[Federal Register Volume 71, Number 216 (Wednesday, November 8, 2006)]
[Proposed Rules]
[Pages 65426-65430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-18826]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 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. 71, No. 216 / Wednesday, November 8, 2006 / 
Proposed Rules  

[[Page 65426]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 46

[Docket Number FV05-373]
RIN 0581-AC53


Amendments to Regulations Under the Perishable Agricultural 
Commodities Act (PACA) To Ensure Trust Protection for Produce Sellers 
When Using Electronic Invoicing or Other Billing Statements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Department of Agriculture (USDA) is proposing to amend the 
regulations under the Perishable Agricultural Commodities Act (PACA) to 
ensure that the status of sellers of perishable agricultural 
commodities as trust creditors is protected when electronic data 
interchange (EDI) or other forms of electronic commerce are used to 
invoice buyers. Specifically, the proposed amendments would require a 
buyer licensed under the PACA or his third party representative to 
accept the PACA trust notice submitted to it by a seller on a paper, 
electronic invoice, or other billing statement. In addition, the buyer 
must allow sufficient data space for the required trust language 
regardless of the billing medium. Finally, any failure, act or omission 
inconsistent with this responsibility is unlawful and a violation of 
the PACA. Comments are being sought from the public, but in particular, 
from buyers and sellers of fruit and vegetables and vendors/software 
developers of electronic billing systems.

DATES: Written or electronic comments received by January 8, 2007 will 
be considered prior to issuance of a final rule.

ADDRESSES: You may submit written or electronic comments to:
    (1) PACA Trust Comments, AMS, F&V Programs, PACA Branch, 1400 
Independence Avenue, SW., Room 2095-S, Stop 0242, Washington, DC 20250-
0242
    (2) Fax: 202-720-8868.
    (3) E-mail comments to [email protected].
    (4) Internet: http://www.regulations.gov.
    Instructions: All comments will become a matter of public record 
and should be identified as ``PACA Trust Comments.'' Comments will be 
available for public inspection at the Agricultural Marketing Service 
at the above address or over the Agency's Web site at: http://www.ams.usda.gov/paca. Web site questions can be addressed to the PACA 
Webmaster, [email protected].

FOR FURTHER INFORMATION CONTACT: Karla Whalen, Section Head, Trade 
Practices Section, or Phyllis Hall, Senior Marketing Specialist, Trade 
Practices Section, 202-720-6873.

SUPPLEMENTARY INFORMATION:

Background of PACA and Trust Provisions

    The Perishable Agricultural Commodities Act (PACA) establishes a 
code of fair trading practices in the marketing of fresh and frozen 
fruits and vegetables in interstate and foreign commerce. The PACA 
protects growers, shippers, distributors, and retailers dealing in 
those commodities by prohibiting unfair and fraudulent trade practices. 
The law also provides a forum to adjudicate or mediate commercial 
disputes. Licensees who violate the PACA may have their license 
suspended or revoked, and principals of such a licensee are restricted 
from employment or operating in the produce industry for a period of 
time.
    The PACA also imposes a statutory trust for the benefit of unpaid 
suppliers or sellers on perishable agricultural commodities received 
and accepted but not yet paid for, and may encumber products derived 
from those commodities, and any receivables or proceeds due from the 
sale of those commodities or products. USDA's Agricultural Marketing 
Service (AMS) administers and enforces the PACA.
    In the case of a business failure or bankruptcy of an entity 
subject to PACA, the debtor's inventory and receivables (PACA trust 
assets) are not property of the estate and are not available for 
general distribution until the claims of PACA creditors who have 
preserved their trust rights have been satisfied. Because of the 
statutory trust provision, PACA trust creditors who have preserved 
their trust rights with the appropriate written notices, including 
sellers outside of the United States, have a far greater chance of 
recovering the money owed to them should an entity subject to PACA go 
out of business. The PACA trust provisions protect producers and the 
majority of firms trading in fruits and vegetables as each buyer of 
perishable agricultural commodities in the marketing chain becomes a 
seller in its own turn.
    In 1995, the PACA was amended to provide that licensed sellers of 
fresh and frozen fruits and vegetables may provide notice to buyers of 
their intention to preserve trust benefits by including specific 
language on invoice and billing documentation. The required language 
reads: ``The perishable agricultural commodities listed on this invoice 
are sold subject to the statutory trust authorized by section 5(c) of 
the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499e(c)). 
The seller of these commodities retains a trust claim over these 
commodities, all inventories of food or other products derived from 
these commodities, and any receivables or proceeds from the sale of 
these commodities until full payment is received.'' (7 U.S.C. 
499e(c)(4)).

Amendment of PACA Regulations To Allow for Electronic Invoicing

    The PACA regulations (7 CFR 46.46(a)(5)) were amended in 1997 to 
state that electronic transmissions are considered ``ordinary and usual 
billing and invoicing statements'' within the meaning of Section 
5(c)(4) of the PACA. Under current regulations, unpaid PACA licensed 
sellers or suppliers of fresh and frozen fruits and vegetables may 
provide notice to buyers of their intention to preserve their trust 
rights by including the specified language contained in Section 5(c)(4) 
of the PACA on their billing or invoice statements, whether paper 
documentation or electronic transmissions. Alternatively, as provided 
in the PACA and regulations, sellers (licensed or non-licensed) may 
satisfy the notice requirement by

[[Page 65427]]

sending the buyer a separate detailed notice of their intent to 
preserve trust benefits within thirty (30) days of payment default. 
Whichever method of notice is used to preserve trust benefits, in order 
to claim the benefit of the trust, payment terms may not exceed 30 days 
from date of acceptance.
    Since the amendment to the regulations, a number of produce sellers 
have voiced concern that their PACA trust rights may not be preserved 
if: (1) The buyer/buyer's agent either willfully or through oversight 
does not receive the entire electronic transmission (i.e., electronic 
invoice); (2) the buyer/buyer's agent does not download the trust 
information; (3) the buyer/buyer's agent does not opt to receive the 
information; (4) the buyer/buyer's agent does not buy the data field 
that allows the inclusion of the trust language; or (5) the EDI service 
provider does not translate the field that contains the trust language. 
Additional concerns have been expressed that the alternate method of 
trust notice (i.e., separate trust notice letter) is not being accepted 
by some buyers who require electronic invoicing. Others in the industry 
have expressed concern about being charged a fee by the buyer to accept 
the notice to preserve their trust benefits with an electronic invoice, 
a paper invoice, or separate trust notice.

Advanced Notice of Proposed Rulemaking

    AMS published an Advanced Notice of Proposed Rulemaking in the 
Federal Register on January 30, 2006, (71 FR 4831) seeking comments on 
whether, and if so, how to amend the PACA regulations to address 
industry concerns regarding electronic invoicing. The Advance Notice of 
Proposed Rulemaking invited comments on: (1) The types of problems that 
may need to be addressed by new regulatory language; (2) any 
technological barriers and solutions; (3) any additional costs likely 
to be associated with appropriate regulations, and opinions regarding 
who should bear such costs; (4) whether the Agency should by regulation 
define electronic invoicing methods that must be made available by 
licensed buyers, (e.g., creating a separate field for trust notice 
language in electronic invoices); (5) whether buyers should be required 
to accept separate notices (i.e., electronic or paper PACA trust) 
without restriction or charge; and (6) other related issues and 
suggestions. The comment period ended on March 16, 2006.

Discussion of Comments

    During the comment period, AMS received 65 comments. Sixty-two 
comments favor amending the regulations to clarify electronic invoicing 
practices so that sellers have the same protection when using 
electronic invoicing as that afforded through traditional paper 
invoices. Two comments suggest creating a blanket trust notice. One 
comment did not believe that regulatory action was necessary. The major 
subject areas of these comments are discussed below.

Modifying Regulations Necessary To Preserve Trust Protection

    Of the sixty-two comments in favor of amending the regulations, 
fifty-one comments were basically identical in form and substance. 
These comments were submitted by growers/shippers of fresh fruits and 
vegetables. They encourage AMS to amend the regulations to clarify that 
shippers have the same statutory trust protections when invoicing 
electronically as when invoicing using traditional paper invoices. 
Comments also state that the regulations need to be changed to adapt to 
evolving industry practices and provide protection to shippers when 
invoicing electronically. These commentors did not give suggestions on 
how to modify the regulations.
    There has been uncertainty industry-wide about electronic billing 
and the assurance of statutory trust protection. The 1997 amendment to 
the PACA regulations serves to accommodate changes in the marketplace 
as well as advances in technology. However, the industry has continued 
to express concern about the potential danger that a notice seeking to 
perfect trust rights may not be effective if the shipper/seller is 
invoicing electronically. There is strong industry support for changing 
the regulations to eliminate this perceived risk and to avoid a 
potential challenge to trust protection in light of recent produce 
company bankruptcies in the tens of millions of dollars. AMS agrees 
with the commentors that the regulations should be modified to clarify 
that shippers are provided the same statutory trust protection whether 
they invoice electronically or use paper documentation and to ensure 
that buyers/receivers do not hinder the sellers' claim of trust 
protection.

Mandatory Acceptance of Trust Language

    Another issue addressed by a number of commentors is whether the 
buyer must be required to accept, or should be deemed to have accepted 
the trust language in its electronic transactions. Comments from fifty-
one growers/shippers of fresh fruit and vegetables support modifying 
the regulations so that it is mandatory and not discretionary for a 
buyer to accept the trust notifications received from its sellers. 
Specific comments are detailed below.
    One trade association supports modifying the regulations to protect 
sellers who invoice electronically and to allow coverage under the 
trust on all electronic transmissions. This commentor further states 
that it should be mandatory, not discretionary, for the buyer to accept 
the notice to preserve trust benefits whether received on paper or 
electronically.
    One trade association believes that any new regulation should 
ensure that the trust protection language included on an electronic 
invoice be considered as accepted whether or not the customer or a 
third party service provider elects to receive, relay or download such 
language and that all of the seller's electronic invoices to its 
customer shall be subject to trust protection. This commentor believes 
a new regulation need only establish a mechanism for the seller to 
notify the buyer of its intent to preserve its trust rights.
    Another trade association explains that a seller cannot be sure the 
trust notice transmits to the buyer when using electronic invoices 
because some buyers have expressed a desire to avoid including the 
required language in the electronic billing format. This commentor 
states that the PACA requires growers' agents to preserve trust 
benefits but that they are confronted with billing systems that fail to 
provide assurance of the transmission of the trust notice.
    One shipper maintains that its buyers require it to exclusively 
invoice electronically and will not accept paper invoices. This 
commentor believes the trust language is being dropped or excluded at 
the buyer's discretion from the electronic invoice program.
    One law firm explains that while current PACA regulations provide 
that sellers can preserve their trust rights by including the trust 
language on their electronic invoices, some purchasers are not allowing 
a field for the trust language in their electronic format. This 
commentor further explains that a few buyers are not allowing the 
sellers to send any paper documentation related to the sales and are 
charging the sellers a fee if paper documents are sent, thus inhibiting 
the sellers from preserving their trust rights.
    Finally, one trade association noted that the intent of Congress 
when

[[Page 65428]]

creating the PACA trust was to protect the sellers of produce.
    We agree that the PACA requires any buyer operating subject to the 
Act to accept the trust notifications received from its seller/supplier 
whether they be in paper or electronic format. However, the seller must 
meet the statute's requirements for preserving its trust benefit, 
including using the specific language required by the statute. If 
invoicing electronically, the seller must be able to verify that the 
electronic invoice was sent to the buyer and that it contained the PACA 
trust notice.
    The amended regulations provide assurance to the sellers that they 
will have the same protection when invoicing electronically as through 
traditional paper invoices whether or not the buyer accepts the trust 
notice.

Failure To Accept Trust Notices Is an Unfair Practice

    Another issue raised by a number of commentors is that the buyer's 
failure to accept the trust language should be considered an unfair 
trade practice. Some specific comments on this topic follow.
    One trade association believes that since electronic billing serves 
as an ordinary and usual billing method, action to defeat the trust by 
blocking the transmission of the trust language would be a violation of 
a buyer's duty.
    One trade association asserts that a buyer's attempt to inhibit the 
seller's effort to preserve PACA rights by creating a billing system 
that does not accept the mandated language, would be an unfair trade 
practice.
    Another trade association believes that attempts at trust avoidance 
should be considered failure to maintain the trust or failure to 
perform other express or implied specifications or duties. Further, 
this commentor states that actions which attempt to undermine 
perfection of the trust should be considered a failure to maintain the 
trust as much as dissolution of trust assets.
    We agree that any attempt to preclude the seller from preserving 
its trust rights is an unfair trade practice and a violation of Section 
2(4) of the PACA. The requirements of the PACA trust cannot be lawfully 
circumvented through the use of a technological change in how a 
business invoices for the purchase and sale of fruits and vegetables. 
As one commentor states:
    ``No technology should impair the trust or change the way buyers 
and sellers use the trust.''
    This commentor further states that:
    ``* * * technologies must enable sellers to notify buyers of trust 
benefits preservation, and they must do so in such a way that sellers 
can comply fully, including being able to show that they have filed a 
notice (either electronically or documentary) to preserve trust rights 
with the buyers.''

Trust Protection When Using a Third Party

    An additional subject addressed in a few comments was the 
effectiveness of enforcing the trust when either the buyer or the 
seller uses a third party agent or service provider.
    Since all of the information contained on the electronic invoice is 
not flowing directly from the seller to the buyer when a seller is 
using a third party vendor, one commentor expressed concern that the 
buyer could argue that the seller did not preserve its trust rights 
because the trust language was not sent directly to the buyer. This 
commentor also asserts that some buyers or their third party vendors 
may be stripping out the statutory trust language from electronic 
invoices. Therefore, the commentor argues that when the sellers send 
the trust preservation notice electronically to the third party vendor, 
the buyer could potentially argue that the seller did not preserve its 
trust rights because the buyer did not actually receive the trust 
language.
    When a buyer uses a third party vendor or agent on its behalf to 
facilitate the electronic invoicing process, the third party vendor, 
acting as the buyer's agent receives the trust notice on behalf of the 
purchaser. Trust protection logically flows to and from the principals 
directing the transactions. The law requires certain actions of the 
seller to preserve its rights and obligates the buyer to hold all 
inventories of food or other products derived from perishable 
agricultural commodities, and any receivables or proceeds from the sale 
of such commodities or products in trust for the benefit of all unpaid 
suppliers or sellers of such commodities or agents involved in the 
transaction, until full payment has been received. Although buyers may 
generally hold these trust assets in a floating trust without specific 
identification, sellers may seek the establishment of a trust account 
to prevent dissipation of the trust upon a proper showing in a court 
action brought on the trust. As both buyer and seller often use agents 
in produce transactions, the proposed amendment to the regulation 
permits the giving and receiving of the required notice through such 
third party agents or electronic service providers. Thus, the proposed 
amendment to the regulation assures that a purchaser utilizing a third 
party agent or service provider does not negate the perfection of the 
trust, because the purchaser itself does not receive the notice. If the 
purchaser's agent, acting for and on behalf of the purchaser receives 
the notice, then the purchaser has received the notice.

Trading Partner Agreements

    A few comments suggest that to facilitate the preservation of trust 
protection through electronic commerce, the regulation should allow for 
a trading partner agreement to cover all transactions between the 
parties under the trust.
    For instance, one commentor suggests creating a blanket trust 
notice in a Trading Partner Agreement (TPA). The commentor explains 
that this type of agreement is signed before parties begin exchanging 
information electronically and essentially takes care of the language 
found on various documents (including invoices) and therefore would 
reduce costs on electronic transactions since the charges are based on 
the number of characters transmitted. This commentor wants USDA to 
determine if a TPA can be considered binding under the PACA and 
applicable to all electronic transactions.
    Another commentor suggests that USDA create a TPA drafted 
specifically to preserve the seller's trust rights. The commentor 
explains that the content of the TPA should be developed by USDA with 
no clause in it for renewal. The commentor suggests the regulation be 
clear that the receiver does not have the right to refuse to enter into 
a TPA.
    This blanket trust notice or Trading Partner Agreement suggestion 
may not be adopted, however, since the statutory language that creates 
the PACA trust expressly sets forth the two permitted methods of 
preserving trust interests by written notice. (See 7 U.S.C. 
499e(c)(3)(4).) Either the required language must be on each sales 
invoice or other billing statement issued by a PACA licensee, or there 
must be a written notice filed after single or multiple transactions 
that is timely [within 30 days of the date payment is due in 
transactions without extended payment terms] to each transaction for 
all transactions to be protected.

Financial Impact/Costs

    Several commentors point out that protection under the trust is 
critical to the financial well-being of sellers.
    The issue of the cost of trust protection through electronic 
commerce was addressed by a number of commentors.
    One of the commentors believes it is critical that AMS become 
actively

[[Page 65429]]

involved in proposing new regulatory language that provides a secure, 
predictable and consistent manner by which sellers may preserve their 
trust rights. This commentor states that it is critically important 
that businesses have a clear-cut, low-cost method of preserving PACA 
trust rights in electronic transactions and sees no technological 
barriers and no increased costs to buyers or sellers since the 
technology is already in place. This commentor believes that no 
financial barriers should be placed upon sellers either through 
regulation or from buyers in order to preserve their PACA trust rights.
    Another commentor asserts that PACA must set forth clear and 
unambiguous rules and regulations to protect the seller. This commentor 
argues that this clarity will then lower costs. This and other 
commentors believe that Congress intended the trust to favor sellers 
over buyers, in effect, imposing costs on buyers to protect sellers.
    AMS believes it is unwise for the amended regulation to define for 
the industry how to manage the cost of their business dealings. Each 
business and transacting party must make its own decision as to when to 
enter into a transaction and how best to cover the costs of such a 
deal.

Suggested Language for Amending the Regulations

    Comments by three trade associations and two distributors offer 
strong support for modifying and streamlining the regulations for 
electronic invoicing practices. They advocate keeping the regulations 
as simple as possible. They suggest almost identical language to amend 
the regulations at Section 46.46(f)(3). The first is as follows:
    ``Licensees may choose an alternative method of preserving trust 
benefits from the requirements described in paragraphs (f)(1) and (2) 
of this section. Licensees may use their invoice or other billing 
statement to preserve trust benefits. The alternative method requires 
that the licensee's invoice or other billing statement, whether 
documentary or electronic, contain the following statement at the time 
of mailing or transmission to the buyer, irrespective of whether or not 
the buyer downloads, receives, or accepts such statement.''
    The other suggestion is as follows:
    ``Licensees may choose an alternative method of preserving trust 
benefits from the requirements described in paragraphs (f)(1) and (2) 
of this section. Licensees may use their invoice or other billing 
statement to preserve trust benefits. The alternative method requires 
that the licensee's invoice or other billing statement, whether 
documentary or electronic, contain the following statement at the time 
of mailing or transmission to the buyer, irrespective of whether or not 
the buyer provides a field for including such statement or downloads, 
receives, or accepts such statement.''
    Another commentor suggests amending the regulations as follows:
    ``* * * the licensee's invoice or other billing statement, whether 
documentary or electronic, contain the following statement at the time 
of mailing or transmission to the buyer, regardless of whether or not 
the buyer downloads, receives, or accepts such statement.''
    While each of these suggested amendments to the regulatios has 
merit, USDA is suggesting slightly different language as noted in the 
proposed revisions to follow.

Executive Orders 12866 and 12988

    This proposed rule has been determined to be not significant for 
the purposes of Executive Order 12866, and therefore, has not been 
reviewed by the Office of Management and Budget.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform, and is not intended to have retroactive effect. 
This proposed rule will not preempt any State or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule. There are no administrative procedures that 
must be exhausted prior to any judicial challenge to the provisions of 
this proposed rule.

Effects on Small Businesses

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601 et seq.), AMS has considered the economic 
impact of this proposed rule on small entities. The purpose of the RFA 
is to fit regulatory actions to the scale of businesses subject to such 
actions in order that small businesses will not be unduly or 
disproportionately burdened. Small agricultural service firms have been 
defined by the Small Business Administration (SBA) (13 CFR 121.601) as 
those whose annual receipts are less than $5,000,000. There are 
approximately 15,000 firms licensed under the PACA, many of which could 
be classified as small entities.
    The proposed regulation clarifies how to preserve the trust benefit 
when using electronic invoicing. The use of electronic invoicing would 
provide companies an electronic alternative to paper documentation to 
give notice of intent to preserve trust rights, thereby reducing the 
time and expense associated with preserving trust rights under the 
PACA.
    Given the preceding discussion, AMS has made an initial 
determination that the provisions of this proposed rule would not have 
a significant economic impact on a substantial number of small 
entities.

Paperwork Reduction Act

    In accordance with OMB regulations (5 CFR part 1320) that implement 
the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the 
information collection and recordkeeping requirements that are covered 
by this proposed rule were approved under OMB number 0581-0031 on 
October 5, 2004, and expire on October 31, 2007.

E-Government Act Compliance

    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.

Proposed Changes

    Under the Act it is the responsibility of the seller to preserve 
its trust benefits, and we agree that the buyer must accept the trust 
language if the seller attempts to preserve its trust rights. Based 
upon full consideration of the comments received during the comment 
period, the concerns of industry members and AMS about enforceability 
of trust protection through electronic commerce, changes in the 
technological nature of produce transactions, as well as the desire to 
avoid enforcement problems if a produce firm using an electronic 
billing system goes bankrupt, AMS is proposing to amend the PACA 
regulations to require buyers or their intermediaries to accept the 
PACA trust statement submitted by a seller on a paper or electronic 
invoice or other billing statement. Further, any failure, act or 
omission which is inconsistent with this responsibility is unlawful and 
a violation of Section 2 of the PACA.

List of Subjects in 7 CFR Part 46

    Agricultural commodities, Brokers, Investigations, Penalties, 
Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, AMS proposes to amend 7 
CFR part 46 as follows:

PART 46--[AMENDED]

    1. The authority citation for part 46 continues to read as follows:


[[Page 65430]]


    Authority: Sec. 15, 46 Stat. 537; 7 U.S.C. 499o.
    2. In Sec.  46.46, paragraph (f)(3) introductory text is revised 
and new paragraphs (f)(4) and (5) are added to read as follows:


Sec.  46.46  Statutory trust.

* * * * *
    (f) * * *
    (3) Licensees may choose an alternate method of preserving trust 
benefits from the requirements described in paragraphs (f)(1) and (2) 
of this section. Licensees may use their invoice or other billing 
statement as defined in paragraph (a)(5) of this section, whether in 
documentary or electronic form, to preserve trust benefits. 
Alternately, the licensee's invoice or other billing statement, given 
to the buyer, must contain:
* * * * *
    (4) If the invoice or other billing statement is in electronic 
form, the licensee has met its requirement of giving the buyer notice 
of intent to preserve trust benefits on the face of the invoice or 
other billing statement if the electronic invoice or other billing 
statement containing the statement set forth in paragraph (f)(3)(i) is 
sent to the buyer and the electronic transmission can be verified. The 
licensee will be deemed to have given notice to the buyer of its intent 
to preserve trust benefits if the licensee can verify that the 
electronic invoice or other billing statement was sent to a third party 
electronic transaction vendor designated by the buyer. The licensee 
will have met the requirement of giving the buyer written notice of 
intent to preserve trust benefits using electronic means if it can 
verify that the electronic data invoice or other billing statement was 
transmitted to the buyer, or its designated electronic transaction 
vendor, irrespective of whether or not the buyer or third party vendor 
downloads or accepts the trust statement.
    (5) If a buyer conducts its transactions in perishable agricultural 
commodities using an electronic system, the buyer or its third party 
electronic vendor must allow sufficient space for the seller to include 
the required trust statement of intent to preserve trust benefits in 
the buyer's electronic invoices or other billing statement forms. A 
buyer or its designated third party electronic vendor must accept a 
seller's notice of intent to preserve benefits under the trust using 
the required trust statement, whether in documentary or electronic 
form, as set forth in paragraphs (d) and (f) of this section. Any act 
or omission which is inconsistent with this responsibility is unlawful 
and in violation of Section 2 of the Act (7 U.S.C. 499b).

    Dated: November 3, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-18826 Filed 11-7-06; 8:45 am]
BILLING CODE 3410-02-P