[Federal Register Volume 71, Number 68 (Monday, April 10, 2006)]
[Rules and Regulations]
[Pages 17982-17983]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-3364]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1412

RIN 0560-AH49


Percentages for Direct and Counter-Cyclical Program Advance 
Payments

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Final rule.

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SUMMARY: This final rule implements the provisions of the Agricultural 
Reconciliation Act of 2005 regarding percentages used to determine 
payment amounts for producers electing to receive advance payments 
through the Direct and Counter-Cyclical Program. Reducing the direct 
payment advance percentages shifts payments between fiscal years, but 
will have no impact on total payments.

DATES: Effective Date: This rule becomes effective on April 10, 2006.

FOR FURTHER INFORMATION CONTACT: Tracey Smith, Production, Emergencies 
and Compliance Division, United States Department of Agriculture 
(USDA), Stop 0517, 1400 Independence Ave., SW., Washington, DC 20250-
0517. Telephone: (202) 720-4365. Electronic mail: 
[email protected]. Persons with disabilities who require 
alternative means for communication (Braille, large print, audio tape, 
etc.) should contact the USDA Target Center at (202) 720-2600 (voice 
and TDD).

SUPPLEMENTARY INFORMATION:

Background

    The Direct and Counter-Cyclical Program (DCP), authorized by Farm 
Security and Rural Investment Act of 2002 (Pub. L. 107-171, May 13, 
2002) (``2002 Act''), provides payments to eligible producers on farms 
enrolled for the 2002 through 2007 crop years. There are two types of 
DCP payments--direct payments and counter-cyclical payments. These 
payments provide income support to producers of eligible commodities 
and are based on historically-based acreage and yields and do not 
depend on the current production choices of the farmer. DCP replaces 
the Production Flexibility Contract (PFC) payments made under the 
Federal Agriculture Improvement and Reform Act of 1996 for the crop 
years 1996 through 2002. In addition to the commodities that were 
eligible for PFC payments, the 2002 Act also provides for direct and 
counter-cyclical payments for peanuts, soybeans, sunflower seed and 
other oilseeds.

Explanation of Change

    This rule implements section 1102 of Title I of Subtitle A of the 
Deficit Reduction Act of 2005 (Pub. L. 109-171, February 8, 2006). This 
section provides that DCP advance direct payment percentages will be 
reduced for fiscal years 2006 and 2007 from 50 percent to 40 percent 
for the 2006 fiscal year, and to 22 percent for the 2007 program year. 
This rule amends the direct and counter-cyclical program regulations at 
7 CFR 1412.502(b) to reduce the advance direct payment rate percentages 
accordingly. Producers will continue to have the option to receive 
advance direct payments during any month from December through 
September of the applicable fiscal year.

Notice and Comment

    Section 1601(c) of the Farm Security and Rural Investment Act of 
2002 (7 U.S.C 7991(c)), provides that the regulations needed to 
implement Title I of the 2002 Act (7 U.S.C. 7901 et seq.), including 
those involved here, may be promulgated without regard to the notice 
and comment provisions of 5 U.S.C. 553 or the Statement of Policy of 
the Secretary of Agriculture effective July 24, 1971 relating to 
notices of proposed rulemaking and public participating in rulemaking.

Executive Order 12866

    This rule is issued in conformance with Executive Order 12866, was 
determined to be economically significant and was reviewed by the 
Office of Management and Budget. The economic effects of this rule are 
summarized below.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this rule because the CCC is not required by 5 U.S.C. 533 
or any other law to publish a notice of proposed rulemaking for the 
subject matter of this rule.

Environmental Assessment

    The environmental impacts of this 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 the FSA 
regulations for compliance with NEPA, 7 CFR part 799. FSA concluded 
that the rule requires no further environmental review because it is 
administrative in nature and no extraordinary circumstances or other 
unforeseeable factors exist which would require preparation of an 
environmental assessment or environmental impact statement.

Executive Order 12988

    This rule has been reviewed in accordance with Executive Order 
12988. This rule will preempt State laws that are inconsistent with it. 
Before any legal action may be brought regarding a determination under 
this rule, the administrative appeal provisions set forth at 7 CFR 
parts 11 and 780 must be exhausted.

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 3014, subpart V, 
published at 48 FR 29115 (June 24, 1983).

Unfunded Mandates Reform Act of 1995

    The rule contains no Federal mandates under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995 
(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 the UMRA.

Paperwork Reduction Act

    Section 1601(c) of the 2002 Act (7 U.S.C. 7991(c)) provides that 
the promulgation of regulations and the administration of Title I of 
the 2002 Act shall be made without regard to chapter 5 of title 44 of 
the United States Code

[[Page 17983]]

(the Paperwork Reduction Act). Accordingly, these regulations and the 
forms and other information collection activities needed to administer 
the program authorized by these regulations are not subject to review 
by OMB under the Paperwork Reduction Act.

Executive Order 12612

    This rule does not have sufficient Federalism implications to 
warrant the preparation of a Federalism Assessment. The provisions 
contained in this rule will not have substantial direct effect on 
States or their political subdivisions or on the distribution of power 
and responsibilities among the various levels of government.

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 FSA in particular to provide the 
public the option of submitting information or transacting business 
electronically to the maximum extent possible. The forms and other 
information collection activities required for participation in the 
program are available electronically through the USDA eForms Web site 
at http://www.sc.egov.usda.gov for downloading. Applications may be 
submitted at the FSA county offices, by mail or by FAX. At this time, 
electronic submission is not available. Full development of electronic 
submission is underway.

Federal Assistance Programs

    The title and number of the Federal assistance program found in the 
Catalog of Federal Domestic Assistance to which this final rule applies 
are: 10.055--Direct and Counter-cyclical Payments Program (DCP).

Cost Benefit Analysis Summary

    Changing the advance direct payment percentage shifts about $0.305 
billion of 2006-crop direct payments from FY 2006 to FY 2007 direct 
payments among FY's and shifts about $1.47 billion of 2007-crop direct 
payments from FY 2007 to FY 2008. About $90 million of 2007-crop direct 
payments is expected to shift from calendar year 2006 into calendar 
year 2007 because of the direct payment percentage change from 50 
percent to 22 percent. While no net impact in nominal dollars on income 
is expected, the postponement of some advance payments does have some 
time value. The reduction in the real value of payments will be 
approximately $5 million for the 2006 crop and $22 million for the 2007 
crop.

List of Subjects in 7 CFR Part 1412

    Agricultural commodities, Feed grains, Grains, Oilseeds, Reporting 
and recordkeeping requirements.


0
For the reasons set forth in the preamble, 7 CFR part 1412 is amended 
as follows:

PART 1412--DIRECT AND COUNTER-CYCLICAL PROGRAM AND PEANUT QUOTA 
BUYOUT PROGRAM

0
1. The authority section for part 1412 continues to read as follows:

    Authority: 7 U.S.C. 7911-7918, 7951-7956; 15 U.S.C. 714b and 
714c.


0
2. Section 1412.502 is amended by revising paragraph (b) introductory 
text to read as follows:


Sec.  1412.502  Direct payment provisions.

* * * * *
    (b) At the option of the producer, direct payments for the farm 
with respect to covered commodities and peanuts for which payment 
yields and base acres are established, shall be paid in any month from 
December through September of the fiscal year of the contract, as 
requested by the producer as an advance payment based on 50 percent of 
the direct payment rate for 2003 through 2005 contracts, 40 percent of 
the direct payment rate for 2006 contracts, and 22 percent of the 
direct payment rate for 2007 contracts. For any producer to receive an 
advance direct payment, all producers sharing in the direct payments 
for the farm must:
* * * * *

    Signed in Washington, DC, on April 4, 2006.
Teresa C. Lasseter,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 06-3364 Filed 4-7-06; 8:45 am]
BILLING CODE 3410-05-P