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contains regulatory documents having general

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Rules and Regulations Federal Register

55225 

Vol. 70, No. 182 

Wednesday, September 21, 2005 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 1216 

[FV–05–701–IFR] 

Amendment to the Peanut Promotion, 

Research, and Information Order 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Interim final rule with request 

for comments. 

SUMMARY: The purpose of this rule is to 

bring the provisions of the Peanut 

Promotion, Research and Information 

Order (Order), into conformity with 

changes that have occurred since the 

implementation of the Order with 

regard to the collection of assessments. 

This order is issued under the authority 

of the Commodity Promotion, Research 

and Information Act of 1996. This rule 

invites comments on changes to the 

Order provisions on assessments and 

the deletion of a number of obsolete 

definitions. 

DATES: September 22, 2005; comments 

received by October 21, 2005 will be 

considered prior to issuance of a final 

rule. 

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this rule. Comments must be 

sent to the Docket Clerk, Research and 

Promotion Branch, Fruit and Vegetable 

Programs, AMS, USDA, 1400 

Independence Avenue, SW., Stop 0244, 

Washington, DC 20250–0237; Fax: (202) 

205–2800, or Email:deborah.simmons@usda.gov; or 

Internet: http://www.regulations.gov. All 

comments should reference the docket 

number, the date and the page number 

of this issue of the Federal Register and 

will be made available for public 

inspection in the Office of the Docket 

Clerk during regular business hours, or 

can be viewed at: http// 

www.ams.usda.gov/fv/rpb.html. 

FOR FURTHER INFORMATION CONTACT: 

Deborah S. Simmons, Research and 

Promotion Branch, Fruit and Vegetable 

Programs, AMS, USDA, Stop 0244, 1400 

Independence Avenue, SW., Room 2535 

South Building, Washington, D.C. 

20250–0244; telephone (202) 720–9916 

or fax (202) 205–2800. 

SUPPLEMENTARY INFORMATION: Legal 

Authority. The Peanut Promotion, 

Research and Information Order (Order) 

(7 CFR Part 1216) became effective July 

29, 1999. It was issued under the 

Commodity Promotion, Research, and 

Information Act of 1996 (Act) (7 U.S.C. 

7401–7425). 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. This rule is not intended to 

have retroactive effect. Section 524 of 

the Act provides that the Act shall not 

affect or preempt any State or local laws 

authorizing promotion or research 

relating to an agricultural commodity. 

Under Section 519 of the Act, a 

person subject to the Order may file a 

petition with the Secretary of 

Agriculture (Secretary) stating that the 

Order, any provision of the Order, or 

any obligation imposed in connection 

with the Order, is not established in 

accordance with the law, and requesting 

a modification of the Order or an 

exemption from the Order. Any petition 

filed challenging the Order, any 

provision of the Order, or any obligation 

imposed in connection with the Order, 

shall be filed within two years after the 

effective date of the Order, provision, or 

obligation subject to challenge in the 

petition. The petitioner will have the 

opportunity for a hearing on the 

petition. Thereafter, the Secretary will 

issue a ruling on a petition. The Act 

provides that the district court of the 

United States for any district in which 

the petitioner resides or conducts 

business shall have the jurisdiction to 

review a final ruling on the petition, if 

the petitioner files a complaint for that 

purpose not later than 20 days after the 

date of the entry of the Secretary’s final 

ruling. 

Executive Order 12866 

This rule has been determined not 

significant for purposes of Executive 

Order 12866 and therefore has not been 

reviewed by the Office of Management 

and Budget (OMB). 

Regulatory Flexibility Act and 

Paperwork Reduction Act 

In accordance with the Regulatory 

Flexibility Act (RFA) [5 U.S.C. 601 et 

seq.], the Agency has examined the 

impact of this rule on small entities. The 

purpose of the RFA is to fit regulatory 

actions to the scale of businesses subject 

to such actions so that small businesses 

will not be disproportionately 

burdened. 

There are approximately 13,000 

producers and 57 first handlers of 

peanuts subject to the program. Most of 

the producers would be classified as 

small businesses under the criteria 

established by the Small Business 

Administration (SBA) [13 CFR 121.201]. 

Most first handlers would not be 

classified as small businesses. The SBA 

defines small agricultural handlers as 

those whose annual receipts are less 

than $6 million, and small agricultural 

producers are defined as those having 

annual receipts of not more than 

$500,000 annually. 

A number of changes have occurred to 

Farm Service Agency loan programs for 

peanuts since the 2002 Farm Bill. In 

view of this, several provisions of the 

Order needed to be updated. The 

changes are to the collection process for 

assessments, Section 1216.51 of the 

Order as amended. This section 

included provisions concerning 

collection of assessments and peanuts 

placed under marketing assistance 

loans. The Commodity Credit 

Corporation will deduct and remit to the 

Board assessments deducted from the 

proceeds of the loan. Producers are also 

required to pay assessments directly to 

the Board in certain circumstances. 

This rule, however, does not alter the 

amount of the assessment or the 

obligation of producers of peanuts to 

pay the assessment. 

Additional changes are made to 

amend definitions and delete 

definitions that are no longer needed. 

Accordingly, § 1216.2 concerning 

additional peanuts, § 1216.3 concerning 

area marketing associations, § 1216.6 

concerning contract export additional 

peanuts, and § 1216.24 concerning 

quota peanuts are deleted. 

There are no relevant federal rules 

that duplicate, overlap, or conflict with 

the proposed rule. 

55226 Federal Register / Vol. 70, No. 182 / Wednesday, September 21, 2005 / Rules and Regulations 

In accordance with the Office of 

Management and Budget (OMB) 

regulation [5 CFR Part 1320] which 

implements the Paperwork Reduction 

Act of 1995 [44 U.S.C. Chapter 35], the 

information collection and 

recordkeeping requirements that are 

imposed by the Order have been 

approved previously under OMB 

control number 0581–0093. This rule 

does not result in a change to the 

information collection and 

recordkeeping requirements previously 

approved. 

We have performed this Initial 

Regulatory Flexibility Analysis 

regarding the impact of this proposed 

amendment to the Order on small 

entities, and we invite comments 

concerning potential effects of the 

proposed amendment. 

Background 

The Order became effective on July 

29, 1999, after a national referendum 

among all peanut producers. Under the 

Order, peanut producers are assessed 1 

percent of the total value of all farmers 

stock peanuts, which currently 

generates about $6 million in annual 

revenues. The program is administered 

by the Board under USDA supervision. 

The Board is composed of 10 

members and 10 alternates, nominated 

by producers and appointed by the 

Secretary of Agriculture. There is one 

member and alternate for each of the 

nine primary peanut-producing states 

and one at-large member and alternate 

representing all other peanut-producing 

states. 

Currently, the nine major peanutproducing states are (in descending 

order) Georgia, Texas, Alabama, North 

Carolina, Florida, Virginia, Oklahoma, 

New Mexico, and South Carolina. The 

minor peanut-producing states are 

Arizona, Arkansas, California, Kansas, 

Louisiana, Mississippi, Missouri, and 

Tennessee. 

There is an assessment rate of 1 

percent of the price paid for all farmers 

stock peanuts sold. Peanut producers 

may sell their peanuts commercially or 

put them in the market assistance loan 

program. For peanuts sold 

commercially, the first handler will 

remit the assessment to the Board. 

Further § 1216.51(d) currently 

provides that for peanuts placed under 

loan with the Department’s Commodity 

Credit Corporation, each area marketing 

association shall remit to the Board the 

following: (1) One (1) percent of the 

initial price paid for either quota or 

additional peanuts no more than 60 

days after the last day of the month in 

which the peanuts were placed under 

loan; and (2) One (1) percent of the 

profit from the sale of the peanuts 

within 60 days after the final day of the 

area marketing association’s fiscal year. 

A number of changes have occurred to 

Farm Service Agency loan program for 

peanuts since the 2002 Farm Bill. In 

view of this, the Board submitted a 

request to amend the Order to update 

the collection of assessments for all 

peanuts, including loan peanuts. This 

rule does not alter the amount of the 

assessment or the obligation of 

producers of peanuts to pay the 

assessment. 

This rule does provide in § 1216.51 

(d) that for peanuts placed under a 

marketing assistance loan with the 

Department’s Commodity Credit 

Corporation, the Commodity Credit 

Corporation or any entity determined by 

the Commodity Credit Corporation shall 

deduct and remit to the Board, from the 

proceeds of the loan paid to the 

producer, (1) one (1%) percent of the 

loan value of the peanuts as determined 

by the warehouse receipt accompanying 

such peanuts, no more than 60 days 

after the last day of the month in which 

the peanuts were placed under a 

marketing assistance loan. 

This rule also provides in § 1216.51(e) 

that if a producer places peanuts under 

a marketing assistance loan and 

subsequently redeems and sells such 

peanuts at a price greater than the loan 

amount, the producer shall pay the 

difference between the sales price and 

the loan amount value of the peanuts 

multiplied by one (1%) percent to the 

Board within sixty (60) days of the date 

of sale. 

In accordance with the Office of 

Management and Budget (OMB) 

regulation [5 CFR Part 1320] which 

implements the Paperwork Reduction 

Act of 1995 [44 U.S.C. Chapter 35], the 

information collection and 

recordkeeping requirements that are 

imposed by this Order were submitted 

to OMB for approval and were approved 

under OMB control number 0581–0093. 

This proposal will not cause any change 

in the information collection and 

recordkeeping requirement. 

Additional changes are made to 

amend definitions and delete 

definitions that are no longer needed. 

Accordingly, § 1216.2 concerning 

additional peanuts, § 1216.3 concerning 

area marketing associations, § 1216.6 

concerning contract export additional 

peanuts, and § 1216.24 concerning 

quota peanuts are deleted. 

This rule invites comments on the 

amendment to the collection process set 

forth in the Order and on the deletion 

of § 1216.2, § 1216.3, § 1216.6 and 

§ 1216.24. Any comments received 

before the October 21, 2005 will be 

considered prior to finalization of this 

rule. 

Pursuant to 5 U.S.C. 553, it is also 

found and determined upon good cause 

that it is impracticable, unnecessary, 

and contrary to the public interest to 

give preliminary notice prior to putting 

this rule into effect and that good cause 

exists for not postponing the effective 

date of this rule until 30 days after 

publication in the Federal Register 

because: (1) The crop year began on 

August 1, 2005 and this action should 

be in place as soon as possible and (2) 

this notice does not alter the amount of 

assessment but only changes provisions 

concerning the collection of assessment. 

For these reasons, a thirty-day comment 

period is deemed appropriate. 

General Findings 

List of Subjects in 7 CFR Part 1216 

Administrative practice and 

procedure; Advertising; Agricultural 

research; Peanuts; Reporting and 

recordkeeping requirements. 

■ For the reasons set forth in the 

preamble, Title 7 of Chapter XI of the 

Code of Federal Regulations is amended 

as follows: 

PART 1216—PEANUT PROMOTION, 

RESEARCH, AND INFORMATION 

ORDER 

■ 1. The authority citation for part 1216 

continues to read as follows: 

Authority: 7 U.S.C. 7401–7425. 

§§ 1216.2, 1216.3, 1216.6, 1216.24 

[Removed and reserved] 

■ 2. Sections 1216.2, 1216.3, 1216.6 and 

1216.24 are removed and reserved. 

■ 3. Section 1216.51 is revised to read 

as follows: 

§ 1216.51 Assessments. 

(a) The funds necessary to pay for 

programs and other costs authorized by 

this part shall be acquired by the 

levying of assessments upon producers 

in a manner prescribed by the Secretary. 

(b) Each first handler, at such times 

and in such manner as prescribed by the 

Secretary, shall collect from each 

producer or first purchaser/handler and 

pay assessments to the Board on all 

peanuts handled, including peanuts 

produced by the first handler, no later 

than 60 days after the last day of the 

month in which the peanuts were 

marketed. 

(c) Such assessments shall be levied at 

a rate of one (1%) percent of the price 

paid for all farmers stock peanuts sold. 

Price paid is one (1%) percent of loan 

value. 

(d) For peanuts placed under a 

marketing assistance loan with the 

Federal Register / Vol. 70, No. 182 / Wednesday, September 21, 2005 / Rules and Regulations 55227 

Department’s Commodity Credit 

Corporation, the Commodity Credit 

Corporation, or any entity determined 

by the Commodity Credit Corporation 

shall deduct and remit to the Board, 

from the proceeds of the loan paid to the 

producer, one (1%) percent of the loan 

value of the peanuts as determined by 

the warehouse receipt accompanying 

such peanuts, no more than 60 days 

after the last day of the month in which 

the peanuts were placed under a 

marketing assistance loan. 

(e) If a producer places peanuts under 

a marketing assistance loan and 

subsequently redeems and sells such 

peanuts at a price greater than the loan 

amount, the producer shall pay the 

difference between the sales price and 

the loan value of the peanuts multiplied 

by one (1%) percent to the Board within 

sixty (60) days after the final day of the 

loan availability period. 

(f) All assessments collected under 

this section are to be used for expenses 

and expenditures pursuant to this Order 

and for the establishment of an 

operating reserve as prescribed in the 

Order. 

(g) The Board shall impose a late 

payment charge on any person who fails 

to remit to the Board the total amount 

for which the person is liable on or 

before the payment due date established 

under this section. The late payment 

charge will be in the form of interest on 

the outstanding portion of any amount 

for which the person is liable. The rate 

of interest shall be prescribed in 

regulations issued by the Secretary. 

(h) Persons failing to remit total 

assessments due in a timely manner 

may also be subject to actions under 

federal debt collection procedures. 

(i) The Board may authorize other 

organizations to collect assessments on 

its behalf with the approval of the 

Secretary. 

(j) The assessment rate may not be 

increased unless the new rate is 

approved by a referendum among 

eligible producers. 

Dated: September 15, 2005. 

Lloyd C. Day, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 05–18759 Filed 9–20–05; 8:45 am] 

BILLING CODE 3410–02–P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Part 712 

Audit Requirement for Credit Union 

Service Organizations 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Final rule. 

SUMMARY: NCUA is amending its rule 

concerning credit union service 

organizations (CUSOs) to provide that a 

wholly owned CUSO need not obtain its 

own annual financial statement audit 

from a certified public accountant if it 

is included in the annual consolidated 

audit of the federal credit union (FCU) 

that is its parent. The amendment will 

reduce regulatory burden and conform 

the regulation with agency practice, 

which since 1997 has been to view 

credit unions with wholly owned 

CUSOs in compliance with the rule if 

the parent FCU has obtained an annual 

financial statement audit on a 

consolidated basis. 

DATES: This rule is effective on October 

21, 2005. 

FOR FURTHER INFORMATION CONTACT: Ross 

P. Kendall, Staff Attorney, Office of 

General Counsel, at telephone (703) 

518–6540. 

SUPPLEMENTARY INFORMATION: 

Background 

On March 17, 2005, the NCUA Board 

requested comment on a proposed 

change to part 712 of its regulations to 

provide that that a CUSO that is wholly 

owned need not secure its own public 

accounting firm financial statement 

audit if it is included on a consolidated 

basis in the audit of the FCU itself. 70 

FR 14579 (March 23, 2005). The 

proposal recognized that, where a CUSO 

is controlled by an FCU by virtue of its 

ownership of one hundred percent of its 

voting shares, generally accepted 

accounting principles (GAAP) call for 

the preparation of financial statements 

of both the FCU and the CUSO on a 

consolidated basis. 

As noted in the preamble to the 

proposed rule, consolidated financial 

statements present the results of 

operations, financial position, and cash 

flows of a parent and its subsidiaries as 

if the group were a single enterprise. 

Under GAAP, consolidated financial 

statements generally include enterprises 

in which the parent has a controlling 

financial interest, usually, a majority 

voting interest. There is a presumption 

that consolidated statements are more 

meaningful than separate statements 

and are usually necessary for a fair 

presentation when one of the 

enterprises in a group directly or 

indirectly has a controlling financial 

interest in another. 

Summary of Comments 

NCUA received twelve comments on 

the proposal, eleven of which were fully 

supportive of the amendment. These 

commenters noted several bases for 

their support, including efficiency, 

flexibility and cost savings, as well as 

the generally more thorough and 

accurate financial picture that emerges 

when the operations of corporate 

parents and subsidiaries are included in 

a consolidated financial statement. The 

one commenter that did not offer 

express support did not indicate 

opposition to the proposal, but rather 

raised two questions about the operation 

of the rule in specified circumstances. 

In the preamble to the proposed rule, 

the Board specifically recognized that 

GAAP would allow for consolidated 

financial reporting in cases that involve 

a CUSO that is majority owned. The 

Board noted, however, that it was not 

recommending extension of the rule to 

those cases, and indicated its belief that 

the proposal would ensure that 

prospective minority investors in 

CUSOs would have maximum 

disclosure of potential risks to their 

investment. Nine commenters 

recommended that NCUA extend the 

exemption for a separate audit to 

majority owned CUSOs, instead of 

limiting it to cases of one hundred 

percent ownership. Two of these 

commenters conditioned their support 

for this expanded treatment on 

including in the rule a safeguard to 

allow a minority owner to request the 

CUSO to obtain a separate opinion 

audit. 

The Board remains convinced that the 

original proposal, with its limited 

application only to cases involving one 

hundred percent ownership of the 

CUSO, is the best course. Absent a 

provision in the rule, a minority 

investor could encounter some 

difficulty in asserting its right to a 

separate opinion audit. The Board notes, 

in this respect, that its concern for the 

safety and soundness of credit unions, 

rather than assuring that its rules 

conform in all respects to what may be 

formally permissible under GAAP, is of 

paramount importance. Accordingly, 

NCUA is adopting the proposed 

amendments as a final rule without 

change. 

The Board notes that the rule change 

extends to cases involving CUSO 

subsidiaries that are also wholly owned. 

While cases of second tier CUSOs are 

relatively rare, the principles of the rule