each such manufacturer shall submit a statement of its actual 
    countable purchases of eligible tobacco for that marketing year, by 
    kind, for burley and flue-cured tobacco. For these purposes, countable 
    purchases of eligible tobacco shall be as defined in, and determined 
    under, paragraph (b) of this section. If a domestic manufacturer fails 
    to file a statement of intentions, the Director shall declare the 
    amount which will be considered that manufacturer's intentions for the 
    marketing year. That declaration by the Director shall be based on the 
    domestic manufacturer's previous reports, or such other information as 
    is deemed appropriate by the Director in the Director's discretion. 
    Notice of the amount so declared shall be forwarded to the domestic 
    manufacturer. If the domestic manufacturer fails to file a year-end 
    report or files an inaccurate or incomplete report, then the Director 
    may deem that the manufacturer has no purchases to report or take such 
    other action as the Director believes is appropriate to fulfill the 
    goals of this section. Intentions and purchases of countable tobacco 
    will be compared for purposes of determining whether a penalty is due 
    from the domestic manufacturer.
        (b) Eligible tobacco for statements of intentions and countable 
    purchases toward those intentions. For reports and determinations under 
    this section, eligible tobacco for purposes of determining the 
    countable purchases under paragraph (a) of this section will be 
    unmanufactured domestic tobacco of the relevant kind for use to 
    manufacture, for domestic or foreign consumption, cigarettes, semi-
    processed bulk smoking tobacco and other tobacco products. Eligible 
    tobacco for these purposes does not include tobacco purchased for 
    export as leaf tobacco, stems, trimmings, or scrap. Countable purchases 
    of eligible tobacco shall include purchases of eligible tobacco made by 
    domestic manufacturers directly from the producers, from a regular 
    auction market, or from the price support loan inventory, and shall 
    also include purchases by the manufacturer where the manufacturer 
    purchases or acquires the tobacco from dealers or buyers who purchased 
    the tobacco for the domestic manufacturer during the relevant marketing 
    year directly from a producer, at a regular auction market, or from the 
    price support loan inventory.
        (c) Weight basis and nature of reports. The weight basis used for 
    all reports and comparisons shall be a farm sales weight basis unless 
    the Director permits otherwise and all reports will be considered to 
    have been made on that basis unless the report clearly states 
    otherwise. Submitted reports shall be assumed to cover countable 
    purchases of eligible tobacco only, absent indications to the contrary.
        (d) Due dates and addresses for reports. For flue-cured tobacco, 
    the domestic manufacturer's statement of intentions shall be submitted 
    by December 1 before the marketing year and the year-end report shall 
    be submitted by August 20 following the end of the marketing year. 
    Those respective dates for burley tobacco shall be January 15 before 
    the burley tobacco marketing year and November 20 after the burley 
    tobacco marketing year.
    
    [[Page 11585]]
    
    Reports shall be mailed or delivered to the Director, Tobacco and 
    Peanuts Division, STOP 0514, 1400 Independence Avenue, SW, Washington, 
    DC 20250-0514.
        (e) Penalties. A domestic manufacturer shall be liable for a 
    penalty equal to twice the purchaser's no-net-cost assessment rate per 
    pound for the applicable kind of tobacco for the relevant marketing 
    year, if the manufacturer's purchases of either burley or flue-cured 
    tobacco for the marketing year do not equal or exceed, as determined by 
    the Director, 90 percent of their stated purchase intentions for that 
    kind of tobacco for the relevant marketing year. The Director shall 
    adjust the domestic manufacturer's intentions, however, to the extent, 
    that producers have not produced the full amount of the national quota 
    for the relevant marketing year for the particular kind of tobacco. The 
    burden of establishing all purchases shall be with the domestic 
    manufacturer and the Director may, in the case of indirect purchases 
    for the manufacturer, require that the manufacturer obtain verification 
    of the purchases by the dealer who made the purchase from the producer, 
    at a regular auction market, or from the price support loan inventory, 
    in order to assure that the tobacco is, to the manufacturer, a 
    countable purchase. The Director may require such additional 
    information as determined needed to enforce this subpart.
        (f) Penalty notice and penalty remittance. Penalties will be 
    assessed after notice and an opportunity for hearing before the 
    Director. Remittances are to be made to the CCC and will be credited to 
    the applicable producer loan association's no-net-cost fund or account 
    as provided for in part 1464 of this title.
        (g) Maintenance and examination of records. Each domestic 
    manufacturer shall keep all relevant records of purchases, by kind, of 
    burley and flue-cured tobacco for a period of at least 3 years. The 
    Director, Office of Inspector General, or other duly authorized 
    representative of the United States may examine such records, receipts, 
    computer files, or other information held by a domestic manufacturer 
    that may be used to verify or audit such manufacturer's reports. The 
    reasonable cost of such examination or audit may be charged to the 
    domestic manufacturer who is the subject of the examination or audit. 
    All records examined or received under this part by officials of the 
    Department of Agriculture shall be kept confidential to the extent 
    required by law.
    
    
    Secs. 723.101 through 723.504  [Amended]
    
        11. Sections 723.101 through 723.504 are amended by removing 
    ``ASC'' wherever it appears and adding ``FSA'' in its place.
    
        Signed at Washington, DC, on March 3, 1998.
    Keith Kelly,
    Administrator, Farm Service Agency.
    [FR Doc. 98-6060 Filed 3-9-98; 8:45 am]
    BILLING CODE 3410-05-P
    
    
    

Document Information

Effective Date:
3/10/1998
Published:
03/10/1998
Department:
Farm Service Agency
Entry Type:
Rule
Action:
Final rule.
Document Number:
98-6060
Dates:
March 10, 1998.
Pages:
11581-11585 (5 pages)
RINs:
0560-AE96: Amendments to the Tobacco Marketing Quota Regulations
RIN Links:
https://www.federalregister.gov/regulations/0560-AE96/amendments-to-the-tobacco-marketing-quota-regulations
PDF File:
98-6060.pdf
CFR: (11)
7 CFR 723.104
7 CFR 723.210
7 CFR 723.213
7 CFR 723.216
7 CFR 723.309
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