[Federal Register Volume 61, Number 18 (Friday, January 26, 1996)]
[Notices]
[Pages 2479-2480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-1415]



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 Notices
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 This section of the FEDERAL REGISTER contains documents other than rules 
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  Federal Register / Vol. 61, No. 18 / Friday, January 26, 1996 / 
Notices  

[[Page 2479]]


DEPARTMENT OF AGRICULTURE

Office of the Secretary of Agriculture


Waiver of Penalties for Small Business and Reducing the Frequency 
of Reports

AGENCY: Office of the Secretary of Agriculture, USDA.

ACTION: Notice.

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SUMMARY: We are advising the public of the Department of Agriculture's 
policy for the waiver of penalties for small businesses and the 
reduction of the frequency of reports required to be made by the 
public. In April 1995, the President directed heads of executive branch 
agencies to use their discretion to waive, in appropriate 
circumstances, the imposition of all or a portion of penalties on small 
businesses and, where feasible and authorized by law, to cut by one-
half the frequency with which regularly scheduled reports are required, 
by rule or policy, to be provided to the United States Government. The 
Secretary of Agriculture issued Secretary's Memorandum 3031-1, 
effective October 10, 1995, implementing the President's directive.

FOR FURTHER INFORMATION CONTACT:
William Jenson, Senior Counsel, Regulatory Division, Office of the 
General Counsel, USDA, room 2402, South Building, 14th Street and 
Independence Avenue SW., Washington, D.C. 20250; (202) 720-2453.

SUPPLEMENTARY INFORMATION: On April 21, 1995, the President issued a 
memorandum to heads of executive branch agencies directing that each: 
(1) use his or her discretion to waive penalties imposed on small 
businesses where appropriate; (2) where feasible and authorized by law, 
cut by one-half the frequency with which regularly scheduled reports 
are required, by rule or policy, to be provided to the United States 
Government; and (3) submit a plan to the Director of the Office of 
Management and Budget describing the actions the agency will take to 
implement the President's April 21, 1995, memorandum. The President's 
memorandum was published in the Federal Register on April 26, 1995, at 
60 FR 20621-20622.
    The Department of Agriculture's plan to implement the President's 
April 21, 1995, memorandum was approved by the Director of the Office 
of Management and Budget, and the Secretary of Agriculture's memorandum 
implementing the President's directive became effective on October 10, 
1995.
    This notice serves to notify small businesses and the public of the 
Department of Agriculture's policy regarding the waiver of penalties 
for small businesses, and the Department of Agriculture's policy 
regarding reductions in the frequency with which regularly scheduled 
reports are required, by rule or policy, to be provided to the 
Department of Agriculture. These Department of Agriculture policies are 
set forth in Secretary's Memorandum 3031-1 which reads as follows:

[Secretary's Memorandum 3031-1]

Waiver of Penalties for Small Business and Cutting Frequency of 
Reports

1. Background

    The Secretary administers a number of statutes that authorize 
the Secretary to impose penalties for violations of those statutes, 
of regulations issued under those statutes, and of contracts and 
agreements executed under those statutes. The Secretary administers 
a number of programs under which the public is required, by 
regulation or policy, to provide USDA with regularly scheduled 
reports. The President issued a memorandum on April 21, 1995, to the 
heads of executive branch agencies directing that each:
    a. use his or her discretion to waive the imposition of all or a 
portion of penalties on small businesses;
    b. cut by one-half the frequency with which regularly scheduled 
reports are required, by rule or policy, to be provided to the 
United States Government; and
    c. submit a plan to the Director of the Office of Management and 
Budget describing the actions the agency will take to implement the 
penalty waiver policy and the reporting frequency policy described 
in the President's April 21, 1995, memorandum.

2. Purpose

    a. This Memorandum implements the President's policy to waive 
penalties for small businesses and to reduce the frequency of 
reports required to be made by the public.
    b. Neither the President's policy to waive penalties for small 
businesses and to reduce the frequency of reports required to be 
made by the public nor this Memorandum applies to:
    (1) matters related to law enforcement, national security, or 
foreign affairs;
    (2) the importation of exportation of prohibited or restricted 
items;
    (3) United States Government taxes, duties, fees, revenues, or 
receipts; or
    (4) USDA agencies whose principal purpose is the collection, 
analysis, and dissemination of statistical information.

3. Definitions

    For the purposes of this Memorandum, the following terms shall 
have the meanings set forth in this paragraph.
    a. Administering agency. The USDA agency that administers the 
statute, regulation, contract, or agreement under which penalties 
may be imposed.
    b. Corrective action. Action taken by a small business to 
correct a violation or to achieve compliance.
    c. Covered penalty. Any penalty that may be imposed for a 
violation of a statute, regulation, contract, or agreement for 
which:
    (1) the violator has made a good faith effort to comply with the 
statute, regulation, contract, or agreement that has been violated;
    (2) the violation does not constitute a violation of criminal 
law;
    (3) the violation did not result in a significant threat to 
health, safety, or the environment;
    (4) the violation can be corrected or the violator can achieve 
compliance;
    (5) an adjudicatory action has not been instituted; and
    (6) the Secretary is permitted by law or has discretion under 
applicable statutes, regulations, contracts, or agreements to waive 
all or a portion of the penalty.
    d. Good faith effort to comply with the statute, regulation, 
contract, or agreement that has been violated. Conduct that results 
in a violation of a statute, regulation, contract, or agreement, but 
circumstances surrounding the violation indicate that (1) the 
violator did not know that the conduct constituted a violation and 
the violator did not intend to commit the violation; (2) the 
violator made every reasonable effort to comply with the statute, 
regulation, contract, or agreement; or (3) the violator knew that 
the conduct constituted a violation, but due to circumstances beyond 
the violator's control it was impossible for the violator to comply, 
and the violator brought the violation to the attention of 
appropriate USDA officials in an expeditious manner. (The term good 
faith effort to comply with the statute, regulation, contract, or 
agreement 

[[Page 2480]]
that has been violated does not include any circumstance in which: the 
violation was malicious; the violator had previously been found to 
have violated the same statute, regulation, contract, or agreement; 
or the violator had previously been informed that the conduct that 
resulted in the violation is prohibited by statute, regulation, 
contract, or agreement.)
    e. Penalty. Any sanction that may be imposed directly by the 
Secretary. (The term penalty does not include: liquidated damages; 
any restitution for damages suffered by USDA; any action that either 
permanently or temporarily excludes a small business from entering 
into a transaction with USDA; or any sanction that may be imposed by 
a USDA grantee or subgrantee even if the sanction may be imposed as 
a result of conditions required by USDA for the grant.)
    f. Penalty Modification Coordinator. The individual appointed by 
a USDA agency in accordance with paragraph 5 of this Memorandum.
    g. Secretary. The Secretary of the United States Department of 
Agriculture or any individual to whom the Secretary delegates 
authority.
    h. Significant threat to health, safety, or the environment. Any 
conduct that is likely to result in:
    (1) death, injury, illness, or spread of diseases or pests to 
any human, animal, or plant; or
    (2) material harm to the environment.
    i. Small business. Any sole proprietorship, joint venture, 
partnership, corporation, association, or other legal entity that:
    (1) employed 500 or fewer individuals at the time of the alleged 
violation; or
    (2) in the tax year immediately preceding the alleged violation, 
had gross receipts of $1,000,000 or less.
    j. USDA. The United States Department of Agriculture.

4. Waiver of Penalties

    a. If a penalty may be imposed on the small business by the 
Secretary, the administering agency shall determine whether the 
penalty is a covered penalty. If the administering agency determines 
the penalty to be a covered penalty, the administering agency shall:
    (1) provide a copy of this Memorandum to the small business on 
which the penalty may be imposed; and
    (2) notify the small business that the imposition of all or a 
portion of a penalty can be waived as agreed by the small business 
and the agency, if corrective action can be achieved within the time 
to be established in the sole discretion of the administering 
agency. The penalty shall be waived, in whole or in part, if the 
administering agency and the small business agree in writing as to 
the waiver of the penalty, the administering agency establishes the 
time within which correction action is to be taken, and the small 
business takes corrective action within the time established by the 
administering agency.
    b. If the small business takes corrective action, but fails to 
do so within the time established in accordance with paragraph 4a(2) 
of this Memorandum by the administering agency, the administering 
agency may reduce the amount of any monetary penalty that may be 
imposed for the violation up to the amount spent by the small 
business for corrective action. When determining whether to reduce a 
monetary penalty in accordance with this subparagraph, the 
administering agency shall take into account the time in which the 
small business took corrective action and any difficulties the small 
business encountered when doing so.
    c. Any administering agency that waives a penalty in accordance 
with paragraph 4a or 4b of this Memorandum shall issue a written 
statement to the small business stating that corrective action has 
been taken, that the imposition of all or a portion of the penalty 
has been waived, the manner in which the penalty has been waived, 
and the amount or type of any remaining penalty that may be imposed.
    d. The use of appropriate alternative dispute resolution 
techniques to assist in the determination whether a penalty will be 
waived as authorized by this Memorandum is encouraged.
    e. Each Under or Assistant Secretary shall submit a quarterly 
report, starting January 1, 1996, to the Secretary of Agriculture 
describing actions taken pursuant to this Memorandum. Each quarterly 
report must include each penalty that has been waived during the 
quarter, the manner in which each penalty has been waived, the 
corrective action taken by the small business, and the amount or 
type of any remaining penalty.

5. Penalty Modification Coordinator

    Each administering agency that administers any program under 
which the Secretary is permitted by law or has discretion to waive 
the imposition of a penalty shall appoint a Penalty Modification 
Coordinator who shall be responsible for the implementation of 
paragraphs 4 and 6 of this Memorandum in the administering agency.

6. Notification

    a. Each Penalty Modification Coordinator shall provide to each 
employee of the administering agency who has authority to assess 
penalties or to recommend the assessment of penalties:
    (1) a copy of this Memorandum; and
    (2) the name, address, and telephone number of the Penalty 
Modification Coordinator, who shall be available to answer questions 
concerning the implementation of this Memorandum posed by agency 
employees.
    b. Small businesses shall be notified of this Memorandum by 
publication of this Memorandum in the Federal Register.

7. Reporting Frequency

    a. Except as provided in paragraph 7c of this Memorandum, each 
agency shall reduce by at least one-half the frequency with which 
regularly scheduled reports required, by regulation or policy in 
effect on April 21, 1995, must be provided to USDA.
    b. Policy changes necessary to comply with paragraph 7a of this 
Memorandum shall be implemented no later than November 1, 1995. 
Regulatory changes necessary to comply with paragraph 7a of this 
Memorandum shall be effective no later than January 1, 1996.
    c. The frequency with which regularly scheduled reports shall be 
provided to USDA shall not be reduced pursuant to paragraph 7a of 
this Memorandum if:
    (1) the frequency with which the report is provided to USDA is 
required by statute;
    (2) the report is required to be provided to USDA as a condition 
of continued employment with USDA, execution of a contract with 
USDA, or receipt of a loan, grant, guarantee, or benefit from USDA; 
or
    (3) the Secretary of Agriculture determines that the reduction 
of the frequency with which the regularly scheduled report is 
provided to USDA--is not legally permissible; would not adequately 
protect health, safety, or the environment; would be inconsistent 
with achieving regulatory flexibility or reducing regulatory 
burdens; or would impede the effective administration of a USDA 
program.

8. Effective Date

    This Memorandum shall be effective on October 10, 1995.

9. Effect on Other Agency Penalty Waiver Policies

    To the extent that any administering agency policy regarding the 
waiver of covered penalties is inconsistent with this Memorandum, 
the policy shall be revoked or modified to conform to this 
Memorandum no later than November 1, 1995. To the extent that any 
administering agency regulations regarding the waiver of covered 
penalties is inconsistent with this Memorandum, the regulations 
shall be revoked or modified to conform to this Memorandum no later 
than January 1, 1996. This Memorandum does not affect any 
administering agency policy to waive penalties that is not 
inconsistent with this Memorandum.

10. Termination or Modification

    This Memorandum may be terminated or modified by the Secretary 
of Agriculture at any time.

11. Judicial Review

    This Memorandum is intended only to improve the internal 
management of USDA and does not create any right or benefit, 
substantive or procedural, enforceable at law or equity by a party 
against the United States, USDA, the officers or employees of the 
United States or USDA, or any other person. Neither this Memorandum 
nor the waiver of any penalty in accordance with this Memorandum 
shall affect the date on which the imposition of a penalty shall be 
considered to be final agency action for the purposes of judicial 
review.

    Done in Washington, D.C., this 22nd day of January, 1996.
Dan Glickman,
Secretary of Agriculture.
[FR Doc. 96-1415 Filed 1-25-96; 8:45 am]
BILLING CODE 3410-01-M