This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

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REGISTER issue of each week.

Rules and Regulations Federal Register

15359 

Vol. 74, No. 64 

Monday, April 6, 2009 

DEPARTMENT OF AGRICULTURE 

Commodity Credit Corporation 

7 CFR Part 1435 

RIN 0560–AH86 

Sugar Program 

AGENCY: Farm Service Agency and 

Commodity Credit Corporation, USDA. 

ACTION: Final rule. 

SUMMARY: The Commodity Credit 

Corporation (CCC) is amending 

regulations as required by the Food, 

Conservation, and Energy Act of 2008 

(the 2008 Farm Bill) to administer the 

sugar loan and sugar marketing 

allotment program through 2012. The 

2008 Farm Bill generally extends the 

existing sugar program with some 

changes, including new loan rates for 

raw cane sugar and beet sugar, new 

provisions to guarantee domestic 

suppliers an 85 percent market share, 

and revised procedures for granting new 

allocations for new entrants. 

DATES: Effective Date: April 6, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Barbara Fecso, Dairy and Sweeteners 

Analysis Group, Economic Policy and 

Analysis Staff, USDA, FSA, Stop 0516, 

1400 Independence Ave., SW., 

Washington, DC 20250–0516; phone: 

(202) 720–4146; e-mail: 

barbara.fecso@wdc.usda.gov; or fax: 

(202) 690–1480. Persons with 

disabilities who require alternative 

means for communication (Braille, large 

print, audiotape, etc.) should contact the 

USDA Target Center at (202) 720–2600 

(voice and TDD). 

SUPPLEMENTARY INFORMATION: 

Background 

This rule implements all the changes 

to the sugar loan and sugar marketing 

allotment programs mandated by Title I 

of the 2008 Farm Bill (Pub. L. 110–246). 

The provisions of Title IX of the 2008 

Farm Bill, concerning the Feedstock 

Flexibility Program for Bioenergy, will 

be implemented at a later date as a 

proposed rule. We are separating these 

regulatory provisions into two rules 

because the 2008 Farm Bill requires us 

to promulgate the regulations to 

implement the Title I changes and 

exempts the regulations from notice and 

comment rulemaking, while Title IX 

must be implemented subject to notice 

and comment rulemaking. Also, we 

need to implement the Title I changes 

now in order to provide sugar loans and 

marketing allotments for fiscal year (FY) 

2009. In contrast, it is unlikely given 

current supply and demand conditions 

that we will be required to implement 

provisions of the Feedstock Flexibility 

Program in FY 2009. The Feedstock 

Flexibility Program is triggered by the 

prospect of sugar forfeitures, which are 

unlikely to occur in FY 2009. The U.S. 

Department of Agriculture’s (USDA) 

December 2008 World Agricultural 

Supply and Demand Estimate (WASDE) 

report projected sugar ending stocks for 

FY 2009 of 60 percent of the level USDA 

normally considers necessary to provide 

for a balanced domestic sugar market, 

making forfeitures quite unlikely. 

The sugar program is a collection of 

Federal programs designed to support 

the return from raising sugarcane and 

sugar beets above a threshold 

established by statute. The price of 

sugar, rather than the price of sugar 

beets and sugarcane, is supported, 

because the growers’ return from the 

crop is proportional to the price of sugar 

and the crops are not storable, which 

makes them unsuitable loan collateral 

for CCC price support loans. The price 

level supported is determined by the 

sugar loan program. Regulations for this 

program are in subpart B in 7 CFR part 

1435. Sugar beet and sugarcane 

processors can receive loans from CCC 

on their sugar production, which can be 

fully satisfied by giving CCC title to 

their loan collateral, also known as a 

‘‘forfeiture’’ of collateral. Thus, sugar 

processors always have the opportunity 

to receive at least the loan proceeds 

from their crop, which becomes a floor 

on the market price of domestic sugar. 

The sugar program has had a 

mandate, since the Farm Security and 

Rural Investment Act of 2002 (Pub. L. 

107–171, commonly known as the 2002 

Farm Bill), to avoid the federal costs 

associated with sugar loan collateral 

forfeitures. The sugar program 

minimizes forfeiture expenditures by 

limiting domestic supply, resulting in 

higher domestic sugar prices than the 

floor created by the sugar loan program. 

Thus, the cost of the program falls upon 

domestic purchasers of sugar, not the 

federal government. USDA can control 

supply by limiting the quantity of sugar 

that domestic sugar beet and sugarcane 

processors can sell under the Sugar 

Marketing Allotment program, and by 

limiting the quantity of foreign sugar on 

the domestic market via sugar tariff-rate 

quotas (TRQ), subject to the minimum 

access levels established by 

international treaties. 

While some price support aspects of 

the sugar program may not be needed in 

2009 due to the predicted tight U.S. 

sugar market, other aspects of the Sugar 

Loan and Marketing Allotments for 

Sugar program will be implemented in 

FY 2009 and need this rule in order to 

operate. All of the changes in this rule 

are required by the 2008 Farm Bill, for 

which USDA has little or no discretion 

in when and how to implement. This 

rule makes changes to subparts A, B, C, 

D, and E of 7 CFR part 1435, ‘‘Sugar 

Program.’’ The Payment in Kind 

Program in subpart E will be moved to 

a new subpart F. A new subpart E on 

General Disposition of CCC Inventory 

and subpart G will be added in the 

subsequent Title IX rule and used to 

implement the Feedstock Flexibility 

Program. 

Changes to General Provisions 

(Subpart A) 

The extension of the domestic sugar 

program through the 2012 crop year is 

reflected in the revised section 1435.1, 

‘‘Applicability.’’ Also added to this 

section is the administration of a 

program to dispose of surplus sugar to 

bioenergy fuels production. 

Section 1435.2, ‘‘Definitions,’’ is 

updated and modified to reflect changes 

required by the 2008 Farm Bill. The 

definition of beet sugar is revised to 

implement the requirement in the 2008 

Farm Bill that sales of sugar processed 

from in-process beet sugar, such as thick 

juice, whether imported or domestic, 

used for domestic human consumption 

is subject to the processor’s sugar 

marketing allocation. This change also 

resulted in changes to the definitions of 

‘‘in-process beet sugar,’’ ‘‘in-process 


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cane sugar,’’ ‘‘overall allotment 

quantity,’’ ‘‘sugar,’’ and ‘‘sugar beet 

processor.’’ A definition for ‘‘human 

consumption’’ is added, using the 

definition in the 2008 Farm Bill. A 

definition for ‘‘proportionate share 

State’’ is added for clarification. The 

definition of ‘‘marketing’’ is revised to 

reflect the 2008 Farm Bill requirement 

that a sale of sugar to the Feedstock 

Flexibility Program is a marketing 

subject to a processor’s sugar marketing 

allocation. A definition of ‘‘cane sugar 

refiner’’ is modified to be consistent 

with Foreign Agricultural Service (FAS) 

regulations. 

Section 1435.3, ‘‘Maintenance and 

Inspection of Records,’’ is modified to 

reflect that CCC has no authority to 

inspect processor records and has 

instituted a data audit process, in lieu 

of inspection, to verify processor 

records. This audit process is explained 

in section 1435.200, ‘‘Information 

Reporting.’’ 

Changes to Sugar Loan Program 

(Subpart B) 

The regulations governing the Sugar 

Loan Program are modified to reflect the 

changes required by the 2008 Farm Bill. 

Section 1435.101, ‘‘Loan Rates,’’ sets 

forth the increased loan rates under the 

2008 Farm Bill. The national average 

loan rate for raw cane sugar produced 

from domestically-grown sugarcane is 

unchanged for the 2008 crop year, at 18 

cents per pound, but increases as 

follows for the subsequent years: 

• 18.25 cents per pound for the 2009 

crop year; 

• 18.50 cents per pound for the 2010 

crop year; 

• 18.75 cents per pound for the 2011 

crop year; and 

• 18.75 cents per pound for the 2012 

crop year. 

The national average loan rate for 

refined beet sugar produced from 

domestically-grown sugar beets remains 

unchanged for the 2008 crop year, but 

increases to 128.5 percent of the loan 

rate per pound of raw cane sugar for 

each of the crop years 2009 through 

2012. 

The eligibility requirements in section 

1435.102, ‘‘Eligibility Requirements,’’ 

are modified to exclude sugar processed 

from imported in-process sugars from 

eligibility for the loan program. The 

2008 Farm Bill now treats in-process 

beet sugar just like sugar beets; that is, 

as an input into the production of sugar. 

Since sugar produced from imported 

beets is not eligible for the loan 

program, neither is sugar produced from 

imported in-process beet sugar. Section 

1435.103, ‘‘Availability, Disbursement, 

and Maturity of Loans,’’ is revised to 

reflect the change in loan rate for 

supplemental loans. Instead of getting 

the loan rate in effect at the time the 

supplemental loan is made, 

supplemental loans will receive the loan 

rate that was in effect at the time the 

original loan was made. Section 

1435.105, ‘‘Loan Settlement and 

Foreclosure,’’ is updated to reflect that 

premiums or discounts may result from 

any differences in the sugar 

characteristics identified on the loan 

certification versus at the time of actual 

loadout of forfeited sugar. Storage 

payment rates paid by CCC on forfeited 

sugar loan collateral have also been 

added to section 1435.105. The 

minimum rate set by the 2008 Farm Bill 

is 15 cents per hundredweight for 

refined sugar and 10 cents per 

hundredweight for raw sugar, 

significantly above the rates 

administratively set by USDA of 10 

cents per hundredweight for refined 

sugar and 8 cents per hundredweight for 

raw sugar. 

Changes to Information Reporting and 

Recordkeeping Requirements 

(Subpart C) 

Subpart C, ‘‘Information Reporting 

and Recordkeeping Requirements,’’ is 

revised to reflect the 2008 Farm Bill’s 

requirement that USDA publish 

Mexican supply data and use estimates 

in its monthly WASDE report. The 2008 

Farm Bill also requires the WASDE 

report to include publicly available data 

on Mexican high fructose corn syrup 

production, consumption, and trade 

data. This rule also replaces the 

requirement in the regulation that all 

processors, refiners and importers must 

submit an annual audit to CCC. The new 

regulation allows CCC to select some, 

but not necessarily all, for audit. 

Changes to the Flexible Sugar 

Marketing Allotment Program 

(Subpart D) 

The 2008 Farm Bill significantly 

modified the Flexible Sugar Marketing 

Allotment Program. All of the changes 

to subpart D in this rule described 

below are required to implement the 

2008 Farm Bill. This section discusses 

the overall changes in the program and 

the implications of those changes first, 

then discusses the changes to specific 

sections of the regulations. 

The 2002 Farm Bill required USDA to 

set the overall allotment quantity (OAQ) 

by a formula that permitted domestic 

producers to receive a market share 

equal to the amount of domestic 

demand, less an import share of 1.532 

million tons. This allotment quantity 

had to be reduced, if necessary, to avoid 

the cost of potential forfeitures of sugar 

loan collateral. Allotments were to be 

suspended if the import share exceeded 

the 1.532 million tons allotted to it. 

Suspending allotments was expected to 

increase the likelihood of CCC 

expenditures as forfeitures under the 

price support loan program were 

constrained by the program—forfeitures 

are marketings credited against a 

processor’s allocation of the marketing 

allotment. Without an allotment 

program, processors could forfeit their 

entire sugar supply, if they so chose. 

The 2008 Farm Bill added another 

objective to the domestic allotment 

program, reinforcing USDA’s function to 

use the sugar program to provide for a 

balanced domestic sugar market. USDA 

must now set the domestic allotment 

quantity, subject to specific constraints, 

to ensure that there is an adequate 

supply of raw and refined sugar for the 

domestic market. This new objective in 

the domestic program complements the 

existing authority in chapter 17 of the 

Harmonized Tariff Schedule maintained 

by the United States International Trade 

Commission permitting USDA to 

increase the sugar TRQs if supply is 

determined to be ‘‘inadequate to meet 

domestic demand at reasonable prices.’’ 

Thus, USDA must continue to use the 

sugar program authorities, to the extent 

possible, to keep supply limited enough 

to avoid forfeitures, but large enough to 

provide an adequate supply. 

The Sugar Marketing Allotment 

program divides the domestic sugar 

market between sugar importers and 

domestic sugar beet and sugarcane 

processors. Importers are always 

expected to fill their share because the 

U.S. price of sugar is usually 

considerably above the world sugar 

price. If the domestic processors’ supply 

is inadequate to fill their allotment, then 

CCC must fill the deficit with its 

inventory; if it has no inventory, then 

CCC must reassign the unfilled market 

share to importers. The maximum 

market share reserved for imports under 

the 2002 Farm Bill, 1.532 million tons, 

was also the allotment program 

suspension threshold and did not 

include imports needed to make up for 

deficit domestic production. 

Under the 2002 Farm Bill, all types of 

imported sugar were eligible for 

reassignment of the deficit, including, 

but not limited to, TRQ raw sugar, TRQ 

refined sugar, Mexican imports, Central 

America Free Trade Agreement 

(CAFTA) imports, and other high-tier 

imports. At times, a reassignment meant 

new access to the U.S. sugar market, for 

example an increase in the TRQ. At 

other times, a reassignment meant 

acknowledging an existing import 

category that resulted in no new access, 


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such as Mexican sugar. USDA 

reassigned the surplus allotment to an 

import source consistent with the 

objective of balancing the domestic 

market, avoiding forfeitures and 

providing adequate supply at reasonable 

prices. If USDA determined that the 

market was not adequately supplied, 

then USDA would increase access 

through a TRQ increase. If USDA 

determined that the market would be 

adequately supplied with the imports 

already expected, then USDA would 

reassign the surplus allotment to those 

imports. The following is a table of the 

sources of reassigned surplus allotment 

during administration of the Sugar 

Marketing Allotment program under the 

2002 Farm Bill. 

REASSIGNMENT HISTORY

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 

(short tons, raw value) 

OAQ ......................................................... 8,663,000 8,250,000 8,680,000 9,350,000 8,750,000 8,950,000 

Beet Sugar ........................................ 4,534,340 4,483,875 4,717,580 4,776,380 4,755,625 4,864,325 

Cane Sugar ....................................... 3,954,660 3,766,125 3,670,208 2,981,620 3,540,375 3,626,533 

Reassignments: 

Reassign Cane Shortfall to CCC ...... 174,000 0 17,120 0 0 0 

Reassigned to Total Imports ............ 0 0 275,092 1,592,000 454,000 459,142 

Raw World Trade Organization 

(WTO) TRQ ............................ 0 0 84,447 745,000 250,000 ........................

Refined WTO TRQ .................... 0 0 69,933 509,921 58,581 70,000 

Mexico TRQ ............................... 0 0 0 276,000 86,419 0 

Mexico Non TRQ ....................... 0 0 120,713 0 0 389,142 

Non Program Imports ................ 0 0 0 61,079 59,000 0 

The 2008 Farm Bill changes the 

market sharing arrangements embodied 

in the Sugar Marketing Allotment 

program. The new objective that it must 

ensure adequate sugar supply means 

that when USDA sets the overall 

allotment quantity, it must be 

comfortable that the remaining share of 

domestic demand, up to 15 percent, will 

be satisfied. USDA cannot reassign 

surplus allotment to imports that would 

permit the non-allotment market share 

(15 percent) to be unfulfilled. Thus, for 

the new allotment program, USDA 

cannot reassign surplus allotment to 

imports that would count against the 15- 

percent import market share. The 2008 

Farm Bill also specifically requires that 

surplus allotment be reassigned to raw 

cane sugar imports only. Thus, the raw 

sugar TRQ, or raw sugar portion of 

CAFTA or Mexican imports, are now 

eligible as a source for reassignment. 

This still permits USDA significant 

flexibility in balancing the domestic 

market as these categories are expected 

to range between 1 to 2 million tons per 

year. Any imported refined sugar must 

be credited against the 15-percent 

import market share because it is not 

eligible for reassignment if domestic 

producers cannot fill their allotment. 

It should be noted that USDA’s 

increases in access to the domestic 

market do not necessarily mean 

domestic supplies will increase and 

prices will fall. Sugar must be 

physically available to fill the access. 

Likewise, USDA’s ability to restrict 

supply and raise prices is hampered by 

storage capacity. CCC sugar is stored in 

processor warehouses and storage 

capacity limits will cause the processors 

to reduce prices to avoid paying for 

expensive short term storage as the new 

crop is processed. CCC purchased sugar 

for considerably less than the forfeiture 

proceeds in 2000. 

The USDA budget baseline projects 

substantial costs to the sugar program 

because USDA’s ability to limit supply 

was curtailed by NAFTA, which 

deregulates sweetener trade across the 

U.S.-Mexican border. The U.S. 

advantage in high fructose corn syrup 

(HFCS) production was expected to 

result in an increased flow of U.S. HFCS 

into Mexico, creating a Mexican surplus 

in sugar that would result in increased 

Mexican sugar imports into the United 

States. The increased Mexican imports 

were expected to result in prices below 

the federal support level and forfeiture 

of sugar price support loan collateral. 

The 2008 Farm Bill addressed CCC’s 

options to dispose of surplus sugar in 

the new Feedstock Flexibility Program, 

located in Title IX of the 2008 Farm Bill. 

Section 1435.300, ‘‘Applicability,’’ 

now provides that marketings of sugar 

made from in-process beet sugar will be 

counted against a processor’s sugar 

marketing allocation. Before this 

change, which is required by the 2008 

Farm Bill, CCC considered in-process 

beet sugar as a sugar and counted 

marketings of in-process beet sugar 

against a processor’s allocation. This 

rule considers in-process beet sugar a 

feedstock from which sugar can be 

made, just as sugar beets or sugarcane 

are considered feedstocks for producing 

sugar. This change required minor edits 

for consistency to many sections in this 

subpart, as well as changes to the 

definitions section. 

Section 1435.302 is modified to 

reflect not only the 85 percent market 

share guarantee to domestic producers, 

but also CCC’s policy of requiring a 

processor to use its marketing allotment 

to participate in USDA’s sugar re-export, 

sugar containing products re-export, or 

polyhydric alcohol programs, and to sell 

sugar to CCC under the new Feedstock 

Flexibility Program. 

Section 1435.303, ‘‘Overall Allotment 

Quantity,’’ is removed from the 

regulations because it is now obsolete, 

and subsequent sections are renumbered 

accordingly. 

Section 1435.303, ‘‘The Adjustment of 

the Overall Allotment Quantity,’’ 

(formerly section 1435.304) has been 

modified to reflect the change in the 

2008 Farm Bill which restricts CCC from 

reducing the OAQ below 85 percent of 

human consumption. The 2002 Farm 

Bill, as mentioned earlier, allowed CCC 

to reduce the domestic share in times of 

a demand decrease, without a lower 

limit. 

Sections 1435.306, ‘‘Allocation of 

Marketing Allotments to Processors,’’ 

and 1435.307, ‘‘Transfer of Allocation,’’ 

have been reorganized for clarification 

and to reflect changes from the 2008 

Farm Bill. The provisions in these 

sections were formerly in §§ 1435.307 

and 1435.308. 

The updated § 1435.306, ‘‘Allocation 

of Marketing Allotments to Processors,’’ 

includes new provisions that exempt 

sugar made in FY 2009 from in-process 

beet sugar purchased in FY 2008. The 

marketing of domestic in-process beet 


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sugar in FY 2008 was subject to a 

processor’s FY 2008 allocation because, 

under the 2002 Farm Bill, in-process 

sugar was considered sugar subject to a 

processor’s allotment. After September 

30, 2008, the marketings of in-process 

beet sugar are no longer considered 

sugar subject to a processor’s allotment 

due to a change made by the 2008 Farm 

Bill. Section 359b(c)(1) of the 

Agricultural Adjustment Act of 1938, as 

amended by the 2008 Farm Bill, 

includes the marketing of sugar 

processed from in-process beet sugar in 

the section describing the coverage of 

allotments. The new provision in 

§ 1435.306 is required so that companies 

that purchased in-process sugar, sold 

under a FY 2008 allocation, are not 

caught in the transition to the new 

definition of sugar subject to allotment. 

Some of these companies may not have 

been beet processors with allotments. 

Without this new provision, these 

companies would be prevented from 

marketing the sugar processed from the 

in-process beet sugar. In the future, any 

company wishing to process in-process 

beet sugar into refined sugar must be a 

beet processor with an allocation of the 

beet sugar marketing allotment. 

The updated § 1435.307, ‘‘Transfer of 

allocation,’’ provides that for 

proportionate share States, growers may 

now move allocation between facilities 

as they change their sugarcane 

deliveries. Under the previous 

regulation, growers needed permission 

from the processor they were leaving to 

move allocation commensurate with 

their cane deliveries. CCC is 

establishing the signup period for 

growers to request CCC to move 

allocation as the month of May for the 

following cane harvest season. During 

that signup month, CCC expects the 

grower to reach agreement with its 

original facility as to the amount of 

production history the grower is 

requesting and entitled to move. If the 

petitioning grower does not supply CCC 

during the month of May with its 

history for the crop years 1997 through 

2003, certified by its original facility, 

CCC will refuse the grower’s petition to 

transfer allocation. Since growers in 

proportionate share States do not need 

permission from the facility they are 

leaving to move allocation associated 

with their production, provisions for 

them are no longer included in the 

‘‘Transfer of Allocation’’ section 

regarding facility closures. 

In light of proceedings in a court case, 

Amalgamated Sugar, LLC v. Vilsack, et 

al., the updated § 1435.307 (formerly 

§ 1435.308) is being amended to permit 

CCC wider discretion to determine that 

a processor has permanently terminated 

operations. In a decision dated February 

11, 2009, the U.S. Court of Appeals for 

the Ninth Circuit reversed a 

determination made by the Department 

transferring the sugar marketing 

allocation from one sugar processor to 

another sugar processor. The 

amendment permits CCC to make a 

determination that a sugar processor has 

permanently terminated operations, and 

transfer the allocation on the basis of a 

CCC determination, in addition to the 

other specified circumstances. 

This section also reflects an addition 

in the 2008 Farm Bill that allows the 

buyer and seller of a facility, rather than 

CCC, to choose the allocation amount to 

be transferred upon sale of the facility. 

Finally, § 1435.307 is modified to add a 

provision that was effective in the 2002 

Farm Bill, but not specified in the 

previous regulation, that a buyer of 

facilities may fill a production shortfall 

of its purchased facilities with beet 

sugar produced in other beet facilities it 

owns, if necessary. 

Section 1435.308, ‘‘New Entrants,’’ 

now specifies that in subsequent years 

after being assigned its initial allocation, 

the new entrant cane processor will be 

assigned an allocation that provides a 

fair, efficient, and equitable distribution 

of allocations from the allotment of the 

State within which the new entrant is 

located. In the case of cane processors 

in proportionate share States, the new 

entrant’s allocation in subsequent years 

will include any allocation acquired 

through the voluntary allocation transfer 

provisions of § 1435.307, ‘‘Transfer of 

Allocation.’’ This ‘‘New Entrants’’ 

section also implements a change from 

the 2008 Farm Bill that requires CCC to 

assign to a new entrant constructing a 

new or reopening an existing facility 

that has no allocation an allocation that 

enables it to achieve a facility utilization 

rate similar to other sugar beet 

processors. The 2002 Farm Bill 

specified a formula to determine the 

new allocation that is removed in this 

rule. This section also now provides 

that a new entrant acquiring a facility 

with production history and the 

company holding its allocation must 

agree on the allocation to be transferred; 

otherwise CCC will deny the new 

entrant an allocation. 

Section 1435.309, ‘‘Reassignment of 

Deficits,’’ is changed in this rule to 

restrict reassignment of production 

shortfall, after it has been determined 

that CCC cannot fill the allocation, to 

imports of raw cane sugar only. 

Section 1435.313, ‘‘Permanent 

Transfer of Acreage Base Histories 

Under Proportionate Shares,’’ now 

incorporates a new process to restore 

sugarcane base acreage lost to 

nonagricultural uses before May 13, 

2002 in proportionate share States. 

USDA will notify affected landowners 

within 90 days of USDA becoming 

aware of the conversion that the 

landowner has 90 days to transfer the 

base. It is not USDA’s responsibility to 

keep a vigilant watch for sugarcane base 

acreage converting to a nonagricultural 

use. If the landowner does not exercise 

his transfer rights, the grower of record 

will have 90 days after being notified by 

USDA to transfer the base. If the 

landowner or grower does not transfer 

the base, then the FSA county 

committee will take requests for the 

base and randomly assign to sugarcane 

farms in the county that are eligible and 

capable of accepting the acreage base. 

Any base remaining will go to the State 

FSA committee for dispersal. 

Section 1435.318, ‘‘Penalties and 

Assessments,’’ is also changed by this 

rule to include a provision for 

liquidated damages that was previously 

specified in section 1435.307. 

Redesignation of Subpart E, ‘‘Processor 

Sugar Payment-in-Kind (PIK) Program’’ 

The subpart on PIK is not changing 

with this rule. We will implement 

minor changes to PIK with the 

subsequent rule implementing Title IX 

to include provisions of the Feedstock 

Flexibility Program. This rule merely 

moves the PIK subpart from E to F, and 

reserves part E for a new subpart on 

‘‘General Disposition of CCC Inventory’’ 

that will be added with the Title IX rule. 

It makes sense to have the General 

disposition subpart appear in the CFR 

before the PIK subpart, because PIK is 

a specific kind of disposition program. 

This rule also reserves subpart G for the 

Feedstock Flexibility program sections 

that will be added with the Title IX rule. 

Notice and Comment 

These regulations are exempt from the 

notice and comment requirements of the 

Administrative Procedures Act (5 U.S.C. 

553), as specified in section 1601(c) of 

the 2008 Farm Bill, which requires that 

the regulations be promulgated and 

administered without regard to the 

notice and comment provisions of 

section 553 of title 5 of the United States 

Code or the Statement of Policy of the 

Secretary of Agriculture effective July 

24, 1971 (36 FR 13804) relating to 

notices of proposed rulemaking and 

public participation in rulemaking. 

Executive Order 12866 

The Office of Management and Budget 

(OMB) designated this rule as 

economically significant under 

Executive Order 12866 and, therefore, 

OMB reviewed this final rule. A costVerDate Nov<24>2008 16:36 Apr 03, 2009 Jkt 217001 PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 E:\FR\FM\06APR1.SGM 06APR1

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benefit assessment of this rule is 

summarized below and is available from 

the contact information above. 

Summary of Economic Impacts 

This rule implements two major 

changes in the sugar program resulting 

from the 2008 Farm Bill: Higher loan 

rates and a guaranteed market share. 

These are expected to have zero impact 

on federal costs for FY 2009 and FY 

2010. This is because baseline 

assumptions project FY 2011 to be the 

first year of surplus sugar in the 

marketplace. However, over the course 

of FY 2009 through FY 2018, federal net 

expenditures are expected to be $1.055 

billion more than if the 2002 Farm Bill 

provisions were still in place. This 

result is mostly driven by the increase 

in loan rates that increases the NAFTA 

floor price. While higher sugar prices in 

Mexico cause its manufacturers and 

consumers to substitute high fructose 

corn syrup for sugar, they also increase 

the grower incentive to plant more 

acreage to sugarcane. As a result, 

Mexican sugar exports to the U.S. are 

likely to increase over time, on average 

by 33 percent between 2009 and 2018. 

At the same time, U.S. production is 

likely to increase in response to high 

support levels. The loan rate increase is 

expected to increase sugar costs to 

consumers and sugar users by $1.4 

billion from 2009 to 2018. This cost is 

the increase in the loan rate multiplied 

by sugar use; the demand for sugar is 

assumed to be perfectly inelastic. 

Regulatory Flexibility Act 

This rule is not subject to the 

Regulatory Flexibility Act since CCC is 

not required to publish a notice of 

proposed rulemaking for this rule. 

Environmental Review 

FSA has determined that these 

changes would not constitute a major 

Federal action that would significantly 

affect the quality of the human 

environment. Therefore, in accordance 

with the provisions of the National 

Environmental Policy Act (NEPA), 42 

U.S.C. 4321–4347, the regulations of the 

Council on Environmental Quality (40 

CFR parts 1500–1508), and FSA 

regulations for compliance with NEPA, 

specifically 7 CFR part 799.10(b)(2)(vii), 

no environmental assessment or 

environmental impact statement will be 

prepared. 

Executive Order 12372 

This program is not subject to 

Executive Order 12372, which requires 

consultation with State and local 

officials. See the notice related to 7 CFR 

part 3015, subpart V, published in the 

Federal Register on June 24, 1983 (48 

FR 29115). 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988. This rule is not 

retroactive and it does not preempt State 

or local laws, regulations, or policies 

unless they present an irreconcilable 

conflict with this rule. Before any 

judicial action may be brought regarding 

the provisions of this rule the 

administrative appeal provisions of 7 

CFR parts 11 and 780 must be 

exhausted. 

Executive Order 13132 

The policies contained in this rule do 

not have any substantial direct effect on 

states, on the relationship between the 

national government and the states, or 

on the distribution of power and 

responsibilities among the various 

levels of government. Nor does this rule 

impose substantial direct compliance 

costs on state and local governments. 

Therefore, consultation with the states 

is not required. 

Unfunded Mandates 

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 government or 

the private sector. In addition, CCC was 

not required to publish a notice of 

proposed rulemaking for this rule. 

Therefore, this rule is not subject to the 

requirements of sections 202 and 205 of 

UMRA. 

Small Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA) 

Section 1601(c)(3) of the 2008 Farm 

Bill requires that the Secretary use the 

authority in section 808 of title 5, 

United States Code, which allows an 

agency to forgo SBREFA’s usual 60-day 

Congressional Review delay of the 

effective date of a major regulation if the 

agency finds that there is a good cause 

to do so. Accordingly, this rule is 

effective upon publication in the 

Federal Register. 

Paperwork Reduction Act 

The regulations in this rule are 

exempt from the requirements of the 

Paperwork Reduction Act (44 U.S.C. 

Chapter 35), as specified in section 

1601(c)(2) of the 2008 Farm Bill, which 

provides that these regulations be 

promulgated and administered without 

regard to the Paperwork Reduction Act. 

E-Government Act Compliance 

CCC is committed to complying with 

the E–Government Act, to promote the 

use of the Internet and other 

information technologies to provide 

increased opportunities for citizen 

access to Government information and 

services, and for other purposes. 

List of Subjects in 7 CFR Part 1435 

Loan programs—agriculture, 

Penalties, Price support programs, 

Reporting and recordkeeping 

requirements, Sugar. 

■ For the reasons discussed above, this 

rule amends 7 CFR part 1435 as follows: 

PART 1435—SUGAR PROGRAM 

■ 1. Revise the authority for part 1435 

to read as follows: 

Authority: 7 U.S.C. 1359aa–1359jj and 

7272; 15 U.S.C. 714b and 714c. 

Subpart A—General Provisions 

■ 2. Amend § 1435.1 as follows: 

■ a. Amend the introductory text by 

removing the years ‘‘2002–2007’’ and 

adding in their place the years ‘‘2008 

through 2012,’’ and 

■ b. Revise paragraph (d) to read as set 

forth below. 

§ 1435.1 Applicability. 

* * * * * 

(d) Administer an inventory 

disposition program to sell CCC 

inventory to bioenergy producers and 

exchange CCC inventory for processor 

reductions in production or certificates 

of quota entry. 

■ 3. Amend § 1435.2 as follows: 

■ a. Add new definitions, in 

alphabetical order, for ‘‘CCC,’’ 

‘‘facility,’’ ‘‘human consumption,’’ ‘‘inprocess beet sugar,’’ ‘‘in-process cane 

sugar,’’ and ‘‘proportionate share State,’’ 

to read as set forth below, 

■ b. Remove the definition for ‘‘inprocess sugar,’’ and 

■ c. Revise the definitions of ‘‘beet 

sugar,’’ ‘‘cane sugar refiner,’’ ‘‘market or 

marketing,’’ ‘‘overall allotment 

quantity,’’ ‘‘sugar,’’ and ‘‘sugar beet 

processor’’ to read as set forth below. 

§ 1435.2 Definitions. 

* * * * * 

Beet sugar means sugar that is 

processed directly or indirectly from 

sugar beets, sugar beet molasses, or inprocess beet sugar, whether produced 

domestically or imported. 

* * * * * 

Cane sugar refiner means any person 

in the U.S. Customs Territory that 

refines raw cane sugar through 

affination or defecation, clarification, 

and further purification by absorption or 

crystallization. 

* * * * * 


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CCC means the Commodity Credit 

Corporation. 

* * * * * 

Facility means a factory, mill, or 

plant. 

* * * * * 

Human consumption means sugar for 

use in human food, beverages, or similar 

products. 

* * * * * 

In-process beet sugar means the 

intermediate sugar-containing product, 

as CCC determines, produced from 

processing sugar beets. Like sugar beets, 

it is considered an input into the 

production of sugar regardless of 

whether it is produced domestically or 

imported. 

In-process cane sugar means the 

intermediate sugar-containing product, 

as CCC determines, produced from the 

processing of sugarcane. It is not raw 

sugar, nor is it suitable for direct human 

consumption. 

Market or marketing means the 

transfer of title associated with the sale 

or other disposition of sugar for human 

consumption in United States 

commerce. A marketing also includes a 

sale of sugar under the Feedstock 

Flexibility Program, the forfeiture of 

sugar loan collateral under the Sugar 

Loan Program, exportation of sugar from 

the United States Customs Territory 

eligible to receive credits under reexport 

programs for refined sugar or sugarcontaining products administered by the 

Foreign Agricultural Service, or the sale 

of sugar eligible to receive credit for the 

production of polyhydric alcohol under 

the Polyhydric Alcohol program (see 

part 1530 of this title) administered by 

the Foreign Agricultural Service, and for 

any integrated processor and refiner, the 

movement of raw cane sugar into the 

refining process. 

* * * * * 

Overall allotment quantity means, on 

a national basis, the total quantity of 

domestically produced sugar, raw value, 

processed from sugarcane, sugar beets or 

in-process beet sugar (whether the sugar 

beets or in-process beet sugar are 

produced domestically or imported), 

and the raw value equivalent of sugar in 

sugar products, that is permitted to be 

marketed by processors, during a crop 

year or other period in which marketing 

allotments are in effect. 

* * * * * 

Proportionate share State means a 

State with an established allotment and 

more than 250 sugarcane producers in 

the State, other than Puerto Rico. 

* * * * * 

Sugar means any grade or type of 

saccharine product derived, directly or 

indirectly, from sugarcane, sugar beets, 

sugarcane molasses, sugar beet molasses 

or in-process beet sugar whether 

domestically produced or imported and 

consisting of, or containing, sucrose or 

invert sugar, including raw sugar, 

refined crystalline sugar, edible 

molasses, edible cane syrup, liquid 

sugar, and in-process cane sugar. 

Sugar beet processor means a person 

who commercially produces sugar, 

directly or indirectly, from sugar beets, 

sugar beet molasses, or in-process beet 

sugar. 

* * * * * 

§ 1435.3 [Amended] 

■ 4. Amend § 1435.3 as follows: 

■ a. In the heading, remove the words 

‘‘and inspection,’’ 

■ b. Remove paragraph (a), 

■ c. Redesignate paragraph (b) as 

paragraph (a), 

■ d. In newly redesignated paragraph (a) 

introductory text, remove the words 

‘‘the records shall’’ and add the words 

‘‘records required by CCC to operate the 

sugar program must’’ in their place, and 

■ d. Reserve paragraph (b). 

Subpart B—Sugar Loan Program 

■ 5. Revise the heading of Subpart B to 

read as set forth above. 

■ 6. Amend § 1435.101 by revising 

paragraphs (a) and (b) to read as follows: 

§ 1435.101 Loan rates. 

(a) The national average loan rate for 

raw cane sugar produced from 

domestically grown sugarcane is: 18 

cents per pound for the 2008 crop year; 

18.25 cents per pound for the 2009 crop 

year; 18.50 cents per pound for the 2010 

crop year; 18.75 cents per pound for the 

2011 crop year; and 18.75 cents per 

pound for the 2012 crop year. 

(b) The national average loan rate for 

refined beet sugar from domestically 

grown sugar beets is: 22.90 cents per 

pound for the 2008 crop year; and a rate 

equal to 128.5 percent of the loan rate 

per pound of raw cane sugar for each of 

the crop years 2009 through 2012. 

* * * * * 

§ 1435.102 [Amended] 

■ 7. Amend § 1435.102 in paragraph 

(c)(3) by adding the words ‘‘in-process 

sugars,’’ immediately after the word 

‘‘beets,’’. 

■ 8. Amend § 1435.103 by revising 

paragraph (f) to read as follows: 

§ 1435.103 Availability, disbursement, and 

maturity of loans. 

* * * * * 

(f) Processors receiving loans in July, 

August, or September may repledge the 

sugar as collateral for a supplemental 

loan. Such supplemental loan must: 

(1) Be requested by the processor 

during the following October; 

(2) Be made at the loan rate in effect 

at the time the first loan was made; and 

(3) Mature in 9 months less the 

number of months that the first loan was 

in effect. 

§ 1435.104 [Amended] 

■ 9. Amend § 1435.104 as follows: 

■ a. Remove paragraph (c)(2) and 

■ b. Redesignate paragraphs (c)(3) and 

(c)(4) as paragraphs (c)(2) and (c)(3), 

respectively. 

■ 10. Amend § 1435.105 as follows: 

■ a. Revise paragraph (b) to read as set 

forth below, 

■ b. In paragraph (c)(2), add the word 

‘‘before’’ immediately before the words 

‘‘the processor,’’ 

■ c. In paragraph (f), add the word ‘‘next 

business’’ before the word ‘‘day,’’ and 

■ d. Add paragraph (j) to read as set 

forth below. 

§ 1435.105 Loan settlement and 

foreclosure. 

* * * * * 

(b) Forfeiture of sugar loan collateral 

will be accepted as payment in full of 

the principal and interest due under a 

nonrecourse loan, subject to applicable 

premiums and discounts based on the 

difference between specifications 

reported on the sugar loan certification 

report and actual loadout 

characteristics. 

* * * * * 

(j) The CCC rates for the storage of 

forfeited sugar to approved warehouses 

for each crop year of 2008 through 2011 

will be at least: 

(1) For refined sugar, 15 cents per 

hundredweight of refined sugar per 

month; and 

(2) For raw cane sugar, 10 cents per 

hundredweight of raw cane sugar per 

month. 

(3) For 2012 and subsequent crop 

years, rates for the storage of forfeited 

sugar will revert to those used before 

June 18, 2008. 

(4) For sugar located in space not 

approved by CCC for storage, the 

payment rate will be zero until such 

time as the processor delivers such 

sugar to a CCC-approved warehouse. 

Subpart C—Information Reporting and 

Recordkeeping Requirements 

■ 11. Amend § 1435.200 as follows: 

■ a. In paragraph (a), second sentence, 

remove the words ‘‘made by’’ and add, 

in their place, the word ‘‘due,’’ 

■ b. Revise paragraph (e) to read as set 

forth below, 


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■ c. Redesignate paragraphs (f), (g), and 

(h) as (h), (i), and (j), respectively, 

■ d. Add paragraphs (f) and (g) to read 

as set forth below, and 

■ e. Revise newly redesignated 

paragraph (i) to read as set forth below. 

§ 1435.200 Information reporting. 

* * * * * 

(e) Importers of sugars, syrups, or 

molasses to be used for domestic human 

consumption or to be used for the 

extraction of sugar for domestic human 

consumption must report such 

information as CCC requires, including 

the quantities of the products imported 

and the sugar content or equivalent of 

the products. 

(f) The Secretary will collect 

information on the production, 

consumption, stocks and trade of sugar 

in Mexico and publish the data in each 

edition of the World Agricultural 

Supply and Demand Estimates report. 

(g) The Secretary will collect publicly 

available information on the production, 

consumption, and trade of high fructose 

corn syrup in Mexico and publish the 

data in each edition of the World 

Agricultural Supply and Demand 

Estimates report. 

* * * * * 

(i) By November 20 of each year, sugar 

beet processors, sugarcane processors, 

sugarcane refiners, and importers of 

sugars, syrups, and molasses, as selected 

by CCC, will submit to CCC a report, as 

specified by CCC, from an independent 

Certified Public Accountant that 

reviews its information submitted to 

CCC during the previous October 1 

through September 30 period. 

* * * * * 

§ 1435.201 [Amended] 

■ 12. Amend § 1435.201 in paragraph 

(a) by removing the reference 

‘‘§ 1435.200’’ and adding, in its place, 

the references ‘‘§ 1435.200(a) through 

(e).’’ 

Subpart D—Flexible Marketing 

Allotments for Sugar 

■ 13. Amend § 1435.300 as follows: 

■ a. Revise paragraphs (a)(1) and (b) to 

read as set forth below and 

■ b. In paragraph (a)(2), remove the 

words ‘‘domestically produced.’’ 

§ 1435.300 Applicability. 

(a) * * * 

(1) Processor marketings of sugar 

domestically processed from sugar beets 

or in-process beet sugar, whether such 

sugar beets or in-process beet sugar were 

produced domestically or imported, 

* * * * * 

(b) This subpart does not apply to 

marketing imported raw or refined 

sugar. 

* * * * * 

■ 14. Amend § 1435.301 as follows: 

■ a. Revise paragraphs (a)(1) and (a)(4) 

to read as set forth below and 

■ b. Amend paragraph (a)(3) by 

removing the words ‘‘available for 

consumption from’’ and adding in their 

place the words ‘‘used for human 

consumption in the United States 

from.’’ 

§ 1435.301 Annual estimates and quarterly 

re-estimates. 

(a) * * * 

(1) Quantity of sugar that will be 

subject to human consumption in the 

United States during the crop year; 

* * * 

(4) Quantity of sugar that will be 

available from domestically processed 

sugarcane, sugar beets, and in-process 

beet sugar; and 

* * * * * 

■ 15. Revise § 1435.302 and its heading 

to read as follows: 

§ 1435.302 Establishment of allotments. 

(a) By the beginning of the crop year, 

CCC will establish the overall allotment 

quantity, beet sugar and cane sugar 

allotments, State cane sugar allotments, 

and allocations for processors marketing 

sugar domestically processed from 

sugarcane, sugar beets, or in-process 

beet sugar, whether the sugar beets or 

in-process beet sugar is domestically 

produced or imported at a level: 

(1) That is sufficient to maintain raw 

and refined sugar prices above 

minimum prices to avoid forfeiture of 

loans to the CCC, but 

(2) Not less that 85 percent of 

estimated quantity of sugar for domestic 

human consumption for the crop year. 

(b) Determinations under this section 

to establish marketing allotments will be 

published in the Federal Register and 

accompanied by a statement of the 

reasons for the determination. 

■ 16. Remove § 1435.303 and 

redesignate §§ 1435.304 through 

1435.308 as §§ 1435.303 though 

1435.307, respectively. 

■ 17. Amend newly redesignated 

§ 1435.303 by revising paragraphs (a) 

and (b) to read as follows: 

§ 1435.303 Adjustment of the Overall 

Allotment Quantity. 

(a) The overall allotment quantity may 

be adjusted, as CCC determines 

appropriate, but never to a quantity less 

than 85 percent of the estimated 

quantity of sugar for domestic human 

consumption for the crop year: 

(1) To avoid forfeiture of sugar loan 

collateral to CCC, 

(2) Ensure adequate supplies of raw 

and refined sugar in the domestic 

market, and, 

(3) To reflect changes in estimated 

sugar consumption, stocks, production, 

or imports based on re-estimates under 

§ 1435.301. 

(b) Determinations to adjust the 

overall allotment quantity will be 

published in the Federal Register and 

accompanied by a statement of the 

reasons for the determination. 

* * * * * 

§ 1435.305 [Amended] 

■ 18. Amend newly redesignated 

§ 1435.305, in paragraph (b), by 

removing the reference ‘‘§ 1435.308(f)’’ 

and adding, in its place, the reference 

‘‘§ 1435.308.’’ 

■ 19. Amend newly redesignated 

§ 1435.306 as follows: 

■ a. In paragraph (a) introductory text, 

add the words ‘‘, other than a new 

entrant’s,’’ before the words ‘‘of the beet 

allotment,’’ 

■ b. Revise paragraphs (b), (e) 

introductory text, (e)(1), and (e)(2) to 

read as set forth below, 

■ c. Revise paragraph (g) to read as set 

forth below, and 

■ d. Add paragraph (h) to read as set 

forth below. 

§ 1435.306 Allocation of marketing 

allotments to processors. 

* * * * * 

(b) Each sugarcane processor’s, other 

than a new entrant’s, allocation from a 

State cane sugar allotment will be 

calculated as the cane processor’s share 

times the State cane sector allotment. 

(1) Each cane processor’s share will be 

calculated as the processor’s production 

base divided by the sum of the State’s 

processor production bases. 

(2) A processor’s production base is 

the sum of 0.50 times its ability to 

market plus 0.25 times its past 

processings plus 0.25 times its past 

marketings. These weights may be 

adjusted as CCC deems appropriate for 

the crop year. 

* * * * * 

(e) Paragraph (d) of this section will 

not apply to: 

(1) Any sugar marketings to facilitate 

the export of sugar or sugar-containing 

products as long as such exports are not 

eligible to receive credits under reexport 

programs administered by the Foreign 

Agricultural Service for refined sugar or 

sugar-containing products; 

(2) Any sugar marketings for 

nonhuman consumption, except for the 

sale of sugar for the production of 

ethanol or other bioenergy under the 


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Feedstock Flexibility program or the 

sale of sugar for the production of 

polyhydric alcohol under the 

Polyhydric Alcohol program 

administered by the Foreign 

Agricultural Service; and 

* * * * * 

(g) Paragraph (d) of this section also 

will not apply to the marketing of beet 

sugar processed from purchased inprocess beet sugar if the processor 

purchased the in-process beet sugar 

before October 1, 2008. 

(h) A sugar beet processor allocated a 

share of the beet sugar allotment may 

use only beet sugar to fill such 

allocation. A sugarcane processor 

allocated a share of the cane sugar 

allotment may only use cane sugar to fill 

such allocation. 

■ 20. Revise newly redesignated 

§ 1435.307 to read as follows: 

§ 1435.307 Transfer of allocation. 

(a) If a sugarcane processing facility is 

sold or transferred to another owner or 

is closed as part of a corporate 

consolidation CCC will transfer the 

allotment allocation to the purchaser or 

successor. 

(b) In proportionate share States, 

allocations, based on the number of 

acres of sugarcane base being transferred 

and the pro rata amount reflecting the 

grower’s contribution to allocation of 

the processor for the sugarcane base 

being transferred, will be transferred 

between facilities if the transfers are 

based on: 

(1) Written consent of the crop-share 

owners, or their representatives, 

(2) Written certification from the 

processor that will accept the additional 

sugarcane deliveries that its processing 

capacity will not be exceeded, 

(3) CCC will only consider requests 

for transfer of allocation submitted 

during the month of May. The request 

must include the grower’s sugar 

production history for crop years 1997 

through 2003. The facility with the 

grower’s history will be required to 

certify the history when requested by 

the grower, and 

(4) Allocation transfers will be 

effective for the next fiscal year after the 

request is submitted to CCC, that is 

beginning October 1. 

(c) If a sugar beet processing facility 

or a sugarcane processing facility 

located in a non-proportionate share 

State is closed, and the growers that 

delivered their crops to the closed 

facility elect to deliver their crops to 

another processor, the growers may 

petition the Executive Vice President, 

CCC, to transfer their share of the 

allocation from the processor that closed 

the facility to their new processor. If 

CCC approves transfer of the allocations, 

it will distribute the closed facility’s 

allocation based on the contribution of 

the growers’ production history to the 

closed facility’s allocation. CCC may 

grant the allocation transfer upon: 

(1) Written request by a grower to 

transfer allocation, 

(2) Written approval of the processor 

that will accept the additional 

deliveries, 

(3) Evidence satisfactory to CCC that 

the new processor has the capacity to 

accommodate the production of 

petitioning growers, and 

(4) Determinations by the CCC will be 

made within 60 days after the filing of 

the petition. 

(d) Subject to a transfer of allocation, 

if any, described in paragraph (c) of this 

section being completed, CCC will 

consider a processor to be permanently 

terminated and eliminate the 

processor’s remaining allocation and 

distribute it to all other processors on a 

pro-rata basis when the processor: 

(1) Has been dissolved, 

(2) Has been liquidated in a 

bankruptcy proceeding, 

(3) Has not processed sugarcane or 

sugar beets for 2 consecutive crop years, 

(4) Has notified CCC that the 

processor has permanently terminated 

operations, or 

(5) Has been determined by CCC to 

have permanently terminated 

operations. 

(e) If a processor of beet sugar 

purchases all the assets of another 

processor, then CCC will immediately 

transfer allocation commensurate with 

the purchased facilities’ production 

history, unless the allocation has 

already been transferred under 

paragraph (d) of this section. 

(f) If a processor of beet sugar 

purchases some, but not all, of the assets 

of another processor, then CCC will 

assign a pro rata portion of the 

allocation to the buyer to reflect the 

historical contribution of the sold 

facilities, unless the buyer and seller 

have agreed upon a different allocation 

amount. 

(1) The assignment of the allocation 

will apply to the crop year in which the 

sale occurs and for each subsequent 

year. 

(2) The buyer of the facilities as 

specified in paragraph (e) of this section 

may fill the assigned allocation with 

production from other facilities it owns 

if the purchased facilities lack the 

production to fill the assigned 

allocation. 

■ 21. Add § 1435.308 to read as follows: 

§ 1435.308 New entrants. 

(a) The Secretary may assign a new 

entrant sugarcane processor an 

allocation that provides a fair, efficient, 

and equitable distribution of allocations: 

(1) Applicants must demonstrate their 

ability to process, produce, and market 

sugar for the applicable crop year, 

(2) CCC will consider any adverse 

effects of the allocation upon existing 

processors and producers, 

(3) CCC will conduct a hearing on a 

new entrant application if an interested 

processor or grower requests a hearing, 

(4) A new entrant’s allocation is 

limited to no more than 50,000 short 

tons, raw value, for the first crop year, 

and 

(5) A new entrant will be provided, as 

determined by CCC: 

(i) A share of its State’s cane allotment 

if the processor is located in Hawaii, 

Florida, Louisiana, or Texas or 

(ii) A share of the overall mainland 

cane allotment if the processor is 

located in any mainland State not listed 

in paragraph (a)(5)(i) of this section. 

(b) For proportionate share States, 

CCC will establish proportionate shares 

for the sugarcane required to fill the 

allocation. 

(c) If a new entrant beet processor 

constructs a new facility or reopens a 

facility that currently has no allocation, 

but last produced beet sugar from sugar 

beets and sugar beet molasses prior to 

the 1998 crop year, CCC will: 

(1) Assign an allocation to the new 

entrant to enable it to achieve a facility 

utilization rate comparable to other 

similarly-situated sugar beet processors 

and 

(2) Reduce all other beet processor 

allocations by a like amount on a pro 

rata basis. 

(d) If a new entrant acquires an 

existing facility with production history 

that processed sugar beets for the 1998 

or subsequent crop year, CCC will: 

(1) Assign the allocation to the buyer 

to reflect the historical contribution of 

the sold facilities, unless the buyer and 

seller have agreed upon a different 

allocation amount, or 

(2) If the new entrant and the 

processor holding the allocation of the 

existing facility cannot agree on an 

allocation amount, the new entrant will 

be denied a beet sugar allocation. 

§ 1435.309 [Amended] 

■ 22. Amend § 1435.309, paragraphs 

(c)(4) and (e)(3), by adding the words 

‘‘of raw cane sugar’’ at the end of each 

paragraph. 

■ 23. Amend § 1435.310 as follows: 

■ a. In paragraph (b)(1)(i)(A), add the 

word ‘‘or’’ at the end, 

■ b. In paragraph (b)(1)(i)(B), remove the 

word ‘‘or’’, 


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■ c. Remove paragraph (b)(1)(i)(C) and 

■ d. Remove paragraph (b)(2) and 

redesignate paragraph (b)(3) as 

paragraph (b)(2). 

§ 1435.312 [Amended] 

■ 24. Amend § 1435.312, paragraph (a), 

first sentence, by adding the words 

‘‘(meaning only those varieties 

dedicated to the production of 

sugarcane to produce sugar for human 

consumption)’’ immediately after the 

word ‘‘seed.’’ 

■ 25. Amend § 1435.313 as follows: 

■ a. Redesignate paragraphs (b) and (c) 

as paragraphs (a)(1) and (a)(2), 

respectively, and 

■ b. Add paragraph (b) to read as set 

forth below: 

§ 1435.313 Permanent transfer of acreage 

base histories under proportionate shares. 

* * * * * 

(b) Sugarcane acreage base that has 

been converted to nonagricultural use 

on or before May 13, 2002, may be 

transferred to other land suitable for the 

production of sugarcane under the 

following terms: 

(1) CCC must notify 1 or more affected 

landowners within 90 days of becoming 

aware of the conversion, of their rights 

to transfer the base to 1 or more farms 

owned by the landowner; 

(2) The landowner has 90 days from 

the date the landowner was notified to 

transfer the base; 

(3) If the landowner does not exercise 

this transfer right, the grower of record 

will have 90 days after being notified by 

CCC to transfer the base to 1 or more 

farms owned by the grower; 

(4) If the transfers as specified under 

paragraphs (b)(2) or (3) of this section 

are not accomplished during the 

specified periods, FSA county 

committee will place the base into a 

pool for possible reassignment to other 

farms; 

(5) After providing notice to farm 

owners, operators and growers of record 

in the county, the committee will accept 

requests from farm owners, operators, 

and growers in the county; 

(6) The county committee will assign 

the base to other sugarcane farms in the 

county that are eligible and capable of 

accepting the acreage base, based on a 

random drawing among requests 

received under paragraph (b)(5) of this 

section; 

(7) Any unassigned base will be made 

available to the State FSA committee 

and be allocated to remaining FSA 

county committees in the State 

representing counties with farms 

eligible for assignment of the base, 

based on a random drawing; and 

(8) After the acreage base has been 

reassigned, the acreage base will remain 

on the farm and subject to the transfer 

provisions of paragraph (a) of this 

section. 

■ 26. Amend § 1435.318 as follows: 

■ a. Revise paragraph (a) to read as set 

forth below, 

■ b. Redesignate paragraphs (b) through 

(e) as paragraphs (c) through (f), 

respectively, and 

■ c. Add paragraph (b) to read as set 

forth below. 

§ 1435.318 Penalties and assessments. 

(a) Any sugar beet or sugarcane 

processor who knowingly markets sugar 

or sugar products in excess of the 

processor’s allocation will be liable to 

CCC for a civil penalty in an amount 

equal to 3 times the U.S. market value, 

at the time the violation was committed, 

of that quantity of sugar involved in the 

violation. 

(b) CCC may assess liquidated 

damages, as specified in a surplus 

allocation survey and agreement, with 

respect to a surplus allocation still 

existing after the end of a crop year if 

the processor had a surplus allocation 

because the processor provided 

incomplete or erroneous information to 

CCC. 

Subpart E—[Redesignated and 

Reserved] 

■ 27. Redesignate subpart E, consisting 

of §§ 1435.400 through 1435.405, as 

subpart F and reserve subpart E. 

Subpart F—Processor Sugar PaymentIn-Kind (PIK) Program 

§§ 1435.400 through 1435.405 [Amended] 

■ 28. In newly redesignated subpart F, 

redesignate §§ 1435.400 through 

1435.405 as §§ 1435.500 through 

1435.505, respectively. 

Subpart G—[Added and Reserved] 

■ 29. Reserve subpart G. 

Signed at Washington, DC, on March 31, 

2009. 

Dennis J. Taitano, 

Acting Executive Vice President, Commodity 

Credit Corporation. 

[FR Doc. E9–7633 Filed 4–3–09; 8:45 am] 

BILLING CODE 3410–05–P 

DEPARTMENT OF HOMELAND 

SECURITY 

U.S. Citizenship and Immigration 

Services 

8 CFR Part 208 

[CIS No. 2440–08; DHS Docket No. USCIS 

2008–0022] 

RIN 1615–AB59 

Forwarding of Affirmative Asylum 

Applications to the Department of 

State 

AGENCY: U.S. Citizenship and 

Immigration Services, DHS. 

ACTION: Final rule. 

SUMMARY: The Department of Homeland 

Security (DHS) is amending its 

regulations to alter the process by which 

it forwards Form I–589, Application for 

Asylum and Withholding of Removal, 

for asylum applications filed 

affirmatively with U.S. Citizenship and 

Immigration Services (USCIS) to the 

Department of State (DOS). The 

affirmative asylum process allows 

individuals, who are physically present 

in the United States, regardless of their 

manner of arrival and regardless of their 

current immigration status, to apply for 

asylum. The current regulation requires 

USCIS (formerly Immigration and 

Naturalization Service (INS)) to forward 

to DOS a copy of each completed 

asylum application it receives. This rule 

provides that USCIS will no longer 

forward all affirmative asylum 

applications to DOS. Instead, USCIS 

will send affirmative asylum 

applications to DOS only when USCIS 

believes DOS may have country 

conditions information relevant to the 

case. This change will increase the 

efficiency of DOS’ review of asylum 

applications. Additionally, in 

accordance with the Homeland Security 

Act, this rule revises references to 

legacy INS in 8 CFR 208.11. 

DATES: Effective date: This final rule is 

effective April 6, 2009. 

Comment date: Written comments 

must be submitted on or before June 5, 

2009 in order to be assured of 

consideration. 

ADDRESSES: The public may submit 

comments, identified by DHS Docket 

No. USCIS–2008–0022, by any of the 

following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Chief, Regulatory 

Management Division, U.S. Citizenship 

and Immigration Services, Department 

of Homeland Security, 111 


pwalker on PROD1PC71 with RULES