[Federal Register Volume 60, Number 101 (Thursday, May 25, 1995)]
[Rules and Regulations]
[Pages 27682-27684]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12803]



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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

7 CFR Part 946

[FV95-946-2FR]


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: Final rule.

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

EFFECTIVE DATE: May 25, 1995.

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 issued 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 final 
rule in conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12778, Civil 
Justice Reform. This action is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
action.
    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 
[[Page 27683]] 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 rule (1) establishes an interest charge of one (1) percent per 
month to be applied to any assessment balance remaining unpaid after 30 
days, and (2) clarifies that funds in the operating reserve may not 
exceed approximately two fiscal periods' expenses.
    These changes were unanimously recommended by the Committee. The 
changes will 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 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 change will encourage handlers to pay their assessments when 
due, thereby eliminating inequities. The Committee believes that this 
will be an effective means to ensure timely payments. This action 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 Regulations (7 CFR Sec. 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 
rule makes that conforming change by changing the words ``one fiscal 
year's expenses'' at the end of the proviso to ``two fiscal periods' 
expenses''.
    A proposed rule on these actions was published in the Federal 
Register on April 18, 1995, (60 FR 19382). It provided a 15-day comment 
period which ended May 3, 1995. No comments were received.
    Based on available information, the Administrator of the AMS has 
determined that this action will not have a significant economic impact 
on a substantial number of small entities.
    After consideration of all relevant matters presented, the 
information and recommendations submitted by the Committee and other 
information, it is found that finalizing the proposed rule, without 
change, as published in the Federal Register (60 FR 19382, April 18, 
1995), will tend to effectuate the declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined that good 
cause exists for not postponing the effective date of this action until 
30 days after publication in the Federal Register because: (1) This 
action clarifies authority for an operating financial reserve 
approximating two fiscal periods' expenses rather than one; (2) this 
action should be in effect as soon as possible so handlers can make 
plans for the upcoming shipping season and to encourage any handlers 
owing delinquent assessments to promptly pay; (3) this action was 
unanimously recommended by the Committee at an open public meeting and 
all interested persons had an opportunity to provide input; and (4) 
this action provided a 15-day period for submission of written comments 
and none were received.

List of Subjects in 7 CFR Part 946

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.
    For the reasons set forth in the preamble, 7 CFR part 946 is 
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 [[Page 27684]] funds in the operating reserve 
may not exceed approximately two fiscal periods' expenses.
* * * * *
    Dated: May 19, 1995.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 95-12803 Filed 5-24-95; 8:45 am]
BILLING CODE 3410-02-P