[Federal Register Volume 65, Number 219 (Monday, November 13, 2000)]
[Rules and Regulations]
[Pages 67608-67616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-28969]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1424

RIN 0560-AG16


Bioenergy Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The Commodity Credit Corporation (CCC) is adopting as final 
the proposed rule published July 27, 2000, in the Federal Register to 
accelerate the development and use of bio-based technologies in 
stimulating the industrial use of agricultural commodities into bio-
based fuels and products. CCC will make incentive cash payments to 
bioenergy producers who increase their purchases of eligible 
agricultural commodities, as compared to the corresponding period in 
the prior fiscal year (FY), and convert that commodity into increased 
bioenergy production.

EFFECTIVE DATE: This program will become effective December 1, 2000. 
The FY 2001 sign-up period will begin that day and will end December 
31, 2000.

FOR FURTHER INFORMATION CONTACT: Steve Gill, Director, Warehouse and 
Inventory Division, FSA, United States Department of Agriculture 
(USDA), STOP 0553, 1400 Independence Avenue, SW., Washington, DC 20250-
0553, telephone (202) 720-2121 or e-mail address, 
[email protected] or Jim Goff at (202) 720-5396. Persons with 
disabilities who require alternative means of communication for 
regulatory information (braille, large print, audiotape, etc.) should 
contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).

SUPPLEMENTARY INFORMATION:   

Executive Order 12866

    This rule has been determined to be economically significant for 
the purposes of Executive Order 12866 and therefore has been reviewed 
by the Office of Management and Budget (OMB). A summary of the cost-
benefit assessment is included in the Background section explaining the 
actions this rule will take.

Small Business Regulatory Enforcement Fairness Act

    This rule was determined to be Major under the Small Business 
Regulatory Enforcement Fairness Act of 1996 (SBREFA). Section 801 of 
SBREFA requires a 60-day delay for Congressional review before Major 
regulations can go into effect. However, section 808 of SBREFA allows 
an agency to promulgate a rule at such time as it determines necessary, 
notwithstanding the Congressional review required by section 801 of 
SBREFA, if the agency finds for good cause that it is impracticable, 
unnecessary, or contrary to the public purpose to delay the rule. It is 
hereby determined that delaying this rule would be contrary to the 
public interest and, accordingly, this rule is effective December 1, 
2000.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this rule because CCC is not required by 5 U.S.C. 553 or 
any other provision of law to publish a notice of proposed rule making 
with respect to the matter of this rule.

Executive Order 12372

    This program 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).

Environmental Assessment

    An environmental assessment has been completed and it has been 
determined that there will be no significant impact on the environment.

Executive Order 12988

    This rule has been reviewed in accordance with Executive Order 
12988, Civil Justice Reform. All State and local laws and regulations 
that are in conflict with this rule will be preempted. No retroactive 
effect will be given to this rule. It will not effect agreements 
entered into prior to the effective date of the rule. The 
administrative appeal provisions published at 7 CFR parts 11 and 780 
must be exhausted before bringing any action for judicial review.

Executive Order 12612

    It has been determined that this rule does not have sufficient 
Federalism implications to warrant the preparation of a Federalism 
Assessment. The provisions contained in this Rule will not have a 
substantial direct effect on States or their political subdivisions or 
on the distribution of power and responsibilities among the various 
levels of Government.

Unfunded Mandates Reform Act of 1995

    This Rule contains no Federal mandates under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995 
(UMRA) for State, local, and tribal governments or the private sector. 
Therefore, this rule is not subject to the requirements of sections 202 
and 205 of the UMRA regulations.

Paperwork Reduction Act

    The information collection reporting and recordkeeping requirements 
associated with this rulemaking have

[[Page 67609]]

been approved by OMB and assigned control number 0560-xxxx. A Federal 
Register notice for this information collection was published on July 
27, 2000. No comments were received.

Background

    To encourage bioenergy producers to expand agricultural markets by 
promoting increased bioenergy (ethanol and biodiesel) production, CCC, 
in accordance with Executive Order 13134, Developing and Promoting 
Biobased Products and Bioenergy, and the CCC Charter Act, will make 
incentive cash payments to bioenergy producers who increase their 
purchases of agricultural commodities over the previous fiscal year's 
(FY's) purchases and convert that commodity into increased ethanol and 
biodiesel production over previous FY ethanol and biodiesel production. 
This rule provides for payments on purchases of barley, corn, grain 
sorghum, oats, rice, wheat, soybeans, sunflower seed, canola, crambe, 
rapeseed, safflower, sesame seed, flaxseed, mustard seed, and 
cellulosic crops, such as switchgrass and short rotation trees, grown 
on farms, for the purpose of producing ethanol and or biodiesel used in 
either ethanol or biodiesel production.
    Eligible bioenergy producers will receive incentive cash payments 
quarterly, based on the producer's total annual bioenergy production 
increase for the FY to date compared to the same time period in the 
previous FY. If, at the end of the fourth quarter, overpayments have 
been made, the bioenergy producer shall repay the overpayment plus 
interest from the date of the overpayment through the date of repayment 
to CCC. Eligible bioenergy producers with less than 65 million gallons 
annual production capacity from all facilities will receive a higher 
effective payment rate than bioenergy producers with 65 million gallons 
or more annual production capacity to increase the incentive for 
smaller plants and thereby further promote expansion of bioenergy 
production. A higher incentive is needed for smaller plants because, 
compared to larger plants, they tend to produce a more limited product 
range during refining, are less able to capture economies of scale, and 
may not have access to attractive risk management strategies.
    Except for FY 2001, bioenergy producers will enter into annual 
agreements with CCC establishing their eligibility to receive program 
payments before September of the preceding FY. Once an agreement is 
entered into, eligible bioenergy producers will submit quarterly 
applications after the end of each quarter requesting payments for that 
quarter. For example, during January 2002, producers may request 
payments for the period beginning October 1, 2001 through December 31, 
2001. CCC will make payments to eligible bioenergy producers within 30 
calendar days of receiving a completed eligible application.
    CCC will make available up to $150 million in FY 2001 and $150 
million in FY 2002 for this program. Because payment requests could 
potentially exceed available program funding, producers will be 
required to complete an agreement during a sign-up period to be 
announced by CCC for each FY of the program. The agreement will include 
an estimate of increased production for the upcoming FY. The total 
estimated increase in production for the upcoming FY will be used to 
determine if payment requests will exceed funding. If so, a factor will 
be used to prorate payments to keep payments at or below the budgeted 
amount. Eligible producers (agreement holders) will submit applications 
for program payments after each FY quarter. A producer will enter into 
a single agreement covering all production facilities operated or 
planned to be operated during the applicable FY by the producer at 
sign-up. However, agreement holders must submit separate applications 
for each facility location each quarter once enrolled in the program. 
Applicable payments will be based on the total production increase from 
all facilities FY to date, reconciled each quarter, compared to the 
producer's production at all locations during the base period. 
Producers who anticipate having new or expanded production capacity on 
line during the FY applicable to the sign-up period should enroll that 
anticipated production increase in the program during sign-up.
    Payments under the program will be based on the expected additional 
amount of agricultural commodities used by producers to produce 
additional energy. Interested parties will be required to sign up for 
the program and the total amount of expected claims will then be 
prorated, as needed, to match the available funding. Actual payments 
will be made on a quarterly basis by converting the extra fuel 
production to a gross extra commodity amount by using a factor set by 
CCC which estimates the amount of corn or other eligible commodity that 
was used to produce the increase in bioenergy. That figure will then be 
reduced to payable bushels or other unit of production. For smaller 
firms, as specified in the rule, payable bushels will be 1 bushel for 
every 2.5 gross bushels. For larger firms, it will be 1 bushel for 
every 3.5 gross bushels. Subject to the proration factor referred to 
above, a producer's payable bushels will be multiplied by a current (at 
the time) per bushel dollar amount to reach the payment amount. 
However, rising commodity prices could mean that funding is exhausted, 
despite the proration, before the end of the year. Should that happen, 
the agency will determine the manner in which it will resolve the 
competing claims but in no case will total payments exceed available 
funding. All participants will be required to sign an agreement that 
will set out the terms of the payment and the refund obligations that 
will apply if the additional commodity use levels are not obtained. The 
agreement will also set out whatever additional terms and conditions 
appear to be appropriate to assure that the program obtains its 
objectives. In all cases, the amount of the payment to which the 
producer remains eligible will be based on the increases in the energy 
produced for the year to date (as accounted for each quarter). Hence, 
changes in production could mean that payments received earlier in the 
year may have to be returned.
    Bioenergy producers, to be eligible for this program, must meet 
additional requirements specific to the bioenergy fuel being produced. 
For example, ethanol producers must also be licensed by the Bureau of 
Alcohol, Tobacco, and Firearms (ATF) for fuel ethanol production.

Proposed Rule

    A proposed rule addressing this matter was published in the Federal 
Register (65 FR 46115) on July 27, 2000. Comments from interested 
parties were due on or before August 28, 2000. A total of 123 comments 
were received from 6 different sectors as follows: three Government; 16 
ethanol and biodiesel organizations; three Congressional; 17 industry 
(processors, plants, banks, accounting firms and cooperatives); 31 
renderers; and 53 individuals. Comments submitted varied widely in 
support for the proposed rule. Forty-three supported the rule as 
written, while all 31 renderers were strongly opposed to the program 
unless substantial changes are made to include rendered animal by-
products and recycled cooking oils as eligible for program payments. 
Most renderers mentioned in some way perceived unfairness because the 
grain commodities already are eligible for other USDA program benefits 
while renderers and recycled products are not eligible.

[[Page 67610]]

    The proposed rule asked for comments on 8 specific questions. These 
questions and the responses to them are as follows:

1. Producers of What Forms of Bioenergy Should be Eligible for Program 
Payments?

    Ethanol and biodiesel were included in the proposed rule.
    Comments: The majority of comments (43) supported making payments 
to only ethanol and biodiesel producers. The remainder of commentators 
suggested various alternatives such as: focusing incentives on 
expansion of alternative fuels; transferring funds from farm level 
price support subsidies to programs such as this to refocus payments 
for crops used in bioenergy production; adding E-85 (a blend of 85 
percent ethanol and 15 percent gasoline); limiting program to biodiesel 
and ethanol produced from domestic feed stocks; adding E-diesel (less 
than 5 percent additive and diesel fuel); changing the word gasoline in 
the definition of ethanol to denaturant; limiting biodiesel producers 
to commercial producers registered and in good standing with 
Environmental Protection Agency (EPA) under section 211(b) of the Clean 
Air Act Amendment of 1990.
    Response: As supported by the majority of comments received, the 
program will only cover ethanol and biodiesel production in the US from 
commodities produced in the US. This has remained unchanged so that the 
effect of this program will not be diluted but will be confined to 
traditional uses of those commodities which could, otherwise, produce 
inventories of goods that would have to be stored at government 
expense. However, definitions of ethanol and biodiesel fuel have been 
broadened and requirements have been added to address comments received 
about E-diesel, the use of gasoline as a denaturant, and to assure that 
eligible biodiesel producers meet EPA regulatory requirements. No 
change was made regarding adding E-85 since payments will only be made 
on increased ethanol production and the percentage of blend with 
gasoline will not be a factor.

2. What Agricultural Commodities Used in Bioenergy Production Should be 
Included in the Program?

    The proposed rule listed barley, corn, grain sorghum, oats, rice, 
wheat, soybeans, sunflower seed, canola, crambe, rapeseed, safflower, 
flaxseed, and mustard seed used in either ethanol or biodiesel 
production.
    Comments: The majority of respondents were in favor of the proposed 
eligible commodities. However, we did receive comments favoring the 
inclusion of sugar and commodities for which there is another statutory 
program so that incentive payments for using that commodity in this 
Program will result in lower costs in other Programs in the form of 
loan deficiency payments (LDP's), forfeitures, storage costs, or other 
payments to farmers. We also received many (31) letters from renderers 
recommending the inclusion of animal fats and oils and certain recycled 
products of these fats and oils as eligible commodities in the Program. 
Additional items that were suggested to be added to the definition were 
as follows: tobacco, peanuts, cellulosic crops such as switchgrass, 
crop residues (such as corn stover), forest residue, non-recyclable 
cellulosic solid waste (i.e. waste paper), cotton waste, sustainable 
forest thinning material, soybean wax, and other biomass materials. One 
respondent was against including recycled and waste products as 
eligible commodities.
    Response: In response CCC has decided to add cellulosic crops, such 
as switchgrass and short rotation trees, grown on farms for the purpose 
of producing ethanol or biodiesel to the eligible commodity definition. 
This change allows CCC to support crops with excellent long-run 
potential for increasing the Nation's supply of ethanol and biodiesel 
and are the basis for much of USDA's efforts under the President's 
Bioenergy Initiative and the Biomass Research and Development Act of 
2000. While we have an interest in supporting a broad bioenergy 
industry, the addition of other items proposed needs further analysis 
and public comment. We plan to specifically request comments on adding 
animal fats and oils that are first used in ethanol and biodiesel 
production to this program. For the reasons given earlier, this rule 
will for the time being focus on field crops for which marketing 
assistance is provided and which are more customarily the focus of the 
use of agricultural products to produce ethanol and biodiesel fuel.

3. At What Plant Capacity Level Should Program Payment Rates Change to 
Account for Plant Efficiency Variances by Eligible Program Commodity?

    The proposed rule suggested making larger payments to producers 
with less than 30 million gallon-per-year capacity than to plants with 
30 million gallon or more capacity.
    Comments: Several respondents indicated that, while the 30 million 
gallons per year limit has been the ``traditional'' definition of a 
``small'' ethanol producer, time and technology have changed. One 
respondent stated, ``In a country where there are at least five ethanol 
plants that can produce at least 100 million gallons per year, a 31 
million gallon plant is by no means a large producer and should not be 
categorized as one for the sake of this program.'' Since 1990, the 
majority of the industry's growth has been in smaller, farmer-owned 
cooperatives. Today, many of these facilities are looking to expand 
their initial output to more than 30 million gallons per year to take 
advantage of plant efficiencies, economies of scale, and potential new 
market demand. The majority of respondents commenting in this area felt 
the level should be raised to 65 million gallons per year. We also had 
individual comments to: cap payments to plants with 150 million gallon-
per-year production capacity; provide a reduced payment to firms with 
multiple facilities; and provide the smallest incentives to firms with 
largest capacities that also have other production.
    Response: We agree with the majority of respondents and this rule 
provides for more advantageous payments to producers with less than 65 
million gallons-per-year capacity than to producers with 65 million 
gallons or more capacity. This level appears to be a reasonable line of 
demarcation, based on the comments, between those producers who may 
need an extra incentive and those that do not. Under the terms of the 
rule, that extra incentive will, as indicated, mean that smaller firms 
will receive payment on a higher percentage of their extra purchases of 
agricultural commodities. As for capping payments at 150 million 
gallons per year capacity by producer or considering the number of 
other production sites, we believe neither would help accomplish the 
purpose of the program which is increased bioenergy production. In 
addition, by having a five percent payment limitation, we will restrict 
payments to very large producers so funding is available to more 
producers.

4. How Should Payment Rates Be Established, Especially for Commodities 
Without CCC Announced Terminal Market Prices?

    The proposed rule limited payments to commodities with established 
CCC announced terminal prices.
    Comments: A few respondents suggested: establishing a separate 
budget for biodiesel and ethanol; changing the time period used in

[[Page 67611]]

comparison to determine increase in production; and, structuring 
payments to allow plant construction or expansion. Individual 
respondents suggested: considering a flexible mechanism in adjusting 
payment formulas to maximize removal of commodities from markets; using 
daily prices by region or area for payments; establishing terminal 
market prices for those commodities without them or using an average of 
recent prices paid by the producers.
    Response: While the suggestion that the time period for comparison 
be changed, there was no consensus what would be better and the vast 
majority of respondents recommended no change to the program. 
Therefore, the comparison time period remains FY compared to the prior 
FY. However, the formula has been adjusted from a quarterly comparison 
to FY to date as the FY progresses to level out payments between 
quarters and reduce the need for end of FY repayments. CCC considered 
the comments on structuring the payments to allow plant expansion and 
construction and concluded that the program as proposed met those goals 
in the short term. Since CCC cannot predict the amount of either 
ethanol or biodiesel production that will be covered by the program, we 
do not feel we can accurately establish a separate budget for ethanol 
versus biodiesel. The sign-up will decide how funding is divided 
between the two. Based on the limited comments received, no change has 
been made from the proposed rule in this area. However, since terminal 
market prices and county differentials are not available for cellulosic 
crops, such as switchgrass and short rotation trees, grown on farms for 
the purpose of producing ethanol and or biodiesel that have been added 
as eligible commodities, CCC will announce how payment rates will be 
established on these commodities after sign-up occurs and CCC knows 
payments will be applicable on the commodity.

5. When Payments Are Limited, How Should Payments Be Distributed?

    The proposed rule asked for comments on how payments should be 
prorated in the event that the program should be oversubscribed in the 
sense that there might be more willing participants than the normal 
payment formulas and funding would allow. It was contemplated in that 
respect, however, that there would be a sign-up period so that all 
interested parties could make their interest known so that the amount 
of proration could be then adduced. The proposed rule suggested several 
methods for dealing with shortage in funding.
    Comments: We received a variety of comments on how to distribute 
payments including: supported prorating payments; advance 90 percent of 
expected payments quarterly with final payments reflecting the balance 
due; limit the total dollars any one entity could receive; limit 
program to 30 million gallon-per-year capacity producers; issue 
payments on a first come first paid basis; and, limit payments to 
corporations with 125 million gallon-per-year capacity or less capacity 
for program participation.
    Response: Based on comments received, we believe the procedure in 
the proposed rule is best. Therefore, there will be a sign-up period 
and a proration made on the basis of that sign up as otherwise there 
would be an overemphasis on early filings. As for limitations on 
payments to particular entities, while there is a desire to avoid over-
concentration of the payment to one or several entities, it was felt 
that goal is met by setting, in the rule, a limit on the annual amount 
of program funding that could be received by a particular party.

6. Should the Payment Formulas Be Adjusted if There Is an Under 
Subscription of the Program, so as to, in Effect, Allow Payments at 
Higher Than the 100 Percent of Formula Level Contemplated in the 
Proposed Rule?

    Comments: A few respondents stated the cap should be 100 percent. 
Other individual respondents stated that payments should be prorated 
provided all other criteria are met and a payment cap would not be 
necessary if bid offer system was used to establish payments.
    Response: The payment ``cap'' will stay at 100 percent of formula 
amount since it appears for now to provide a sufficient incentive for 
increased production of energy resources using grains and other 
eligible agricultural commodities. A bid offer system is discussed 
below under ``Change the way payments are established''.

7. How Should Increases in Bioenergy Production be Established for the 
Various Commodities Receiving Program Payments?

    The proposed rule compared ethanol and biodiesel production for the 
just completed FY quarter to the production from the same quarter in 
the prior FY.
    Comments: Individual comments received in response to this question 
included: base program payments on the percentage increase in eligible 
domestic crop purchases and renewable energy production; proposed rule 
considers purchases and production from existing nonproducing plants as 
increases; payments should reflect changes in feedstock components and 
commodity prices based on volume and input cost of product.
    Response: The final rule compares the producer's agricultural 
commodity energy production at all locations with that producer's 
production in the previous year at all locations. For the first quarter 
of the year, energy production will be compared with the production 
from the first quarter of the previous year. After that quarter, the 
comparison will be made as a running total. That is, for example, at 
the end of the third quarter, the payment will be based on the increase 
in bioenergy for all three quarters, not just the third quarter by 
itself. This will reduce the need for any producer repayments at the 
end of the FY. At the same time, it will encourage producers to 
immediately begin their process of increasing their use of agricultural 
commodities and increasing their energy production. We concur with the 
comment that this considers purchases and production from existing 
nonproducing plants as increases and believe that meets the program's 
goal of increasing bioenergy production. We also believe that the 
procedure for establishing program payments addresses the other 
comments.

8. What are the Expected Impacts of This Program on Agricultural 
Commodity Prices, Fossil Fuel Energy Prices, Farm Income, Bioenergy 
Production and Prices, and International Trade in Agricultural and 
Energy Products?

    Comments: The majority of respondents that commented (54) stated 
the program would have a positive impact in these areas. One respondent 
mentioned the program would provide a market for aflatoxin corn.
    A large group of respondents (33) felt the program would have a 
negative impact in these areas. A couple of respondents stated the 
program would have a minimal impact in these areas. Specific single 
negative comments stated the program would: pay incentives for capacity 
and demand that would have occurred anyway; encourage the building of 
small plants that may not be financially viable; have a side effect of 
restraining bioenergy production; discourage construction of new plants 
or put recently completed plants at a disadvantage; attempt to reward 
production increases but instead creates uncertainty; and, result in 
some ethanol and biodiesel production facilities not receiving payments 
since

[[Page 67612]]

they are already at 100 percent production capacity. One respondent 
advised against the adoption of the proposed rule as currently written.
    Several respondents suggested changing the program as follows: 
emphasize the soy-based biodiesel industry; increase program's life-
span to 3 to 6 years; issue Payment-in-Kind (PIK) certificates instead 
of cash payments; target low-income areas of the county; and, use a 
per-capita basis for allocating funds.
    Additionally some individual respondents suggested that USDA 
instead of proceeding with the program should: conduct an assessment of 
impacts on country grain elevators and feed mills before proceeding; 
establish a strategic corn reserve to remove corn from the market 
during periods of low prices; and, establish a limited farmer-stored 
reserve program dedicated to bioenergy feed stock.
    Response: We agree with the positive comments received and agree 
that ethanol production does provide a market for aflatoxin corn. The 
negative comments question the wisdom of the program as it was 
proposed. USDA has in that respect conducted what it believes to be a 
thorough evaluation of the program and believes that these incentives 
will in fact produce appropriate and needed increases in energy 
production and commodity use. Should the operation of the program have 
any of the negative impacts cited by respondents or other negative 
impacts, a reassessment will be made and changes will be made as 
needed. We believe the program will have a positive impact and 
therefore it is being implemented. Current available funding does not 
allow CCC to extent the guaranteed life of the program beyond FY 2002. 
CCC does not have the inventory needed to support changing payments 
from cash to PIK. Changing the program to target low-income areas or 
base payments on a per-capita basis would be counter to the program's 
goal of increasing bioenergy production as much as possible. 
Establishing a strategic corn reserve and or a limited farmer-stored 
reserve program are outside the scope of this rule.
    In addition to comments on the eight specific questions above, 
comments were also received on the following issues:
1. Unspent Funding Allocations for FY 2000
    Comments: A few respondents wanted CCC to commit the $100 million 
for FY 2000 retroactively.
    Response: Originally it was hoped that this program would be 
operated in FY 2000 but that has not proved to be possible. Any 
retroactive payments would, at this time, not be an incentive payment 
and thus would not be consistent with the nature of this program.
2. Change Payment Restriction
    Under the proposed rule no person could receive more than 10 
percent of the total funding available under the program.
    Comments: Several respondents supported some level of payment 
limitation. However, a number of respondents favored changes that would 
increase the number of firms that could receive payments. Comments made 
by these respondents included: limit gross amount of funding for each 
large producer to an equitable percent of funding; lower the payment 
limitation to 8 percent; lower payment limitation to 5 percent; and 
change payment limitation to per corporation capacity of 125 million 
gallons per year ethanol. Additionally comments received suggested: 
having a separate biodiesel payment limitation of 30 percent; limiting 
payments by single company; and not having a payment limitations.
    Response: In order to increase the number of producers that can 
enroll in the program, the payment restriction has been lowered to five 
percent of total funding so payments will be available to a greater 
number of producers, and the rule has been clarified that the 
restriction is by producer for all plants. Without sign-up data and 
long range commodity price forecasts, we cannot predict what limitation 
the five percent will establish on producer size or justify 
establishing a separate limitation for biodiesel producers.
3. Records Inspection
    Comments: Inividual respondents commented that production increases 
should be verifiable by documentation and record retention should be 
reduced to only 3 years.
    Response: We agree with both comments. Record retention has been 
reduced to 3 years in section 1424.11(b) and the rule requires 
documentation be kept to support all program payments.
4. Change the way Payments Are Established
    Comments: One respondent suggested that a reverse auction similar 
to the Conservation Reserve Program should be used so producers would 
bid on payments per unit of increased bioenergy production. Another 
respondent questioned whether the program should expand the use of 
terminal market prices.
    Response: We believe a reverse auction would favor large plants at 
the expense of others and would be contrary to the goals of the program 
to encourage greater production among all producers and to encourage 
diversity in production by providing greater incentives to smaller 
plants. While one respondent questioned using terminal market prices in 
this program, we consider using them whenever possible as the best 
option for the program.
5. Change Payment Amounts
    Comments: A respondent suggested basing payment on grain use 
instead of increased bioenergy production.
    Response: The primary goal of the program is to increase bioenergy 
production and, as structured, payments will also reflect increased 
commodity use.
6. Clarify Definition of Producer
    Comments: A respondent asked that we clarify the difference between 
producer and facility.
    Response: We agree that there was ambiguity in the proposed rule 
between these two terms. The definition of producer has been modified 
to say that a producer is a legal entity (individual, partnership, 
cooperative, or corporation, etc) who is a producer of bioenergy. 
Clarification has also been made throughout this rule that payment 
restrictions apply by producer and payments.
Changes From Proposed Rule
    CCC is adopting as final the proposed rule published July 27, 2000, 
in the Federal Register with the following changes. First, most of the 
major payment provisions, for purposes of clarity, have been 
concentrated in one section rather than spread throughout the 
regulation, including that portion of the regulation that contains 
definitions. In that connection, the provision allowing smaller 
producers to be paid on a higher percentage of the extra units of the 
agricultural commodity they use for extra energy production has been 
changed so that the dividing line between small and large producers has 
been raised from a 30 million gallon per year energy production level 
to a 65 million gallons per year production level. Also the regulations 
now reflect that quality factors can be used in determining per unit 
payment rates for the payable units of the commodity. Also, the 
proration provision has been amended to correct an error in the 
original formula and to assure that the proration is as accurate as 
possible. In that respect as well, terms have been adjusted and 
reorganized. In addition,

[[Page 67613]]

the amended rule, in order to help assure real increases in the use of 
agricultural commodities to produce fuel, provides that in accounting 
for production the producer must aggregate production by all persons 
(not just the producer) at all locations in which the producer had an 
interest now (in the current FY) or in the previous FY, irrespective of 
whether the producer still has such an interest in that facility. This 
will avoid situations in which there could otherwise be an artificial 
increase due to a mere reorganization or change of ownership, or shift 
of production from one plant to another. CCC will be able to grant 
exemptions to that requirement should a need arise. Also, the rule 
provides that CCC may, in the program agreement, require that the 
producer certify the amount of the actual increased use of agricultural 
commodities for energy production at all such locations for the 
relevant period and make an adjustment in the formulaic payments that 
would otherwise be made to the producer if there is a difference 
between that certification and the amount of increased commodity use as 
calculated under the formula. A provision has also been added which 
would allow persons who acquire facilities under contract to petition 
CCC to be permitted to succeed to the existing contract. Still further, 
a provision has been added to specify that a contract may be terminated 
if the contracting party fails to retain the ability to assure that the 
contract obligations and responsibilities will be met over the full 
life of the contract. of payment to provide greater clarity. Further:
    (a) In Sec. 1424.3 the following definitions are changed:
    (1) The definition of biodiesel producer will require commercial 
biodiesel producers to also be registered and in good standing with EPA 
under the Clean Air Act Amendment of 1990, Title II, Section 211(b).
    (2) The definition of eligible commodity has been expanded to 
include sesame seed and cellulosic crops, such as switchgrass and short 
rotation trees, grown on farms for the purpose of producing ethanol and 
or biodiesel.
    (3) The definition of ethanol has been changed to state that it 
``has been rendered unfit for beverage use'' instead of composed of 95 
percent ethanol and 5 percent gasoline.
    (4) The definition of producer has been clarified to be ``a legal 
entity (individual, partnership, cooperative, or corporation, etc) who 
is a commercial producer of bioenergy making application under this 
program.''
    (b) 1424.4(a) has been changed to indicate that Agreement forms may 
be also obtained via the internet.
    (c) 1424.4(b) has been changed to indicate that Form CCC-850, 
Bioenergy Program Agreement, must be submitted to KCCO, Contract 
Reconciliation Division, STOP 8758, P.O. Box 419205, Kansas City, 
Missouri 64141-6205;
    (d) 1424.5(b) has been changed to indicate Applications are also 
available via the internet.
    (e) 1424.5(c) has been changed to remove the requirement that 
applications must be submitted within 30 days of the end of a quarter. 
It now just states that applications must be submitted by 30 days after 
the end of the applicable FY.
    (f) 1424.8(a) has been changed to indicate that unused funds for 
any FY will not be reallocated and, therefore, will not be carried 
over.
    (g) 1424.8(b) has been changed to state that reconciliations will 
be year-to-date for each quarter of the FY.
    (h) 1424.8(e) has been changed to indicate that no producer may 
receive more than five percent of the available funding for this 
program and determinations of payment eligibility shall take that limit 
into account.
    (i) 1424.9 has been changed to indicate that once an eligible 
producer has submitted an Agreement, Form CCC-850, that producer shall 
file information for each bioenergy producing facility quarterly 
through the end of the applicable FY as specified by CCC.
    (j) 1424.11 b has been changed to require record retention for 3 
years (instead of 6) from the payment date.

Cost-Benefit Assessment

    The program is projected to provide significant benefits for the 
agricultural sector. It will expand existing demand for corn and other 
grains used in ethanol production, and create new markets for oilseed 
crops, particularly soybeans, through the stimulation of biodiesel 
production. Impacts of the program were estimated under two scenarios, 
a low-impact scenario with no other significant policy changes that 
would increase biofuels demand, and a high-impact scenario, with other 
policy and program changes in addition to the program that collectively 
would substantially increase demand for ethanol and biodiesel. 
Incentive payments during FYs 2001-2002 for the program are expected to 
range from about $57 million under a low-impact scenario to about 
$164.2 million under a high-impact scenario.
    Under the low-impact scenario, average farm prices for corn are 
projected to increase by 1 cent per bushel in marketing year 2000/01 
and increase by 2 cents per bushel in 2001/02. For soybeans, average 
farm prices are projected to remain unchanged in marketing year 2000/01 
and increase by 1 cent per bushel in marketing year 2001/02. CCC 
outlays (including direct payments under the program) for feed grains 
and soybeans are projected to decrease by $258 million during FYs 2001-
2002.
    Under the high-impact scenario, average farm prices for corn are 
projected to increase by 1 and 4 cents per bushel in marketing years 
2000/01 and 2001/02 respectively. Soybean farm prices are projected to 
increase by 1 and 4 cent per bushel in marketing years 2000/01 and 
2001/02, respectively. CCC outlays (including direct payments under the 
program) for feed grains and soybeans are projected to decrease by $355 
million during FYs 2000-2002.
    Under the low-impact scenario, ethanol production is projected to 
reach about 1.730 billion gallons by 2002, about 95 million gallons 
higher than the baseline level. Biodiesel fuel production is projected 
to reach about 7 million gallons, 5 million gallons above base levels. 
Under the high-impact scenario, ethanol production is projected to 
reach about 1.940 billion gallons by 2002, or about 305 million gallons 
above baseline levels. Biodiesel fuel production is projected to reach 
about 14 million gallons, 12 million gallons above the baseline levels.
    The small increases in feed costs resulting from the program would 
not be sufficient to significantly affect livestock and poultry 
production. Thus, no impacts are expected on consumer prices for meat 
and poultry products.
    Ethanol and biodiesel processors benefit from the program by having 
reduced production costs. Providing more supply with reduced production 
costs is expected to increase net returns for participating processors. 
Minimal effects are expected on ethanol and biodiesel market prices as 
these prices are largely determined by fossil-based liquid fuel prices. 
Increased ethanol and biodiesel production is expected to substitute 
for Methyl Tertiary Butyl Ether (MTBE) and imported oil, helping to 
achieve the Administration's goals for reducing MTBE use and increasing 
energy security.

List of Subjects in 7 CFR Part 1424

    Administrative practice and procedure, Energy--bioenergy, Reporting 
and recordkeeping requirements.

    For the reasons stated in the preamble, 7 CFR Part 1424 Chapter XIV

[[Page 67614]]

is amended by adding Part 1424 as set forth below.

PART 1424--BIOENERGY PROGRAM

Sec.
1424.1   Applicability.
1424.2   Administration.
1424.3   Definitions.
1424.4   General eligibility rules.
1424.5   Application process.
1424.6   Eligibility determinations.
1424.7   [Reserved]
1424.8   Payment amounts.
1424.9   Reports required.
1424.10   Succession and control of facilities and production
1424.11   Maintenance and inspection of records.
1424.12   Appeals.
1424.13   Misrepresentation and scheme or device.

    Authority: 15 U.S.C. 714 c (e); Section 5(e) of the Commodity 
Credit Corporation Charter Act.


Sec. 1424.1  Applicability.

    This part establishes the Bioenergy Program (Program). It sets 
forth the terms and conditions a bioenergy producer must meet to obtain 
payments from the Commodity Credit Corporation (CCC) for eligible 
bioenergy production. Additional terms and conditions are set forth in 
Form CCC-850, Bioenergy Program Agreement.


Sec. 1424.2  Administration.

    (a) On behalf of CCC, the Farm Service Agency (FSA) will administer 
the provisions of this part under the general direction and supervision 
of the Deputy Administrator, Commodity Operations (Deputy 
Administrator), FSA.
    (b) The Deputy Administrator or a designee may authorize a waiver 
or modification of deadlines and other program requirements in cases 
where lateness or failure to meet such other requirements does not 
adversely affect the operation of the Program, and may set such 
additional requirements as will facilitate the operation of the 
program.


Sec. 1424.3  Definitions.

    The definitions set forth in this section shall be applicable for 
all purposes of program administration under this subpart.
    Agreement means the Bioenergy Program Agreement, Form CCC-850.
    Application means the Bioenergy Program Application, Form CCC-850-
A.
    ATF is the Bureau of Alcohol, Tobacco and Firearms of the 
Department of the Treasury.
    Biodiesel is a nontoxic, biodegradable replacement for or additive 
to petroleum diesel derived from the oils and fats of plants and 
animals and manufactured in the United States. Chemically, biodiesel is 
described as a mono alkyl ester.
    Biodiesel producer is a producer that produces and sells biodiesel 
who is also registered and in good standing with Environmental 
Protection Agency under Clean Air Act Amendment of 1990, Title II, 
Section 211(b).
    Bioenergy means ethanol and biodiesel produced from eligible 
commodities.
    Eligible commodity means barley, corn, grain sorghum, oats, rice, 
wheat, soybeans, sunflower seed, canola, crambe, rapeseed, safflower, 
sesame seed, flaxseed, mustard seed, and cellulosic crops, such as 
switchgrass and short rotation trees, grown on farms for the purpose of 
producing ethanol and or biodiesel or any other commodity or commodity 
by-product as determined and announced by CCC used in ethanol and 
biodiesel production which is produced in the United States and its 
territories.
    Eligible producer means a bioenergy producer who has been 
determined by CCC to be eligible to receive Program payments and has 
entered into an Agreement with CCC.
    Ethanol is anhydrous ethyl alcohol manufactured in the United 
States and sold:
    (1) For fuel use and which has been rendered unfit for beverage use 
in a manner and which is produced at a facility approved by the ATF for 
the production of ethanol for fuel, or
    (2) As denatured ethanol used by blenders and refiners which has 
been rendered unfit for beverage use.
    Ethanol producer is a producer that has authority from the ATF to 
produce ethanol.
    FSA means the Farm Service Agency, USDA.
    FY means fiscal year beginning each October 1 and ending September 
30 of the following year.
    Gallon Conversion factor shall be:
    (1) 2.5 bushels, unless otherwise determined through review of an 
individual Program participant by CCC, of ethanol produced per bushel 
of corn used in ethanol production;
    (2) 1.4 bushels, unless otherwise determined through review of an 
individual Program participant by CCC, of biodiesel per bushel of 
soybeans used in biodiesel production; or
    (3) As determined by CCC for other eligible commodities.
    KCCO means Kansas City Commodity Office.
    Producer is a legal entity (individual, partnership, cooperative, 
or corporation, etc.) who is a commercial bioenergy producer making 
application under this program.
    Quarter means the respective time periods of October 1 through 
December 31, January 1 through March 31, April 1 through June 30, and 
July 1 through September 30 of each FY, as applicable.
    USDA means the United States Department of Agriculture.


Sec. 1424.4  General eligibility rules.

    To obtain Program payments, a producer must do all of the 
following:
    (a) Obtain an Agreement, Form CCC-850, from the KCCO, Contract 
Reconciliation Division, STOP 8758, P.O. Box 419205, Kansas City, 
Missouri 64141-6205 or via the internet at: www.fsa.usda.gov/daco/bioenergy/bioenergy.htm;
    (b) Submit a completed Agreement, Form CCC-850, to CCC no later 
than October 1 of each year or a later date, if announced by CCC, to 
KCCO, Contract Reconciliation Division, STOP 8758, P.O. Box 419205, 
Kansas City, Missouri 64141-6205;
    (c) Be assigned an Agreement number by KCCO indicating the producer 
is eligible for program payments;
    (d) Maintain records indicating:
    (1) Commodities for which it seeks payment;
    (2) The quantity of bioenergy produced from an eligible commodity 
by location during the quarter FY to date compared to the same time 
period in the previous FY; and
    (3) The quantity of eligible commodity used to produce the 
bioenergy stated in paragraph (d)(2) of this section during the quarter 
FY to date compared to the same time period in the previous FY;
    (e) Furnish CCC such certification, and access to such records, as 
CCC considers necessary to verify compliance with Program provisions;
    (f) Make Application submissions in accordance with Sec. 1424.9;
    (g) If not purchasing raw commodity input, be able to prove to 
CCC's satisfaction that both the producer's net purchases of eligible 
commodities and net production of bioenergy increased as compared to 
such production at all locations during the relevant base period. 
Except as otherwise provided for by CCC, the increase in production 
must equal or exceed that amount of energy production which would be 
calculated using the gross amount of agricultural commodities which 
forms the basis of the payment and the conversion factor set out in 
Sec. 1424.2. Example: A producer that purchases soy oil from a soybean 
crushing plant for further refinement into biodiesel must be able to 
prove to CCC's satisfaction that both soy oil purchases and biodiesel 
production increased for the applicable quarter;

[[Page 67615]]

    (h) Certify the accuracy and truthfulness of the information 
provided in their Agreement on Form CCC-850; and
    (i) Allow verification by CCC of all information provided. Refusal 
to allow CCC or any other agency of USDA to verify any information 
provided will result in a determination of ineligibility.
    (j) Meet all other conditions for payment which are set out in the 
Agreement or in these regulations or otherwise.


Sec. 1424.5  Application process.

    To receive payments under this program during a FY, an eligible 
producer must:
    (a) Have an approved Agreement in accordance with Sec. 1424.4(b) 
and an Agreement number assigned by KCCO under Sec. 1424.4(c);
    (b) Obtain an Application, Form CCC-850-A, from the KCCO, Contract 
Reconciliation Division, STOP 8758, P.O. Box 419205, Kansas City, 
Missouri 64141-6205 or via the internet at: www.fsa.usda.gov/daco/bioenergy/bioenergy.htm;
    (c) Submit applications for each quarter. Submit the last quarterly 
application of the FY within 30 calendar days of the end of the FY for 
which payment is requested. If the actual deadline is a non-workday, 
the deadline will be the next business day;
    (d) Submit other relevant documents as required by CCC for the 
specific commodity; and
    (e) Certify with respect to the accuracy and truthfulness of the 
information provided.


Sec. 1424.6  Eligibility determinations.

    (a) Applicants will, after Agreements are submitted, if:
    (1) Determined eligible, receive notification of eligibility;
    (2) Determined ineligible, be notified in writing of ineligibility 
for program participation and reason for the determination; or
    (3) Additional information is needed for CCC to determine 
eligibility, be contacted for additional supporting documentation.
    (b) Applicants will, after Applications are submitted, if:
    (1) Determined eligible, receive payment;
    (2) Determined ineligible, be notified in writing of ineligibility 
for payment and reason for determination; or
    (3) Additional information is needed for CCC to determine 
eligibility, be contacted for additional supporting documentation.


Sec. 1424.7  [Reserved]


Sec. 1424.8  Payment amounts.

    (a) Eligible producer may be paid the amount specified in this 
section, subject to the availability of funds. Funds shall be 
considered available only to the extent determined appropriate by CCC. 
Unless otherwise determined by CCC, that amount shall be no more than 
$150 million in FY 2001 and no more than an additional $150 million in 
FY 2002.
    (b) Eligible producer must sign an agreement to participate. Such 
an agreement must be signed during the designated sign-up period. 
Thereafter, producers must file a report of their production at all 
locations for the program year to date through the respective quarter 
for each such report. Such reports must comply with the terms of the 
agreement and these regulations.
    (c) Persons will be eligible for payments only to the extent that 
their production of eligible energy from eligible inputs is, for the 
program year to date, as compared to the comparable portion of the 
previous year, in excess of their total comparable production at all 
locations. Producers will not be paid twice for the same increase and 
any decline in relative production between quarters will require a 
comparable refund as specified below. That is, for example, if a 
producer were to be paid, at the end of the first quarter, for an 
increase of 500 units of energy production, but by the end of the 
second quarter that producer's production, for the year to date, was 
down to a net increase for the year of 450 units, then a refund would 
be due for the loss of the corresponding 50 units of net extra 
production. For these purposes unless CCC shall agree otherwise in 
order to facilitate the program, ``all locations'' for these and other 
purposes within these regulations shall mean any and all locations in 
which the producer had an interest now (in the current FY) or in the 
previous FY, irrespective of whether the producer still has such an 
interest in that facility. Eligibility determinations will be made on 
the basis of aggregating production figures from all such locations and 
shall include production by all persons at those locations for the 
current and preceding FY, not just the production of the producer. 
Also, the CCC may in the program agreement require that the producer 
certify the amount of the actual increased use of agricultural 
commodities for energy production at all such locations for the 
relevant period and make adjustment in the formulaic payments that 
would otherwise be made to the producer if there is a difference 
between that certification and the amount of increased commodity use as 
calculated under the formula.
    (d) The submitted agreements filed during the sign-up period will 
require that the applicant set out the expected increase in production 
and other information as the agency may demand. Based on expected 
commodity prices, following the formula set out in this section, all 
such submissions will be assigned an expected value. Should the total 
expected value of all such agreements exceed the available funding, 
then a proration factor will be developed to factor the agreements down 
to the funding made available by CCC.
    (e) Subject to the provisions of this section and conditions 
specified in the Agreement, a producer's payment eligibility shall be 
adjusted at the end of each quarter, and figured as follows:
    (1) the extra production in energy from eligible inputs will be 
converted to gross payable bushels (or other applicable agricultural 
unit) by, unless otherwise determined by CCC:
    (i) Allowing, as applicable, 1 bushel of corn for each increase of 
2.5 gallons of ethanol;
    (ii) Allowing, as applicable, 1 bushel of soybeans for each 
increase of 1.4 gallons of biodiesel production;
    (iii) Such other method for other eligible agricultural commodities 
as CCC deems appropriate.
    (2) The gross payable bushels, or other gross units, calculated 
under paragraph (e)(1) of this section shall then be converted to a net 
payable bushel (or other unit amount) by:
    (i) For producers whose annual bioenergy production is less than 65 
million gallons, allowing 1 net payable bushel for every 2.5 gross 
payable bushels of corn or soybeans, or by allowing a similar 
conversion in the event that there are other eligible agricultural 
commodities involved in the calculation;
    (ii) For producers whose annual bioenergy production is equal to or 
more than 65 million gallons, allowing 1 net payable bushel for every 
3.5 gross payable bushels of corn or soybeans, or by allowing a similar 
conversion in the event that there are other eligible commodities 
involved;
    (3) The net payable bushel (or other unit) agricultural commodity 
amount calculated under paragraph (e)(2) of this section, shall be then 
converted to a gross payment by multiplying that commodity amount by 
the per unit value for the commodity determined as follows:
    (i) For those agricultural commodities with established terminal 
market prices,

[[Page 67616]]

the CCC will use the applicable terminal market price for the last day 
of the program quarter announced daily by the KCCO, FSA, adjusted by 
the county average differential for the county in which the plant is 
located and the applicable quality factors determined by CCC. For this 
purpose the terminal market and differential used by CCC in determining 
different values for different locations will, to the extent practical, 
be the same as that used for producers under other major CCC commodity 
programs for determining marketing loan gains and other matters.
    (ii) For those agricultural commodities that do not, as determined 
by CCC, have acceptable established terminal prices, the price shall be 
as determined by CCC based on such market data as appears to be 
appropriate for a fair evaluation.
    (4) The gross payment calculated under paragraph (e)(3) of this 
section shall be reduced to a net payment by multiplying the gross 
payment figure by the proration factor determined under paragraph (d) 
of this section.
    (5) Subject to other provisions of this section, producers shall be 
paid the net current payment, if positive, determined for the first 
quarter.
    (6) After the first quarter, adjustments shall be made based on 
changes in production. New or renewed increases shall be paid using the 
formula set out above using current per unit values. Refunds, when due, 
shall be due at the per unit values at which they were paid unless CCC 
determines otherwise.
    (7) If despite or in the absence of a proration under paragraph (d) 
of this section funds shall not be sufficient to cover payments due for 
any quarter then CCC shall prorate, or further prorate, the claims in 
such manner as CCC deems fit.
    (8) No producer may receive more than five percent of the available 
funding for this program and determinations of payment eligibility 
shall take that limit into account.


Sec. 1424.9  Reports required.

    Once an eligible producer has submitted an Agreement, Form CCC-850, 
that producer shall file information for each bioenergy producing 
facility quarterly through the end of the applicable FY as specified by 
CCC.


Sec. Sec. 1424.10  Succession and control of facilities and production.

    A person who obtains a facility which is under contract under this 
part may request permission to succeed to the program contract and CCC 
may grant such request if it is determined that permitting such 
succession would serve the purposes of the program. As determined to be 
appropriate, CCC may require the consent of the original party to such 
succession and likewise CCC may terminate a contract and demand a full 
refund of payments made if a contracting party loses control of a 
facility whose increased production is the basis of a program payment 
or otherwise fails to retain the ability to assure that all program 
obligations and requirements will be met.


Sec. 1424.11  Maintenance and inspection of records.

    For the purpose of verifying compliance with the requirements of 
this part, each eligible producer shall make available at one place at 
all reasonable times for examination by representatives of USDA, all 
books, papers, records, contracts, scale tickets, settlement sheets, 
invoices, written price quotations, or other documents related to the 
program that is within the control of such entity for not less than 3 
years from the payment date.


Sec. 1424.12  Appeals.

    (a) Any producer who is subject to an adverse determination made 
under this part shall have a right to appeal the determination by 
filing a written request with the Deputy Administrator at the following 
address: Deputy Administrator, Commodity Operations, Farm Service 
Agency, United States Department of Agriculture, STOP 0550, 1400 
Independence Avenue, SW., Washington, DC 20250-0550.
    (b) Any producer who believes that they have been adversely 
affected by a determination under this part must seek review with the 
Deputy Administrator within thirty days of such determination, unless 
provided with notice by FSA which provides a different time for 
appealing.
    (c) Any producer who believes that they have been adversely 
affected by a determination by the Agency, must seek review with the 
Deputy Administrator before any other review may be requested within 
the Agency.


Sec. 1424.13  Misrepresentation and scheme or device.

    (a) A producer shall be ineligible to receive payments under this 
program if CCC determines the producer:
    (1) Adopted any scheme or device which tends to defeat the purpose 
of the program in this part;
    (2) Made any fraudulent representation; or
    (3) Misrepresented any fact affecting a program determination.
    (b) Any funds disbursed pursuant to this part to a producer engaged 
in a misrepresentation, scheme, or device, or to any other person as a 
result of the bioenergy producer's actions, shall be refunded with 
interest together with such other sums as may become due, plus damages 
as may be determined by CCC.
    (c) Interest charged under this part shall at the rate of interest 
which the United States Treasury charges CCC for funds, as of the date 
CCC made such funds available. Such interest shall accrue from the date 
such payments were made available to the date of repayment or the date 
interest increases as determined in accordance with applicable 
regulations.
    (d) CCC may waive the accrual of interest and or damages if CCC 
determines that the cause of the erroneous determination was not due to 
any action of the bioenergy producer.
    (e) Any producer or person engaged in an act prohibited by this 
section and any producer or person receiving payment under this part 
shall be jointly and severally liable for any refund due under this 
part and for related charges.
    (f) The remedies provided in this part shall be in addition to 
other civil, criminal, or administrative remedies which may apply.
    (g) Late payment interest shall be assessed on all refunds in 
accordance with the provisions of, and subject to the rates prescribed 
in, 7 CFR part 1403.
    (h) Other limitations may apply.

    Signed in Washington, DC, on November 7, 2000.
Parks Shackelford,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 00-28969 Filed 11-7-00; 4:08 pm]
BILLING CODE 3410-05-U