[Federal Register Volume 68, Number 80 (Friday, April 25, 2003)]
[Rules and Regulations]
[Pages 20331-20333]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-10222]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 Prices of new books are listed in the first FEDERAL REGISTER issue of each 
 week.
 
 ========================================================================
 

  Federal Register / Vol. 68, No. 80 / Friday, April 25, 2003 / Rules 
and Regulations  

[[Page 20331]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1427

RIN 0560-AG97


Cottonseed Payment Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Final rule.

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

SUMMARY: This rule implements the 2002-crop Cottonseed Payment Program 
authorized by section 206 of the Agricultural Assistance Act of 2003. 
Section 206 requires the Commodity Credit Corporation to provide 
assistance to producers and first-handlers of the 2002 crop of 
cottonseed. Other provisions of Agricultural Assistance Act of 2003 
will be implemented under separate rules.

EFFECTIVE DATE: April 24, 2003.

FOR FURTHER INFORMATION CONTACT: Gene Rosera at (202) 720-8481, or via 
electronic mail at [email protected].

SUPPLEMENTARY INFORMATION:

Notice and Comment

    Section 217(b) of Title II of Division N of the Consolidated 
Appropriations Resolution, 2003 (Public Law 108-7) provides that the 
regulations to implement that title, including those implemented in 
this notice, may 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. Division N, Title II, of Public Law 
108-7 is also known as the ``Agricultural Assistance Act of 2003'' 
(``2003 Act'').

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 12988

    The final rule has been reviewed in accordance with Executive Order 
12988. 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 2003 Act requires CCC to use the authority in 
section 808 of the Small Business Regulatory Enforcement Fairness Act 
of 1996, Public Law 104-121 (SBREFA), to forgo the usual 60-day delay 
in the effective date of major final rules required by SBREFA (5 U.S.C. 
801(a)(3)(A)(ii)). Also, this rule affects a number of persons who may 
have a strong need for the relief provided in this rule. For these 
reasons, the rule is made effective on publication in the Federal 
Register.

Paperwork Reduction Act

    Section 217 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, 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 206 of the 2003 Act directs the Secretary of Agriculture to 
use $50 million of funds of the Commodity Credit Corporation (CCC) to 
provide assistance to producers and first handlers of the 2002 crop of 
cottonseed. Previous 1999-crop and 2000-crop cottonseed programs were 
codified in 7 CFR part 1427. This rule follows the model set by those 
preceding programs.
    The major provisions of this program are as follows. The CCC will 
announce a period during which U.S. cotton gins may apply for 
cottonseed payments. To

[[Page 20332]]

participate, cotton gins must complete an application form including: 
(1) Applicant name, address, and a contact person and phone; (2) bank 
account information for payees electing to have payments made by direct 
account deposit; (3) the gin 5-digit identifying code; (4) the number 
of bales of cotton ginned from the 2002 cotton crop; and, (5) the 
weight (in pounds) of cotton lint of the reported bales for which 
payment is requested. CCC must receive the application within the 
announced application period.
    Upon receipt of all payment applications from gins, CCC will 
estimate the national total quantity of cottonseed for payment based on 
the number of bales and the weight of cotton lint for which payment is 
requested. The payment rate per ton of cottonseed will be determined by 
dividing the available $50 million by the total quantity of cottonseed 
for payment. With the available funding, the resulting payments to 
individual cotton gins are not subject to any payment limitation.
    CCC plans to provide all 2002-crop cottonseed payments to cotton 
gins and to require gins to share such payments with cotton producers 
to the extent that the effect of low cottonseed prices for the 2002 
crop were borne by producers or to the extent that such sharing is 
consistent with the arrangements between the producer and the gins. 
This is as it was in previous cottonseed programs which appeared to 
work well. Presumably, Congress expected the old program to serve as 
the model for the program provided for in the new legislation as no 
dissatisfaction was expressed. Based on their contractual or marketing 
agreements, ginners and producers are best suited to know how to most 
equitably distribute the funds. A producer's recourse, for an 
unfavorable distribution, will be against the ``first handler'' or 
ginner that receives the payments. Other program provisions also remain 
as before except that changes have been made for clarity and to allow 
for greater program efficiency.

List of Subjects in 7 CFR Part 1427

    Agriculture, Cottonseeds.


0
For the reasons set out in the preamble, 7 CFR part 1427 is amended as 
set forth below.

PART 1427--COTTON

0
1. The authority citation for 7 CFR part 1427 is revised to read as 
follows:

    Authority: 7 U.S.C. 7213-7237; 15 U.S.C. 714b, 714c; Pub. L. 
108-7.

0
2. Add subpart F to read as follows:
Subpart F--2002-Crop Cottonseed Payment Program
Sec.
1427.1100 Applicability.
1427.1101 Administration.
1427.1102 Definitions.
1427.1103 Eligible cottonseed.
1427.1104 Eligible first handlers.
1427.1105 Payment application.
1427.1106 Available funds.
1427.1107 Applicant payment quantity.
1427.1108 Total payment quantity.
1427.1109 Payment rate.
1427.1110 Payment calculation and form.
1427.1111 Liability of first handler.

Subpart F--2002-Crop Cottonseed Payment Program


Sec.  1427.1100  Applicability.

    (a) This subpart sets forth the terms and conditions under which 
the Commodity Credit Corporation (CCC) shall provide payments under the 
cottonseed payment program for the 2002 crop of cottonseed. Additional 
terms and conditions may be set forth in the application or other forms 
which must be executed to participate in the cottonseed payment 
program.
    (b) Payments shall be available only for cottonseed produced and 
ginned in the United States.


Sec.  1427.1101  Administration.

    (a) The cottonseed payment program shall be administered by the 
Executive Vice President, CCC, or a designee and carried out by 
employees of the Farm Service Agency (FSA).
    (b) Representatives and employees of FSA have no authority to 
modify or waive any of the provisions of the regulations of this 
subpart.
    (c) The Executive Vice President, CCC, or a designee, may determine 
any question arising under the program or reverse or modify any 
determination made by any FSA official or employee.
    (d) The Deputy Administrator for Farm Programs, FSA, may specify, 
waive or modify deadlines and other program requirements where lateness 
or failure to meet such other requirements do not affect adversely the 
operation of the cottonseed payment program.
    (e) A representative of CCC may execute cottonseed 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 except as otherwise provided in this 
part.


Sec.  1427.1102  Definitions.

    The definitions in this section shall apply to the cottonseed 
payment program provided for in this subpart. The terms defined in 
Sec.  1427.3 of this part shall also be applicable to this subpart.
    Application period means a period, as announced by CCC, during 
which applications for payments under the Cottonseed Payment Program 
must be received to be considered for payment.
    Cottonseed means the seed from any varieties of upland cotton and 
extra long staple (ELS) cotton produced and ginned in the United 
States.
    Gin means a person (i.e., an individual, partnership, association, 
corporation, cooperative marketing association, estate, trust, State or 
political subdivision or agency thereof, or other legal entity) that 
removes cotton seed from cotton lint in commercial quantities.
    Lint means cotton lint as contained in bales of cotton ordinarily 
marketed as cotton and excludes any linters, raw motes, re-ginned 
motes, cleaned motes, and any other gin waste or byproduct not 
traditionally defined as cotton lint.
    Number of ginned cotton bales means the number of ginned running 
bales of cotton based on individual bale weights unadjusted to a 
uniform bale weight.
    Running bale means a bale of cotton lint that has a minimum weight 
of 425 pounds and is not a bale of motes, linters, gin waste, or other 
gin byproduct.
    Ton means a unit of weight equal to 2,000 pounds avoirdupois 
(907.18 kilograms).


Sec.  1427.1103  Eligible cottonseed.

    To be eligible for payments under this subpart, cottonseed must:
    (a) Have been grown in the United States during the 2002-crop 
production period.
    (b) Have been ginned by the applicant from 2002-crop cotton.
    (c) Not have been destroyed or damaged by fire, flood, or other 
events such that its loss or damage was compensated by other local, 
State, or Federal government or private or public insurance or disaster 
relief payments.


Sec.  1427.1104  Eligible first handlers.

    (a) For the purpose of this subpart, an eligible first handler of 
cottonseed shall be a gin that ginned 2002-crop cotton.
    (b) Applicants must comply with the terms and conditions set forth 
in this subpart and instructions issued by CCC, and sign and submit an 
accurate, legible and complete Cottonseed Payment Program Application 
and Certification.
    (c) Applicants signing the cottonseed payment application or 
receiving

[[Page 20333]]

payment under this subpart must share any payment with the producer of 
the cotton that was the basis of the cottonseed payment to the extent 
that the effect of low cottonseed prices was borne by the producer 
rather than the gin. To the extent that such funds will be shared with 
the producer by the gin, those funds will be considered to have been 
received by the applicant on behalf of such producers.


Sec.  1427.1105  Payment application.

    (a) Payments in accordance with this subpart shall be made 
available only to eligible first handlers of cottonseed based on 
information provided on a Cottonseed Payment Program Application and 
Certification.
    (b) Payment applications must be received by the program 
application deadline announced by CCC. Applications received after such 
application deadline will not be accepted for payment.
    (c) Cottonseed Payment Program Application and Certifications may 
be obtained from the CCC as announced by press release. In order to 
participate in the cottonseed payment program under this subpart, first 
handlers of cottonseed must execute and submit to CCC according to 
announced instructions the Cottonseed Payment Program Application and 
Certification.


Sec.  1427.1106  Available funds.

    The total available program funds shall be $50 million for 2002-
crop cottonseed.


Sec.  1427.1107  Applicant payment quantity.

    The applicant's payment quantity of cottonseed will be determined 
by CCC based on the eligible number of ginned cotton bales and the 
cotton lint weight from those bales as submitted on the Cottonseed 
Payment Application and Certification and/or obtained by CCC, with the 
agreement of the applicant, from the Agricultural Marketing Service. 
The applicant's payment quantity of cottonseed shall be calculated by 
multiplying:
    (a) The applicant's weight of eligible lint for which payment is 
requested, as approved by CCC, by;
    (b) The national Olympic average of estimated pounds of cottonseed 
per pound of ginned cotton lint, as determined by CCC for the 5 years 
preceding the 2002 crop year.


Sec.  1427.1108  Total payment quantity.

    The total quantity of 2002-crop cottonseed produced in the United 
States is potentially eligible for payment under this subpart. The 
total payment quantity of cottonseed will be the total of eligible 
quantities of cottonseed for which completed applications for payment 
are received within the application period announced by CCC. Eligible 
cottonseed for which no application is received according to announced 
application instructions shall not be included in the total payment 
quantity of cottonseed. The total payment quantity of cottonseed (ton-
basis) shall be calculated by multiplying:
    (a) The weight of cotton lint (ton-basis) for which payment is 
requested by all applicants, as approved by CCC, by
    (b) The national Olympic average of estimated pounds of cottonseed 
per pound of ginned cotton lint, as determined by CCC for the 5 years 
preceding the crop year for which the cottonseed payments are provided.


Sec.  1427.1109  Payment rate.

    The payment rate (dollars per ton) for the purpose of calculating 
payments made available in accordance with this subpart shall be 
determined by CCC by dividing the total available program funds by the 
total eligible payment quantity of cottonseed unless the calculation 
would provide an excess rate of payment in which case an alternative 
method will be used as determined appropriate by CCC.


Sec.  1427.1110  Payment calculation and form.

    (a) Payments in accordance with this subpart shall be determined 
for individual applicants by multiplying:
    (1) The payment rate, determined in accordance with Sec.  
1427.1109, by
    (2) The eligible payment quantity of the applicant, determined in 
accordance with Sec.  1427.1107 and other provisions of this subpart.
    (b) After receipt of the application for payment, CCC will issue 
payments to the applicant by electronic funds transfer to the 
applicant's account except that applicants may request that payment be 
made by mailed check.


Sec.  1427.1111  Liability of first handler.

    (a) If any person makes any erroneous or fraudulent representation 
in obtaining a cottonseed payment under this part, or in connection 
with such a payment engages in a scheme or device that tends to defeat 
the purposes of this program, the person shall be liable to CCC for the 
amount of the payment and interest on such payment as determined by 
CCC. Such remedy will be in addition to whatever additional remedies 
may be allowed by law.
    (b) If more than one person executes a program payment application 
with CCC and payments are made thereunder, each such person shall be 
jointly and severally liable for any violation of the terms and 
conditions for any payment made to anyone under that application or for 
any refund due from any person signing that application. Such liability 
shall remain until payment in full is made of any such refund and its 
related charges.
    (c) If a person receives a program payment in excess of the amount 
authorized by this subpart, that person shall refund to CCC an amount 
equal to the excess payment, plus interest thereon, as determined by 
CCC.
    (d) From the date of the payment application until the earlier of 3 
years after the date of the application or July 31, 2006, the applicant 
shall keep records, including records supporting the quantity of 
cottonseed for which payment was requested, and furnish such 
information and reports relating to the application to CCC as 
requested. 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. In the event of a controversy concerning 
payments or questions involving the payments, records must be kept for 
such longer period as may be specified by CCC until such controversy is 
resolved.

    Signed in Washington, DC, on April 9, 2003.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 03-10222 Filed 4-24-03; 8:45 am]
BILLING CODE 3410-05-P