[Federal Register Volume 71, Number 149 (Thursday, August 3, 2006)]
[Proposed Rules]
[Pages 43992-43996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-6652]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1483

RIN 0551-AA68


Quality Samples Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION:  Proposed rule.

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SUMMARY: This proposed rule would establish regulations applicable to 
the Quality Samples Program (QSP). The proposed regulations set forth 
details concerning program administration, including participant 
eligibility, application requirements, review and allocation process, 
reimbursement rules and procedures, and program controls.

DATES: Comments concerning this rule should be received on or before 
October 2, 2006 to be assured consideration.

ADDRESSES: Comments must be submitted to Director, Marketing Operations 
Staff, Foreign Agricultural Service, U.S. Department of Agriculture, 
Stop 1042, 1400 Independence Ave., SW., Washington, DC 20250-1042; by 
phone at (202) 720-4327; by fax at (202) 720-9361; or by e-mail at 
[email protected].

FOR FURTHER INFORMATION CONTACT: Marketing Operations Staff by phone at 
(202) 720-4327; by fax at (202) 720-9361; or by e-mail at 
[email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule is issued in conformance with Executive Order 12866. It 
has been determined non-significant for the purposes of Executive Order 
12866.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this rule because the Commodity Credit Corporation is not 
required by any provision of law to publish a notice of proposed 
rulemaking with respect to the subject matter of this rule.

Executive Order 12988

    This proposed rule has been reviewed in accordance with Executive 
Order 12988, Civil Justice Reform. The rule would have preemptive 
effect with respect to any State or local laws, regulations or policies 
which conflict with such provisions or which otherwise impede their 
full implementation; would not have retroactive effect, and does not 
require administrative proceedings before suit may be filed.

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which require intergovernmental consultation with State and 
local offices (See the notice related to 7 CFR part 3014, subpart V, 
published at 48 FR 29115).

The Unfunded Mandates Reform Act of 1995

    This 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 
204 of the UMRA.

Executive Order 13132

    It has been determined that this rule does not have sufficient 
Federalism implications to warrant the preparation of a Federalism 
impact statement. The provisions contained in this rule will not have a 
substantial direct effect on States or their political subdivisions, or 
on the distribution of power and responsibilities among the various 
levels of government.

[[Page 43993]]

Paperwork Reduction Act of 1995

    In accordance with section 3507(j) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the Commodity Credit Corporation 
(CCC) requests approval of a new information collection in support of 
the Quality Samples Program.
    Title: Quality Samples Program.
    OMB Control Number: Not yet assigned.
    Type of Request: Approval of an information collection.
    Abstract: This information is needed to administer CCC's Quality 
Sample Program. The information will be gathered from applicants 
desiring to receive grants under the program to determine the viability 
of requests for funds.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 32 hours per year per respondent.
    Respondents: U.S. government agencies, State government agencies, 
non-profit trade associations, agricultural cooperatives, and private 
companies.
    Estimated Number of Respondents: 30.
    Estimated Number of Responses per Respondent: 5.
    Estimated Total Annual Burden on Respondents: 960 hours.
    Proposed topics for comments are: (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 to be 
collected; or (d) ways to minimize the burden of the collection of 
information on those who are to respond, including the use of 
appropriate automated, electronic, mechanical or other technological 
collection techniques or other forms of information technology. 
Comments should be sent to the Desk Officer for Agriculture, Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Washington, DC 20503 and to: Director, Marketing Operations Staff, 
Foreign Agricultural Service, Stop 1042, U.S. Department of 
Agriculture, 1400 Independence Ave., SW., Washington, DC 20250-1042.
    Copies of this information collection may be obtained from Tamoria 
Thompson, FAS' Information Collection Coordinator, at (202) 690-1690.

Government Paperwork Elimination Act

    The Foreign Agricultural Service is committed to compliance with 
the Government Paperwork Elimination Act (GPEA), which requires 
Government agencies, in general, to provide the public the option of 
submitting information or transacting business electronically to the 
maximum extent possible. Accordingly, applications for participation in 
the Quality Samples Program may be submitted online. Payment 
transactions will be handled both electronically and in paper form.

Background

    Section 5(f) of the CCC Charter Act, 15 U.S.C. 714c(f) authorizes 
CCC to aid in the development and expansion of export markets for U.S. 
agricultural commodities. The QSP is intended to accomplish this market 
development by assisting U.S. entities provide commodity samples to 
potential foreign importers to promote better understanding and 
appreciation for the high quality of U.S. agricultural products. The 
QSP is administered by personnel of the Foreign Agricultural Service.

List of Subjects in 7 CFR Part 1483

    Agriculture commodities, Exports.

    Accordingly, CCC proposes to amend Title 7 of the Code of Federal 
Regulations by adding a new part 1483 to read as follows:

PART 1483--QUALITY SAMPLES PROGRAM

Sec.
1483.1 What is the Quality Samples Program?
1483.2 What special definitions apply to the QSP?
1483.3 Who can apply to the QSP?
1483.4 What type of activity is appropriate for the QSP?
1483.5 What may be reimbursed under the QSP?
1483.6 What is the process for submitting proposals?
1483.7 How are proposals evaluated?
1483.8 How are agreements formalized?
1483.9 How are payments made?
1483.10 What are the reporting requirements?
1483.11 How is program compliance monitored?
1483.12 Miscellaneous provisions

    Authority: Section 5(f) of CCC Charter Act, 15 U.S.C. 714(c)(f).


Sec.  1483.1  What is the Quality Samples Program?

    The Quality Samples Program (QSP) is designed to encourage the 
development and expansion of export markets for U.S. agricultural 
commodities by assisting U.S. entities in providing commodity samples 
to potential foreign importers to promote a better understanding and 
appreciation for the high quality of U.S. agricultural commodities. The 
QSP is administered by personnel of the Foreign Agricultural Service 
(FAS). Under the QSP, a participant would provide information to target 
audiences regarding the attributes, characteristics, and proper use of 
U.S agricultural commodities.


Sec.  1483.2  What special definitions apply to the QSP?

    For purposes of this part, the following definitions apply:
    Activity--A project undertaken to provide an appropriate sample of 
a U.S. agricultural commodity and appropriate technical assistance to a 
foreign importer, or a group of foreign importers, in a given market.
    Affiliate--Any partnership, association, company, corporation, 
trust, or any other such party in which the participant or its 
membership has an investment, other than in a mutual fund.
    CCC--Commodity Credit Corporation.
    Eligible Organization--Any United States private or government 
entity with a demonstrated role or interest in exporting U.S. 
agricultural commodities.
    FAS--Foreign Agricultural Service, United States Department of 
Agriculture.
    QSP--Quality Samples Program.
    Sample--A U.S. agricultural commodity provided to a foreign 
importer, or group of foreign importers in quantities less than a 
typical commercial sale and limited to the amount sufficient to achieve 
the goals of an activity approved by CCC.
    UES--Unified Export Strategy.


Sec.  1483.3  Who can apply to the QSP?

    Any United States private or government entity with an interest in 
exporting U.S. agricultural commodities may apply to the program. 
Government organizations include Federal, State, and local agencies. 
Private organizations include non-profit trade associations, 
universities, agricultural cooperatives, state regional trade groups, 
and profit-making entities.


Sec.  1483.4  What type of activity is appropriate for the QSP?

    (a) In order to be approved for funding under this part:
    (1) A QSP activity must provide broad benefit to the represented 
U.S. industry and not to a specific company or brand;
    (2) A QSP activity must target a single market/commodity 
combination and develop a new market for a U.S.

[[Page 43994]]

product, promote a new U.S. product, or promote a new use for a U.S. 
product, rather than promote the substitution of one established U.S. 
product for another;
    (3) Samples provided under a QSP activity must represent 
commodities that are in sufficient supply and available on a commercial 
basis;
    (4) A QSP activity shall either subject the commodity sample to 
further processing or substantial transformation in the importing 
country, or the sample must be used in technical seminars designed to 
demonstrate to an appropriate target audience the proper preparation or 
use of the sample in the creation of an end product;
    (5) Samples provided in a QSP activity shall not be directly used 
as part of a retail promotion or supplied directly to consumers. 
However, the end product, i.e., the product resulting from further 
processing, substantial transformation, or a technical seminar, may be 
provided to end-use consumers to demonstrate to importers consumer 
preference for that end product; and,
    (6) A QSP activity must include the provision of technical 
assistance to facilitate successful use of the sample by the target 
audience.
    (b) QSP activities shall target foreign importers or entities that 
meet at least one of the following criteria:
    (1) Have not previously purchased the U.S. commodity that will be 
sampled under the QSP;
    (2) Are unfamiliar with the variety, quality attribute, or end-use 
characteristic of the U.S. commodity which will be sampled under the 
QSP;
    (3) Have been unsuccessful in previous attempts to import, process, 
and market the U.S. commodity which will be sampled under the QSP 
(because of improper specification, blending, or formulation; or 
sanitary or phytosanitary issues); or
    (4) Need technical assistance in processing or using the U.S. 
commodity that will be sampled under the QSP.


Sec.  1483.5  What may be reimbursed under the QSP?

    (a) Each QSP participant is responsible for procuring (or arranging 
for the procurement of) commodity samples, transporting the samples 
from the point of purchase to the destination, and providing at the 
destination the technical assistance necessary to facilitate successful 
use of the samples by the target audience. Participants that are funded 
under this annoucement may seek reimbursement for the sample purchase 
price and the costs of transporting the samples domestically to the 
port of export and then to the foreign port, or point of entry. 
Transportation costs from the foreign port, or point of entry to the 
final destination will not be eligible for reimbursement. CCC will not 
reimburse the costs incidental to purchasing and transporting samples, 
for example, inspection or documentation fees. Although providing 
technical assistance is required for all projects, CCC will not 
reimburse the costs of providing technical assistance. A QSP 
participant will be reimbursed after CCC reviews its reimbursement 
claim and determines that the claim is complete.
    (b) The number of activities per participant will not be limited. 
However, individual activities will be limited to $75,000 of QSP 
reimbursement. Activities comprised of technical preparation seminar, 
i.e., projects that do not include further processing or substantial 
transformation, will be limited to $15,000 of QSP reimbursement as 
these projects require smaller samples. CCC will not reimburse 
expenditures made prior to approval or a proposal or unreasonable 
expenditures.


Sec.  1483.6  What is the process for submitting proposals?

    (a) CCC will periodically announce that it is accepting proposals 
for participation in the QSP. The announcement will contain relevant 
information such as application deadlines. Proposals must be submitted 
in accordance with the terms of the announcement.
    (b) Organizations can submit applications to CCC through FAS' 
Unified Export Strategy (UES) application Internet Web site. Applicants 
also have the option of submitting electronic versions in the UES 
format (along with two paper copies) of their applications. However, 
the UES format is not required.
    (c) To be considered for the QSP, an applicant must submit 
information detailed in this part. In addition, all applicants must 
submit a Dun and Bradstreet Data Universal Numbering System (DUNS) 
number. An applicant may request a DUNS number at no cost by calling 
the dedicated toll-free DUNS number request line at 1-866-705-5711. 
Incomplete applications and applications which do not otherwise conform 
to this part will not be accepted for review.
    (d) Applicants to the QSP are not required to submit proposals in 
any specific format; however, proposals should contain, at a minimum, 
the following:
    (1) Organizational information, including:
    (i) Organization's name, address, Chief Executive Officer (or 
designee), Federal Tax Identification Number (TIN), and DUNS number;
    (ii) Type of organization;
    (iii) Name, telephone number, fax number, and e-mail address of the 
primary contact person;
    (iv) A description of the organization and its membership;
    (v) A description of the organization's prior export promotion 
experience; and
    (vi) A description of the organization's experience in implementing 
an appropriate trade/technical assistance component;
    (2) Market information, including:
    (i) An assessment of the market;
    (ii) A long-term strategy in the market; and
    (iii) U.S. export value, volume and market share (historic and 
goals) for the time period specified in the applicable announcement;
    (3) Project information, including:
    (i) A brief activity title;
    (ii) Amount of funding requested;
    (iii) A brief description of the specific market development trade 
constraint or opportunity to be addressed by the activity, performance 
measures for the time period specified in the applicable announcement, 
which will be used to measure the effectiveness of the project, a 
benchmark performance measure as specified in the applicable 
announcement, the viability of long term sales to this market, the 
goals of the activity, and the expected benefits to the represented 
industry;
    (iv) A description of the activities planned to address the 
constraint or opportunity, including how the sample will be used in the 
end-use performance trial, the attributes of the sample to be 
demonstrated and its end-use benefit, and details of the technical 
servicing component (including who will provide and who will fund this 
component);
    (v) A sample description (i.e., commodity, quantity, quality, type, 
and grade), including a justification for selecting a sample with such 
characteristics (this justification should explain in detail why the 
activity could not be effective with a smaller sample);
    (vi) An itemized list of all estimated costs associated with the 
activity for which reimbursement will be sought;
    (vii) The importer's role in the activity, including its handling 
and processing of the commodity sample; and
    (viii) Information indicating all funding sources and amounts to be 
contributed by each entity that will supplement implementation of the 
proposed project. This may include the organization that submitted the

[[Page 43995]]

proposal, private industry entities, host governments, foreign third 
parties, CCC, FAS, or other Federal agencies. Contributed resources may 
include cash or goods and services.


Sec.  1483.7  How are proposals evaluated?

    (a) All proposals will be reviewed against the evaluation criteria 
contained herein and funds will be awarded on a competitive basis. FAS 
will use the following criteria in evaluating proposals:
    (1) The ability of the organization to provide an experienced staff 
with the requisite technical and trade experience to execute the 
proposal;
    (2) The extent to which the proposal is targeted to a market in 
which the United States is generally competitive;
    (3) The potential for expanding commercial sales in the proposed 
market;
    (4) The nature of the specific market constraint or opportunity 
involved and how well it is addressed by the proposal;
    (5) The extent to which the importer's contribution in terms of 
handling and processing enhances the potential outcome of the project;
    (6) The amount of reimbursement requested and the organization's 
willingness to contribute resources, including cash and goods and 
services of the U.S. industry and foreign third parties; and
    (7) How well the proposed technical assistance component assures 
that performance trials will effectively demonstrate the intended end-
use benefit.
    (b) Highest priority for funding will be given to meritorious 
proposals that target countries that meet either of the following 
criteria:
    (1) Per capita income as set forth in the applicable announcement; 
and population greater than 1 million. Proposals may address suitable 
regional groupings, for example, the islands of the Caribbean Basin; or
    (2) U.S. market share of imports of the commodity identified in the 
proposal of 10 percent or less.
    (c) Proposals will be evaluated by the applicable FAS commodity 
division. The divisions will review each proposal against the factors 
described above. The purpose of this review is to identify meritorious 
proposals, recommend an appropriate funding level for each proposal 
based upon these factors, and submit the proposals and funding 
recommendations to the Deputy Administrator, Commodity and Marketing 
Programs.


Sec.  1483.8  How are agreements formalized?

    (a) Under the QSP, CCC enters into agreements with approved 
participants to share the costs of certain overseas marketing and 
promotion activities. Funding for successful proposals will be provided 
through specific agreements. These agreements will incorporate the 
regulations of this part 1483 and the proposal as approved by CCC. 
Amendments to these agreements are only valid if approved by CCC in 
writing.
    (b) CCC, through FAS, will notify each applicant in writing of the 
final disposition of its application. CCC will send an approval letter 
and agreement to each approved applicant. The approval letter and 
agreement will specify the terms and conditions applicable to the 
project, including the levels of QSP funding and any cost-share 
contribution requirements. Agreements may also outline specific 
responsibilities of the participant, including, but not limited to, 
arranging for transportation of the commodity sample within a time 
limit specified in the agreement and timely and effective 
implementation of technical assistance.
    (c) Termination of agreements: CCC reserves the right to 
unilaterally terminate QSP agreements where CCC has a reasonable basis 
for concluding that there has been a violation of any requirements in 
this part.


Sec.  1483.9  How are payments made?

    Financial assistance will be made available on a reimbursement 
basis; that is, cash advances will not be made available to any QSP 
participant.
    (a) Following the implementation of an activity for which CCC has 
agreed to provide funding, a participant may submit claims for 
reimbursement of eligible expenses to the extent that CCC has agreed to 
pay such expenses. Any changes to approved activities must be approved 
in writing, and in advance, by CCC before any reimbursable expenses 
associated with the change can be incurred. A participant will be 
reimbursed after CCC reviews the claim and determines that it is 
complete.
    (b) All claims for reimbursement must be received no later than 90 
calendar days following the expiration or termination date of the 
project agreement.
    (c) Participants shall maintain complete records which fully 
identify all project expenditures by QSP agreement number, project 
year, country or region, activity number and cost category. Such 
records shall be accompanied by original documentation which supports 
the expenditures and shall be made available to CCC upon request.
    (d) Participants shall maintain all records and documents relating 
to QSP projects, including the original documentation which supports 
expenditures and reimbursement claims, for a period of three calendar 
years following the expiration or termination date of the project 
agreement, and shall make such records and documents available upon 
request to authorized officials of the U.S. Government. Such records 
and documents will be subject to verification by the FAS Compliance 
Review Staff (CRS).
    (e) CCC may deny a claim for reimbursement or may disallow a claim 
for reimbursement that has already been paid for any of the following 
reasons:
    (1) The claim for reimbursement is not supported by acceptable 
documentation;
    (2) Project funds were spent on unapproved activities:
    (3) The participant violated a provision of these regulations, 
including section 1483.12(b).
    (f) In the event that a reimbursement claim is overpaid or is 
disallowed after payment has been made, the participant shall return 
the overpayment amount or the disallowed amount to the CCC within 30 
days after realizing the overpayment or receiving notification of the 
overpayment or disallowed amount, unless the participant avails itself 
of the procedures set forth in Sec.  1483.11(d)-(i).


Sec.  1483.10  What are the reporting requirements?

    The QSP participant must submit a written evaluation report within 
90 days of the expiration of its QSP agreement. Evaluation reports 
should address all performance measures that were presented in the 
proposal.


Sec.  1483.11  How is program compliance monitored?

    (a) QSP agreements are subject to review and verification by the 
CRS. Upon request, a QSP participant shall provide to CCC the original 
documents which support the participant's reimbursement claims.
    (b) CRS performs periodic on-site reviews of QSP participants to 
ensure compliance with this part, applicable federal regulations, and 
the terms of the project agreement.
    (c) The Director, CRS, will notify a QSP participant through a 
compliance report when, in the opinion of the Director, CRS, it appears 
based on CRS' review or other acceptable sources of information, 
including but limited to, USDA's Office of the Inspector General

[[Page 43996]]

or other federal or state government agencies, that CCC is entitled to 
recover funds from the participant. The report will state the basis for 
this action. Upon receipt of the compliance report, that participant 
will return the funds to CCC within 30 days as set forth in Sec.  
1483.9(f), unless the participant wishes to pursue the procedures set 
forth below in paragraphs (d) through (i) of this section.
    (d) A participant may within 60 days of the date of the compliance 
report, submit a written response to the Director, CRS. The Director, 
CRS, at his or her discretion, may extend the period for response up to 
an additional 30 days. The response shall include:
    (1) Repayment of any funds determined to be due to CCC;
    (2) Submission of documentation or evidence or any other required 
action; or
    (3) A request for reconsideration of any finding and the supporting 
justification for the request.
    (e) If after review of the compliance report and response, the 
Director, CRS determines that the participant owes money to CCC, the 
Director, CRS, will so inform the participant and provide a detailed 
basis for the decision. The participant has 30 days from the date of 
the Director's, CRS, determination to submit any money owed to CCC or 
to request reconsideration.
    (f) If the participant does not respond to the compliance report 
within the required time period, the Director, CRS, may initiate action 
to collect any amount owed to CCC pursuant to 7 CFR part 1403, Debt 
Settlement Policies.
    (g) A participant may appeal the determinations of the Director, 
CRS, to the Deputy Administrator, CMP. The request must be in writing 
and be submitted to the Office of the Deputy Administrator, CMP, within 
30 days following the date of the original determination. The 
participant may request a hearing.
    (h) If the participant submits its appeal and requests a hearing, 
the Deputy Administrator, or the Deputy Administrator's designee, will 
set a date and time, generally within 60 days. The hearing will be an 
informal proceeding. A transcript will not ordinarily be prepared 
unless the participant bears the cost of the transcript; however, the 
Deputy Administrator or designee may have a transcript prepared at 
FAS's expense.
    (i) The Deputy Administrator or the Deputy Administrator's designee 
will base the determination on appeal upon information contained in the 
administrative record and will endeavor to make a determination within 
60 days after submission of the appeal, hearing, or receipt of any 
transcript, whichever is later. The determination of the Deputy 
Administrator will be the final determination of FAS. The participant 
must exhaust all administrative remedies contained in this section 
before pursuing judicial review of a determination by the Deputy 
Administrator.


Sec.  1483.12  Miscellaneous provisions.

    (a) Disclosure of Program Information.
    (1) Documents submitted to CCC by participants are subject to the 
provisions of the Freedom of Information Act (FOIA), 5 U.S.C. 552, 7 
CFR part 1, subpart A--Official Records, and specifically 7 CFR 1.11, 
``Handling Information from a Private Business.''
    (b) Ethical Conduct.
    (1) A participant shall conduct business overseas in accordance 
with the laws and regulations of the country in which an activity is 
carried out.
    (2) A participant shall not use program activities or program funds 
to promote private self-interests or to conduct private business.
    (3) Participants, members of the participating organization, and 
their affiliates are prohibited from using any association with this 
program to make export sales of any agricultural commodities or 
products covered under the terms of the agreement and from using any 
association with this program to charge a fee for facilitating an 
export sale of any agricultural commodities or products covered under 
the terms of the agreement. A participant may, however, collect check-
off funds and membership fees that are required for membership in the 
participating organization.
    (4) A participant shall immediately report any actions or 
circumstances that have a bearing on the propriety of the program in 
writing to the FAS.
    (c) Additional Program Requirements. QSP participants are required 
to comply with cargo preference requirements (shipment on U.S. flag 
vessels, as required) and compliance with Fly America Act requirements 
(shipment on U.S. air carriers, as required).

    Dated: July 21, 2006.
Michael W. Yost,
Administrator, Foreign Agricultural Service, and Vice President, 
Commodity Credit Corporation.
[FR Doc. 06-6652 Filed 8-2-05; 8:45 am]
BILLING CODE 3410-10-M