[Federal Register Volume 66, Number 205 (Tuesday, October 23, 2001)]
[Rules and Regulations]
[Pages 53507-53510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-26543]


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DEPARTMENT OF AGRICULTURE

Farm Service Agency

Commodity Credit Corporation

7 CFR Parts 718, 723 and 1464

RIN 0560-AG 40


Amendments to the Tobacco Marketing Quota Regulations

AGENCY: Farm Service Agency, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements the provisions of the Agricultural Risk 
Protection Act of 2000 (ARPA) regarding transfers of tobacco 
allotments, the lease and transfer of burley tobacco quota and record 
keeping for burley tobacco quota and acreage. It also implements the 
provisions of the Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies Appropriations Act, 2001 (the 2001 
Act) regarding the Tobacco Loss Assistance Program 2000 (TLAP00).

Notice and Comment

    Section 840 of Pub. L. 106-387 requires that the regulations 
necessary to implement its provisions regarding TLAP00 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. Section 263 of Pub. L. 106-224 requires that the 
regulations necessary to implement its provisions regarding quotas and 
allotments 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 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.

EFFECTIVE DATE: October 23, 2001.

FOR FURTHER INFORMATION CONTACT: Joe Lewis Jr., Agricultural Program 
Specialist, Tobacco and Peanuts Division, or Bob Tarczy, Agricultural 
Economist, Tobacco and Peanuts Analysis Staff, Farm Service Agency, 
United States Department of Agriculture (USDA), 1400 Independence 
Avenue, SW., STOP 0514, Washington, DC 20250-0514, telephone (202) 720-
0795, (202) 720-5346.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This final rule is issued in conformance with Executive Order 12866 
and has been determined to be significant and was reviewed by OMB .

Regulatory Flexibility Act

    It has been determined that 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.

Federal Assistance Programs

    The title and number of the Federal Assistance Program, as found in 
the Catalog of Federal Domestic Assistance, to which this final rule 
applies is: Commodity Loans and Purchases-10.0514.

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).

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.

Small Business Regulatory Enforcement Act of 1996

    Section 263 of Pub. L. 106-224 and Section 840 of Pub. L. 106-387 
requires that these regulations be issued as soon as practicable after 
the date of enactment and without regard to the notice and comment 
provision 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 
notice of proposed rulemaking and public participation in rulemaking. 
They also require the Secretary to use the provisions of 5 U.S.C. 808, 
the Small Business Regulatory Enforcement Act (SBREFA), which provide 
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 801 of SBREFA requiring a 60-day delay for 
Congressional review of a major regulation before the regulation can go 
into effect. This final rule is considered major for the purposes of 
SBREFA. However, these regulations affect a large number of 
agricultural producers who have been significantly impacted by natural 
disasters and poor market conditions. Accordingly, and because Sec. 263 
explicitly sets out Congress' intent that the waiting period of SBREFA 
should not apply, it has been determined that it would be

[[Page 53508]]

contrary to the public interest and the relevant public laws to delay 
implementation of this rule. This rule is therefore made effective 
immediately.

Paperwork Reduction Act

    Section 263 of Pub. L. 106-224 requires that the bulk of these 
regulations be promulgated and the programs administered without regard 
to the Paperwork Reduction Act and an equivalent provision is contained 
in the other legislation implemented herein, specifically in section 
840 of the 2001 Act. This means that the information collections 
required by these rules and the burdens that may be imposed as a result 
do not have to be reviewed and/or approved by the Office of Management 
and Budget or be subject to the normal requirement for a 60-day public 
comment period that may be applicable to some information collections.

Background

    This final rule implements provisions of section 204 (b) (8)-(12) 
of the ARPA, enacted on June 20, 2000, which amended provisions of the 
Agricultural Adjustment Act of 1938 (1938 Act) pertaining to burley 
tobacco. In addition, as indicated below provisions of Pub. L. 106-387 
relating to tobacco are also implemented in this rule.
    Section 204(b)(8) of the ARPA revised section 318 (g) of the 1938 
Act (7 U.S.C. 1314d), which deals with the transfer of allotments for 
fire-cured, dark air-cured and Virginia sun-cured tobacco. Prior to the 
amendment such transfers between farms could not exceed more than 10 
acres of allotments and the total acreage allotted to any farm after 
the transfer could not exceed 50 percent of the acreage of cropland on 
the farm. The amendment retains the latter limitation but drops the 10 
acre rule. This rule updates the program regulations accordingly.
    Section 204(b)(9) of the ARPA deals with burley tobacco. It amends 
section 319(c)(3) of the 1938 Act which sets out the formula for 
setting the annual burley tobacco quota. Under that formula, the 
Secretary is allowed to make an adjustment in the calculated formula so 
that stocks of the tobacco reach a prescribed ``reserve stock level.'' 
Provisions of Section 319 have limited the amount in pounds that can be 
made using that authority; however, the new law provides that the 
limitation on the adjustment will not apply beginning with any year in 
which non-committed pool stocks of burly tobacco actually do reach a 
level equal to or less than the reserve stock level. This rule updates 
the program regulations accordingly.
    Section 204(b)(10)(A) of the ARPA also deals with burley tobacco. 
It also amends section 319. It limit the total amount of under 
marketings that can be ``carried over'' as quota additions to farms, 
nationwide, in total, to 10 percent of the national basic quota for the 
preceding year. Hence, if individual farms under marketings will, in 
total, exceed that level, some form of factoring will have to be used 
to determine the amount of under marketings that can be carried forward 
by the individual farm. In this rule, the program regulations are 
updated accordingly. Further, in other legislation, Pub. L. 106-472, 
enacted after ARPA, Congress provided that the amendments made by 
Section 204(b)(10)(A) of the ARPA would only apply beginning with under 
marketings of the 2001 crop of burley tobacco and with marketings of 
the 2002 crops of burley tobacco. Further, in Pub. L. 106-554, it was 
provided that section 204(b)(10)(B) would not be effective until July 
1, 2002. Hence, this limitation on the amount of under marketings that 
can be added to a farm's quota will not be applied until beginning with 
2002 crop (at which time the quota calculations will take into account 
the 2001 crop under marketings).
    Other provisions in this rule, however, are effective beginning 
with the 2001 crops. Section 204(b)(10)(B) of the ARPA deals with 
burley tobacco. It changes 319(k) of the 1938 Act to limit ``fall 
transfers'' of burley tobacco quota (those essentially being disaster 
transfers of quota made after the normal planting season). Under the 
statutory amendment, the total quantity of tobacco that can be leased 
or transferred to a farm during a crop year is limited to 15 percent of 
the effective quota on that farm that existed prior to the lease or 
transfer for leases filed after July 1 of the crop year. The program 
rules have been updated accordingly.
    Section 204(b)(11) of the ARPA deals with burley tobacco. It 
revises section 319(l) of the 1938 Act by making a technical change in 
the language dealing with allowing cross-county leasing of burley 
tobacco, but in certain states only and then only if, in those states, 
producers approve of the measure in a state-wide referendum. Previous 
language in Section 319 produced litigation and following the statutory 
revisions new votes were held in those states in which the Department 
had previously considered the measure for cross-county leasing to have 
been approved. After that new vote in those four states, three approved 
the measure--Tennessee, Indiana, and Ohio. Kentucky producers, which 
had previously approved the measure, voted against it. In this rule, 
the regulations are updated to reflect the new votes.
    Section 204(b)(12) of the ARPA deals with burley tobacco. It amends 
section 319 of the 1938 Act by adding a requirement that owners of 
farms for which a burley tobacco quota is established must report 
acreage planted to burley tobacco annually. This final rule revises the 
tobacco regulations at 7 CFR part 1464 accordingly and makes a 
corresponding change in 7 CFR 718.102(b)(4).
    This final rule also implements provisions of Pub. L. 106-387 
related to the TLAP 2000. TLAP 2000 unlike the previous ``TLAP'' 
program involved direct federal payments to farmers. In the previous 
TLAP, program the payments were made to States which then paid farmers. 
TLAP 2000 was provided for under Pub. L. 106-224 and a rule 
implementing that program was published in the Federal Register on 
November 2, 2000 (65 FR 65718). By the provisions of that statute 
actual production of the quota was required for anyone associated with 
the quota to be paid. However, Section 841 of Pub. L. 106-387 directs 
the Secretary to make payments to otherwise eligible persons who would 
have been paid but for the quota not being produced. Payments are to be 
made under the same rules, and in the same amounts, that otherwise 
applied to other payments but these payments are not subject to the 
same overall funding limit that applied to the program. Hence, the TLAP 
rules are amended accordingly and they are clarified, too, in accord 
with the circumstances under which the payment was made with respect to 
quota lessees. Other than the change in eligibility compelled by Pub. 
L. 106-387, there has been no change in payment eligibility and no 
additional payments will be made.
    Changes made in this rule are prospective only and do not effect 
previous program actions and determinations.

List of Subjects

7 CFR Part 718

    Acreage allotments, Marketing quotas, Reconstitutions.

7 CFR Part 723

    Acreage allotments, Auction warehouses, Dealers, Domestic 
manufacturers, Marketing quotas Penalties, Reconstitutions, Tobacco.

7 CFR Part 1464

    Tobacco, Loans, Importer assessments.

[[Page 53509]]

PART 718--PROVISIONS APPLICABLE TO MULTIPLE PROGRAMS

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

    Authority: 7 U.S.C. 1373, 1374, 7201 et seq.; 15 U.S.C. 714b, 
Pub. L. 106-224.


    2. Revise Sec. 718.102(b)(4) to read as follows:


Sec. 718.102  Acreage reports.

* * * * *
    (b) * * *
    (4) Participants in the programs authorized by parts 723 and 1464 
of this title must report the acreage planted to tobacco by kind on all 
farms that have an effective allotment or quota greater than zero; 
provided further that for burley tobacco each person who owns a farm 
for which a burley quota is established must report the acreage planted 
to burley tobacco, including instances in which the acres planted are 
zero acres; and
* * * * *

PART 723--TOBACCO

    4. The authority citation for 7 CFR part 723 continues to read as 
follows:

    Authority: 7 U.S.C. 1301-1314, 1314-1, 1314b, 1314b-1, 1314b-2, 
1314c, 1314d, 1314e, 1314f, 1314i, 1315, 1316, 1362, 1363, 1372-75, 
1377-1379, 1421, 1445-1 and 1445-2.

    5. Revise Sec. 723.206(c)(1) to read as follows:


Sec. 723.206  Determining farm marketing quotas and effective farm 
marketing quotas.

* * * * *
    (c) * * *
    (1) Upward adjustments. Adding the:
    (i) Effective under marketings from the preceding marketing year, 
but effective for the 2002 and subsequent marketing years, the 
aggregate amount for all farms of under marketings of burley tobacco 
for all farms that can be carried over shall be limited to 10 percent 
of the national basic quota of the preceding year. If needed, factoring 
will be undertaken to insure that the limit of the preceding sentence 
is not exceeded.
* * * * *

    6-8. Revise Secs. 723.216(e)(5)(iv), (e)(6)(ii)(B) and (i)(6) to 
read as follows:


Sec. 723.216  Transfer of tobacco acreage allotment or marketing quota 
by sale, lease, or owner.

* * * * *
    (e) * * *
    (5) * * *
    (iv) Filed on or before July 1. Unless the receiving farm is 
administratively located in the same county as the transferring farm. 
However, burley tobacco producers in the States of Tennessee, Ohio and 
Indiana shall, irrespective of the preceding sentence, be permitted to 
lease and transfer burley tobacco quota from one farm in a State to any 
other farm in the State if other conditions for the transfer are met.
* * * * *
    (e) * * *
    (6) * * *
    (ii) * * *
    (B) Pounds of quota to be transferred to the lessee farm do not 
exceed the difference obtained by subtracting the effective farm 
marketing quota (before the filing of the transfer agreement) for the 
lessee farm from the total pounds of tobacco marketed and/or available 
for marketing (based on estimated pounds of tobacco on hand and/or in 
the process of being produced) from the farm in the current year. 
However, the total quantity of tobacco that can be leased or 
transferred to a farm during a crop year may not exceed that quantity 
which equals 15 percent of the effective quota on the farm prior to any 
leases or transfers filed after July 1 of the crop year.
* * * * *
    (i) * * *
    (6) Limitation on acreage transferred. The total of the Fire-cured, 
Dark air-cured, or Virginia sun-cured tobacco allotment which may be 
transferred for each kind of tobacco, by sale, lease, or by owner, to a 
farm shall not exceed 50 percent of the acreage of cropland on the 
farm. The cropland in the farm for the current year for purposes of 
such transfers shall be the total cropland as defined in Part 718 of 
this chapter.
* * * * *

    9. Revise Sec. 723.503(a)(3) to read as follows:


Sec. 723.503  Establishing the quotas.

* * * * *
    (a) * * *
    (3) Reserve stock level adjustment. The Director may then adjust 
the total calculated by adding the sums of paragraphs (a)(1) and (a)(2) 
of this section, by making such adjustment which the Director, in his 
discretion, determines necessary to maintain inventory levels held by 
producer loan associations for burley and flue-cured tobacco at the 
reserve stock level. For burley tobacco, the reserve stock level for 
these purposes is the larger of 50 million pounds farm sales weight or 
15 percent of the previous year's national market quota. For flue-cured 
tobacco, the reserve stock level for these purposes is the larger of 
100 million pounds farm sales weight or 15 percent of the previous 
year's national market quota. Any adjustment under this clause shall be 
discretionary taking into account supply conditions: provided that for 
burley tobacco no downward adjustment under this clause may exceed the 
larger of 35 million pounds (farm sales weight) or 50 percent of the 
amount by which loan inventories exceed the reserve stock level. 
However, if for any of the 2001 and subsequent crops the uncommitted 
pool stocks of burley tobacco become equal to or less than the reserve 
stock level, then for that year and any subsequent year the limitation 
contained in the previous sentence on the amount of the downward 
adjustment in quota that may be made based on the reserve stock level, 
for that kind of tobacco, shall not apply.
* * * * *

PART 1464--TOBACCO

    10. The authority citation for part 1464 is revised to read as 
follows:

    Authority: 7 U.S.C. 1421, 1423, 1441, 1445, 1445-1; 1445-2; 15 
U.S.C. 714b, 714c; Pub. L. 106-78, Pub. L. 106-113, Stat.1135 and 
Pub. L. 106-224.


    11. Revise Sec. 1464.8(d)(1) to read as follows:


Sec. 1464.8  Eligible tobacco.

* * * * *
    (d) * * *
    (1) The farm operator has filed a report of the acreage planted to 
tobacco on the farm in the applicable year in accordance with part 718 
of this title.
* * * * *

    12. Revise Sec. 1464.401(a) to read as follows:


Sec. 1464.401  Applicability and basic terms for payments.

    (a) This subpart sets forth the terms and conditions of the Tobacco 
Loss Assistance Program 2000 (TLAP00) authorized by Section 204(b) of 
the Agricultural Risk Protection Act of 2000 (Pub. L. 106-224). That 
section provides that $340 million of funds of the Commodity Credit 
Corporation (CCC) shall be made available to make direct payments to 
eligible persons, on a farm for which the quantity of quota of eligible 
tobacco allotted to the farm was reduced from the 1999 crop year to the 
2000 crop year.
* * * * *

    13. Revise Sec. 1464.403 to read as follows:


Sec. 1464.403  Eligibility.

    For a person to be considered an ``eligible person'' for purposes 
of this

[[Page 53510]]

part, such person must own, operate or produce eligible tobacco on a 
farm for which a quota reduction from the 1999 crop year to the 2000 
crop year occurred and that was used for the production of tobacco 
during the 2000 crop year. Leased quotas may, as determined appropriate 
by the Deputy Administrator in making the payments prior to January 1, 
2001, may qualify operators or controllers and growers by reference by 
back, as needed, to the leasing farm. Also, to the extent allowed by 
Pub. L. 106-387 payments may be made to person without regard to 
whether the quota was used for the production of eligible tobacco 
during the 2000 crop year. Payments that are made by virtue of the 
preceding sentence may by made, to the extent authorized by law, from 
funds of the Commodity Credit Corporation and without regard to the 
overall limitation for payment that otherwise apply to this program.

    14. In Sec. 1464.404 revise the definition of ``Eligible person'' 
to read as follows:


Sec. 1464.404  Definitions.

* * * * *
    Eligible person means, with respect to payments under this part and 
subject to the provisions of section 1464.403 and other provisions of 
this part, a person who owns or operates, or produces eligible tobacco 
on a farm for which the quantity of quota of eligible tobacco allotted 
to the farm under part I of subtitle B of title III of the Agricultural 
Adjustment Act of 1938 was reduced from the 1999 crop year to the 2000 
crop year. Actual production of the crop may be required to the extent 
otherwise provided in these rules. For purposes of this subpart, 
further, an eligible person's status, as owner or controller or 
producer of the tobacco, will be determined as of July 3, 2000.
* * * * *

    Signed at Washington, DC, on October 16, 2001.
James R. Little,
Acting Administrator, Farm Service Agency and Executive Vice-President, 
Commodity Credit Corporation.
[FR Doc. 01-26543 Filed 10-22-01; 8:45 am]
BILLING CODE 3410-05-P