[Federal Register Volume 59, Number 88 (Monday, May 9, 1994)]
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From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11016]
Federal Register / Vol. 59, No. 88 / Monday, May 9, 1994 /
[[Page Unknown]]
[Federal Register: May 9, 1994]
VOL. 59, NO. 88
Monday, May 9, 1994
DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1434
RIN 0560-AD73
General Price Support Regulations for Honey
AGENCY: Commodity Credit Corporation, USDA.
ACTION: Interim rule with request for comments.
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SUMMARY: This interim rule amends the regulations with respect to the
Honey Price Support Loan Program which is conducted by the Commodity
Credit Corporation (CCC) in accordance with section 207 of the
Agricultural Act of 1949, as amended (the 1949 Act). The amendments
made by this interim rule will provide price support loan rates for
1991 and subsequent crop years; revise the limitation on the total
amount of payments a producer may receive; revise the provisions of the
honey marketing assessment; lessen the administrative actions CCC
imposes on producers who violate the loan and loan deficiency payment
(LDP) agreements; provide more authority to State and county committees
in administering the program; eliminate obsolete provisions, and
incorporate the provisions of the Agriculture, Rural Development, Food
and Drug Administration, and Related Agencies Appropriations Act, 1994
and the Omnibus Budget Reconciliation Act of 1993.
DATES: Interim rule effective May 9, 1994. Comments must be received on
or before June 8, 1994 in order to be assured of consideration.
ADDRESSES: Submit comments to Director, Cotton, Grain, and Rice Price
Support Division, Agricultural Stabilization and Conservation Service
(ASCS), United States Department of Agriculture (USDA), P.O. Box 2415,
Washington, DC 20013-2415; telephone 202-720-7641. Comments received
may be inspected between 9 a.m. and 4:30 p.m., Monday through Friday,
except holidays, in room 3623, South Agriculture Building, USDA, 14th
Street and Independence Avenue, Washington, DC.
FOR FURTHER INFORMATION CONTACT: James Tegeler, Program Specialist,
Cotton, Grain, and Rice Price Support Division, ASCS, USDA, P.O. Box
2415, Washington, DC 20013-2415; telephone 202-720-3110.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be significant for purposes of
Executive Order 12866 and has been reviewed by OMB.
Federal Assistance Program
The title and number of the Federal Assistance Program, as found
in the Catalog of Federal Domestic Assistance, to which this rule
applies are Commodity Loans and Purchases--10.051.
Regulatory Flexibility Act
It has been determined that the Regulatory Flexibility Act is not
applicable because the CCC 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 these determinations.
Environmental Evaluation
It has been determined by an environmental evaluation that this
action will have no significant impact on the quality of human
environment.
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).
Executive Order 12778
This interim rule has been reviewed pursuant to Executive Order
12788. To the extent State and local laws are in conflict with these
regulatory provisions, it is the intent of CCC that the terms of the
regulations prevail. The provisions of this interim rule are not
retroactive. Prior to any judicial action in a court of competent
jurisdiction, administrative review under 7 CFR part 780 must be
exhausted.
Paperwork Reduction Act
Public reporting burden for the information collections contained
in this regulation with respect to price support programs is estimated
to average 15 minutes per response, including time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collections of information. The information collections have previously
been cleared under the current regulations by the Office of Management
and Budget (OMB), and assigned OMB Nos. 0560-0087 and 0560-0129.
Comments
Since producers are currently making decisions regarding honey
which may be pledged as collateral for CCC price support loans, it has
been determined that it is impractical and contrary to the public
interest for CCC to comply with any further rulemaking requirements
with respect to amending the eligibility requirements. Accordingly, the
provisions of this interim rule are effective upon publication in the
Federal Register. Comments are requested, however, and will be taken
into consideration when developing the final rule. This interim rule
will be scheduled for review so that a final document discussing
comments received and any amendments required can be published in the
Federal Register as soon as possible.
Background
The 1949 Act sets forth the statutory authority for CCC price
support programs. CCC price support programs are intended to stabilize
market prices and provide interim financing and assistance to producers
in the orderly marketing of eligible commodities. Section 207 of the
1949 Act was amended by the Omnibus Budget Reconciliation Act of 1993,
Public Law 103-66 (Budget Act). In addition, the Agriculture, Rural
Development, Food and Drug Administration, and Related Agencies
Appropriations Act, 1994, Public Law 103-111 (Appropriations Act)
provides special provisions that affect the operation of the honey
price support program in fiscal year 1994. This interim rule amends the
regulations for the price support program for honey to reflect these
legislative changes. In addition, this interim rule amends the
regulations to provide more authority to State and county committees in
administering the programs, lessen the administrative actions CCC
imposes on producers who violate the loan and LDP agreements, and make
minor changes for the correction of errors and omissions as specified
herein.
The Budget Act amended the 1949 Act to:
(1) Provide price support loan rates for the crop years 1991
through 1998;
(2) Eliminate the marketing assessment for the 1994 and subsequent
crops of honey; and
(3) Limit the total amount of payments that a person may receive.
The Appropriations Act provides that no funds made available by
that Act may be used to support the price of honey which results in the
following:
(1) Elimination of payments to producers during the 1994 fiscal
year for the 1994 crop of honey; and
(2) Limiting the amount of forfeitures of 1994-crop honey loan
collateral during 1994 fiscal year to support the price of honey to
zero pounds of honey.
Accordingly, this interim rule amends: (1) Sections 1434.1(a),
1434.25(a)(1) and 1434.27(c)(3) to exclude, for the 1994 fiscal year
for the 1994 crop year of honey, the provisions that allow a producer
to:
(a) Repay a loan at less than the principal loan amount plus
charges and interest;
(b) Request and obtain a LDP by agreeing to forego a loan on that
quantity of honey; and
(c) Deliver the quantity of honey pledged as collateral for loan to
CCC in settlement for such loan;
(2) Section 1434.6(b) to incorporate the price support loan rates;
(3) Section 1434.7 to add paragraphs (c)(1) and (c)(2) which were
inadvertently omitted in the CCC final rule published on November 4,
1993, (58 FR 58739);
(4) Section 1434.13(b) to update the provisions of the marketing
assessment for honey to specify that such assessment applies only to
the 1991 through 1993 crops of honey;
(5) Section 1434.14 by removing and reserving the section because
administrative offsets are currently provided in part 3 of this title
and part 1403 of this chapter;
(6) Section 1434.16(a)(1) to correct the title of Form CCC-666 LDP;
(7) Section 1434.17 to revise the provisions of the payment
limitation to specify such limitation for the 1994 through 1998 crop
years; and
(8) Section 1434.27(c) by adding paragraph (3) to provide that if
the amount of the loan indebtedness for 1994-crop year loan during the
1994 fiscal year is not repaid and CCC forecloses on the honey in
accordance with Sec. 1434.28, the settlement value of the honey shall
be determined by CCC to be the proceeds received as a result of the
sale of such honey.
In addition to the amendments provided by the Budget Act and
Appropriations Act, the following regulatory revisions are intended to
make the price support program for honey more user friendly.
Producers who violate the loan note and security agreement by
moving farm-stored loan collateral from the structure designated for
the storage of such loan collateral, without prior written consent of
the county committee, are subject to liquidated damages. In some cases,
collateral is moved to other structures on the farm which makes it
possible for CCC to perfect its security on such collateral. CCC has
determined that when such security can be established, producers should
not be subject to such liquidated damages. Accordingly, this interim
rule amends Sec. 1434.23(b)(2) to clarify that unauthorized removal
only includes cases where CCC cannot obtain the first lien on the
collateral.
It is difficult to prove the amount of damages to CCC for loan and
LDP violations committed by producers; however, 20 and 50 percent of
the loan and LDP rates, as applicable, were established for first and
second offenses, respectively, when the county committee determined
that the producer acted in good faith. CCC has determined that the
liquidated damages can be reduced without affecting the administration
of the loan and LDP programs. Accordingly, this interim rule amends
Sec. 1434.23 to: (a) Decrease the liquidated damages amounts; and (b)
add paragraph (k) to provide that any or all of the liquidated damages
may be waived under certain conditions.
In addition, under certain conditions, producers who violated loan
and LDP provisions may be denied loans and LDP's on commodities stored
on the farm. CCC has determined that this penalty is severe and should
only be assessed when the county committee determines that such action
is necessary to protect the interest of CCC. Accordingly, in
Sec. 1434.23, paragraphs (d)(2)(i), (d)(2)(ii), and (e) have been
amended to remove the requirement for denial of farm-stored loans or
LDP's.
In addition, in Sec. 1434.23, paragraphs (a)(2), (a)(3), and (c),
and in Sec. 1434.26, paragraph (b)(3) have been amended to delete the
references to Forms CCC-700 and CCC-701 and include the Form CCC-666
LDP.
This interim rule amends Sec. 1434.24 by adding paragraph (f) to
provide if a producer moves honey from storage without prior approval
on a nonworkday, the producer will not be subject to administrative
actions providing the producer notifies the county office on the next
workday that the honey has been moved and such movement is approved by
CCC.
List of Subjects in 7 CFR Part 1434
Honey, Loan programs/agriculture, Price support programs, Reporting
and recordkeeping requirements, Warehouses.
Accordingly, 7 CFR part 1434 is amended as follows:
PART 1434--HONEY
1. The authority citation for 7 CFR part 1434 continues to read as
follows:
Authority: 7 U.S.C. 1421, 1423, 1425a, 1446h, 4601 et seq; 15
U.S.C. 714b and 714c.
2. Section 1434.1 is amended by revising paragraph (a) to read as
follows:
Sec. 1434.1 Applicability.
(a) The regulations of this part are applicable to the 1991 and
subsequent crops of extracted honey, except that
Secs. 1434.24(a)(2)(ii), (e)(1)(ii), and (e)(2); 1434.25(a)(2);
1434.26; and 1434.27 are not applicable for the 1994 crop in fiscal
year 1994. These regulations set forth the terms and conditions under
which price support loans shall be entered into and loan deficiency
payments made by the Commodity Credit Corporation (CCC). Additional
terms and conditions are set forth in the note and security agreement
or the loan deficiency payment application which must be executed by a
producer in order to receive a price support loan or loan deficiency
payment. Purchase agreements shall not be offered for the 1991 and
subsequent crops of honey.
* * * * *
3. Section 1434.6 is amended by revising paragraph (b) to read as
follows:
Sec. 1434.6 Availability, disbursement, and maturity.
* * * * *
(b) Price support loans at a national average price support rate of
53.8 cents per pound for 1991 through 1993; 50 cents per pound for 1994
and 1995; 49 cents per pound for 1996; 48 cents per pound for 1997; and
47 cents per pound for 1998 crops of honey are available to producers
as soon as announced by CCC, but not earlier than April 1 of the year
in which the honey is produced and extracted and not later than March
31 of the year following the year in which the honey is produced and
extracted. However, whenever the final date of availability falls on a
nonworkday for county offices, the applicable final date shall be
extended to include the next workday. Price support loans mature on
demand but not later than the last day of the ninth calendar month
following the month in which the loan application is approved. However,
when the final date of maturity falls on a nonworkday for county
offices the final date shall be extended to include the next workday.
* * * * *
4. Section 1434.7 is amended by adding paragraphs (c)(1) and (c)(2)
to read as follows:
Sec. 1434.7 Eligible honey.
* * * * *
(c) * * *
(1) The 5-gallon containers must hold approximately 60 pounds of
honey and shall be new, clean, sound, uncased, and free from
appreciable dents and rust. The handle of each container must be firm
and strong enough to permit carrying the filled container. The cover
and can opening must not be damaged in any way that will prevent a
tight seal. Cans which are punctured or have been punctured and
resealed by soldering will not be acceptable.
(2) Steel drums must be open-end type and filled no closer than 2
inches from the top of the drums. In addition, such drums must be new
or must be used drums which have been reconditioned inside and outside.
Drums must:
(i) Be clean,
(ii) Be treated inside and outside to prevent rusting,
(iii) Be fitted with gaskets which provide a tight seal, and
(iv) Have an inside coating suitable for honey storage.
* * * * *
5. Section 1434.13 is amended by revising paragraph (b) to read as
follows:
Sec. 1434.13 Fees, charges and interest.
* * * * *
(b) Effective only for each of the 1991 through 1993 crops of
honey, producers and producer-packers of honey as defined in paragraphs
(5) and (9), respectively, of section 3 of the Honey Research,
Promotion, and Consumer Information Act (7 U.S.C. 4602) shall remit to
CCC a nonrefundable marketing assessment. Such marketing assessment
shall be computed by multiplying an amount equal to one percent of the
national average price support loan rate by the loan quantity of the
crop. The assessment shall be collected from the loan deficiency
payments and loan proceeds for the crop of honey. However, producers
exempt from the payment of the honey research and promotion fee as
provided in paragraph (e) of this section are also exempt from this
marketing assessment.
* * * * *
Sec. 1434.14 [Removed and Reserved]
6. Section 1434.14 is removed and reserved.
7. Section 1434.16 is amended by revising paragraph (a)(1) to read
as follows:
Sec. 1436.16 Determination of quality.
(a)(1) Loans and loan deficiency payments on farm-stored honey will
be made on the basis of the floral source and color of the honey as
declared and certified by the producer on Form CCC-666 (Honey), Honey
Loan Certification and Worksheet for loans, and Form CCC-666 LDP, Loan
Deficiency Payment Application and Certification for loan deficiency
payments, at the time the honey is either pledged as collateral for a
loan or the loan deficiency payment application is made. The producer
is also required to declare and certify on Form CCC-666 (Honey) or Form
CCC-666 LDP the color and class (table or nontable) of the honey at the
time the honey is pledged as collateral for a loan or at the time the
loan deficiency payment application is made.
* * * * *
8. Section 1434.17 is amended by:
A. Revising paragraphs (a)(3) and (a)(4), and
B. Adding paragraphs (a)(5), (a)(6), and (a)(7) to read as follows:
Sec. 1434.17 Payment and forfeiture limitations.
(a) * * *
(3) $150,000 in the 1993 crop year;
(4) $125,000 in the 1994 crop year;
(5) $100,000 in the 1995 crop year;
(6) $75,000 in the 1996 crop year; and
(7) $50,000 in each of the 1997 and 1998 crop years.
* * * * *
9. Section 1434.23 is amended by:
A. Revising paragraphs (a)(2), (a)(3), (b)(1), (b)(2), and (c),
B. Revising introductory text to paragraph (d),
C. Revising paragraph (d)(2),
D. Revising paragraph (e), and
E. Adding paragraph (k) to read as follows:
Sec. 1434.23 Incorrect certification, unauthorized removal and
unauthorized disposition.
(a) * * *
(2) When signing Form CCC-666 LDP, Loan Deficiency Payment
Application and Certification that the producer will not provide an
incorrect certification of the quantity or make any fraudulent
representation for loan deficiency payment purposes.
(3) That violation of the terms and conditions of the Form CCC-677
or Form CCC-666 LDP, as applicable, will cause harm or damage to CCC in
that funds may be disbursed to the producer for a quantity which is not
actually in existence or for a quantity on which the producer is not
eligible.
(b) * * *
(1) Incorrect certification is the certifying of a quantity of a
commodity for the purpose of obtaining a commodity loan or a loan
deficiency payment in excess of the quantity eligible for such loan or
loan deficiency payment or the making of any fraudulent representation
with respect to obtaining loans or loan deficiency payments.
(2) Unauthorized removal is the movement of any farm-stored loan
quantity from the storage structure in which the commodity was stored
or structures which were designated when the loan was approved to any
other storage structure whether or not such structure is located on the
producer's farm without prior written authorization from the county
committee in accordance with Sec. 1434.24, if the movement of loan
collateral prevents CCC from obtaining the first lien on such
collateral.
* * * * *
(c) The producer and CCC agree that it will be difficult, if not
impossible, to prove the amount of damages to CCC for the violations in
accordance with paragraph (b) of this section. Accordingly, if the
county committee determines that the producer has violated the terms
and conditions of Form CCC-677 or Form CCC-666 LDP, as applicable,
liquidated damages shall be assessed on the quantity of the commodity
which is involved in the violation. If CCC determines the producer:
(1) Acted in good faith when the violation occurred, liquidated
damages will be assessed by multiplying the quantity involved in the
violation by:
(i) 10 percent of the loan rate applicable to the loan note or the
loan deficiency payment rate for the first offense; or
(ii) 25 percent of the loan rate applicable to the loan note or the
loan deficiency payment rate for the second offense, or
(2) Did not act in good faith with regard to the violation, or for
cases other than the first or second offense, liquidated damages will
be assessed by multiplying the quantity involved in the violation by 25
percent of the loan rate applicable to the loan note or the loan
deficiency payment rate.
(d) For liquidated damages assessed in accordance with paragraph
(c)(1) of this section, the county committee shall:
* * * * *
(2) If the producer fails to pay such amount within 30 days from
the date of notification, call the applicable loan involved in the
violation, or for loan deficiency payments, require repayment of the
entire loan deficiency payment and charges plus interest.
(e) For liquidated damages assessed in accordance with paragraph
(c)(2) of this section, the county committee shall call the loan
involved in the violation, or for loan deficiency payments, require
repayment of the entire loan deficiency payment and charges plus
interest.
* * * * *
(k) Any or all of the liquidated damages assessed in accordance
with the provisions of paragraph (c) of this section may be waived as
determined by CCC.
10. Section 1434.24 is amended by adding paragraph (f) to read as
follows:
Sec. 1434.24 Release of the honey pledged as collateral for a loan.
* * * * *
(f) If the honey is moved on a nonworkday from storage without
obtaining prior approval to move such honey, such removal shall
constitute unauthorized removal or disposition, as applicable, of such
honey unless the producer notifies the county office the next workday
that such honey has been moved and such movement is approved by CCC.
11. Section 1434.25 is amended by revising paragraph (a)(1) to read
as follows:
Sec. 1434.25 Liquidation of loans.
(a) * * *
(1) Repay the loan by payment of the amount of loan and any
charges, plus interest, or with the exception of 1994 crop in the 1994
fiscal year, an amount, without interest, which is less than the loan
level determined in accordance with 1434.24(e)(1)(ii), or,
* * * * *
12. Section 1434.26 is amended by revising paragraph (b)(3) to read
as follows:
Sec. 1434.26 Loan deficiency payments.
* * * * *
(b) * * *
(3) File and request payment on Form CCC-666 LDP;
* * * * *
13. Section 1434.27 is amended by adding paragraph (c)(3) to read
as follows:
Sec. 1434.27 Settlement.
* * * * *
(c) * * *
(3) If, during fiscal year 1994, CCC forecloses on 1994 crop honey
pledged as collateral for a loan, in accordance with Sec. 1434.28, the
settlement value will be determined by CCC to be the proceeds received
as a result of the sale of such honey.
* * * * *
Signed in Washington, DC on April 29, 1994.
Bruce R. Weber,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. 94-11016 Filed 5-6-94; 8:45 am]
BILLING CODE 3410-05-P
