[Federal Register: September 7, 2005 (Volume 70, Number 172)]
[Proposed Rules]
[Page 53103-53105]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07se05-18]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 53103]]
DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1435
RIN 0560-AH37
Transfer of Sugar Program Marketing Allocations
AGENCY: Commodity Credit Corporation, USDA.
ACTION: Proposed rule.
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SUMMARY: The Commodity Credit Corporation (CCC) proposes several
changes to the sugar program regulations. First, CCC proposes to amend
the regulations for transferring sugar marketing allocation when a mill
closes and growers request to move their allocation.
Second, CCC proposes imposing a regulatory deadline for the
program's information reporting requirements. The required monthly
information would be due on the 20th of each month.
Third, CCC proposes to amend the requirements for the maintenance
and inspection of records to require each cane processor, cane refiner
and beet processor to provide an annual report by a Certified Public
Accountant (CPA) that verifies the company's data submitted to CCC.
DATES: Comments on this rule must be submitted by November 7, 2005 to
be assured consideration.
ADDRESSES: The Farm Service Agency (FSA) invites interested persons to
submit comments on this proposed rule. Comments may be submitted by any
of the following methods:
E-mail: Send comments to sugar@wdc.usda.gov.
Mail: Submit comments to: Director, Dairy and Sweeteners Analysis
Group (DSAG), FSA, United States Department of Agriculture (USDA), STOP
0516, 1400 Independence Avenue, SW., Washington, DC 20250-0516.
Fax: Submit comments by facsimile transmission to (202) 690-1480.
Hand Delivery or Courier: Deliver comments to the above address.
Federal eRulemaking Portal: Go to http://www.regulations.gov.
Follow the online instructions for submitting comments.
Comments may be inspected in the Office of the Director, DSAG, FSA,
USDA, Room 3752-S South Building, Washington, DC, between 8 a.m. and
4:30 p.m. Monday through Friday, except holidays. A copy of this
proposed rule is available on the DSAG Web site at http://www.fsa.usda.gov/ao/epas/dsa.htm
.
FOR FURTHER INFORMATION CONTACT: Barbara Fecso at (202) 720-4146, or
via e-mail at barbara.fecso@wdc.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:
Background
Annually, CCC establishes sugar marketing allotments at a level
estimated to prevent sugar loan collateral forfeitures to CCC. CCC
establishes the overall allotment quantity, beet sugar and cane sugar
allotments, State cane sugar allotments, and marketing allocations for
processors marketing sugar domestically processed from sugar beets and
domestically-produced sugarcane. If a processing mill closes, growers
who delivered sugar beets or sugarcane to that mill may request a
transfer of a portion of the closed mill's marketing allocation to
another mill that reflects their production history at the closed mill.
CCC proposes to amend the regulations at 7 CFR 1435.308 to provide
for an orderly and transparent method of distributing allocation to
successor mills after growers have petitioned the Executive Vice
President, CCC, to transfer allocation when their mill closes. CCC is
proposing to use a formula to distribute the closed mill's allocation
that will calculate grower shares based on the grower's contribution to
the mill's allocation. Since the formula that determines a mill's
allocation is different in the beet sector and among the cane states,
the formula CCC will use to transfer allocation of closed mills will
reflect these differences.
Since the enactment of the Farm Security and Rural Investment Act
of 2002 (2002 Act), (Pub. L. 107-171), the only processing facilities
to have closed have been cane processing facilities in Louisiana. The
procedure used then to transfer allocations, while not explicit in the
sugar program regulations, reflected the two main components of the
cane marketing allocation formula, (1) past production history, which
is a fixed value, and (2) current year production, known as the
``ability to market,'' a value that changed from year to year. CCC
published an amendment to the regulations on September 13, 2004 (69 FR
35061), which fixed the ``ability to market'' factor in the allocation
formula for each mainland cane State and cane processor until the
program expires in 2008, under the 2002 Act. The other components of
the mainland cane marketing allocation formulas were already fixed on
the basis of historical production.
When two Louisiana mills announced they would not reopen for the
2005 crop, issues arose such as whether to allow growers with
production history at the closed mill to petition if they had not
delivered cane to the mill in the preceding year. There was also debate
over which years to consider in the transfer formula, given that the
``ability to market'' change to the regulation had added more crop
years in the allocation formula. In the end, CCC and successor mills
were able to negotiate transfer shares that satisfied all parties. CCC
considered allowing successor mills the opportunity to negotiate a
distribution of allocation from the closed mill in the proposed rule.
However, no mill can be expected to take less than it would under a
formula, so CCC did not propose that option under this proposed rule.
While the closure of cane mills precipitated this proposed rule, it
applies to all beet and cane processors.
The second change CCC proposes is to include a due date in the
information reporting provisions in 7 CFR 1435.200. This section
requires every sugar beet processor, sugarcane processor, cane sugar
refiner, and importer of sugar, syrup, and molasses to report to CCC,
on a monthly basis, information necessary to administer the sugar
programs. CCC established an informal reporting due date of the 20th of
each month in 1991, which would be incorporated in the regulations. The
chronic lateness of some reporters in recent times has delayed
processing and analysis of all data, which is detrimental to the sound
[[Page 53104]]
administration of the Sugar Program. The civil penalties provisions in
section 156h(4) of the Federal Agriculture Improvement and Reform Act
of 1996, as amended (7 U.S.C. 7272(h)(4)) and 7 CFR 1435.201 allow CCC
to assess a civil penalty of no more than $10,000 to reporters who
willfully fail or refuse to furnish the information, or who willfully
furnish false data. CCC will consider a reporter to have willfully
failed to provide the information and subject to penalty, if CCC does
not receive the data by the 20th of the month.
The final proposal would require each reporting entity to have an
independent third party verify each company's data submitted to CCC.
CCC will require an Agreed-upon Procedures engagement, conducted by an
independent Certified Public Accountant (CPA), to analyze the company
data annually. The provisions of 7 CFR 1435.3, Maintenance and
inspection of records give CCC, as well as any other U.S. Government
agency, the right of access to the premises of any sugar beet
processor, sugarcane processor, cane sugar refiner, importer of sugars,
syrups, and molasses, or of any other person having custody of records
that the examining agency deems necessary to verify compliance with
this part's requirements. Since this information is necessary to
determine whether a processor is in compliance with sugar marketing
allotment program requirements, CCC proposes to require that an
independent CPA conduct a yearly agreed-upon procedures engagement of
each reporter to validate their materials balance. CCC will provide the
procedures to be followed by each independent CPA.
Executive Order 12866
This rule has been determined to be not significant under Executive
Order 12866 and has not been reviewed by the Office of Management and
Budget.
Regulatory Flexibility Act
The requirements of the Regulatory Flexibility Act (5 U.S.C. 601--
602) do not apply to this rule because CCC is not required to publish a
notice of proposed rulemaking for the subject of this rule.
Nonetheless, CCC has determined that this rule will not have a
significant economic impact on a substantial number of small entities
and a Regulatory Flexibility Analysis was not performed.
Environmental Assessment
The environmental impacts of this rule have been considered under
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 regulations of the Farm Service Agency (FSA) of
the Department of Agriculture (USDA) for compliance with NEPA, 7 CFR
part 799. An environmental evaluation was completed and the proposed
action has been determined not to have the potential to significantly
impact the quality of the human environment and no environmental
assessment or environmental impact statement is necessary. A copy of
the environmental evaluation is available for inspection and review
upon request.
Executive Order 12988
This rule has been reviewed in accordance with Executive Order
12988, Civil Justice Reform. In accordance with this Executive Order:
(1) All State and local laws and regulations that are in conflict with
this rule will be preempted; (2) no retroactive effect will be given to
this rule; and (3) administrative proceedings in accordance with 7 CFR
part 11 must be exhausted before seeking judicial review.
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 29115 (June 24, 1983).
Unfunded Mandates Reform Act of 1995
This rule contains no Federal mandates, as defined under title II
of the 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 UMRA.
Executive Order 13132
The policies contained in this rule do not have any substantial
direct effect on States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Nor does this
rule impose substantial direct compliance costs on State and local
governments. Therefore, consultation with the States is not required.
Paperwork Reduction Act
Under 7 U.S.C 7991(c)(2)(A) these regulations may be promulgated
and the program administered 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 needed to administer the provisions authorized by these
regulations are not subject to review by the Office of Management and
Budget under the Paperwork Reduction Act.
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 the FSA in particular, to provide
the public the option of submitting information or transacting business
electronically to the maximum extent possible. Because of the nature of
the forms and other information collection activities required for this
program, they are not fully implemented in a way that would allow the
public to conduct business with CCC electronically. Accordingly, at
this time, all forms and information required to be submitted under
this rule may be submitted to CCC by mail or FAX.
List of Subjects in 7 CFR Part 1435
Loan programs--agriculture, Price support programs, Reporting and
Recordkeeping requirements, and Sugar.
Accordingly, 7 CFR part 1435 is proposed to be amended as follows:
PART 1435--SUGAR PROGRAM
1. The authority citation continues to read as follows:
Authority: 7 U.S.C. 1359aa--1359jj and 7272 et seq.; 15 U.S.C.
714b and 714c.
2. In Sec. 1435.200 revise paragraph (a), redesignate paragraph
(g) as paragraph (h), and add new paragraph (g) to read as follows:
Sec. 1435.200 Information reporting.
(a) Every sugar beet processor, sugarcane processor, cane sugar
refiner, and importer of sugar, syrup, and molasses shall report, by
the 20th of each month, on CCC-required forms, its imports and
receipts, processing inputs, production, distribution, stocks and other
information necessary to administer the sugar programs. If the 20th of
the month falls on a weekend or a Federal holiday, the report shall be
made by the next business day.
* * * * *
(g) By November 20 of each year, each sugar beet processor,
sugarcane processor, sugarcane refiner, and importer of sugars, syrups,
and molasses will submit to CCC a report, as specified by CCC, from an
independent Certified Public Accountant that reviews its
[[Page 53105]]
information submitted to CCC during the previous October 1 through
September 30 period.
* * * * *
3. Revise Sec. 1435.308(a) to read as follows:
Sec. 1435.308 Transfer of allocation, new entrants.
(a) If a sugar beet or sugarcane processing facility is closed and
the growers that delivered their crops to the closed facility elect to
deliver their crops to another processor, the growers may petition the
Executive Vice President, CCC, to transfer their share of the
allocation from the processor that closed the facility to their new
processor. If CCC determines to transfer the allocations, it will
distribute the closed mill's allocation based on the contribution of
the growers' production history to the closed mill's allocation. CCC
may grant the allocation transfer upon:
(1) Written request by a grower to transfer allocation,
(2) Written approval of the processing company that will accept the
additional deliveries, and
(3) Evidence satisfactory to CCC that the new processor has the
capacity to accommodate the production of petitioning growers.
* * * * *
Signed in Washington, DC, on August 18, 2005.
James R. Little,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. 05-17684 Filed 9-6-05; 8:45 am]
BILLING CODE 3410-05-P