[Federal Register Volume 71, Number 210 (Tuesday, October 31, 2006)]
[Rules and Regulations]
[Pages 63665-63668]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-18249]



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 Rules and Regulations
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  Federal Register / Vol. 71, No. 210 / Tuesday, October 31, 2006 / 
Rules and Regulations  

[[Page 63665]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR 1427

RIN 0560-AH63


2005 Cottonseed Payment Program

AGENCIES: Commodity Credit Corporation, USDA.

ACTION: Final rule.

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SUMMARY: This final rule implements a portion of the Emergency 
Supplemental Appropriations Act for Defense, the Global War on Terror, 
and Hurricane Recovery of 2006 to provide assistance to producers and 
first-handlers of the 2005 crop of cottonseed in counties which were 
declared a natural disaster area by the President of the United States, 
and contiguous counties, due to Hurricanes Katrina, Ophelia, Rita, 
Wilma or a related condition in 2005.

DATES: This rule is effective October 31, 2006.

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

SUPPLEMENTARY INFORMATION:

Discussion of Final Rule

    Section 3015(a) of Subtitle A of Title III of Pub. L. 109-234 
states, ``The Secretary shall use $15,000,000 of the funds of the 
Commodity Credit Corporation to provide assistance to producers and 
first-handlers of the 2005 crop of cottonseed in hurricane-affected 
counties.'' (Title III, Subtitle A, 120 Stat. 477, June 15, 2006) 
(``2006 Act''). This rule provides the Commodity Credit Corporation 
(CCC) regulations for implementation of the 2005 Cottonseed Payment 
Program authorized by this provision.
    Assistance under the 2005 Cottonseed Payment Program is provided 
under the same terms and conditions, generally, as it was for the 2004 
Cottonseed Payment Program. However, section 3015(b)(2) of the 2006 Act 
states that, for the 2005 program, funds will be distributed ``* * * 
based on cottonseed production during the most recent year for which a 
disaster payment specifically for cottonseed was not authorized.'' (120 
Stat. 477) The most recent year for which a disaster payment 
specifically for cottonseed was not authorized was the 2003 cottonseed 
production year. Accordingly, this rule provides that 2003 cottonseed 
production will be used as a basis for payments provided under the 2005 
Cottonseed Payment Program.
    Also, as provided in section 3015(b)(2) of the 2006 Act, payment 
calculations for the 2005 Cottonseed Payment Program will differ from 
those used for the 2004 Cottonseed Payment Program. The 2004 program 
payments were based upon a loss attributable to the disaster. The 2005 
Cottonseed Payment Program shall be based solely upon production during 
the most recent year for which a disaster payment specifically for 
cottonseed was not authorized (the 2003 crop), without requiring proof 
of a loss.
    Another difference from the 2004 program is that this rule 
clarifies which counties are eligible for assistance. This rule clearly 
defines the term ``hurricane affected counties'' for the 2005 program 
as those counties designated as a disaster area resulting from 
Hurricanes Katrina, Ophelia, Rita, Wilma, or a related condition, and 
contiguous counties thereof, meaning counties directly adjoining the 
primary disaster county.

Executive Order 12866

    This rule has been determined to be ``Significant'' under Executive 
Order 12866 and has been reviewed by the Office of Management and 
Budget (OMB).

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 for the subject 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 FSA's 
regulations for compliance with NEOA, 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 foreseeable 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 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 
set forth at 7 CFR part 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 19115 (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

    Section 3034(b)(3) of the 2006 Act requires that this rule be 
implemented and administered without regard to the Paperwork Reduction 
Act. Therefore, the normal 60-day public comment period and OMB 
approval do not apply to the information collections required by this 
rule.

E-Government Act Compliance

    CCC is committed to complying with the E-Government Act to promote 
the

[[Page 63666]]

use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes. For information pertinent to E-
GOV compliance related to this rule, please contact the person named 
above under the information contact section.

List of Subjects in 7 CFR Part 1427

    Agriculture, Cottonseed.


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. 7231-7236; 15 U.S.C. 714b, 714c; Pub. L. 
108-324, Pub. L. 108-447, Pub. L. 109-234.

Subpart H--2005 Cottonseed Payment Program

0
2. Add subpart H as follows:

Subpart H--2005 Cottonseed Payment Program

Sec.
1427.1300 Applicability.
1427.1301 Administration.
1427.1302 Definitions.
1427.1303 Eligible cottonseed.
1427.1304 Eligible applicants (first handlers).
1427.1305 Payment application and deadline.
1427.1306 Available funds.
1427.1307 Applicant payment quantity.
1427.1308 Total payment quantity.
1427.1309 Payment rate.
1427.1310 Payment calculation and form.
1427.1311 Liability of first handler.


Sec.  1427.1300  Applicability.

    (a) Subject to the availability of funds, this subpart sets forth 
the terms and conditions under which the Commodity Credit Corporation 
(CCC) will provide payments under the cottonseed payment program for 
the 2005 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 2005 crop cottonseed in hurricane-affected 
counties according to Sec.  1427.1303 of this part.


Sec.  1427.1301  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 in 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 
subpart.


Sec.  1427.1302  Definitions.

    The definitions in this section shall apply to the cottonseed 
payment program in this subpart. The terms defined in Sec.  1427.3, 
Subpart A, Nonrecourse Cotton Loan and Loan Deficiency Payment 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.
    Hurricane-affected county means a county declared a natural 
disaster or included in the geographic area covered by a natural 
disaster declaration related to Hurricane Katrina, Hurricane Ophelia, 
Hurricane Rita, Hurricane Wilma, a related condition, or a county 
contiguous to such a county.
    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.
    Ton means a unit of weight equal to 2,000 pounds avoirdupois 
(907.18 kilograms).


Sec.  1427.1303  Eligible cottonseed.

    To be eligible for payments under this subpart, cottonseed must:
    (a) Have been produced from cotton grown in a hurricane-affected 
county as defined in section 1427.1302 during the 2005-crop production 
period.
    (b) Have been the result of ginning 2005-crop cotton by the 
applicant.
    (c) Not have been destroyed or damaged in any amount at the gin by 
fire, flood, or other events such that its loss or damage was 
compensated by any other local, State, or Federal government or private 
or public insurance or disaster relief payments.


Sec.  1427.1304  Eligible applicants (first handlers).

    (a) An eligible applicant shall be a first handler of cottonseed or 
a gin that has an eligible payment quantity as determined under Sec.  
1427.1307. This is the gin(s) that ginned 2005 crop cotton for the 
producer except if the 2005 gin is no longer in business to the extent 
the company has no means to apply for payment on behalf of producers 
and distribute funds, the current gin becomes the applicant. Only an 
eligible first handler shall be eligible to file an application for 
payment in this subpart.
    (b) Applicants must comply with the terms and conditions set forth 
in this subpart 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 payment in this subpart must share and distribute any payment 
with the producer of the cotton that was the basis for the cottonseed 
payment to the extent that the effect of the loss of 2005 crop 
cottonseed was borne by the producer rather than the gin. To the extent 
that such funds shall be shared with and distributed to the producer by 
the gin pursuant to this subpart, those funds will be considered to 
have been received by the applicant on behalf of such producers.


Sec.  1427.1305  Payment application and deadline.

    (a) Payments in 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) The application deadline shall be 45 calendar days after the 
rules in this subpart become effective. A further

[[Page 63667]]

extension of application time may be announced by CCC. 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) The 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 in this subpart, first 
handlers of cottonseed must execute and submit to CCC according to 
announced instructions the Cottonseed Payment Program Application and 
Certification.


Sec.  1427.1306  Available funds.

    The total available program funds for the 2005-crop cottonseed 
program provided for in this subpart shall be $15 million.


Sec.  1427.1307  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 by CCC.
    (1) An applicant must be an eligible gin to which a producer 
delivered 2005 cotton and the applicant's payment eligibility will be 
based on the determination of the total amount of 2003 crop lint 
deliveries by cotton producers in eligible counties.
    (2) The 2003 crop lint delivery determination will be made by the 
applicant for each eligible county producer by producer, based upon 
producer certification, ginning records, or other relevant information 
as applicable. If the producer delivered 2003 crop cotton to a gin(s) 
different from the gin that received 2005 crop deliveries, the 2005 gin 
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.
    (3) If the producer delivered cotton to more than one 2005 gin, 
each gin shall be an applicant. If the producer did not deliver cotton 
to the same gins in 2003, the applicants shall divide the total 2003 
production, obtained according to paragraph (a)(2) of this section, 
equally between each applicant gin.
    (4) If the producer did not grow any 2005 crop cotton in the 
eligible county, the applicant shall not apply for payment on behalf of 
the producer.
    (5) If the producer grew 2005 crop cotton but did not produce 2003 
crop cotton, the producer shall be considered a new producer. In this 
case, the applicant shall compute an assumed 2003 lint delivery amount 
by multiplying the 2003 USDA National Agricultural Statistics Service 
(NASS) county average yield for the applicable county times the 
producer's 2005 cotton acreage in the eligible county. Proof of cotton 
acreage may be obtained by the applicant from producer certification, 
FSA county office acreage reports, or crop insurance records. If the 
NASS county average yield is not computed for the applicable county, 
the applicant shall use the NASS county average yield for the nearest 
cotton producing county with the highest NASS county average yield.
    (b) The applicant'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.


Sec.  1427.1308  Total payment quantity.

    (a) The total quantity of 2005-crop cottonseed eligible in 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 
the announced application instructions shall not be included in the 
total payment quantity of cottonseed.
    (b) The total payment quantity of cottonseed (ton-basis) shall be 
calculated by CCC by multiplying the weight of cotton lint (ton-basis) 
for which payment is requested by all applicants, as approved by CCC, 
by the Olympic average of estimated pounds of cottonseed per pound of 
ginned cotton lint, excluding the highest and lowest years' production, 
as determined by CCC for the 5 years preceding the 2005 crop.


Sec.  1427.1309  Payment rate.

    The payment rate (dollars per ton) for the purpose of calculating 
payments made available in accordance in this subpart shall be 
determined by CCC by dividing the total available program funds, less 
an amount reserved for approved corrections, by the total eligible 
payment quantity of cottonseed. However, in no event may the total 
payment to an eligible applicant exceed the national average price of 
2005 crop cottonseed as determined by CCC, or $98 per ton, multiplied 
by the applicant's total eligible payment quantity.


Sec.  1427.1310  Payment calculation and form.

    (a) Payment in accordance in subpart shall be determined for 
individual applicants by multiplying:
    (1) The payment rate as determined in subpart Sec.  1427.1309 by
    (2) The eligible payment quantity of the applicant was determined 
in Sec.  1427.1308 and other provisions in this part.
    (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 payment be made 
by mailed check.


Sec.  1427.1311  Liability of first handler.

    (a) If any person makes any erroneous or fraudulent representation 
in obtaining a cottonseed payment in 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 on the same quantity and payments are made there under, 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 in this subpart, that person shall refund to CCC an amount 
equal to the excess payment, plus interest thereon, as determined by 
CCC.
    (d) For three years after the date of the application for 2005-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 payment 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.


[[Page 63668]]


    Signed in Washington, DC, on October 25, 2006.
Thomas B. Hofeller,
Acting Executive Vice President, Commodity Credit Corporation.
 [FR Doc. E6-18249 Filed 10-30-06; 8:45 am]
BILLING CODE 3410-05-P