[Federal Register Volume 60, Number 74 (Tuesday, April 18, 1995)]
[Proposed Rules]
[Pages 19382-19383]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-9453]



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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 60, No. 74 / Tuesday, April 18, 1995 / 
Proposed Rules  
[[Page 19382]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[FV95-946-2PR]


Irish Potatoes Grown in Washington; Establishment of Interest 
Charge on Overdue Assessment Payments and Clarification of Operating 
Reserve Authority

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would establish an interest charge on 
overdue assessments under the marketing order and clarify authority for 
an operating reserve not to exceed approximately two fiscal periods' 
expenses. This proposed rule would contribute to the efficient 
operation of the order by ensuring that adequate funds are available to 
cover authorized expenses incurred under the order. This proposed rule 
was recommended by the State of Washington Potato Committee 
(Committee), the agency responsible for the local administration of the 
order.

DATES: Comments must be received by May 3, 1995.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments must be sent in triplicate to the 
Docket Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525, South 
Building, P.O. Box 96456, Washington, D.C. 20090-6456, Fax: (202) 720-
5698. All comments should reference the docket number and the date and 
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.

FOR FURTHER INFORMATION CONTACT: Dennis L. West, Northwest Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Division, AMS, USDA, 1220 SW Third Avenue, room 369, 
Portland, Oregon 97204-2807; telephone: (503) 326-2724; or James B. 
Wendland, Marketing Order Administration Branch, Fruit and Vegetable 
Division, AMS, USDA, P.O. Box 96456, room 2523-S, Washington, D.C. 
20090-6456; telephone: (202) 720-2170.

SUPPLEMENTARY INFORMATION: This rule is proposed under Marketing 
Agreement No. 113 and Marketing Order No. 946 (7 CFR part 946), both as 
amended, regulating the handling of Irish potatoes grown in Washington, 
hereinafter referred to as the ``order.'' The order is authorized by 
the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 
601-674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (Department) is issuing this proposed 
rule in conformance with Executive Order 12866.
    This proposed rule has been reviewed under Executive Order 12778, 
Civil Justice Reform. It is not intended to have retroactive effect. If 
adopted, the proposed rule would not preempt any State or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with the proposal.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with the Secretary of 
Agriculture (Secretary) a petition stating that the order, any 
provision of the order, or any obligation imposed in connection with 
the order is not in accordance with law and request a modification of 
the order or to be exempted therefrom. A handler is afforded the 
opportunity for a hearing on the petition. After the hearing the 
Secretary would rule on the petition. The Act provides that the 
district court of the United States in any district in which the 
handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction in equity to review the Secretary's ruling 
on the petition, provided a bill in equity is filed not later than 20 
days after the date of the entry of the ruling.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Administrator of the Agricultural Marketing Service 
(AMS) has considered the economic impact of this action on small 
entities.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and rules issued thereunder, are unique in that 
they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 50 handlers of Washington potatoes subject 
to regulation under the order and approximately 450 producers of 
Washington potatoes in the regulated production area. Small 
agricultural service firms have been defined by the Small Business 
Administration (13 CFR 121.601) as those having annual receipts of less 
than $5,000,000, and small agricultural producers are defined as those 
whose annual receipts are less than $500,000. The majority of potato 
handlers and producers regulated under the order may be classified as 
small entities.
    This proposed rule would (1) establish an interest charge of one 
(1) percent per month to be applied to any assessment balance remaining 
unpaid after 30 days, and (2) clarify that funds in the operating 
reserve may not exceed approximately two fiscal periods' expenses.
    These proposed changes were recommended by the Committee at its 
February 22, 1995, meeting. Thirteen of the 15-member Committee 
attended the meeting. All in attendance favored the proposed changes. 
The proposed changes would contribute to the efficient operation of the 
program by ensuring that adequate funds are available to cover the 
Committee's authorized expenses.
    Section 946.41 of the order specifies that if handlers do not pay 
their assessments within the time prescribed by the Committee, the 
assessments may be increased by a late payment charge or an interest 
charge, or both, at rates prescribed by the Committee with the approval 
of the Secretary.
    The Committee depends upon handler assessment payments for 
operating funds. Handlers are invoiced by the Committee on a monthly 
basis. However, some handlers are continually late with their 
assessment payments, and a few wait until the end of the 
[[Page 19383]] season to remit to the Committee what is owed. When 
assessments are not paid in a timely manner, the handlers paying 
assessments on time are placed in an unfair situation compared with the 
delinquent handlers, who have use of that unpaid assessment money for 
other purposes, including earning interest in a financial institution.
    As part of its collection efforts, the Committee has requested 
handlers to promptly submit delinquent assessment payments. However, 
such requests have not substantially decreased the frequency of 
delinquent payments. To facilitate the collection of assessments needed 
for the maintenance and functioning of the Committee, it recommended 
the establishment of an interest charge of one (1) percent per month to 
be applied to any assessment balance remaining unpaid after 30 days, 
and that this one (1) percent interest charge shall be applied monthly 
thereafter to the unpaid balance, including any accumulated unpaid 
interest. The Committee believes that these charges are high enough to 
encourage timely assessment payments. The charges are within the 
interest range customarily charged by banks on commercial accounts.
    This proposed change is intended to encourage handlers to pay their 
assessments when due, thereby eliminating inequities. The Committee 
believes that this would be an effective means to ensure timely 
payments. This proposed change is expected to reduce the need for 
Department involvement with compliance efforts and thereby reduce the 
costs for the government to administer the order.
    Effective June 5, 1972, Sec. 946.42 of the order was revised to 
authorize the Committee to maintain an operating reserve not to exceed 
approximately two fiscal periods' operational expenses, or such lower 
limits as the Committee, with the approval of the Secretary, may 
establish (37 FR 10915; June 1, 1972). Funds in the reserve are 
available for use by the Committee for expenses authorized pursuant to 
Sec. 946.40. Since June of 1972, the Committee has conducted its 
financial operations with a reserve approximating two fiscal periods' 
expenses and has not recommended a lower limit.
    However, the proviso in paragraph (a) of Sec. 946.142 of Subpart--
Rules and Regulation's (7 CFR 946.100-946.142; 32 FR 16199; November 
28, 1967) limiting the operating reserve to approximately one fiscal 
year's expenses has never been updated to bring it into conformity with 
amended paragraph (a) of Sec. 946.42 of the order. This proposed rule 
proposes to make that conforming change by changing the words ``one 
fiscal year's expenses'' at the end of the proviso to ``two fiscal 
periods' expenses''.
    Based on available information, the Administrator of the AMS has 
determined that this action would not have a significant economic 
impact on a substantial number of small entities.
    A 15-day comment period is deemed appropriate to allow interested 
persons to respond to this proposal. The Committee would like to impose 
interest charges on delinquent handlers as soon as possible to 
encourage such handlers to pay assessments in a timely manner. All 
written comments received within the comment period will be considered 
before a final rule is issued on this matter.

List of Subjects in 7 CFR Part 946

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, it is proposed that 7 
CFR part 946 be amended as follows:

PART 946--IRISH POTATOES GROWN IN WASHINGTON

    1. The authority citation for 7 CFR part 946 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

    2. A new Sec. 946.141 is added to read as follows:


Sec. 946.141  Late payment and interest charge.

    The Committee shall impose an interest charge on any handler who 
fails to pay his or her assessment within thirty (30) days of the 
billing date shown on the handler's assessment statement received from 
the Committee. The interest charge shall, after 30 days, be one percent 
of the unpaid assessment balance. In the event the handler fails to pay 
the delinquent assessment, the one percent interest charge shall be 
applied monthly thereafter to the unpaid balance, including any 
accumulated unpaid interest. Any amount paid by a handler as an 
assessment, including any charges imposed pursuant to this paragraph, 
shall be credited when the payment is received in the Committee office.
    3. In Sec. 946.142, paragraph (a) is revised to read as follows:


Sec. 946.142  Operating reserve.

    (a) The Committee, with the approval of the Secretary, may carry 
over excess funds into subsequent fiscal periods as an operating 
reserve: Provided, That funds in the operating reserve may not exceed 
approximately two fiscal periods' expenses.
* * * * *
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 95-9453 Filed 4-17-95; 8:45 am]
BILLING CODE 3410-02-P