Amendment to the Production Flexibility Contract Regulations

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1412

RIN 0560-AF25

Amendment to the Production Flexibility Contract Regulations

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This interim rule amends the production flexibility contract

regulations found at 7 CFR part 1412.

[[Page 55151]]

The amendments add a final date for producers to designate payment

shares and provide supporting documentation to be eligible to earn

contract payments in a fiscal year when payment shares have not been

designated in such fiscal year; change the dates by which a producer or

owner must inform county committee of changes in interest; add a final

date for producers to request advance payments; clarify cash lease

provisions; change the provisions for determining whether a lease is a

cash lease or a share lease with respect to combination leases; and

change the date by which all landowners, tenants, and sharecroppers

failing to reach an agreement regarding the division of contract

payments for a fiscal year must execute a contract to be eligible to

receive the contract payment for that fiscal year.

DATES: Effective Date: October 23, 1997. Comments on this rule must be

received on or before November 24, 1997 to be assured of consideration.

FOR FURTHER INFORMATION CONTACT: Scotty M. Abbott, Farm Service Agency,

United States Department of Agriculture, STOP 0517, 1400 Independence

Avenue, SW, Washington, DC 20250-0517, telephone 202-720-5422, Internet

address: S[email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be not significant and therefore

was not reviewed by the Office of Management and Budget (OMB).

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 proposed rulemaking with

respect to the subject matter of this rule. Section 161(d) of the

Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7281)

indicates that the Secretary is to issue regulations without respect to

the notice and comment provisions of 5 U.S.C. 553 and other statutory

and regulatory requirements. However, the Commodity Credit Corporation

is requesting comments on the amendments to the regulations.

Accordingly, this interim final rule is effective upon publication in

the Federal Register, with 30 days for the submission of comments.

Environmental Evaluation

An Environmental Evaluation with respect to the proposed 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, or appearance.

Therefore, neither an Environmental Assessment nor an Environmental

Impact Statement is needed.

Executive Order 12988

This rule has been reviewed in accordance with Executive Order

12988. The provisions of this proposed rule preempt State laws to the

extent such laws are inconsistent with the provisions of this rule. The

provisions of this rule are not retroactive. Before any judicial action

may be brought concerning the provisions of this rule, the

administrative remedies must be exhausted.

Executive Order 12372

This program/activity 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

The amendments to 7 CFR part 1412 set forth in this rule were

previously approved under OMB Control Number 0560-0025. An information

collection notice was published in the Federal Register (62 FR 27216)

on May 19, 1997. No comments were received regarding this notice. A

revised information collection package has been submitted to OMB.

Executive Order 12612

It has been determined that 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 a

substantial direct effect on States or their political subdivisions or

on the distribution of power and responsibilities among the various

levels of Government.

Unfunded Mandates Reform Act of 1995

This 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.

Therefore, this rule is not subject to the requirements of sections 202

and 205 of the UMRA.

Discussion of Changes

This rule amends the production flexibility contract regulations as

follows:

Section 1412.201 Production flexibility contract.

This rule adds a final date for producers to designate payment

shares and provide supporting documentation to be eligible to earn

contract payments in a given fiscal year when payment shares have not

been designated in such fiscal year. All producers sharing in the

contract payment on a farm, whose payment shares have not been

designated for such fiscal year must sign a new contract designating

payment shares, and provide supporting documentation no later than

August 1 of such fiscal year to be eligible to earn a contract payment

in such fiscal year.

Section 1412.207 Succession-in-interest to a production flexibility

contract.

This rule changes the dates a producer or owner must inform the

county committee of changes in interest. A producer or owner must

inform the county committee of changes in interest by August 1 of the

fiscal year in which the change is made if producers on the contract

remain the same but payment shares change; or no later than August 1 of

such fiscal year, if a new producer is being added to the contract.

Section 1412.302 Contract payment provisions.

This rule adds a final date to request advance payments for fiscal

year 1998, and each subsequent fiscal year. To receive the advance

payment for fiscal year 1998, and each subsequent fiscal year, all

producers sharing in the contract payment on the farm must, no later

than 15 days prior to the final date to issue the advance payment:

(1) Sign the contract designating payment shares and provide

supporting documentation, if applicable; and

(2) Request the advance payment.

Section 1412.303 Sharing of contract payments.

This rule clarifies that a lease is a cash lease, if the lessor

receives only a guaranteed sum certain cash payment, or fixed quantity

of the crop. This rule also changes provisions with respect to

combination leases. Combination leases are leases that contain

provisions for both a guaranteed amount such as a fixed dollar amount,

or quantity and a share of a crop or crop proceeds. Combination leases

include those leases that provide for the greater of a guaranteed

amount, or share of the crop or crop proceeds. The amendment provides

that all combination leases shall be considered share leases for fiscal

year 1998, and later fiscal years.

[[Page 55152]]

Section 1412.304 Provisions relating to tenants and sharecroppers.

This rule changes the date by which all landowners, tenants and

sharecroppers failing to reach an agreement regarding the division of

contract payments for a fiscal year, must execute a contract to be

eligible to receive the contract payment for such fiscal year. If the

landowners, tenants and sharecroppers on a farm fail to reach an

agreement regarding the division of contract payments for a fiscal

year, the county committee shall make the payment at a later date if

all persons eligible to receive a share of the contract payment, have

executed a contract no later than August 1 of that fiscal year, and

subsequently agree to the division of contract payment.

List of Subjects in 7 CFR Part 1412

Contract acreage, Contract payments, Production flexibility

contract, Succession-in-interest.

Accordingly, 7 CFR part 1412 is amended as follows:

PART 1412--PRODUCTION FLEXIBILITY CONTRACTS FOR WHEAT, FEED GRAINS,

RICE, AND UPLAND COTTON

1. The authority citation for part 1412 continues to read as

follows:

Authority: 7 U.S.C. 7201 et seq.; and 15 U.S.C. 714b and 714c.

2. Section 1412.201 is amended by adding paragraph (c) to read as

follows:

Sec. 1412.201 Production flexibility contract.

* * * * *

(c) All producers sharing in the contract payments on a farm whose

payment shares have not been designated for a fiscal year, must sign

the contract designating payment shares and provide supporting

documentation as specified in parts 1400, 1405, and 12 of this title,

no later than August 1 of the fiscal year to be eligible to earn a

contract payment in that fiscal year. If all producers have not signed

the contract by this deadline; no producers on the contract will be

eligible for a payment for that farm for that fiscal year.

3. Section 1412.207 paragraph (d) is revised to read as follows:

Sec. 1412.207 Succession-in-interest to a production flexibility

contract.

* * * * *

(d) A producer or owner must inform the county committee of changes

in interest not later than:

(1) August 1 of the fiscal year in which the change occurs, if

producers on the contract remain the same, but payment shares change;

or

(2) August 1 of the fiscal year in which the change occurs , if a

new producer is being added to the contract.

* * * * *

4. Section 1412.302 paragraph (b) is revised to read as follows:

Sec. 1412.302 Contract payment provisions.

* * * * *

(b) At the option of the producer, for fiscal year 1997 and each

subsequent fiscal year, 50 percent of the annual contract payment shall

be paid on December 15 or January 15, as requested by the producer. To

receive the advance payment the producers on the farm must be in

compliance with all requirements of the contract at the time of the

advance payment. For fiscal year 1998 and each subsequent fiscal year,

all producers sharing in the contract payment on the farm must, no

later than 15 days prior to the final date to issue the advance payment

sign the contract designating payment shares and provide supporting

documentation as specified in parts 1400, 1405, and 12 of this title,

if applicable; and request the advance payment. If all producers on the

farm have not signed the contract designating payment shares, according

to this paragraph, then no producers will be eligible for an advance

payment for that farm for that fiscal year.

* * * * *

5. Section 1412.303 is amended by removing paragraph (a)(6) and

revising paragraphs (a)(2) and (a)(4) to read as follows:

Sec. 1412.303 Sharing of contract payments.

(a) * * *

(2) A lease will be considered a cash lease if the lease provides

for only a guaranteed sum certain cash payment, or a fixed quantity of

the crop (for example, cash, pounds, or bushels per acre).

* * * * *

(4) A lease shall be considered a share lease if the lease provides

for both a guaranteed amount such as a fixed dollar amount or quantity

and a share of a crop or crop proceeds, including leases which provide

for the greater of a guaranteed amount or share of the crop or crop

proceeds.

* * * * *

6. Section 1412.304 paragraph (b) is revised to read as follows:

Sec. 1412.304 Provisions relating to tenants and sharecropper.

* * * * *

(b) Notwithstanding the provisions set forth at Sec. 1412.302(c),

if the landowners, tenants and sharecroppers on a farm fail to reach an

agreement regarding the division of contract payments for a fiscal

year, the county committee shall make the payment at a later date if

all persons eligible to receive a share of the contract payment, have

executed a contract not later than August 1 of the applicable fiscal

year and subsequently agree to the division of contract payment.

Signed at Washington, DC, on October 15, 1997.

Bruce R. Weber,

Acting Executive Vice President, Commodity Credit Corporation.

[FR Doc. 97-28009 Filed 10-22-97; 8:45 am]

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