[Federal Register: September 2, 2005 (Volume 70, Number 170)]
[Rules and Regulations]
[Page 52283-52285]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02se05-1]
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Rules and Regulations
Federal Register
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DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1405
RIN 0560-AH35
Collection of State Commodity Assessments
AGENCY: Commodity Credit Corporation, USDA.
ACTION: Final rule.
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SUMMARY: This final rule sets forth the Commodity Credit Corporation's
(CCC) policy with respect to implementation of the discretionary
authority provided to it by Public Law 108-470. This act allows for the
collection of assessments levied on the marketings of agricultural
commodities. Generally, these assessments are required, under State and
Federal law, to be paid from CCC marketing assistance loan proceeds by
a producer who markets the commodity or are required to be collected by
the first purchaser of the commodity. This final rule adopts, with
changes, the proposed rule published in the Federal Register on June 7,
2005 (70 FR 33043).
DATES: This rule is effective September 2, 2005.
FOR FURTHER INFORMATION CONTACT: Kimberly Graham, 202-720-9154, e-mail:
Kimberly.Graham@usda.gov. 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:
Discussion of Final Rule
On June 7, 2005, CCC issued a proposed rule with respect to the
manner in which it proposed to collect agricultural commodity
assessments owed by a producer to a State or State agency when the
producer had obtained a CCC marketing assistance loan. (70 FR 33043).
The rule provided that CCC would deduct from marketing assistance loan
proceeds an amount equal to any assessment required under State or
Federal law to be paid by a producer who markets the commodity, or by
the first purchaser of the commodity. The preamble of that rule
described the history of CCC's role in collecting commodity
assessments, the statutory authority allowing CCC to engage in the
collection of commodity program assessments, and the necessity to
codify the process for collecting commodity assessments. With respect
to the collection of State assessments, the major provisions of the
proposed rule included: (1) A request for CCC to engage in the
collection activity must initially be submitted by the Governor of the
State; (2) such request must identify the entity that the Governor has
designated to enter into the collection agreement with CCC; (3) a
statement from the Attorney General, at any time prior to final
execution of the agreement, that the agreement is in compliance with
applicable State laws and the provisions of section 1(a) of Public Law
108-470; (4) collection of the assessment, as requested by the
Governor, may be at either the time the marketing assistance loan is
disbursed to the producer or at the time of forfeiture of the commodity
to CCC, but not both; and (5) the State agrees to indemnify CCC for any
costs incurred in collecting the assessment, including costs relating
to resolution of disputes arising from the requested collection of the
assessment.
With respect to assessments collected under Federal statutes, the
proposed rule provides that collections will be made as provided in
such manner as may be agreed upon by CCC and the entity to whom the
Secretary has delegated responsibility to otherwise engage in
collection activities.
Comments and Changes to Final Rule
The 30-day comment period for the proposed rule closed on July 7,
2005. CCC received 36 responses from entities or persons, which
included 22 agricultural commodity associations, nine producers, two
Agency employees, two Designated Marketing Associations (DMA's), one
State Department of Agriculture and one State Senator. In general, the
majority of the responses support the intent and implementation of the
proposed regulation. Seven commenters opposed the collection and
deduction of commodity assessments from a producer's marketing
assistance loan proceeds and five commenters support the proposed
regulation as written. These comments were submitted without any
additional explanations. CCC analyzed the public comments received and
has decided to adopt the proposed rule, with some slight modifications
as discussed below based on these comments.
One respondent requested specific information regarding the number
of forfeited loans in the State of South Dakota. This comment did not
address provisions of the proposed rule and was not within the scope of
the proposed rule.
One commenter stated producers are better served by collecting the
assessments at forfeiture rather than at loan disbursement. The
commenter identified two specific reasons for collecting the assessment
at the time of forfeiture rather than at loan disbursement. The first
reason suggested that certified farm-stored marketing assistance loans
may not accurately reflect the producer's harvested quantity;
therefore, the assessment amount collected may not be accurate. The
actual quantity delivered in satisfaction of the marketing assistance
loan is determined at the time the commodity is sold or forfeited. The
quantity delivered may differ from the quantity pledged as collateral
for the marketing assistance loan. Collection of additional assessment
amounts may be necessary. The second reason suggested producers may
oppose the collection of commodity assessments at the time of loan
making because the producer is responsible for the repayment of the
full loan amount disbursed plus interest, if the producer repays the
marketing assistance loan at principal plus interest. Therefore, the
producer would be paying interest on the assessment amount deducted
from the loan proceeds. CCC believes the proposed rule supports Public
Law 108-470; therefore, these comments are not adopted and no changes
were made.
One commenter suggested that, in the case of an approved
Cooperative Marketing Association (CMA) or Designated Marketing
Association (DMA), the entire marketing assistance
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loan be disbursed to the CMA or DMA and the CMA or DMA be responsible
for deducting the applicable commodity assessment and remitting the
commodity assessment to the State entity. An approved CMA or DMA is
eligible to receive marketing assistance loans or LDP's on behalf of
their eligible producer members. CCC agrees with the commenter and
believes it would be more difficult and complex to handle individual
producer members' multi-state commodity assessment deductions. Since
the CMA and DMA have administrative processes in place to monitor
producer members' marketing assistance loan and LDP amounts and
cooperative pool sale amounts for its' members amounts, CCC believes
the CMA and DMA will ensure that fair and accurate distribution of the
commodity assessment deductions will be made to the specific State
entity. Therefore, the comments are adopted and such changes are
included in the final rule.
More specific responses addressed particular provisions of the rule
with respect to the collection of State commodity assessments. Some
responses contained multiple comments. These comments are discussed
below on a section-by-section basis, along with the changes that have
been made to the interim rule.
Section 1405.9(b)(1)-(2)
Nine respondents opposed the provisions in section 1405.9(b)(1) and
(2) that require the Governor of the State to request that the
assessment be collected and the Attorney General of the State, or a
person authorized to act on behalf of the Attorney General, provide CCC
an opinion that the collection activity is authorized by State law and
complies with the provisions of section 1(a) of Public Law 108-470.
Most of the respondents suggested that the request from the Governor
was superfluous since the state commodity commissions are created by
State statute and are agencies of the State. It was suggested that a
request from a state commission and a copy of the enabling legislation
should be deemed sufficient for the purpose of making the initial
request. Commenters also believe that obtaining a separate opinion from
the Attorney General would be costly, time consuming, and redundant. In
prior years, CCC has routinely required that approval from the Office
of the Attorney General for a State be obtained by the party entering
into such an agreement with CCC in order to ensure that such party has
the authority to bind the State with respect to all of the provisions
of the agreement. Specifically, CCC is concerned that such party must
be able to obligate the State to reimburse CCC for any costs it may
incur in the event CCC is sued by a party who objects to the collection
of the assessment on behalf of the State. Accordingly, CCC will
continue to require that such approval has been obtained before CCC
will enter into an agreement to collect the assessment.
Section 1405.9(c)(1)-(2)
Several comments opposed the provisions in sections 1405.9(c)(1)
and (2) that requires the State to indemnify CCC for any costs incurred
in collecting the commodity assessment and that the producer have the
ability to request from the State a refund of the assessment collected
from the producer's marketing assistance loan. Several respondents
expressed uncertainty as to whether the costs would include CCC
administrative costs associated with routinely collecting and
processing assessments. Commenters also expressed opposition towards
the indemnification provision, if the provision included those types of
administrative costs. The action of CCC in collecting State authorized
commodity assessments provides no benefit to CCC and results in the
expenditure of funds appropriated to FSA; the loss of these
expenditures directly affects the ability of FSA to undertake its own
activities. Accordingly, CCC has determined, since the beneficiary of
this action is the State or State agency requesting the assessment be
collected, that the costs of such action should not be borne by CCC or
FSA.
With respect to allowing the producer to request from the State a
refund of the collected assessment, CCC is required by statute to
provide a certain levels of assistance to producers. By deducting state
commodity assessments from the marketing assistance loan proceeds and
not at the time of actual marketing increases the risk of the producer
paying double assessments. A double assessment would result in a
reduction of the statutory level of assistance required to be provided
by CCC. Also, CCC is not responsible for tracking double assessments or
for making refunds of double assessment collections to the producer.
For that reason the final rule retains this requirement for the
agreement; however, the final rule will clarify that the mandatory
refund is applicable to refunds of double assessment collections.
Executive Order 12866
This rule is issued in conformance with Executive Order 12866, was
determined to be not significant, and has not been reviewed by the
Office of Management Budget.
Regulatory Flexibility Act
It has been determined that the Regulatory Flexibility Act is
applicable to this final rule.
Environmental Assessment
The environmental impacts of this final 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
categorically excluded. No extraordinary circumstances or other
unforeseeable factors exist which would require preparation of an
environmental assessment or environmental impact statement.
Executive Order 12988
This final rule has been reviewed in accordance with Executive
Order 12988. This final rule preempts State laws that are inconsistent
with it. This rule is not retroactive. 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 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
(the Paperwork Reduction Act). Accordingly, these regulations and the
forms and other information collection activities
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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.
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 Commodity Loans and Loan Deficiency Payments, 10.051.
List of Subjects in 7 CFR Part 1405
Agricultural commodities, Feed grains, Grains, Loan programs--
agriculture, Oilseeds, Price support programs, Reporting and record
keeping requirements.
0
Accordingly, 7 CFR part 1405 is amended as follows:
PART 1405--LOANS, PURCHASES, AND OTHER OPERATIONS
0
1. The authority citation for part 1405 is revised to read as follows:
Authority: 7 U.S.C. 1515; 7 U.S.C. 7991(e); 15 U.S.C. 714b and
714c; and Public Law 108-470.
0
2. Add Sec. 1405.9 to read as follows:
Sec. 1405.9 Commodity assessments.
(a) CCC will deduct from the proceeds of a marketing assistance
loan an amount equal to the amount of an assessment otherwise required
to be remitted to a State agency under a State statute by the producer
of the commodity pledged as collateral for such loan or by the first
purchaser of such commodity subject to the requirements of paragraph
(b) of this section.
(1) The assessment will be collected in one of the following ways,
as requested by the State, but not both:
(i) When the proceeds of the loan are disbursed; or
(ii) When the commodity pledged as collateral for the loan is
forfeited to CCC, in which case CCC will collect from the producer the
amount of the assessment submitted by CCC to the State.
(2) CCC will deduct from the proceeds of a marketing assistance
loan an amount equal to the amount of an assessment otherwise
authorized to be remitted to a federally authorized entity under a
Federal statute by the producer of the commodity pledged as collateral
for such loan or the first purchaser of such commodity in the manner
agreed to by CCC and the entity to whom the Secretary of Agriculture
has authorized to collect such assessments.
(b) CCC will collect commodity assessments authorized under a State
statute when:
(1) The State entity has:
(i) Requested that the assessment be collected;
(ii) Identified whether the assessment is to be collected at the
time the loan proceeds are disbursed or at the time the commodity is
forfeited to CCC;
(iii) Identified the person who may enter into an agreement with
CCC that sets forth the obligations of the State and CCC with respect
to the collection of the assessment; and
(iv) Provided an opinion from the Office of the Attorney General to
CCC that concludes the person signing the agreement may obligate the
State to comply with the agreement and the provisions of Public Law
108-470 have been met.
(2) The agreement described in paragraph (c) of this section has
been executed by the appropriate State official and CCC.
(c) CCC will enter into an agreement with an authorized State
official to collect commodity assessments when the actions set forth in
paragraphs (b)(1) and (2) of this section have been completed. Such
agreement will contain the obligations and responsibilities of the
State and CCC. All such agreements will include provisions that
provide:
(1) The State will indemnify CCC for any costs incurred in the
collection of the assessment including costs incurred with respect to
resolution of disputes arising from the requested collection of the
assessment and for administrative costs incurred by CCC in the
collection of the assessment;
(2) The State, in cases where an assessment has been collected two
or more times with respect to the same quantity of the commodity
subject to the assessment, will refund the amount of the excess
collection to the producer.
(3) The agreement may be terminated by either party upon 30 days
notice.
(4) The State, in cases where the marketing assistance loan is made
by a cooperative marketing association or a designated marketing
association approved by CCC, or any other similar entity that is
approved by CCC, to obtain such a loan on behalf of its members may
enter into individual arrangements with such entity to facilitate the
collection of the assessment with the approval of CCC.
Signed in Washington, DC, on August 17, 2005.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 05-17500 Filed 9-1-05; 8:45 am]
BILLING CODE 3410-05-P