[Federal Register: March 3, 2003 (Volume 68, Number 41)]
[Proposed Rules]
[Page 9944-9947]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03mr03-23]
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DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Parts 1405 and 1499
AGENCY FOR INTERNATIONAL DEVELOPMENT
22 CFR Part 211
RIN 0560-AG49
Ocean Freight Claims Administrative Appeal Process
AGENCIES: Commodity Credit Corporation, USDA, and Agency for
International Development.
[[Page 9945]]
ACTION: Proposed rule.
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SUMMARY: This rule would establish an administrative appeals procedure
that would be used by the Commodity Credit Corporation (CCC) with
respect to ocean transportation cargo loss and damage claims arising
under shipments of agricultural commodities made available by CCC under
various foreign donation programs. Whether or not title to the
commodities has passed from CCC to a cooperating sponsor, which may be
a foreign government, private voluntary organization, or private
entity, CCC either retains the right or may be assigned the right to
initiate, prosecute, and, with certain limited exceptions, retain the
proceeds of cargo loss and damage claims. The rule would require that
any recipient of CCC-donated commodities must include in the contract
for the ocean transportation of the commodities a provision that the
maritime carrier agrees to participate in this administrative appeal
process.
For CCC claims initiated on behalf of the United States Agency for
International Development (USAID), the rule would also require
consultations between agencies and the crediting of funds collected
into USAID accounts.
DATES: Comments must be submitted on or before April 2, 2003, to be
assured of consideration.
ADDRESSES: All comments concerning these proposed regulations should be
addressed to Steve Mikkelsen, Director, Procurement and Donations
Division, USDA/FSA/PDD/STOP 0551, 1400 Independence Avenue, SW.,
Washington, DC 20250-0551 or sent electronically to:
steve_mikkelsen@wdc.fsa.usda.gov. Persons with disabilities who require
alternative means for communication (braille, large print, audiotape,
etc.) should contact USDA's Target Center at (202) 720-2600 (voice and
TDD).
Comments concerning USAID programs should also be addressed to
Lauren Landis, Director, Office of Food For Peace, Bureau for
Democracy, Conflict, and Humanitarian Assistance, U.S. Agency for
International Development, Room 7.06-157, Ronald Reagan Building, 1300
Pennsylvania Avenue, NW., Washington, DC 20523 or sent electronically
to: llandis@usaid.gov.
FOR FURTHER INFORMATION CONTACT: Steve Mikkelsen of CCC on (202) 720-
5074, or Jeffrey Drummond of USAID on (202) 712-0238.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This proposed rule is issued in conformance with Executive Order
12866 and has been determined to be not significant.
Regulatory Flexibility Act
It has been determined that the Regulatory Flexibility Act is not
applicable to this rule because neither CCC nor the United States
Agency for International Development (USAID) is required by 5 U.S.C.
553 or any other provision of law to publish a notice of proposed
rulemaking with respect to the subject matter of this rule.
Environmental Evaluation
It has been determined by an environmental evaluation that this
action will have no significant impact on the quality of the human
environment. Therefore, neither an environmental assessment nor an
Environmental Impact Statement is needed.
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 3015, subpart V,
published at 48 FR 29115 (June 24, 1983).
Executive Order 12988
This rule has been reviewed in accordance with Executive Order
12988. The provisions of this rule preempt State laws to the extent
such laws are inconsistent with the provisions of this rule. Before any
judicial action may be brought concerning the provisions of this rule,
the administrative remedies must be exhausted.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their proposed and final rules with Federal mandates that
may result in expenditures to State, local, or tribal governments, or
the private sector, in the aggregate of $100 million or more in any 1
year. This rule contains no Federal mandates under the regulatory
provisions of title II of the UMRA for State, local, and tribal
governments or the private sector. Therefore, this rule is not subject
to the requirements of sections 202 and 205 of the UMRA.
Paperwork Reduction Act
The information collection requirements imposed by this rule have
been previously submitted to the Office of Management and Budget (OMB)
under the Paperwork Reduction Act of 1980 (44 U.S.C. chapter 35). OMB
has assigned control number 0051-0035 for this information collection.
This regulation does not change any of the information collection
requirements.
Background
The regulations set forth at 7 CFR part 1499 establish the general
terms and conditions governing CCC's donation of commodities to
cooperating sponsors under section 416(b) of the Agricultural Act of
1949 and the Food for Progress programs. Under 7 CFR 1499.15(d)(1),
notwithstanding the transfer of title, CCC has the right to file,
pursue and, with certain exceptions, retain the proceeds from claims
arising from ocean transportation cargo loss and damage arising out of
shipments of commodities provided to governmental cooperating sponsors.
Under 7 CFR 1499.15(d)(8), if a nongovernmental cooperating sponsor is
unable to effect collection of a claim or negotiate an acceptable
compromise, the nongovernmental cooperating sponsor is required to
assign its rights to the claim to CCC. Nongovernmental cooperating
sponsors must also assign their claim rights to CCC upon CCC's request.
The regulations set forth at 22 CFR part 211 establish the general
terms and conditions governing the U.S. Agency for International
Development's (USAID) food donation programs under title II, Public Law
480. CCC makes the agricultural commodities available to USAID for use
in these programs. Under 22 CFR 211.9(c)(2)(i), whether or not title to
commodities is transferred from CCC to the cooperating sponsor, if
USAID contracted for the ocean transportation, CCC has the right to
initiate, prosecute, and retain the proceeds of all claims against
maritime carriers for cargo loss and damage arising out of shipments of
commodities made available by CCC. Under 22 CFR 211.9(c)(2)(ii)(F), if
a nongovernmental cooperating sponsor is unable to effect collection of
a claim or negotiate an acceptable compromise, the nongovernmental
cooperating sponsor is required to assign its rights to the claim to
CCC. Nongovernmental sponsors must also assign their claim rights to
CCC upon CCC's request.
If the commodity is lost or damaged in transit due to the fault of
the carrier, existing admiralty law principles control whether the
party contracting for the transportation of the goods may recover
damages from the carrier. The provisions of the Carriage of Goods by
Sea Act (46 U.S.C. 1300 et seq.) either
[[Page 9946]]
apply by law, or are incorporated by reference into the cargo bookings
and charter parties.
CCC does not have an established administrative appeal process to
handle the internal review of these cargo claims before the claims are
referred to the U.S. Department of Justice for collection through
litigation. This rule would establish an administrative appeal process.
CCC intends that independent hearing officers would make written
determinations with respect to the claims. Once the administrative
appeal was completed, if the carrier was determined to be liable for
the loss and damage to cargo, CCC would follow the CCC debt settlement
policies and procedures set forth in 7 CFR part 1403 to collect the
debt. This would include but would not be limited to the administrative
offset of the amount of the debt against other freight earned by the
carrier which had not been paid or freight earned in the future.
Section 212(e) of the Federal Crop Insurance Reform and Department
of Agriculture Reorganization Act of 1994 (Pub. L. 103-354) provides
that, notwithstanding any other provision of law, a person shall
exhaust all administrative appeal procedures established by the
Secretary of Agriculture before a person may bring an action in a court
of competent jurisdiction against the Secretary, the Department of
Agriculture, or agency, office, officer or employee of the Department.
Therefore, a carrier would have to participate in the administrative
appeals procedure before it could file an action in court contesting
the establishment of the debt or possible subsequent offset of the
debt. The court's review would be limited to the administrative record
established in the administrative appeal.
This rule also establishes a consultative process between USAID and
CCC for claims pursued under title II, Public Law 480 food donation
programs. It also requires CCC to credit the appropriate title II
account for any funds collected by or remitted to CCC pursuant to 22
CFR 211.9(c)(2).
List of Subjects
7 CFR Part 1405
Administrative practice and procedure, Agricultural commodities,
Cargo claims, Cooperating sponsor, Maritime carriers.
7 CFR Part 1499
Agricultural commodities, Cooperating sponsor.
22 CFR Part 211
Agricultural commodities, Cooperating sponsor.
Accordingly, for the reasons set forth in the preamble, CCC
proposes to amend 7 CFR parts 1405 and 1499, and USAID proposes to
amend 22 CFR part 211 as follows:
7 CFR CHAPTER XIV
PART 1405--LOANS, PURCHASES AND OTHER OPERATIONS
1. The authority citation for 7 CFR part 1405 continues to read as
follows:
Authority: 15 U.S.C. 714(b) and 714(c).
2. Add Sec. 1405.100 to read as follows:
Sec. 1405.100 Cargo claims appeal process.
(a) Applicability. (1) The administrative appeals process set forth
in this section is applicable to all ocean transportation cargo loss
and damage claims arising under shipments of agricultural commodities
made available by CCC under section 416(b) of the Agricultural Act of
1949, the Food for Progress Act of 1985, and Title II of the
Agricultural Trade Development and Assistance Act of 1954, commonly
known as Public Law 480, and any other regulation or contract that
incorporates by reference the provisions of this section. This includes
the movement of cargoes under through bills of lading to inland
destinations.
(2) This section is applicable to any determination made by CCC
relating to the resolution of disputed cargo loss and damage claims
between CCC and the maritime carrier.
(b) Delegations of authority. (1) The Deputy Vice President, CCC,
who is Deputy Administrator for Commodity Operations of the Farm
Service Agency (Deputy Administrator), shall be responsible for
administering this section. The Deputy Administrator may delegate the
authority provided in this section in the manner deemed appropriate by
the Deputy Administrator.
(2) The Executive Vice President, CCC, who is the Administrator for
the Farm Service Agency, may modify or reverse any action of the Deputy
Administrator or a designee of the Deputy Administrator made with
respect to this section.
(c) Appeal procedure. (1) If CCC determines that a maritime carrier
is liable for loss and damage that occurred during the transportation
of commodities made available by CCC, CCC will notify the carrier in
writing of the nature of the violation. The carrier will be given 30
days in which to appeal the determination to CCC and request either a
hearing before a hearing officer or a hearing by telephone. CCC will
provide to the carrier a written acknowledgment of their appeal and
request for a hearing.
(2) If the carrier requests to pursue an appeal but not a hearing,
CCC will allow the carrier to submit, in writing, the reasons why the
carrier believes the determination of CCC to be in error. The carrier
will be given 30 days from the receipt of the acknowledgment to file
any statements and documents in support of its appeal. The carrier will
be given an additional 15 days to respond to any new issues raised by
CCC in response to the carrier's initial submission.
(3) If the carrier requests to pursue an appeal and requests a
hearing, CCC will notify the carrier of the date of the hearing. All
hearings will be held at the Kansas City Commodity Office of the Farm
Service Agency, 6501 Beacon Drive, Kansas City, Missouri 64133-4675,
except as may be determined by CCC. If a hearing is requested, the
carrier will be notified of the date of the hearing and will be
afforded 30 days from the receipt of the notification of the scheduling
of the hearing to submit any statements and documents in support of the
appeal. The carrier will be given an additional 15 days following the
date of the hearing to submit any additional material that may have
been determined necessary due to issues raised at the hearing.
(4) Determinations of the hearing officer shall be final and no
further appeal within CCC shall be available except as may be specified
in the final determination of the hearing officer.
(d) Exhaustion of administrative remedy. A carrier may not initiate
an action in any court of competent jurisdiction prior to the
exhaustion of the administrative appeal process set forth in this
section.
PART 1499--FOREIGN DONATION PROGRAMS
3. The authority citation for 7 CFR part 1499 continues to read as
follows:
Authority: 7 U.S.C. 1431(b), 7 U.S.C. 1736o, E.O. 12752.
4. Amend Sec. 1499.15 by adding paragraph (j) to read as follows:
Sec. 1499.15 Liability for loss, damage, or improper distribution of
commodities--claims and procedures.
* * * * *
(j) Required contract term. Any cooperating sponsor must include
the following provision in the contract for the transportation of the
commodity made available by CCC: ``The provisions
[[Page 9947]]
of 7 CFR 1405.100 shall be applicable to this contract and are
incorporated by reference in their entirety.''
22 CFR CHAPTER II
PART 211--TRANSFER OF FOOD COMMODITIES FOR FOOD USE IN DISASTER
RELIEF, ECONOMIC DEVELOPMENT AND OTHER ASSISTANCE
5. The authority citation for 22 CFR part 211 continues to read as
follows:
Authority: Section 207(c) of the Agricultural Trade Development
and Assistance Act of 1954, as amended; see Public Law 101-624, 104
Stat. 3632, 3641, 7 U.S.C. 1726a(c).
6. Amend Sec. 211.9 by adding paragraph (c)(2)(v) to read as
follows:
Sec. 211.9 Liability for loss damage or improper distribution of
commodities.
* * * * *
(c) * * *
(2) * * *
(v) Any funds collected by or remitted to CCC pursuant to this
section shall be credited to the appropriate Title II account. CCC
shall also consult with USAID's Office of Food For Peace in Washington,
DC (USAID/FFP) before it authorizes the settlement, compromise, or
termination of a claim. CCC shall also consult with USAID/FFP before it
authorizes a CS to compromise a claim pursuant to paragraph
(c)(2)(ii)(E) of this section.
* * * * *
(i) Required contract term. Any cooperating sponsor must include
the following provision in the contract for carriage of the commodity
donated by CCC: ``The provisions of 7 CFR 1405.100 shall be applicable
to this contract and are incorporated by reference in their entirety.''
Dated: February 18, 2003.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
Dated: January 17, 2003.
Roger P. Winter,
Assistant Administrator, DCHA, Agency for International Development.
[FR Doc. 03-4574 Filed 2-28-03; 8:45 am]
BILLING CODE 3410-05-P