[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Rules and Regulations]
[Pages 33303-33304]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16355]



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 Rules and Regulations
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  Federal Register / Vol. 61, No. 125 / Thursday, June 27, 1996 / Rules 
and Regulations  

[[Page 33303]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1464

RIN 0560-AE41


Tobacco--Tobacco Loan Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Final rule.

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SUMMARY: This final 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. This final rule adopts, the 
proposed rule published in the Federal Register on February 12, 1996.

EFFECTIVE DATE: June 27, 1996.

FOR FURTHER INFORMATION CONTACT: David W. Anderson, Assistant to the 
Director, Tobacco and Peanuts Division, Farm Services Agency (FSA), 
United States Department of Agriculture (USDA) AG Code 0514, PO Box 
2415, Washington, DC., telephone (202) 690-2518.

SUPPLEMENTARY INFORMATION

Executive Order 12866

    This final 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 
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 impact 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 final rule has been reviewed in accordance with Executive 
Order 12778. The provisions of this final rule are not retroactive and 
preempt State laws to the extent that such laws are inconsistent with 
the provisions of this final 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 final 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 or 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 a proposed rule published on February 12, 1996, it was proposed 
that the regulations in part 1464 be clarified to make explicit that a 
refund will be due from support loan recipients on individual nested 
lot in all cases of nesting, whether the nesting was ``knowingly'' done 
or not by the loan recipient. However, the proposal would have allowed 
the 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's Deputy Administrator for Farm Programs. 
This allowance was proposed to permit adjustments to avoid undue 
hardship to producers. The proposal did not adjust the terms under 
which a producer could lose eligibility for loans for an entire crop 
year due to nesting. That loss could still require that a violation be 
``knowingly'' committed by a loan recipient.

Discussion of Comments

    Five public comments were received, three in favor of the proposed 
rule and two opposed. One of the negative comments suggested that the 
grading of tobacco was a subjective matter and that a mistake on the 
part of the producer could be construed to be nesting. The other 
negative comment indicated that with increased size of operations that 
laborers might mix some tobacco, thus causing nesting to take place and 
that producers should be forgiven and not be held as being the 
responsible party. The other comments received supported the proposed 
rule as written, with one respondent suggesting that a penalty be 
established only on the nest and that the rate of penalty be higher 
than set out in current regulations.
    After consideration of all comments received, CCC has determined 
that the proposed rule which was published at 7 CFR part 1464 on 
February 12, 1996, should be adopted as a final rule without change. 
While some producers may have more difficulty than others in 
controlling their operations, it still is the responsibility of the 
producer to make grade on tobacco offered for prrice support. The price 
support program is not an insurance program. If a full refund is not 
warranted, then an accommodation can be considered under the relief 
provisions of the rule. The rule is not intended to serve as a penalty, 
but only to insure that only

[[Page 33304]]

marketable tobacco is offered for price support and to insure that the 
amount of support made available is not excessive.

List of Subjects in 7 CFR Part 1464

    Agriculture, Assessments, Loan program, Price support program, 
Tobacco, Warehouses.
    Accordingly, 7 CFR Part 1464 is 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.
* * * * *
    Signed at Washington, DC on June 20, 1996.
Bruce R. Weber,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. 96-16355 Filed 6-26-96; 8:45 am]
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