[Federal Register Volume 61, Number 29 (Monday, February 12, 1996)]
[Proposed Rules]
[Pages 5317-5318]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-2927]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1464
RIN 0560-AE41
Tobacco--Tobacco Loan Program
AGENCY: Commodity Credit Corporation, USDA.
ACTION: Proposed rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: This proposed rule clarifies the regulations for price support
loans for tobacco to specify that a refund will be due on ``nested''
tobacco whether or not the producer knew the tobacco was nested. This
modification is intended to insure that producers take responsibility
for, and are the insurers of, the quality of the tobacco placed for
price support and that price support is limited to normal, non-
adulterated lots based on true weights.
DATES: Comments must be received on or before April 12, 1996.
ADDRESSES: Interested persons are invited to submit written comments to
the Director, Tobacco and Peanuts Division, Farm Service Agency (FSA),
United States Department of Agriculture (USDA) AG Code 0514, P.O. Box
2415, Washington, DC 20013-2415, telephone (202) 720-7413. All written
comments will be available for public inspection in room 5750 South
Building, USDA, 14th Street and Independence Avenue, SW, Washington,
DC, between 8 am and 5 pm, Monday through Friday, except holidays.
FOR FURTHER INFORMATION CONTACT:
David W. Anderson, Assistant to the Director, Tobacco and Peanuts
Division, FSA, at the address listed above, telephone (202) 690-2518.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This proposed rule has been determined to be not significant for
purposes of Executive Order 12866 and therefore has not been reviewed
by the Office of Management and Budget (OMB).
Regulatory Flexibility Act
It has been determined that the Regulatory Flexibility Act is not
applicable to this rule since the Commodity Credit Corporation (CCC) is
[[Page 5318]]
not required by 5 USC 553 or any other provision of law to publish a
notice of proposed rulemaking with respect to the subject matter of
this rule.
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
Environmental Evaluation
It has been determined by an environmental evaluation that this
action will have no significant impact on the quality of the human
environment. Therefore, neither an environmental assessment nor
environment statement is needed.
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 2915 (June 24, 1983).
Executive Order 12778
This proposed rule has been reviewed in accordance with Executive
Order 12778. The provisions of this proposed rule are not retroactive
and preempt State laws to the extent that such laws are inconsistent
with the provisions of this proposed rule. Before any legal action is
brought regarding determinations made under provision of 7 CFR Part
1464, the administrative appeal provisions set forth at 7 CFR Part 780
must be exhausted.
Paperwork Reduction Act
This proposed rule does not change the information collection
requirements that have been approved by OMB and assigned control number
0560-0058.
Background
Nested tobacco is tobacco in a lot containing a ``nest'' of
inferior tobacco or foreign material, presumably, to increase the
payment of loan weight of the lot. A formal definition of nesting is
found in regulations codified at 7 CFR Part 29 and that definition is
incorporated in the rules for the tobacco price support program found
at 7 CFR Part 1464.
In some cases, the nesting may not be discovered until later in
processing, well after a price support loan for the tobacco has been
disbursed. Under current tobacco program rules n 7 CFR Part 1464.7
through 9, a producer found to have ``knowingly'' presented nested
tobacco (i) must refund the price support loan amount for the
individual lot and (ii) will be declared to be ineligible for any other
tobacco price support for that year.
Because of the severity of the consequences, there is sometimes a
reluctance to make a finding that the violation was knowing and
producers will sometimes contend that the nesting was the act of
irresponsible employees or other handlers of tobacco. However, there is
no apparent reason why a refund should not be demanded for a loan made
on any adulterated (nested) lot whether it was, as to producer,
``knowingly'' nested or not. It must be the responsibility of the
producer to present eligible tobacco. Nesting produces false weights,
and processing problems, and by producing undue loan disbursements can
cause losses that ultimately are born by the tobacco producer because
of the ``no net-cost'' nature of the tobacco program.
The proposed rule would make explicit that a refund wi8ll be due
from the loan recipient on the individual nested lot in all cases of
nesting (``knowing'' or not). However, the rules would allow the Farm
Service Agency (FSA) county committee, with the concurrence of the FSA
State committee, to reduce the amount of the refund demanded, in
accordance with guidelines of the FSA Deputy Administrator for Farm
Programs. This allowance will permit adjustments to avoid undue
hardships to producers.
This rule would not adjust the terms under which a producer can
lose eligibility for the entire crop year, for all lots, as a result of
a nesting violation. For that, a ``knowing'' violation will still be
required. The proposed rule is, instead, addressed to the accounting
for the individual lot that is actually nested. This result would be
accomplished by modifying Part 1464.8 to make more explicit that nested
tobacco is per se ineligible for price support. Also, Part 1464.9 would
be amended to remove the reference to ``knowing'' violations with
regard to demands for refunds on individual lots.
Comments on this proposed rule are welcomed and should be submitted
by the date indicated in this notice.
List of Subjects in 7 CFR Part 1464
Agriculture, Assessments, Loan program, Price support program,
Tobacco, Warehouses.
Accordingly, it is proposed that 7 CFR Part 1464 be amended as
follows:
PART 1464--TOBACCO
1. The authority citation for part 1464 continues to read as
follows:
Authority: 7 U.S.C. 1421, 1423, 1441, 1445, 1445-1 and 1445-2;
15 U.S.C. 714b, 714c.
2. Section 1464.8 is amended by revising the introductory text to
read as follows:
Sec. 1464.8 Eligible tobacco.
Eligible tobacco for the purpose of pledging such tobacco as
collateral for a price support loan is any tobacco of a kind for which
price support is available, as provided in Sec. 1464.2, that is in
sound and merchantable condition, is not nested as defined in 7 CFR
Part 29, and:
* * * * *
3. Section 1464.9 is amended by revising paragraph (a) to read as
follows:
Sec. 1464.9 Refund of price support advance.
* * * * *
(a) Received a price support advance on tobacco that was nested, as
defined in part 29 of this title or otherwise not eligible for price
support. The county committee, with concurrence of a State committee
representative, may reduce the refund with respect to tobacco otherwise
required in this part, in accordance with guidelines issued by the
Deputy Administrator for Farm Programs.
* * * * *
Signed at Washington, D.C., on February 5, 1996.
Bruce R. Weber,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. 96-2927 Filed 2-9-96; 8:45 am]
BILLING CODE 3410-05-M