[Federal Register Volume 62, Number 199 (Wednesday, October 15, 1997)]
[Proposed Rules]
[Pages 53580-53581]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-26928]


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 Proposed Rules
                                                 Federal Register
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 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.
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  Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / 
Proposed Rules  

[[Page 53580]]


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DEPARTMENT OF AGRICULTURE

Office of the Secretary

7 CFR Part 6


Dairy Tariff-Rate Import Quota Licensing

AGENCY: Foreign Agricultural Service, USDA.

ACTION: Advanced notice of proposed rulemaking on Dairy Tariff-Rate 
Import Quota Licensing.

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SUMMARY: This document requests public comments on possible options for 
the implementation of the Dairy Tariff-Rate Import Quota Licensing 
regulation's requirement to permanently reduce certain historical 
licenses based on surrenders, including possible recision, suspension, 
or delay of this requirement.

DATES: Comments should be submitted on or before 5 p.m. on November 28, 
1997 to be assured of consideration.

ADDRESSES: Interested parties may mail their comments to: Diana 
Wanamaker, Group Leader, Import Policies and Programs Division, Foreign 
Agricultural Service, 1400 Independence Avenue, SW., Stop 1021, 
Washington, DC 20250-1021. They may also fax their comments to 202-720-
0876. All comments received will be available for public inspection in 
room 5541-S at the above address. Summaries of comments will be made 
available via our fax retrieval system by calling (202) 720-0876 after 
December 5, 1997.

FOR FURTHER INFORMATION CONTACT: Diana Wanamaker, Group Leader, Import 
Policies and Programs Division, Foreign Agricultural Service, 1400 
Independence Avenue, SW, Stop 1021, Washington, DC 20250-1021 or 
telephone (202) 720-2916.

SUPPLEMENTARY INFORMATION: The Foreign Agricultural Service (FAS) under 
the authority of 7 CFR 2.43 is requesting comments concerning possible 
implementation of Sec. 6.25(b) of the Department's Dairy Tariff-Rate 
Import Quota Licensing Regulation (``the Regulation''). Section 
6.26(b)(2) provides that prior to 1999, a determination may be made, in 
light of market conditions, to eliminate the requirement in 
Secs. 6.25(b)(1)(i) and 6.25(b)(1)(ii) to permanently reduce the 
quantity of a historical license based on consecutive years of license 
surrender. Specifically, Sec. 6.25(b)(1)(i) states that beginning in 
1999, if a licensee has surrendered to the Department more than 50 
percent of a historical license in each of three prior years, that 
license will be permanently reduced to the average amount entered 
during those three years (the ``three-year rule''). Section 
6.25(b)(1)(ii) provides that beginning in 2001, if a licensee 
surrenders to the Department more than 50 percent of a historical 
license in three of the five prior years, that license will be 
permanently reduced by the average amount entered during those five 
years (the ``five-year'' rule).
    Section 6.25(b)(2) is under review by the Department and we are 
seeking comments, views, and recommendations with respect to methods 
and timing of the implementation of this section. At this time, all 
options are under consideration, including but not limited to the 
following:
    A. Issue an immediate determination that Secs. 6.25(b)(1)(i) and 
6.25(b)(1)(ii) shall not apply in light of market conditions, 
effectively rescinding the provision;
    B. Revise the regulation to advance the effective date of 
Sec. 6.25(b)(1)(i) from 1999 to 2003, the effective date of 
Sec. 6.26(b)(ii) from 2001 to 2005, and the determination date from 
prior to 1999 to prior to 2003; and
    C., D. Revise the regulation to eliminate either the three-year 
rule (section 6.25(b)(1)(i)) or the five-year rule (section 
6.26(b)(1)(ii)) to provide that one but not both of these provisions 
remain in effect with existing or modified requirements.
    FAS also invites comments as to whether current dairy import market 
conditions are such that FAS should implement Sec. 6.25(b)(2) 
immediately.

Background

Rationale for Section 6.26(b)(2)

    Revision 8 of the Regulation, issued on October 6, 1996, amended 
the previous rule so that a historical license that is being 
consistently underutilized will be permanently reduced. Under the 
previous rule, there was no consequence for surrendering license 
amounts. In light of the small amount of license available to new 
entrants or others who wish to increase imports of a certain dairy 
product, the Department determined that it was sound public policy to 
reallocate licenses amounts that are consistently not being used. 
Therefore, the amount by which a historical license is permanently 
reduced is to be converted to a nonhistorical license.

How Section 6.25(b) May Be Implemented

    Section 6.25(b)(2) of the Regulation permits the Secretary of 
Agriculture to determine that Sec. 6.25(b)(1) ``does not apply in light 
of market conditions.'' Authority for administration of tariff-rate 
quotas (TRQs) for dairy products was delegated to the FAS Administrator 
under 7 CFR 2.43.

Requests for Public Comments on Section 6.25(b)

    FAS requests comments on any of the following options and any other 
views, comments or recommendation for action that commentors wish to 
submit on this matter.
A. Using Section 6.25(b)(2) To Permanently Cancel Section 6.25(b)(1)
    Under this option, FAS would use its determination authority to 
find that market conditions in 1997 are such that FAS would invoke 
Sec. 6.25(b)(2) to permanently void Sec. 6.25(b)(1). If FAS implemented 
this option, licensees would not be subsequently penalized for having 
surrendered more than 50 percent of their historical licensed amounts 
in 1996 or 1997 or in future years. However, the problems concerning 
repeated license surrenders and limited access to licenses to import 
inquota TRQ amounts would remain.
B. Postponing Implementation of Section 6.25(b)(1)
    Under this option, FAS would amend the Sec. 6.25(b)(1)(i) to delay 
its implementation from 1999 to a future date. This delay would give 
licensees time to adjust to changing market conditions which have 
resulted from the implementation of the Uruguay Round Trade Agreement 
with respect to market access and export subsidies. FAS invites 
comments on the concept of delaying implementation of 
Secs. 6.25(b)(1)(i) and

[[Page 53581]]

6.25(b)(1)(ii)96, and welcomes proposals as to future implementation 
dates.
C. Eliminate the Three-Year Rule, While Retaining the Five-Year Rule
    Under this option, FAS would amend the Regulation to delete 
Sec. 6.25(b)(1)(i). This action would eliminate the three-year rule, 
while retaining the five-year rule, which appears in 
Sec. 6.25(b)(1)(ii). Per the five-year rule, a licensee could surrender 
more than 50 percent of its historical licensed amount for two of five 
consecutive years without penalty. The five-year rule may be viewed as 
giving licensees two years in which to adjust to changed market 
conditions.
D. Eliminate the Five-Year Rule, While Retaining the Three-Year Rule
    Under this option, FAS could amend the Regulation to delete 
Sec. 6.25(b)(1)(ii). This action would eliminate the five-year rule, 
while retaining the three-year rule, which appears in 
Sec. 6.25(b)(1)(i). Per the three-year rule, a licensee could surrender 
more than 50 percent of a historical license amount for two years 
without penalty and not be subjected to license reduction if more than 
50 percent of that license were surrendered in the next two years. This 
also may be viewed as giving licensees time to adjust to changed market 
conditions.


    Signed at Washington, DC, on October 3, 1997.
Christopher E. Goldthwait,
Acting Administrator.
[FR Doc. 97-26928 Filed 10-14-97; 8:45 am]
BILLING CODE 3410-10-M