[Federal Register Volume 64, Number 140 (Thursday, July 22, 1999)]
[Proposed Rules]
[Pages 39442-39446]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18434]
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DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1430
RIN 0560-AF41
Dairy Recourse Loan Program for Commercial Dairy Processors
AGENCY: Commodity Credit Corporation, USDA.
ACTION: Proposed rule with request for comments.
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SUMMARY: Beginning on January 1, 2000, the Commodity Credit Corporation
(CCC) will make recourse loans to commercial processors of dairy
products. The regulations currently in effect for this program are
being revised and the public is invited to comment on the regulations
as revised. The proposed rule includes changes that would make recourse
loans available to dairy processors through a central location, as
opposed to in-person applications taken at Farm Service Agency (FSA)
State or county offices, allow the loan collateral to be based on a
rolling, commingled inventory, versus an identity preserved inventory,
and miscellaneous other changes which would provide for a more
customer-friendly program. These changes are based on suggestions from
the dairy processing industry through informal discussions held since
the publication of the interim rule on July 18, 1996 at 61 FR 37616.
DATES: Comments on this rule must be received on or before September 7,
1999 to be assured of consideration. Comments regarding the information
collection requirements of the Paperwork Reduction Act must be received
on or before September 20, 1999 to be assured of consideration.
ADDRESSES: Comments should be sent to Steve P. Gill, Warehouse and
Inventory Division, United States Department of Agriculture (USDA),
FSA, STOP 0553, 1400 Independence Avenue, SW, Washington, DC 20250-0553
or E-mail: [email protected] Persons with disabilities who
require alternative means for communication (braille, large print,
audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600
(voice and TDD).
FOR FURTHER INFORMATION CONTACT: Barry Klein at (202) 720-4647.
SUPPLEMENTARY INFORMATION:
Executive Order 12612
It has been determined that this rule does not have sufficient
Federalism implications to warrant the preparation of a Federalism
Assessment. The provisions contained in this rule will not have a
substantial direct effect on States or their political subdivisions, or
on the distribution of power and responsibilities among various levels
of Government.
Executive Order 12866
The Office of Management and Budget (OMB) has reviewed the proposed
rule and determined the rule to be significant for the purposes of
Executive Order 12866.
Cost-Benefit Assessment
The Commodity Credit Corporation (CCC) of the United States
Department of Agriculture (USDA) proposes to revise the regulations
governing the dairy recourse loan program (7 CFR 1430). This proposed
rule would provide recourse loans to commercial processors of cheddar
cheese, butter, and nonfat dry milk. The borrower would be fully liable
to repay the amount of the loan, not withstanding the value of the
collateral in the event of default. The loan would mature no later than
September 30 of the fiscal year in which the loan is made, but the
collateral may be repledged for a new loan that matures before the end
of the next fiscal year. The program would be primarily conducted
electronically through a central location based on rolling, commingled
collateral and be operated using CCC funds, facilities, and
authorities.
There are currently about 180 plants in 32 States approved for USDA
grading and producing at least one of the products eligible for loans.
Consultations with current lenders suggest that the interest rates
under the program would be attractive to all but the very best
customers that they service. About 170 participants would be expected
to participate with an average loan value of $1.3 million.
The incremental costs have been calculated as initial costs and
annual costs. Initial costs are those one-time costs that would occur
in the first year only. Annual costs are those costs that occur
periodically. The initial incremental cost savings associated with this
rulemaking would be $1.37 million realized by USDA in training and
nonrecurring start-up costs. No incremental capital/start-up costs
would be incurred by participants. The incremental annual costs to
dairy processors would be $3,060, because of increased paperwork that
would be required to become an Approved Dairy Processor (ADP). However,
this would be more than offset by a $1.17-million incremental annual
cost savings because the proposal would allow for the collateralization
of commingled inventory. USDA would realize incremental annual cost
savings of approximately $473,000 due primarily to administrative
savings of centralized processing.
In summary, under the proposed rule, total initial cost savings in
the first year would be $1.37 million. Total recurring annual cost
savings would be $1.65 million.
The benefits of this proposed rule, in addition to the quantifiable
cost savings discussed above, are associated with efficiency and
effectiveness. Streamlining the participatory process, would likely
increase program participation. That is, loan program participants
would benefit from a less burdensome loan application and
administration process. In addition, the commingling of inventory would
allow processors to only have to show in inventory an amount and type
of product equal to that pledged as loan collateral without uniquely
having to identify specific product. USDA would benefit by
administering the loan in a more efficient and effective manner.
USDA, however, is concerned that this program could have a
significant impact on current lenders. More specifically, some banks
that lend to dairy processors may be significantly affected. USDA
requests documented quantifiable cost data on the extent to which their
businesses would be affected.
Copies of the cost benefit assessment may be obtained from Barry
Klein, Inventory Management Branch, Warehouse and Inventory Division,
FSA, USDA, STOP 0553, 1400 Independence Avenue, SW, Washington DC
20250-0553, telephone (202)720-2121.
Executive Order 12988
The rule has been reviewed in accordance with Executive Order
12988. The provisions of this rule preempt State laws to the extent
such laws are inconsistent with the provisions of this rule. The
provisions of this rule are not retroactive. Before any judicial action
may be brought concerning the provisions of this rule, the
administrative remedies must be exhausted.
[[Page 39443]]
Regulatory Flexibility Act
It has been determined that the Regulatory Flexibility Act is not
applicable because CCC is not required by 5 U.S.C. 533 or any other
provision of law to publish a notice of proposed rule making with
respect to the matter of this rule.
Unfunded Mandates 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 UMRA.
Federal Assistance Program
The title and number of the Federal assistance program, as found in
the Catalogue of Federal Domestic Assistance, to which this 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).
Environmental Evaluation
An Environmental Evaluation has been completed. It has been
determined that this action will not have significant adverse effects
on environmental factors such as wildlife habitat, water quality, air
quality, land use, and appearance. Therefore, neither an Environmental
Assessment nor an Environmental Impact Statement is needed.
Paperwork Reduction Act
Title: 7 CFR 1430, Dairy Products
OMB Number: 0560--NEW
Type of Request: Request for approval of a new information
collection.
Abstract: USDA will collect information from loan applicants as the
Secretary may require to ensure the borrower's ability to repay the
loan and to secure the quantity and quality of loan collateral. The
Recourse Loan Program for Commercial Dairy Processors will make
recourse loans available to eligible dairy processors of eligible dairy
products. Once approved, the dairy processor will pledge the commodity
as collateral, and repay the loan principal, plus interest, by the
maturity date. Dairy processors seeking participation in the program
will have to meet minimum requirements by providing information
concerning the organizational, operational, and financial aspects of
the operation, including information that the commodities being pledged
are free and clear of liens, security interests, and other
encumbrances. Applicants must provide a statement indicating that they
will abide by the nondiscrimination and other provisions of the
recourse loan program. Burden calculations have been rounded up to
nearest quarter hour.
Estimate of Respondent Burden: Public reporting burden for the
collection of information is estimated to average .75 hours per
response.
Respondents: Domestic processors of cheese, butter and nonfat dry
milk, who apply for a loan under this program.
Estimated Number of Respondents: 170.
Estimated Number of Responses per Respondent: 2 responses per year.
Estimated Total Annual Burden Hours on Respondents: 255 hours.
In addition to commenting on the substance of the regulation, the
public is invited to comment on the information collection. Proposed
topics include the following: (a) whether the proposed collection of
information is necessary for the proper performance of the functions of
the agency, including whether the information will have practical
utility; (b) the accuracy of the agency's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; or (c) ways to enhance the quality,
utility, and clarity of the information technology. Comments may be
sent to the Desk Officer for Agriculture; Office of Information and
Regulatory Affairs, Office of Management and Budget, Washington, DC
20503, and to Barry Klein, Inventory Management Branch, Warehouse and
Inventory Division, FSA, USDA, STOP 0553, 1400 Independence Avenue, SW,
Washington DC 20250-0553, (202)720-2121.
OMB is required to make a decision concerning the collection of
information contained in this proposed rule between 30 and 60 days
after publication of this document in the Federal Register. Therefore,
a comment to OMB regarding the information collection is most likely to
be considered if OMB receives it within 30 days of the publication.
This does not affect the deadline for the public to comment to the USDA
on the substance of the proposed rule.
All comments to this notice will be summarized and included in the
request for OMB approval. All comments will also become a matter of
public record.
Background
The Federal Agriculture Improvement and Reform Act of 1996,
terminates the Milk Price Support Program as of December 31, 1999, and
institutes a Dairy Recourse Loan Program to begin on January 1, 2000,
to assist processors to manage inventories of eligible dairy products
and ensure a greater degree of price stability for the dairy industry.
The current regulations, found at 7 CFR Part 1430, are being revised
prior to implementation of the program on January 1, 2000, to
facilitate suggestions from several potential users of this program.
The suggestions received centered around the dairy industry's desire
for a program most closely reflecting their traditional way of
receiving financial services. Processors with multi-plant locations
were most concerned with having a centralized location to do business.
All parties were concerned with our requirement to identity-preserve
(IP) the loan collateral, and the problems with re-qualifying for
multiple loans throughout the year. This proposed rule therefore
includes changes that will make recourse loans available to dairy
processors through a central location, as opposed to in-person
applications taken at FSA State or county offices, allow the loan
collateral to be based on a rolling, commingled inventory, versus an
identity preserved inventory, establish a system for pre-approval as an
ADP, and make miscellaneous other changes which would provide for a
more customer-friendly program that reflects common lending practices.
The provisions of 7 U.S.C. 1308c limit the ability of certain
foreign persons to obtain loans on commodities they produce. That
provision applies to this program, but as a practical matter its scope
would appear to be limited to cases where the processor obtaining the
loan is also the party that produced the milk. Rules for the
application of 1308-c appear in 7 CFR part 1400. Further, as provided
for in 31 U.S.C. 3720B the proposed rules provide that persons who are
delinquent on other federal debts will be ineligible for loans under
this program. Also, dairy products, to be eligible for this program,
will have to meet certain quality standards set out in the regulations
and the regulations provide that the loan applicants will have to
provide security for the loans in the form of encumbrances on the
eligible product, future inventories, and proceeds.
The objectives of the Dairy Recourse Loan program are to assist
processors with the management of eligible dairy product inventories
and to assure a
[[Page 39444]]
greater degree of price stability for the dairy industry during the
year. Because of the interest rate at 1 percent above CCC's cost of
borrowing, the number of dairy recourse loan program participants is
estimated to range around 170, a relatively high proportion of those
potentially eligible. There are 180 plants in 32 States approved for
USDA grading and producing at least one of the products eligible for
loans. Only 45 days have been set for comment as that period should
provide sufficient time for comments and will help assure that the
program is implemented in a timely manner. Accordingly, it has been
determined that a longer comment period is unnecessary and contrary to
the public interest.
List of Subjects in 7 CFR Part 1430
Dairy products, Loan programs, Reporting and recordkeeping
requirements.
For the reasons stated in the preamble, the Department of
Agriculture proposes to amend 7 CFR part 1430 as follows:
PART 1430--DAIRY PRODUCTS
1. The authority citation for part 1430 continues to read as
follows:
Authority: 7 U.S.C. 7252; and 15 U.S.C. 714b and 714c.
2. Subpart C is revised to read as follows:
Subpart C--Dairy Recourse Loan Program for Commercial Processors of
Dairy Products
Sec.
1430.400 Applicability.
1430.401 Administration.
1430.402 Definitions.
1430.403 General eligibility rules.
1430.404 Application and recertification process.
1430.405 Approval process.
1460.406 Withdrawal and termination of approval.
1430.407 Interest and loan rates.
1430.408 Product eligibility requirements.
1430.409 Storage facility requirements.
1430.410 Availability, disbursement, priority and maturity of
loans.
1430.411 Loan maintenance.
1430.412 Loan maturity.
1430.413 Loan liquidation.
1430.414 Maintenance and inspection of records.
1430.415 False certification.
1430.416 Reconsideration and appeal.
1430.417 OMB Control Numbers.
Sec. 1430.400 Applicability.
As provided in Sec. 142 of the Federal Agriculture Improvement and
Reform Act of 1996, (7 U.S.C. 7252), this part sets forth the terms and
conditions an Approved Dairy Processor (ADP) must meet to obtain dairy
recourse loans from the Commodity Credit Corporation (CCC) for eligible
dairy products produced after September 30, 1998. An ADP meeting these
terms and conditions may obtain recourse loans for any eligible dairy
product. Additional terms and conditions are set forth in the loan
application and the note and security agreement which an ADP must
execute to receive a loan.
Sec. 1430.401 Administration.
(a) On behalf of CCC, the Farm Service Agency, (FSA) will
administer the provisions of this part under the general direction and
supervision of the FSA Deputy Administrator for Commodity Operations
(DACO).
(b) The DACO or a designee may authorize a waiver or modification
of deadlines and other program requirements in cases where lateness or
failure to meet such other requirements does not adversely affect the
operation of the loan program.
Sec. 1430.402 Definitions.
The definitions set forth in this section shall be applicable for
all purposes of program administration under this subpart.
Appeal means a written request by an ADP asking the next level
reviewing authority to review a decision.
Approved Dairy Processor (ADP) means a dairy processor of eligible
dairy products that is approved by CCC to participate in the dairy
recourse loan program.
Approved storage means storage structure of sound construction, in
good state of repair, not subject to greater than normal risk of fire,
flood or other hazards and adequately equipped to receive, handle,
store, preserve, and deliver the applicable commodity.
Beneficial interest means that the dairy processor retains control,
title, and risk of loss in the eligible dairy products, including the
right to make all decisions regarding the tender of such eligible dairy
product to CCC for loan.
CCC means the Commodity Credit Corporation.
Eligible dairy products means Cheddar cheese of acceptable quality,
U.S. Grade A, or higher, not to exceed 38.5 percent moisture; butter of
acceptable quality, U.S. Grade A, or higher, and nonfat dry milk of
acceptable quality, U.S. Extra Grade, not to exceed 3.5 percent
moisture. Only dairy products processed exclusively from milk produced
in the United States shall be eligible for loan.
Final decision means the program decision rendered by the DACO upon
written request of the ADP. A decision that is otherwise final shall
remain final unless the decision is timely appealed to the National
Appeals Division.
Fiscal year means the 12-month period from October 1 through
September 30.
FSA means the Farm Service Agency, USDA.
Inventory means a rolling, commingled inventory of the same
quantity and quality as those dairy products originally put up as
collateral to acquire the recourse loan.
Loan maturity date means September 30 of the fiscal year in which
the loan was granted.
Loan process means the method by which application is made by a
dairy processor requesting ADP status; ADP requests a dairy recourse
loan; and CCC administers the loan program.
Loan rate means the applicable rate announced by the Secretary,
prior to January 1, 2000, and prior to October 1 in each of the
following years, at which loans will be offered for Cheddar cheese,
butter, and nonfat dry milk, which shall, as determined by the
Secretary, reflect a milk equivalent value of $9.90 per hundredweight
of milk containing 3.67 percent butterfat.
Note and security agreement means a promissory note and financing
statement setting forth the specific terms and conditions of an
approved loan.
Recourse loan means a loan that requires repayment of the full
amount of principal and interest.
USDA means the United States Department of Agriculture.
Sec. 1430.403 General eligibility rules.
For a dairy processor to obtain ADP status to participate in a
dairy recourse loan program, a dairy processor must do all of the
following:
(a) Submit a completed application indicating commodities for which
it seeks approval;
(b) Have beneficial interest in the commodity that is tendered to
CCC for a loan and for the duration of the loan;
(c) Furnish CCC such certification as CCC considers necessary to
verify compliance with quantitative limitations;
(d) Provide eligible dairy products to CCC free and clear of liens
or encumbrances, or, if approved by CCC, waivers of those liens and
encumbrances; and
(e) Provide documentation to CCC, as requested, that the dairy
processor is a:
(1) Citizen of, or legal resident alien in, the United States; or
(2) Farm cooperative, private domestic corporation, partnership, or
joint operation in which a majority interest is held by members,
stockholders, or partners who are
[[Page 39445]]
citizens of, or legal resident aliens, in the United States.
Sec. 1430.404 Application and recertification process.
(a) A dairy processor must submit an application package for
approval to CCC in order to gain ADP status to participate in the dairy
recourse loan program. An application package must include, unless
otherwise approved by CCC:
(1) A completed application for status as an ADP; and
(2) A balance sheet and any supporting notes and schedules
requested by CCC , dated within the last year, prepared for the dairy
processor that:
(i) is accompanied by a letter from an independent Certified Public
Accountant, certifying that the balance sheet was prepared in
accordance with generally accepted accounting principles;
(ii) shows satisfactory levels of solvency and liquidity, as
determined by CCC;
(iii) is evidence of resolutions made by the dairy processor
stating that it will abide by provisions of this part and other related
CCC policies; and
(iv) includes other information as requested by CCC concerning the
organizational, operational, financial or any other aspect of the dairy
processor requested by CCC related to the dairy processor's proposed
methods of conducting CCC loan business.
(b) An ADP must fulfill all requirements of Sec. 1430.404(a) each
fiscal year.
(c) An ADP shall furnish information to CCC within 30 calendar days
relating to any:
(1) Change to the ADP's name, address, phone number, or related
data shown on the Application for Approval of Approved Dairy Processor;
and
(2) Additional information CCC may request related to the ADP's
continued approval.
Sec. 1430.405 Approval process.
(a) CCC shall, in accordance with the provisions of this subpart,
determine the eligibility of a dairy processor seeking to participate
in the dairy recourse loan program.
(b) Once approved, an ADP is eligible to participate in the program
unless and until approval is suspended or terminated by CCC so long as
all eligibility criteria continue to be met. There shall be an
affirmative duty to notify CCC of all material changes in the ADP's
circumstances or operations.
Sec. 1430.406 Withdrawal and termination of approval.
(a) CCC may withdraw its approval of an ADP and preclude an ADP
from obtaining loans when CCC determines the ADP has not:
(1) Operated according to the ADP's application for approval or its
last recertification submission;
(2) Complied with applicable regulations;
(3) Corrected deficiencies of the ADP's operation as noted by CCC;
or
(4) Complied with any of its agreements with CCC.
(b) An ADP whose approval has been withdrawn may be reinstated when
CCC determines the ADP has complied with all requirements for approval.
(c) CCC may terminate an ADP's approval at any time by giving the
ADP written notice of the termination.
(d) An ADP may make a written request for CCC to voluntarily
terminate its participation in the loan program when ADP does not have
any dairy recourse loans outstanding.
Sec. 1430.407 Interest and loan rates.
(a) Interest that accrues with respect to a loan shall be
determined in accordance with part 1405 of this chapter.
(b) In the event of default by an ADP, interest shall continue to
accrue with additional penalties as provided by statute being assessed.
(c) The Secretary will announce before January 1, 2000, and
thereafter, before October 1 of each fiscal year, the loan rates for
Cheddar cheese, butter, and nonfat dry milk based on a milk equivalent
value of $9.90 per hundredweight of milk containing 3.67 percent
butterfat or based on other such prices as may be required by law.
Sec. 1430.408 Product eligibility requirements.
(a) An eligible ADP is eligible for a recourse loan on eligible
dairy products it owns subject to the following additional
requirements:
(1) The total quantity of eligible dairy product which an ADP may
pledge for loan is the amount in inventory not to exceed the quantity
processed by the ADP during the previous or current fiscal year in
which the loan request is made; and
(2) The eligible dairy products must be processed exclusively from
domestically-produced milk and milk products;
(b) Eligible dairy products pledged as collateral must be free of
any contamination by either natural or manmade substances, must not
contain chemicals or other substances which are poisonous or harmful to
humans or animals and must meet such other quality standards as may be
set by CCC.
Sec. 1430.409 Storage facility requirements.
(a) Eligible dairy products will be stored in approved storage
facility as defined in Sec. 1430.402.
(b) CCC shall at any time, have the right to inspect loan
collateral and the storage facilities in which the loan collateral is
stored.
Sec. 1430.410 Availability, disbursement, priority and maturity of
loans.
(a) No loan proceeds may be disbursed for dairy products until they
have actually been produced and are determined by CCC to be eligible to
be pledged as loan collateral.
(b) To obtain a recourse loan on eligible dairy products, an ADP
must:
(1) File such loan application request as CCC prescribes;
(2) Execute a note and security agreement as CCC prescribes;
(3) Be responsible for all costs incurred in moving eligible dairy
products to an approved storage facility, if moving is necessary; and
(c) Delinquent Federal debtors shall be ineligible for dairy
recourse loans under this part.
(d) The security interests obtained by the CCC as a result of the
execution of a security agreement by an ADP shall be superior to all
statutory and common law liens on the collateral.
(e) The regulations the Secretary issues governing offsets and
withholding set forth as part 3 of this title and part 1403 of this
chapter are applicable to the program set forth in this subpart.
Likewise, the provisions of part 1400 of this chapter relating to the
eligibility of foreign persons for certain benefits apply to this
program and can affect an ADP's eligibility for loans.
(f) CCC shall file a security interest in the loan collateral, and
the dairy processor shall grant CCC a security interest in the loan
collateral, future inventory and any proceeds obtained from the sale of
the dairy products.
(g) Loans will mature on, and must be satisfied by September 30,
unless the loan is extended by the Secretary for an additional period.
Sec. 1430.411 Loan maintenance.
(a) The ADP shall:
(1) Abide by the terms and conditions of the loan application and
the note and security agreement;
(2) Be responsible for storage costs through loan maturity; and
(3) Be responsible for maintaining the quality and quantity of the
loan collateral through date of repayment
[[Page 39446]]
and reimburse CCC for loss in quantity or quality of the loan
collateral.
(b) If CCC determines that the actual eligible quantity serving as
collateral for a recourse loan is less than the loan quantity because
of incorrect certification by the ADP or unauthorized removal, CCC may
charge liquidated damages and/or call all loans of the ADP. In such
cases, the approval of an ADP for future loans shall be withdrawn and
current loan shall be considered due and owing.
(c) ADP may, at any time before maturity of the loan, redeem all or
any part of the loan collateral by paying CCC the loan principal plus
interest applicable to the quantity of dairy product redeemed.
Sec. 1430.412 Loan maturity.
(a) ADP must pay CCC the principal plus interest due and redeem his
collateral no later than the loan maturity date.
(b) CCC may, on demand, call all outstanding CCC loans made to an
ADP whose approval has been withdrawn or terminated. When loans are
called, CCC will provide at least 10 calendar days written notice to
the ADP. Dairy recourse loans must be repaid by the date specified by
CCC. If redemption is not made by the date specified, title to the
encumbered commodity shall vest in CCC and CCC shall have no obligation
to pay the commodity's market value above the principal amount of such
loans. Any deficiency that remains after the disposition of the
collateral shall continue to be a debt of the ADP and may be collected
in any manner allowed by law.
(c) CCC may at any time accelerate the date of repayment of the
loan indebtedness, including interest. CCC will give the ADP notice of
such acceleration at least 15 days in advance of the accelerated loan
maturity date.
Sec. 1430.413 Loan liquidation.
(a) If an ADP does not pay to CCC the total amount due in
accordance with the terms of the loan, late payment charges in addition
to interest on the ADP's indebtedness shall accrue at the rate
specified in part 1403 of this chapter and shall accrue until the debt
is paid.
(b) Upon notice:
(1) CCC may, with or without removing the collateral from storage,
sell such collateral at either a public or private sale; or
(2) the ADP must deliver loan collateral in or to a CCC-approved
storage facility at the expense of the ADP, provided further that for
these purposes:
(i) CCC-approved storage will include only those storage facilities
which:
(A) Meet CCC standards for Approval of Dry and Cold Storage
Warehouses for Processed Agricultural Commodities, Extracted Honey, and
Bulk Oils (part 1423 of this chapter); and
(B) Have entered into a storage contract with CCC.
(ii) If the eligible dairy product is delivered in or to an
ineligible storage facility, the ADP shall be responsible for all costs
incurred in moving the eligible dairy products to a CCC-approved
storage facility.
(c) If the proceeds from CCC sale of collateral are:
(1) Less than the amount of principal, interest, and any other
expenses incurred by the CCC then the ADP is liable for the deficiency;
or
(2) Greater than the amount of principal, interest, and any other
expenses incurred by the CCC then the amount in excess shall be paid to
the processor or, if applicable, to any secured creditor of the
processor.
(d) CCC shall at all times, have the right to inspect CCC-owned
eligible dairy products and the storage facilities in which the
eligible dairy product is stored.
(e) Regardless of whether CCC inspected the eligible dairy product
or storage facility, the ADP is liable to CCC for any damages or loss
CCC suffers if CCC does not recover the full value of the principal and
interest on the loan, plus any incidental expenses incurred.
Sec. 1430.414 Maintenance and inspection of records.
CCC, as well as any other U.S. Government agency, shall have the
right of access to the premises of the ADP in order to inspect,
examine, and make copies of the books, records, accounts, and other
written data as the examining agency deems necessary to verify
compliance with the requirements of this subpart. Such books, records,
accounts, and other written data shall be retained by the ADP for not
less than 3 years from the loan disbursement date. Destruction of
records after such time shall be at the ADP's own risk.
Sec. 1430.415 False certification.
Any ADP making a false certification will subject the ADP and the
principal making such certification, to liability or prosecution under
any applicable federal civil and criminal statutes. This remedy shall
be in addition to all others that may apply.
Sec. 1430.416 Reconsideration and appeal.
(a) An ADP may seek reconsideration of a decision made under this
subpart by filing a written request for reconsideration with USDA, FSA,
Deputy Administrator for Commodity Operations, STOP 0550, 1400
Independence Avenue, SW, Washington, DC, 20250-0550. The request should
state the basis upon which the ADP relies to show that:
(1) The decision was not proper and not made in accordance with
applicable program regulations; or
(2) All material facts were not properly considered in such
decision.
(b) A request for reconsideration of a decision shall be filed
within 30 days after written notice of the decision which is the
subject of the request is mailed or otherwise made available to the
ADP. A request for reconsideration shall be considered to have been
timely filed if postmarked or privately mailed within 30 days of the
decision. A party seeking review of a decision may, at the discretion
of the Deputy Administrator, be granted an additional 30 days in which
to file a request for reconsideration if requested within 30 days of
the decision. A decision shall become final and nonreviewable unless
reconsideration is timely sought.
(c) A request for reconsideration may be accepted and acted upon
even though it is not filed within the time prescribed in paragraph (b)
of this section if, in the judgment of the Deputy Administrator, the
circumstances warrant such action.
(d) Subject to the remedies provided above and the provisions of
part 11 of this chapter, an ADP may appeal a final decision and request
review of determinations made under this subpart by filing a written
request for appeal with USDA, National Appeals Division, STOP 7000,
1400 Independence Avenue, SW, Washington, DC 20250-7000. See part 780
of this title.
Sec. 1430.417 OMB control numbers.
The information collection requirements for these regulations have
been submitted to OMB for approval.
Signed at Washington, DC, on July 13, 1999.
Parks Shackleford,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. 99-18434 Filed 7-21-99; 8:45 am]
BILLING CODE 3410-05-P
