[Federal Register Volume 68, Number 74 (Thursday, April 17, 2003)]
[Rules and Regulations]
[Pages 18833-18836]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-9319]



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 Rules and Regulations
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  Federal Register / Vol. 68, No. 74 / Thursday, April 17, 2003 / Rules 
and Regulations  

[[Page 18833]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1464

RIN 0560-AG96


Tobacco Payment Program

AGENCIES: Commodity Credit Corporation, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements the Tobacco Payment Program authorized by 
the Agricultural Assistance Act of 2003. Section 205 of that Act 
requires the Commodity Credit Corporation to provide assistance to 
producers of tobacco. This rule is intended to implement this 
legislative mandate. Other provisions of the Agricultural Assistance 
Act of 2003 will be implemented under separate rules.

EFFECTIVE DATE: April 16, 2003.

FOR FURTHER INFORMATION CONTACT: Misty Jones at (202) 720-0200, or via 
electronic mail at [email protected].

SUPPLEMENTARY INFORMATION:

Notice and Comment

    Section 217 of Title II of Division N of the Consolidated 
Appropriations Resolution, 2003, (Pub. L. 108-7) (Agricultural 
Assistance Act of 2003) requires that the regulations to implement this 
program be promulgated without regard to the notice and comment 
provisions of 5 U.S.C. 553, the Statement of Policy of the Secretary of 
Agriculture relating to notices of proposed rulemaking and public 
participation in rulemaking (36 FR 13804, July 24, 1971). Thus, this 
rule is final as published.

Executive Order 12866

    This final rule has been determined to be not significant under 
Executive Order 12866 and has not been reviewed by the Office of 
Management and Budget (OMB).

Federal Assistance Programs

    This final rule applies to the following Federal assistance 
programs, as found in the Catalog of Federal Domestic Assistance: 
10.073--Crop Disaster Program.

Regulatory Flexibility Act

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

Environmental Assessment

    The environmental impacts of this proposed rule have been 
considered in accordance with the provisions of the National 
Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq., the 
regulations of the Council on Environmental Quality (40 CFR parts 1500-
1508), and FSA's regulations for compliance with NEPA, 7 CFR part 799. 
To the extent these authorities may apply, CCC has concluded that this 
rule is categorically excluded from further environmental review as 
evidenced by the completion of an environmental evaluation. No 
extraordinary circumstances or other unforeseeable factors exist which 
would require preparation of an environmental assessment or 
environmental impact statement. A copy of the environmental evaluation 
is available for inspection and review upon request.

Executive Order 12778

    The final rule has been reviewed in accordance with Executive Order 
12778. This final rule preempts State laws to the extent such laws are 
inconsistent with it. This rule is not retroactive. Before judicial 
action may be brought concerning this rule, all administrative remedies 
must be exhausted.

Executive Order 12372

    This program is not subject to Executive Order 12372, which 
requires intergovernmental consultation with State and local officials. 
See the notice related to 7 CFR part 3015, subpart V, published at 48 
FR 29115 (June 24, 1983).

Unfunded Mandates

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) does 
not apply to this rule because CCC is not required by 5 U.S.C. 553 or 
any other law to publish a notice of proposed rulemaking for the 
subject of this rule. Further, this rule contains no unfunded mandates 
as defined in sections 202 and 205 of UMRA.

Small Business Regulatory Enforcement Fairness Act of 1996

    Section 217(c) of the Agricultural Assistance Act of 2003 (``2003 
Act''), Pub. L. 108-7, requires CCC to use the authority in section 808 
of the Small Business Regulatory Enforcement Fairness Act of 1996, Pub. 
L. 104-121 (SBREFA), to forgo the usual 60-day delay in the effective 
date of major rules required by SBREFA (5 U.S.C. 801(a)(3)(A)(ii)). 
This rule affects a number of agricultural producers who may have a 
strong urgent need of the payments to be provided under it. For these 
reasons and in accord with 5 U.S.C. 808(2), CCC has determined that 
delay is contrary to public interest and this rule is effective upon 
the date of filing for public inspection by the Office of the Federal 
Register.

Paperwork Reduction Act

    Section 217(c) of the Agricultural Assistance Act of 2003 requires 
that these regulations be promulgated and the programs administered 
without regard to 44 U.S.C. 35, the Paperwork Reduction Act. This means 
that the information to be collected from the public to implement these 
programs and the burden, in time and money, that the collection of the 
information would have on the public do not have to be approved by the 
Office of Management and Budget or be subject to the 60-day public 
comment period required by 5 CFR 1320.8(d)(1).

Background

    Section 205 of the Agricultural Assistance Act of 2003 directs the 
Secretary of Agriculture to use funds of the Commodity Credit 
Corporation (CCC) to provide assistance to persons associated with 
certain 2002-crop tobaccos. Tobaccos with an established 2002 acreage 
allotment or poundage quotas are eligible for payment. Eligible persons 
include owners of the land with an established 2002 acreage allotment 
or

[[Page 18834]]

quota, as well as growers, and in some cases, controllers of farms with 
quotas or allotments. This rule promulgates regulations governing 
payment eligibility in accord with the legislation.
    As provided for by statute and set out by rule, each eligible kind 
of tobacco will have its own fund. For each kind, the fund amount will 
be based on multiplying the national quota or allotment (converted by a 
formula to pounds) by 5.55 cents per pound. For flue-cured tobacco 
(types 11-14) and for cigar filler tobacco (types 42-44 and 54-55), the 
fund will be divided into two parts, one for eligible owners and the 
other for eligible growers. The other eligible tobaccos ``pot'' will be 
divided into three equal parts, one for eligible owners, the other for 
eligible controllers and the remaining part for growers. The other 
eligible tobaccos are burley tobacco (type 31), fire-cured tobacco 
(types 21-23), dark air-cured tobacco (types 35-36), and Virginia sun-
cured tobacco (type 37). Eligible persons will share in the sub-
accounts based on basic or effective quota or allotment amounts as 
specified in the rule (irrespective of the actual production amounts 
that may or may not have occurred on a particular farm so long as the 
participants meet other program rules for payment).
    Similar programs have been provided for in the past in part 1400. 
As with those programs, eligibility determinations will be made as of 
July 1 of the calendar year that corresponds with the crop year covered 
(2002 in this case). It is understood that, to the extent practicable, 
Congress has intended that this program be run in the same manner as 
its predecessors in part 1400. There is nothing in the history of this 
statute to indicate a view to the contrary, as would be expected were 
significant changes intended. This rule has been drafted accordingly. 
The statute specifies which tobaccos are eligible for payment and the 
factors for converting allotments to pounds. The statute sets a payment 
date of June 1, 2003. Payments will be made in advance of that date, if 
possible.

Cost/Benefit Assessment

    Payments to eligible persons in 2003 are estimated to total $55 
million dollars.

List of Subjects in 7 CFR Part 1464

    Agricultural commodities, Acreage allotments, Marketing quotas, 
Tobacco.

0
For the reasons set out in the preamble, 7 CFR part 1464 is amended as 
set forth below.

PART 1464--TOBACCO

0
1. The authority citation for 7 CFR 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, 113 Stat. 1135; Pub. L. 106-113, 
113 Stat. 1501; Pub. L. 108-7, 117 Stat. 11.

0
2. Add subpart G to read as follows:
Subpart G--Tobacco Payment Program
Sec.
1464.601 Applicability and basic terms for payments.
1464.602 Administration.
1464.603 Eligibility.
1464.604 Definitions.
1464.605 Sign up.
1464.606 [Reserved]
1464.607 Payment benefits.
1464.608 Offsets and assignments.
1464.609 Misrepresentation and scheme or device.
1464.610 Cumulative liability.
1464.611 Estates, trusts, and minors.
1464.612 Death, incompetence, or disappearance.
1464.613 Appeals.

Subpart G--Tobacco Payment Program


Sec.  1464.601  Applicability and basic terms for payments.

    This subpart sets forth the terms and conditions of the Tobacco 
Payment Program (TOPP). Under this program CCC will make direct 
payments on a farm relating to basic tobacco quotas or allotments 
established for the 2002 crop year under part I of subtitle B of title 
III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) 
for eligible tobaccos. Payments are subject to the availability of 
funds and payment formulas set out in this part.


Sec.  1464.602  Administration.

    This subpart shall be administered by the Executive Vice President, 
CCC or his designee, under the general supervision of the Farm Service 
Agency (FSA), Deputy Administrator for Farm Programs (Deputy 
Administrator). The program shall be carried out in the field by State 
and county FSA committees and FSA employees in accordance with this 
subpart.


Sec.  1464.603  Eligibility.

    For a person to be considered an eligible person for purposes of 
this part, such person must own or control (in some cases only) a farm 
for which on the status date a basic 2002 crop quota or allotment for 
eligible tobacco was established under part I of subtitle B of title 
III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.). 
Also, growers of that tobacco are eligible for payments to the extent 
provided for in this part.


Sec.  1464.604  Definitions.

    The definitions set forth in this section shall apply to the 
administration of TOPP under this subpart. The definitions in 
Sec. Sec.  718.2 and 723.104 of this title also apply to TOPP. The 
definitions in this section apply rather than the definitions in 
Sec. Sec.  718.2 and 723.104 of this title to the extent that the 
definitions in those sections differ. The following terms shall have 
the following meanings:
    Controller means that person or entity who, as determined by the 
Deputy Administrator, controls the land used to produce eligible 
tobacco and share in the risk of production.
    Eligible person means an owner, or (as applicable) controller of a 
farm for which a basic quota or allotment was established for the 2002 
crop year under part I of subtitle B of title III of the Agricultural 
Adjustment Act of 1938 to the extent otherwise provided in these rules. 
Growers of that tobacco, as specified in this part, can also be 
eligible for payment. For this TOPP, an eligible person's status, as 
owner or controller or grower, will be determined as of July 1, 2002.
    Eligible tobacco means each of the following kinds of tobacco: 
Flue-cured tobacco (types 11, 12, 13 and 14), burley tobacco (type 31), 
Virginia sun-cured tobacco (type 37), fire-cured tobacco (types 21-23), 
dark air-cured tobacco (types 35-36), and cigar filler/binder tobacco 
(types 42 through 44, 54 and 55).
    Grower means for flue-cured tobacco and cigar binder tobacco, a 
``producer,'' as defined below, for all other eligible tobaccos, as 
``grower/tenant,'' as defined below.
    Grower/tenant means a person or entity who provides labor to 
produce tobacco and share in the risk of production.
    Owner means with respect to a quota or allotment farm the person or 
entity who owns the land for which the tobacco quota or allotment was 
established for the 2002 crop as of the operative status date of July 
1, 2002 provided for in this part.
    Payment pounds means the pounds of tobacco for which a person is 
eligible to be paid under this subpart.
    Producer means a person or entity actively engaged in planting, 
growing, harvesting, and/or marketing of tobacco, or who shares in the 
risk of producing the crop.
    Share in the risk of production means having a direct financial 
stake in the success of the crop through a direct share in the actual 
proceeds from the actual marketing of the crop which share is 
conditional upon the success of

[[Page 18835]]

that marketing. Farm owners who cash-lease their farmland to a tobacco 
producer for the right to grow tobacco on that land and receive payment 
for such right regardless of whether or not a tobacco crop is marketed 
are not considered to share in the risk of production. Farm laborers 
who provide service in exchange for a wage and whose payment is not 
subject to the marketing or the tobacco crop are not considered to 
shared in the risk of production.
    TOPP means the Tobacco Payment Program.


Sec.  1464.605  Sign up.

    (a) To apply for TOPP funds, persons must submit an application to 
the county FSA office by the date established by the Deputy 
Administrator. Late applications may be accepted if approved by the 
Deputy Administrator, if the lateness was the result of documented 
hardship.
    (b) Data furnished by the applicant will be used to determine 
eligibility for program benefits. Furnishing the data is voluntary; 
however, without it program benefits will not be provided.


Sec.  1464.606  [Reserved]


Sec.  1464.607  Payment benefits.

    (a) Payment will only be made subject to the availability of funds 
and only for eligible tobacco and for eligible persons who meet all 
conditions of eligibility for whom monies are provided by the terms of 
this section.
    (b) The total national payment amount made available for each kind 
of eligible tobacco for all claimants for that kind of tobacco, will be 
computed by multiplying the 2002 crop national poundage amount for that 
kind by 5.55 cents per pound.
    (c) The national poundage amount of a kind shall be, for those 
tobaccos for which poundage quotas were established for individual 
farms, the national basic quota, in total, for all farms. For all other 
tobaccos, the 2002 crop national poundage amount shall be determined by 
multiplying the national basic acreage allotment for that kind of 
tobacco by the following per acre conversion factors:
    (1) For fire-cured tobacco (type 21) 1,746 pounds;
    (2) For fire-cured tobacco (types 22-23) 2,676 pounds;
    (3) For dark air-cured tobacco (types 35-36) 2,475 pounds; and
    (4) For Virginia sun-cured tobacco (type 37) 1,502 pounds.
    (d) Once the national payment amount is determined for the eligible 
tobacco kind, it will for flue-cured tobacco (types 11-14) and for 
cigar filler tobacco (types 42-44 and 54-55) be divided into two equal 
parts, one for eligible owners and the other for eligible growers. 
Shares in the sub-accounts will be determined using basic poundage 
quota amounts for flue-cured tobacco and basic allotments for the cigar 
filler types. For cigar filler type allotments, a conversion to pounds 
will be made using the same conversion factor provided in paragraph (b) 
of this section.
    (e) For those eligible tobaccos not covered in paragraph (d) of 
this section, the national payment amount fund as determined under 
paragraph (b) of this section will be divided into three equal parts. 
Those parts shall be: one for eligible owners; one for eligible 
controllers; and one for eligible growers. Shares in each sub-account 
will be determined for burley tobacco using:
    (1) Basic poundage quota amounts for owners; and
    (2) Effective quota amounts for controllers and growers.
    (f) For all other tobaccos covered by paragraph (e) of this 
section, shares in each sub-account will be determined using:
    (1) Basic allotments for owners; and
    (2) Effective allotment amounts for controllers and growers. 
Allotments will be converted to pounds using the conversion factors in 
paragraph (c) of this section. ``Effective quotas'' and ``effective 
allotments'' means the amount of quota or allotment before any transfer 
which, as determined by the Deputy Administrator, occurred after a 
disaster.
    (g) Growers who otherwise meet the terms of this part, will qualify 
based on the full amount of the basic quota or effective quota or 
allotment, as the case may be, for the kind involved, even though they 
did not fully produce the operative pounds. Such growers must meet the 
labor, active engagement in farming, and risk of production elements of 
the ``grower'' definition of Sec.  1464.604, as applicable to their 
kind of tobacco. The Deputy Administrator may provide other elements of 
eligibility as necessary to accomplish the provisions of this part in 
accord with the operative legislation.
    (h) Payments will be made as soon as practicable.
    (i) The amount of TOPP funds allocated to the eligible persons in 
Georgia will be disbursed only if the State of Georgia agrees to use an 
equal amount of funds (not to exceed $13,000,000) to make payments in 
the same manner as provided for in this section.
    (j) All payments under this part are subject to the eligibility of 
funds. In the case where a payment to a farm is disputed the Deputy 
Administrator may require that all interested parties agree to the 
resolution of the dispute before any payment is made and may delay 
payments to the farm until any such disputes are resolved. Also, as 
determined appropriate to accomplish the goal that program payments be 
made expeditiously in a manner that is administratively efficient, the 
Deputy Administrator may properly exclude payments to a person who does 
not file a timely claim and all payments may be made to those parties 
whose claim to the payment is not challenged. Nothing in this section 
shall, however, be construed to prevent the agency from denying any 
payment to any person based upon a failure of that person to meet any 
eligibility criteria set forth in this part.


Sec.  1464.608  Offsets and assignments.

    (a) TOPP payments, or a portion thereof, shall be made without 
regard to questions of title under State law and without regard to any 
claim or lien against the crop, or proceeds thereof, in favor of the 
owner or any other creditor. However, offsets and withholdings of TOPP 
payments maybe taken in accordance with part 1403 of this chapter.
    (b) TOPP payments may be assigned as provided in part 1404 of this 
chapter.


Sec.  1464.609  Misrepresentation and scheme or device.

    (a) A person who is determined to have misrepresented any fact with 
the intention of affecting a TOPP program determination or received 
payments as a result of such misrepresentation shall not be entitled to 
payments and must refund all payments, plus interest in accordance with 
7 CFR part 1403.
    (b) A person determined to have knowingly adopted a scheme or 
device that tends to defeat the purpose of the program, or made any 
fraudulent representation shall refund all payments, plus interest 
determined in accordance with 7 CFR part 1403 and shall not receive any 
payment not yet made.
    (c) Persons who are party to the TOPP application must refund any 
excess or unearned TOPP payments to CCC, plus interest, made under such 
application.


Sec.  1464.610  Cumulative liability.

    The liability of any person for any penalty under this part or for 
any refund to CCC or related charge arising in connection therewith 
shall be in addition to any other liability of such

[[Page 18836]]

person under any civil or criminal fraud statute or any other provision 
of law including, but not limited to, 18 U.S.C. 286, 287, 371, 641, 
1001; 15 U.S.C. 714m; and 31 U.S.C. 3729.


Sec.  1464.611  Estates, trusts, and minors.

    (a) Program documents executed by persons legally authorized to 
represent estates or trusts will be accepted only if such persons 
furnish evidence of the authority to execute such documents.
    (b) A minor who is a producer shall be eligible for assistance 
under this subpart only if such person meets one of the following 
requirements:
    (1) The right of majority has been conferred on the minor by court 
proceedings or by statute;
    (2) A guardian has been appointed to manage the minor's property 
and has executed the applicable program documents; or
    (3) A bond is furnished under which the surety guarantees any loss 
incurred for which the minor would be liable had the minor been an 
adult.


Sec.  1464.612  Death, incompetence, or disappearance.

    In the case of death, incompetence, or disappearance of any person 
who is eligible to receive assistance in accordance with this part, 
such person or persons as specified in part 707 of this title may 
receive such assistance.


Sec.  1464.613  Appeals.

    Determinations made under this part may be appealed as provided in 
parts 11 and 780 of this title.

    Signed in Washington, DC, on April 7, 2003.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 03-9319 Filed 4-16-03; 8:45 am]
BILLING CODE 3410-05-P