[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