
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 7USC1359a]

 
                          TITLE 7--AGRICULTURE
 
             CHAPTER 35--AGRICULTURAL ADJUSTMENT ACT OF 1938
 
 SUBCHAPTER II--LOANS, PARITY PAYMENTS, CONSUMER SAFEGUARDS, MARKETING 
                   QUOTAS, AND MARKETING CERTIFICATES
 
                        Part B--Marketing Quotas
 
                  subpart vi--marketing quotas--peanuts
 
Sec. 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;
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                (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.
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                              (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, Sec. 358e, formerly Sec. 359a, as 
added Pub. L. 101-624, title VIII, Sec. 804, Nov. 28, 1990, 104 Stat. 
3467; renumbered Sec. 358e and amended Pub. L. 102-237, title I, 
Sec. 117(a), (b)(2)(D), Dec. 13, 1991, 105 Stat. 1841; Pub. L. 103-66, 
title I, Sec. 1109(c)(2), Aug. 10, 1993, 107 Stat. 326; Pub. L. 103-182, 
title III, Sec. 321(d)(1)(B), Dec. 8, 1993, 107 Stat. 2110; Pub. L. 103-
465, title IV, Sec. 404(e)(6), Dec. 8, 1994, 108 Stat. 4961; Pub. L. 
104-127, title I, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 1109(c)(2)(B), substituted 
``1997'' for ``1995''.
    1991--Subsec. (b)(1). Pub. L. 102-237, Sec. 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.
