Sugar Loan Program Crop Year Definition and Loan Availability Period

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1435

RIN 0560-AE94

Sugar Loan Program Crop Year Definition and Loan Availability

Period

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The proposed rule on the sugar loan program crop year and loan

availability period, published in the Federal Register on April 2,

1997, at 62 FR 15622, is adopted with changes as a final rule. The

final rule defines crop year for the sugar loan program as the Federal

fiscal year and extends the loan availability period to the whole

fiscal year. The final rule conforms to current statutory language by

removing the restriction that supplemental loans, which permit sugar

collateral to be repledged for a second loan in the following fiscal

year, will be offered only on sugar from sugarcane or sugar beets

normally harvested in July, August, or September.

EFFECTIVE DATE: June 27, 1997.

FOR FURTHER INFORMATION CONTACT: Daniel Colacicco, Farm Service Agency,

United States Department of Agriculture (USDA), STOP 0516, 1400

Independence Avenue, SW, Washington, DC 20250-0516, telephone 202-690-

0734.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be not significant and therefore

was not reviewed by OMB under Executive Order 12866.

Federal Assistance Program

The title and number of the Federal assistance program, as found in

the Catalogue of Federal Domestic Assistance, to which this final rule

applies are Commodity Loans and Purchases--10.051.

Regulatory Flexibility Act

It has been determined that the Regulatory Flexibility Act is not

applicable because CCC is not required by 5 U.S.C. 553 or any other

provision of law to publish a notice of final rulemaking with respect

to the subject matter of this rule.

Environmental Evaluation

An Environmental Evaluation with respect to the rule has been

completed. It has been determined that this action will not have

significant adverse effects on environmental factors such as wildlife

habitat, water quality, air quality, land use, and appearance.

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 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).

Paperwork Reduction Act

A request for comments to revise the previously approved

information collection (OMB number 0560-0138) was published in the

Federal Register with the publication of the proposed rule on April 2,

1997, at 62 FR 15622. No comments were received. The revised

information collection package will be submitted for OMB approval.

Executive Order 12998

This final rule has been reviewed in accordance with Executive

Order 12998. The provisions of this final rule preempt State laws to

the extent such laws are inconsistent with the provisions of this final

rule, are not retroactive, and are not subject to administrative appeal

remedies.

Background

A proposed rule was published in the Federal Register on April 2,

1997, at 62 FR 15622 to simplify program administration and ensure

conformity between the statutory language of section 156 of the Federal

Agriculture Improvement and Reform Act of 1996 (the 1996 Act), 7 U.S.C.

156, and the implementing regulations. The proposed rule redefined the

1996 crop year as the period from July 1, 1996 through September 30

1997; redefined the crop years for 1997 through 2001 from the current

period, July 1 through June 30, to the Federal fiscal year, October 1

through September 30; and redefined the 2002 crop year as the period

from October 1, 2002 through June 30, 2003. The proposed rule reaffirms

that the loan program expires on June 30, 2003, so as not to extend the

program authority through administrative action.

The proposed rule extended the loan availability period from

October 1 through June 30, to the whole fiscal year, except for the

2002 crop year which ends on June 30, 2003, reflecting the statutory

language of section 156(d)(2). This removed the restriction that the

Commodity Credit Corporation (CCC) could only make loans during July

through September on sugar from sugarcane or sugar beets normally

harvested during that 3-month period as previous legislation had

required. All sugar collateral pledged during July through September

would be eligible for supplemental loans during October of the

following fiscal year. The proposed rule also recommended elimination

of an obsolete provision governing the 1995 crop year price support

program.

Summary of Comments

Four sugar industry associations commented on the proposed rule.

Three supported all proposed rule changes. One recommended that the

restriction be retained that CCC can only make supplemental loans on

sugar from sugarcane or sugar normally harvested in July, August, or

September.

The commenter agreed that the language of the 1996 Act no longer

explicitly limits supplemental loans to sugar from sugarcane or sugar

beets normally harvested during the July-September period as did the

language of the Food, Agriculture, Conservation, and Trade Act of 1990.

However, the commenter contends that there is nothing in the

legislative history of the 1996 Act to suggest Congress intended to

expand the eligibility for supplemental loans. The commenter also

contends that: (1) If such broad loan eligibility is authorized by the

1996 Act,

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it is discretionary and the Secretary is not required to implement it;

(2) broadening supplemental loan eligibility will complicate rather

than simplify program administration; and (3) such action will increase

uncertainty as to forfeitures and double the period that processors may

forfeit their loan collateral.

CCC reaffirms its position that the statutory language clearly

provides for any domestically grown sugar to be put under loan during

July through September and that all sugar put under loan during that 3-

month period is eligible for a supplemental loan. Both sections 156 (a)

and (b) of the 1996 Act state: ``The Secretary shall make loans

available to processors of domestically grown* * *.'' Section 156(d)(2)

states: ``In the case of a loan made under this section in the last 3

months of a fiscal year, the processor may repledge* * *.'' The only

discretion is on the part of the processor who may choose to, or not

to, repledge collateral for a supplemental period.

Section 1435.105(g), which describes the conditions for the

supplemental loan, is simplified by removing redundant language that

states that loans made in July, August, or September must be settled by

September 30. Section 1435.105(f) clearly states that all loans made

during the fiscal year must be settled by September 30.

List of Subjects in 7 CFR Part 1435

Loan programs/agriculture, Price-support programs, Reporting and

record keeping requirements, Sugar.

Accordingly, the proposed rule modifying 7 CFR part 1435, which was

published in the Federal Register on April 2, 1997, at 62 FR 15622 is

adopted with changes as a final rule to read as follows:

PART 1435--SUGAR

1. The authority citation for 7 CFR part 1435 continues to read as

follows:

Authority: 7 U.S.C. 7272 and 15 U.S.C. 714b and 714c.

Sec. 1435.1 [Amended]

2. Section 1435.1 is amended by removing paragraph (a) and removing

the designation ``(b)'' from paragraph (b).

3. In Sec. 1435.2, the definition for ``Crop year'' is revised to

read as follows:

Sec. 1435.2 Definitions.

* * * * *

Crop year for the 1996 crop means the period from July 1, 1996

through September 30, 1997. Crop year for the 1997-2001 crops means the

period from October 1 through September 30, inclusive, and is

identified by the year in which the crop year begins. For example, the

1997 crop year begins on October 1, 1997. The 1997 crop of sugar beets,

sugarcane, or sugar means domestically-produced sugar beets,

domestically-produced sugarcane, or sugar processed from domestically-

produced sugar beets or sugarcane during the 1997 crop year. Crop year

for the 2002 crop means the period from October 1, 2002 through June

30, 2003. Sugar from desugaring molasses is considered to be from the

crop year the desugaring took place.

* * * * *

4. Section 1435.105 is amended by revising paragraphs (a) and (g)

and adding paragraph (h) to read as follows:

Sec. 1435.105 Availability, disbursement, and maturity of loans.

(a) To obtain a loan, a processor must:

(1) File a loan request, as CCC prescribes, no later than September

30, 1997, for the 1996 crop year, no earlier than October 1 and no

later than September 30 of the applicable crop year for the 1997-2001

crop years, and no earlier than October 1, 2002 and no later than June

30, 2003, for the 2002 crop year, with the State committee of the State

where such processor is headquartered, or with a county committee

designated by the State committee;

* * * * *

(g) Processors receiving loans in July, August, or September may

repledge the sugar as collateral for a supplemental loan. Such

supplemental loan shall:

(1) Be requested by the processor during the following October;

(2) Be recourse or nonrecourse depending on which type of loan is

in effect according to Sec. 1435.102;

(3) Be made at the loan rate in effect at the time the supplemental

loan is made; and

(4) Mature in 9 months minus the number of whole months that the

initial loan was in effect.

(h) No loans will be made after June 30, 2003.

Signed in Washington, DC, on June 23, 1997.

Bruce R. Weber,

Acting Executive Vice President, Commodity Credit Corporation.

[FR Doc. 97-16847 Filed 6-26-97; 8:45 am]

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