Sugar Loan Program Crop Year Definition and Loan Availability Period

SUMMARY: This proposed rule would redefine the crop year for the sugar

loan program from the current period, July 1 through June 30, to the

Federal fiscal year, October 1 through September 30. The proposed rule

also would extend the loan availability period to the whole fiscal year

instead of ending the availability period on June 30. The restriction

that the Commodity Credit Corporation (CCC) could only make loans in

July, August, and September on sugar processed from sugarcane or sugar

beets that are normally harvested in those months would be removed. The

proposed rule would also eliminate obsolete provisions governing the

1995 crop year price support program and producer protections and

revise the information collection requirements to reflect the

simplified monthly data-reporting forms and the transfer of reporting

items to new annual reporting forms.

DATES: Comments on this rule must be received on or before June 2, 1997

to be assured of consideration.

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 proposed

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 proposed rulemaking with

respect to the subject matter of this rule.

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, 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

Title: 7 CFR Part 1435, Sugar Program.

OMB Number: 0560-0138.

Date of Approval Expiration: July 31, 1998.

Type of Request: Revision of previously approved information

collection.

Abstract: The Federal Agriculture Improvement and Reform Act of

1996 (1996 Act) requires the Department of Agriculture to collect and

publish, on a monthly basis, information as the Secretary may require

to administer sugar programs, including sales of sugarcane, sugar

beets, and sugar, and production, importation, distribution, and stock

levels of sugar. The Farm Service Agency uses these data to estimate

supply and use for the monthly World Agricultural Supply and Demand

Estimates report; establish regional sugar loan rates; estimate the

impact of alternative sugar policy options on the sugar market; and

publish the monthly Sweetener Market Data report.

Estimate of Respondent Burden: Public reporting burden for the

revised collection of information is estimated to average 56 minutes

per response.

Respondents: Domestic sugarcane processors, sugar beet processors,

and cane sugar refiners.

Estimated Number of Respondents: 49.

Estimated Number of Responses per Respondent: 19 responses per

year.

Estimated Total Annual Burden Hours on Respondents: 864 hours.

Comments are invited on: (a) Whether the proposed collection of

information is necessary for the proper performance of the functions of

the agency, including whether the information will have practical

utility; (b) the accuracy of the agency's estimate of the burden of the

proposed collection of information, including the validity of the

methodology and assumptions used; (c) ways to enhance the quality,

utility, and clarity of the information from those who are to respond,

including the use of appropriate automated, electronic, mechanical, or

other technological collection techniques or other forms of information

technology. Comments may be sent to the Desk Officer for Agriculture,

Office of Information and Regulatory Affairs, OMB, Washington, D.C.

20503, and to Dan Colacicco, Economic and Policy Analysis Staff, FSA,

USDA, STOP 0516, 1400 Independence Avenue, SW, Washington, DC 20250-

0516, (202)690-0734.

Copies of the information collection package may be obtained from

Fran Hentz, Economic Policy Analysis Staff, FSA, USDA, STOP 0516, 1400

Independence Avenue, SW, Washington, DC 20250-0516, (202)720-7794.

OMB is required to make a decision concerning the collection of

information contained in these proposed regulations between 30 and 60

days after publication of this document in the Federal Register.

Therefore, a comment to OMB is best assured of having its full effect

if OMB receives it within 30 days of publication. This does not affect

the deadline for the public to comment to the Department of Agriculture

on the proposed regulation.

All responses to this notice will be summarized and included in the

request

[[Page 15623]]

for OMB approval. All comments will also become a matter of public

record.

Executive Order 12998

This proposed rule has been reviewed in accordance with Executive

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

the extent such laws are inconsistent with the provisions of this

proposed rule; are not retroactive; and are not subject to

administrative appeal remedies.

Background

Paragraph 1435.1(a), which governs the price support loan program

and producer protections for the 1995 crop year, is eliminated. The

1995 crop year ended on June 30, 1996, and all 1995 crop year loans

were repaid to CCC before October 1, 1996.

Sugar Crop Year Definition

The current CCC regulations at Sec. 1435.2 define the sugar crop

year as ``the period from July 1 through June 30, inclusive''. The

current July-June crop year is a carry-over from the implementation of

the Agriculture and Food Act of 1981, which mandated a purchase program

and a subsequent price support loan program.

Redefining the crop year to the period October 1 through September

30 would: (1) be consistent with the fiscal year, thus providing a

better fit for the analysis and administration of the sugar program,

(2) reduce the reporting burden placed on the industry, and (3) better

reflect the beginning of the harvest, which is the basis for other

commodities' crop years.

USDA already uses the fiscal year for the sugar World Agricultural

Supply and Demand Estimates and baseline budget estimates. The tariff-

rate import quota (TRQ) and marketing assessment rates are specified in

terms of fiscal years, and the final loan maturity date is September

30, the end of the fiscal year.

Changing the crop year definition is expected to reduce the

industry's reporting burden and costs because they will no longer have

to provide separate crop year and fiscal year data to USDA.

The 1996 Act authorizes a sugar program through the 2002 crop year.

Under the current crop year definition, the program would apply only to

sugar processed through June 30, 2003. Changing the crop year

definition to the fiscal year that ends on September 30 cannot change

the end of loan program authority. Thus, the revised rule would

reaffirm that the loan program expires on June 30, 2003.

Loan Availability Period and Supplemental Loans

Under current regulations, the loan availability period ends June

30, which is consistent with the end of the current July-June crop year

and similar to the other commodities in terms of the number of months

loans are available after the beginning of harvest. However, loans are

made available during the July-September period on sugar from sugar

beets and sugarcane ``normally harvested'' during the July-September

period. Sugar pledged as collateral for a loan during this period may

be repledged as collateral for a supplemental loan during the following

fiscal year for up to 9 months minus the number of months the initial

loan was in effect.

The Agricultural Act of 1949 (1949 Act), as amended by the Food,

Agriculture, Conservation, Trade Act of 1990, specified that the

Secretary shall make available to eligible processors price support

loans with respect to sugar processed from sugar beets and sugarcane

harvested in the last 3 months of a fiscal year, with supplemental

loans available the following fiscal year for up to 9 months minus the

length of the initial loan. However, the 1996 Act, which supersedes the

1949 Act, provides only that in the case of a loan made during the last

3 months of a fiscal year, the collateral may be repledged for a

supplemental loan during the following fiscal year for up to 9 months

minus the length of the initial loan. Thus, the 1996 Act eliminates the

restriction that only sugar from sugar beets or sugarcane harvested in

the July-September period is eligible for a loan during that period.

Extending the loan availability period through the entire fiscal

year and providing supplemental loans to all sugar originally pledged

for loans during the July-September period would: (1) Simplify program

regulations and administration (e.g., by eliminating continuous harvest

loan applications), (2) increase industry flexibility by providing

loans year-round, thus increasing its ability to store sugar in

anticipation of better prices, (3) be more consistent with other sugar

program provisions, and (4) recognize the impact of desugarization

technology.

All loans would be made at the loan rates in effect at the time the

loans are made. Sugar repledged for loans during the July-September

period would continue to be ineligible for supplemental loans.

List of Subjects in 7 CFR Part 1435

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

record keeping requirements, Sugar.

Accordingly, 7 CFR part 1435 is proposed to be amended 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.

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

the designation for 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. In Sec. 1435.105 paragraphs (a)(1) and (g) are revised to read

as follows:

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

(a) * * *

(1) File a loan request, as CCC prescribes, no earlier than July 1

and no later than September 30 for the 1996 crop year, no earlier than

October 1 and no later than September 30 for the 1997-2001 crop years,

and no earlier than October 1 and no later than June 30 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)(1) Notwithstanding any other provision of this subpart,

processors receiving loans in July, August, or September:

(i) Must settle the loan by September 30 following disbursement;

and

(ii) May repledge the sugar as collateral for a supplemental loan.

[[Page 15624]]

(2) Such supplemental loan shall:

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

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

in effect according to Sec. 1435.102;

(iii) Be made at the loan rate in effect at the time the

supplemental loan is made; and

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

initial loan was in effect.

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

Signed in Washington, DC, on March 26, 1997.

Bruce R. Weber,

Acting Executive Vice President, Commodity Credit Corporation.

[FR Doc. 97-8413 Filed 4-1-97; 8:45 am]

BILLING CODE 3410-05-P