15644 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Rules and Regulations 

TABLE I 

Variety Regulation period Minimum grade 

Minimum 

diameter 

(inches) 

(1) (2) (3) (4) 

* * * * * * * 

Grapefruit.

* * * * * * * 

Seedless, except red ............................... On and after 9/01/94 ............................... U.S. No. 1 ............................................... 35⁄16

* * * * * * * 

* * * * * PART 944—FRUITS; IMPORT 

REGULATIONS 

■ 3. In § 944.106, the table in paragraph 

(a) is amended by revising the entry for 

‘‘Seedless, except red’’ to read as 

follows: 

§ 944.106 Grapefruit import regulation. 

(a) * * * 

Grapefruit classification Regulation period Minimum grade 

Minimum 

diameter 

(inches) 

(1) (2) (3) (4) 

* * * * * * * 

Seedless, except red ............................... On and after 9/01/94 ............................... U.S. No. 1 ............................................... 35⁄16

* * * * * 

Dated: April 1, 2009. 

Robert C. Keeney, 

Acting Associate Administrator, Agricultural 

Marketing Service. 

[FR Doc. E9–7822 Filed 4–6–09; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF AGRICULTURE 

Commodity Credit Corporation 

7 CFR Parts 1421 and 1434 

RIN 0560–AH87 

Marketing Assistance Loans and Loan 

Deficiency Payments 

AGENCY: Commodity Credit Corporation, 

USDA. 

ACTION: Final rule. 

SUMMARY: The Commodity Credit 

Corporation (CCC) is revising 

regulations as required by the Food, 

Conservation, and Energy Act of 2008 

(the 2008 Farm Bill) to administer the 

Marketing Assistance Loans (MAL) and 

Loan Deficiency Payments (LDP) 

programs for wheat, feed grains, 

soybeans, other oilseeds, peanuts, pulse 

crops, honey, wool and mohair. The 

2008 Farm Bill generally extends the 

existing programs with some changes 

that are implemented in this rule. The 

amendments in this rule will add large 

chickpeas, beginning with the 2009 crop 

year, to the list of pulse crops eligible 

for assistance and provide separate rates 

for long and medium grain rice 

beginning with the 2008 crop year. The 

addition of large chickpeas may increase 

the number of farmers and ranchers who 

may receive FSA and CCC program 

benefits. The amendments will also, in 

addition, to other amendments to the 

old rule and clarifications, allow 

producers to store collateral in Federally 

and State-licensed warehouses that do 

not have a CCC storage agreement, 

which may reduce redundant licensing 

costs for warehouse operators while 

allowing producers a greater choice of 

warehouses. 

DATES: Effective Date: April 6, 2009. 

FOR FURTHER INFORMATION CONTACT: Jose 

R. Gonzalez, Program Manager, 

Marketing Assistance Loans and Loan 

Deficiency Payment Programs or Tonye 

B. Gross, Program Manager, Peanut 

Program, Price Support Division, FSA/ 

USDA, STOP 0512, 1400 Independence 

Ave. SW., Washington, DC 20250–0512; 

telephone (202) 690–2534; or (202) 720– 

4319, facsimile (202) 690–3307; e-mails: 

Jose.Gonzalez@wdc.usda.gov or 

Tonye.Gross@wdc.usda.gov. Persons 

with disabilities who require alternative 

means of communication (Braille, large 

print, audio tape, etc.) should contact 

the USDA Target Center at (202) 720– 

2600 (voice and TDD). 

SUPPLEMENTARY INFORMATION: 

Background 

The 2008 Farm Bill extends MAL and 

LDP programs for the 2008 through 2012 

crop years. The 2008 Farm Bill generally 

extends the existing programs, with 

some minor changes that are 

implemented in this rule. In some cases, 

the 2008 Farm Bill gives the Secretary 

discretion to select among different 

policy options; this rule implements 

such discretionary changes. This rule 

also makes numerous housekeeping 

changes to make administrative 

improvements, correct typographical 

errors, remove expired regulations, and 

improve organization. 

Producers of eligible commodities 

that are eligible for loans can request 

MALs or LDPs on their commodities. 

MALs and LDPs are available to eligible 

producers beginning with harvest or 

shearing season and extending through 

the marketing year. MALs are 9-month 

loans with the commodity pledged as 

collateral for the loan. MALs and LDPs 

must be requested on or before the final 

Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Rules and Regulations 15645 

loan availability date for the applicable 

commodity. Producers may repay the 

MAL at a rate that is the lesser of the 

loan rate plus interest or alternative 

repayment rates as determined and 

announced by the Department of 

Agriculture (USDA). MALs support 

America’s farmers and ranchers in 

several ways. They provide producers 

with interim financing at and during the 

harvest or shearing season. They 

provide significant income support 

when market prices are below statutory 

loan rates. They facilitate the orderly 

marketing and distribution of loan 

eligible commodities throughout the 

year, giving the producer the flexibility 

on when to sell the crop. With MALs, 

the producer doesn’t have to sell the 

crop immediately after harvest, when 

prices are often relatively low. 

Producers can settle their loan during 

the 9-month period by either selling the 

commodity and repaying the loan or by 

forfeiting the commodity to the CCC. 

As an alternative to MAL, if a 

producer agrees to forgo MAL, the 

producer may obtain LDP on their crop, 

if such LDP is currently available for the 

applicable commodity and the producer 

is eligible for MAL. LDPs allow the 

producer to receive a payment when the 

alternative repayment rate posted for a 

commodity is below the loan rate for 

that commodity. The payment is the 

established loan rate for the applicable 

loan commodity less the repayment rate 

multiplied by the eligible quantity of the 

commodity. Similar to the MAL 

program, LDPs provide price income 

support to producers so they do not 

have to sell their commodities when 

prices are low. 

The specific statutory changes 

required by the 2008 Farm Bill and 

discretionary changes affecting the MAL 

and LDP programs that are implemented 

in this rule are described below. 

Eligible Loan Commodities 

Prior to the 2008 Farm Bill, MALs and 

LDPs were authorized for wheat, feed 

grains, soybeans, other oilseeds, 

peanuts, pulse crops, honey, wool and 

mohair. Feed grains included corn, 

grain sorghum, barley, oats and rice. 

Other oilseeds included sunflower seed, 

rapeseed, canola, safflower, flaxseed, 

mustard seed, crambe, and sesame seed. 

Pulse crops included lentils, dry peas 

and small chickpeas. The 2008 Farm 

Bill reauthorizes MALs and LDPs for all 

the existing eligible commodities. 

However, it has further defined the feed 

grain category and expanded the pulse 

crop category. Rice is now further 

defined as long grain rice and medium 

grain rice, with rates listed by type. 

Medium grain rice also includes short 

grain rice. Beginning with the 2009 crop 

year, large chickpeas will be included as 

an eligible pulse crop and will be 

eligible for MAL and LDP. This rule 

changes sections 1421.1, 

‘‘Applicability,’’ 1421.3, ‘‘Definitions,’’ 

1421.5, ‘‘Eligible Commodities,’’ and 

1421.9, ‘‘Basic Loan Rates,’’ to include 

large chickpeas beginning with the 2009 

crop year. This rule changes sections 

1421.3, 1421.5, and 1421.10, ‘‘Market 

Rates’’ (renamed as ‘‘Loan Repayment 

Rates’’), to specify provisions for long 

grain and medium grain rice. This rule 

amends section 1421.7, ‘‘Requesting 

Marketing Assistance Loans and Loan 

Deficiency Payments,’’ to add a final 

loan availability date for crambe and 

sesame seed. 

Other Eligibility Requirements for 

Producers 

The 2008 Farm Bill changes eligibility 

provisions by removing the eligibility of 

states, political subdivisions, and their 

agencies to receive MALs or LDPs. This 

rule removes those entities from section 

1421.4, ‘‘Eligible Producers.’’ 

Beneficial Interest 

As used in 7 CFR part 1421, beneficial 

interest in a commodity means that 

control of the commodity and title to the 

commodity remain with the producer. 

Beneficial interest requirements remain 

largely unchanged for all loan 

commodities in this rule, and producers 

must retain beneficial interest in the 

commodity offered as collateral for a 

MAL or LDP. We are amending section 

1421.6, ‘‘Beneficial Interest’’, to clarify 

that delivery of a commodity to a feed 

or grain bank will result in the loss of 

beneficial interest. This rule also 

amends section 1421.6 to clarify that if 

deferred price, forward, or price-later 

contract is used, fulfillment of the 

delivery requirements of the contract or 

receipt of payment for the contract will 

result in the loss of beneficial interest as 

of the earlier of those events. 

Average Crop Revenue Election (ACRE) 

Program 

This final rule implements a 

provision of the new Average Crop 

Revenue Election (ACRE) Program 

established by the 2008 Farm Bill. 

Under the ACRE program, during each 

of the 2009 through 2012 crop years, the 

applicable MAL rates for wheat, feed 

grains, soybeans, other oilseeds, 

peanuts, and pulse crops, will be 

reduced by 30 percent for commodities 

on a farm where producers make the 

irrevocable decision to have the farm 

participate in ACRE. This rule amends 

section 1421.9, ‘‘Basic Loan Rates,’’ to 

include provisions for this new 

program. The regulations for the ACRE 

program are being established through a 

separate rulemaking that will amend 7 

CFR part 1412. 

Commodity Certificate Availability Will 

Be Phased Out 

Commodity certificates are currently 

available to producers to exchange for 

collateral for MAL. The exchange rate is 

the applicable loan repayment rate on 

the date the commodity certificate is 

purchased. The 2008 Farm Bill 

reauthorizes commodity certificates 

only through the 2009 crop year. The 

authority to make commodity 

certificates available to producers will 

terminate effective with the ending of 

the 2009 crop year. Therefore, this rule 

amends the regulations to remove 

provisions for the availability of 

commodity certificates for crop years 

after 2009. 

Adjusted Gross Income and Payment 

Limitations 

For the 2008 crop only, the current 

payment limit on marketing loan gains 

and LDPs remains at $75,000 per person 

and the three-entity rule is also retained. 

Under the current three-entity rule, an 

individual can receive a full payment 

directly and up to a half payment, 

indirectly, for each of two additional 

entities. Producers with annual adjusted 

gross income over $2.5 million, 

averaged over 3 years, are not currently 

eligible for payments, unless more than 

75 percent of the adjusted gross income 

is from agriculture. For 2009 through 

2012 crop years, payment limitation and 

adjusted gross income requirements will 

be modified as specified in sections 

1603 and 1604 of the 2008 Farm Bill. 

Starting with the 2009 crop year, CCC 

will no longer limit the gains from 

marketing assistance loans and loan 

deficiency payments. (Note: Payment 

limitation rules are established in 7 CFR 

part 1400 and not within various 

commodity regulations, such as these 

regulations. CCC is implementing 

changes to the payment limitation 

provisions through a separate 

rulemaking.) This rule amends section 

1421.409, ‘‘Monitoring Payment 

Limitations,’’ to state that payment 

limitations are not applicable for the 

2009 through 2012 crop years for 

designated marketing associations for 

peanuts. 

Warehouse Licensing Requirements 

Current regulatory provisions require 

eligible commodities offered as 

collateral for MALs to be stored in an 

on-farm storage structure or a 

commercial warehouse approved by 

CCC. To be a CCC-approved warehouse, 

15646 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Rules and Regulations 

warehouses must enter into a CCC 

storage agreement. This rule removes an 

exception that allowed the use of 

unlicensed warehouses in certain 

circumstances, because the 2008 Farm 

Bill removed that provision. However, 

this rule amends the regulations to 

allow the use of State and Federally 

licensed warehouses that do not have a 

CCC storage agreement. This change is 

not required by the 2008 Farm Bill; 

however, this will benefit warehouse 

operators and producers without 

increasing financial risk for CCC. This 

rule amends multiple sections to 

remove references to ‘‘approved’’ 

warehouses and add references to 

‘‘authorized’’ warehouses instead. 

Historically, approved warehouses 

have been warehouse operators who 

have entered into storage agreements 

with CCC that set forth terms and 

conditions regarding: (1) Financial 

aspects of the warehouse; (2) rates that 

are applicable to the storage of CCC 

owned inventory and CCC loan 

collateral; (3) handling and delivery 

charges with respect to these 

commodities; and (4) related storage 

issues. These agreements were required 

to protect CCC interests because, prior 

to the authorization and use of MALs, 

producers tendered over 75 percent of 

the annual production of some crops to 

CCC in some years. 

Most States, as well as USDA, have a 

warehouse licensing program for the 

storage of agricultural commodities. In 

most States, an entity must have a State 

or Federal license to engage in storing 

these commodities. These licensed 

entities issue warehouse receipts that 

document ownership of commingled 

commodities. In those States that do not 

have a licensing program, warehouses 

must follow State laws relating to 

bailment and storage. The State laws 

relating to bailment and storage vary 

from State to State. 

In general, non-licensed entities in 

States with licensing programs may not 

store agricultural commodities on behalf 

of producers, but may purchase 

commodities from producers. 

Commercial feed lots, ethanol plants, 

wool pools, and feed banks that are 

typical end users of the commodity are 

not licensed warehouses. This rule 

removes a provision in the regulations 

that allows the use of unlicensed 

warehouses for storing MAL collateral, 

because, as indicated, that is no longer 

authorized under the 2008 Farm Bill. 

Starting with the 2009 crop year and 

throughout the remaining years covered 

by the 2008 Farm Bill, CCC will no 

longer require a Federally licensed 

warehouse operator to also maintain a 

CCC storage agreement, except for 

peanuts. Warehouses licensed by USDA 

under the United States Warehouse Act 

must meet conditions to obtain a 

Federal license, which exceed those that 

must be met for obtaining a CCC storage 

agreement. While the CCC storage 

agreement specifies storage rates that 

CCC will pay in the unlikely event the 

commodity is forfeited to CCC, CCC 

moves commodities it obtains when 

forfeited into the market as quickly as 

possible. Thus, CCC incurs minimal 

storage costs. As of July 2008, CCC’s 

commodity inventories have been 

depleted. Accordingly, CCC has 

determined that requiring a Federally 

licensed warehouse operator to also 

maintain a CCC storage agreement 

provides no additional protection to 

CCC’s interests as a lender in the 

administration of the MAL programs 

and, therefore, CCC will no longer 

require such warehouse operators to 

also maintain a storage agreement. 

However, CCC may reserve the right to 

continue to utilize storage agreements in 

those instances where it is engaged in 

the long-term storage of commodities. 

In a State with an operating 

warehouse licensing program, CCC will 

no longer require the use of a CCC 

storage agreement for a State-licensed 

warehouse. In such States, especially 

those with grain indemnity funds that 

provide cash payments to depositors in 

the event of the insolvency of the 

warehouse operator, CCC already has 

adequate protection as a secured lender. 

There are redundant costs to the 

warehouse operator in meeting and 

maintaining compliance with both the 

State license and the CCC storage 

agreement. Even without the storage 

agreement, CCC will still have clear title 

to the commodity in the event of the 

insolvency of the warehouse operator. If 

the loan is repaid, CCC has no interest 

at stake. Thus, for State-licensed 

warehouses, a CCC storage agreement 

will not be required. However, CCC may 

reserve the right to continue to utilize 

storage agreements in those instances 

where it is engaged in the long-term 

storage of commodities. 

For warehouse operators in the small 

number of States that do not have 

warehouse licensing programs, CCC 

may require these entities to execute a 

CCC storage agreement before a 

producer may obtain a MAL with 

respect to commodities stored in such 

warehouse, but may require that the 

warehouse be approved in advance. A 

list of approved local warehouses may 

be obtained from FSA State and county 

offices. 

These changes will allow producers to 

obtain warehouse-stored loans at all 

warehouses; both State and Federally 

licensed, which expands the amount of 

storage available for use by producers 

who wish to obtain such loans. This is 

particularly beneficial since commercial 

warehouse capacity has declined over 

the past 15 years while the amount of 

commodities produced in that time has 

increased. Marketing patterns have 

changed during this time, for example, 

many buyers have turned to a ‘‘timedto-arrive’’ basis and do not maintain 

large stocks of commodities at their 

facilities. These regulatory changes are 

responsive to changing market 

conditions. 

For peanuts, the 2008 Farm Bill 

requires that the facility in which 

peanuts for MAL are stored meets 

certain conditions set by the Secretary 

and that the facility agrees to provide 

storage on a non-discriminatory basis. 

Wool and Mohair 

The 2008 Farm Bill reauthorizes 

provisions allowing producers to pledge 

wool or mohair as collateral to secure a 

nonrecourse MAL. This rule makes 

minor changes specific to those items, 

including changing references to update 

specific crop years and changing the 

basis on which the Secretary will 

announce alternative repayment rates 

from ‘‘periodically’’ to weekly in section 

1421.10, ‘‘Market Rates.’’ This rule also 

changes the title of the section on 

‘‘Market Rates’’ to ‘‘Loan Repayment 

Rates.’’ 

Peanuts 

The 2008 Farm Bill reauthorizes most 

of the provisions for peanuts, with two 

major exceptions. First, the Farm 

Security and Rural Investment Act of 

2002 (Pub. L. 107–171, commonly 

known as the 2002 Farm Bill) required 

CCC for a time to pay for the storage, 

handling and other associated costs for 

peanuts pledged under a MAL. This 

authority terminated with the beginning 

of the 2007 crop of peanuts. Therefore, 

for the 2007 crop, CCC required a 

peanut warehouse receipt showing 

payment of storage charges through the 

loan period, and reduced the loan 

amount for any unpaid storage charges. 

The 2008 Farm Bill, beginning with the 

2008 crop, requires CCC, at the time the 

peanuts are placed in MAL, to pay for 

handling and other associated costs (but 

not storage costs) for peanuts. The 2008 

Farm Bill requires the repayment of 

these costs when MALs are redeemed. 

Second, the 2008 Farm Bill authorizes 

CCC to pay storage, handling, and other 

associated costs for all peanut MALs 

that achieved maturity and are forfeited 

to CCC as a settlement of the MAL. This 

rule makes changes to section 1421.10, 

‘‘Loan Repayment Rates,’’ to implement 

Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Rules and Regulations 15647 

these specific provisions of the 2008 

Farm Bill. 

National Loan Rates 

The 2008 Farm Bill specifies the 

national loan rates for the 2008 through 

2012 crop years for the eligible loan 

commodities. The loan rates specified 

by the 2008 Farm Bill are as follows: 

Commodity 2008 Crop year 2009 Crop year 2010–2012 

Crop years 

Wheat .................................................................................................................................. $2.75/bu ........... $2.75/bu ........... $2.94/bu. 

Corn .................................................................................................................................... $1.95/bu ........... $1.95/bu ........... $1.95/bu. 

Grain Sorghum ................................................................................................................... $1.95/bu ........... $1.95/bu ........... $1.95/bu. 

Barley .................................................................................................................................. $1.85/bu ........... $1.85/bu ........... $1.95/bu. 

Oats .................................................................................................................................... $1.33/bu ........... $1.33/bu ........... $1.39/bu. 

Long Grain Rice .................................................................................................................. $6.50/cwt .......... $6.50/cwt .......... $6.50/cwt. 

Medium Grain Rice ............................................................................................................. $6.50/cwt .......... $6.50/cwt .......... $6.50/cwt. 

Soybeans ............................................................................................................................ $5.00/bu ........... $5.00/bu ........... $5.00/bu. 

Other Oilseeds .................................................................................................................... $9.30/cwt .......... $9.30/cwt .......... $10.09/cwt. 

Peanuts ............................................................................................................................... $355.00/ton ...... $355.00/ton ...... $355.00/ton. 

Dry Peas ............................................................................................................................. $6.22/cwt .......... $5.40/cwt .......... $5.40/cwt. 

Lentils .................................................................................................................................. $11.72/cwt ........ $11.28/cwt ........ $11.28/cwt. 

Small Chickpeas ................................................................................................................. $7.43/cwt .......... $7.43/cwt .......... $7.43/cwt. 

Large Chickpeas ................................................................................................................. N/A ................... $11.28/cwt ........ $11.28/cwt. 

Graded Wool ....................................................................................................................... $1.00/lb ............. $1.00/lb ............. $1.15/lb. 

Nongraded Wool ................................................................................................................. $0.40/lb ............. $0.40/lb ............. $0.40/lb. 

Mohair ................................................................................................................................. $4.20/lb ............. $4.20/lb ............. $4.20/lb. 

Honey .................................................................................................................................. $0.60/lb ............. $0.60/lb ............. $0.69/lb. 

The 2008 through 2009 crop year loan 

rates for MALs remained the same for 

wheat, feed grains, soybeans, other 

oilseeds, peanuts, wool and mohair 

from those established during the last 

year of the 2002 Farm Bill in 2007. The 

2010 through 2012 loan rates for MALs 

for wheat, barley, oats, other oilseeds, 

graded wool and honey are increased as 

shown in the previous table. The 2008 

Farm Bill establishes two loan rates for 

rice. Rice is divided into a long grain 

rice loan rate and medium short grain 

loan rate. We are amending section 

1421.5, ‘‘Eligible Commodities,’’ to 

reflect that the determination of class, 

grade, and other quality factors for rice 

will be based on the U.S. Standards for 

Rice. Large chickpeas, beginning with 

the 2009 crop year, are now included as 

a pulse crop. The 2008 Farm Bill 

removed a pulse crop loan rate 

provision requiring that the loan rates 

be based upon U.S. feed grade for dry 

peas and U.S. number 3 grade for lentils 

and small chickpeas. Effective with the 

2008 crop (with the 2009 crop for large 

chickpeas), pulse crop loan rates will 

reflect values of U.S. grade number 1. 

Adjustments of Loans (Premiums and 

Discounts) 

The 2008 Farm Bill reauthorizes the 

provisions authorizing adjustments of 

loan rates for any eligible loan 

commodity under this regulation, 

except for rice, for differences in grade, 

type, quality, location and other factors. 

Long grain and medium grain rice loan 

rates will only be adjusted for grade and 

quality (including milling yields). To 

the extent practicable, FSA will make 

adjustments to ensure that weighted 

average base county loan rates are 

consistent and reflect current market 

conditions. Specifically, for the 2008 

crop year, USDA will continue to apply 

appropriate premiums and discounts to 

loan rates in the county where the 

commodity is stored. On a per-unit 

basis, premiums are added to and 

discounts are subtracted from the loan 

rate when the MAL is made for the 2008 

crop year. If a producer chooses to repay 

a MAL, these same premiums and 

discounts applied to the loan rate at 

loan making are also applied to the loan 

repayment rate. 

Beginning with the 2009 crop year, 

except for peanuts, and throughout the 

remaining years of the 2008 Farm Bill, 

CCC will no longer apply premiums and 

discounts to loan rates at loan making 

time. CCC will apply premiums and 

discounts at the time of loan settlement 

or loan forfeiture instead. Producers will 

settle their outstanding nonrecourse 

MAL during the loan period by repaying 

MAL at applicable repayment rate or 

upon maturity by forfeiting the 

commodity to CCC. At forfeiture, the 

applicable loan rate in effect for the 

commodity will be adjusted by 

premiums and discounts. This rule 

amends sections 1421.9, ‘‘Basic Loan 

Rates,’’ and 1421.112, ‘‘Loan 

Settlement,’’ to implement these 

changes that are required by the 2008 

Farm Bill. 

Loan Repayment Rates 

Currently, USDA permits eligible 

producers to repay MALs on wheat, feed 

grains (except rice), soybeans, other 

oilseeds (except confectionary and each 

other kind of sunflower seed (other than 

oil sunflower seed)) at any time during 

the loan period at a rate that is the lesser 

of: (1) Loan rate plus accrued interest or 

(2) a rate determined by the Secretary 

that would minimize forfeitures, 

accumulation of stocks, storage costs, 

impediments to the market and 

discrepancies in benefits across State 

and county boundaries. For rice, MALs 

are repaid at lesser of: (1) Loan rate plus 

accrued interest or the adjusted world 

price (AWP). The 2008 Farm Bill 

maintains the two existing loan 

repayment rate options, and mandates 

that the Secretary add a third loan 

repayment option that allows the loan 

repayment rate to be based on average 

market prices during the preceding 30- 

day-period. For long grain rice and 

medium grain rice, the 2008 Farm Bill 

requires USDA to permit eligible 

producers to repay MALs at any time 

during the loan period at a rate that is 

the lesser of: (1) Loan rate plus accrued 

interest or (2) the prevailing world 

market price adjusted to U.S. quality 

and location, and often referred to as the 

adjusted world price or AWP. For 

peanuts, the 2008 Farm Bill requires 

USDA to permit eligible producers to 

repay MALs at any time during the loan 

period at a rate that was the lesser of: 

(1) Loan rate plus accrued interest or (2) 

a rate determined by the Secretary that 

would minimize forfeitures, 

accumulation of stocks, storage costs, 

and impediments to the market. For 

confectionary and other kinds of 

sunflower seeds, the 2008 Farm Bill 

requires USDA to permit eligible 

producers to repay MALs at any time 

during the loan period at a rate that was 

the lesser of: (1) Loan rate plus accrued 

15648 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Rules and Regulations 

1Outlay impacts from 2008–Farm-Bill-mandated 

changes regarding MAL and LDP programs are 

discussed in the cost benefit assessment, but 

projected outlays impacts are addressed in the cost 

benefit assessment associated with the statutory and 

regulatory changes for the Direct and Countercyclical Payment and Average Crop Revenue 

Election Programs (7 CFR part 1412). In addition, 

the economic and budgetary impacts of mandatory 

changes, including changes in national average loan 

rates, are discussed in that cost benefit assessment 

as well. Statutory and regulatory changes associated 

with payment limitations, direct attribution, and 

adjusted gross income eligibility criteria are 

evaluated in the cost benefit assessment that 

accompanies that regulation (7 CFR part 1400). 

interest or (2) a repayment rate 

established for oil sunflower seed. This 

rule amends section 1421.10, ‘‘Loan 

Repayment Rates,’’ to reflect these 

changes required by the 2008 Farm Bill. 

Additionally, the 2008 Farm Bill 

provides authority to temporarily adjust 

loan repayment rates. In the event of a 

severe disruption to marketing, 

transportation, or related infrastructure, 

USDA may modify the loan repayment 

rate applicable to eligible commodities. 

Any adjustments made to the applicable 

eligible commodity loan repayment rate 

will be short-term and temporary basis, 

as determined by USDA. Such 

adjustments will be announced; they 

will not be in the regulations. 

Payments In Lieu of Loan Deficiency 

Payments for Grazed Acreage 

The 2008 Farm Bill reauthorizes 

provisions for grazed acreage LDP. The 

2002 Farm Bill provided a payment 

program for producers who grazed 

livestock on land that may otherwise be 

used to produce LDP eligible crops, also 

known as ‘‘graze-out’’ provisions. 

Producers who would be eligible for a 

wheat, barley, oats, or triticale LDP but 

instead use those planted crops to graze 

livestock will be eligible for LDPs if they 

agree to forgo harvesting of that acreage. 

We are making minor amendments to 

1421.304, ‘‘Payment Amount’’, to clarify 

grazing payment provisions and to 

remove obsolete provisions for previous 

crop years. 

Honey 

The 2008 Farm Bill reauthorizes and 

extends existing honey provisions. The 

existing way of determining honey 

producers’ eligibility and beneficial 

interest is to require them to comply 

with the provisions in both 7 CFR parts 

1434 and 1421. That policy is not 

changing, although we are clarifying 

that policy by stating it explicitly in the 

regulations. New provisions in this rule 

for 7 CFR part 1421 also apply to honey 

producers even if they are not 

specifically addressed under 7 CFR part 

1434, for example, changes discussed in 

this preamble for other eligibility 

requirements for producers, beneficial 

interest, and adjusted gross income and 

payment limitations. The increase in the 

national loan rate effective for 2010 

through 2012 crop years (which is not 

in the regulations but is specified in this 

preamble and in the 2008 Farm Bill) and 

the provision allowing the Secretary to 

temporarily adjust loan repayment rates 

in the event of a severe disruption to 

marketing, transportation, or related 

infrastructure also apply to honey. This 

rule removes section 1434.22, 

‘‘Handling Payments and Collections 

not Exceeding $9.99,’’ to be consistent 

with part 1421. This rule also amends 

section 1434.15, ‘‘Personal Liability,’’ to 

reduce liquidated damages (penalties) 

for violations to be consistent with 

similar provisions in part 1421. 

Other Miscellaneous Changes 

This rule amends section 1421.104 to 

state that CCC will conduct lien 

searches on all commodities pledged as 

collateral for amounts greater than 

$50,000, which is an increase from 

$25,000 in the current regulations. Field 

offices should be able to process loan 

applications more quickly if lien 

searches are limited to loans over 

$50,000. CCC will still have the 

discretion to conduct lien searches for 

any loan amount when it is determined 

that CCC’s interest may be at risk. 

This rule clarifies section 1421.104 

about assessment authority language. 

Commodity assessments, if applicable, 

are deducted from MAL proceeds at 

loan making and furnished to 

appropriate National or State 

assessment authorities. 

CCC is also making a number of 

housekeeping changes to clean up the 

regulations. For example, we are 

consolidating all the definitions and 

abbreviations that are currently in 

separate sections for each subpart into 

one section for this part. In general, CCC 

is making changes to add clarity, make 

administrative improvements, correct 

typographical errors, add consistency 

with current CCC and industry 

practices, remove expired regulations, 

improve internal consistency, and 

improve organization. These changes do 

not represent substantive policy or 

administrative changes. 

Notice and Comment 

These regulations are exempt from 

notice and comment provisions of the 

Administrative Procedure 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 

This final rule is economically 

significant according to Executive Order 

12866 and has been reviewed by the 

Office of Management and Budget 

(OMB). A cost-benefit assessment of the 

changes made by this rule and is 

summarized below and is available from 

the contact above. 

Summary of Economic Impacts 

The Cost-Benefit Assessment includes 

discussions of statutorily-mandated 

changes as well as discretionary changes 

for the MAL and LDP Programs.1 The 

projected impacts from the use of 

discretionary authority are expected to 

be relatively minor. Projected outlays 

impacts were addressed in the cost 

benefit analysis completed for the final 

rule for the Direct and Counter-cyclical 

Payment and Average Crop Revenue 

Election Programs, which was 

published on December 29, 2008 (73 FR 

79284–79306). The impacts from the 

regulatory changes addressed in the two 

rules are inherently interrelated and not 

addressed as individual impacts. 

The discretionary changes are: 

• Premiums and discounts: With 

exception of cotton and peanuts, 

discontinue applying premiums and 

discounts at the time warehouse-stored 

loans are made, and instead apply them 

only if loan quantities are forfeited; 

• Loan repayment rates: For 

applicable commodities, discontinue 

using prices from a single day to 

establish loan repayment rates, and 

instead use the lesser of a statutorilymandated 30-day moving average of 

market prices adjusted for location and 

a discretionary 5-day average of 

applicable terminal prices backed off to 

the local level to establish alternative 

loan repayment rates; 

• Lien searches: Raise the minimum 

loan principal amount for which lien 

searches are required from $25,000 to 

$50,000; and 

• Uniform Grain and Rice Storage 

Agreements (UGRSA’s): Discontinue the 

widespread use of UGRSA’s with 

applicable warehouse operators and 

instead apply such agreements on a 

case-by-case basis. 

The premium and discount, lien 

search, and UGRSA changes are 

expected to save some staff time, and 

the staff time will instead be devoted to 

new tasks (for example, administering 

the new ACRE program provisions) or 

Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Rules and Regulations 15649 

reducing backlogs (for example, 

inspecting all Federally-licensed 

warehouses at least once annually under 

provisions of the United States 

Warehouse Act (USWA)). Use of 

discretionary authority in implementing 

the new loan repayment rate provisions 

is expected to reduce the day-to-day (or, 

as applicable, week-to-week) variability 

in loan repayment rates for wheat, feed 

grains, oilseeds, pulses, wool, and 

mohair. The use of a 30-day average 

price and a 5-day average price in loan 

repayment rate determinations is not 

expected to affect outlays. However, the 

mandated use of a 30-day average price 

will cause the repayment rate 

determination to be less transparent. 

Federal Assistance Programs 

The title and number of the Federal 

assistance program in the Catalog of 

Federal Domestic Assistance to which 

this final rule applies is 10.051— 

Commodity Loans and Loan Deficiency 

Payments. 

Regulatory Flexibility Act 

This rule is not subject to the 

Regulatory Flexibility Act because CCC 

is not required to publish a notice of 

proposed rulemaking for this rule. 

Environmental Review 

The environmental impacts of this 

rule have been considered in a manner 

consistent 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 (7 CFR part 

799). FSA has determined that this rule 

would not constitute a major Federal 

action significantly affecting the quality 

of the human environment, and 

therefore, no environmental assessment 

or environmental impact statement will 

be prepared. 

Executive Order 12988 

The final rule has been reviewed 

under Executive Order 12988. This rule 

preempts State laws that are 

inconsistent with its provisions. This 

rule is not retroactive and 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 870 

must be exhausted. 

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 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 

the 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. This rule affects a large number 

of agricultural producers who are 

dependent upon these provisions for 

income support and need to know the 

details as soon as possible because it has 

a profound effect on their planting and 

marketing decisions. In any event, 

Section 1601 provides on its own basis 

for the finding a good cause. 

Accordingly, this rule is effective upon 

the date of filing for public inspection 

by the Office of the Federal Register. 

Paperwork Reduction Act 

The regulations in this rule are 

exempt from 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 

7 CFR Part 1421 

Barley, Feed grains, Grains, Loan 

programs—agriculture, Oats, Oilseeds, 

Peanuts, Price support programs, 

Reporting and recordkeeping 

requirements, Soybeans, Surety bonds, 

Warehouses, Wheat. 

7 CFR Part 1434 

Honey, Loan programs—agriculture, 

Price support programs, Reporting and 

recordkeeping requirements. 

■ For the reasons discussed above, this 

rule amends 7 CFR parts 1421 and 1434 

as follows: 

PART 1421—GRAINS AND SIMILARLY 

HANDLED COMMODITIES— 

MARKETING ASSISTANCE LOANS 

AND LOAN DEFICIENCY PAYMENTS 

FOR 2008 THROUGH 2012 

■ 1. Revise the authority citation for part 

1421 to read as follows: 

Authority: 7 U.S.C. 7231–7237 and 7931– 

7936; 15 U.S.C. 714b and 714c, and Public 

Law 110–246. 

■ 2. Revise the part heading for 7 CFR 

part 1421 to read as shown above. 

■ 3. Amend § 1421.1 as follows: 

■ a. Revise the section heading to read 

as set forth below; 

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

forth below; and 

■ c. Remove paragraph (e). 

§ 1421.1 Applicability and interest. 

(a) The regulations of this subpart are 

applicable to the 2008 through 2012 

crops of barley, small chickpeas, corn, 

grain sorghum, lentils, oats, dry peas, 

peanuts, rice, wheat, wool, mohair, 

oilseeds and other crops designated by 

Commodity Credit Corporation (CCC). 

Additionally, large chickpeas are 

authorized for coverage for the 2009 

through 2012 crop years. These 

regulations specify the general 

provisions under which marketing 

assistance loans (MAL) and loan 

deficiency payments (LDP) will be 

administered by CCC. Additional terms 

and conditions are in the note and 

security agreement and the loan 

deficiency payment application that 

must be executed by a producer to 

receive marketing assistance loans and 

LDPs. In any case in which money must 

be refunded to CCC in connection with 

this part, interest will be due to run 

from the date of disbursement of the 

sum to be refunded. This will apply, 

15650 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Rules and Regulations 

unless waived by the Deputy 

Administrator, irrespective of any other 

rule. 

* * * * * 

§ 1421.2 [Amended] 

■ 4. Amend § 1421.2 by removing 

paragraph (c)(1) and redesignating 

paragraphs (c)(2) and (c)(3) as (c)(1) and 

(c)(2), respectively. 

■ 5. Amend § 1421.3 as follows: 

■ a. Add new definitions, in 

alphabetical order, for the terms 

‘‘Administrative County Office,’’ ‘‘CCC,’’ 

‘‘chickpeas,’’ ‘‘CMA,’’ ‘‘COC,’’ ‘‘Control 

or Recording FSA County Office,’’ 

‘‘crop,’’ ‘‘crop year,’’ ‘‘current net worth 

ratio,’’ ‘‘Department,’’ ‘‘Deputy 

Administrator,’’ ‘‘DMA Service County 

Office,’’ ‘‘drawdown account,’’ 

‘‘electronic warehouse receipt (EWR),’’ 

‘‘FSA,’’ ‘‘high moisture state,’’ ‘‘loan 

deficiency payment (LDP),’’ ‘‘loan 

settlement,’’ ‘‘MAL,’’ ‘‘medium grain 

rice,’’ ‘‘rice,’’ ‘‘Secretary,’’ ‘‘security for 

DMAs,’’ and ‘‘STC’’ to read as set forth 

below; 

■ b. Remove the definitions of ‘‘field 

direct loan deficiency payment,’’ ‘‘high 

moisture commodities,’’ ‘‘loan 

deficiency payment,’’ and ‘‘small 

chickpea’’; 

■ c. Revise the definition of ‘‘loan 

commodities,’’ to read as set forth 

below; 

■ d. Amend paragraph (1) of the 

definition of ‘‘other crops designated by 

CCC’’ by removing the word ‘‘haulage’’ 

and adding, in its place, the word 

‘‘haylage’’; 

■ e. Amend the definition of ‘‘pulse 

crops’’ by removing the word ‘‘small’’; 

and 

■ f. Amend the definition of ‘‘wool’’ by 

adding the words ‘‘and includes, unless 

noted otherwise, graded and nongraded 

wool’’ before the period at the end. 

§ 1421.3 Definitions. 

* * * * * 

Administrative County Office is the 

FSA County Office where a producer’s 

FSA records are maintained. 

* * * * * 

CCC means the Commodity Credit 

Corporation. 

* * * * * 

Chickpeas means any chickpea that 

meets the definition of a chickpea 

according to the Grain Inspection, 

Packers and Stockyards Administration 

(GIPSA), Federal Grain Inspection 

Service (FGIS). 

(1) Small chickpea falls below a 

20/64th sieve. 

(2) Large chickpea stays above a 

20/64th sieve. 

* * * * * 

CMA means a cooperative marketing 

association that is subject to regulations 

in Part 1425 of this chapter. 

COC means the FSA county 

committee. 

* * * * * 

Control or Recording FSA County 

Office is the FSA County Office that 

controls subsidiary files for producers 

designated as multi-county producers. 

Crop means with respect to a year, 

commodities harvested in that year. 

That is, a reference to the 2009 crop of 

a commodity means commodities that 

when planted were intended for harvest 

in calendar year 2009. 

Crop year means any time relevant to 

the relevant crop for that year. Thus 

references to the 2009 crop year are 

used to include any activities relevant to 

the 2009 crop. 

Current net worth ratio means current 

assets minus current liabilities, divided 

by current liabilities, based on the 

financial statement provided in 

connection with a DMA application or 

a recertification for DMA status. 

Department means the United States 

Department of Agriculture. 

Deputy Administrator means the 

Deputy Administrator for Farm 

Programs, Farm Service Agency (FSA) 

or a designee of that person. 

* * * * * 

DMA Service County Office is an FSA 

County Office designated by CCC to 

accept, process, and disburse bundled 

peanut MALs and LDPs to a DMA. In 

the absence of a centralized MAL and 

LDP processing system for peanuts, a 

service county FSA office is necessary 

for entering MALs and LDPs made by 

DMAs into CCC accounting systems. 

Drawdown account is an account 

titled to the DMA at a financial 

institution and funded at the discretion 

of CCC for the purpose of allowing the 

DMA to advance funds to producers 

who have applied for MALs and LDPs 

before a subsequent MAL or LDP is 

made to the DMA by an assigned FSA 

county office. 

Electronic warehouse receipt (EWR) 

means a receipt electronically filed in a 

central filing system by an approved 

provider as provided in an executed, 

‘‘Farm Service Agency Provider 

Agreement to Electronically File and 

Maintain Warehouse Receipts.’’ 

FSA means the Farm Service Agency 

of the United States Department of 

Agriculture. 

High moisture state means corn or 

grain sorghum having a moisture 

content in excess of CCC standards used 

to determine eligibility for marketing 

assistance loans made by the Secretary. 

* * * * * 

Loan commodities means wheat, corn, 

grain sorghum, barley, oats, rice, 

soybeans, other oilseeds, peanuts, wool, 

mohair, dry peas, lentils, chickpeas, and 

other crops designated by CCC. 

Loan deficiency payment (LDP) means 

a payment received in lieu of a loan 

when the CCC-determined value is 

below the applicable county loan rate. 

Loan settlement means farm stored 

commodities delivered to CCC and 

warehouse stored commodities forfeited 

to CCC, effective with the 2009 through 

2012 crop years. 

MAL means marketing assistance 

loan. 

Medium grain rice for the purposes of 

this part includes both short and 

medium grain rice as defined by the 

U.S. Standards for Rice. 

* * * * * 

Rice means, unless otherwise noted, 

long grain rice and medium grain rice. 

Secretary means the Secretary of the 

United States Department of 

Agriculture, or the Secretary’s delegate. 

Security for DMAs means a certified 

or cashier’s check payable to CCC, an 

irrevocable commercial letter of credit 

in a form acceptable to CCC, a 

performance or surety bond conditioned 

on the DMA fully discharging all of its 

obligations under this part, or other 

form of financial security as CCC may 

deem appropriate. 

* * * * * 

STC means the FSA State committee. 

* * * * * 

■ 6. Amend § 1421.4 as follows: 

■ a. Amend paragraph (a)(1) by 

removing the words ‘‘State or political 

subdivision or agency thereof,’’ and 

■ b. Revise paragraph (a)(2) to read as 

set forth below. 

§ 1421.4 Eligible producers. 

(a) * * * 

(2) Comply with all provisions of this 

part and, as applicable: 

(i) 7 CFR part 12—Highly Erodible 

Land and Wetland Conservation; 

(ii) 7 CFR part 707—Payments Due 

Persons Who Have Died, Disappeared, 

or Have Been Declared Incompetent; 

(iii) 7 CFR part 718—Provisions 

Applicable to Multiple Programs; 

(iv) 7 CFR part 996—Minimum 

Quality and Handling Standards for 

Domestic and Imported Peanuts 

Marketed in the United States; 

(v) 7 CFR part 1400—Payment 

Limitation & Payment Eligibility for 

2009 and Subsequent Crops, Programs, 

or Fiscal Years; 

(vi) 7 CFR part 1402—Policy for 

Certain Commodities Available for Sale; 

(vii) 7 CFR part 1403—Debt 

Settlement Policies and Procedures; 

Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Rules and Regulations 15651 

(viii) 7 CFR part 1405—Loans, 

Purchases, and Other Operations; 

(ix) 7 CFR part 1412—Direct and 

Counter-Cyclical Program and Average 

Crop Revenue Election Program for the 

2008 and Subsequent Crop Years; and 

(x) 7 CFR part 1423—Commodity 

Credit Corporation Approved 

Warehouses. 

* * * * * 

■ 7. Amend § 1421.5 as follows: 

■ a. Amend paragraph (a)(1) by 

removing the words ‘‘canola,’’ and 

‘‘small’’; 

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

forth below; and 

■ c. Amend paragraph (f) by adding the 

word ‘‘or’’ immediately after the word 

‘‘gift,’’. 

§ 1421.5 Eligible commodities. 

* * * * * 

(c)(1) To be an eligible commodity, 

the commodity must be merchantable 

for food, feed, or other uses determined 

by CCC and must not contain mercurial 

compounds, toxin producing molds, or 

other substances poisonous to humans 

or animals. A commodity containing 

vomitoxin, aflatoxin, or Aspergillus 

mold may not be pledged for a loan 

made under this part, except as 

provided by CCC in the marketing 

assistance loan note and security 

agreement. 

(2) The determination of eligibility for 

rice includes class, grade, grading factor, 

milling yields, and other quality factors 

and will be based upon the U.S. 

Standards for Rice as applied to rough 

rice whether or not such determinations 

are made on the basis of an official 

inspection. 

(3) The determination of eligibility for 

peanuts includes type, quality, and 

quantity. 

(4) With respect to barley, canola, 

corn, flaxseed, grain sorghum, oats, rice, 

soybeans, sunflower seed for extraction 

of oil, wheat, and other commodities 

designated by CCC, the determination of 

eligibility will be based upon the 

Official U.S. Standards for Grain: U.S. 

Standards for Whole Dry Peas, Split 

Peas, and Lentils for dry peas and 

lentils; and the U.S. Standards for Beans 

for chickpeas, whether or not such 

determinations are made on the basis of 

an official inspection. 

(5) With regard to hull-less barley, 

hull-less oats, mustard seed, rapeseed, 

safflower seed, flaxseed, and sunflower 

seed used for a purpose other than to 

extract oil, the determination of 

eligibility will be based on quality 

requirements established and 

announced by CCC, whether or not such 

determinations are made on the basis of 

an official inspection. The costs of an 

official quality determination may be 

paid by CCC. The quality requirements 

that are used in administering marketing 

assistance loans and loan deficiency 

payments for the oilseeds in this 

paragraph are available in USDA State 

and county FSA service centers. 

(6) With regard to farm-stored 

peanuts, the determination of eligibility 

will be determined at the time of 

delivery to CCC by a Federal or State 

Inspector authorized or licensed by the 

Secretary. 

* * * * * 

■ 8. Amend § 1421.6 as follows: 

■ a. In paragraphs (b)(5), (c)(5), and 

(h)(2) remove the word ‘‘approved’’ and 

add, in its place, the word ‘‘authorized’’ 

each time it appears; 

■ b. In paragraph (a), revise the second 

sentence to read as set forth below; 

■ c. In paragraphs (b)(5) and (c)(5), add 

the words ‘‘feed or grain bank’’ 

immediately after the words ‘‘feed 

mill,’’ each time they appear; 

■ d. In paragraph (c)(5), remove the 

word ‘‘unapproved’’ and add, in its 

place, the word ‘‘unauthorized’’; 

■ e. In paragraph (h)(1)(i), add the words 

‘‘the earlier of receipt of any payment 

or’’ immediately before the word ‘‘once’’ 

and add the words ‘‘of the delivery 

requirements’’ immediately after the 

word ‘‘fulfillment’’; 

■ f. In paragraph (h)(2), add the words 

‘‘if CCC determines such a provision is 

required’’ before the period at the end; 

and 

■ g. In paragraph (i), remove the words 

‘‘loan and’’ and add, in their place, the 

words ‘‘loan or’’ and remove the words 

‘‘or payment’’ and add, in their place, 

the words ‘‘or LDP’’. 

§ 1421.6 Beneficial interest. 

(a) * * * For the purposes of this 

part, the term ‘‘beneficial interest’’ refers 

to a determination by CCC that a person 

has title to and control of the 

commodity that is tendered to CCC as 

collateral for a marketing assistance loan 

or of the commodity that will be used 

to determine a loan deficiency payment. 

* * * * * 

§ 1421.7 [Amended] 

■ 9. Amend § 1421.7 as follows: 

■ a. In paragraph (c), remove the words 

‘‘a crop of a’’ and add, in their place, the 

words ‘‘an eligible’’; 

■ b. In paragraph (c)(1), add the words 

‘‘crambe, sesame seed’’ immediately 

after the word ‘‘rapeseed,’’; 

■ c. In paragraph (c)(2), remove the 

word ‘‘small’’; and 

■ d. Remove paragraph (d). 

§ 1421.8 [Amended] 

■ 10. Amend § 1421.8 as follows: 

■ a. In paragraph (a)(2), remove the 

reference ‘‘§ 1421.106’’ and add, in its 

place, the references and words 

‘‘§§ 1421.9, 1421.106, and 1421.107 as 

applicable’’; 

■ b. In paragraph (b)(1) introductory 

text, add the words ‘‘loan availability’’ 

immediately after the word ‘‘final’’; 

■ c. In paragraph (c)(1), remove the 

word ‘‘approved’’ and add, in its place, 

the word ‘‘authorized’’ each time it 

appears; 

■ d. Remove paragraph (c)(2) and 

redesignate paragraph (c)(3) as (c)(2); 

and 

■ e. In newly redesignated paragraph 

(c)(2), remove the words ‘‘an otherwise 

eligible commodity’’ in the last sentence 

and add, in their place, the words 

‘‘otherwise eligible’’. 

■ 11. Amend § 1421.9 as follows: 

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

forth below; 

■ b. In paragraph (b), remove the words 

‘‘small chickpeas,’’ and add the words 

‘‘chickpeas, crambe, sesame seed,’’ in 

their place, and remove the word ‘‘at’’ 

and add the word ‘‘to’’ in its place; 

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

forth below; and 

■ d. Add paragraphs (d) through (g) to 

read as set forth below. 

§ 1421.9 Basic loan rates. 

(a) Basic marketing assistance loan 

rates for a commodity may be 

established on a National, State, 

regional, county basis or other basis, 

will be at rates that comply with 

applicable statutes, and may be adjusted 

by CCC to reflect grade, type, quality, 

location and other factors applicable to 

the commodity and as otherwise 

provided in this section. 

* * * * * 

(c)(1) Subject to adjustment under 

paragraph (g) of this section in case of 

forfeiture, for all 2009 through 2012 

crop year commodities, except rice and 

peanuts, warehouse-stored loans will be 

disbursed at levels based on the basic 

county marketing assistance loan rate 

for the county where the commodity is 

stored. For the 2008 crop year only, 

warehouse-stored loans will be 

disbursed at levels based on the basic 

county marketing assistance loan rate 

for the county where the commodity is 

stored, adjusted for the schedule of 

premiums and discounts established for 

the commodity on the basis of grade, 

type, and quality factors set forth on 

warehouse receipts or supplemental 

certificates and for other factors, as 

determined and announced by CCC. 

(2) Subject to adjustment under 

paragraph (g) of this section in case of 

15652 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Rules and Regulations 

forfeiture, for 2009 through 2012 crop 

years rice, warehouse-stored loans will 

be disbursed at levels based on the 

milling yields times the whole and 

broken kernel marketing assistance loan 

rates. For the 2008 crop year of rice 

only, warehouse-stored loans will be 

disbursed at levels based on the milling 

yields times the whole and broken 

kernel marketing assistance loan rates, 

adjusted for the schedule of discounts 

on the basis of grade and quality factors 

set forth on warehouse receipts or 

supplemental certificates and for other 

factors, as determined and announced 

by CCC. 

(3) For peanuts, warehouse-stored 

loans will be disbursed at levels based 

on National loan rates by peanut type, 

adjusted for the schedule of premiums 

and discounts on the basis of grade, 

quality, and other factors set forth on 

warehouse receipts. 

(d) The Secretary will establish a 

single loan rate in each county for each 

kind of other oilseeds, such as but not 

limited to, sunflower, rapeseed, canola, 

safflower, flaxseed, mustard seed, 

crambe, sesame seed, and other oilseeds 

as designated by the Secretary. 

(e) Adjustments by the Secretary to 

establish loan rates for loan 

commodities, except rice, on a county 

basis will not be lower than 95 percent 

of the national average loan rate, if those 

loan rates do not result in an increase 

in outlays. Adjustments in this section 

will not result in an increase in the 

national average loan rate for any year. 

(f) For the 2009 through 2012 crops, 

producers on farms in the Acreage Crop 

Revenue Election program under part 

1400 of this title will receive a 30 

percent reduction in loan rate as 

established under this section for all 

loan commodities from the farm, except 

honey, wool, and mohair. 

(g) For the 2009 through 2012 crop 

years, premiums and discounts will not 

be applicable for all eligible loan 

commodities, except for peanuts, at loan 

disbursement; however, premiums and 

discounts will apply if the eligible loan 

commodities are forfeited and delivered 

to CCC and any deficiency must be 

repaid to CCC. 

■ 12. Revise § 1421.10 to read as 

follows: 

§ 1421.10 Loan repayment rates. 

(a) For the 2008 through 2012 crops 

of barley, corn, grain sorghum, oats, 

wheat, dry peas, lentils, chickpeas, 

oilseeds, wool, mohair, and other crops 

as designated by CCC (other than 

peanuts, long grain rice, medium grain 

rice, and confectionery and each other 

kind of sunflower seed (other than oil 

sunflower seed)), a producer may repay 

a nonrecourse marketing assistance loan 

at a rate that is the lesser of: 

(1) The loan rate established for the 

commodity under § 1421.9, plus 

interest; 

(2) A rate (as determined by the 

Secretary) that is calculated based on 

average market prices for the loan 

commodity during a preceding 30-day 

period and that the Secretary has 

determined will minimize discrepancies 

in marketing loan benefits across State 

boundaries and across county 

boundaries; or 

(3) A rate that the Secretary may 

develop using alternative methods for 

calculating a repayment rate for a loan 

commodity that the Secretary 

determines will: Minimize potential 

loan forfeitures; minimize the 

accumulation of stocks of the 

commodity by the Federal Government; 

minimize the cost incurred by the 

Federal Government in storing the 

commodity; allow the commodity 

produced in the U.S. to be marketed 

freely and competitively, both 

domestically and internationally; and 

minimize discrepancies in marketing 

loan benefits across State boundaries 

and across county boundaries. 

(b) To the extent practicable, CCC will 

determine and announce repayment 

rates under paragraphs (a)(2) and (a)(3) 

of this section based upon market prices 

at appropriate U.S. markets as 

determined by CCC and these 

repayment rates may be adjusted to 

reflect grade, type, quality, location, and 

other factors for each crop of a 

commodity as follows: 

(1) On a weekly basis in each county 

for oilseeds, except canola, flaxseed, 

soybeans, and sunflower seed; 

(2) On a daily basis in each county for 

barley, canola, corn, flaxseed, grain 

sorghum, oats, soybeans, sunflower seed 

and wheat; and 

(3) On a weekly basis regionally for 

dry peas, lentils, chickpeas, wool and 

mohair. 

(c)(1) For the 2008 through 2012 crops 

of peanuts, a producer may repay a 

nonrecourse loan at a rate that is the 

lesser of: 

(i) The loan rate established for the 

commodity under § 1421.9, plus 

interest; or 

(ii) A rate that the Secretary 

determines will: Minimize potential 

loan forfeitures; minimize the 

accumulation of stocks of the 

commodity by the Federal Government; 

minimize the cost incurred by the 

Federal Government in storing the 

commodity; and allow the commodity 

produced in the United States to be 

marketed freely and competitively, both 

domestically and internationally. 

(2) To the extent practicable, CCC will 

determine and announce weekly 

alternative repayment rates for peanuts. 

(d) For the 2008 through 2012 crop of 

peanuts, the Secretary will require the 

repayment of handling and other 

associated costs paid under § 1421.104 

for all peanuts pledged as collateral for 

a loan that are redeemed under this 

section. 

(e) The Secretary will permit 

producers to repay a marketing 

assistance loan for long grain rice and 

medium grain rice at a rate that is the 

lesser of: 

(1) The loan rate established for the 

commodity under § 1421.9, plus 

interest; or 

(2) The prevailing world market price 

for the commodity, as determined and 

adjusted by the Secretary in accordance 

with this section. 

(f) For purposes of this section, the 

Secretary will prescribe— 

(1) A formula to determine the 

prevailing world market price for long 

grain rice and medium grain rice and 

(2) A mechanism by which the 

Secretary will announce periodically 

those prevailing world market prices. 

(g) Adjustments will be made to the 

prevailing world market price for long 

grain rice and medium grain rice. 

(1) The prevailing world market price 

for long grain and medium rice 

determined under paragraph (f) of this 

section will be adjusted to U.S. quality 

and location. 

(2) In making adjustments under this 

subsection, the Secretary will establish 

a mechanism for determining and 

announcing the adjustments in order to 

avoid undue disruption in the U.S. 

market. 

(h)(1) The prevailing world market 

price for a class of rice will be 

determined by CCC based upon a review 

of prices at which rice is being sold in 

world markets and a weighting of such 

prices through the use of information 

such as changes in supply and demand 

of rice, tender offers, credit concessions, 

barter sales, government-to-government 

sales, special processing costs for 

coatings or premixes, and other relevant 

price indicators, and will be expressed 

in U.S. equivalent values F.O.B. (free on 

board) vessel, U.S. port of export, per 

hundredweight as follows: 

(i) U.S. grade No. 2, 4 percent broken 

kernels, long grain milled rice; 

(ii) U.S. grade No. 2, 4 percent broken 

kernels, medium grain milled rice; and 

(iii) U.S. grade No. 2, 4 percent broken 

kernels, short grain milled rice. 

(2) Export transactions involving rice 

and all other related market information 

will be monitored on a continuous 

basis. Relevant information may be 

Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Rules and Regulations 15653 

obtained for this purpose from USDA 

field reports, international 

organizations, public or private research 

entities, international rice brokers, and 

other sources of reliable information. 

(3) The prevailing world market price 

for a class of rice adjusted to U.S. 

quality and location, the adjusted world 

price (AWP), as determined under 

paragraph (h)(5) of this section, will 

apply to this section. 

(4) The adjusted world price for each 

class of rice will equal the prevailing 

world market price for a class of rice 

(U.S. equivalent value) as determined 

under paragraphs (h)(1) and (h)(2) of 

this section and adjusted to U.S. quality 

and location as follows: 

(i) The prevailing world market price 

for a class of rice will be adjusted to 

reflect an F.O.B. mill position by 

deducting from such calculated price an 

amount that is equal to the estimated 

national average costs associated with: 

(A) The use of bags for the export of 

U.S. rice, and 

(B) The transfer of such rice from a 

mill location to F.O.B. vessel at the U.S. 

port of export with such costs including, 

but not limited to, freight, unloading, 

wharfage, insurance, inspection, 

fumigation, stevedoring, interest, 

banking charges, storage, and 

administrative costs. 

(ii) The price determined under 

paragraph (h)(4)(i) of this section will be 

adjusted to reflect the market value of 

the total quantity of whole kernels 

contained in milled rice by deducting 

the world value of broken kernels it 

contains, with the value of the broken 

kernels determined by multiplying a 

formulaic quantity of broken kernels (4 

percent per hundredweight) by the 

world market value of broken kernels. 

The world market value of broken 

kernels will be based upon the 

relationship of whole and broken kernel 

world prices as estimated from 

observations of prices at which rice is 

being sold in world markets. 

(iii) The price determined under 

paragraph (h)(4)(ii) of this section will 

be adjusted to reflect the per-pound 

market value of whole kernels by 

dividing the price by the quantity of 

whole milled kernels contained in the 

milled rice (96 percent per 

hundredweight). 

(iv) The price determined under 

paragraph (h)(4)(iii) of this section will 

be adjusted to reflect the market value 

of whole kernels contained in 100 

pounds of rough rice by multiplying 

such price by the estimated national 

average quantity of whole kernel rice by 

class obtained from milling 100 pounds 

of rough rice. 

(v) The price determined under 

paragraph (h)(4)(iv) of this section will 

be adjusted to reflect the total market 

value of rough rice by: 

(A) Adding to such price: 

(1) The market value of bran 

contained in the rough rice, computed 

by multiplying the domestic unit market 

value of bran by the estimated national 

average quantity of bran produced in 

milling 100 pounds of rice; and 

(2) The market value of broken 

kernels contained in the rough rice, 

computed by multiplying the estimated 

world market value of broken kernels by 

the estimated national average quantity 

of broken kernels produced in milling 

100 pounds of rice; 

(B) Deducting from such price an 

estimated cost of milling rough rice; and 

an estimated cost of transporting rough 

rice from farm to mill locations. 

(5) The adjusted world price for each 

class of rice, loan rate basis, will be 

determined by CCC and announced, to 

the extent practicable, on or after 7 a.m. 

Eastern Standard Time each Wednesday 

or more frequently as determined 

necessary by CCC, continuing through 

the later of: 

(i) The last Wednesday of July in the 

year in which the crop rice loan 

matures; 

(ii) The last Wednesday of the latest 

month the crop rice loans mature, or 

(iii) In the event that Tuesday is not 

a normal business day, the 

determination may be made on the next 

work day, on or after 7 a.m. Eastern 

Standard Time. 

(i) The producer may repay a 

marketing assistance loan under this 

section for confectionery and each other 

kind of sunflower seed (other than oil 

sunflower seed) at a rate that is the 

lesser of: 

(1) The loan rate established for the 

commodity under § 1421.9, plus 

interest, or 

(2) The repayment rate established for 

oil sunflower seed. 

(j)(1) On a form prescribed by CCC, a 

producer may request to lock in the 

applicable repayment rate for a period 

of 60 calendar days or for the remaining 

life of the loan term, whichever is less, 

provided that no request may be granted 

within 14 calendar days of the end of 

the loan. 

(2) The request to lock in the 

applicable repayment rate must be 

received in the FSA county service 

center that disbursed the loan. 

(3) The repayment rate that is locked 

in will be the rate in effect when the 

request to lock in is approved. 

(4) The repayment rate may be locked 

in on outstanding farm-stored or 

warehouse-stored loans. 

(5) The repayment rate that is locked 

in will expire as provided in paragraph 

(j)(1) of this section. 

(6) The requests can only be 

completed one time for a designated 

quantity. 

(7) The requests can be made in 

person or by facsimile. 

(8) The requests cannot be canceled, 

terminated, or changed after approval. 

(9) The locked in applicable 

repayment rate will not transfer to any 

loan disbursed outside of the originating 

county where the commodity was 

stored. 

(10) Once a repayment rate is locked 

in it cannot be extended. 

(k) If a producer fails to repay a 

marketing assistance loan within the 

time prescribed by CCC under the terms 

and conditions of the request to lock in 

a market loan repayment rate, the 

producer may repay the loan: 

(1) On or before maturity, at the lesser 

of: 

(i) Principal plus interest as 

determined by CCC; or 

(ii) The repayment rate in effect on 

the day the repayment is received in the 

FSA County Service Center. 

(2) After maturity, at principal plus 

interest. 

(l) When the proceeds of the sale of 

the commodity are needed to repay all 

or a part of a farm-stored loan, the 

producer must request and obtain prior 

written approval on a CCC-approved 

form and comply with the terms and 

conditions of such form, to remove a 

specified quantity of the commodity 

from storage. Approval does not 

constitute release of CCC’s security 

interest in the commodity or release of 

producer liability for amounts due CCC 

for the marketing assistance loan 

indebtedness if payment in full is not 

received by the county office. Failure to 

repay a marketing assistance loan 

within the time period prescribed by 

CCC in the case of a farm-stored loan 

and delivery of the pledged collateral to 

a buyer is a violation of the agreement. 

In the case of such violation, the 

producer must repay the loan principal 

and interest or another amount as 

determined by the Deputy 

Administrator, FSA, as specified in 

§ 1421.109. 

(m) The producer may obtain county 

committee approval of a release of all or 

part of pledged collateral for a 

warehouse-stored loan at or before the 

maturity of such loan by paying to CCC: 

(1) The principal amount of the 

marketing assistance loan and charges 

plus interest or 

(2) An amount less than the principal 

amount of the marketing assistance loan 

and charges plus interest under the 

15654 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Rules and Regulations 

terms and conditions specified by CCC 

at the time the producer redeems the 

collateral for such loan. 

(n) A partial release of marketing 

assistance loan collateral must cover all 

of the commodity represented by one 

warehouse receipt. Warehouse receipts 

redeemed by repayment of the 

marketing assistance loan must be 

released only to the producer. However, 

such receipt may be released to persons 

designated in a written authorization 

that is filed with the county office by 

the producer within 15 days before the 

date of repayment. 

(o) The note and security agreement 

will not be released until the marketing 

assistance loan has been satisfied in full. 

(p)(1) If the commodity is moved from 

storage without obtaining prior approval 

to move such commodity, such removal 

will constitute unauthorized removal or 

disposition, as applicable under 

§ 1421.109(b), unless the removal 

occurred on a non-workday and the 

producer notified the county office on 

the next workday of such removal. 

(2) Any loan quantities involved in a 

violation of § 1421.109 must be repaid 

under § 1421.109(e). 

(q) In the event of a severe disruption 

to marketing, transportation, or related 

infrastructure, the Secretary may modify 

the repayment rate otherwise applicable 

under this section for marketing 

assistance loans. Any adjustment made 

to the repayment rate for marketing 

assistance loans for a loan commodity 

under § 1421.5 will be in effect on a 

short-term and temporary basis, as 

determined by the Secretary. 

■ 13. Amend § 1421.13 as follows: 

■ a. Revise the heading to read as set 

forth below; 

■ b. Remove paragraph (a); 

■ c. Redesignate paragraph (b) as 

paragraph (a); and 

■ d. In newly designated paragraph 

(a)(2), remove the word ‘‘is’’ and add the 

word ‘‘are’’ in its place. 

§ 1421.13 Special loan deficiency 

payments. 

* * * * * 

§ 1421.101 [Amended] 

■ 14. Amend § 1421.101 paragraph 

(a)(1) first sentence by removing the 

word ‘‘approved’’ and adding the word 

‘‘disbursed’’ in its place. 

§ 1421.102 [Amended] 

■ 15. Amend § 1421.102 as follows: 

■ a. In paragraph (a)(2)(ii), remove the 

words ‘‘average marketing assistance’’; 

■ b. In paragraph (a)(3), remove the 

word ‘‘base’’; and 

■ c. In paragraph (a)(4), remove the 

words ‘‘marketing assistance’’. 

■ 16. Amend § 1421.103 as follows: 

■ a. Revise the heading to read as set 

forth below; 

■ b. In paragraph (a) introductory text, 

remove the word ‘‘Approved’’ and add 

the word ‘‘Authorized’’ in its place; 

■ c. In paragraph (a)(3), remove the 

word ‘‘approved’’ and add the word 

‘‘authorized’’ in its place; and 

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

forth below. 

§ 1421.103 Authorized storage. 

* * * * * 

(c)(1) Authorized warehouse storage 

consists of warehouses that: 

(i) If Federally licensed, are in 

compliance with 7 CFR part 735 or 

(ii) If not Federally licensed, are in 

compliance with State laws and that 

issue warehouse receipts that meet the 

criteria specified in § 1421.107. 

(iii) If not Federally licensed or in 

compliance with State Laws and issue 

warehouse receipts that meet the criteria 

specified in § 1421.107, have entered 

into a storage agreement with CCC. 

(2) Notwithstanding paragraph (c)(1) 

of this section, if storing peanuts, the 

warehouse must in all cases have 

entered into a storage agreement with 

CCC. For storing other crops, 

notwithstanding paragraph (c)(1) of this 

section, CCC may, on a case-by-case 

basis, still require a warehouse operator 

that would qualify under paragraphs 

(c)(1)(i) or (ii) of this section to enter 

into a storage agreement if deemed 

necessary by the Deputy Administrator 

to be needed to protect CCC’s interests. 

■ 17. Amend § 1421.104 as follows: 

■ a. In paragraph (a)(1), remove the 

amount ‘‘$25,000,’’ each time it appears, 

and add the amount ‘‘$50,000,’’ in its 

place; 

■ b. Revise paragraph (b), introductory 

text, to read as set forth below; 

■ c. In paragraph (b)(2), remove the 

semicolon at the end of the sentence 

and replace it with a period; 

■ d. Remove paragraph (b)(3); and 

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

forth below. 

§ 1421.104 Marketing assistance loan 

making. 

* * * * * 

(b) Fees, charges, interest, and all 

applicable approved commodity 

assessment collections must be paid by 

the producer to CCC at a rate CCC 

determines or, in the case of 

assessments, at a rate approved by the 

assessment authority. Such fees, 

charges, and interest include: 

* * * * * 

(c) For the 2008 through 2012 crop 

years, to ensure proper storage of 

peanuts for which a loan is made under 

this section, the Secretary will pay 

reasonable handling and other 

associated costs (other than storage) 

incurred at the time at which the 

peanuts are placed in a warehouse 

stored loan. Such rates will be available 

in the State and county FSA offices. 

* * * * * 

§ 1421.106 [Amended] 

■ 18. Amend § 1421.106 as follows: 

■ a. In paragraph (d) in the first 

sentence, remove the words ‘‘Handling 

and storage’’ and add the word 

‘‘Storage’’ in their place; and 

■ b. Remove paragraph (g). 

■ 19. Amend § 1421.107 as follows: 

■ a. In paragraph (b) in the third 

sentence, remove the word ‘‘approved’’ 

and add the word ‘‘authorized’’ in its 

place; 

■ b. In paragraph (d), remove the words 

‘‘approved warehouse that has a storage 

agreement with CCC shall,’’ add the 

words ‘‘authorized warehouse must’’ in 

their place, and remove the words 

‘‘under such agreement’’; 

■ c. In paragraph (g)(1) introductory 

text, remove the words ‘‘the applicable 

CCC storage agreement or’’; 

■ d. In paragraph (g)(1)(ii), remove the 

word ‘‘CCC’’ and add, in its place, the 

words ‘‘licensing authority’’; 

■ e. In paragraph (h)(2)(i), remove the 

reference ‘‘(g)(2)(iv)’’ and add, in its 

place, a reference ‘‘(h)(2)(iv)’’; 

■ f. In paragraph (h)(2)(ii), remove the 

reference ‘‘(g)(2)(i)’’ and add, in its 

place, a reference ‘‘(h)(2)(i)’’; 

■ g. In paragraph (h)(2)(iv) introductory 

text, remove the reference ‘‘(g)(2)(iii)’’ 

and add, in its place, a reference 

‘‘(h)(2)(iii)’’; 

■ h. In paragraph (h)(2)(iv)(A)(7), 

remove the word ‘‘percen’’ and add, in 

its place, the word ‘‘percent’’; 

■ i. Revise the first sentence of 

paragraph (i)(2) to read as set forth 

below; and 

■ j. In paragraph (j), remove the 

reference ‘‘paragraph (f)’’ and add in its 

place the reference ‘‘paragraph (g)’’. 

§ 1421.107 Warehouse receipts. 

* * * * * 

(i) * * * 

(2) Warehouse receipts and the 

commodities represented by such 

receipts may be subject to a lien for 

warehouse charges. * * * 

* * * * * 

§ 1421.108 [Amended] 

■ 20. Amend § 1421.108 as follows: 

■ a. In paragraph (c) in the first 

sentence, remove the words ‘‘CCCapproved’’ and add in their place the 

word ‘‘authorized’’; and 

Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Rules and Regulations 15655 

■ b. In paragraph (c), third sentence, 

remove the word ‘‘to’’ the second time 

it appears. 

■ 21. Amend § 1421.109 as follows: 

■ a. In paragraph (a)(2), add the words 

‘‘in accordance with § 1421.10’’ before 

the period at the end; 

■ b. In paragraph (a)(3), add a new 

sentence at the end to read as set forth 

below; 

■ c. Revise paragraph (b), introductory 

text, to read as set forth below; 

■ d. In paragraph (c), remove the first 

sentence and the words ‘‘Accordingly, 

if’’ and add the word ‘‘If’’ in their place; 

■ e. In paragraphs (e) and (f) 

introductory text remove the word 

‘‘commensurate’’ and add, in its place, 

the word ‘‘equivalent’’; 

■ f. In paragraph (h) add a new sentence 

at the end to read as set forth below; 

■ g. In paragraph (i)(1), add the word 

‘‘sufficient’’ immediately before the 

word ‘‘evidence’’; 

■ h. In paragraph (j), remove the word 

‘‘lower’’; 

■ i. Revise paragraph (k), introductory 

text, to read as set forth below; 

■ j. In paragraph (p), remove the phrases 

‘‘or loan deficiency payments’’ and ‘‘or 

loan deficiency payment application’’; 

and 

■ k. Revise paragraph (q) to read as set 

forth below. 

§ 1421.109 Personal liability of the 

producer. 

(a) * * * 

(3) * * * If CCC determines that the 

producer has violated the terms and 

conditions of the applicable forms 

prescribed by CCC, liquidated damages 

will be assessed on the quantity of the 

commodity that is involved in the 

violation. 

(b) Such violations as referred to in 

paragraph (a)(3) of this section may 

include, but are not limited to: 

* * * * * 

(h) * * * CCC will demand delivery 

of any remaining loan collateral if not 

repaid within the 30 calendar day 

notification period. 

* * * * * 

(k) Producers denied or rejected for a 

farm-stored loan for any reason under 

this section may apply for a warehousestored loan. 

* * * * * 

(q) Any or all of the liquidated 

damages assessed under this section 

may be waived if the CCC determines 

that the violation occurred 

inadvertently, accidentally, or 

unintentionally. 

§ 1421.110 [Removed] 

§§ 1421.111 through 1421.114 

[Redesignated as §§ 1421.110 through 

1421.113] 

■ 22. Remove § 1421.110 and 

redesignate §§ 1421.111 through 

1421.114 as §§ 1421.110 through 

1421.113 respectively. 

■ 23. Amend newly designated 

§ 1421.110 as follows: 

■ a. In paragraph (a), add the words ‘‘for 

the 2008 and 2009 crop years’’ 

immediately after the words 

‘‘outstanding marketing assistance 

loan’’; 

■ b. In paragraph (b) introductory text, 

remove the word ‘‘lessor’’ and adding in 

its place the word ‘‘lesser’’; 

■ c. In paragraph (c), remove the 

reference to ‘‘§ 1421.110’’ and add, in its 

place, a reference to ‘‘§ 1421.10’’; and 

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

forth below. 

§ 1421.110 Commodity exchange 

certificates. 

* * * * * 

(e) The authority to make commodity 

certificates available to the producer 

will terminate effective the ending of 

the 2009 crop year. 

■ 24. Amend newly designated 

§ 1421.111 as follows: 

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

forth below; 

■ b. In paragraphs (c) introductory text, 

(c)(1), and (c)(2) remove the word 

‘‘approved’’ and add, in its place, the 

word ‘‘authorized’’ each time it appears. 

■ c. Redesignate paragraph (d) as 

paragraph (e) and add a new paragraph 

(d) to read as set forth below; and 

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

forth below. 

§ 1421.111 Loan settlement. 

* * * * * 

(b) Settlements made by CCC for 

eligible commodities that are acquired 

by CCC and that are stored in an 

authorized warehouse will be made on 

the basis of the entries in the applicable 

warehouse receipt, supplemental 

certificate, and accompanying 

documents. 

(1) All eligible commodities that are 

stored in other than authorized 

warehouses must be delivered to CCC as 

CCC instructs. Settlement will be based 

on entries in the applicable warehouse 

receipt, supplemental certificate, and 

accompanying documents. 

(2) For eligible loan commodities that 

are delivered from other than an 

authorized warehouse, settlement will 

be made by CCC on the basis of the 

basic marketing assistance loan rate that 

is in effect for the commodity at the 

producer’s customary delivery point, as 

determined by CCC. 

* * * * * 

(d) For peanuts forfeited to CCC, the 

Secretary will pay reasonable storage, 

handling, and other associated costs for 

all peanuts pledged as collateral that are 

forfeited under this section. 

* * * * * 

(f) Beginning with the 2009 through 

2012 crop years, premiums and 

discounts will apply to all eligible loan 

commodities forfeited and delivered to 

CCC. This will not require any 

additional adjustment for peanuts to the 

extent that such premiums and 

discounts were accounted for when the 

loan was made. 

§ 1421.112 [Amended] 

■ 25. In newly designated § 1421.112, 

amend paragraph (b)(1) by removing the 

reference to ‘‘§ 1421.112’’ and adding, in 

its place, a reference to ‘‘§ 1421.111’’. 

§ 1421.113 [Amended] 

■ 26. In newly designated § 1421.113, 

amend paragraph (b) by adding the 

words ‘‘at principal plus interest’’ 

immediately after the word ‘‘full’’. 

■ 27. Amend § 1421.200 by revising 

paragraph (c)(1) to read as follows: 

§ 1421.200 Applicability. 

* * * * * 

(c)(1) A producer must submit to the 

FSA Service Center a completed request 

for a loan deficiency payment on forms 

prescribed by CCC. This submission 

must be received on or before the date 

beneficial interest is lost in the 

commodity and before the final loan 

availability date for the commodity. 

Such completed and submitted forms 

indicate the producer’s intentions and 

further provide the terms and 

conditions of the loan deficiency 

payment program. If all or any of the 

provisions of this paragraph are not met 

by the producer, the producer may not 

obtain the loan deficiency payment 

benefit. 

* * * * * 

■ 28. Amend § 1421.201 as follows: 

■ a. Revise paragraph (b), introductory 

text, to read as set forth below; 

■ b. Remove paragraphs (b)(1) and 

(b)(2), and (b)(3) introductory text; and 

■ c. Redesignate paragraphs (b)(3)(i), 

(ii), and (iii) as (b)(1), (2) and (3), 

respectively. 

§ 1421.201 Loan deficiency payment rate. 

* * * * * 

(b) The loan deficiency payment rate 

will be the rate in effect in the county 

15656 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Rules and Regulations 

where the commodity was marketed or 

stored on the date: 

* * * * * 

§ 1421.202 [Amended] 

■ 29. Amend § 1421.202 paragraph (c) 

by removing the words ‘‘approved or 

unapproved’’ and adding, in their place, 

the words ‘‘authorized or 

unauthorized’’. 

§ 1421.203 [Amended] 

■ 30. Amend § 1421.203 as follows: 

■ a. Amend paragraph (a)(1) by 

removing the words ‘‘in determining’’ 

and adding, in their place, the words 

‘‘when determining eligibility for’’; 

■ b. Amend paragraph (a)(2) by 

removing the words ‘‘eligible, if’’ and 

adding in their place the words 

‘‘eligible. If’’; 

■ c. Amend paragraph (c)(1) in the first 

sentence by removing the words ‘‘in 

accordance with,’’ and adding in its 

place, the words ‘‘according to’’ and in 

the last sentence by adding the words 

‘‘any other’’ immediately before the 

word ‘‘charges’’; 

■ d. Amend paragraph (c)(2) by adding 

the words ‘‘any other’’ immediately 

before the word ‘‘charges’’; 

■ e. Amend paragraph (d) by removing 

the words ‘‘taken applicable’’ and 

adding, in its place, the words ‘‘assessed 

according’’; 

■ f. Amend paragraph (f)(1) by adding 

the word ‘‘sufficient’’ immediately after 

the word ‘‘provide’’; and 

■ g. Amend paragraph (g) by removing 

the word ‘‘charges’’ and adding, in its 

place, the words ‘‘liquidated damages’’. 

Subpart D—Grazing Payments for the 

2008 Through 2012 Crop of Wheat, 

Barley, Oats, and Triticale 

■ 31. The heading of subpart D is 

revised to read as shown above. 

§ 1421.300 [Amended] 

■ 32. Amend § 1421.300 in paragraph 

(a), first sentence, by removing the years 

‘‘2002–2007’’ and adding, in their place, 

the years ‘‘2008 through 2012’’. 

§ 1421.302 [Removed] 

§§ 1421.303 through 1421.307 

[Redesignated as §§ 1421.302 through 

1421.306] 

■ 33. Remove § 1421.302 and 

redesignate §§ 1421.303 through 

1421.307 as §§ 1421.302 through 

1421.306. 

§ 1421.302 [Amended] 

■ 34. Amend newly redesignated 

§ 1421.302 as follows: 

■ a. Amend paragraph (a), first sentence, 

by removing the years ‘‘2002 through 

2007’’ and adding, in their place, the 

years ‘‘2008 through 2012’’ and in the 

third sentence by removing the words 

‘‘the risk of loss in’’ and adding, in their 

place, the words ‘‘control and title of’’; 

■ b. Amend paragraph (e)(2) by 

removing the words ‘‘control, title, and 

risk of loss in’’ and adding, in their 

place, the words ‘‘control and title of’’; 

and 

■ c. Amend paragraph (f) by removing 

the years ‘‘2002–2007’’ and adding, in 

their place, the years ‘‘2008 through 

2012’’. 

■ 35. Amend newly redesignated 

§ 1421.304 as follows: 

■ a. In paragraph (a) revise the second 

sentence to read as set forth below; 

■ b. In paragraph (d), last sentence, 

remove the extra space before the 

comma ‘‘,’’ in the last sentence 

immediately after the phrase ‘‘otherwise 

be due’’; 

■ c. In paragraph (e), second sentence, 

remove the word ‘‘The’’ immediately 

before the word ‘‘CCC’’; 

■ d. In paragraph (f), remove the words 

‘‘of the applicable crop year’’ and add, 

in their place, the words ‘‘of the 

calendar year following the year the 

crop is normally harvested’’; 

■ e. in paragraph (g), add the word ‘‘be’’ 

immediately before the word 

‘‘ineligible’’ and remove the word ‘‘the’’ 

immediately before the word ‘‘CCC’’; 

and 

■ f. Remove paragraph (h). 

§ 1421.304 Payment amount. 

(a) * * * For triticale, the grazing rate 

will be equal to the loan deficiency 

payment rate in effect for the 

predominant class of wheat in the 

county where the farm is located as of 

the date the application is filed. 

* * * * * 

§ 1421.306 [Amended] 

■ 36. Amend newly redesignated 

§ 1421.306 as follows: 

■ a. In paragraph (a), remove the words 

‘‘or this subpart’’ and add, in their 

place, the words ‘‘of this subpart,’’ and 

remove the words ‘‘late-payments’’ and 

add, in their place, the words ‘‘latepayment’’; 

■ b. In paragraph (c), first sentence, 

remove the words ‘‘required of the 

producer’’ and add, in their place, the 

words ‘‘required from the producer’’; 

and 

■ c. In paragraph (d), remove the words 

‘‘7 CFR part 1403’’ and add, in their 

place, the words ‘‘part 1403 of this 

chapter’’. 

Subpart E—[Amended] 

■ 37. Amend Subpart E as follows: 

■ a. Remove the word ‘‘DMA’s’’ and 

add, in its place, the word ‘‘DMAs’’ each 

time it appears; 

■ b. Remove the word ‘‘MAL’s’’ and 

add, in its place, the word ‘‘MALs,’’ 

each time it appears; 

■ c. Remove the word ‘‘LDP’s’’ and add, 

in its place, the word ‘‘LDPs,’’ each time 

it appears; and 

■ d. Remove the word ‘‘EWR’s’’ and 

add, in its place, the word ‘‘EWRs,’’ 

each time it appears. 

§ 1421.400 [Amended] 

■ 38. Amend § 1421.400 as follows: 

■ a. In paragraph (a), remove the last 

sentence; and 

■ b. Remove and reserve paragraph (b). 

§ 1421.401 [Removed] 

§§ 1421.402 through 1421.418 

[Redesignated as §§ 1421.401 through 

1421.417] 

■ 39. Remove § 1421.401 and 

redesignate §§ 1421.402 through 

1421.418 as §§ 1421.401 through 

1421.417, respectively. 

■ 40. Amend newly redesignated 

§ 1421.401 by removing the word 

‘‘theFederal’’ in paragraph (b)(1) and 

adding, in its place, the words ‘‘the 

Federal’’. 

■ 41. Amend newly redesignated 

§ 1421.409 by adding a sentence to the 

end of the section to read as follows: 

§ 1421.409 Monitoring and payment 

limitations. 

* * * Payment limitations are not 

applicable for the 2009 through 2012 

crop years. 

§ 1421.419 [Removed] 

§§ 1421.420 through 1421.423 

[Redesignated as §§ 1421.418 through 

1421.420] 

■ 42. Remove § 1421.419 and 

redesignate §§ 1421.420 through 

1421.423 as §§ 1421.418 through 

1421.421, respectively. 

Subpart F—[Removed] 

■ 43. Remove subpart F. 

PART 1434—NONRECOURSE 

MARKETING ASSISTANCE LOANS 

AND LDP REGULATIONS FOR HONEY 

■ 44. Revise the authority citation for 

part 1434 to read as follows: 

Authority: 7 U.S.C. 7931 and Public Law 

110–246. 

■ 45. Revise § 1434.1 to read as set forth 

below: 

§ 1434.1 Applicability. 

(a) This part provides the terms and 

conditions of Commodity Credit 

Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Rules and Regulations 15657 

1Public Law 109–351, 120 Stat. 1966 (Oct. 13, 

2006). 

2See 12 CFR part 24 (2008) (implementing 12 

U.S.C. 24(Eleventh)). 

3Public Law 109–351, § 305, 120 Stat. at 1970– 

71 (emphasis added). 

Corporation (CCC) nonrecourse 

marketing assistance loans or loan 

deficiency payments for honey for the 

2008 through 2012 crop years. 

Marketing loan gains and loan 

deficiency payments for the 2008 crop 

will be limited to the payment 

limitation rules applicable to the 2008 

crop. Beginning with the 2009 crop 

year, there will not be payment limits 

on marketing loan gains and loan 

deficiency payments. 

(b) Producers must comply with all 

provisions of this part and part 1421 of 

this chapter. 

■ 46. Amend § 1434.6 as follows: 

■ a. Remove paragraph (b) and 

redesignate paragraphs (c) through (e) as 

paragraphs (b) through (d), respectively; 

■ b. In newly redesignated paragraph (b) 

introductory text, remove the words 

‘‘control, title, and risk of loss in’’ and 

add, in their place, the words ‘‘title and 

control of’’; 

■ c. Revise newly redesignated 

paragraph (b)(1) to read as set forth 

below; and 

■ d. In newly redesignated paragraph 

(b)(2), remove the words ‘‘risk of loss,’’. 

§ 1434.6 Beneficial interest. 

* * * * * 

(b) * * * 

(1) Executes an option to purchase, 

whether or not a payment is made by 

the potential buyer for such option to 

purchase, with respect to such honey if 

all other eligibility requirements are met 

and the option to purchase contains the 

following provision: 

‘‘Notwithstanding any other provision of 

this option to purchase or any other contract, 

title and control of the honey and beneficial 

interest in the honey, as specified in 7 CFR 

1434.6, must remain with the producer until 

the buyer exercises this option to purchase 

the honey. This option to purchase will 

expire, notwithstanding any action or 

inaction by either the producer or the buyer, 

at the earlier of: 

(1) The maturity of any Commodity Credit 

Corporation (CCC) loan which is secured by 

such honey; 

(2) The date the CCC claims title to such 

honey; or 

(3) Such other date as provided in this 

option.’’ 

* * * * * 

■ 47. Amend § 1434.15 as follows: 

■ a. Revise the section heading to read 

as set forth below; 

■ b. Revise paragraph (c)(1) to read as 

set forth below; and 

■ c. In paragraph (c)(2), remove the 

words ‘‘25 percent’’ and add, in their 

place, the words ‘‘10 percent’’. 

§ 1434.15 Personal liability. 

* * * * * 

(c) * * * 

(1) Acted in good faith when the 

violation occurred, liquidated damages 

will be assessed by multiplying the 

quantity involved in the violation by 10 

percent of the loan rate applicable to the 

loan note for each offense. 

* * * * * 

■ 48. Amend § 1434.18 as follows: 

■ a. In paragraph (a), add the words 

‘‘during the loan period’’ immediately 

after the word ‘‘loan’’; and 

■ b. Add paragraph (a)(3) to read as set 

forth below. 

§ 1434.18 Loan repayments. 

(a) * * * 

(3) In the event of a severe disruption 

to marketing, transportation, or related 

infrastructure, the Secretary may modify 

the repayment rate otherwise applicable 

under this section for marketing 

assistance loans. Any adjustment made 

to the repayment rate for marketing 

assistance loans for honey under this 

part will be in effect on a short-term and 

temporary basis, as determined by the 

Secretary. 

* * * * * 

§ 1434.21 [Amended] 

■ 49. Amend § 1434.21(a) by removing 

the years ‘‘2002–2007’’ and adding, in 

their place, the words ‘‘2008 through 

2012’’. 

§ 1434.22 [Removed] 

§ 1434.23 [Redesignated as § 1434.22] 

■ 50. Remove § 1434.22 and redesignate 

§ 1434.23 as § 1434.22. 

Signed in Washington, DC, on March 31, 

2009. 

Dennis J. Taitano, 

Acting Executive Vice President, Commodity 

Credit Corporation. 

[FR Doc. E9–7644 Filed 4–6–09; 8:45 am] 

BILLING CODE 3410–05–P 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

12 CFR Part 24 

[Docket ID OCC–2009–0006] 

RIN 1557–AD12 

Community and Economic 

Development Entities, Community 

Development Projects, and Other 

Public Welfare Investments 

AGENCY: Office of the Comptroller of the 

Currency, Treasury. 

ACTION: Final rule. 

SUMMARY: The Office of the Comptroller 

of the Currency (OCC) is adopting in 

final form and without change the 

interim final rule, issued on August 11, 

2008, which implemented the statutory 

change to national banks’ community 

development investment authority made 

in the Housing and Economic Recovery 

Act of 2008 (HERA). The OCC also is 

revising Appendix 1 to part 24, the CD– 

1 National Bank Community 

Development (Part 24) Investments 

Form, to make technical changes that 

are consistent with the HERA provision 

and the revised regulation. Section 2503 

of the HERA revised the community 

development investment authority in 

section 24(Eleventh) to restore a 

national bank’s authority to make 

investments designed primarily to 

promote the public welfare. 

DATES: Effective Date: April 7, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Stephen Van Meter, Assistant Director, 

Community and Consumer Law 

Division, (202) 874–5750; Michele 

Meyer, Assistant Director, Patrick T. 

Tierney, Senior Attorney, or Rebecca 

Smith, Attorney, Legislative and 

Regulatory Activities Division, (202) 

874–5090, Office of the Comptroller of 

the Currency, 250 E Street, SW., 

Washington, DC 20219. 

SUPPLEMENTARY INFORMATION: 

Background 

Introduction 

The Financial Services Regulatory 

Relief Act of 2006 (FSRRA) 1 made a 

number of changes to 12 U.S.C. 

24(Eleventh), the statute that authorizes 

national banks’ community 

development investments.2 Prior to its 

amendment by the FSRRA, 12 U.S.C. 

24(Eleventh) authorized a national bank 

‘‘[t]o make investments designed 

primarily to promote the public welfare, 

including the welfare of low- and 

moderate-income communities or 

families (such as by providing housing, 

services, or jobs)’’ (the public welfare 

test). The FSRRA, among other things, 

narrowed the grant of authority in 

section 24(Eleventh) by providing that a 

national bank may ‘‘make investments 

directly or indirectly, each of which 

promotes the public welfare by 

benefiting primarily low- and moderateincome communities or families (such 

as by providing housing, services, or 

jobs).’’ 3 On April 24, 2008, the OCC 

issued a final rule that implemented the