[Federal Register Volume 62, Number 90 (Friday, May 9, 1997)]
[Rules and Regulations]
[Pages 25433-25439]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11788]
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DEPARTMENT OF AGRICULTURE
Farm Service Agency
7 CFR Parts 718 and 729
RIN 0560-AE82
Amendments to the Peanut Poundage Quota Regulations
AGENCY: Farm Service Agency, USDA.
ACTION: Final rule.
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SUMMARY: This final rule adopts, with certain modifications, the
interim rule published in the Federal Register on July 16, 1996 (61 FR
36997), which set forth regulations for Federal farm peanut poundage
quotas. These regulations implement the provisions of the Agricultural
Market Transition Act of 1996 (1996 Act) for the 1996 through 2002
crops of peanuts. The amendments adopted in this final rule principally
involve the following issues: eliminating the national poundage quota
floor; eliminating the undermarketing carryover provisions;
establishing temporary seed quota allocations; establishing the
ineligibility of certain farms for quota allocation; authorizing the
intercounty transfer of farm poundage quotas in all States, subject to
certain limitations in some States; eliminating the special allocations
of increased quotas for certain Texas counties; establishing new
provisions for ``considered produced'' credit with respect to a farm
whose quota has been transferred; and other minor clarifying and
technical changes.
These regulations are required by the Agricultural Adjustment Act
of 1938, as amended (1938 Act). The modifications made in this final
rule to 7 CFR part 729 have been made after consideration of public
comments.
In addition, this rule makes a technical change concerning the
application of special sanctions in connection with certain drug-
related offenses.
EFFECTIVE DATE: This final rule is effective May 9, 1997.
FOR FURTHER INFORMATION CONTACT: David Kincannon, Farm Service Agency,
United States Department of Agriculture, STOP 0514, 1400 Independence
Avenue, SW, Washington, D.C. 20250-2415 or call (202) 720-7914.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This final rule has been determined to be Economically Significant
and was reviewed by the Office of Management and Budget (OMB) under
Executive Order 12866.
The 1996 Act makes at least six important changes to the peanut
program. These changes include the following: (1) elimination of the
minimum quota floor, (2) elimination of undermarketings, (3) provisions
for unlimited and limited transfer of peanut quota by sale or lease
within State in all States, (4) forfeiture of quota for certain
nonproducers, (5) no-net-cost to treasury provisions, and (6) lowering
the quota price support level.
The final rule contains no changes from the interim rule published
in the Federal Register on July 16, 1996 that have any discernible
budget or economic impact. Differences in this cost benefit assessment
and the one prepared for the interim rule reflect new data and
projections.
The economic impacts of the peanut program provisions of the 1996
Act include expected reductions in producers' revenue by $1.25 billion
from 1996 to 2002, while taxpayers are expected to benefit by avoiding
costs of $0.5 billion compared with the FY 1997 baseline. First buyers
benefit from lower prices, part of which will be passed on to
consumers.
Quota lease and capitalized values of quotas are expected to
decline. Quota holders could absorb a loss of about $40 million
annually because of reduced leasing rates due to the lower peanut price
support. Capitalized value of quotas could decline $200 to $300
million, thus reducing land values and the tax base of rural
communities. With increased transferability of quotas under the 1996
Act, the sale and rental market for quotas becomes a State rather than
a county market. Values are reduced in more efficient production areas
and increased in less efficient areas.
[[Page 25434]]
Under no peanut program, producer prices would decline resulting in
gains to first buyers of peanuts of $150 to $160 million annually,
compared with 1996 provisions. Over the 7-year life of the program, the
capitalized gain to first buyers would total about $800 million,
assuming a 10 percent capitalization rate. For additional information
or to request a copy of the cost benefit assessment, contact: Verner N.
Grise at (202) 720-5291.
Executive Order 12988
This final rule has been reviewed in accordance with Executive
Order 12988, Civil Justice Reform. The provisions of this final rule
would not preempt any State or local laws, regulations, or policies,
unless they present an irreconcilable conflict with this rule. Before
any legal action is brought regarding determinations made under the
provisions of 7 CFR part 729, the administrative appeal provisions set
forth at 7 CFR parts 11 and 780 must be exhausted.
Regulatory Flexibility Act
It has been determined that the Regulatory Flexibility Act is not
applicable to this final rule because 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 rulemaking with respect to the subject matter of
this rule.
Paperwork Reduction Act
The regulations set forth in this final rule require a new
information collection instrument, form FSA-377, Register of Tentative
Out of County Peanut Poundage Quota Transfers. The new form necessary
to conduct the peanut poundage quota program has been developed, and a
notice and request for comments for revising a currently approved
information collection was issued in the Federal Register on December
24, 1996 (61 FR 67767), and provided for a 60-day comment period.
Because the information collection is needed before the regular
submission for approval of the information can be submitted to OMB, FSA
has submitted to OMB an addendum to the information collection
requirements, as set forth in 5 CFR 1320.18 for OMB Control Number
0560-0006, and has requested that OMB authorize emergency processing of
the information collection submission.
Environmental Evaluation
It has been determined by an environmental 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.
Unfunded Federal Mandates
This rule contains no Federal mandates under the regulatory
provisions of Title II of the Unfunded Mandate 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.
Small Business Regulatory Enforcement Fairness Act of 1996
To the extent that this rule can be or is considered to be major
under the Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA), it has been determined that, pursuant to section 808 of
SBREFA, that it is impracticable, unnecessary, and contrary to the
public interest to delay the effective date of this rule. That finding
has been made on the basis that such a delay would make it impossible
to make the changes in this rule effective in time for producers with a
substantial interest in production to plant peanuts in a timely fashion
with a proper understanding of the rules for quota distribution and for
forfeitures. Those matters could have a substantial impact on
individual decisions. Different provisions, if needed, can be
implemented for subsequent crop years. Accordingly, this rule is
effective upon publication in the Federal Register.
Federal Assistance Program
The title and number of the Federal Assistance Program, as found in
the Catalog of Federal Domestic Assistance, to which this final rule
applies are: Commodity Loans and Purchases--10.051.
Executive Order 12372
This program 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).
National Appeals Division Rules of Procedure
The procedures set out in 7 CFR parts 11 and 780 apply to appeals
of adverse decisions made under the regulations adopted in this notice.
Background
Title I of the 1996 Act amended the 1938 Act and the Agricultural
Act of 1949, as amended, to provide, for the 1996 through 2002 crops,
for a revised peanut poundage quota and peanut price support program.
The statutory provisions for the peanut poundage quota program
contained in the 1996 Act were described in the supplementary
information section of the interim rule.
Summary of Comments
A total of 42 comments was received in response to the interim rule
published in the Federal Register on July 16, 1996. The comment period
expired on August 15, 1996. The following is a summary, by section, of
the comments received:
Section 729.103--Definition of Preliminary Quota
The interim rule defined ``preliminary quota'' to be that farm's
quota for the previous year unless the quota is subject to a reduction.
There are several statutory provisions calling for reductions for
individual farm quota, one being a provision relating to residency and
the location of the quota, which is addressed elsewhere in the rule.
One comment objected to the references to reductions but since that
reference relates to statutory provisions, it has been determined that
no modification should be made.
Section 729.204--Temporary Seed Quota Allocation
The 1996 Act allowed for providing a quota in an amount equal to
the seed which producers would plant to grow the peanuts and the
interim rule provided for a national per acre seeding allowance with
small variations made to account for peanut type. A total of six
comments addressed this issue. One respondent requested that a
temporary seed quota allocation be allowed for peanut acreage of
``volunteer'' peanuts--that is, peanuts which grow wild and are outside
the area of the farm's planned cultivation of the crop. The statute and
interim rule are clear that the temporary seed quota allocation is to
account for seed peanuts actually planted on the farm. Therefore, no
modification of the interim rule was made to accommodate this
suggestion.
There were five comments about the use of a national seeding rate
and the method of determining the amount of seed allocation. Most
respondents supported the use of a national seeding rate for
determining the amount of seed allocation because it would be less
burdensome than other options. One respondent suggested that temporary
seed allocations be verified by receipts for seed purchased or records
of quota peanuts retained on the farm. No
[[Page 25435]]
modification in the regulation is needed to accommodate this suggestion
at this time. FSA will monitor seed quota allocations through spot
checks to determine whether further action is warranted.
One respondent from Texas suggested that the seeding rate for
Virginia-type peanuts in that area should be 115 pounds per acre rather
than 110 pounds per acre as provided for in the interim rule, and one
respondent from the southeast marketing area suggested the seeding rate
for Runner-type peanuts should be 100 pounds per acre rather than 90
pounds per acre as provided for in the interim rule. The seeding rates
were based on statistical surveys and the best data available at this
time. For that reason, no adjustment has been made in the seed
allocation formula provided for in the interim rule. However, FSA will
continue to monitor seeding rates and review any studies or data which
might indicate a need for seeding rate adjustments.
Section 729.205--Farms Ineligible for Farm Poundage Quota
Provisions of the 1996 Act disallowed quotas for farms that were,
as of the end of the 1996 marketing year (August 1, 1997) or
thereafter, owned or controlled by: (1) A municipality, airport
authority, school, college, refuge or other public entity (other than a
university used for research purposes); or (2) a person who is not a
producer and resides in another State. To implement the nonresidency
provision, the interim rule provided that in the case of corporations
and partnerships the forfeiture would not apply if a person (or
persons) with a 20-percent interest in the entity had their primary
residence in the State where the quota was allocated.
Also, a 3-year grace period was allowed in the interim rule for
involuntary acquisitions by foreclosure or otherwise. Further, for
situations where the ineligible party held the farm prior to August 1,
1997, the rule provided that the quota would be forfeited as of that
date unless there was a sale or transfer of the quota by that date and
to that end the interim rule allowed for the parties to complete the
paperwork by October 1, 1997. The rule effectively allowed the sale of
the future right to the quota to be effective for this purpose rather
than simply limit the sale exemption to sales or transfers of existing,
operational quotas. For farm acquisitions after August 1, 1997, the
rule provided, in accord with the statute, that if an ineligible party
bought the farm, the quota would not be forfeited but no quota would be
established for the farm involved until the ineligibility was corrected
or the quota was sold.
There were 17 comments opposed to the ineligibility of nonresident,
nonproducers and of certain public entities for quota allocation. The
respondents, representing nonresident, nonproducer quota holders and
several resident quota holders opposed this provision on the grounds it
unfairly discriminated based on State of residency. Several suggested
that the provision is unconstitutional. Aside from losing quota,
several expressed concern that the provision adversely impacted the
value of their farm as an inheritance because their heirs were
residents of another State. Most respondents stated that not living in
the State in which the quota was allocated was due to conditions beyond
their control, such as family situations, health or other reasons and
that the State in which a quota holder resided should have no bearing
on a national quota program. One respondent stated that the quota held
by public entities provided a source of peanut quotas for younger
farmers who were just starting to farm.
The ineligibility provisions are statutory and must be enforced.
However, the rules have been amended to provide for corporations and
other specially chartered entities such as estates and limited
partnerships to be considered residents of the place where they are
incorporated or created as well as residents of any State where
individuals with at least a cumulative 20-percent interest in the
entity reside. The incorporation and creation rule replaces the
``primary place of business'' test that was included in the interim
rule and which could have allowed for the maintenance of quotas by
entities with no real tie to the State except for the quota itself.
Also, with respect to defining who is a ``producer'' of peanuts for
purposes of these rules, the final rule provides, as a good faith test,
that the would-be producer must have at least a 15-percent interest in
the quota peanut crop. A lower amount would suggest that the ``risk''
was incidental to other arrangements. Also, after further review of the
statute, the final rule eliminates provisions which would allow for
avoidance of the forfeiture by the sale, by October 1, 1997, of the
future right to the quota. It has been determined (and the rule has
been amended accordingly) that August 1, 1997, should be read as an
absolute deadline in that it appears correct to presume that Congress
did not contemplate sales of a quota to differ from the historical
method of allowing sales only to be made of an existing, established
quota--not future rights to a quota. Presumably, if Congress has
intended or expected otherwise, there would have been some indication
of that intent. On further review, none appears. In special cases of
reliance on the previous rule, the Deputy Administrator may consider
the granting of relief but it is not expected that there will be cases
in which such relief is justified. Otherwise, to avoid forfeiture of
the quota, the owner of an ineligible farm with a 1997 peanut quota
allocation must: (1) Sell the quota prior to August 1, 1997; (2)
beginning with the 1997 crop, produce or share in the production of the
quota peanuts on the farm; or (3) consistent with this rule and prior
to August 1, 1997, establish residency in the State in which the quota
is allocated.
The interim rule provided that schools, colleges and other public
entities were ineligible for quota allocation beginning with the 1998
crop. Upon further review of the 1996 Act, the agency has determined
that the intent of Congress was to allow public universities to hold
the historic research quotas, provided such quotas would continue to be
used for experimental and research purposes. Accordingly,
Sec. 729.205(a)(1) has been amended.
Section 729.214--Transfer of Quota by Sale, Lease, Owner, or Operator
Until the 1996 Act, quotas could not be transferred across county
lines except in States with a small total quota. However, the 1996 Act
allows such transfers in all States up to certain percentages of each
county's quota and all counties with quotas under a certain amount can
have unlimited transfers. Because the demand for transfers could exceed
the limits in some counties, the interim rule allowed for lotteries
(the need for which could decrease as the allowable percentage
increases). The interim rule also noted that the 1996 Act appeared to
grant considered produced credit for any out-of-county transfers, if
the quota was produced or considered produced on the receiving farm.
This, the rule noted, appeared to be different from the rule which the
statute seemed to establish for within-county transfers which appeared
to be to allow considered produced credit only once every three years.
The importance of considered produced credit is that it can help the
transferring farm avoid a loss of quotas under the provisions of the
1938 Act which provide for reducing quotas for nonproduction.
A total of 25 respondents commented on several provisions of the
interim rule applicable to quota transfers. There were 19 respondents
who requested that within-county transfers be treated the same as out-
of-county transfers with
[[Page 25436]]
respect to protecting the quota on the transferring farm if the quota
is produced or considered produced on the receiving farm. One
respondent, a regional peanut growers' association, supported the
interim regulation's treatment of out-of-county transfers.
On further review of this issue, it has been determined that the
interim rule should be amended. The provisions of the 1938 Act which
provide for leasing are those in section 358-1. Section 358-1(a)(1)(D)
provides that for leases under section 358-1 the transferring farm will
receive credit so long as the quota is produced or considered produced
on the receiving farm. It was noted, however, with the interim rule,
that the provisions of section 358-1(b)(4) continue to provide that
where a farm poundage quota was leased to another owner or operator of
a farm within the same county, the transferring farm can receive
considered produced credit for one year in any 3-year base period. On
further review, this appears to be an additional allowance, not a
limitation, since the 358-1(b)(4) credit is not tied to actual
production or planting on the receiving farm and since there is no
actual exclusion of within-county transfers provided for with respect
to the allowance in 358b. Nor is there an inherent conflict given the
special conditions of 358b. Further, the provisions in section 358-
1(b)(3) for removing quotas that are not produced provide that such
reductions shall be made on such fair and equitable basis as the
Secretary determines to be appropriate. It does not appear equitable or
logical to apply a more difficult standard to within-county transfers
in light of the 1996 amendments, nor does there appear to be reason to
believe at this time that such was Congress' intention.
Accordingly, the regulations have been revised as to within-country
transfers. They will receive the same considered produced credit that
is available for out-of-county transfers and, in addition, if they have
not otherwise received considered produced credit on a spring lease in
a 3-year base period, they can receive credit for a transfer for one
year of the 3-year base period for a transfer even if the quota was not
produced or considered produced on the receiving farm.
There were seven comments which addressed the method of
administering the provisions of the 1996 Act with respect to out-of-
county sale and lease limitation. One respondent opposed the lottery in
favor of prorating the amount eligible for out-of-county transfer among
all applicants requesting such transfers. Another respondent favored a
first-come, first-granted method for approving such transfers. Five
respondents were concerned that, in certain counties, the register of
producers requesting to transfer quotas out of county was being filled
with producers who had no intention of effecting such transfers,
thereby decreasing the likelihood that bona fide requests for out-of-
county transfers would be selected in a lottery. Also, in some cases,
producers selected by the lottery were unable to secure an agreement
for an out-of-county transfer, thereby leaving the maximum transfer
percentage unrealized. Suggestions for decreasing the potential for
such a possibility included the following: (1) Permitting only those
having a valid agreement for sale or lease to be registered for the
lottery, (2) allowing alternate selections to transfer if the original
lottery picks chose not to transfer out of county, (3) counting only
the sales or leases actually transferred out of county toward
fulfilling the transfer percentages, and (4) otherwise limiting the
lottery to persons who will actually transfer out of county.
In addition, three respondents stated the view that the intent of
the law to transfer quotas to those actually producing the quota was
being circumvented with the lottery system by the selection of those
who made temporary, out-of-county transfers, thereby displacing those
who wished to effect permanent transfers. Each of these respondents
suggested giving permanent out-of-county transfers priority over
temporary transfers.
To allow more flexibility for handling changing circumstances, the
rule would allow a method other than a lottery to be used. However, for
the immediate crop year, it is expected and planned that a lottery will
be used. Some of the distribution problems should be solved by the
increasing transfer percentage allowed for in the statute. With respect
to permanent transfers, the regulations currently permit priority for
transfer by sale and it is anticipated that, beginning with the 1997
crop of peanuts, such priority will be applied.
The agency does not plan to use a pro rata distribution method as
that would unnecessarily divide up the marketable quota and would
complicate the making of a pre-lottery lease agreement. First-come,
first-served would in this instance induce a new element of uncertainty
and stress with little or no real gain over the current lottery system
and would place some farms at a disadvantage to other farms on grounds
wholly unrelated to the transfer of the quota. As to failed transfers,
the agency plans, effective with the immediate crop year, to provide a
method whereby a transferor who fails to complete the transfer is
replaced in a timely manner by a substitute transferor.
Three respondents supported the interim rule with respect to
prohibiting the transfer to and from the same farm during the same
transfer period. One respondent suggested allowing a permanent transfer
to the farm and a temporary transfer from the farm for the same period.
Another suggested ``easing'' the regulation that prohibits a quota that
is permanently transferred to the farm from being permanently
transferred from the farm for three years.
It appears on further review of the regulations that the rules do
not, as such, forbid a farmer who has recently been the recipient of a
permanent quota transfer from then making, in the same year, a
temporary transfer, by spring lease, to another farm. Rather, such
farms can make those transfers under the same conditions as would apply
if the farm which is the transferring farm in the temporary transfer
had held the quota for a long period of time prior to that transfer.
However, the regulations have been modified to further clarify that a
farm cannot, as far as ``spring leases'' are concerned, receive a quota
by a temporary transfer and then transfer that quota to another farm by
a temporary transfer in the same lease period. That is, the interim
rule is amended to make clear that such ``subleasing'' of quotas is not
permitted.
The provisions of the regulations restricting permanent transfer to
and from a farm are not changed by this rule. However, the rule is
amended to clarify the limitations on permanent transfers to and from
the same farm during the same year. Further, upon review of the
regulations applicable to disposal of a tenant's share of any increased
quota, it was determined that applying permanent transfer limitations
to such tenant's shares would adversely impact the tenant's ability to
sell the quota allocation. Accordingly, the rule is amended to permit
the sale of a tenant's share of increased quota without subjecting
either the transferring farm or the receiving farm to any of the
transfer limitations in part 729.
Section 729.216--National Poundage Quota
One respondent also complained that the Department of Agriculture
(USDA) had not allowed for sufficient comment on the particular quota
set for 1996 following the enactment of the 1996 Act. The rule does not
restrict the time for comment and it is USDA's intent to allow for such
comment as is practicable within the time constraints
[[Page 25437]]
set by Congress for announcing the quota.
Other Changes and Corrections
1. Definitions
The definition of ``farmers stock peanuts'' is revised to specify
that dug peanuts which are not marketed but which are disposed of under
supervision of a representative of FSA will not be considered as
farmers stock peanuts. This modification is intended to arrive at a
more equitable determination of what constitutes actual production for
purposes of determinations to be made under the program regulations.
Also, the definition of ``peanuts'' has been revised to track more
closely with the peanut regulations in 7 CFR part 1446. This should
avoid any possible confusion in the application of terms and rules.
2. Administration
To assist producers who inadvertently fail to meet the final
deadline for transferring quotas, this final rule amends the
regulations to allow the Deputy Administrator to delegate authority to
set guidelines for waivers by the State FSA committees. This action
will expedite producer requests for late-filed transfers and help
assure that available peanuts may be marketed as quota peanuts.
3. Temporary Seed Quota (TSQ)
Upon review of the interim rule with respect to TSQ allocation and
experience gained from the 1996 crop, FSA has determined that a
sanction is needed in instances where the TSQ allocation was based on
an erroneous acreage certification. Accordingly, when the certified
acreage on which the TSQ allocation is made is greater than the acreage
determined by FSA to have been planted to peanuts by more than the
smaller of 2 percent of the certified acreage or 5 acres, a penalty
will be calculated on this difference. When this tolerance is exceeded,
the penalty will be determined by multiplying the difference between
the certified and determined peanut acreage times the applicable per
acre seeding rate used in the calculation of the TSQ times 140 percent
of the applicable per pound quota support rate for the crop year
involved. The authority for this penalty is found in section 358e of
the 1938 Act which allows for penalties for over marketings of quota
peanuts. Since such penalties flow from normal regulations applicable
to the poundage quota system for peanuts, there does not appear to be a
need for new rulemaking on this issue. In addition, in the event of an
erroneous certification within the tolerance allowed by the rule, the
agency may make corrections in the quota for the farm for the following
year and may still assess a penalty in any instances in which such
overreporting is chronic or otherwise found to have been a scheme or
device to defeat the purposes of the program.
The requirement in Sec. 729.214(f)(2)(iii)(A) that 90 percent of
the transferring farm's quota must be planted in order for a fall
transfer to be approved is amended by this rule to clarify that the TSQ
allocation is not included as part of the farm's effective quota with
respect to the 90-percent calculation.
4. Technical Corrections
Section 729.214 contains a reference in paragraph (b)(5)(ii) that
was not changed in the interim rule to reflect that the referenced
paragraph was redesignated from ``(e)'' to ``(f).'' Also, in paragraph
(l) the phrase ``all out-of-county transfers'' was inadvertently
included with owner-to-owner and operator-to-operator transfers. The
adjustment to production history in this paragraph is applicable only
to owner-to-owner and operator-to-operator transfers and, although
there were other changes in the interim rule to bring owner and
operator transfers under the provisions of the new out-of-county
transfer provisions, there was never an intention to adjust the
produced credit for out-of-county transfers not involving owner-to-
owner and operator-to-operator transfers.
Accordingly, this final rule amends Sec. 729.214(b)(5)(ii) to
reflect the correct reference and Sec. 729.214(l) to remove the
reference to ``all out-of-county transfers.''
Modification of Part 718
This rule also makes a correction to provisions of 7 CFR 718.11 as
promulgated in a rule published in the Federal Register on July 18,
1996 (61 FR 37544). That section provides for certain sanctions to
apply in the event that a person is involved in certain drug-related
offenses and is based on a statutory provision which, by its terms,
specifies that the sanctions shall apply to benefits related to
commodity production. Section 718.11(b), as promulgated, only applied
that limitation literally to (b)(1) of that section whereas the
limitation, to matters of commodity production, was intended to apply
to (b)(1) through (b)(3). This rule makes that correction and revises
the provisions of that section to comport more closely with the
language of the statutory provision.
List of Subjects
7 CFR Part 718
Acreage allotments, Authority delegations, Crop insurance
requirement, Drug traffic control, Price support programs.
7 CFR Part 729
Peanuts, Penalties, Poundage quotas, Reporting and recordkeeping
requirements.
For the reasons set out in the preamble, 7 CFR part 718 is amended
and the interim rule for 7 CFR part 729, published in the Federal
Register on July 16, 1996 (61 FR 36997), is adopted as final with
changes as set forth below.
PART 718--PROVISIONS APPLICABLE TO MULTIPLE PROGRAMS
1. The authority citation for 7 CFR part 718 is amended to read as
follows:
Authority: 7 U.S.C. 1373, 1374, 7201 et seq.; 15 U.S.C. 714b and
714c; and 21 U.S.C. 889.
2. Section 718.11 is amended by revising paragraph (b) to read as
follows:
Sec. 718.11 Denial of Benefits.
* * * * *
(b) Any person convicted under Federal or State law of planting,
cultivating, growing, producing, harvesting, or storing a controlled
substance, as defined in 21 CFR part 1308, shall be ineligible for,
with respect to any commodity produced during the same year and the
next succeeding four years:
(1) Any price support loan available in accordance with parts 1446
and 1464 of this title;
(2) Any price support or payment made under the Commodity Credit
Corporation Charter Act;
(3) A farm storage facility loan made under section 4(h) of the
Commodity Credit Corporation Charter Act;
(4) Crop Insurance under the Federal Crop Insurance Act;
(5) A loan made, insured or guaranteed under the Consolidated farm
and Rural Development Act or any other provision of law formerly
administered by the Farmers Home Administration; or
(6) Any payment made under any Act.
* * * * *
PART 729--PEANUTS
3. The authority citation for 7 CFR part 729 continues to read as
follows:
Authority: 7 U.S.C. 1301, 1357 et seq., 1372, 1373, 1375, and
7271.
[[Page 25438]]
4. In Sec. 729.103(b), the definition of ``considered produced
credit'' is amended by redesignating paragraphs (ii) through (v) as
paragraphs (iii) through (vi) respectively, and adding a new paragraph
(b)(ii), and the definitions of ``farmers stock peanuts'' and
``peanuts'' are revised to read as follows:
Sec. 729.103 Definitions.
* * * * *
(b) Terms.
* * * * *
Considered produced credit.* * *
(ii) A peanut poundage quota that was leased and transferred by a
transfer agreement that was filed before August 1 of the current year
to the extent the quota was produced or considered produced on the
receiving farm; provided further, that to the extent that for any base
period a farm receives credit under this paragraph, such farm may not
receive credit under paragraph (iii) of this definition.
* * * * *
Farmers stock peanuts. Picked or threshed peanuts produced in the
United States which have not been changed (except for removal of
foreign material, loose shelled kernels, and excess moisture) from the
condition in which picked or threshed peanuts are customarily marketed
by producers, plus any loose shelled kernels that are removed from
farmers stock peanuts before such farmers stock peanuts are marketed.
* * * * *
Peanuts. All peanuts produced, excluding:
(i) Any peanuts which were not dug;
(ii) Any dug peanuts not picked or threshed which are disposed of
under the direction and supervision of FSA personnel; and
(iii) Green peanuts.
* * * * *
5. Section 729.104 is amended in paragraph (d)(3) by adding a
sentence at the end of the paragraph to read as follows:
Sec. 729.104 Administration.
* * * * *
(d) * * *
(3) * * * Such authority shall include, but not be limited to, the
delegation of the authority to the State FSA committee to, acting in
accordance with such instructions as the Deputy Administrator may
issue, modify deadlines for the filing of transfer of peanut quotas.
6. Section 729.204 is amended by adding a new paragraph (e) at the
end of the section to read as follows:
Sec. 729.204 Temporary seed quota allocation.
* * * * *
(e) Penalty for erroneous certification. If the certified acreage
on which the temporary seed quota allocation is made is greater than
the acreage determined by FSA to be planted to peanuts by more than the
smaller of 2 percent of the certified acreage or 5 acres, the producer
shall be assessed a penalty based on this difference. The penalty
amount shall be calculated by multiplying the difference between the
certified and determined peanut acreage by the applicable per acre
seeding rate used in the calculation of the temporary seed quota by 140
percent of the applicable per pound quota support rate for the crop
year involved. In addition, a commensurate penalty at the same rate may
be assessed in cases within the tolerance allowed by the previous
sentence in any instance in which the variance is determined to be due
to a scheme or device to defeat the purposes of the program, or is
repeated. Further, all errors may in all cases result in a commensurate
diminution of the quota allowed the farm for the following year.
7. Section 729.205 is amended:
a. In paragraph (a)(1) after the word ``entities'' by adding, the
parenthetical phrase ``(other than a university used for research
purposes)'',
b. By revising paragraph (a)(2)(ii), and
c. Redesignating paragraph (c) as paragraph (e), revising paragraph
(b), revising the new redesignated paragraph (e), and adding paragraphs
(c) and (d) to read as follows:
Sec. 729.205 Farms ineligible for farm poundage quota.
(a) Ineligible farms. * * *
(2) * * *
(ii) Whose primary domicile, as determined by FSA, in the case of
any individual is in a State outside the State in which the quota is
allocated or, in the case of an entity, does not qualify under this
section to be considered to be a resident of the State in which the
quota is allocated.
(b) Determination of residency and related rules. (1) For purposes
of administering paragraph (a) of this section, an entity may be
considered a resident of the State in which the quota is located if:
(i) It is determined that a person or persons with at least a
cumulative 20-percent interest in any such entity are individuals whose
primary residence is in the State in which the quota is allocated; or
(ii) As determined appropriate by the Deputy Administrator, the
corporation or other entity, but not a general partnership or an entity
not recognized as a separate and distinct legal entity from its
members, has been created under the laws of the State in which the
quota is allocated.
(2) For purposes of the provisions of (a)(2)(i) of this section, a
person shall not be considered to be a producer of a crop of peanuts
unless such person is at risk for at least 15 percent of the proceeds
from the marketing of the production of the quota at issue.
(c) Exemption for involuntary acquisition. Paragraph (a)(2) of this
section shall not apply to any involuntary acquisition of a farm by
foreclosure, or otherwise, resulting directly from the conduct of a
public business in the State in which the quota is allocated, or an
acquisition resulting directly by reason of a death. The exemption for
involuntary farm acquisitions allowed under the preceding sentence
shall only apply to the establishment of quota in the three crop years
immediately following the date of the involuntary acquisition of the
quota farm.
(d) Applicable crop year. For purposes of applying the rules in
paragraph (a) of this section as they regard production, the
determination of whether paragraph (a)(2) of this section applies shall
be made based on the crop last planted before the date on which the
determination is to be made.
(e) Allocating forfeited quota and sales of quotas subject to
paragraph (a). Except for the exemption for involuntary acquisition in
Sec. 729.205(c), beginning in 1997 any farm poundage quota held on or
after August 1 of 1997 by an ineligible person as determined under
paragraph (a) of this section shall be allocated from the quota farm to
other farms in the same State in accordance with Sec. 729.206 of this
part; provided, however, that if the ineligibility arises solely
because of a purchase of a farm after August 1, 1997, or involves a
quota which is acquired because of the expiration of a CRP contract
after August 1, 1997, the quota shall not be forfeited but may not be
used to market peanuts until the ineligibility is determined by the
county committee to have been removed or the quota is sold to an
eligible farm. Such reallocations shall be made to the extent
practicable but shall take into account those instances in which the
regulations call for an ineligibility for quota allocation rather than
forfeiture of the quota.
8. Section 729.214 is amended:
a. In paragraph (b)(5)(ii) by removing the words ``paragraph (e)''
and adding in its place the words ``paragraph (f)'';
[[Page 25439]]
b. In paragraph (d)(2)(iv) by adding the words ``or other method''
to follow the word ``lot'';
c. In paragraph (e)(1) by removing the words ``result in a
transfer'' and adding the words ``result in a temporary transfer'' in
its place;
d. In paragraph (f)(1)(iii)(A) by adding to the end of the sentence
the words ``prior to adjustment for temporary seed quota allocated to
the farm'';
e. In paragraph (l) by removing the words ``and all out-of-county
transfers''; and
f. By revising paragraphs (f)(3) (i) and (m) to read as follows:
Sec. 729.214 Transfer of quota by sale, lease, owner, or operator.
* * * * *
(f) Other transfer provisions--* * *
(3) Permanent transfer of quota from a farm. * * *
(i) Permanent transfer of quota to the farm. For the amount of
quota purchased or otherwise permanently transferred to the farm in the
current year and during the base period, as adjusted for any increase
or decrease in such quota due to adjustment in the national quota
during the base period, except that a transfer of a tenant's share of
any peanut quota increase shall not be considered for purposes of
determinations made under the provisions of this paragraph.
* * * * *
(m) Considered produced credit. Quota that is leased and
transferred from a farm shall be considered produced on such farm to
the extent of considered produced credit set forth in the definition of
``Considered produced credit'' in Sec. 729.103 of this part.
Signed at Washington, D.C., on April 30, 1997.
Bruce R. Weber,
Acting, Administrator Farm Service Agency.
[FR Doc. 97-11788 Filed 5-8-97; 8:45 am]
BILLING CODE 3410-05-P
