[Federal Register Volume 65, Number 145 (Thursday, July 27, 2000)]
[Rules and Regulations]
[Pages 46085-46087]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18963]



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  Federal Register / Vol. 65, No. 145 / Thursday, July 27, 2000 / Rules 
and Regulations  

[[Page 46085]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 29

[Docket No. TB-99-02]
RIN 0581-AB75


Tobacco Inspection

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a 
final rule, the regulations for flue-cured tobacco to more accurately 
describe tobacco as it presently appears at the marketplace. The 
revision will add a new provision to the official grade standards for 
flue-cured tobacco to denote that any lot of baled tobacco that has not 
been opened for inspection be graded by the exterior only. Additional 
bale dimensions and space requirements will be established for uniform 
marketing display in the warehouses, and a revision will be made in the 
poundage adjustment for a warehouse selling in excess of the sales 
schedule for designated and undesignated producer tobacco.

EFFECTIVE DATE: July 28, 2000.

FOR FURTHER INFORMATION CONTACT: John P. Duncan III, Deputy 
Administrator, Tobacco Programs, Agricultural Marketing Service (AMS), 
United States Department of Agriculture (USDA), Room 502 Annex 
Building, PO Box 96456, Washington, DC 20090-6456. Telephone (202) 205-
0567.

SUPPLEMENTARY INFORMATION: The Department published in the Federal 
Register on March 15, 2000 (65 FR 13915) a proposed rule amending the 
regulations at 7 CFR part 29, subpart B, Regulations; subpart C, 
Standards, and subpart G, Policy Statement and Regulations Governing 
Availability of Tobacco Inspection and Price Support Services to Flue-
Cured Tobacco on Designated Markets. The Department requested comments 
on the regulations. The comment period expired on May 15, 2000, and AMS 
received no comments on the amendments.
    The final rule will add a new provision to the grade standards for 
baled flue-cured tobacco, establish bale dimensions and spacing 
requirements, and revise the poundage adjustment for a warehouse 
selling in excess of the sales schedule for designated and undesignated 
tobacco, pursuant to the authority contained in the Tobacco Inspection 
Act of 1935, as amended (49 Stat.731; 7 U.S.C. 511 et seq.).
    On January 20, 2000, the Flue-Cured Tobacco Advisory Committee 
(FCTAC) met and reviewed recommendations from the tobacco industry on 
the flue-cured bale as an alternative packaging method. The 
recommendations made by the FCTAC have been included in this final rule 
for regulatory action. The revisions will add a new provision to the 
official standards for flue-cured tobacco to denote that any lot of 
baled tobacco that has not been opened for inspection will be graded by 
the exterior only, establish dimension and spacing requirements for 
marketing display of bales, and revise the poundage adjustment for a 
warehouse selling in excess of the sales schedule. An earlier proposed 
rule concerning bale inspection was issued on May 12, 1999 (64 FR 
25462) and was withdrawn on July 22, 1999 (64 FR 39432). The notice of 
the withdrawal stated that we intended to publish an advance notice of 
proposed rulemaking to solicit additional input. The FCTAC advised that 
the rule be published promptly, and we agree that the issues have 
already been considered within the industry. Accordingly, we published 
in the Federal Register a proposed rule on March 15, 2000.
    Flue-cured tobacco has been traditionally marketed in a sheet with 
a maximum weight of 275 pounds. The dimensions of the sheet is 8 feet x 
8 feet and is composed of burlap or other synthetic materials. The 
tobacco is arranged in a circular pattern on the sheet and the corners 
are tied diagonally for handling purposes. The lot of sheeted tobacco 
is approximately 4 feet in diameter.
    The tobacco industry has experimented with the bale as an 
alternative packaging method for marketing flue-cured tobacco during 
the past 4 years. This alternative package is a 42-inch wide x 42-inch 
high x 40-inch long bale weighing approximately 750 pounds. The bale is 
compressed together and bound by metal wires. The FCTAC recommended 
bale dimensions of 42 inches x 42 inches x 40 inches. Because 
uniformity in the size of bales is an important aspect of the 
acceptability of baled tobacco, bales which are not approximately these 
dimensions will be ineligible for a standard grade and designated ``No-
G.''
    The current regulations under the Tobacco Inspection Act do not 
specifically restrict baling as a packaging method for flue-cured 
tobacco. However, the current regulations do require that an official 
grade determination be based on a thorough examination of a lot of 
tobacco. A minimum of three locations within a lot is required to be 
sampled to show the range of the entire lot. However, the buying 
segment of the tobacco industry has opposed opening bales citing 
integrity issues.
    During the 1998 flue-cured marketing season, Tobacco Programs 
conducted a research project on marketing flue-cured tobacco in bales. 
The research focused on the grade and condition of flue-cured baled 
tobacco from the beginning to the end of the marketing process. 
Research data was collected at the farm level as the tobacco was 
compressed into a bale, at the auction warehouse before and during the 
day of sale, and at the processing facility as the bale was 
disassembled.
    The purpose of the research project was to determine if significant 
variations existed between the exterior and interior of the flue-cured 
bale that would impact the official grade standards. The findings 
indicated there was no significant variation in grade and condition 
observed.
    Accordingly, this rule will revise the current tobacco regulations 
to allow the inspection of bales of flue-cured tobacco without the bale 
being opened for inspection. All lots of tobacco that are subject to 
mandatory inspection on a designated market should be made accessible 
to perform grading activities. The recommendation was made that each 
lot of baled flue-cured tobacco

[[Page 46086]]

displayed for sale on auction warehouse floors be placed in rows end to 
end so the open side of the bales are facing the aisles. Also, a 
minimum space of 30 inches between the rows with the distance between 
lots of tobacco within the row shall be no less than 18 inches between 
immediately adjacent lots was recommended. These two spacing proposals 
will promote the orderly marketing of baled tobacco by providing a 
uniform marketing display in the warehouse. This will also provide 
accessibility for inspection of the bales.
    An additional revision will increase the poundage adjustment of 
2,500 pounds by doubling the poundage amount for a warehouse selling in 
excess of the daily sales schedule. For example, 2,500 pounds will 
become 5,000 pounds and 5,000 pounds will become 10,000 pounds. The 
same will be applicable to undesignated producer tobacco, with 500 
pounds becoming 1,000 pounds and 1,000 pounds becoming 2,000 pounds. 
This action is being adopted because the bale weight is approximately 
three times as much as tobacco marketed in sheets. This will give the 
farmers a chance to complete selling their lots of tobacco when the 
daily sales schedule has been depleted. This rule should meet industry 
needs for marketing tobacco in bales.
    This rule has been determined to be ``non significant'' for 
purposes of Executive Order 12866, and therefore, has not been reviewed 
by the Office of Management and Budget.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This action is not intended to have retroactive 
effect. This rule will not preempt any State or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule. There are no administrative procedures which 
must be exhausted prior to any judicial challenge to the provisions of 
this rule.
    Additionally, in conformance with the provisions of the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.), full consideration has been 
given to the potential economic impact upon small businesses. All 
tobacco warehouses and producers fall within the confines of ``small 
business'' which are defined by the Small Business Administration (13 
CFR 121.201) as those having annual receipts of less than $500,000, and 
small agricultural service firms are defined as those whose annual 
receipts are less than $3,500,000. There are approximately 190 tobacco 
warehouses and approximately 30,000 producers. The Agricultural 
Marketing Service has determined that this action would not have a 
significant economic impact on a substantial number of small entities. 
A new rule will be added to the official standards for flue-cured 
tobacco to denote that any lot of baled tobacco that has not been 
opened for inspection will be graded by the exterior only. Accordingly, 
this change will allow grading of a closed package from the exterior 
only, and will assist in maintaining program integrity. Additional bale 
dimensions and space requirements will be established for uniform 
marketing display in the warehouses and will provide accessibility for 
inspection of the bales. A revision will be made to the poundage 
adjustment for a warehouse selling in excess of the sales schedule and 
for undesignated producer tobacco in order to take into account the 
marketing of bales. These changes will apply equally to both small and 
large entities and they will take into account the marketing of flue-
cured tobacco as it presently appears in the marketplace. Pursuant to 5 
U.S.C. 553, it is determined that good cause exists for not postponing 
the effective date of this rule until 30 days after publication in the 
Federal Register because: (1) The flue-cured tobacco marketing season 
will begin in July and it is essential that the requirements be uniform 
for the entire marketing season, and (2) a 60-day comment period was 
provided for the proposed rule and no comments were received.

List of Subjects in 7 CFR Part 29

    Administrative practice and procedure, Advisory committees, 
Government publications, Imports, Pesticides and pests, Reporting and 
recordkeeping requirements, Tobacco.

    For the reasons set forth in the preamble, 7 CFR part 29 is amended 
as follows:

PART 29--TOBACCO INSPECTION

Subpart B--Regulations

    1. The authority citation for Part 29, Subpart B continues to read 
as follows:

    Authority: 7 U.S.C. 511m and 511r.

    2. A new Sec. 29.75b is added to read as follows:


Sec. 29.75b  Display of baled flue-cured tobacco on auction warehouse 
floors in designated markets.

    Each lot of baled flue-cured tobacco displayed for sale on auction 
warehouse floors shall have a minimum of 30 inches from side to side 
between rows with the open side of the bale facing the aisles. Distance 
between lots of baled tobacco within the row shall be no less than 18 
inches between immediately adjacent lots.

Subpart C--Standards

    3. The authority citation for Part 29, Subpart C continues to read 
as follows:

    Authority: 7 U.S.C. 511b, 511m, and 511r.


Sec. 29.1059  [Amended]

    4. Section 29.1059 is amended by removing the words ``and 29.)'' 
and adding in their place there the words ``29, and 30'').

    5. Section 29.1109 is revised to read as follows:


Sec. 29.1109  Rule 3.

    In drawing an official sample from a hogshead or other package of 
tobacco, three or more breaks shall be made at such points and in such 
manner as the inspector or sampler may find necessary to determine the 
kinds of tobacco and the percentage of each kind contained in the lot. 
All breaks shall be made so that the tobacco contained in the center of 
the package is visible to the sampler, except for baled tobacco that is 
not opened for inspection (see Rule 30). Tobacco shall be drawn from at 
least three breaks from which a representative sample shall be 
selected. The sample shall include tobacco of each different group, 
quality, color, length, and kind found in the lot in proportion to the 
quantities of each contained in the lot.

    6. Section 29.1129 is revised to read as follows:


Sec. 29.1129  Rule 23.

    Tobacco shall be designated by the grademark ``No-G,'' when it is 
offtype, semicured, fire-killed, smoked, oxidized over 10 percent, has 
an odor foreign to the type, or is packed in bales which are not 
approximately 42 inches wide x 42 inches high x 40 inches long.

    7. A new Sec. 29.1136 is added to read as follows:


Sec. 29.1136  Rule 30.

    Any lot of baled tobacco that is not opened for inspection but 
which otherwise meets the specifications of a grade shall be graded by 
the exterior only.

Subpart G--Policy Statement and Regulations Governing Availability 
of Tobacco Inspection and Price Support Services to Flue-Cured 
Tobacco on Designated Markets

    8. The authority citation for Part 29, Subpart G continues to read 
as follows:

    Authority: Tobacco Inspection Act, 49 Stat. 731 (7 U.S.C. 511 et 
seq.); Commodity Credit Corporation Charter Act, 62 Stat. 1070, as 
amended (15 U.S.C. 714 et seq.); sec. 213, Pub. L. 98-180, 97 Stat. 
1149 (7 U.S.C. 1421);

[[Page 46087]]

49 Stat. 731 (7 U.S.C. 511 et seq.), unless otherwise noted.

    9. Section 29.9406 is amended by revising paragraghs (c)(1), 
(c)(2), (c)(3), and (d) to read as follows:


Sec. 29.9406  Failure of warehouse to comply with opening and selling 
schedule.

* * * * *
    (c) * * *
    (1) If the excess is 5,000 pounds or less of designated producer 
tobacco, the adjustment in producer sales opportunity shall be one 
pound for each pound of excess; sales in excess of 5,000 pounds shall 
be a violation of the sales schedule and the adjustment for the first 
violation shall be 5,000 pounds plus the larger of 3 pounds for each 
pound in excess of 5,000 pounds or 5,000 pounds; for the second 
violation, the adjustment shall be 5,000 pounds plus the larger of 5 
pounds for each pound in excess of 5,000 or 15,000 pounds; and for the 
third and subsequent violations, the adjustment shall be 5,000 pounds 
plus the larger of 5 pounds for each pound in excess of 5,000 pounds or 
50 percent of a scheduled day's sales opportunity.
    (2) If the excess is 1,000 pounds or less of undesignated producer 
tobacco, the adjustment in producers sales opportunity is one pound for 
each pound of excess; if the excess is larger than 1,000 pounds, the 
adjustment is 1,000 pounds plus the larger of 3 pounds for each pound 
in excess of 1,000 or 2,000 pounds.
    (3) If the excess is designated producer tobacco that is not 
eligible for sale at the warehouse on the day of the sale, the 
adjustment in producers sales opportunity for the first violation is 
the larger of 3 pounds for each pound in excess or 5,000 pounds, and 
for the second and succeeding violations, the larger of 5 pounds for 
each pound in excess or 10,000 pounds.
    (d) If, on any sales day, a warehouse does not sell the full 
quantity of designated or undesignated tobacco authorized to be sold at 
such warehouse, the designated or undesignated sales opportunity at 
such warehouse on the next immediate sales day shall automatically be 
increased by the unsold quantity except that no such increase in sales 
opportunity shall exceed 5,000 pounds for designated tobacco or 500 
pounds for undesignated tobacco.

    Dated: July 20, 2000.
Kathleen A. Merrigan,
Administrator, Agricultural Marketing Service.
[FR Doc. 00-18963 Filed 7-26-00; 8:45 am]
BILLING CODE 3410-02-P