[Federal Register Volume 59, Number 179 (Friday, September 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-22921]
[[Page Unknown]]
[Federal Register: September 16, 1994]
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DEPARTMENT OF AGRICULTURE
7 CFR Part 1468
RIN 0560-AD68
Payment Programs for Shorn Wool, Wool on Unshorn Lambs, and
Mohair (1991-1995)
AGENCY: Commodity Credit Corporation, USDA.
ACTION: Interim rule with request for comments.
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SUMMARY: This interim rule amends the regulations that set forth the
1991-1995 wool and mohair payment programs as authorized by the
National Wool Act of 1954, as amended. This interim rule provides that
in determining net proceeds for shorn wool or mohair, effective for
1993 and subsequent marketing years, marketing charges for commissions,
coring, or grading shall not be deducted. This interim rule removes the
1 percent assessment on 1993, 1994, and 1995 marketings and revises
payment limitation for the 1995 marketing year. The changes
necessitated by the Omnibus Reconciliation Act, enacted August 10,
1993, were effective for the 1993 marketing year beginning January 1,
1993. Since the Act made changes that affect the 1993 and 1994
marketing years which are currently in effect with payments in process,
good cause is shown to make the changes effective immediately without
prior notice and comment. Comments will be received 60 days after the
effective date and be considered when the rule is to be made final.
DATES: Interim rule effective September 16, 1994. Comments must be
received on or before November 15, 1994 in order to be assured
consideration.
ADDRESSES: Submit comments to: Director, Emergency Operations and
Livestock Programs Division, Agricultural Stabilization and
Conservation Service (ASCS), United States Department of Agriculture
(USDA), P.O. Box 2415, Washington, DC 20013-2415.
FOR FURTHER INFORMATION CONTACT: Sharon Diel, Program Specialist,
Emergency Operations and Livestock Programs Division, ASCS, USDA, P.O.
Box 2415, Washington, DC 20013-2415, telephone 202-720-6605.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This interim rule is issued in conformance with Executive Order
12866. Based on information compiled by USDA it has been determined
that this interim rule:
(1) Would have an annual effect on the economy of less than $100
million;
(2) Would not adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities;
(3) Would not create a serious inconsistency or otherwise interfere
with an action taken or planned by another agency;
(4) Would not alter the budgetary impact of entitlement, grants,
user fees, or loan programs or rights and obligations of recipients
thereof; or
(5) Would not raise novel legal or policy issues arising out of
legal mandates, the President's priorities, or principles set forth in
Executive Order 12866.
Environmental Evaluation
It has been determined by an environmental evaluation that this
action will not have a significant impact on the quality of the human
environment. Therefore, neither an Environmental Assessment nor an
Environmental Impact Statement is needed.
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: National Wool Act Payments--10.059.
Executive Order 12778
This interim rule has been reviewed in accordance with Executive
Order 12778. The provisions of this interim rule do not preempt State
laws and are not retroactive to 1992 and prior crop years. Before any
judicial action may be brought regarding the provisions of this
regulation, the administrative appeal provisions set forth at 7 CFR
part 780 must be exhausted.
Executive Order 12372
This program/activity is not subject to the provisions of Executive
Order 12372, which requires intergovernmental consultation with State
and local officials. See notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115 (June 24, 1983).
Paperwork Reduction Act
The amendments to 7 CFR part 1468 set forth in this interim rule
will not result in any change in the public reporting burden or in the
application for payment. Therefore, the information collection
requirements of the Paperwork Reduction Act are not applicable to the
interim rule.
Request for Comments
Comments are requested with respect to this interim rule and such
comments shall be considered in developing the final rule.
Background
The regulations at 7 CFR part 1468 currently set forth the
provisions which are used to administer the wool and mohair programs.
These programs are authorized by the National Wool Act of 1954, as
amended (Wool Act).
The Omnibus Budget Reconciliation Act of 1993 amended the Wool Act
by:
(1) Requiring the Secretary of Agriculture not to deduct marketing
charges for commissions, coring, and grading in determining net sales
proceeds and national payment rates for shorn wool or mohair; and
(2) Revising the payment limitation for wool and mohair producers
for the 1995 marketing year from $125,000 to $100,000.
Also, the Wool Act authorizes the Secretary to deduct a 1 percent
assessment from Wool Act payments made to producers during the 1991 and
1992 marketing years. Such authority has not been renewed. Removing the
1 percent assessment will increase producer's Wool Act payments by the
1 percent that was withheld from the 1991 and 1992 marketing year
payments.
Not deducting marketing charges for commissions, coring, and
grading in determining net sales proceeds and national payment rates
for shorn wool and mohair will reduce total Wool Act payments by a
small amount. Producers who have marketing charges for commissions,
coring, and grading will have their payments increased slightly; but
the national payment rate will be reduced slightly. This action should
encourage more producers to core and grade their wool and mohair to
obtain a higher price for their wool or mohair.
The decrease in the payment limitation for the 1995 marketing year
from $125,000 to $100,000 will reduce payments slightly. The persons
affected by this change would be larger producers who earn over
$100,000 for a marketing year.
The statutory requirement not to deduct marketing charges for
commissions, grading, and coring in determining net sales proceeds
requires a change in definitions. All references to ``net sales
proceeds'' have been changed to ``net proceeds for payment purposes''.
A definition for ``net proceeds for payment purposes'' has been added
in Sec. 1468.3.
Section 1468.3 is amended by adding the definitions for (1)
commission; (2) coring; (3) deductible marketing charges; (4) grading;
(5) gross proceeds; (6) net proceeds; (7) net proceeds for payment
purposes; (8) nondeductible marketing charges; and (9) nonmarketing
charges.
Section 1468.4 is amended to reduce the payment limitation for the
1995 marketing year.
Section 1468.5 is amended to change the reference to net sales
proceeds.
Section 1468.6 is amended to exclude non-deductible marketing
charges in determining net proceeds for payment purposes. Section
1468.6 is also amended to change the reference to net sales proceeds.
Section 1468.8 is amended to exclude non-deductible marketing
charges in determining net proceeds for payment purposes. Section
1468.8 is also amended to change the reference for net sales proceeds,
and to remove the 1 percent assessment.
Section 1468.10 is amended to change the reference for net sales
proceeds.
Section 1468.13 is amended to change the reference for net sales
proceeds.
Section 1468.15 is removed to withdraw the provision for
assessments.
It is necessary that this regulation be placed in effect as soon as
possible. Since the Omnibus Reconciliation Act amendments went into
effect during the 1993 marketing year and assistance in process is
being affected by the statutory changes, these changes need to be
implemented immediately so as to impact the 1993 and 1994 marketing
years. Accordingly, good cause is shown for making this rule effective
without prior public notice and comment. Comments will be reviewed
after the interim rule is effective.
List of Subjects in 7 CFR Part 1468
Grant programs--agriculture, Livestock, Mohair, Reporting and
recordkeeping requirements, Wool.
Accordingly, 7 CFR part 1468 is amended as follows:
PART 1468--WOOL AND MOHAIR
1. The authority citation for 7 CFR part 1468 continues to read as
follows:
Authority: 7 U.S.C. 1781-1787; 15 U.S.C. 714b and 714c.
2. Section 1468.3 is amended to add ``commission,'' ``coring,''
``deductible marketing charges,'' ``grading,'' ``gross proceeds,''
``net proceeds,'' ``net proceeds for payment purposes,''
``nondeductible marketing charges,'' and ``nonmarketing charges''
definitions to read as follows:
Sec. 1468.3 Definitions.
* * * * *
Commission means fees or charges incurred to market shorn wool or
mohair on behalf of the producer. Examples of commissions include
charges for overhead charges, operating expenses, in and out charges,
insurance, advertising, association dues, or assessments.
Coring means obtaining a sample representative of a lot of grease
wool or mohair. The sample is tested for yield, diameter, and vegetable
matter content. The core sample may also be used to measure clean
color.
* * * * *
Deductible marketing charges means service fees or charges paid by
or for the account of the producer that are directly related to
marketing of shorn wool or mohair, such as, but not limited to,
transportation (freight), scouring, and carbonizing and are deducted
from a producer's gross proceeds to determine price support payments.
* * * * *
Grading (sorting and classing) means the grouping of like fleeces
by measurable characteristics, such as fineness, yield, vegetable
matter type and content, length, strength, and color. Skirting is not
considered to be part of the grading process.
* * * * *
Gross proceeds means the amount computed for the seller on a grease
basis before any marketing or nonmarketing charges have been
subtracted.
* * * * *
Net proceeds means the amount paid to the seller after all
marketing and nonmarketing charges have been subtracted.
Net proceeds for payment purposes means proceeds that are
determined by subtracting from the gross proceeds of the wool or mohair
all deductible marketing charges and any amount of nondeductible
marketing charges that exceeds the combined total nondeductible
marketing charges for price support payment established by CCC. This
figure is also used in establishing national payment rates and
individual producer payments.
Nondeductible marketing charges means service fees or charges paid
by or for the account of the producer for commission, grading, and
coring, and are not deducted from a producer's gross proceeds to
determine price support payments. CCC shall determine the combined
total charges for commission, grading, and coring on which price
support payments will be made.
Nonmarketing charges means charges paid by or for the account of
the producer that are not directly related to improving the
marketability of the shorn wool or mohair, such as, but not limited to,
storage, bags, advances, interest on advances, shearing, and
association dues, and are not deducted from the producer's gross
proceeds to determine price support payments.
* * * * *
3. Section 1468.4 is amended by:
A. Revising paragraphs (c)(3) and (c)(4), and
B. Adding paragraph (c)(5) to read as follows:
Sec. 1468.4 Eligibility for payments.
* * * * *
(c) * * *
(3) $150,000 for the 1993 marketing year;
(4) $125,000 for the 1994 marketing year; and
(5) $100,000 for the 1995 marketing year.
* * * * *
4. Section 1468.5 is amended by revising paragraphs (b) and (d) to
read as follows:
Sec. 1468.5 Bona fide marketing within a specified marketing year.
* * * * *
(b) The price utilized for the purpose of computing net proceeds
for payment purposes under the provisions of Sec. 1468.8 shall not
exceed the fair market value of the wool or mohair as determined by
CCC.
* * * * *
(d) The exchange of wool or mohair for merchandise or services of a
nature other than wool or mohair or wool or mohair products will be
considered as a bona fide marketing if a definite price for the wool or
mohair is established by the parties prior to the exchange. Such price,
or whatever other price CCC determines is the fair market value for
such wool or mohair, whichever is lower, shall be used for the purpose
of computing the net proceeds for payment purpose under the provisions
of Sec. 1468.8.
* * * * *
5. Section 1468.6 is amended by revising paragraphs (b)(5) and
(b)(6) to read as follows:
Sec. 1468.6 Contents of sales documents.
* * * * *
(b) * * *
(5) The gross amount paid to the seller on a grease basis.
(6) The net amount paid to the seller after the deduction of all
marketing and nonmarketing charges have been subtracted.
(i) (A) The following is applicable to 1993 and prior marketing
years. Marketing deductions may be itemized or as a composite amount
for all marketing charges with an explanation of what services are
included in that amount. If it is the practice of a marketing agency to
show, on the sales document, only the net proceeds after marketing
deductions, the gross sales proceeds and the amount of the marketing
deductions need not be shown, provided the sales document contains a
statement reading substantially as follows:
``The net proceeds for payment purposes after marketing deductions
shown herein were computed by deducting from the gross proceeds charges
for the following marketing services: -- -- --. Details of these
charges will be furnished on request.''
(B) All services for which deductions are made shall be enumerated
in the blank space indicated. If a sales document shows charges without
specifying their nature, the charges will be considered deductible
marketing charges.
(ii) (A) The following is applicable to 1994 and subsequent
marketing years. Nondeductible marketing charges must be identified
separately from other deductible marketing charges and nonmarketing
charges and the amount of such specified. If commissions, grading, and/
or coring are identified as being included in marketing charges, the
services that are included in commissions and/or grading must be
specified. CCC shall determine the combined total for commission,
grading, and coring charges on which price support payments will be
made. Deductible marketing charges and nonmarketing charges may be
itemized or as a composite amount for all deductible marketing charges
and nonmarketing charges with an explanation of what services are
included in that amount. If it is the practice of a marketing agency to
show only the net proceeds paid to the seller; the gross sales
proceeds, the amount of deductible marketing charges, and nonmarketing
charges need not be shown, provided the sales document contains a
statement reading substantially as follows:
``The net proceeds paid to the seller were computed by subtracting
from the gross sales proceeds all marketing charges and nonmarketing
charges. Deductible marketing charges and nonmarketing charges deducted
from gross proceeds include: -- -- --. Details of these charges will be
furnished on request.''
(B) All the services for which deductions are made shall be
enumerated in the blank space as indicated. If a sales document shows
charges without specifying the nature, the charges will be considered
deductible marketing charges.
(iii) If a sales document contains a figure for net proceeds for
payment purposes, computed for a location other than the producer's
farm, ranch, or local shipping point, the person preparing the sales
document shall show thereon the name of the location for which the net
proceeds for payment purposes have been computed. If a marketing agency
has guaranteed a minimum sales price for the wool or mohair, is unable
to sell the wool or mohair for a higher price, and therefore settles
with the producer on the basis of such guaranteed minimum price, the
sales document shall be on the basis of guaranteed minimum price,
regardless of a lower price at which the agency may sell the wool or
mohair. In such a case, the marketing agency shall indicate on the
sales document that the price is the guaranteed minimum sales price.
* * * * *
6. Section 1468.8 is amended by revising paragraphs (a) and (b) to
read as follows:
Sec. 1468.8 Computation of payment.
(a) (1) The amount of the shorn wool or mohair price support
payment shall be computed by applying the rate of payment to the net
proceeds for payment purposes for the wool or mohair marketed during
the specified marketing year. For shorn wool payments, if there is a
purchase by the producer of unshorn lambs, the resultant amount shall
be reduced, by an amount resulting from multiplying the liveweight at
the time of purchase of such lambs reported in the application for
payment by the calculated wool on shorn lambs price support for such
marketing year. If the amount of the reduction exceeds the payment
computed on the shorn wool marketed, the liveweight of lambs which
corresponds to the excess amount shall be carried forward and used to
reduce payments on unshorn lambs marketed or slaughtered or shorn wool
marketed in the current or subsequent years.
(2) Except as provided in Sec. 1468.6 (b)(6) with respect to a
guaranteed minimum sales price, the net proceeds for payment purposes
for shorn wool and shorn mohair shall be determined by subtracting from
the gross sales proceeds of the shorn wool or mohair all deductible
marketing charges, and any amount of nondeductible marketing charges
that exceed the combined total nondeductible marketing charges for
price support payment established by CCC.
(b) The amount of the price support payment due a producer for wool
on unshorn lambs shall be computed by applying the rate of payment to
the liveweight of the lambs sold or moved to slaughter during the
specified marketing year, reduced, on account of the purchase or
importation by the producer of unshorn lambs, by the liveweight at the
time of purchase or importation of such lambs reported in the
application for payments. If the amount of the reduction exceeds the
liveweight of the unshorn lambs sold or moved to slaughter during said
marketing year, such excess liveweight shall be carried forward and
used to reduce payments on the wool on unshorn lambs marketed or
slaughtered or shorn wool marketed in the current or subsequent years.
* * * * *
7. Section 1468.10 is amended by revising paragraph (a) to read as
follows:
Sec. 1468.10 Preparation of application.
(a) Application for price support payments for shorn wool, shorn
mohair, and wool on unshorn lambs must be submitted by completing Form
CCC-1155, ``Application for Payment (National Wool Act)''. Marketing
agencies may assist producers in filling out applications by inserting
the information on sales of wool and mohair and sending sales documents
to the appropriate county office, but the producer must sign the
application and is responsible for the requirements as to the time and
manner of filing the application. If the producer paid marketing
charges not shown on the sales document, such charges shall be
considered in arriving at the net proceeds for payment purposes.
* * * * *
8. Section 1468.13 is amended by revising paragraph (a) to read as
follows:
Sec. 1468.13 Payment.
(a) Payments under this part shall be made only on the basis of the
net proceeds for payment purposes received for wool or mohair or the
calculated amount of wool grown on unshorn lambs sold or moved to
slaughter. No payment shall be made on that part of any sale which has
been canceled or on the basis of prices or weights which have been
fraudulently increased for the purpose of obtaining higher payments. No
payment shall be made on sales to a wool or mohair growers association,
which is not a cooperative marketing association, by its producer-
members on the basis of net proceeds for payment purposes in excess of
the fair market value of the wool or mohair (grease basis), as
determined by CCC.
* * * * *
Sec. 1468.15 [Removed and reserved]
9. Section 1468.15 is removed and reserved.
Signed at Washington, DC, on September 8, 1994.
Bruce R. Weber,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. 94-22921 Filed 9-15-94; 8:45 am]
BILLING CODE 3410-05-P
