§1359a. Marketing penalties and disposition of additional peanuts

(a) Marketing penalties

(1) In general

(A) Marketing peanuts in excess of quota

The marketing of any peanuts for domestic edible use in excess of the farm poundage quota for the farm on which the peanuts are produced shall be subject to penalty at a rate equal to 140 percent of the support price for quota peanuts for the marketing year in which the marketing occurs. The penalty shall not apply to the marketing of breeder or Foundation seed peanuts grown and marketed by a publicly owned agricultural experiment station (including a State operated seed organization) under such regulations as the Secretary may prescribe.

(B) Marketing year

For purposes of this section, the marketing year for peanuts shall be the 12-month period beginning August 1 and ending July 31.

(C) Marketing additional peanuts

The marketing of any additional peanuts from a farm shall be subject to the same penalty unless the peanuts, in accordance with regulations established by the Secretary, are-

(i) placed under loan at the additional loan rate in effect for the peanuts under section 1445c–3 ¹ of this title and not redeemed by the producers;

(ii) marketed through an area marketing association designated pursuant to section 1445c–3(c)(1) ¹ of this title; or

(iii) marketed under contracts between handlers and producers pursuant to subsection (f) of this section.

(2) Payer

The penalty shall be paid by the person who buys or otherwise acquires the peanuts from the producer or, if the peanuts are marketed by the producer through an agent, the penalty shall be paid by the agent. The person or agent may deduct an amount equivalent to the penalty from the price paid to the producer.

(3) Failure to collect

If the person required to collect the penalty fails to collect the penalty, the person and all persons entitled to share in the peanuts marketed from the farm or the proceeds thereof shall be jointly and severally liable with such persons who failed to collect the penalty for the amount of the penalty.

(4) Application of quota

Peanuts produced in a calendar year in which farm poundage quotas are in effect for the marketing year beginning therein shall be subject to the quotas even though the peanuts are marketed prior to the date on which the marketing year begins.

(5) False information

If any producer falsely identifies, fails to accurately certify planted acres, or fails to account for the disposition of any peanuts produced on the planted acres, a quantity of peanuts equal to the greater of the farm's average or actual yield, as determined by the Secretary, times the planted acres, shall be deemed to have been marketed in violation of permissible uses of quota and additional peanuts. Any penalty payable under this paragraph shall be paid and remitted by the producer.

(6) Unintentional violations

The Secretary shall authorize, under such regulations as the Secretary shall issue, the county committees established under section 590h(b) of title 16 to waive or reduce marketing penalties provided for under this subsection in cases which the committees determine that the violations that were the basis of the penalties were unintentional or without knowledge on the part of the parties concerned.

(7) De minimis violations

Errors in weight that do not exceed one-tenth of 1 percent in the case of any one marketing document shall not be considered to be marketing violations except in cases of fraud or conspiracy.

(b) Use of quota and additional peanuts

(1) Quota peanuts

Only quota peanuts may be retained for use as seed or for other uses on a farm. When peanuts are so retained, such retention shall be considered as marketings of quota peanuts, except that the Secretary may exempt from consideration as marketings of quota peanuts seeds of peanuts for the quantity involved that are used to produce peanuts excluded under section 1359(c) of this title, are unique strains, and are not commercially available.

(2) Additional peanuts

Additional peanuts shall not be retained for use on a farm and shall not be marketed for domestic edible use, except as provided in subsection (g) of this section.

(3) Seed

Except as provided in paragraph (1), seed for planting of any peanut acreage in the United States shall be obtained solely from quota peanuts marketed or considered marketed for domestic edible use.

(c) Marketing peanuts with excess quantity, grade, or quality

On a finding by the Secretary that the peanuts marketed from any crop for domestic edible use by a handler are larger in quantity or higher in grade or quality than the peanuts that could reasonably be produced from the quantity of peanuts having the grade, kernel content, and quality of the quota peanuts acquired by the handler from the crop for the marketing, the handler shall be subject to a penalty equal to 140 percent of the loan level for quota peanuts on the quantity of peanuts that the Secretary determines are in excess of the quantity, grade, or quality of the peanuts that could reasonably have been produced from the peanuts so acquired.

(d) Handling and disposal of additional peanuts

(1) In general

Except as provided in paragraph (2), the Secretary shall require that the handling and disposal of additional peanuts be supervised by agents of the Secretary or by area marketing associations designated pursuant to section 1445c–3(c)(1) ¹ of this title.

(2) Supervision by nonhandlers

(A) In general

Supervision of the handling and disposal of additional peanuts by a handler shall not be required under paragraph (1) if the handler agrees in writing, prior to any handling or disposal of the peanuts, to comply with regulations that the Secretary shall issue.

(B) Regulations

The regulations issued by the Secretary under subparagraph (A) shall include the following provisions:

(i) Types of exported or crushed peanuts

Handlers of shelled or milled peanuts may export or crush peanuts classified by type in all of the following quantities:

(I) Sound split kernel peanuts

Sound split kernel peanuts purchased by the handler as additional peanuts to which, under price support loan schedules, a mandated deduction with respect to the price paid to the producer of the peanuts would be applied due to the percentage of the sound splits.

(II) Sound mature kernel peanuts

Sound mature kernel peanuts (which term includes sound split kernel peanuts and sound whole kernel peanuts) in an amount equal to the poundage of the peanuts purchased by the handler as additional peanuts, less the total poundage of sound split kernel peanuts described in subclause (I).

(III) Remainder

The remaining quantity of total kernel content of peanuts purchased by the handler as additional peanuts.

(ii) Documentation

Handlers shall ensure that any additional peanuts exported or crushed are evidenced by onboard bills of lading or other appropriate documentation as may be required by the Secretary, or both.

(iii) Loss of peanuts

If a handler suffers a loss of peanuts as a result of fire, flood, or any other condition beyond the control of the handler, the portion of the loss allocated to contracted additional peanuts shall not be greater than the portion of the handler's total peanut purchases for the year attributable to contracted additional peanuts purchased for export or crushing by the handler during the year.

(iv) Shrinkage allowance

(I) In general

The obligation of a handler to export or crush peanuts in quantities described in this subparagraph shall be reduced by a shrinkage allowance, to be determined by the Secretary, to reflect actual dollar value shrinkage experienced by handlers in commercial operations, except that the allowance shall not be less than 4 percent, except as provided in subclause (II).

(II) Common industry practices

The Secretary may provide a lower shrinkage allowance for a handler who fails to comply with restrictions on the use of peanuts, as may be specified by the Commodity Credit Corporation, to take into account common industry practices.

(3) Adequate finances and facilities

A handler shall submit to the Secretary adequate financial guarantees, as well as evidence of adequate facilities and assets, with the facilities under the control and operation of the handler, to ensure the handler's compliance with the obligation to export peanuts.

(4) Commingling of like peanuts

Quota and additional peanuts of like type and segregation or quality may, under regulations issued by the Secretary, be commingled and exchanged on a dollar value basis to facilitate warehousing, handling, and marketing.

(5) Penalty

(A) In general

Except as provided in subparagraph (B), the failure by a handler to comply with regulations issued by the Secretary governing the disposition and handling of additional peanuts shall subject the handler to a penalty at a rate equal to 140 percent of the loan level for quota peanuts on the quantity of peanuts involved in the violation.

(B) Nondelivery

A handler shall not be subject to a penalty for failure to export additional peanuts if the peanuts were not delivered to the handler.

(6) Reentry of exported peanuts

(A) Penalty

If any additional peanuts exported by a handler are reentered into the United States in commercial quantities as determined by the Secretary, the importer of the peanuts shall be subject to a penalty at a rate equal to 140 percent of the loan level for quota peanuts on the quantity of peanuts reentered.

(B) Records

Each person, firm, or handler who imports peanuts into the United States shall maintain such records and documents as are required by the Secretary to ensure compliance with this subsection.

(e) Special export credits

(1) In general

The Secretary shall, with due regard for the integrity of the peanut program, promulgate regulations that will permit any handler of peanuts who manufactures peanut products from domestic edible peanuts to export the products and receive credit for the fulfillment of export obligations for the peanut content of the products against which the export credits the handler may thereafter apply, up to the amount thereof, equivalent quantities of additional peanuts of the same type acquired by the handler and used in the domestic edible market. The peanuts so acquired for the domestic edible market as provided in this subsection shall be of the same crop year as the peanuts used in the manufacture of the products so exported.

(2) Certification

Under such regulations, the Secretary shall require all handlers who are peanut product manufacturers to submit annual certifications of peanut product content on a product-by-product basis. Any changes in peanut product formulas as affecting peanut content shall be recorded within 90 days of the changes. The Secretary shall conduct an annual review of the certifications. The Secretary shall pursue all available remedies with respect to persons who fail to comply with this paragraph.

(3) Records

The Secretary shall require handlers who are peanut product manufacturers to maintain and provide such documents as are necessary to ensure compliance with this subsection and to maintain the integrity of the peanut program.

(f) Contracts for purchase of additional peanuts

(1) In general

Handlers may, under such regulations as the Secretary may issue, contract with producers for the purchase of additional peanuts for crushing or export, or both.

(2) Submission to Secretary

(A) Contract deadline

Any such contract shall be completed and submitted to the Secretary (or if designated by the Secretary, the area marketing association) for approval not later than September 15 of the year in which the crop is produced.

(B) Extension of deadline

The Secretary may extend the deadline under subparagraph (A) by up to 15 days in response to damaging weather or related condition (as defined in section 112 of the Disaster Assistance Act of 1989 ² (7 U.S.C. 1421 et seq.)). The Secretary shall announce the extension no later than September 5 of the year in which the crop is produced.

(3) Form

The contract shall be executed on a form prescribed by the Secretary. The form shall require such information as the Secretary determines appropriate to ensure the proper handling of the additional peanuts, including the identity of the contracting parties, the poundage, and category of the peanuts, the disclosure of any liens, and the intended disposition of the peanuts.

(4) Information for handling and processing additional peanuts

Notwithstanding any other provision of this section, any person wishing to handle and process additional peanuts as a handler shall submit to the Secretary (or if designated by the Secretary, the area marketing association), such information as may be required under subsection (d) of this section by such date as prescribed by the Secretary so as to permit final action to be taken on the application by July 1 of each marketing year.

(5) Terms

Each such contract shall contain the final price to be paid by the handler for the peanuts involved and a specific prohibition against the disposition of the peanuts for domestic edible or seed use.

(6) Suspension of restrictions on imported peanuts

Notwithstanding any other provision of this chapter, if the President issues a proclamation under section 3601(b) of title 19 expanding the quantity of peanuts subject to the in-quota rate of duty under a tariff-rate quota, or under section 624 of this title temporarily suspending restrictions on the importation of peanuts, the Secretary shall, subject to such terms and conditions as the Secretary may prescribe, permit a handler, with the written consent of the producer, to purchase additional peanuts from any producer who contracted with the handler and to offer the peanuts for sale for domestic edible use.

(g) Marketing of peanuts owned or controlled by Commodity Credit Corporation

(1) In general

Subject to section 1427 of this title, any peanuts owned or controlled by the Commodity Credit Corporation may be made available for domestic edible use, in accordance with regulations issued by the Secretary, so long as doing so does not result in substantially increased cost to the Commodity Credit Corporation. Additional peanuts received under loan shall be offered for sale for domestic edible use at prices not less than those required to cover all costs incurred with respect to the peanuts for such items as inspection, warehousing, shrinkage, and other expenses, plus-

(A) not less than 100 percent of the loan value of quota peanuts if the additional peanuts are sold and paid for during the harvest season on delivery by and with the written consent of the producer;

(B) not less than 105 percent of the loan value of quota peanuts if the additional peanuts are sold after delivery by the producer but not later than December 31 of the marketing year; or

(C) not less than 107 percent of the loan value of quota peanuts if the additional peanuts are sold later than December 31 of the marketing year.

(2) Acceptance of bids by area marketing associations

(A) In general

Except as provided in subparagraph (B), for the period from the date additional peanuts are delivered for loan to March 1 of the calendar year following the year in which the additional peanuts were harvested, the area marketing association designated pursuant to section 1445c–3(c)(1) ² of this title shall have sole authority to accept or reject lot list bids when the sales price, as determined under this subsection, equals or exceeds the minimum price at which the Commodity Credit Corporation may sell its stocks of additional peanuts.

(B) Modification

The area marketing association and the Commodity Credit Corporation may agree to modify the authority granted by subparagraph (A) to facilitate the orderly marketing of additional peanuts.

(3) Producer marketing and expenses

Notwithstanding any other provision of this chapter, the Secretary shall, in any determination required under subsections (a)(2) and (b)(1) of section 1445c–3 ² of this title, include any additional marketing expenses required by law, excluding the amount of any assessment required under the Omnibus Budget Reconciliation Act of 1990.

(h) Administration

(1) Interest

The person liable for payment or collection of any penalty provided for in this section shall be liable also for interest thereon at a rate per annum equal to the rate per annum of interest that was charged the Commodity Credit Corporation by the Treasury of the United States on the date the penalty became due.

(2) De minimis quantity

This section shall not apply to peanuts produced on any farm on which the acreage harvested for nuts is one acre or less if the producers who share in the peanuts produced on the farm do not share in the peanuts produced on any other farm.

(3) Liens

Until the amount of the penalty provided by this section is paid, a lien on the crop of peanuts with respect to which the penalty is incurred, and on any subsequent crop of peanuts subject to farm poundage quotas in which the person liable for payment of the penalty has an interest, shall be in effect in favor of the United States.

(4) Penalties

(A) Procedures

Notwithstanding any other provision of law, the liability for and the amount of any penalty assessed under this section shall be determined in accordance with such procedures as the Secretary by regulation may prescribe. The facts constituting the basis for determining the liability for or amount of any penalty assessed under this section, when officially determined in conformity with the applicable regulations prescribed by the Secretary, shall be final and conclusive and shall not be reviewable by any other officer or agency of the Government.

(B) Judicial review

Nothing in this section shall be construed as prohibiting any court of competent jurisdiction from reviewing any determination made by the Secretary with respect to whether the determination was made in conformity with the applicable law and regulations.

(C) Civil penalties

All penalties imposed under this section shall for all purposes be considered civil penalties.

(5) Reduction of penalties

(A) In general

Notwithstanding any other provision of law and except as provided in subparagraph (B), the Secretary may reduce the amount of any penalty assessed against handlers under this section by any appropriate amount, including, in an appropriate case, eliminating the penalty entirely, if the Secretary finds that the violation on which the penalty is based was minor or inadvertent, and that the reduction of the penalty will not impair the operation of the peanut program.

(B) Failure to export contracted additional peanuts

The amount of any penalty imposed on a handler under this section that resulted from the failure to export or crush contracted additional peanuts shall not be reduced by the Secretary.

(i) Crops

Notwithstanding any other provision of law, this section shall be effective only for the 1991 through 2002 crops of peanuts.

(Feb. 16, 1938, ch. 30, title III, §358e, formerly §359a, as added Pub. L. 101–624, title VIII, §804, Nov. 28, 1990, 104 Stat. 3467 ; renumbered §358e and amended Pub. L. 102–237, title I, §117(a), (b)(2)(D), Dec. 13, 1991, 105 Stat. 1841 ; Pub. L. 103–66, title I, §1109(c)(2), Aug. 10, 1993, 107 Stat. 326 ; Pub. L. 103–182, title III, §321(d)(1)(B), Dec. 8, 1993, 107 Stat. 2110 ; Pub. L. 103–465, title IV, §404(e)(6), Dec. 8, 1994, 108 Stat. 4961 ; Pub. L. 104–127, title I, §155(i)(1)(D), Apr. 4, 1996, 110 Stat. 928 .)

References in Text

Section 1445c–3 of this title, referred to in subsecs. (a)(1)(C)(i), (ii), (d)(1), and (g)(2)(A), (3), was repealed by Pub. L. 104–127, title I, §171(b)(2)(E), Apr. 4, 1996, 110 Stat. 938 .

Section 112 of the Disaster Assistance Act of 1989 (7 U.S.C. 1421 et seq.), referred to in subsec. (f)(2)(B), is section 112 of Pub. L. 101–82, which is set out in a note under section 1421 of this title.

The Omnibus Budget Reconciliation Act of 1990, referred to in subsec. (g)(3), is Pub. L. 101–508, Nov. 5, 1990, 104 Stat. 1388 . For complete classification of this Act to the Code, see Tables.

Amendments

1996-Pub. L. 104–127, §155(i)(1)(D)(i), struck out "for 1991 through 1997 crops of peanuts" after "peanuts" in section catchline.

Subsec. (i). Pub. L. 104–127, §155(i)(1)(D)(ii), substituted "2002" for "1997".

1994-Subsec. (f)(6). Pub. L. 103–465 inserted "under section 3601(b) of title 19 expanding the quantity of peanuts subject to the in-quota rate of duty under a tariff-rate quota, or" after "issues a proclamation".

1993-Pub. L. 103–66, §1109(c)(2)(A), substituted "1997" for "1995" in section catchline.

Subsec. (d). Pub. L. 103–182 amended par. (6) generally. Prior to amendment, par. (6) read as follows: "If any additional peanuts exported by a handler are reentered into the United States in commercial quantities as determined by the Secretary, the importer thereof shall be subject to a penalty at a rate equal to 140 percent of the loan level for quota peanuts on the quantity of peanuts reentered."

Subsec. (i). Pub. L. 103–66, §1109(c)(2)(B), substituted "1997" for "1995".

1991-Subsec. (b)(1). Pub. L. 102–237, §117(b)(2)(D), made a technical amendment to the reference to section 1359(c) of this title to reflect the renumbering of the corresponding section of the original act.

Effective Date of 1994 Amendment

Amendment by Pub. L. 103–465 effective on the date of entry into force of the WTO Agreement with respect to the United States [Jan. 1, 1995], except as otherwise provided, see section 451 of Pub. L. 103–465, set out as an Effective Date note under section 3601 of Title 19, Customs Duties.

Effective Date

Section effective beginning with the 1991 crop of an agricultural commodity, with provision for prior crops, see section 1171 of Pub. L. 101–624, set out as an Effective Date of 1990 Amendment note under section 1421 of this title.

Section Referred to in Other Sections

This section is referred to in sections 1358–1, 7271 of this title; title 19 section 3391.

¹ See References in Text note below.

² See References in Text note below.