This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

53580

Vol. 62, No. 199

Wednesday, October 15, 1997

DEPARTMENT OF AGRICULTURE

Office of the Secretary

7 CFR Part 6

Dairy Tariff-Rate Import Quota

Licensing

AGENCY: Foreign Agricultural Service,

USDA.

ACTION: Advanced notice of proposed

rulemaking on Dairy Tariff-Rate Import

Quota Licensing.

SUMMARY: This document requests

public comments on possible options

for the implementation of the Dairy

Tariff-Rate Import Quota Licensing

regulation’s requirement to permanently

reduce certain historical licenses based

on surrenders, including possible

recision, suspension, or delay of this

requirement.

DATES: Comments should be submitted

on or before 5 p.m. on November 28,

1997 to be assured of consideration.

ADDRESSES: Interested parties may mail

their comments to: Diana Wanamaker,

Group Leader, Import Policies and

Programs Division, Foreign Agricultural

Service, 1400 Independence Avenue,

SW., Stop 1021, Washington, DC 20250–

1021. They may also fax their comments

to 202–720–0876. All comments

received will be available for public

inspection in room 5541–S at the above

address. Summaries of comments will

be made available via our fax retrieval

system by calling (202) 720–0876 after

December 5, 1997.

FOR FURTHER INFORMATION CONTACT:

Diana Wanamaker, Group Leader,

Import Policies and Programs Division,

Foreign Agricultural Service, 1400

Independence Avenue, SW, Stop 1021,

Washington, DC 20250–1021 or

telephone (202) 720–2916.

SUPPLEMENTARY INFORMATION: The

Foreign Agricultural Service (FAS)

under the authority of 7 CFR 2.43 is

requesting comments concerning

possible implementation of § 6.25(b) of

the Department’s Dairy Tariff-Rate

Import Quota Licensing Regulation

(‘‘the Regulation’’). Section 6.26(b)(2)

provides that prior to 1999, a

determination may be made, in light of

market conditions, to eliminate the

requirement in §§ 6.25(b)(1)(i) and

6.25(b)(1)(ii) to permanently reduce the

quantity of a historical license based on

consecutive years of license surrender.

Specifically, § 6.25(b)(1)(i) states that

beginning in 1999, if a licensee has

surrendered to the Department more

than 50 percent of a historical license in

each of three prior years, that license

will be permanently reduced to the

average amount entered during those

three years (the ‘‘three-year rule’’).

Section 6.25(b)(1)(ii) provides that

beginning in 2001, if a licensee

surrenders to the Department more than

50 percent of a historical license in

three of the five prior years, that license

will be permanently reduced by the

average amount entered during those

five years (the ‘‘five-year’’ rule). Section 6.25(b)(2) is under review by

the Department and we are seeking

comments, views, and

recommendations with respect to

methods and timing of the

implementation of this section. At this

time, all options are under

consideration, including but not limited

to the following: A. Issue an immediate determination

that §§ 6.25(b)(1)(i) and 6.25(b)(1)(ii)

shall not apply in light of market

conditions, effectively rescinding the

provision; B. Revise the regulation to advance

the effective date of § 6.25(b)(1)(i) from

1999 to 2003, the effective date of

§ 6.26(b)(ii) from 2001 to 2005, and the

determination date from prior to 1999 to

prior to 2003; and C., D. Revise the regulation to

eliminate either the three-year rule

(section 6.25(b)(1)(i)) or the five-year

rule (section 6.26(b)(1)(ii)) to provide

that one but not both of these provisions

remain in effect with existing or

modified requirements. FAS also invites comments as to

whether current dairy import market

conditions are such that FAS should

implement § 6.25(b)(2) immediately.

Background

Rationale for Section 6.26(b)(2)

Revision 8 of the Regulation, issued

on October 6, 1996, amended the

previous rule so that a historical license

that is being consistently underutilized

will be permanently reduced. Under the

previous rule, there was no consequence

for surrendering license amounts. In

light of the small amount of license

available to new entrants or others who

wish to increase imports of a certain

dairy product, the Department

determined that it was sound public

policy to reallocate licenses amounts

that are consistently not being used.

Therefore, the amount by which a

historical license is permanently

reduced is to be converted to a

nonhistorical license.

How Section 6.25(b) May Be

Implemented

Section 6.25(b)(2) of the Regulation

permits the Secretary of Agriculture to

determine that § 6.25(b)(1) ‘‘does not

apply in light of market conditions.’’

Authority for administration of tariffrate quotas (TRQs) for dairy products

was delegated to the FAS Administrator

under 7 CFR 2.43.

Requests for Public Comments on

Section 6.25(b)

FAS requests comments on any of the

following options and any other views,

comments or recommendation for action

that commentors wish to submit on this

matter.

A. Using Section 6.25(b)(2) To

Permanently Cancel Section 6.25(b)(1)

Under this option, FAS would use its

determination authority to find that

market conditions in 1997 are such that

FAS would invoke § 6.25(b)(2) to

permanently void § 6.25(b)(1). If FAS

implemented this option, licensees

would not be subsequently penalized

for having surrendered more than 50

percent of their historical licensed

amounts in 1996 or 1997 or in future

years. However, the problems

concerning repeated license surrenders

and limited access to licenses to import

inquota TRQ amounts would remain.

B. Postponing Implementation of

Section 6.25(b)(1)

Under this option, FAS would amend

the § 6.25(b)(1)(i) to delay its

implementation from 1999 to a future

date. This delay would give licensees

time to adjust to changing market

conditions which have resulted from the

implementation of the Uruguay Round

Trade Agreement with respect to market

access and export subsidies. FAS invites

comments on the concept of delaying

implementation of §§ 6.25(b)(1)(i) and
Federal Register / Vol. 62, No. 199 / Wednesday, October 15, 1997 / Proposed Rules 53581

6.25(b)(1)(ii)96, and welcomes proposals

as to future implementation dates.

C. Eliminate the Three-Year Rule, While

Retaining the Five-Year Rule

Under this option, FAS would amend

the Regulation to delete § 6.25(b)(1)(i).

This action would eliminate the threeyear rule, while retaining the five-year

rule, which appears in § 6.25(b)(1)(ii).

Per the five-year rule, a licensee could

surrender more than 50 percent of its

historical licensed amount for two of

five consecutive years without penalty.

The five-year rule may be viewed as

giving licensees two years in which to

adjust to changed market conditions.

D. Eliminate the Five-Year Rule, While

Retaining the Three-Year Rule

Under this option, FAS could amend

the Regulation to delete § 6.25(b)(1)(ii).

This action would eliminate the fiveyear rule, while retaining the three-year

rule, which appears in § 6.25(b)(1)(i).

Per the three-year rule, a licensee could

surrender more than 50 percent of a

historical license amount for two years

without penalty and not be subjected to

license reduction if more than 50

percent of that license were surrendered

in the next two years. This also may be

viewed as giving licensees time to adjust

to changed market conditions.

Signed at Washington, DC, on October 3,

1997.

Christopher E. Goldthwait,

Acting Administrator.

[FR Doc. 97–26928 Filed 10–14–97; 8:45 am]

BILLING CODE 3410–10–M

FARM CREDIT ADMINISTRATION

12 CFR Parts 614, 616, 618, and 621

RIN 3052–AB63

Loan Policies and Operations;

Leasing; General Provisions;

Accounting and Reporting

Requirements

AGENCY: Farm Credit Administration.

ACTION: Proposed rule.

SUMMARY: The Farm Credit

Administration (FCA) through the Farm

Credit Administration Board (Board)

issues a proposed rule to amend its

regulations that provide Farm Credit

System (Farm Credit or System)

institutions, including the Farm Credit

Leasing Services Corporation (FCL),

regulatory guidance concerning leasing

activities. The proposed rule clarifies

leasing authorities of System

institutions and addresses issues

regarding leasing raised by System

institutions and FCA examiners. The

proposed rule is also intended to

provide clear and concise regulations

pertaining to the System’s leasing

activities and clarify what existing

regulations are applicable to leasing

activities.

DATES: Comments should be received on

or before December 15, 1997.

ADDRESSES: Comments may be mailed

or delivered to Patricia W. DiMuzio,

Director, Regulation Development

Division, Office of Policy Development

and Risk Control, Farm Credit

Administration, 1501 Farm Credit Drive,

McLean, Virginia 22102–5090, or sent

by facsimile transmission to FAX

number (703) 734–5784. Comments may

also be provided by electronic mail

addressed to ‘‘reg-comm@fca.gov’’ on

the internet. Copies of all

communications received will be

available for examination by interested

parties in the Office of Policy

Development and Risk Control, Farm

Credit Administration.

FOR FURTHER INFORMATION CONTACT:

Robert G. Magnuson, Policy Analyst,

Office of Policy Development and

Risk Control, Farm Credit

Administration, McLean, VA 22102–

5090, (703) 883–4498, TDD (703) 883–

4444,

or

James M. Morris, Senior Counsel, Office

of General Counsel, Farm Credit

Administration, McLean, VA 22102–

5090, (703) 883–4020, TDD (703) 883–

4444.

SUPPLEMENTARY INFORMATION: System

leasing operations continue to evolve to

meet the demands of agricultural and

aquatic producers, cooperatives, and

rural utilities. Several System

institutions have inaugurated new

leasing programs to meet the increased

demands for leasing and provide

customers with more options for

financing the expansion of agricultural

operations. In addition, the FCL has

experienced substantial growth since

1990 because of increased demand for

leases by agricultural and aquatic

producers and their cooperatives.

The System’s statutory leasing powers

were granted to supplement its lending

authorities. The leasing provisions of

the Farm Credit Act of 1971, as

amended (Act), remain separate

authorities, however, and do not

parallel the rules for lending in all

respects. The proposed regulations are

intended to clarify which lending

regulations are applicable to leasing

activities and how the rules applicable

to leasing differ from those governing

lending transactions. In addition, this

proposal provides specific guidance for

the FCL.

The FCL was chartered in 1983 as a

service corporation under section 4.25

of the Act. The FCL was initially

organized and owned by 14 of the 37

then existing System banks to acquire

and lease assets and provide related

services to eligible customers of the

System. Today, it is owned by all eight

of the System banks. As a service

corporation, it derives its leasing

authorities from the authorities of its

stockholder banks that operate under

titles I and III of the Act.

FCA’s regulations currently address

the leasing activities of System banks,

associations, and the FCL by defining

‘‘loans’’ as including leases in some, but

not all regulatory provisions and by

generally providing that service

corporations are subject to the

regulations applicable to their

organizing banks. This approach has

conveyed the FCA’s view that leasing

activities should ordinarily follow the

rules for lending and that the FCL

should be governed by the same rules as

other System lessors. This approach,

while having the virtue of simplicity,

has not always proved satisfactory. It

does not account for the ways in which

lease transactions differ from loan

transactions, nor does it reflect

differences between loans and leases in

the Act. The proposed regulations

would apply rules uniformly to all

System institutions that conduct leasing

activities under the same title(s) of the

Act.

The existing leasing regulations in

§§ 618.8050 and 618.8060 will be

deleted upon the promulgation of final

leasing regulations in part 616.

Technical changes are made to

§§ 614.4710 and 621.9 to conform with

the below amendments. A discussion of

the proposed amendments follows.

I. Leasing Authorities

1. Authority and Lessee Eligibility

Proposed § 616.6100 implements

sections 1.11(c)(2), 2.4(b)(4), and 3.7(a)

of the Act, which grant express leasing

authorities to various System

institutions. Proposed § 616.6100(a)

addresses the authority of Farm Credit

Banks (FCBs), agricultural credit banks

(ACBs), Federal land credit associations

(FLCAs), agricultural credit associations

(ACAs), and the FCL to lease facilities

under section 1.11(c)(2) of the Act.

Similarly, proposed § 616.6100(b)

reflects the equipment leasing authority

of: (1) FCBs, ACBs, and the FCL under

section 1.11(c)(2) of the Act; and (2)

ACAs and production credit

associations (PCAs) under section