[Federal Register Volume 59, Number 88 (Monday, May 9, 1994)]
[Unknown Section]
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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 /
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[[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