[Federal Register Volume 70, Number 172 (Wednesday, September 7, 2005)]
[Proposed Rules]
[Pages 53103-53105]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-17684]


 ========================================================================
 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. 172 / Wednesday, September 7, 2005 / 
Proposed Rules  

[[Page 53103]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1435

RIN 0560-AH37


Transfer of Sugar Program Marketing Allocations

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Commodity Credit Corporation (CCC) proposes several 
changes to the sugar program regulations. First, CCC proposes to amend 
the regulations for transferring sugar marketing allocation when a mill 
closes and growers request to move their allocation.
    Second, CCC proposes imposing a regulatory deadline for the 
program's information reporting requirements. The required monthly 
information would be due on the 20th of each month.
    Third, CCC proposes to amend the requirements for the maintenance 
and inspection of records to require each cane processor, cane refiner 
and beet processor to provide an annual report by a Certified Public 
Accountant (CPA) that verifies the company's data submitted to CCC.

DATES: Comments on this rule must be submitted by November 7, 2005 to 
be assured consideration.

ADDRESSES: The Farm Service Agency (FSA) invites interested persons to 
submit comments on this proposed rule. Comments may be submitted by any 
of the following methods:
    E-mail: Send comments to [email protected].
    Mail: Submit comments to: Director, Dairy and Sweeteners Analysis 
Group (DSAG), FSA, United States Department of Agriculture (USDA), STOP 
0516, 1400 Independence Avenue, SW., Washington, DC 20250-0516.
    Fax: Submit comments by facsimile transmission to (202) 690-1480.
    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, DSAG, FSA, 
USDA, Room 3752-S 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 DSAG Web site at http://www.fsa.usda.gov/ao/epas/dsa.htm.

FOR FURTHER INFORMATION CONTACT: Barbara Fecso at (202) 720-4146, or 
via e-mail at [email protected]. Persons with disabilities who 
require alternative means for communication (Braille, large print, 
audiotape, etc.) should contact the USDA Target Center at (202) 720-
2600 (voice and TDD).

SUPPLEMENTARY INFORMATION:

Background

    Annually, CCC establishes sugar marketing allotments at a level 
estimated to prevent sugar loan collateral forfeitures to CCC. CCC 
establishes the overall allotment quantity, beet sugar and cane sugar 
allotments, State cane sugar allotments, and marketing allocations for 
processors marketing sugar domestically processed from sugar beets and 
domestically-produced sugarcane. If a processing mill closes, growers 
who delivered sugar beets or sugarcane to that mill may request a 
transfer of a portion of the closed mill's marketing allocation to 
another mill that reflects their production history at the closed mill.
    CCC proposes to amend the regulations at 7 CFR 1435.308 to provide 
for an orderly and transparent method of distributing allocation to 
successor mills after growers have petitioned the Executive Vice 
President, CCC, to transfer allocation when their mill closes. CCC is 
proposing to use a formula to distribute the closed mill's allocation 
that will calculate grower shares based on the grower's contribution to 
the mill's allocation. Since the formula that determines a mill's 
allocation is different in the beet sector and among the cane states, 
the formula CCC will use to transfer allocation of closed mills will 
reflect these differences.
    Since the enactment of the Farm Security and Rural Investment Act 
of 2002 (2002 Act), (Pub. L. 107-171), the only processing facilities 
to have closed have been cane processing facilities in Louisiana. The 
procedure used then to transfer allocations, while not explicit in the 
sugar program regulations, reflected the two main components of the 
cane marketing allocation formula, (1) past production history, which 
is a fixed value, and (2) current year production, known as the 
``ability to market,'' a value that changed from year to year. CCC 
published an amendment to the regulations on September 13, 2004 (69 FR 
35061), which fixed the ``ability to market'' factor in the allocation 
formula for each mainland cane State and cane processor until the 
program expires in 2008, under the 2002 Act. The other components of 
the mainland cane marketing allocation formulas were already fixed on 
the basis of historical production.
    When two Louisiana mills announced they would not reopen for the 
2005 crop, issues arose such as whether to allow growers with 
production history at the closed mill to petition if they had not 
delivered cane to the mill in the preceding year. There was also debate 
over which years to consider in the transfer formula, given that the 
``ability to market'' change to the regulation had added more crop 
years in the allocation formula. In the end, CCC and successor mills 
were able to negotiate transfer shares that satisfied all parties. CCC 
considered allowing successor mills the opportunity to negotiate a 
distribution of allocation from the closed mill in the proposed rule. 
However, no mill can be expected to take less than it would under a 
formula, so CCC did not propose that option under this proposed rule. 
While the closure of cane mills precipitated this proposed rule, it 
applies to all beet and cane processors.
    The second change CCC proposes is to include a due date in the 
information reporting provisions in 7 CFR 1435.200. This section 
requires every sugar beet processor, sugarcane processor, cane sugar 
refiner, and importer of sugar, syrup, and molasses to report to CCC, 
on a monthly basis, information necessary to administer the sugar 
programs. CCC established an informal reporting due date of the 20th of 
each month in 1991, which would be incorporated in the regulations. The 
chronic lateness of some reporters in recent times has delayed 
processing and analysis of all data, which is detrimental to the sound

[[Page 53104]]

administration of the Sugar Program. The civil penalties provisions in 
section 156h(4) of the Federal Agriculture Improvement and Reform Act 
of 1996, as amended (7 U.S.C. 7272(h)(4)) and 7 CFR 1435.201 allow CCC 
to assess a civil penalty of no more than $10,000 to reporters who 
willfully fail or refuse to furnish the information, or who willfully 
furnish false data. CCC will consider a reporter to have willfully 
failed to provide the information and subject to penalty, if CCC does 
not receive the data by the 20th of the month.
    The final proposal would require each reporting entity to have an 
independent third party verify each company's data submitted to CCC. 
CCC will require an Agreed-upon Procedures engagement, conducted by an 
independent Certified Public Accountant (CPA), to analyze the company 
data annually. The provisions of 7 CFR 1435.3, Maintenance and 
inspection of records give CCC, as well as any other U.S. Government 
agency, the right of access to the premises of any sugar beet 
processor, sugarcane processor, cane sugar refiner, importer of sugars, 
syrups, and molasses, or of any other person having custody of records 
that the examining agency deems necessary to verify compliance with 
this part's requirements. Since this information is necessary to 
determine whether a processor is in compliance with sugar marketing 
allotment program requirements, CCC proposes to require that an 
independent CPA conduct a yearly agreed-upon procedures engagement of 
each reporter to validate their materials balance. CCC will provide the 
procedures to be followed by each independent CPA.

Executive Order 12866

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

Regulatory Flexibility Act

    The requirements of the Regulatory Flexibility Act (5 U.S.C. 601--
602) do not apply to this rule because CCC is not required to publish a 
notice of proposed rulemaking for the subject of this rule. 
Nonetheless, CCC has determined that this rule will not have a 
significant economic impact on a substantial number of small entities 
and a Regulatory Flexibility Analysis was not performed.

Environmental Assessment

    The environmental impacts of this rule have been considered under 
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 regulations of the Farm Service Agency (FSA) of 
the Department of Agriculture (USDA) for compliance with NEPA, 7 CFR 
part 799. An environmental evaluation was completed and the proposed 
action has been determined not to have the potential to significantly 
impact the quality of the human environment and no environmental 
assessment or environmental impact statement is necessary. A copy of 
the environmental evaluation is available for inspection and review 
upon request.

Executive Order 12988

    This rule has been reviewed in accordance with Executive Order 
12988, Civil Justice Reform. In accordance with this Executive Order: 
(1) All State and local laws and regulations that are in conflict with 
this rule will be preempted; (2) no retroactive effect will be given to 
this rule; and (3) administrative proceedings in accordance with 7 CFR 
part 11 must be exhausted before seeking judicial review.

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 Reform Act of 1995

    This rule contains no Federal mandates, as defined under title II 
of the UMRA, for State, local, and tribal governments or the private 
sector. Thus, this rule is not subject to the requirements of sections 
202 and 205 of UMRA.

Executive Order 13132

    The policies contained in this rule do not have any substantial 
direct effect on States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Nor does this 
rule impose substantial direct compliance costs on State and local 
governments. Therefore, consultation with the States is not required.

Paperwork Reduction Act

    Under 7 U.S.C 7991(c)(2)(A) these regulations may be promulgated 
and the program administered without regard to chapter 5 of title 44 of 
the United States Code (the Paperwork Reduction Act). Accordingly, 
these regulations and the forms and other information collection 
activities needed to administer the provisions authorized by these 
regulations are not subject to review by the Office of Management and 
Budget under the Paperwork Reduction Act.

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 nature of 
the forms and other information collection activities required for this 
program, they are not fully implemented in a way that would allow the 
public to conduct business with CCC electronically. Accordingly, at 
this time, all forms and information required to be submitted under 
this rule may be submitted to CCC by mail or FAX.

List of Subjects in 7 CFR Part 1435

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

    Accordingly, 7 CFR part 1435 is proposed to be amended as follows:

PART 1435--SUGAR PROGRAM

    1. The authority citation continues to read as follows:

    Authority: 7 U.S.C. 1359aa--1359jj and 7272 et seq.; 15 U.S.C. 
714b and 714c.

    2. In Sec.  1435.200 revise paragraph (a), redesignate paragraph 
(g) as paragraph (h), and add new paragraph (g) to read as follows:


Sec.  1435.200  Information reporting.

    (a) Every sugar beet processor, sugarcane processor, cane sugar 
refiner, and importer of sugar, syrup, and molasses shall report, by 
the 20th of each month, on CCC-required forms, its imports and 
receipts, processing inputs, production, distribution, stocks and other 
information necessary to administer the sugar programs. If the 20th of 
the month falls on a weekend or a Federal holiday, the report shall be 
made by the next business day.
* * * * *
    (g) By November 20 of each year, each sugar beet processor, 
sugarcane processor, sugarcane refiner, and importer of sugars, syrups, 
and molasses will submit to CCC a report, as specified by CCC, from an 
independent Certified Public Accountant that reviews its

[[Page 53105]]

information submitted to CCC during the previous October 1 through 
September 30 period.
* * * * *
    3. Revise Sec.  1435.308(a) to read as follows:


Sec.  1435.308  Transfer of allocation, new entrants.

    (a) If a sugar beet or sugarcane processing facility is closed and 
the growers that delivered their crops to the closed facility elect to 
deliver their crops to another processor, the growers may petition the 
Executive Vice President, CCC, to transfer their share of the 
allocation from the processor that closed the facility to their new 
processor. If CCC determines to transfer the allocations, it will 
distribute the closed mill's allocation based on the contribution of 
the growers' production history to the closed mill's allocation. CCC 
may grant the allocation transfer upon:
    (1) Written request by a grower to transfer allocation,
    (2) Written approval of the processing company that will accept the 
additional deliveries, and
    (3) Evidence satisfactory to CCC that the new processor has the 
capacity to accommodate the production of petitioning growers.
* * * * *

    Signed in Washington, DC, on August 18, 2005.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 05-17684 Filed 9-6-05; 8:45 am]
BILLING CODE 3410-05-P