[Federal Register Volume 60, Number 145 (Friday, July 28, 1995)]
[Proposed Rules]
[Pages 38766-38767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18552]



 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 60, No. 145 / Friday, July 28, 1995 / 
Proposed Rules  


[[Page 38766]]


DEPARTMENT OF AGRICULTURE

Consolidated Farm Service Agency

7 CFR Part 737

RIN 0560-AD92


Tobacco Warehouses

AGENCY: Consolidated Farm Service Agency, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Consolidated Farm Service Agency (CFSA) is proposing to 
amend its regulations pertaining to licensed tobacco warehouses under 
the United States Warehouse Act (USWA). The proposed rule would define 
warehouse to exclude places which have contracted with a cooperative 
marketing association (association) to make Commodity Credit 
Corporation (CCC) price support advances to producers on behalf of the 
association and to which producers will deliver their tobacco for 
display and auction (hereinafter auction warehouses). Accordingly, the 
proposed rule removes such places from the jurisdiction of the USWA 
Tobacco Warehouse Regulations as provided for under 7 CFR part 737. The 
proposed rule also makes changes with respect to package arrangement 
and some clerical corrections.

DATES: Comments must be received by August 28, 1995 to be assured of 
consideration.

ADDRESSES: Comments must be submitted to Acting Director, Warehouse and 
Inventory Division (WID), CFSA, P.O. Box 2415, Washington, DC 20013-
2415, FAX 202-690-0014.
    All submissions will be available for public inspection in room 
5962, South Agriculture Building, U.S. Department of Agriculture, 14th 
Street and Independence Avenue SW, Washington, DC, between 8 a.m. and 5 
p.m., Monday through Friday, except holidays.

FOR FURTHER INFORMATION CONTACT: Steve Mikkelsen, Licensing Authority 
Branch, WID, CFSA, P.O. Box 2415, Washington, DC 20013-2415; telephone 
202-720-7433 or FAX 202-690-3123.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This proposed rule has been determined to be not significant and 
was not reviewed by the Office of Management and Budget (OMB) under 
Executive Order 12866.

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 the Notice related to 7 CFR part 3015, subpart 
V, published at 48 FR 29115 (June 24, 1983).

Executive Order 12778

    This proposed rule has been reviewed in accordance with Executive 
Order 12778. The provisions of this proposed rule do not preempt State 
laws, are not retroactive, and do not involve administrative appeals.

Paperwork Reduction Act

    The amendments set forth in this proposed rule do not generate any 
new or revised information collection or recordkeeping requirements on 
the public.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this proposed rule, because it has been determined that 
this rule will not have a significant effect on a substantial number of 
small businesses. Licensing under the USWA is strictly voluntary on the 
warehouse operator's part.

Environmental Evaluation

    It has been determined by an environmental evaluation that this 
action will not have significant impact on the quality of the human 
environment. Therefore, neither an Environmental Assessment nor an 
Environmental Impact Statement is needed.

Background

    The purpose of this proposed rule is to remove tobacco auction 
warehouses from coverage under the USWA and the regulations issued 
thereunder (7 CFR part 737). The USWA, as amended (7 U.S.C. 241 et 
seq.), provides that the Secretary of Agriculture may issue a license 
for the conduct of public warehouses that store agricultural 
commodities.
     The USWA is implemented, as it pertains to tobacco warehouses, by 
regulations at 7 CFR part 737 and is administered by CFSA. 
Approximately, 1,500 entities hold licenses for storing eight different 
agricultural commodities. Presently, there are six tobacco auction 
warehouses licensed under the USWA.
    In the tobacco industry, there are generally two types of tobacco 
warehouses: (1) Long term storage warehouses and (2) tobacco auction 
warehouses. The first type usually stores processed tobacco or raw 
tobacco that has been chopped, placed in containers, and otherwise 
prepared for long term storage. The second type receives raw tobacco 
from producers and retains it for a limited period of time, generally 
less than 30 days, until the tobacco is sold in an auction or 
transferred to a tobacco association for placement under the CCC price 
support program. Unlike a warehouse whose primary purpose is to store 
processed tobacco for a long period of time, the primary purpose of an 
auction warehouse is to market producer-owned tobacco. Presently, there 
are approximately 400 tobacco auction warehouses.
    The primary objectives of the USWA are to protect those who store 
commodities in public warehouses; assure the integrity of warehouse 
receipts as documents of title to be used as collateral; and set, 
regulate, and maintain superior standards for said warehouse operators. 
Because the auctioning of tobacco is a merchandising function, a 
function which is not regulated by the USWA, the USWA and its 
regulations, thereunder, were not intended to cover tobacco auction 
warehouses. This proposed rule, however, does not affect the U.S. 
Department of Agriculture's (USDA) other regulatory activity as it 
applies to tobacco auction warehouses.
    The primary functions of tobacco auction warehouses are currently 
regulated by several USDA agencies. For example, tobacco auction 
warehouses approved by the Agricultural Marketing Service (AMS) and 
CFSA may sell producer-owned tobacco. AMS strictly regulates the manner 
in which the tobacco must be stored, handled, 

[[Page 38767]]
presented for sale, and graded for sale. See, 7 CFR part 29. Further, 
the AMS regulations include detailed recordkeeping requirements. 
Further, AMS has representatives, on-site, during all sales of tobacco.
    In addition the Agricultural Adjustment Act of 1938, as amended, 
and the Agricultural Act of 1949, as amended, strictly regulate the 
sale of tobacco. CCC and CFSA regulate auction warehouses through the 
Tobacco Marketing Quota and Price Support Programs they administer. 
These regulations are codified at 7 CFR parts 723 and 1464. Under these 
regulations, CCC and CFSA require that warehousemen retain detailed 
records of all tobacco handled by them. The tobacco and the 
transactions associated with it must be tracked and recorded from the 
time the tobacco is brought into the warehouse by producers, to the 
time it leaves the warehouse.
    The type and level of regulation by AMS, CCC, and CFSA are unique 
to auction warehouses. Producers who believe they have not been treated 
fairly by the warehouseman may seek relief directly from the on-site 
representatives of the various government agencies. If such allegations 
are confirmed, under the provisions of 7 CFR parts 723 and 1464, CCC or 
CFSA has the right to take appropriate actions against the tobacco 
auction warehouse to protect the interests of producers. Accordingly, 
because tobacco auction warehouses are (1) more involved with 
merchandising (which is a non-USWA function) as opposed to the long 
term storage of tobacco and (2) sufficiently regulated by other USDA 
regulations, CFSA proposes to eliminate the application of the USWA and 
its regulations to tobacco auction warehouses. This action further 
reduces the amount of federal regulation.

List of Subjects in 7 CFR Part 737

    Administrative practice and procedure, Agricultural Commodities, 
Tobacco, Surety Bonds, Warehouses.

    Accordingly, the provisions of 7 CFR part 737 are amended as 
follows:

PART 737--TOBACCO WAREHOUSES
    1. The authority citation for part 737 is revised to read as 
follows:

    Authority: 7 U.S.C. 268.

    2. Section 737.2 is amended by revising the introductory text and 
paragraphs (f), (i), and (j) to read as follows:


Sec. 737.2  Terms defined.

    For the purposes of this part, unless otherwise provided, the 
following terms shall mean:
* * * * *
    (f) Service. The Consolidated Farm Service Agency of the U.S. 
Department of Agriculture.
* * * * *
    (i) Warehouse. Any suitable building, structure, or other protected 
enclosure in which tobacco is, or may be, stored for interstate or 
foreign commerce, or, if located within any place under the exclusive 
jurisdiction of the United States, in which tobacco is, or may be, 
stored and for which a license has been issued under the act except for 
any place, including any suitable building, structure, or other 
protected enclosure to which tobacco is delivered by the producers 
thereof, or their agents for the purposes of obtaining CCC price 
support advances and for the display and auction of tobacco.
    (j) Warehouseman. Any person lawfully engaged in the business of 
storing tobacco and holding a warehouse license.
* * * * *
    3. Section 737.4 is amended by adding the following sentence at the 
end of the paragraph:


Sec. 737.4  Grounds for not issuing license.

    * * * Further, a license shall not be issued to any place to which 
tobacco is delivered by the producers thereof, or their agents, for the 
purposes of obtaining CCC price support advances and for the display 
and auction of tobacco.
    4. In Sec. 737.34 paragraph (a) is revised and paragraph (b) is 
amended by adding a period after the word ``section'' and removing the 
remainder of the paragraph.


Sec. 737.34  Package arrangement.

    (a) Each warehouseman shall arrange the packages of warehoused 
tobacco so that the identification number thereon as required by 
Sec. 737.33 is visible, readily accessible, and shall arrange all 
packages so as to permit an accurate check thereof, unless waived in 
writing by the Administrator.
* * * * *


Sec. 737.50  [Amended]

    5. Section 737.50 is amended by removing ``order of Agricultural 
Marketing Service, USDA'', and by adding ``Service.''

    Signed at Washington, DC, on July 24, 1995.
Bruce R. Weber,
Acting Administrator, Consolidated Farm Service Agency.
[FR Doc. 95-18552 Filed 7-27-95; 8:45 am]
BILLING CODE 3410-05-P