[Federal Register Volume 66, Number 51 (Thursday, March 15, 2001)]
[Rules and Regulations]
[Pages 15172-15185]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-6428]



[[Page 15171]]

-----------------------------------------------------------------------

Part II





Department of Agriculture





-----------------------------------------------------------------------



Commodity Credit Corporation



-----------------------------------------------------------------------



7 CFR Part 1400, et al.



Dairy and Cranberry Market Loss Assistance Programs, Honey Marketing 
Assistance Loan and LDP Program, Sugar Nonrecourse Loan Program, and 
Payment Limitations for Marketing Loan Gains and Loan Deficiency 
Payments; Final Rule

  Federal Register / Vol. 66, No. 51 / Thursday, March 15, 2001 / Rules 
and Regulations  

[[Page 15172]]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Parts 1400, 1421, 1427, 1430, 1434, 1435, and 1476

RIN 0560-AG34


Dairy and Cranberry Market Loss Assistance Programs, Honey 
Marketing Assistance Loan and LDP Program, Sugar Nonrecourse Loan 
Program, and Payment Limitations for Marketing Loan Gains and Loan 
Deficiency Payments

AGENCIES: Commodity Credit Corporation, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule implements provisions of the Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies 
Appropriations Act, 2001 related to the Dairy and Cranberry Market 
Assistance Programs, the Honey Marketing Assistance Loan and LDP 
Program, the Sugar Program and payment limitations for marketing loan 
gains and loan deficiency payments. Other provisions of the Act will be 
implemented under separate rules.

DATES: Effective March 13, 2001.

FOR FURTHER INFORMATION CONTACT: Grady Bilberry, Director, Price 
Support Division, FSA, USDA, STOP 0540, 1400 Independence Avenue, SW, 
Washington, D.C. 20250-0540, Telephone: (202)720-7901; e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

Notice and Comment

    Section 840 of the Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies Appropriations Act, 2001 (Pub. L. 
106-387) requires that the regulations necessary to implement these 
provisions be issued as soon as practicable and without regard to the 
notice and comment provisions of 5 U.S.C. 553 or the Statement of 
Policy of the Secretary of Agriculture (the Secretary) effective July 
24, 1971 (36 FR 13804) relating to notices of proposed rulemaking and 
public participation in rulemaking. These provisions are thus issued as 
final and are effective immediately.

Executive Order 12866

    This final rule is issued in conformance with Executive Order 12866 
and has been determined to be Economically Significant and has been 
reviewed by the Office of Management and Budget. A cost-benefit 
assessment was completed and is summarized after the background section 
explaining the actions this rule will take.

Regulatory Flexibility Act

    The Regulatory Flexibility Act is not applicable to this rule 
because USDA is not required by 5 U.S.C. 553 or any other provision of 
law to publish a notice of proposed rulemaking with respect to the 
subject matter of this rule.

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 an 
Environmental Impact Statement is needed.

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which require 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).

Executive Order 12988

    This rule has been reviewed in accordance with Executive Order 
12988. The provisions of this rule preempt State laws to the extent 
such laws are inconsistent with the provisions of this rule. Before any 
judicial action may be brought concerning the provisions of this rule, 
the administrative remedies must be exhausted.

Unfunded Mandates

    The provisions of Title II of the Unfunded Mandates Reform Act of 
1995 are not applicable to this rule because the USDA is not required 
by 5 U.S.C. 553 or any other provision of law to publish a notice of 
proposed rulemaking with respect to the subject matter of this rule. 
Further, in any case, these provisions do not impose any mandates on 
State, local or tribal governments, or the private sector.

Small Business Regulatory Enforcement Fairness Act of 1996

    Section 840 of Public Law 106-387 requires that the regulations 
necessary to implement these provisions be issued as soon as 
practicable and without regard to the notice and comment provisions of 
5 U.S.C. 553 or the Statement of Policy of the Secretary of Agriculture 
effective July 24, 1971 (36 FR 13804) relating to notices of proposed 
rulemaking and public participation in rulemaking. It also requires 
that the Secretary use the provisions of 5 U.S.C. 808 (the Small 
Business Regulatory Enforcement Fairness Act (SBREFA)), which provides 
that a rule may take effect at such time as the agency may determine if 
the agency finds for good cause that public notice is impracticable, 
unnecessary, or contrary to the public purpose, and thus does not have 
to meet the requirements of section 801 of SBREFA requiring a 60-day 
delay for Congressional review of a major regulation before the 
regulation can go into effect. This rule is considered a major rule for 
the purposes of SBREFA. However, the rule affects the incomes of a 
large number of agricultural producers who have been hit hard by 
natural disasters and poor market conditions. Accordingly, because it 
would be contrary to the public interest to delay those provisions of 
this rule, as expressed in Public Law 106-387, they are issued as final 
and are effective immediately.

Paperwork Reduction Act

    Section 824 of Public Law 106-78 requires that the regulations 
implementing these provisions be promulgated without regard to the 
Paperwork Reduction Act. This means that the normal 60-day public 
comment period and OMB approval of the information collections required 
by this rule are not required before the regulations may be made 
effective. However, the 60-day public comment period and OMB approval 
under the provisions of 44 U.S.C. chapter 35 are still required after 
the rule is published, and Information Collection Packages and requests 
for approval will be submitted to OMB.

Background

    This rule will implement requirements of Public Law 106-387 related 
to the Dairy, Honey and Cranberry Market Assistance Programs, the Sugar 
Program, and to payment limitations and eligibility for marketing loan 
gains and loan deficiency payments. Descriptions of this rule's 
provisions follow.

1. 7 CFR Parts 1400, 1421, and 1427--Payment Limitation and Eligibility 
for 2000-Crop Marketing Loan Gains and Loan Deficiency Payments

    This rule implements section 837 of Public Law 106-387, which 
revised the payment limitation and eligibility requirements for 
Marketing Loan Gains (MLG's) and Loan Deficiency Payments (LDP's) for 
2000-crop contract commodities and oilseeds. Section 837 increased to 
$150,000 the maximum total amount of MLG's and LDP's provided under 
section 1001(3) of the

[[Page 15173]]

Food Security Act of 1985 (7 U.S.C. 1308(1)) that a person may receive 
under the Agricultural Marketing Transition Act (7 U.S.C. 7201 et seq.) 
for one or more contract commodities and oilseeds produced during the 
2000 crop year. It also provides that a producer who marketed a 
quantity of an eligible 2000 crop for which an MLG or LDP was not 
received may receive such gain or payment as of the date the quantity 
was marketed or redeemed.
    The payment limitation had also been increased from $75,000 to 
$150,000 for the 1999 crop year only, and it should be emphasized that 
this change of the limitation on MLG's and LDP's to $150,000 is 
applicable only to the 2000 crop year. This rule amends the payment 
limitation provisions in 7 CFR Parts 1400, 1421, and 1427.
    To implement the new eligibility requirements, this rule further 
amends the regulations at 7 CFR Part 1421, which govern MLG's and LDP's 
for wheat, feed grains, rice, oilseeds, and farm-stored peanuts, and at 
7 CFR Part 1427, which govern MLG's and LDP's for cotton. Subject to 
certain conditions, the new rules will allow a producer who is 
otherwise eligible to receive a payment to receive an MLG or LDP even 
though the producer has already marketed the commodity. This will only 
apply for commodities marketed or redeemed with cash on or before April 
12, 2001 and to otherwise eligible producers on commodities for which 
no MLG or LDP has been paid.

2. 7 CFR Part 1430-Dairy Market Loss Assistance Program (DMLAP III)

    This rule implements the requirements of section 805 of Public Law 
106-387 related to the Dairy Market Loss Assistance Payment Program 
(DMLAP). Section 805 provided for the Commodity Credit Corporation to 
make supplemental payments to dairy producers who received payments 
under section 805 of Public Law 106-78 and to new dairy producers. The 
supplemental payments will be provided by extending the Dairy Market 
Loss Assistance Program, which was established by a final rule 
published in the Federal Register on May 10, 1999 at 64 FR 24933 and 
amended in a final rule published in the Federal Register on February 
16, 2000 at 65 FR 7942.
    The original DMLAP implemented section 1121 of Public Law 105-277, 
which directed the Secretary to provide $200 million in assistance to 
dairy producers. Eligible dairy producers received payments for the 
first 26,000 hundredweight (cwt.) of milk marketings in either 1997 or 
1998, but not both. Eligible operations had to have been in existence 
during the fourth quarter of 1998. The $200 million was divided among 
all the eligible dairy operations that applied during the initial 
application period that ended on May 21, 1999.
    The second phase of DMLAP (DMLAP II) implemented sections 805 and 
825 of Public Law 106-78, which provided $325 million for assistance 
for livestock and dairy producers who suffered economic losses in 1999. 
Of that $325 million, $125 million was made available to dairy 
producers.
    Under the new provisions of this rule, supplemental payments will 
be made to dairy operations that received payments under previous DMLAP 
on up to 39,000 cwt. of eligible production, an increase from 26,000 
cwt under the previous DMLAP. For dairy operations that were new in 
1999 or 2000 or that had less than 12 months eligible production, 
signup has been extended through February 28, 2001. Dairy operations 
may apply in person at FSA county offices during regular business hours 
and at that time complete the application form. Dairy operations that 
applied for and received payments under the February 2000 DMLAP do not 
need to reapply. The 2001 Act requires that payments be at a rate equal 
to 35 percent of the reduction in market value per unit of milk 
production in 2000. That rate will be $.6468 per cwt., which was based 
upon USDA data on average returns and market prices.

3. 7 CFR Part 1434--Honey Marketing Assistance Loans

    Section 812 of Public Law 106-387 provides that in order to assist 
producers of honey to market their honey in an orderly manner during a 
period of disastrously low prices, the Secretary of Agriculture shall 
make available nonrecourse marketing assistance loans or loan 
deficiency payments to producers of the 2000 crop of honey on fair and 
reasonable terms and conditions, as determined by the Secretary. The 
loan rate for a marketing assistance loan available to producers of 
2000 crop honey shall be 65 cents per pound. Producers shall repay a 
marketing assistance nonrecourse loan at principal plus interest or the 
prevailing domestic market price for honey. The marketing loan 
repayment rate will be announced monthly, as determined by the 
Secretary. The monthly loan repayment rate will be available at FSA 
county offices. Section 812(c) of Public Law 106-387 provides that, for 
an orderly transition, all outstanding 2000 crop honey recourse loans 
shall be converted to nonrecourse loans. To effectuate the conversion, 
producers will be required to sign a new Farm Storage Note and Security 
Agreement (CCC-677). The loan maturity date will remain the same as for 
the recourse loans, and the loan rate will be increased and additional 
disbursements will be paid to the producers. The provisions of Public 
Law 106-387 related to the increase in payment limitation for marketing 
loan gains and loan deficiency payments and to eligibility of producers 
for marketing loan gains and LDP's for such commodities even though the 
producer has already marketed the commodity, which this rule 
implements, as described earlier in this summary, shall also apply to 
the Honey Program.
    The terms and conditions of the Honey Program that this rule 
implements focus on eligibility and program administration.
Eligibility
    The regulations at 7 CFR 1434.4 list the eligibility requirements 
for persons applying for a nonrecourse marketing assistance loan or 
loan deficiency payments for honey being tendered as loan collateral. 
The essence of the eligibility requirements is that loan applicants 
must be ``producers'' of honey and not speculators who have purchased 
the honey. In general, a loan applicant must have a separate and 
identifiable interest in both the bees and the honey. This means, in 
part, that the loan applicant must have been responsible for the 
financial risk of keeping the bees and for producing and extracting the 
honey.
    The loan applicant must also hold a beneficial interest in the 
honey collateral until the loan is repaid. Under the regulation, such 
an interest will require that the producer maintain title and control 
over the disposition of the honey, as well as the risk of loss of the 
honey thru loan maturity or the date of repayment.
    Persons handling the marketing of the honey through a CCC-approved 
cooperative marketing association (CMA) are also eligible to 
participate in the loan program, provided the beneficial interest in 
the honey remains with the CMA member/loan applicant who shares in the 
marketing proceeds realized by the CMA. Two or more applicants may be 
eligible for a joint loan if, as individuals, they would fulfill the 
eligibility requirements and the commingled honey is not already under 
CCC loan.
Program Administration
    Section 812 of Public Law 106-387 provides that nonrecourse 
marketing

[[Page 15174]]

assistance loans or loan deficiency payments will be made to producers 
of 2000-crop honey. The honey nonrecourse marketing assistance loan and 
loan deficiency payment program will operate similarly to the way the 
honey program was operated in the 1994 and 1995 crop years. CCC has 
determined that the final date to request a loan or LDP is March 31, 
2001. The loans will mature 9 months after loan disbursement. Anyone 
interested in applying for a loan or LDP, or who has questions 
concerning eligibility or any other matter covered under this 
regulation, will be able to obtain assistance from the local FSA county 
office.
    Any producer seeking to sell the honey pledged as collateral to 
repay the loan will be required to obtain written authorization from 
the FSA county office before moving the honey for sale. If the producer 
fails to obtain such authorization, provides incorrect certification, 
or makes fraudulent representation, the producer will be in violation 
of the terms and conditions of the loan note and security agreement and 
will be subject to liquidated damages and other actions as provided in 
7 CFR 1434.13. If the loan is not repaid in full by the loan maturity 
date, CCC may foreclose on the pledged honey and sell it. CCC's 
security interest in the honey loan collateral is first and superior to 
all other security interests. Also, the Government may pursue other 
options open to it, including remedies against persons handling honey 
in disregard of the security interest.

4. 7 CFR Part 1435--Sugar Nonrecourse Loans

    Section 836 of Public Law 106-387 provides that only nonrecourse 
loans be made available to processors of domestic sugar beets and 
sugarcane. Accordingly, this rule amends the regulations governing the 
Sugar Price Support Program, which is conducted by the Commodity Credit 
Corporation (CCC) under section 156 of the Federal Agriculture 
Improvement and Reform Act of 1996 (1996 Act). The 2001 Act eliminates 
the requirement for recourse loans when the sugar tariff is established 
at 1.5 million tons or less. Recourse loans have never been made 
available during the time the 1996 Act has been in effect. Recourse 
loans have not been available because USDA has established a tariff-
rate quota (TRQ) greater than 1.5 million tons each year since the 
enactment of the FAIR Act. USDA established the FY 2001 TRQ above 1.5 
million tons in September 2000.
    There is no significant economic impact expected from this action. 
USDA's baseline projects that under U.S. trade agreements U.S. imports 
will exceed 1.5 million tons during the remaining years of the FAIR 
Act. As a result, nonrecourse loans would have been in effect without 
this change.

5. 7 CFR Part 1476--Cranberry Market Loss Assistance Payment Program

    Section 816 of Public Law 106-387 directs the Secretary of 
Agriculture to use $20 million of funds of the Commodity Credit 
Corporation (CCC) to provide assistance to producers of the 1999 crop 
of cranberries. Public Law 106-554 mandated a Government-wide 
rescission of 0.22 percent of appropriated funds, reducing the funding 
for the Cranberry Market Loss Assistance Payment Program to $19.956 
million. This will be the first time since 1959 that the government has 
provided financial assistance directly to cranberry growers.
    Recent increases in acreage and yields, while demand has remained 
fairly constant, have resulted in a large cranberry surplus. During the 
1999 crop year, U.S. cranberry production reached a record high of 6.4 
million barrels, which caused the price of cranberries to plummet to an 
average price of $17 per barrel, a historical low. The result has been 
a tremendous increase in inventory and reduced grower returns. These 
extreme market conditions have caused many cranberry growers 
difficulty. Steps taken thus far by USDA towards stabilizing prices, 
including the purchase of agricultural products containing cranberry 
ingredients, have only marginally reduced existing surpluses. A 
cranberry marketing order was approved by the Secretary to help reduce 
the surplus, but the short-term impact on growers will be negative 
unless and until prices for cranberries are restored. There are an 
estimated 1,300 cranberry growers in the U.S. representing 
approximately 11 states nationwide, producing over 90 percent of 
cranberry production in the processed market, with the remainder sold 
to the fresh fruit market. Without a significant improvement in the 
market price on sales of cranberries, many cranberry producers will not 
be able to remain in business.
    Producers of cranberries can receive a cash payment per pound for a 
qualifying farm unit's 1999 production of cranberries. Producers will 
only be paid on a maximum quantity of 1,600,000 pounds per separate 
farm unit, as reported to the Cranberry Marketing Committee, or other 
source approved by CCC. Payments will not be subject to administrative 
offset, as provided by section 842 of Public Law 106-387.
    To receive cash payments, eligible cranberry producers must (1) 
have produced cranberries during the 1999 crop year, (2) not have 
received a payment from any other Federal program, other than crop 
insurance, for the same loss, (3) be engaged in the business of 
producing and marketing agricultural products at the time of 
application for cash payment, and (4) apply for cash payments during 
the application period for each farm unit.
    Program applications will be mailed to all cranberry growers in the 
United States by the Farm Service Agency's (FSA), Price Support 
Division (PSD). The names, addresses, and production of cranberry 
growers in the United States have been obtained from the Cranberry 
Marketing Committee list of producers who marketed cranberries under 
the Agricultural Marketing Service's Cranberry Marketing Order for 
1999. There are approximately 30 producers in the State of Maine who do 
not market under the marketing order who will be identified by CCC and 
contacted to make application. In addition, program applications may be 
obtained by mail, telephone, or facsimile from the Price Support 
Division or obtained via the Internet. The Internet website is located 
at www.fsa.usda.gov/dafp/psd/.
    To participate in the program, cranberry producers must complete 
the application form and return it by mail to the PSD within the 
announced application period. At the close of the application period, a 
national per pound payment rate will be determined based on the 
factoring of the available funds of $19.956 million divided by the 
total pounds of eligible 1999 cranberry production from each applying 
farm unit, with no farm exceeding 1,600,000 pounds of cranberry 
production. Because outlays for this program are a fixed amount, the 
national average payment rate and individual payments can only be 
calculated after the total eligible quantity of 1999 cranberry 
production has been determined from approved applications.

Cost-Benefit Assessment Summary

Outlays

                           Summary of Outlays
------------------------------------------------------------------------
                                                              Outlays  $
                          Program                              millions
------------------------------------------------------------------------
Payment Limitations and Eligibility........................            5
Dairy Market Loss Assistance...............................          667
Honey......................................................           26
Cranberry..................................................       \1\ 20

[[Page 15175]]

 
Sugar......................................................            0
                                                            ------------
  Total....................................................         718
------------------------------------------------------------------------
\1\ $19.956 million after 0.22% rescission required by Public Law 106-
  554.

Payment Limitations and Eligibility for MLG's and LDP's

    An increase in the 2000-crop payment limit is expected to have a 
relatively minor effect on loan and LDP program outlays. Relatively few 
producers are expected to receive additional benefits because of the 
increase in the payment limit to $150,000 per person. Outlays will be 
affected most notably for those producers who both reached the pre-
2001-Act payment limit of $75,000 and who lost beneficial interest upon 
delivery almost immediately after harvest. Loss of beneficial interest 
shortly after harvest made such producers ineligible for loans and 
therefore for either the certificate exchange process or the forfeiture 
process. As such, these producers were denied access to direct and 
indirect program benefits beyond the $75,000 level prior to 
implementation of the statutorily-mandated, payment-limit increase. The 
number of producers meeting both conditions (reach $75,000 in benefits 
and near-immediate loss of beneficial interest after harvest) is 
expected to be relatively small.
    Producers who did not lose beneficial interest after harvest, but 
who reached the pre-2001-Act payment limit of $75,000, had the 
opportunity (which many, if not all, used) to secure a CCC loan, using 
the certificate exchange process to realize an indirect certificate 
gain. With an increase in the limit to $150,000, producers who 
subsequently reach $75,000 in applicable benefits for the 2000 crop 
will not need to rely on the certificate exchange or forfeiture 
processes to realize additional program benefits unless and until their 
payment-limit-applicable benefits reach $150,000.

Dairy Market Loss Assistance Program

    The DMLAP III is not expected to have significant impacts on 
prices, production, or the consumption of dairy products. The $667 
million 2001 DMLAP assistance will offset a portion of the decline in 
dairy producer incomes in calendar year (CY) 2000 as prices declined. 
Value of all milk produced in CY 1999 was reported as $23,402,392,000 
and estimated CY 2000 value is $20,881,600,000. The DMLAP III payments 
will add about 3 percent to CY 2000 cash receipts of dairy producers. 
Payments will cut the decline in receipts from CY 1999 to CY 2000 from 
11 percent to an 8 percent decline. While these payments will cushion 
the effect of declining revenue it is not expected to affect investment 
decisions that are based on market return prospects. While these 
payments could help some producers stay in operation longer or provide 
seed capital for expansion they could also provide an opportunity to 
get out of dairying with lower transition costs.
    The number of commercial dairy operations declined about 5 percent 
from 1998 to 1999. Since we estimate that 2 percent of the farms are 
new entrants in the dairy business, about 7 percent of dairy farms left 
the business between 1998 and 1999. The enrollment criteria for the 
1999 DMLAP required that the dairy operation be in business in the 4th 
quarter of 1998. Thus one could expect that about 1.5 percent of the 
recipients of the 1999 DMLAP payments would not have been in operation 
in 1999. If an additional 7 percent left production between 1999 and 
2000 then about 8.5 percent of DMLAP III recipients were not in 
operation in CY 2000. The chance of including operations in the program 
that did not farm in 2000 was not considered great enough to justify 
requiring the 78,560 operations to re-enroll at the FSA county offices 
and delay the payments by several months. However, sign-up was extended 
to permit the estimated 1,600 commercial operations that did not enroll 
in the DMLAP II an opportunity to enroll in DMLAP III.

Honey Marketing Assistance Loans

    The 2001 Honey Program loan rate, 65 cents per pound, is expected 
to significantly exceed market prices, and CCC will receive loan 
repayments at the alternative repayment rate (CCC's estimated of the 
prevailing honey price) rather than principal plus interest. The 2001 
honey crop price is forecast to average 51 cents per pound. There is no 
expected impact on 2000-crop honey supply because the program was not 
created until the honey production season was essentially finished.
    There are no significant expected effects on market prices or 
demand because the major benefit to producers is expected to be the 
LDP's or marketing loan gains, not market price improvement through 
honey removals from forfeitures. CCC has limited ability to affect 
market prices. Domestic honey prices are closely related to prices of 
imports because of sizeable quantities imported. For the 1996-1999 
period, honey imports represented about 45 percent of total domestic 
honey consumption. Sizable CCC honey removals in the 1980s resulted in 
increased imports instead of increased domestic market prices. Since 
foreign honey prices are unaffected by the 2001 Honey Program, it would 
seem unlikely that domestic honey prices will be affected by the 
program, and domestic consumers will not be impacted.
    CCC's estimated loan loss is about 14 cents per pound. Conversely, 
the producers' increase in income from marketing loan gains, LDP's, and 
gains from forfeitures is also 14 cents per pound. The CCC's loan 
losses and producers' gains from loans are estimated at $9.8 million. 
CCC's cost and producers' gains from LDP's are estimated at $16.3 
million. The total program cost and increase in producers' income is 
estimated at $26.1 million.
    Producers who use the 2001-crop loan program will also benefit from 
the reduced borrowing costs compared with commercial loans if market 
prices stay below 65 cents per pound. Interest savings are estimated at 
$5.3 million. It is expected that 2.9 million pounds of honey, or 1.5 
percent of production, will be forfeited to CCC.

Sugar Nonrecourse Loans

    The elimination of the recourse loan option by the 2001 Act is not 
expected to have any impact on Federal expenditures or farm incomes 
because the recourse loan option was not expected to be exercised in FY 
2001 or FY 2001. The February 2000 baseline, like all previous 
baselines, assumed that the sugar TRQ would exceed 1.5 million tons in 
FY 2001 and FY 2002 because of international access commitments under 
the World Trade Organization (WTO) and the North American Free Trade 
Agreement (NAFTA). Consequently, nonrecourse loans have always been 
expected to be offered by CCC in FY 2001 and FY 2002.

Cranberry Market Loss Assistance Program

    The principal benefit from the market loss assistance program will 
be the approximately $20 million in financial assistance that cranberry 
growers receive, which could determine if some of them remain in 
business. Individual payments will be based on each grower's 
production, with an upper cap of 1.6 million pounds. The per-pound 
payment hinges on the total eligible production reported by applicants, 
so FSA will be unable to calculate the final rate until about February 
2001. Participation will likely be almost universal among eligible 
cranberry

[[Page 15176]]

growers as the only requirement is to have produced a 1999 cranberry 
crop. Given expected heavy participation and information on how 
production is divided among growers provided by USDA's Agricultural 
Marketing Service (AMS), FSA's preliminary projection is for a payment 
rate on the order of $5 to $7 per barrel. Given that rate, half of the 
cranberry growers will receive payments under $10,000 and about 12 
percent of the growers will receive the highest payments of around 
$90,000.
    The cranberry market loss assistance program could aid some 
producers on the brink of insolvency to remain in business but the 
effect of this program on the long-run viability of the industry will 
be minimal. In fact, if the program encourages overproduction it will 
slow structural changes needed to enhance industry viability. 
Conversely, program benefits could prove to be synergistic with the two 
concurrent programs designed to address oversupply: the imposition of 
the cranberry marketing order in 2000 and government purchases of 
excess cranberry products.
    For further information, the following individuals may be contacted 
regarding the different parts of the Cost/Benefit Assessment:

Cranberry--John Jinkins, 202-720-2100
Honey, Dairy, Pasture Recovery, and Sugar--Dan Colacicco, 202-720-6733
Payment Limitations--Terry Hickenbotham, 202-690-0733

List of Subjects

Part 1400

    Agriculture, Grant programs--agriculture, Loan programs--
agriculture, Price support programs, Reporting and recordkeeping 
requirements.

Part 1421

    Feed grains, Loan programs--agriculture, Peanuts, Oilseeds, Price 
support programs, Reporting and recordkeeping requirements, Soybeans.

Part 1427

    Cotton, Loan programs--agriculture, Price support programs, 
Reporting and recordkeeping requirements.

Part 1430

    Dairy products, Milk, Price support programs, Reporting and 
recordkeeping requirements.

Part 1434

    Honey, Loan programs--agriculture, Reporting and recordkeeping 
requirements.

Part 1435

    Loan programs--agriculture, Price support programs, Reporting and 
recordkeeping requirements, Sugar.

Part 1476

    Cranberries, Loan programs--Price support programs, Reporting and 
recordkeeping requirements.


    For the reasons set out in the preamble, 7 CFR Chapter XIV is 
amended as set forth below.

PART 1400--PAYMENT LIMITATION AND PAYMENT ELIGIBILITY

    1. The authority citation is revised to read as follows:

    Authority: 7 U.S.C. 1308, 1308-1, and 1308-2; 16 U.S.C. 3834; 
Pub. L. 106-78 113 Stat. 1135; and Pub. L. 106-387 (114 Stat. 1549).


    2. Amend Sec. 1400.1 by revising Footnote 3 in the table in 
paragraph (g) to read as follows:


Sec. 1400.1  Applicability.

* * * * *
    \3\ The total of marketing loan gains and loan deficiency payments 
cannot exceed $75,000 per crop year, except for the 1999 and 2000 crop 
years in which the limit shall be $150,000.

PART 1421-GRAINS AND SIMILARLY HANDLED COMMODITIES

    3-4. The authority citation is revised to read as follows:

    Authority: 7 U.S.C. 7213-7235, 7237; 15 U.S.C. 714b, 714c; Sec. 
813, Pub. L. 106-78, 113 Stat. 1182; Sec. 206, Pub. L. 106-224, Sec. 
205, Pub. L. 106-224, Sec. 837, Pub. L. 106-387, 114 Stat. 1549.


    5. Amend Sec. 1421.1 by revising paragraphs (e) introductory text, 
(e)(1), (e)(2) introductory text, and (e)(2)(v) to read as follows:


Sec. 1421.1  Applicability.

* * * * *
    (e) Notwithstanding provisions of this subpart and subchapter:
    (1) For commodities produced during either the 1999 or 2000 crop 
year, the $75,000 per person total limitation on all commodities 
together on the sum of loan deficiency payments and marketing loan 
gains realized under this part shall not apply, but, rather, such limit 
shall be $150,000 per person.
    (2) For eligible crops produced in either the 1999 or 2000 crop 
year, a producer may receive with respect to a commodity, a marketing 
loan gain in connection with loans made under this part or loan 
deficiency payments made under this part even though the crop has 
already been marketed, so long as:
    (i) * * *
    (ii) * * *
    (iii) * * *
    (iv) * * *
    (v) The producer marketed the 1999 crop year commodity prior to 
February 16, 2000 and marketed the 2000 crop year commodity on or 
before April 12, 2001.
* * * * *

PART 1427--COTTON

    6. The authority citation is revised to read as follows:


    Authority: 7 U.S.C. 7213-7235, 7237; 15 U.S.C. 714b, 714c; Sec. 
813, Pub. L. 106-78, 113 Stat. 1182; Sec. 837, Pub. L. 106-387, 114 
Stat. 1549.

    7. Amend Sec. 1427.1 by revising paragraphs (d) introductory text, 
(d)(1), (d)(2) introductory text, and (d)(2)(v) to read as follows:


Sec. 1427.1  Applicability.

* * * * *
    (d) Notwithstanding provisions of this subpart and subchapter:
    (1) For commodities produced during either the 1999 or 2000 crop 
year, the $75,000 per person total limitation on all commodities 
together on the sum of loan deficiency payments and marketing loan 
gains realized under this part shall not apply, but, rather, such limit 
shall be $150,000 per person.
    (2) For eligible cotton produced in either the 1999 or 2000 crop 
year, a producer may receive, with respect to cotton, a marketing loan 
gain in connection with loans made under this part or loan deficiency 
payments made under this part even though the cotton has already been 
marketed, so long as:
    (i) * * *
    (ii) * * *
    (iii) * * *
    (iv) * * *
    (v) The producer marketed 1999 crop year cotton prior to February 
16, 2000 and marketed 2000 crop year cotton on or before April 12, 
2001.
* * * * *

PART 1430--DAIRY PRODUCTS

    8. The authority citation for part 1430 subpart D is revised to 
read as follows:

    Authority: Pub. L. 105-277, 112 Stat. 2681; Pub. L. 106-78, 113 
Stat. 1135; Pub. L. 106-387, 114 Stat. 1549.

    9. In Sec. 1430.500 revise the phrase ``under Public Law 105-277, 
112 Stat. 2681 and sections 805 and 825 of Public Law 106-78 only'' to 
read ``under Public Law 105-277, 112 Stat. 2681; sections 805 and 825 
of Public Law 106-78; and section 805 of Public Law 106-387 only''.

[[Page 15177]]


    10. Amend Sec. 1430.502 and Sec. 1430.503 by revising the phrase 
``February 28, 2000'' wherever it appears to read ``February 28, 
2001''.

    11. Revise Sec. 1430.510 to read as follows:


Sec. 1430.510  New producers.

    Notwithstanding other provisions of this subpart, producers who 
were new producers in 1999 or 2000 and not affiliated with other 
eligible producers may receive payments from sums made available after 
October 27, 2000 based on their 1999 production levels or for 2000, on 
their production levels from October 1, 1999 through September 30, 
2000.

    12. Add Sec. 1430.511 to read as follows:


Sec. 1430.511  Supplemental payments.

    (a) Supplemental payments under Public Law 106-387 will be made 
available to dairy operations in connection with normal milk production 
that is sold on the commercial market.
    (b) For supplemental payments made under this section, the payment 
rate shall be $0.6468 per cwt.
    (c) For dairy operations that received a payment under sections 805 
and 825 of Public Law 106-78 on less than 12 months production, an 
annual production level will be calculated by subtracting from the 
dairy operation's production level for the period of October 1, 1999 
through September 30, 2000 the production level on which previous 
payments were received.

    13. Revise part 1434 to read as follows:

PART 1434--NONRECOURSE MARKETING ASSISTANCE LOAN AND LDP 
REGULATIONS FOR HONEY

Sec.
1434.1   Applicability.
1434.2   Administration.
1434.3   Definitions.
1434.4   Eligible producer.
1434.5   Eligible honey.
1434.6   Beneficial interest.
1434.7   Approved storage.
1434.8   Containers and drums.
1434.9   Determination of quantity.
1434.10   Application, availability, disbursement, and maturity.
1434.11   Fees and interest.
1434.12   Liens.
1434.13   Transfer of producer's interest prohibited.
1434.14   Loss or damage.
1434.15   Personal liability of the producer.
1434.16   Release of the honey pledged as collateral for a loan.
1434.17   Liquidation of loans.
1434.18   Loan repayments.
1434.19   Settlement.
1434.20   Foreclosure.
1434.21   Loan deficiency payments.
1434.22   Handling payments and collections not exceeding $9.99.
1434.23   Death, incompetency, or disappearance; appeals; other loan 
provisions.

    Authority: Sec. 812, Public Law 106-387, 114 Stat. 1549.

PART 1434--NONRECOURSE MARKETING ASSISTANCE LOAN AND LDP 
REGULATIONS FOR HONEY


Sec. 1434.1  Applicability.

    (a) The regulations of this part provide the terms and conditions 
under which the Commodity Credit Corporation (CCC) may issue 
nonrecourse marketing assistance loans or loan deficiency payments for 
the 2000 crop of honey, under Public Law 106-387.
    (b) Notwithstanding provisions of this subpart and subchapter, for 
eligible honey produced during the 2000 crop year:
    (1) The $75,000 per person total limitation on all commodities 
together on the sum of marketing loan gains on loans made under this 
part and on loan deficiency payments with respect to loans under this 
part, shall not apply, but, rather, such limit shall be $150,000 per 
person.
    (2) A producer may receive, with respect to honey, a marketing loan 
gain or loan deficiency payment in connection with loans made under 
this part even though the honey has already been marketed, so long as:
    (i) Neither the producer nor anyone else has received a marketing 
loan gain or loan deficiency payment on the commodity;
    (ii) The person seeking the payment is the actual producer of the 
commodity and had beneficial interest in the commodity at the time of 
the operative marketing, for commodities to which paragraph (b)(2)(iii) 
of this section applies, or at the time at which the commodity was 
redeemed in the case of commodities to which paragraph (b)(2)(iv) of 
this section applies;
    (iii) For those commodities that were previously placed under loan, 
the payment is made solely as marketing loan gain in which case the 
rate to be paid will be determined as of the date of redemption;
    (iv) For commodities not covered by paragraph (b)(2)(iii) of this 
section, the producer will receive the payment as a loan deficiency 
payment in which case the amount to be paid will be determined as of 
the date that the producer marketed or lost beneficial interest in the 
commodity;
    (v) Unless otherwise allowed by the Deputy Administrator, the 
producer marketed the commodity prior to April 12, 2001.


Sec. 1434.2  Administration.

    (a) The regulations of this part shall be administered under the 
general supervision of the Executive Vice President, CCC, and shall be 
carried out in the field by State and county Farm Service Agency (FSA) 
committees.
    (b) State and county committees, representatives and employees 
thereof, do not have the authority to modify or waive any of the 
provisions of the regulations of this part.
    (c) The State committee shall take any action required by the 
regulations of this part that has not been taken by the county 
committee. The State committee shall also:
    (1) Correct, or require a county committee to correct, any action 
taken by such county committee that is not in accordance with the 
regulations of this part; or
    (2) Require a county committee to withhold taking any action that 
is not in accordance with the regulations of this part.
    (d) No provision or delegation herein to a State or county 
committee shall preclude the Executive Vice President, CCC, or a 
designee, from determining any question arising under the program or 
from reversing or modifying any determination made by a State or county 
committee.
    (e) The Deputy Administrator for Farm Programs, FSA, may authorize 
State and county committees to waive or modify deadlines and other 
program requirements in cases where timeliness or failure to meet such 
other requirements does not affect adversely the operation of the 
program.
    (f) An approving official of CCC may execute loans and related 
documents only under the terms and conditions determined and announced 
by CCC. Any such document that is not executed in accordance with such 
terms and conditions, including any purported execution before the date 
authorized by CCC, shall be null and void unless affirmed by the 
Executive Vice President, CCC.


Sec. 1434.3  Definitions.

    The definitions set forth in this section shall be applicable for 
all purposes of program administration. The terms defined in part 718 
of this title shall also be applicable except where those definitions 
are inconsistent with the definitions set forth in this section or for 
purpose of program instruments created under this part.
    Approving official is a representative of CCC who is authorized by 
the

[[Page 15178]]

Executive Vice President, CCC, to approve loan documents prepared under 
this part.
    Charge is a fee, cost, and expense (including foreclosure costs) 
incident to insuring, carrying, handling, storing, conditioning, and 
marketing the honey and otherwise protecting the honey.
    CMA is a cooperative marketing association engaged in marketing 
honey.
    County office is the local FSA office.
    Crop year is the calendar year in which honey is extracted.
    Ineligible honey is honey not eligible for a loan under this part 
for which ineligibility shall include, but is not limited to, honey 
from applicable floral sources regardless of whether the honey meets 
other eligibility requirements.
    Intermediate Bulk Container (IBC) is a bulk container with a 
polyethylene inner bottle with a galvanized steel protective cage with 
a 275 and 330 gallon capacity and is reusable.
    Loan is a nonrecourse marketing assistance loan on honey.
    Nontable honey is honey having a predominant flavor of limited 
acceptability for table use even though such honey may be considered 
suitable for table use.
    Person is an individual, partnership, association, corporation, 
estate or trust, or other business enterprise or other legal entity 
and, whenever applicable a State, political subdivision of a State, or 
any agency thereof.
    Table honey is any honey having a good flavor of the predominant 
floral source which can be readily marketed for table use.
    Representative is a receiver, executor, administrator, guardian, or 
trustee representing the interests of a person or an estate.


Sec. 1434.4  Eligible producer.

    (a) To be eligible to receive an individual or joint loan or loan 
deficiency payments under this part, a person must:
    (1) Have produced honey in the United States during the calendar 
year for which a loan is requested and extracted on or before December 
31 of such calendar year;
    (2) Be responsible for the risk of keeping the bees and producing 
honey;
    (3) Have a continuous beneficial interest in the honey from the 
time the honey was extracted through date of repayment of the loan;
    (4) Store the honey pledged as loan collateral in eligible storage 
and in eligible containers that meet the requirements of Sec. 1434.7 
and Sec. 1434.8, respectively; and
    (5) Adequately protect the interests of CCC by providing security 
for a loan in accordance with the requirements in Sec. 1434.8 and by 
maintaining in good condition the honey pledged as security for a loan.
    (b) A person who complies with paragraph (a) of this section, who 
enters into a contract to sell the honey used as collateral for a loan 
but retains a beneficial interest in the honey and who does not receive 
an advance payment from the purchaser to enter into the contract unless 
the purchaser is a cooperative marketing association (CMA) that is 
eligible under paragraph (g) of this section, remains eligible for a 
loan.
    (c) Two or more applicants may be eligible for a joint loan if:
    (1) The conditions in paragraphs (a) and (b) of this section are 
met with respect to the commingled honey collateral stored in the same 
eligible containers they are tendering for a loan; and
    (2) The commingled honey is not used as collateral for an 
individual loan that has not been repaid.
    (d) Heirs who succeed to a beneficial interest in the honey are 
eligible for a loan if they:
    (1) Assume the decedent's obligation under a loan if such loan has 
already been obtained; and
    (2) Assure continued safe storage of the honey if such honey has 
been pledged as collateral for a loan.
    (e) A representative may be eligible to receive a loan on behalf of 
a person or estate who or which meets the requirements in paragraphs 
(a), (b), (c), and (d) of this section and that the honey tendered as 
collateral by the representative, in the capacity of a representative, 
shall be considered as tendered by the person or estate being 
represented.
    (f) A minor who otherwise meets the requirements of this part for a 
loan shall be eligible to receive a loan only if the minor meets one of 
the following requirements:
    (1) A court or statute has conferred the right of majority on the 
minor;
    (2) A guardian has been appointed to manage the minor's property 
and the applicable loan documents are signed by the guardian;
    (3) Any note signed by the minor is cosigned by a person determined 
by the county committee to be financially responsible; or
    (4) A surety, by furnishing a bond, guarantees to protect CCC from 
any loss incurred for which the minor would be liable had the minor 
been an adult.
    (g) A CMA that the Executive Vice President, CCC, determines meets 
the requirements for CMA's in part 1425 of this title may be eligible 
to obtain a loan on behalf of those members who themselves are eligible 
to obtain a loan provided that:
    (1) The beneficial interest in the honey must always, until loan 
repayment or forfeiture, remain in the member who delivered the honey 
to the eligible CMA or its member CMA's, except as otherwise provided 
in this part; and
    (2) The honey delivered to an eligible CMA shall not be eligible 
for a loan if the member who delivered the honey does not retain the 
right to share in the proceeds from the marketing of the honey as 
provided in part 1425 of this title.


Sec. 1434.5  Eligible honey.

    To be eligible for a loan, the honey must:
    (a) Have been produced by an eligible producer;
    (b) Have been produced in the United States during the calendar 
year for which a loan is requested and extracted on or before December 
31 of such calendar year;
    (c) Be of merchantable quality deemed by CCC to be suitable for 
loan; that is, the honey:
    (1) Is not adulterated;
    (2) Has not been scorched, burned, or subjected to excessive heat 
resulting in objectionable flavor, color deterioration or 
carmelization;
    (3) Does not contain any ineligible honey floral sources; such as 
andromeda, bitterweed, broomweed, cajeput (melaleuca), carrot, 
chinquapin, dog fennel, desert hollyhock, gumweed, mescal, onion, 
prickly pear, prune, queen's delight, rabbit brush, snowbrush 
(ceanothus), snow-on-the-mountain, spurge (leafy spurge), tarweed, and 
similar objectionably-flavored honey or blends of honey as determined 
by the Director, Price Support Division, FSA. If any blends of honey 
contain such ineligible honey, the lot as a whole shall be considered 
ineligible for loan;
    (4) Does not contain excessive bees or bee parts, paint chips, wood 
chips, or other foreign matter; and
    (5) Is not fermenting; and
    (d) Be stored in acceptable containers.


Sec. 1434.6  Beneficial interest.

    (a) To be eligible to receive marketing assistance loans under this 
part a producer must have the beneficial interest in the honey that is 
tendered to CCC for a loan. The producer must always have had the 
beneficial interest in the honey unless, before the honey was 
extracted, the producer and a former producer whom the producer 
tendering the honey to CCC has

[[Page 15179]]

succeeded had such an interest in the honey. Honey obtained by gift or 
purchase shall not be eligible to be tendered to CCC for loans. Heirs 
who succeed to the beneficial interest of a deceased producer or who 
assume the decedent's obligations under an existing loan shall be 
eligible to receive loans whether succession to the honey occurs before 
or after extraction so long as the heir otherwise complies with the 
provisions of this part.
    (b) A producer shall not be considered to have divested the 
beneficial interest in the honey if the producer retains control, 
title, and risk of loss in the honey including the right to make all 
decisions regarding the tender of such honey to CCC for a loan, and the 
producer:
    (1) Executes an option to purchase, whether or not a payment is 
made by the potential buyer for such option to purchase, with respect 
to such honey if all other eligibility requirements are met and the 
option to purchase contains the following provision:

    Notwithstanding any other provision of this option to purchase, 
title, risk of loss, and beneficial interest in the honey, as 
specified in 7 CFR part 1434, shall remain with the producer until 
the buyer exercises this option to purchase the honey. This option 
to purchase shall expire, notwithstanding any action or inaction by 
either the producer or the buyer, at the earlier of: (1) The 
maturity of any CCC loan which is secured by such honey; (2) the 
date the CCC claims title to such honey; or (3) such other date as 
provided in this option.''


or:

    (2) Enters into a contract to sell the honey if the producer 
retains title, risk of loss, and beneficial interest in the honey and 
the purchaser does not pay to the producer any advance payment amount 
or any incentive payment amount to enter into such contract except as 
provided in part 1425 of this chapter.
    (c) If loans are made available to producers through an approved 
CMA in accordance with part 1425 of this chapter, the beneficial 
interest in the honey must always have been in the producer-member who 
delivered the honey to the CMA or its member CMA's, except as otherwise 
provided in this section. Honey delivered to such a CMA shall not be 
eligible for loans if the producer-member who delivered the honey does 
not retain the right to share in the proceeds from the marketing of the 
honey as provided in part 1425 of this chapter.
    (d) A producer may, before the final date for obtaining a loan for 
honey, re-offer as loan honey any honey that has been previously 
pledged if the loan was repaid with principal plus interest, the loan 
on such re-offered honey shall have the same maturity date as the 
original loan.


Sec. 1434.7  Approved storage.

    (a) Loans will be made only on honey in approved storage, which 
shall consist of a storage structure located on or off the farm that is 
determined by CCC to be under the control of the producer and affords 
safe storage for honey pledged as collateral for a loan. If the honey 
located in a farm storage structure is pledged as collateral that 
secures more than one loan, the honey must be segregated so as to 
preserve the identity of the honey securing such loan. Honey securing a 
loan must also be segregated from any honey not pledged as collateral 
for a loan that is stored in the same structure.
    (b) Producers may also obtain loans on honey packed in eligible 
containers and stored in facilities owned by third parties in which the 
honey of more than one person is stored if the honey that is to be 
pledged as collateral for a loan and that is stored identity preserved 
or is segregated from all other honey. Each container of the segregated 
quantity of honey shall be marked with the producer's name, loan 
number, and lot number so as to identify the honey from other honey 
stored in the structure.


Sec. 1434.8  Containers and drums.

    (a)(1) The honey must be packed in plastic Intermediate Bulk 
Container (IBC) or metal containers of a capacity of not less than 5 
gallons or greater than 70 gallons. The IBC container is a bulk 
container with a polyethylene inner bottle with a galvanized steel 
protective cage with a 275 and 330 gallon capacity and is reusable. The 
metal containers must meet the requirements of the Federal Food, Drug, 
and Cosmetic Act, as amended, and regulations issued thereunder and 
must be generally fit for the purpose for which they are to be used;
    (2) The 5-gallon containers must hold approximately 60 pounds of 
honey, and must be new, clean, sound, uncased, and free from 
appreciable dents and rust. The handle of each container must be firm 
and strong enough to permit carrying the filled container. The cover 
and can opening must not be damaged in any way that will prevent a 
tight seal. Cans that are punctured or have been punctured and resealed 
by soldering will not be acceptable; and
    (3) The steel drums must be an open-end type and filled no closer 
than 2 inches from the top of the drums. Such drums must be new or must 
be used drums that have been reconditioned inside and outside. The 
steel drums must be clean, treated inside and outside to prevent 
rusting, fitted with gaskets that provide a tight seal and have an 
inside coating suitable for honey storage.
    (b) Honey shall not be eligible to be pledged as collateral for 
loans if such honey is stored in:
    (1) 55-gallon steel drums having a tare weight less than 38 pounds, 
30-gallon steel drums having a tare weight less than 26 pounds, or 
drums having removable liners of polyethylene or other materials;
    (2) Bung-type drums;
    (3) Bulk tanks;
    (4) Plastic buckets and containers;
    (5) Steel drums that are severely enough dented as to cause damage 
to their lining, improper seal, or stacking capabilities; and
    (6) Rusted drums with corroded areas.


Sec. 1434.9  Determination of quantity.

    The amount of a marketing assistance loan and loan deficiency 
payment shall be based on 100 percent of the net weight in pounds of 
such quantity certified by the producer and verified by the county 
office representative for honey on Form CCC-633 (Honey) that is 
eligible to be pledged as security for the loan or LDP Estimates of the 
quantity of honey shall be made on the basis of 12 pounds for each 
gallon of rated capacity of the container.


Sec. 1434.10  Application, availability, disbursement, and maturity.

    (a) A producer must unless otherwise authorized by CCC, request 
loans and loan deficiency payments at the county office that, in 
accordance with part 718 of this title, is responsible for 
administering the program. To receive loans and loan deficiency 
payments for 2000 crop honey, a producer shall execute a note and 
security agreement or loan deficiency payment application on or before 
March 31 of the year following the year in which the honey was 
extracted.
    (b) A producer must request a loan at the county office of the 
county where the honey is stored if the honey is stored at the 
producer's farm. A producer who requests a loan on honey stored in 
eligible storage other than the producer's farm, may request loans at 
either the county office of the county where the storage facility is 
located or at the county office of the county where the producer's main 
place of business is located. A CMA must request loans at the county 
office for the county in which the principal office of the CMA is 
located unless the State committee designates another county office. If 
the CMA has operations in two or more

[[Page 15180]]

States, the CMA must file its loan applications at the county office 
for the county in which its principal office for each State is located.
    (c) Loans will be made on the honey as declared and certified by 
the producer on Form CCC-633 (Honey), (Honey Loan Certification and 
Worksheet) at the time the honey is pledged as collateral for a loan. 
The producer is also required to declare and certify on Form CCC-633 
(Honey) the class (table or nontable) and floral source of the honey at 
the time the honey is pledged as collateral for a loan.
    (d) The request for a loan shall not be approved until all 
producers having an interest in the honey sign the note and security 
agreement and CCC approves such note and security agreement. The 
disbursement of loans will be made by county offices on behalf of CCC, 
for honey that:
    (1) Has been extracted;
    (2) Is in eligible storage; and
    (3) Has not been blended or mixed with ineligible honey.
    (e) Loans mature on demand but not later than the last day of the 
ninth calendar month following the month in which the note and security 
agreement was approved. When the final maturity date falls on a non-
workday for county offices, CCC shall extend the final date to the next 
workday. Before the date determined in paragraph (a) of this section, a 
producer may re-offer as loan collateral any eligible honey that has 
been offered previously for a CCC loan and the loan has been repaid at 
principal plus interest only.
    (f) If, after a loan is made, CCC determines that the producer or 
the honey collateral is not in compliance with any of the provisions of 
this part, the producer shall refund the total amount disbursed under 
loan and charges plus interest, including late payment interest as 
provided in part 1403 of this title.


Sec. 1434.11  Fees and interest.

    (a) A producer shall pay a nonrefundable loan service fee to CCC. 
The loan service fee shall be the smaller of one-half of 1 percent 
(.005) times the gross loan amount or $45 per loan plus $3 for each 
storage structure over one.
    (b) Interest that accrues with respect to a loan shall be 
determined in accordance with part 1405 of this chapter.


Sec. 1434.12  Liens.

    (a) CCC's security interest in the honey pledged as collateral is 
first and superior to all other security interests.
    (b) The county office shall file or record, as required by State 
law, all financing statements needed to perfect a security interest in 
honey pledged as collateral for a loan. The cost of filing and 
recording shall be for the account of CCC.
    (c) If there are any other security interests, liens, or 
encumbrances on the honey, CCC shall obtain waivers that fully protect 
the interest of CCC even though the security interests, liens, or 
encumbrances are satisfied from the loan proceeds. No additional 
security interests, liens, or encumbrances shall be placed on the honey 
after the loan is approved.


Sec. 1434.13  Transfer of producer's interest prohibited.

    Absent written approval from CCC, the producer shall not transfer 
either the remaining interest in, or right to redeem, the honey pledged 
as collateral for a loan on honey nor shall anyone acquire such 
interest or right. Subject to the provisions of Sec. 1434.17, a 
producer who wishes to liquidate all or part of a loan by contracting 
for the sale of the honey must obtain written approval from the county 
office on a form prescribed by CCC to remove a specified quantity of 
the honey from storage. Any such approval shall be subject to the terms 
and conditions set forth in the applicable form, copies of which may be 
obtained by producers at the county office.


Sec. 1434.14  Loss or damage.

    The producer is responsible for any loss in quantity or quality of 
the honey pledged as collateral for a loan. CCC shall not assume any 
loss in quantity or quality of the loan collateral.


Sec. 1434.15  Personal liability of the producer.

    (a) When applying for an individual or joint loan or loan 
deficiency payment, each producer agrees:
    (1) When signing Form CCC-633 (Honey), Honey Loan Certification and 
Worksheet and Form CCC-677, Farm Storage Note and Security Agreement, 
that the producer will:
    (i) Provide correct, accurate, and truthful certifications and 
representations of the loan quantity and all other matters of fact and 
interest; and
    (ii) Not remove or dispose of any amount of the loan quantity 
without prior written approval from CCC in accordance with this 
section.
    (2) That violation of the terms and conditions of this part and 
Form CCC-677 will cause harm or damage to CCC in that funds may be 
disbursed to the producer for a loan quantity that is not actually in 
existence or for a quantity for which the producer is not eligible.
    (b) For the purposes of this section, violations include any 
failure to comply with this part or the loan agreement, including but 
not limited to any incorrect certification or:
    (1) Unauthorized removal of honey, which shall include, but is not 
limited to, the movement of any loan quantity of honey from the storage 
structure in the commodity was stored when the loan was approved to any 
other storage structure whether or not such structure is located on the 
producer's farm without prior written authorization from the county 
committee in accordance with Sec. 1434.14;
    (2) Any unauthorized disposition, which shall include, but is not 
limited to, the conversion of any loan quantity pledged as collateral 
for a loan without prior written authorization from the county 
committee in accordance with this section.
    (c) The producer and CCC agree that it will be difficult, if not 
impossible, to prove the amount of damages to CCC for conduct that is 
in violation of this section. Accordingly, if the county committee 
determines that the producer has engaged in any such violation, 
liquidated damages shall be assessed in addition to any loan refund and 
other charges that may be due. The amount of such damages shall be 
computed using the quantity of honey that is involved in the violation 
and the following formula. If CCC determines the producer:
    (1) Acted in good faith when the violation occurred, liquidated 
damages will be assessed by multiplying the quantity involved in the 
violation by:
    (i) 10 percent of the loan rate applicable to the loan note for the 
first offense; or
    (ii) 25 percent of the loan rate applicable to the loan note for 
the second offense; or
    (2) Did not act in good faith with regard to the violation, or for 
cases other than the first or second offense, liquidated damages will 
be assessed by multiplying the quantity involved in the violation by 25 
percent of the loan rate applicable to the loan note.
    (d) For liquidated damages assessed in accordance with paragraph 
(c)(1) of this section, the county committee shall:
    (1) Require repayment of the loan principal applicable to the loan 
quantity involved in the violation plus charges and interest; and
    (2) If the producer fails to pay such amount within 30 calendar 
days from the date of notification, call the applicable loan for all of 
the honey under loan, plus charges and interest.
    (e) For liquidated damages assessed in accordance with paragraph 
(c)(2) of this section, the county committee shall call

[[Page 15181]]

the loan involved in the violation, and charges plus interest.
    (f) The county committee:
    (1) May waive the administrative actions taken in accordance with 
paragraphs (c)(1) and (d) of this section if the county committee 
determines that:
    (i) The violation occurred inadvertently, accidentally, or 
unintentionally; or
    (ii) The producer acted to prevent spoilage of the commodity.
    (2) Shall not consider the following acts as inadvertent, 
accidental, or unintentional:
    (i) Movement of loan collateral off the farm;
    (ii) Movement of loan collateral from one storage structure to 
another on the farm; and (iii) Consumption of loan collateral.
    (g) If there is any violation of the loan agreement or this part, 
the loan may be terminated in which case there must be a full refund of 
the loan plus interest and costs.
    (h) If the county committee determines that the producer has 
violated this part or the loan agreement, the county committee shall 
notify the producer in writing that:
    (1) The producer has 30 calendar days to provide evidence and 
information regarding the circumstances that caused the violation, to 
the county committee, and
    (2) Administrative actions will be taken in accordance with 
paragraphs (d) or (e) of this section.
    (i)(1) If a producer:
    (i) Makes any fraudulent or misleading representation in obtaining 
a loan, maintaining, or settling a loan; or
    (ii) Disposes or moves the loan collateral without the approval of 
CCC, such loan shall become payable upon demand by CCC. The producer 
shall be liable for:
    (A) The amount of the loan;
    (B) Any additional amounts paid by CCC with respect to the loan;
    (C) All other costs that CCC would not have incurred but for the 
fraudulent representation, the unauthorized disposition or movement of 
the loan collateral;
    (D) Interest on such amounts;
    (E) Late payment interest as may be provided for in part 1403 of 
this title; and
    (F) Liquidated damages assessed under paragraph (c) of this 
section; and
    (2) Notwithstanding any provisions of the note and security 
agreement, if a producer has made any such fraudulent or misleading 
representation to CCC or if the producer has disposed of, or moved, the 
loan collateral without prior written approval from CCC in accordance 
with this section, the value of the settlement for such collateral 
removed by CCC shall be determined by CCC according to this section.
    (j) A producer shall be personally liable for any damages resulting 
from honey removed by CCC, containing mercurial compounds or other 
substances poisonous to humans, animals, or food commodities that are 
contaminated.
    (k) If the amount disbursed under a loan or in settlement thereof 
exceeds the amount authorized under this part, the producer shall be 
personally liable for repayment of such excess and charges, plus 
interest, and for any other sanction as may be allowed by law.
    (l) If the amount collected from the producer in satisfaction of 
the loan is less than the amount required in accordance with this part, 
the producer shall be personally liable for repayment of the amount of 
such deficiency and charges, plus interest.
    (m) In the case of joint loans, the personal liability for the 
amounts specified in this section shall be joint and several on the 
part of each producer signing the loan note. Further, each producer who 
is a party to a joint loan will be jointly and severally liable for any 
violation of the terms and conditions of the note and security 
agreement, and the regulations set forth in this part. Each such 
producer shall also remain liable for repayment of the entire loan 
amount until the loan is fully repaid without regard to such producer's 
claimed share in the honey, or loan proceeds, after execution of the 
note and security agreement by CCC.
    (n) Any or all of the liquidated damages assessed in accordance 
with the provisions of paragraph (c) of this section may be waived as 
determined by CCC.
    (o) Remedies set out in this section are in addition to remedies 
the CCC will have through its security interest on honey that secures 
the repayment of the loan made on the honey.
    (p) All remedies provided for in this section or part are in 
addition to any remedies as may otherwise be provided for in law.


Sec. 1434.16  Release of the honey pledged as collateral for a loan.

    (a)(1) A producer shall not move or dispose of any honey pledged as 
collateral for a loan until prior written approval for such removal or 
disposition has been received from the county committee in accordance 
with this section.
    (2) A producer may at any time obtain a release of all or part of 
the honey remaining as loan collateral by paying to CCC the amount of 
the loan and any charges that had been made by CCC to the producer with 
respect to the quantity of the honey released, plus interest.
    (3) When the proceeds of a sale of honey are needed to repay all or 
part of a loan, the producer must request and obtain prior written 
approval of the county office on a form prescribed by CCC in order to 
remove a specified quantity of the honey from storage. Any such 
approval shall be subject to the terms and conditions set forth in the 
applicable form, copies of which may be obtained by producers at the 
county office. Any such approval shall not constitute a release of 
CCC's security interest in the commodity or release the producer from 
liability for any amounts due and owing to CCC with respect to any loan 
indebtedness if full payment of such amounts is not received by the 
county office.
    (b) The note and security agreement shall not be released until all 
loan liability has been satisfied in full.
    (c) After satisfaction of a loan, CCC shall release CCC's security 
interest in the honey at the producer's request. The producer shall be 
responsible for payment of any fee for such release if such fee can be 
determined.


Sec. 1434.17  Liquidation of loans.

    (a) The producer is required to repay the loan on or before 
maturity by payment of the amount of loan, plus any charges, plus 
interest.
    (b) If a producer fails to settle the loan in accordance with 
paragraph (a) of this section within 30 calendar days from the maturity 
date of such loan, or other reasonable time period as established by 
CCC, a claim for the loan amount, plus charges, plus interest shall be 
established. CCC shall inform the producer before the maturity date of 
the loan of the date by which the loan must be settled or a claim will 
be established in accordance with part 1403 of this title.


Sec. 1434.18  Loan repayments.

    (a) For 2000 crop honey, a producer may repay a nonrecourse 
marketing assistance loan at a rate that is the lesser of:
    (1) The principal, plus interest; or
    (2) The alternative repayment rate for honey as determined by the 
Secretary.
    (b) To the extent practicable, CCC shall determine and announce the 
alternative repayment rate, based upon the prevailing domestic market 
price for honey, on a monthly basis.

[[Page 15182]]

Sec. 1434.19  Settlement.

    The value of the settlement of loans shall be made by CCC on the 
following basis:
    (a) With respect to nonrecourse loans, the schedule of premiums and 
discounts for the commodity:
    (1) If the value of the collateral at settlement is less than the 
amount due, the producer shall pay to CCC the amount of such deficiency 
and charges, plus interest on such deficiency; or
    (2) If the value of the collateral at settlement is greater than 
the amount due, such excess shall be retained by CCC and CCC shall have 
no obligation to pay such amount to any party.
    (b) With respect to honey that is delivered from other than an 
approved warehouse, settlement shall be made by CCC on the basis of the 
basic loan rate that is in effect for the commodity at the producer's 
customary delivery point, as determined by CCC.


Sec. 1434.20  Foreclosure.

    (a) Upon maturity and nonpayment of the loan, title to the 
unredeemed honey securing the loan shall vest in CCC.
    (b) If the total amount due on a loan or the unpaid amount of the 
note and charges, plus interest is not satisfied upon maturity, CCC may 
remove the honey from storage and assign, transfer, and deliver the 
honey or documents evidencing title thereto at such time, in such 
manner, and upon such terms as CCC may determine at public or private 
sale. Any such disposition may also be effected without removing the 
honey from storage. The honey may be processed before sale and CCC may 
become the purchaser of the whole or any part of the honey at either a 
public or private sale.
    (1) If the value of the collateral computed at settlement is less 
than the amount due, the producer shall pay to CCC the amount of such 
deficiency and charges, plus interest on such deficiency and CCC may 
take any action against the producer to recover the deficiency; or
    (2) If the proceeds received from the sale of the honey so computed 
are greater than the sum of the amount due plus any cost incurred by 
CCC in conducting the sale of the honey, such excess shall be paid to 
the producer or, if applicable, to any secured creditor of the 
producer.


Sec. 1434.21  Loan deficiency payments.

    (a) Loan deficiency payments shall be available with respect to 
2000 crop of honey.
    (b) In order to be eligible to receive loan deficiency payment for 
a crop of honey, the producer must:
    (1) Comply with all of the program requirements to be eligible to 
obtain loan in accordance with this part;
    (2) Agree to forego obtaining such loans;
    (3) File a Form CCC-666 LDP;
    (4) Comply with Secs. 1434.7 and 1434.8 or provide evidence of 
production as determined by CCC for such quantity; and
    (5) Otherwise comply with all program requirements.
    (c) The loan deficiency payment rate for a crop shall be the amount 
by which the marketing assistance loan rate exceeds the rate at which 
CCC has announced that producers may repay their marketing assistance 
loan in accordance with Sec. 1434.18.
    (d) The loan deficiency payment applicable to a crop of honey shall 
be computed by multiplying the loan deficiency payment rate, as 
determined in accordance with paragraph (e) of this section, by the 
quantity of honey the producer is eligible to pledge as collateral for 
a price support loan for which a loan deficiency payment is required.
    (e) Notwithstanding any provisions in this section, loan deficiency 
payments may be based on 100 percent of the net quantity specified on 
acceptable evidence of disposition of the honey certified as eligible 
for a loan deficiency payment if CCC determines that such quantity 
represented the quantity for the number of containers of honey 
initially certified for the loan deficiency payment when the payment 
was made.
    (f) When applying for an individual loan deficiency payment, each 
producer agrees:
    (1) When signing Form CCC-666 LDP, that the producer will provide 
correct, accurate, and truthful certifications and representations of 
the loan quantity and all other matters of fact and interest; and
    (2) That violation of the terms and conditions of this part will 
cause harm or damage to CCC in that funds may be disbursed to the 
producer for a LDP quantity that is not actually in existence or for a 
quantity for which the producer is not eligible.
    (g) For the purposes of this section, violations include any 
failure to comply with this part or the loan agreement, including but 
not limited to any incorrect certification.


Sec. 1434.22  Handling payments and collections not exceeding $9.99.

    In order to avoid administrative costs of making small payments and 
handling small accounts, amounts of $9.99 or less that are due the 
producer will be paid only upon the producer's request. Deficiencies of 
$9.99 or less, including interest, may be disregarded unless demand for 
payment is made by CCC.


Sec. 1434.23  Death, incompetency, or disappearance; appeals; other 
loan provisions.

    (a) In the case of death, incompetency, or disappearance of any 
producer who is entitled to the payment of any sum in settlement of a 
loan, payment shall, upon proper application to the county office that 
made the loan, be made to the persons who would be entitled to such 
producer's share under the regulations contained in part 707 of this 
title. Applications for loans may be made upon application of a 
representative of the producer as allowed under standard practice for 
farm programs.
    (b) Appeals of adverse decisions made under this part shall be 
subject to the provisions of 7 CFR parts 11 and 780.
    (c) In order to effectuate a conversion of 2000-crop recourse honey 
loans to nonrecourse loans, producers will be required to sign a new 
CCC-677 Note and Security Agreement. The loan maturity date will remain 
the same as the original recourse loan, the loan rate will be increased 
and additional disbursements will be paid to the producers.

PART 1435--SUGAR PROGRAM

    15. The authority citation for part 1435 continues to read as 
follows:

    Authority: 7 U.S.C. 7272; and 15 U.S.C. 714b and 714c.


Sec. 1435.2  [Amended]

    16. Amend Sec. 1435.2 by removing the definition for ``Recourse 
loan.''

    17. Revise the second sentence in paragraph (a) of Sec. 1435.100 to 
read as follows:


Sec. 1435.100  Applicability.

    (a) * * * The regulations of this subpart set forth the terms and 
conditions under which CCC will make nonrecourse loans available to 
eligible processors. * * *
* * * * *

    18. Remove Sec. 1435.102 and redesignate Secs. 1435.103 through 
1435.111 as Secs. 1435.102 through 1435.110.

    19. In newly designated Sec. 1435.104, remove paragraph (g)(2) and 
redesignate paragraphs (g)(3) and (g)(4) as paragraphs (g)(2) and 
(g)(3).

    20. In newly designated Sec. 1435.105, revise paragraphs (c) and 
(d)(4) to read as follows:


Sec. 1435.105  Loan maintenance.

* * * * *

[[Page 15183]]

    (c) Nonrecourse loan recipients shall pay all eligible producers 
who have delivered or will deliver sugar beets or sugarcane to such 
processor for processing not less than the minimum payment levels CCC 
specifies for the applicable crop year when nonrecourse loans are in 
effect.
    (d) * * *
    (4) If CCC determines, by actual measurement or otherwise, that the 
actual quantity serving as collateral for a nonrecourse loan is less 
than the loan quantity, because of incorrect certification, 
unauthorized removal, or unauthorized disposition, CCC may call the 
loan and other outstanding loans. Such determination shall result in 
the processor being ineligible for nonrecourse loans for the remainder 
of that crop year and through the next crop year.

    21. In newly designated Sec. 1435.106, remove paragraph (b), 
redesignate paragraphs (c) through (h) as paragraphs (b) through (g), 
and revise newly redesignated paragraph (g) introductory text to read 
as follows:


Sec. 1435.106  Loan settlement and foreclosure.

* * * * *
    (g) If a processor's nonrecourse loan indebtedness is not satisfied 
in accordance with the provisions of this section:
* * * * *

PART 1476--CRANBERRY MARKET ASSISTANCE PAYMENTS

    22. Add part 1476 to subchapter B of 7 CFR Chapter XIV to read as 
follows:

PART 1476--CRANBERRY MARKET LOSS ASSISTANCE PAYMENT PROGRAM

Sec.
1476.1   Applicability.
1476.2   Administration.
1476.3   Definitions.
1476.4   Eligibility.
1476.5   Payment application, time, and method.
1476.6   Applicant payment quantity.
1476.7   Payment rate and cranberry farm unit payment.
1476.8   Offsets.
1476.9   Appeals.
1476.10   Misrepresentation and scheme or device.
1476.11   Estates, trusts, and minors.
1476.12   Death, incompetency, or disappearance.
1476.13   Maintaining records.
1476.14   Refunds; joint and several liability.

    Authority: Sec. 816, Pub. L. 106-387, 14 Stat. 1549; sec. 
203(d)(1), Pub. L. 106-224, 7 U.S.C. 1421 note; 15 U.S.C. 714 et 
seq.


Sec. 1476.1  Applicability.

    (a) The regulations in this part are applicable to the 1999 crop of 
cranberries. These regulations set forth the terms and conditions under 
which the Commodity Credit Corporation (CCC) shall provide payments to 
cranberry growers who have applied to participate in the Cranberry 
Market Loss Assistance Payment Program in accordance with section 816 
of Public Law 106-387. Additional terms and conditions are set forth in 
the payment application that must be executed by participants to 
receive a cranberry payment.
    (b) Payments shall be available only for cranberries produced and 
harvested in the United States.


Sec. 1476.2  Administration.

    (a) The Cranberry Market Loss Payment Program shall be administered 
under the general supervision of the Executive Vice President, CCC, and 
shall be carried out by FSA's Price Support Division (PSD) and Kansas 
City Management Office (KCMO).
    (b) The PSD and KCMO and representative and employees thereof, do 
not have the authority to modify or waive any of the provisions of the 
regulations of this part.
    (c) No provision or delegation of this part to PSD or KCMO shall 
preclude the Executive Vice President, CCC, or a designee, from 
determining any question arising under the program or from reversing or 
modifying any determination made by PSD or KCMO.
    (d) The Executive Vice President, CCC or a designee, may waive or 
modify deadlines and other program requirements in cases where lateness 
or failure to meet such other requirements do not affect adversely the 
operation of the Cranberry Market Loss Assistance Payment Program.
    (e) A representative of CCC may execute the Cranberry Market Loss 
Assistance Payment Program applications and related documents only 
under the terms and conditions determined and announced by CCC.
    (f) Payment applications and related documents not executed in 
accordance with the terms and conditions determined and announced by 
CCC, including any purported execution outside of the dates authorized 
by CCC, shall be null and void unless the Executive Vice President, 
CCC, shall otherwise allow.


Sec. 1476.3  Definitions.

    The definitions set forth in this section shall be applicable for 
purposes of administering the Cranberry Market Loss Assistance Payment 
Program.
    Agricultural Marketing Service or AMS means the Agricultural 
Marketing Service of the Department.
    Application means the Cranberry Market Loss Assistance Program 
payment application, CCC.
    Application period means a period, to be announced by CCC, during 
which applications for payments under the Cranberry Market Loss 
Assistance Payment Program must be received to be considered for 
payment.
    Barrel means 100 pounds of stored cranberries.
    Cranberry Marketing Committee means the eight member panel that 
administers the Cranberry Marketing Order authorizing volume control 
through producer allotments.
    Cranberry Marketing Order means the order regulating the handling 
of cranberries grown in Massachusetts, Rhode Island, Connecticut, New 
Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long 
Island in the State of New York. The order is effective under the 
Agricultural Marketing Agreement Act of 1937.
    Department or USDA means the United States Department of 
Agriculture.
    Farm Unit means a separate and distinct farming operation that 
reports independent production information to the Cranberry Marketing 
Committee.
    Person means any individual, group of individuals, partnership, 
corporation, estate, trust association, cooperative, or other business 
enterprise or other legal entity who is, or whose members are, a 
citizen of, or legal resident alien or aliens in the United States.
    Secretary means the Secretary of the United States Department of 
Agriculture or any other officer or employee of the Department who has 
been delegated the authority to act in the Secretary's stead with 
respect to the program established in this part.
    United States means the 50 States of the United States of America, 
the District of Columbia, and the Commonwealth of Puerto Rico.


Sec. 1476.4  Eligibility.

    (a) To be eligible to receive cash payments under this part, a 
cranberry farm unit must:
    (1) Have produced cranberries in the United States anytime during 
the 1999 crop year;
    (2) Not have been compensated for the same loss by any other 
Federal programs, except an indemnity provided under a policy or plan 
of insurance offered under the Federal Crop Insurance Act (7 U.S.C. 
1501).
    (3) Be engaged in the business of producing and marketing 
agricultural products at the time of application for payment.
    (4) Apply for payments during the application period.

[[Page 15184]]

    (b) A cranberry farm unit must submit a timely application and 
comply with all other terms and conditions of this part and 
instructions issued by CCC, as well as comply with those instructions 
that are otherwise contained in the application to be eligible for 
benefits under this part.


Sec. 1476.5  Payment application, time, and method.

    (a) Payments in accordance with this part shall be made available 
to eligible cranberry producers based on information provided on a 
Cranberry Market Loss Assistance Payment Program Application, CCC-890.
    (b) Payment applications must be received within the program 
application period announced by CCC.
    (c) Cranberry Market Loss Assistance Payment Program applications 
may be obtained from the CCC and PSD, in person, by mail, by telephone, 
or by facsimile. In addition, applicants may download a copy of the 
Form CCC-890 at http://www.usda.gov/dafp/psd. In order to participate 
in the program authorized by this part, cranberry producers must 
execute the Cranberry Market Loss Assistance Payment Program 
Application and forward the completed original to PSD as directed on 
the application.


Sec. 1476.6  Applicant payment quantity.

    (a) The applicant's payment quantity of cranberries will be 
determined by the CCC, based on the 1999 crop of cranberries that was 
produced on each farm unit, as provided by the Cranberry Marketing 
Committee or obtained by CCC, with the agreement of the applicant.
    (b) The maximum quantity of the 1999 crop of cranberries for which 
producers are eligible for a payment for a farm unit under this part 
shall be 1,600,000 pounds.


Sec. 1476.7  Payment rate and cranberry farm unit payment.

    (a) Payments under this part may be made to a cranberry farm unit 
only up to 1,600,000 pounds of 1999 cranberries produced in the United 
States. A payment rate will be determined after the conclusion of the 
application period, and shall be calculated by dividing the total 
available program funds for the Cranberry Market Loss Assistance 
Payment Program by the total 1999 eligible cranberry production 
submitted and approved for payment.
    (b) Each cranberry farm unit payment will be calculated by 
multiplying the payment rate determined in paragraph (a) of this 
section by the farm unit's eligible production.
    (c) In the event that approval of all eligible applications would 
result in expenditures in excess of the amount available, CCC shall 
reduce the payment rate in such manner as CCC, in its sole discretion, 
finds fair and reasonable.
    (d) After receipt of the application for payment, together with 
required supporting documents and the determination of the payment 
rate, CCC will issue payments to the applicant by electronic deposit to 
the applicants's account. Applicants may request that payment be made 
by mailed check. If a payment is not made within 30 days of the close 
of the announced application period, CCC will pay interest at the 
prompt payment interest rate.


Sec. 1476.8  Offsets.

    (a) Any payment or portion thereof due any person under this part 
shall be allowed without regard to questions of title under State law, 
and without regard to any claim or lien against a farm unit, a farm 
unit's cranberry production, or proceeds thereof, in favor of the 
producer or any other creditors, including agencies of the U.S. 
Government.
    (b) Any payments received by a cranberry farm unit are not subject 
to administrative offsets or withholdings, including administrative 
offset under chapter 37 of title 31, United States Code, as provided by 
Public Law 106-387.
    (c) The regulations governing offsets and withholdings found at 7 
CFR part 1403 shall not be applicable to this part.


Sec. 1476.9  Appeals.

    Any producer who is dissatisfied with a determination made pursuant 
to this part may make a request for reconsideration or appeal of such 
determination in accordance with the appeal regulations set forth at 7 
CFR parts 11 and 780.


Sec. 1476.10  Misrepresentation and scheme or device.

    (a) A cranberry farm unit shall be ineligible to receive assistance 
under this part if it is determined by the CCC to have knowingly:
    (1) Adopted any scheme or device that tends to defeat the purpose 
of this program;
    (2) Made any fraudulent representation; or
    (3) Misrepresented any fact affecting a determination under this 
program. CCC will notify the appropriate investigating agencies of the 
United States and take steps deemed necessary to protect the interests 
of the government.
    (b) Any funds disbursed pursuant to this part to any person or farm 
unit engaged in a misrepresentation, scheme, or device, shall be 
refunded to CCC, with interest together with such other sums as may 
become due. Any cranberry farm unit or person engaged in acts 
prohibited by this section and any cranberry farm unit or person 
receiving payment under this part shall be jointly and severally liable 
with other persons or operations involved in such claim for benefits 
for any refund due under this section and for related charges. The 
remedies provided in this part shall be in addition to other civil, 
criminal, or administrative remedies that may apply.


Sec. 1476.11  Estates, trusts, and minors.

    (a) Program documents executed by persons legally authorized to 
represent estates or trusts will be accepted only if such person 
furnishes evidence of the authority to execute such documents.
    (b) A minor who is otherwise eligible for assistance under this 
part must also:
    (1) Establish that the right of majority has been conferred on the 
minor by court proceedings or by statute;
    (2) Show that a guardian has been appointed to manage the minor's 
property and the applicable program documents are executed by the 
guardian; or
    (3) Furnish a bond under which the surety guarantees any loss 
incurred for which the minor would be liable had the minor been an 
adult.


Sec. 1476.12  Death, incompetency, or disappearance.

    In the case of death, incompetency, disappearance or dissolution of 
a person that is eligible to receive benefits in accordance with this 
part, such person or persons specified in part 707 of this chapter may 
receive such benefits, as determined appropriate by FSA.


Sec. 1476.13  Maintaining records.

    Cranberry farm units making application for benefits under this 
part must maintain accurate records and accounts that will document 
that they meet all eligibility requirements specified in this part, as 
may be requested by CCC. Such records and accounts must be retained for 
3 years after the date of payment to the cranberry farm unit under this 
program. Such records shall be available at all reasonable times for an 
audit or inspection by authorized representatives of CCC, United States 
Department of Agriculture, or the Comptroller General of the United 
States. Failure to keep, or make available, such records may result in 
refund to CCC of all payments received plus interest thereon, as 
determined by CCC.

[[Page 15185]]

Sec. 1476.14  Refunds; joint and several liability.

    (a) In the event there is a failure to comply with any term, 
requirement, or condition for payment arising under the application, or 
this part, and if any refund of a payment to CCC shall otherwise become 
due in connection with the application, or this part, all payments made 
under this part to any cranberry farm unit shall be refunded to CCC 
together with interest as determined in accordance with paragraph (c) 
of this section and late payment charges as provided in part 1403 of 
this title.
    (b) All persons signing a cranberry farm unit's application for 
payment as having an interest in the farm unit shall be jointly and 
severally liable for any refund, including related charges, that is 
determined to be due for any reason under the terms and conditions of 
the application or this part with respect to such operation.
    (c) Interest shall be applicable to refunds required of any person 
under this part if CCC determines that payments or other assistance was 
provided to a person who was not eligible for such assistance. Such 
interest shall be charged at the rate of interest that the United 
States Treasury charges the CCC for funds, from the date CCC made such 
benefits available to the date of repayment or the date interest 
increases as determined in accordance with applicable regulations.
    (d) 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 792.
    (e) Any excess payments made by CCC with respect to any application 
under this part must be refunded.
    (f) In the event that a benefit under this part was provided as the 
result of erroneous information provided by any person, the benefit 
must be repaid with any applicable interest.

    Dated: March 9, 2001.
James R. Little,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. 01-6428 Filed 3-13-01; 10:11 am]
BILLING CODE 3410-05-P