[Code of Federal Regulations]
[Title 7, Volume 7]
[Revised as of January 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR729.214]

[Page 196-200]
 
                          TITLE 7--AGRICULTURE
 
                            CHAPTER VII--FARM
                SERVICE AGENCY, DEPARTMENT OF AGRICULTURE
 
PART 729--PEANUTS--Table of Contents
 
 Subpart B--Poundage Quotas, Notices of Quotas, Transfers, and Release 
                           and Reapportionment
 
Sec. 729.214  Transfer of quota by sale, lease, owner, or operator.

    Peanut quota may be transferred between eligible farms, or between 
separately owned tracts within a farm, in accordance with the provisions 
of this section.
    (a) Basis of transfers. A transfer of quota may be either permanent 
or temporary to the extent provided for in this section.
    (1) Permanent. A permanent transfer shall be based on a part or all 
of the farm's basic quota. The maximum quota that may be permanently 
transferred from a farm in the current year is the farm's basic quota. A 
permanent transfer may be by:
    (i) Sale. The sale of a farm's basic quota.
    (ii) Owner. The owner transfering basic quota between two farms when 
such farms have identical ownership as determined by FSA under 
instructions of the Deputy Administrator.
    (2) Temporary. A temporary transfer is for one year and shall be 
based on a part or all of the farm's effective quota. The maximum quota 
that may be temporarily transferred from a farm in the current year is 
the farm's effective quota. A temporary transfer, to the extent 
permitted by this section, may be by:
    (i) Lease. The lease and transfer of a farm's effective quota.
    (ii) Owner. The owner transferring effective quota to another farm 
owned or operated by such owner.
    (iii) Operator. The operator transferring effective quota to another 
farm owned or operated by such operator.
    (b) Transfer agreement. In order to transfer poundage quota in the 
current year between two eligible farms, the transfer agreement must be:
    (1) Form. Recorded on Form FSA-375.
    (2) Where to file. Filed in the county FSA office which serves the 
county in which the transferring farm is located for administrative 
purposes.
    (3) Signatures. Agreed upon and signed by:
    (i) Sale or lease. In the case of a sale or lease, the owner(s) and 
operator of the transferring farm and the owner(s) or operator of the 
receiving farm. However, if a lease is filed after July 31 by a farm 
operator who cash leased the farm the signature of the owner(s) of such 
farm is not required.
    (ii) Owner transfer. In the case of an owner transfer, the owner of 
the transferring farm who also must be the owner or operator of the 
receiving farm.
    (iii) Operator transfer. In the case of an operator transfer, the 
operator of the transferring farm who also must be the owner or operator 
of the receiving farm.
    (iv) Lienholder. In all cases, any person who holds a mortgage or 
other lien against the transferring farm.
    (4) Witness. Signed on Form FSA-375, by each person whose signature 
is required by paragraph (b)(3) of this section, in the presence of a 
State or county committee member or an FSA employee who shall sign Form 
FSA-375 as a witness. If such signatures cannot be witnessed in the 
county FSA office where the farm is administratively located, they may 
be witnessed in any State or county FSA office convenient to the owner 
or operator's residence. The requirement that signatures be witnessed 
for producers that are ill, infirm, reside in distant areas, or are in 
similar hardship situations or may be unduly inconvenienced may be 
waived provided the county FSA office mails

[[Page 197]]

Form FSA-375 for the required signatures.
    (5) When to file. Filed at any time after all required signatures 
have been recorded.
    (i) Permanent transfer. If filed:
    (A) Before August 1, the transfer shall be effective for the current 
year.
    (B) After July 31, the transfer agreement shall not be approved 
until the next year's quota is determined for the transferring farm.
    (ii) Temporary transfer. If filed after July 31 and before February 
1, the transfer agreement shall not be approved unless both the 
transferring farm and the receiving farm meet applicable provisions in 
paragraph (f) of this section that apply to transfers filed during such 
period.
    (c) Location of farms. In order to transfer poundage quota between 
two farms, such farms must be located within the same State and, to the 
extent required by paragraph (d) of this section, in the same county. It 
is not necessary for the receiving farm to have had a basic quota in the 
current or prior year, except as provided in paragraph (d)(4) of this 
section.
    (d) Limitations on transfer by sale or lease. Subject to the 
provisions of paragraph (m) of this section:
    (1) States with less than 10,000 tons of quota. With respect to 
farms in any State for which the State's poundage quota for the year 
preceding the current year was less than 10,000 tons, transfers of 
peanut quota by sale or lease may be made to any other farm in any 
county within the State.
    (2) States with 10,000 tons or more of quota. For farms in States 
with 10,000 tons or more of quota:
    (i) Poundage quota may be transferred to any other farm within the 
same county.
    (ii) If the farm is in a county with less than a total of 50 tons of 
quota, the poundage quota may be transferred to any other farm within 
the same State without regard to the limitations set forth in paragraph 
(d)(2)(iii) of this section.
    (iii) If the farm is in a county with a total of 50 tons or more of 
quota, poundage quota transferred out of county shall be limited to 40 
percent of the quota in the transferring county as of January 1, 1996. 
Further, the cumulative unexpired out-of-county transfers for a crop 
year may not exceed the following percentages of the quota in the 
transferring county as of January 1, 1996:
    (A) 15 percent for the 1996 crop;
    (B) 25 percent for the 1997 crop;
    (C) 30 percent for the 1998 crop;
    (D) 35 percent for the 1999 crop; and
    (E) 40 percent for the 2000 and subsequent crops.
    (iv) Selecting approved transfers. For purposes of administering the 
limitations on the amount of transfers, the Director shall establish a 
method for selecting, by lot or other method, those applications which 
are to be approved. The Director may give preference to permanent 
transfers.
    (3) Fall transfers. The limitations in paragraph (d)(2)(iii) of this 
section do not apply to 1-year fall transfers, which may, in all cases, 
be made to any farm in the same State, subject to such restrictions as 
otherwise apply for fall transfers.
    (4) Owner or operator transfer. Owner or operator transfers of 
poundage quota are permitted to contiguous counties within the same 
State without regard to the percentage limitations of paragraph 
(d)(2)(iii) of this section; provided that, the receiving farm had a 
basic quota established for the preceding year's crop and has the same 
owner, in an owner transfer, or the same operator, in an operator 
transfer.
    (e) Transfers to and from the same farm (subleasing)--
    (1) Transfer agreement filed after January 31 and before August 1. 
The county committee shall not approve a transfer agreement which is 
filed after January 31 of any year and before August 1 of the same year, 
if the approval would result in a temporary transfer both to and from 
either the transferring or receiving farm during such period, except 
that such transfer agreement may be approved if the farm that otherwise 
would be eligible to transfer or receive such quota resulted from a farm 
reconstitution that was approved subsequent to a transfer of quota.
    (2) Record of transfer filed after July 31 and before February 1. 
The county committee shall not approve a temporary

[[Page 198]]

transfer of effective quota if the transfer agreement is filed after 
July 31 of any year and before February 1 of the following year and 
approval would result in a temporary transfer both to and from either 
the receiving farm or transferring farm during such period.
    (f) Other transfer provisions--(1) Temporary transfer of quota from 
a farm. A temporary transfer of quota from a farm by lease, owner, or 
operator shall not be approved:
    (i) Effective quota includes reapportioned quota. If the transfer 
agreement was filed before August 1 of a crop year and the effective 
quota for the farm includes temporarily reapportioned quota from quota 
released from other farms of that crop year.
    (ii) Peanut poundage quota penalty. If any person whose signature is 
required to perfect the transfer is known to owe a peanut poundage quota 
penalty. However, this provision shall not apply if the penalty is paid 
or, in the case of a transfer by lease, the entire proceeds of the lease 
are applied to the penalty and the county committee determines that the 
amount paid for the lease represents a reasonable price for the pounds 
of quota being leased.
    (iii) Filed after July 31 and before February 1 (``Fall 
transfers''). If filed after July 31 of the crop year and before 
February 1 of the following year, unless:
    (A) The reported or determined acreage of peanuts plus prevented 
planted credit for the transferring farm for the current year, when 
multiplied by the larger of the farm yield or the highest actual yield 
during the base period, is equal to or greater than 90 percent of the 
farm's effective quota prior to adjustment for temporary seed quota 
allocated to the farm;
    (B) The county committee determines that the producers on the farm 
made a good faith effort to produce a normal crop of peanuts on the 
acreage devoted to peanuts.
    (C) The quantity to be transferred does not exceed the quota balance 
remaining on the farm's marketing card(s); and
    (D) For a lessee, such lessee provides satisfactory evidence that 
the lease is a cash lease or the owner signs the transfer agreement.
    (2) Temporary transfer of quota to a farm. A temporary transfer of 
quota to a farm by lease, owner, or operator shall not be approved:
    (i) Tillable cropland limitation. If the transfer agreement was 
filed before August 1 of the crop year and the effective quota after the 
transfer would exceed an amount determined by multiplying the acreage of 
tillable cropland on the farm by the larger of the farm yield or the 
highest actual yield per acre during the base period.
    (ii) Filed after July 31 and before February 1. If the transfer 
agreement is filed after July 31 of the crop year and before February 1 
of the following year unless the quantity being transferred:
    (A) Is needed in order to market all eligible peanuts from the 
receiving farm as quota peanuts, and
    (B) Does not exceed an amount by which the receiving farm's 
effective quota before the transfer is less than the entire production 
of peanuts from the farm exclusive of any peanuts that have been graded 
as Segregation 2 or Segregation 3 peanuts.
    (3) Permanent transfer of quota from a farm. A permanent transfer of 
quota from a farm by sale or by owner shall not be approved:
    (i) Permanent transfer of quota by sale to the farm. For the amount 
of quota purchased and permanently transferred to the farm in the 
current year and during the base period, as adjusted for any increase or 
decrease in such quota due to adjustment in the national quota during 
the base period, except that a transfer of a tenant's share of any 
peanut quota increase shall not be considered for purposes of 
determinations made under the provisions of this paragraph.
    (ii) Peanut poundage quota penalty. If the owner is known to owe a 
peanut poundage quota penalty. However, this provision shall not apply 
if the penalty is paid, or in the case of a sale of quota, the entire 
proceeds from the sale of quota are applied to the penalty and the 
county committee determines that the amount paid for the quota 
represents a reasonable price for the pounds of quota being sold.

[[Page 199]]

    (iii) Conservation Reserve contract. If the peanut quota is subject 
to an approved Conservation Reserve Program contract.
    (4) Permanent transfer of quota to a farm. A permanent transfer of 
quota to a farm by sale or by owner shall not be approved if the basic 
quota after transfer would exceed an amount determined by multiplying 
the acreage of tillable cropland on the farm by the larger of the farm 
yield or the highest actual yield per acre during the base period.
    (g) Approval or disapproval of a transfer agreement. The county 
committee shall approve or disapprove each transfer agreement. The 
county committee shall approve each transfer agreement which meets the 
eligibility conditions as set forth in this section or in this part. 
However, the county committee may delegate authority to the county 
executive director or other county FSA employee to act on behalf of the 
county committee and approve a transfer agreement which meets the 
eligibility conditions as set forth in this section. Such delegation may 
authorize the approval of any eligible transfer agreement or the 
delegation of authority may be restrictive as to the type of transfer 
agreements that may be approved. Only the county committee shall 
disapprove a transfer agreement.
    (1) Time for determination. Any approval or disapproval of a 
transfer agreement should be made within 30 days after the transfer 
agreement is filed with the county committee unless additional time is 
required as the result of conditions beyond the control of the county 
committee. However, if a transfer agreement is filed after July 31 of 
the crop year that provides for a permanent transfer of poundage quota, 
the transfer agreement shall not be approved until the next year's quota 
is determined for the transferring farm.
    (2) Effective date. An approved transfer agreement shall become 
effective during the current crop year, except that if an agreement to 
permanently transfer quota is filed after July 31 of the crop year, such 
agreement shall become effective for the next crop year.
    (h) Effect of permanent transfer of quota. In the event of a 
permanent transfer of a quota, applicable farm data for each year of the 
base period shall be transferred to the receiving farm from the 
transferring farm in proportion to the quantity of basic quota which has 
been transferred from the transferring farm.
    (i) Notice of revised quotas. A revised notice of farm poundage 
quota shall be issued for each farm affected by the transfer of farm 
poundage quota.
    (j) Cancellation of transfer--(1) A transfer approved on the basis 
of incorrect information furnished by the parties to the transfer 
agreement, or approved due to error by the county committee, shall be 
void and canceled effective as of the date of approval except as may be 
provided by the Deputy Administrator to accomplish the purposes of this 
part. The cancellation shall not be effective for the current marketing 
year if:
    (i) The transfer approval was made on the basis of incorrect 
information unknowingly furnished in good faith by the parties to the 
transfer agreement or the transfer approval was made in error by the 
county committee, and
    (ii) The parties to the transfer agreement were not notified of the 
cancellation prior to the marketing of quota peanuts in excess of the 
revised effective farm poundage quota.
    (2) If cancellation of a transfer is required, the county committee 
shall issue revised notices of poundage quota showing the reasons for, 
and effect of, the cancellation.
    (k) Withdrawal or minor revision. The county committee may permit 
withdrawal or minor revisions of a transfer upon a:
    (1) Written request by all parties to the transfer, and
    (2) County committee determination that such withdrawal or revision 
is clearly in the best interest of all the producers and will not impair 
the effective operation of the peanut program.
    (l) Adjustment of marketings. For the purpose of computing 
production history for quota increase based on production, in the case 
of temporary transfers by owner to the same owner or operator to the 
same operator, if the current year's produced or considered-produced 
credit from the receiving farm exceeds such farm's basic quota, such 
produced or considered-produced

[[Page 200]]

credit on the receiving farm shall be reduced by the amount of such 
excess, to the extent of the quota temporarily transferred to such farm 
by owner or operator, and such reduced amount shall be added to the 
current year produced or considered-produced credit for the transferring 
farm.
    (m) Considered produced credit. Quota that is leased and transferred 
from a farm shall be considered produced on such farm to the extent of 
considered produced credit set forth in the definition of ``Considered 
produced credit'' in Sec. 729.103 of this part.

[56 FR 16211, Apr. 19, 1991, as amended at 57 FR 27144, June 18, 1992. 
Redesignated and amended at 61 FR 36999, 37001, July 16, 1996; 62 FR 
2719, Jan. 17, 1997; 62 FR 25438, May 9, 1997; 65 FR 8247, Feb. 18, 
2000]