Foreign Donation of Agricultural Commodities

COMMODITY CREDIT CORPORATION

7 CFR Part 1499

RIN 0551-0035

Foreign Donation of Agricultural Commodities

agency: Commodity Credit Corporation, USDA.

action: Proposed rule.

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summary: The Commodity Credit Corporation proposes to amend the rules

governing foreign donations of agricultural commodities. This proposed

rule contains changes, corrections and clarifications to the final

regulations to achieve more effective management of foreign donations

of agricultural commodities.

dates: Submit comments on or before April 24, 1998.

addresses: Address all comments concerning this proposed rule to Ira D.

Branson, Director/Commodity Credit Corporation, Program Support

Division, Foreign Agricultural Service, United States Department of

Agriculture, 1400 Independence Ave., S.W., Stop 1031, Washington, D.C.

20250-1031; telephone (202) 720-3573.

You may submit comments and data by sending electronic mail (E-

mail) to: [email protected].

for further information contact: Juanita Lambert, Chief/Program

Evaluation Branch, Commodity Credit Corporation Program Support

Division, Foreign Agricultural Service, United States Department of

Agriculture, 1400 Independence Ave., S.W., Stop 1031, Washington, D.C.

20250-1031; telephone (202) 720-2465.

supplementary information: This rule is issued in conformance with

Executive Order 12866. Based on information compiled by the Department,

it has been determined that this rule:

(1) Would have an annual effect on the economy of less than $100

million;

(2) Would not adversely affect in a material way the economy, a

sector of the economy, productivity, competition, jobs, the

environment, public health or safety, or State, local, or tribal

governments or communities;

(3) Would not create a serious inconsistency or otherwise interfere

with an action taken or planned by another agency;

(4) Would not materially alter the budgetary impact of entitlement,

grants, user fees, or loan programs or rights and obligations of

recipients thereof; and

(5) Would not raise novel legal or policy issues arising out of

legal mandates, the President's priorities, or principles set forth in

Executive Order 12866.

Regulatory Flexibility Act

It has been determined that the Regulatory Flexibility Act is not

applicable to this final rule since CCC is not required by 5 U.S.C. 553

or any other provision of law to publish a notice of rulemaking with

respect to the subject matter of this rule.

Paperwork Reduction Act

The information collection requirements imposed by this proposed

[[Page 8880]]

rule have been previously submitted to the Office of Management and

Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C.

Chapter 35). OMB has assigned control number 0551-0035 for this

information collection. This proposed rule change would not require

collection of additional information; however, the proposed rule

includes a requirement to use new forms for the semiannual logistics

and monetization reports. These report forms have been submitted to OMB

for review.

Executive Order 12372

This rule 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 46 FR 29115 (June 24, 1983).

Executive Order 12988

This rule has been reviewed under the Executive Order 12988, Civil

Justice Reform. The rule would have pre-emptive effect with respect to

any state or local laws, regulations, or policies which conflict with

such provisions or which otherwise impede their full implementation.

The rule would not have retroactive effect. Administrative proceedings

are not required before parties may seek judicial review.

Rules governing Commodity Credit Corporation's (``CCC'') donation

of agricultural commodities under section 416(b) of the Agricultural

Act of 1949 and the Food for Progress Act of 1985 appear at 7 CFR part

1499. This proposed rule would review the regulations to address

certain issues that have arisen since the rules were first published on

November 29, 1996, and, additionally, make no-substantive corrections.

Program Operation Budgets

The regulations require cooperating sponsors to submit a Program

Operation Budget in order to obtain CCC funding of certain

administrative expenses and overseas internal transportation or

handling cost. The Program Operation Budget details the costs for which

CCC funding is requested. Currently, the regulations (7 CFR

Sec. 1499.7(e)) provide that a cooperating sponsor may make adjustments

to individual line items in an approved Program Operation Budget up to

20 percent of the total approved budget, or $1,000, whichever is less.

This provision has limited cooperating sponsor's flexibility in meeting

unanticipated circumstances during implementation of activities.

Consequently, cooperating sponsors have needed to prepare numerous

budget amendments thereby increasing their paperwork burden and

imposing additional administrative burdens on CCC.

CCC proposes to permit cooperating sponsors to make adjustments in

line items of the Program Operation Budget of up to 20 percent of the

total budget or $5,000, which ever is less. This increase will allow

CCC to maintain effective oversight of the use of its funding while

eliminating paperwork and administrative burdens.

Payment Documentation

If CCC agrees to pay ocean transportation for donated commodities,

CCC will pay the ocean freight directly to the ocean carrier. The

regulations specify the documentation required to be submitted to CCC

before payment will be made.

In accordance with requirements of the Debt Management Improvement

Act of 1994, CCC is moving towards a system whereby all payments of CCC

funds will be by electronic transfer. Therefore, this rule includes a

proposed new section (7 CFR 1499.8(h)(3)) listing the information that

ocean carriers and cooperating sponsors must submit to CCC in order to

receive funds. Recipients must submit the information with every

request for payment. This will speed processing by ensuring that

payment information is kept current.

The proposed rule also clarifies that certain specified documents

must be signed when submitted to CCC for payment. Additionally, CCC

would require a copy of the tariff pages applicable to any liner

shipments to enable CCC to check liner rates.

Termination of Program Activities

This proposed rule adds a new Sec. 1499.10(d) to address the

disposition of donated commodities and local currency proceeds by a

non-governmental cooperating sponsor in the event that the cooperating

sponsor's participation in the program terminates for any reason prior

to completion of approved activities. The proposed rule would add a

requirement that the cooperating sponsor take reasonable steps to

secure any undistributed commodities or sales proceeds and notify CCC

of their status. The commodities or proceeds would then be disposed of

as directed by CCC. Given the varied situations that may arise to cause

termination, the rule cannot set forth, in advance, any standard

disposition procedures.

Reports

The proposed regulation would establish a standard date for

submission of all semiannual logistic and monetization reports and a

standardized reporting period. Also, as mentioned above FAS proposes

the use of specific reporting forms for these reports. Currently, each

agreement set forth the reporting date and period. This uniformity

should ease administration for both the cooperating sponsors and CCC.

Miscellaneous

The proposed regulation would also make a number of nonsubstantive

changes intended for clarification only or to update office references.

List of Subjects in 7 CFR Part 1499

Agricultural commodities, Exports, Foreign aid.

Accordingly, CCC proposes to amend 7 CFR part 1499 as follows:

PART 1499--FOREIGN DONATION PROGRAMS

1. The authority citation for part 1499 continues to read as

follows:

Authority: 7 U.S.C. 1431(b); 7 U.S.C. 1736o; E.O. 12752.

Sec. 1499.1 [Amended]

2. Section 1499.1 is amended by removing ``KCFMO--Kansas City

Financial Management Office'' and adding, in its place, ``KCMO/DMD--

Kansas City Management Office/Debt Management Division''.

3. Section 1499.7(e) is amended by revising the third and fourth

sentences to read as follows:

Sec. 1499.7 Apportionment of costs and advances.

* * * * *

(e) * * * The non-government Cooperating Sponsor may make

adjustments between line items of an approved Program Operations Budget

up to 20 percent of the total amount approved or $5,000, whichever is

less without any further approval. Adjustments beyond these limits must

be specifically approved by the Director, PDD.

* * * * *

Sec. 1499.7 [Amended]

4. Section 1499.7(i) is amended by deleting ``Director, CCCPSD''

and adding in its place, ``Director, PDD.''

5. In Sec. 1499.8, the introductory text of paragraph (b) and the

headings of paragraph (g) and (g)(1) are revised, paragraph (g)(1)(vii)

is redesignated as paragraph (g)(1)(viii), and new

[[Page 8881]]

paragraphs (g)(1)(vii) and (g)(1)(ix) are added, to read as follows:

Sec. 1499.8 Ocean transportation.

* * * * *

(b) Freight procurement requirements. When CCC is financing any

portion of the ocean freight, whether on U.S.-flag or non-U.S. flag

vessels, and the Cooperating Sponsor arranges ocean transportation:

* * * * *

(g) Documents required for payment of freight--(1) General rule. *

* *

* * * * *

(vii) For all liner cargoes, a copy of the tariff page.

* * * * *

(ix) Each request to CCC for payment must provide a document, on

letterhead and signed by an official or agent of the requester, the

name of the entity to receive payment, the bank ABA number to which

payment is to be made; the account number for the deposit at the bank;

the requester's taxpayer identification number; and the type of account

into which funds will be deposited.

* * * * *

1499.8 [Amended]

6. In section 1499.8, paragraph (8) is amended by deleting ``One

copy'' wherever it appears and adding ``One signed copy'' in its place,

and paragraph (g)(1)(vi) is amended by deleting ``a notice'' and

adding, in its place, ``a signed notice''.

7. Section 1499.10 is amended by adding a new paragraph (d) to read

as follows:

Sec. 1499.10 Restrictions on commodity use and distribution.

* * * * *

(d) In the event that its participation in the program terminates,

the non-government cooperating sponsor will safeguard any undistributed

commodities and sales proceeds and dispose of such commodities and

proceeds as directed by CCC.

8. Section 1499.14(b)(2) is amended by deleting ``KCFMO'' and

adding, in its place ``KCMO/DMD.''

9. Section 1499.15, is amended by removing ``KCFMO'' wherever it

appears and add, in its place ``KCMO/DMD'', revising the last sentence

of paragraphs (d)(2) and (f)(3), and adding paragraphs (d)(2)(i)

through (d)(2)(vi) to read as follows:

Sec. 1499.15 Liability for loss, damage, or improper distribution of

commodities--claims and procedures.

* * * * *

(d) * * *

(2) * * * In the event of a declaration of general average:

(i) The Cooperating Sponsor shall assign all claim rights to CCC

and shall provide CCC all documentation relating to the claim, if

applicable;

(ii) CCC will be responsible for settling general average and

marine salvage claims;

(iii) CCC has sole authority to authorize any disposition of

commodities which have not commenced ocean transit or of which the

ocean transit is interrupted;

(iv) CCC will receive and retain any monetary proceeds resulting

from such disposition;

(v) CCC will initiate, prosecute and retain all proceeds of cargo

loss and damage against ocean carriers and any allowance in general

average; and

(vi) CCC will pay any general average or marine salvage claims

determined to be due.

* * * * *

(f) * * *

(3) * * * If the Agricultural Counselor or Attache approves a

Cooperating Sponsor's decision not to take further action on the claim,

the Cooperating Sponsor shall assign the claim to CCC and shall forward

all documentation relating to the claim to KCMO/DMD.

* * * * *

10. In section 1499.16, the second and third sentences of (c)(1)

and the second and third sentences of (c)(2) are revised to read as

follows:

Sec. 1499.16 Records and reporting requirements.

* * * * *

(c) Reports. (1) * * * Cooperating Sponsors must submit reports on

Form CCC-620 and submit the first report by May 16 for agreements

signed during the period, October 1 through March 31 or by November 16

for agreements signed during the period, April 1 through September 30.

The first report must cover the time period from the date of signing

and subsequent reports must be provided at six months intervals

covering the period from the due date of the last report until all

commodities have been distributed or sold and such distribution or sale

reported to CCC. * * *

(2) * * * Cooperating Sponsors must submit reports on Form CCC-621

and submit the first report by May 16 for agreements signed during the

period, October 1 through March 31 or by November 16 for agreements

signed during the period, April 1 through September 30. The first

report must cover the time period from the date of signing and

subsequent reports must be provided at six months intervals covering

the period from the due date of the last report until all funds

generated from commodity sales have been distributed and such

distribution reported to CCC. * * *

* * * * *

Dated: November 20, 1997.

Christopher E. Goldthwait,

General Sales Manager, FAS, and Vice President, Commodity Credit

Corporation.

[FR Doc. 98-4424 Filed 2-20-98; 8:45 am]

BILLING CODE 3410-10-M