[Federal Register Volume 70, Number 121 (Friday, June 24, 2005)]
[Proposed Rules]
[Pages 36536-36539]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-12485]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 70, No. 121 / Friday, June 24, 2005 / 
Proposed Rules  

[[Page 36536]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1427

RIN 0560-AH29


Cottonseed Payment Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Proposed rule.

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

SUMMARY: This rule proposes regulations to implement provisions of the 
Military Construction Appropriations and Emergency Hurricane 
Supplemental Appropriations Act, 2005, enacted on October 13, 2004 
(``2004 Act'') to provide assistance to producers and first-handlers of 
the 2004 crop of cottonseed in counties declared a disaster by the 
President of the United States due to 2004 hurricanes and tropical 
storms.

DATES: Comments on this rule must be received July 25, 2005 in order to 
be assured consideration. Comments on the information collection in 
this rule must be received by August 23, 2005 in order to be assured 
consideration.

ADDRESSES: The Farm Service Agency invites interested persons to submit 
comments on this proposed rule and on the collection of information. 
Comments may be submitted by any of the following methods:
    E-Mail: Send comments to [email protected]
    Fax: Submit comments by facsimile transmission to (202) 690-3307.
    Mail: Submit comments to Grady Bilberry, Director, Price Support 
Division (PSD), Farm Service Agency (FSA), United States Department of 
Agriculture (USDA), STOP 0512, Room 4095-S, 1400 Independence Avenue, 
SW., Washington, DC 20250-0512.
    Hand Delivery or Courier: Deliver comments to the above address.
    Federal eRulemaking Portal: Go to http://www.regulations.gov Follow 
the online instructions for submitting comments.
    Comments may be inspected in the Office of the Director, PSD, FSA, 
USDA, Room 4095, South Building, Washington, DC, between 8 a.m. and 
4:30 p.m. Monday through Friday, except holidays. A copy of this 
proposed rule is available on the PSD Web site at http://www.fsa.usda.gov/dafp/psd.
    Comments on the information collection requirements of this rule 
must also be sent to the addresses listed in the Paperwork Reduction 
Act section of this notice.

FOR FURTHER INFORMATION CONTACT: Chris Kyer, phone: (202) 720-7935; e-
mail: [email protected].

SUPPLEMENTARY INFORMATION:

Background

    Section 104 of Division B of the 2004 Act (Pub. L. 108-324), 
requires the Commodity Credit Corporation (CCC) to provide assistance 
to producers and first-handlers of the 2004 crop of cottonseed in 
counties declared a disaster by the President of the United States due 
to hurricanes. Section 789 of Division A of the Consolidated 
Appropriations Act, 2005 (Pub. L. 108-447) further amended section 104 
of Division B of the 2004 Act by adding as eligible counties those 
which were declared disasters because of tropical storms. The 2004 Act 
appropriated $10 million for these payments. As amended, the provisions 
of section 104 read in full:

    The Secretary of Agriculture shall use $10,000,000 to provide 
assistance to producers and first handlers of the 2004 crop of 
cottonseed located in counties declared a disaster by the President 
of the United States in 2004 due to hurricanes or tropical storms.

    Further, section 105 of Division B of the same Act provides that 
the funds, facilities and authorities of the CCC shall be used to carry 
out Section 104.
    CCC most recently operated a Cottonseed Payment Program in 2003, 
the 2002-Crop Cottonseed Payment Program (68 FR 20332, April 25, 2003). 
This rule proposes that the 2004 Cottonseed Payment Program operate 
somewhat like the 2002 program in that payments will be made to cotton 
gins for distribution to eligible producers. However, the 2002 program 
was tied simply to previous year's production. Consistent with the 
terms of section 104 and other provisions of the same legislation, this 
rule proposes to provide payments for cottonseed loss in eligible 
counties based on a comparison of a producer's production in the year 
before the disaster (making the 2003 crop year the base year) to the 
amount produced in 2004, the year of the hurricanes. Generally, a gin's 
eligibility will be based on the lint lost to gins in deliveries of 
2004-crop cotton because of reductions in lint production in eligible 
counties adjusted for changes in plantings and for crop losses due to 
other causes. This rule proposes special provisions for producers who 
for the 2004 crop were new producers, and for producers who delivered, 
or would have delivered, cotton to more than one gin. Accordingly, 
whereas previous cottonseed programs have covered all cottonseed, 
benefits here will be tied to losses of cottonseed because of eligible 
losses of delivered cotton lint in eligible disaster counties. Comment 
is invited on all aspects of the proposed regulations.
    CCC will announce a period during which U.S. cotton gins may apply 
for cottonseed payments. To 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 weight (in pounds) of cotton lint for which 
payment is requested; and (5) the number of bales of cotton ginned from 
the applicable lint weight. CCC must receive the application within the 
announced application period.
    So that the basic method of operation of the proposed rule is 
clear, the following example is offered:
    Example:
    1. Producer A grows 450 acres of 2004 cotton in an eligible county 
and gin A obtains 225,000 pounds of lint from that cotton. Producer A 
grew 500 acres of 2003 cotton, and gin A obtained 375,000 pounds of 
lint weight from the 2003 cotton.
    2. Gin A calculates the producer's loss in lint weight was 112,500 
pounds, taking into consideration the difference in acres between the 
two years and the difference in production by calculating the per-acre 
yield for each year and multiplying the difference in yield by the 2004 
acres. The 112,500 pound loss is derived by multiplying the 450 acres

[[Page 36537]]

of 2004 cotton by the 250-pound loss in lint yields per acre from 2004 
to 2003.
    3. Gin A calculates the loss for each of its customers and submits 
the total of the losses to FSA as a basis for payment. Producers who 
did not have a loss in yield are not included in the total amount 
submitted for payment.
    Cases involving producers who might have been unable to deliver any 
cotton in 2004 to any gin because of the disaster are dealt with 
separately in the rule.
    Upon receipt of all payment applications from all gins seeking to 
participate, CCC will estimate the national total quantity of 
cottonseed for payment based on the weight of cotton lint for which 
payment is requested. The payment rate per ton of cottonseed will be 
determined by dividing the $10 million available by the total quantity 
of cottonseed for payment. In order to be sure that an eligible 
producer is not over compensated (does not receive more than the total 
economic value of the loss suffered), payments to individual cotton 
gins will be subject to a payment limitation equal to the result of 
multiplying the total pounds of cottonseed determined eligible by the 
2004 national average price of cottonseed ($112 per short ton).
    CCC plans to provide all 2004-crop cottonseed payments to cotton 
gins and to require gins to share such payments with applicable cotton 
producers to the extent that the effect of cottonseed prices was borne 
by the producer rather than the gin. This payment plan is proposed 
because of the various agreements between ginners and producers 
regarding the costs of ginning and the disposition of the proceeds from 
the sale of cottonseed. These agreements were entered into prior to the 
ginning of 2004-crop cotton and the authorization of this cottonseed 
payment program, and CCC has no knowledge of their terms. Based on 
these existing contracts and marketing agreements, ginners and 
producers are best suited to equitably distribute the cottonseed 
assistance payments. However, producers dissatisfied with the 
distribution by the gin will, as in previous cottonseed programs, be 
limited to complaints directed toward the gin itself as may be allowed 
under law--that is, the regulations propose no administrative remedy.
    In order to identify eligible production from designated counties, 
CCC will also ask gins to identify cotton production from designated 
counties versus that from non-designated counties and apply for only an 
eligible payment quantity. CCC believes that gins are well suited to be 
able to identify eligible production using existing systems and readily 
available data. Because of the nature of the interest involved in this 
notice it has been determined that the comment period should be limited 
to 30 days; that is, that a longer period would be contrary to the 
public interest.

Executive Order 12866

    This proposed rule has been determined to be ``Significant'' under 
Executive Order 12866 and was reviewed by the Office of Management and 
Budget (OMB). A cost-benefit assessment of this rule was completed.

Regulatory Flexibility Act

    The Regulatory Flexibility Act does not apply to this proposed 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 consistent 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 proposed rule has been reviewed in accordance with Executive 
Order 12988. This proposed 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 set forth at 7 CFR Parts 11 and 780 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.

Paperwork Reduction Act of 1995

    In accordance with the Paperwork Reduction Act of 1995, FSA intends 
to request approval by OMB of an information collection required to 
support the proposed rule establishing a 2004 crop year cottonseed 
payment program. Copies of the information collection may be obtained 
from Linda Turner, the Agency Information Collection Coordinator, at 
(202) 690-1855.
    Title: 2004 Cottonseed Payment Program.
    OMB Control Number: 0560-NEW.
    Type of Request: Request for Approval of a New Information 
Collection.
    Abstract: Section 104 of the 2005 Act requires the Commodity Credit 
Corporation to provide assistance to producers and first-handlers of 
the 2004 crop of cottonseed in counties declared a disaster by the 
President of the United States due to hurricanes and tropical storms. 
This rule is intended to implement this legislative mandate and assist 
producers who suffered financially as a result of unfavorable weather 
conditions in 2004 caused by hurricanes and tropical storms. Applicants 
are asked to provide: (1) The weight of lint to be used by CCC for 
determining seed weight for payment based upon calculation of a loss in 
lint production; (2) the number of bales ginned and applicable to the 
lint weight for which payment is requested, not adjusted to a uniform 
bale weight basis; and (3) basic data such as name and address, direct 
deposit information, and tax identification number. The information 
will be used by FSA to determine the program eligibility of the gin. 
FSA considers the information collected essential to prudent 
eligibility determinations and payment calculations. Additionally, 
without accurate information on lint weight and bale numbers, the 
national payment rate could be inaccurate and could result in payments 
being made to ineligible recipients, or overpayments, compromising the 
integrity and accuracy of the program.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 45 minutes per response.

[[Page 36538]]

    Respondents: Cotton gins receiving 2004 crop cotton from counties 
declared a disaster by the President of the United States due to 
hurricanes and tropical storms.
    Estimated Number of Respondents: 120.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 90 hours.
    Proposed topics for comment include: (a) Whether the collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (b) the accuracy of the agency's estimate of burden including 
the validity of the methodology and assumptions used; (c) ways to 
enhance the quality, utility, and clarity of the information collected; 
or (d) ways to minimize the burden of the collection of the information 
on those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology. Comments should be 
sent to Grady Bilberry, Director, Price Support Division, Farm Service 
Agency, United States Department of Agriculture, STOP 0512, 1400 
Independence Avenue, SW., Washington, DC 20250-0512 or telephone (202) 
720-7901.

Government Paperwork Elimination Act

    CCC is committed to compliance with the Government Paperwork 
Elimination Act (GPEA) and the Freedom to E-File Act, which require 
Government agencies in general, and the FSA in particular, to provide 
the public the option of submitting information or transacting business 
electronically to the maximum extent possible. Because of the need to 
publish these regulations quickly, the forms and other information 
collection activities required to be utilized by a person subject to 
this rule are not yet fully implemented in a way that would allow the 
public to conduct business with CCC electronically. Accordingly, at 
this time, all forms required to be submitted under this rule may be 
submitted to CCC by mail or FAX.

List of Subjects in 7 CFR Part 1427

    Agriculture, Cottonseed.

    For the reasons set out in the preamble, 7 CFR 1427 is proposed to 
be amended as set forth below.

PART 1427--COTTON

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

    Authority: 7 U.S.C. 7231-7239; 15 U.S.C. 714b, 714c; Pub. L. 
108-324, Pub. L. 108-447.

Subpart F--2004 Cottonseed Payment Program

    2. Revise the title of part 1427 subpart F to read as set forth 
above:
    3. Revise Sec.  1427.1100 to read as follows:


Sec.  1427.1100  Applicability.

    (a) Subject to the availability of funds, this subpart sets forth 
the terms and conditions under which the Commodity Credit Corporation 
(CCC) may provide payments under the cottonseed payment program for the 
2004 crop year 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 as provided in this subpart 
and only with respect to cottonseed losses related to 2004-crop cotton 
production in counties declared a disaster by the President of the 
United States due to hurricanes or tropical storms.


Sec. 1427.1102  [Amended]

    4. In Sec.  1427.1102, remove the definitions ``Number of ginned 
cotton bales'' and ``Running bale.''
    5. Revise Sec.  1427.1103 to read as follows:


Sec.  1427.1103  Eligible cottonseed.

    To be eligible for payments under this subpart, cottonseed losses 
must:
    (a) Be related to 2004-crop cotton production in a county declared 
a disaster by the President of the United States due to 2004 hurricanes 
or tropical storms.
    (b) 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.
    6. Amend Sec.  1427.1104 by revising the section heading, revising 
paragraph (a) and in paragraph (c) changing the term ``low cottonseed 
prices'' to ``loss of the cottonseed'' to read as follows:


Sec.  1427.1104  Eligible applicants (first handlers).

    (a) Only an eligible first handler of cottonseed shall be eligible 
to file an application for payment under this subpart. An eligible 
first handler of cottonseed may only be a gin that has an eligible 
payment quantity as determined under Sec.  1427.1107.
* * * * *
    7. Amend Sec.  1427.1105 by revising the section heading and 
revising paragraph (b) to read as follows:


Sec.  1427.1105  Payment application and deadline.

* * * * *
    (b) The application deadline shall be 30 days after the rules in 
this subpart become effective unless otherwise announced by CCC.
* * * * *
    8. Revise Sec.  1427.1106 to read as follows:


Sec.  1427.1106  Available funds.

    The total available program funds for the 2004-crop cottonseed 
program provided for in this subpart shall be $10 million.
    9. Revise Sec.  1427.1107 to read as follows:


Sec.  1427.1107  Applicant payment quantity.

    (a) The applicant's payment quantity of cottonseed will be 
calculated by the applicant and submitted on the Cottonseed Payment 
Application and Certification for approval for by CCC. An applicant 
must be a gin and the applicant's payment eligibility will be based on 
the determination of the amount of lint deliveries by cotton producers 
in eligible counties which were lost to the gin because of the 
qualifying hurricane or tropical storm as calculated under this 
section.
    (1) The lost lint determination will be made on a producer-by-
producer and farm-by-farm basis, based on producer certification, 
ginning records and other relevant information as applicable.
    (2) The loss determination will be limited to losses related to 
2004-crop cotton production in eligible counties. A cotton producer's 
gross loss of lint shall be determined based on a comparison of lint 
deliveries for 2003 and 2004 by the producer from the eligible farm to 
all gins. That difference will be adjusted to reflect changes in the 
acreage planted in the two years by the producer on the eligible farm 
and adjusted for losses due to reasons other than hurricane or tropical 
storm.
    (b) The producer will certify the gin or gins to which the lost 
lint production as so determined would have been delivered. Also, the 
producer will certify the relevant percentages of the losses that would 
have been delivered to each gin if more than one gin would have 
received the deliveries. Apportionment of the loss may be made by CCC 
between gins on that basis.
    (c) If the producer delivered 2004-crop cotton to a gin different 
than the gin to which the producer delivered 2003-crop cotton, or 
delivered cotton to

[[Page 36539]]

more than one gin in either 2003 or 2004, the gin receiving 2004-crop 
cotton shall contact the other gins for production information or 
obtain other proof of the eligible quantity from the cotton producer so 
as to make or verify the calculation called for in paragraph (a) of 
this section.
    (d) If the cotton producer did not produce 2003-crop cotton the 
producer shall be considered a new producer. A new producer's eligible 
lost quantity will be determined as provided in paragraph (a) of this 
section except that the amount of loss of lint will be made by 
comparing the producer's actual 2004 per-acre yield with the 2003 USDA, 
National Agricultural Statistics Service county average yield for the 
applicable county.
    (e) The gin's lint eligibility will be calculated individually with 
respect to all eligible cotton producers and those individual 
eligibilities for the gin will then be added together to determine the 
total lint eligibility of the gin. From that amount of lint 
eligibility, the applicant gin's payment quantity of cottonseed shall 
be calculated by multiplying:
    (1) The applicant gin's eligible weight of lint for which payment 
is requested, as approved by CCC, and as determined in paragraphs (a) 
through (d) of this section by;
    (2) The Olympic average of estimated pounds of cottonseed per pound 
of ginned cotton lint, as determined by CCC, for the five years 
preceding the 2004 crop year.
    10. Revise Sec.  1427.1108 to read as follows:


Sec.  1427.1108  Total payment quantity.

    The total quantity of 2004-crop cottonseed eligible under this 
subpart shall be based on the total payment quantity of cottonseed as 
determined under this subpart for which timely applications are filed. 
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 total weight of cotton lint (ton-basis) for which payment 
is requested by all applicants, as approved by CCC, by
    (b) The Olympic average of estimated pounds of cottonseed per pound 
of ginned cotton lint, as determined by CCC for the five years 
preceding the 2004 crop year.
    11. Revise Sec.  1427.1109 to read as follows:


Sec.  1427.1109  Payment rate.

    The payment rate (dollars per ton) shall be determined by CCC by 
dividing the total available program funds by the total eligible 
payment quantity of cottonseed. However, in no event may the total 
payment to an eligible applicant exceed $112 per ton of cottonseed 
multiplied by the applicant's total eligible payment quantity.
    12. Amend Sec.  1427.1111 by revising paragraph (d) to read as 
follows:


Sec.  1427.1111  Liability of first handler.

* * * * *
    (d) For three years after the date of the application for 2004-crop 
payments, 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, records must be kept for such longer period as may be 
specified by CCC until such controversy is resolved. Destruction of 
records at any time is at the risk of the applicant.

    Signed in Washington, DC, on June 15, 2005.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 05-12485 Filed 6-23-05; 8:45 am]
BILLING CODE 3410-05-P