[Federal Register Volume 61, Number 236 (Friday, December 6, 1996)]
[Rules and Regulations]
[Pages 64601-64603]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31027]


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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

7 CFR Part 981

[Docket No. FV96-981-4FR]


Almonds Grown in California; Interest and Late Payment Charges on 
Past Due Assessments

AGENCY: Agricultural Marketing Service, USDA.


[[Page 64602]]


ACTION: Final rule.

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SUMMARY: This final rule implements interest and late payment charges 
on past due assessments owed under the almond marketing order. The 
marketing order regulates the handling of almonds grown in California 
and is administered locally by the Almond Board of California (Board). 
This rule implements authority contained in the marketing order to 
allow the Board to collect late payment and interest charges for past 
due assessments owed the Board by handlers, and will contribute to the 
efficient administration of the program.

EFFECTIVE DATE: This final rule becomes effective December 9, 1996.

FOR FURTHER INFORMATION CONTACT: Kathleen M. Finn, Marketing 
Specialist, Marketing Order Administration Branch, F&V, AMS, USDA, room 
2523-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 
720-1509, Fax # (202) 720-5698; or Martin Engeler, California Marketing 
Field Office, Marketing Order Administration Branch, F&V, AMS, USDA, 
2202 Monterey Street, suite 102B, Fresno, California 93721; telephone: 
(209) 487-5901, Fax # (209) 487-5906. Small businesses may request 
information on compliance with this regulation by contacting: Jay 
Guerber, Marketing Order Administration Branch, Fruit and Vegetable 
Division, AMS, USDA, P.O. Box 96456, room 2523-S, Washington, DC 20090-
6456; telephone (202) 720-2491; Fax # (202) 720-5698.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Order No. 981 (7 CFR part 981), as amended, regulating the handling of 
almonds grown in California, hereinafter referred to as the ``order.'' 
This order is effective under 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 rule in 
conformance with Executive Order 12866.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule 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 rule.
    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 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 to review the Secretary's 
ruling on the petition, provided an action is filed not later than 20 
days after date of the entry of the ruling.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), 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 95 handlers and approximately 8,000 
producers of almonds in the regulated area. Small agricultural service 
firms, which includes handlers, 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 
having annual receipts of less than $500,000. The majority of handlers 
and producers of California almonds may be classified as small 
entities.
    This final rule implements regulations concerning collection of 
assessments under the California almond marketing order. This rule 
allows the Board to impose interest and late payment charges on past 
due assessment accounts. Although the vast majority of handlers are 
timely in remitting their assessments, there are a few who are not. 
This rule provides incentive for handlers to remit assessments in a 
timely manner, with the intent of creating a fair and equitable process 
among all industry handlers. It will not impose any costs on handlers 
who pay their assessments on time, and will contribute to the efficient 
administration of the program. Therefore, the AMS has determined that 
this action will not have a significant economic effect on a 
substantial number of small entities.
    Section 981.81 of the almond marketing order provides authority for 
the Board to assess handlers of California almonds to fund authorized 
activities. This section was recently amended to authorize the Board, 
with the approval of the Secretary, to impose interest and late payment 
charges on past due assessments.
    The Board met on July 24, 1996, and unanimously recommended 
implementing the order authority regarding interest and late payment 
charges. Although most handlers remit assessments in a timely manner, 
historically there have been a few who do not. Those handlers are able 
to reap the benefits of Board programs at the expense of others. In 
addition, they are able to utilize funds for their own use that should 
otherwise be paid to the Board to finance Board programs. In effect, 
this provides handlers with an interest free loan.
    Implementing interest and late payment charges will provide an 
incentive for handlers to pay assessments on time, which will improve 
compliance with the order. It will decrease the number of actions taken 
against handlers failing to pay assessments on time through 
administrative remedies or the Federal courts. These remedies can be 
costly and time consuming and often add to an already overburdened 
legal system. This rule removes any economic advantage gained by those 
handlers who do not pay on time, thus helping to ensure a program that 
is equitable to all. This is also consistent with standard business 
practices.
    For 1996-97 crop year assessments, interest charges of one and one 
half percent per month will be charged for assessments 30 days or more 
late. In addition, assessments remaining unpaid for 60 days will be 
charged a 10 percent late payment charge. For prior crop year 
assessments past due, the Board recommended an interest rate of one and 
one half percent per month and a late payment charge of 20 percent, 
after handlers are provided an initial grace period to come into 
compliance.
    While the Board's recommendation contemplated calculating interest 
and late payment charges from the original invoice date, the Department 
has determined that no interest or late payment charges will accrue 
prior to the effective date of this rule. Interest or late payment 
charges will only be applicable to assessments accrued and billed after 
the effective date of this rule.
    The proposed rule concerning this action was published in the 
September 13, 1996, Federal Register (61 FR 48428), with a 30-day 
comment period

[[Page 64603]]

ending October 15, 1996. Two comments were received.
    The Board commented that it supports the rule, in part, but it 
requested that the Department reconsider allowing the application of 
interest and late payment charges on assessments delinquent prior to 
the effective date of the final rule. The Board commented that the 
proposed rule ignored the industry's recommendations with regard to 
assessments which are delinquent prior to the effective date of the 
final rule and no one should be allowed to benefit from a ``free ride'' 
at the expense of other handlers. The Board believes that allowing 
handlers a short period of notice, such as 60 days, before imposing 
interest and late payment charges after the final rule is effective 
would give handlers ample opportunity to become current with all 
assessments past due. Those that do not become current during the 
notice period should be subject to interest and late payment charges, 
the Board believes. The Board further states that it believes this is 
consistent with the order language.
    The Department does not believe that the Board's recommendation 
would be consistent with the order language. The amended order language 
states that assessments not paid within the prescribed period of time 
``subsequent'' to approval by the Secretary shall be subject to 
interest or late payment charges. This language clearly indicates that 
only after the authority is implemented by a final rule should 
assessments be subject to interest and late payment charges. Although 
the Board may disagree with the Department's position that the order 
authorizes it to charge interest and late payment charges only on 
handlers who fail to pay assessments accrued and billed after the 
effective date of the final rule, the Department believes that the 
clear language and the intent of the order amendment is being met with 
this action and the long term benefits of this final rule will be 
significant to the effective administration of the order. For the above 
stated reasons, no change is being made to the rule in response to the 
Board's comment.
    The second comment was submitted by an attorney on behalf of an 
almond handler. This commenter requested clarification on the portion 
of the rule which states that no interest or late payment charges will 
accrue prior to the effective date of the rule and that interest and 
late payment charges will only be applicable to assessments accrued and 
billed after the effective date of the rule. As an example, he asked if 
a handler could be charged interest or late payment charges for 
assessments accrued in 1993. The commenter's interpretation of this 
language was that it would not. The commenter is correct. Only those 
assessments accrued and billed after the effective date of this final 
rule will be subject to interest and late payment charges.
    The commenter also asked if a handler has filed a petition in good 
faith under section 608 15(a) of the Act, challenging the 
constitutionality of any or all portions of the almond marketing order, 
and withholds assessments pending the outcome of this action, is the 
handler subject to interest and late payment charges from the time the 
assessments were originally accrued and billed? The commenter stated 
that interest and late payment charges should not apply during the 
pendency of a 15(a) proceeding because the Department will not 
stipulate to a refund of assessments in the event the handler prevails. 
The commenter proposed an exemption from interest and late payment 
charges for those assessments owed for promotion and advertising 
programs if the handler has filed a 15(a) petition. The handler would 
maintain such assessments in an interest bearing account and the funds 
would ultimately be the property of the prevailing party.
    It is the Department's position that filing a 15(a) petition does 
not relieve a handler from complying with marketing order requirements. 
If a handler prevails in a legal proceeding challenging the validity of 
marketing order provisions, the Department would comply with any final 
unappealable order granting relief to petitioners. Petitioners have the 
opportunity to argue relief remedies in the appropriate legal forum. 
For the foregoing reasons, no change is being made to the rule in 
response to this comment.
    After thoroughly analyzing the comments received and other 
available information, the Department has concluded that this final 
rule is appropriate.
    After consideration of all relevant matter presented, including the 
information and recommendations submitted by the Board and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because this rule should be implemented 
as soon as possible so that the Board will be in a position to 
implement an incentive for handlers to make timely assessment payments. 
Further, handlers are aware of this rule, which was recommended at a 
public meeting. Also, a 30-day comment period was provided for in the 
proposed rule.

List of Subjects in 7 CFR Part 981

    Almonds, Marketing agreements, Nuts, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 981 is 
amended as follows:

PART 981--ALMONDS GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR part 981 continues to read as 
follows:

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

    2. A new Sec. 981.481 is added to read as follows:


Sec. 981.481  Interest and late payment charges.

    (a) Pursuant to Sec. 981.481, the Board shall impose an interest 
charge on any handler whose assessment payment has not been received in 
the Board's office, or the envelope containing the payment legibly 
postmarked by the U.S. Postal Service, within 30 days of the invoice 
date shown on the handler's statement. The interest charge shall be a 
rate of one and one half percent per month and shall be applied to the 
unpaid assessment balance for the number of days all or any part of the 
unpaid balance is delinquent beyond the 30 day payment period.
    (b) In addition to the interest charge specified in paragraph (a) 
of this section, the Board shall impose a late payment charge on any 
handler whose payment has not been received in the Board's office, or 
the envelope containing the payment legibly postmarked by the U.S. 
Postal Service, within 60 days of the invoice date. The late payment 
charge shall be 10 percent of the unpaid balance.

    Dated: December 2, 1996.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 96-31027 Filed 12-5-96; 8:45 am]
BILLING CODE 3410-02-P