[Federal Register Volume 72, Number 44 (Wednesday, March 7, 2007)]
[Notices]
[Pages 10140-10141]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-4095]


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DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration


Calculating Interest on Reparation Awards Under the Packers and 
Stockyards Act

AGENCY: Grain Inspection, Packers and Stockyards Administration, USDA.

ACTION: Notice.

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SUMMARY: The Department of Agriculture (USDA) has changed the method 
used to calculate interest on reparation awards under the Packers and 
Stockyards Act, 1921 (P&S Act). The P&S Act calculation will be 
consistent with interest awarded on monetary judgments in Federal 
courts.

EFFECTIVE DATE: March 7, 2007.

FOR FURTHER INFORMATION CONTACT: S. Brett Offutt, Director, Policy and 
Litigation Division, USDA GIPSA, by telephone at (202) 720-7363, or e-
mail at [email protected].

SUPPLEMENTARY INFORMATION: The Grain Inspection, Packers and Stockyards 
Administration (GIPSA) administers and enforces the Packers and 
Stockyards Act, 1921 (P&S Act). The P&S Act prohibits unfair, 
deceptive, and fraudulent practices by livestock market agencies, 
dealers, stockyard owners, meat packers, swine contractors, and live 
poultry dealers in the livestock, poultry, and meatpacking industries.
    Section 308 of the P&S Act (7 U.S.C. 209) makes persons subject to 
the P&S Act liable to the person or persons injured, when the injury 
involves the purchase, sale or handling of livestock or the purchase or 
sale of poultry, or if the injury relates to a poultry growing 
arrangement or swine production contract, and is caused by violations 
of the P&S Act or the violation of an order of the Secretary under the 
P&S Act. Section 309 of the P&S Act (7 U.S.C. 210) sets out procedures 
for making reparation complaints to the Secretary for actions of 
stockyard owners, market agencies, or dealers in violation of sections 
304, 305, 306, or 307 (7 U.S.C. 204, 205, 207 or 208), or an order of 
the Secretary under Title III of the P&S Act.
    A person may file a reparation complaint with the Secretary under 
the P&S Act or pursue a claim for award of damages in any district 
court of the United States of competent jurisdiction. The decision of 
the Secretary can also be appealed to the Federal district courts.

How will the interest rate be determined?

    GIPSA will follow the same procedural statute for assessing 
interest on money judgments as that used in civil cases recovered in 
Federal courts, which is found in 28 U.S.C. 1961. Accordingly, the 
interest rate on all reparation awards ordered under the P&S Act, 
subsequent to the publication of this notice, will be calculated using 
an interest rate equal to the weekly average 1-year constant maturity 
Treasury yield for the calendar week preceding the date of the Order, 
as published by the Board of Governors of the Federal Reserve System in 
the Federal Reserve Statistical Release (H.15) for Selected Interest 
Rates. The interest will be computed daily at that same rate, and 
compounded annually, until the full payment is received.

[[Page 10141]]

When will the interest begin accruing and how long will it continue to 
accrue?

    The interest on a reparation award will accrue from the date 
payment or remittance would have been due under the P&S Act. The 
interest will continue accruing at the same rate, compounded annually, 
until full payment is made.
    For example, if an Order issued October 2, 2006, awarded $800 for 
one transaction in which payment was due on June 30, 2006, then the 
Order would start interest accrual on the award as of June 30, 2006, 
and continue accruing the interest until the person subject to the 
Order makes full payment, including interest. The rate of interest used 
to calculate the accrual in this example would be 4.9 percent, since 
the weekly average 1-year constant maturity Treasury yield for the 
calendar week prior to October 2, 2006, reported by the Federal Reserve 
as of September 29, 2006, was 4.9 percent.
    If the reparation involves more than one transaction, the interest 
on the reparation award will accrue from the date payment or remittance 
is due under the P&S Act for the last transaction on which the award is 
calculated. The interest will continue accruing at the same rate, 
compounded annually, until the person subject to the Order makes full 
payment.
    For example, if an Order issued October 2, 2006, awarded $1500 for 
three transactions in which payment was due on June 15, June 30, and 
July 15, 2006, respectively, the Order would start interest accrual on 
the award on July 15, 2006, and continue accruing the interest until 
full payment, including interest, is made. The rate of interest used to 
calculate the accrual in this instance would be 4.9 percent, since the 
weekly average 1-year constant maturity Treasury yield for the calendar 
week prior to October 2, 2006, reported by the Federal Reserve as of 
September 29, 2006, was 4.9 percent.
    Beginning interest accrual when payment is due under the P&S Act 
accomplishes several goals. It consistently enforces the payment 
requirements of the P&S Act and regulations and it discourages 
violations of the P&S Act that are subject to the reparations process. 
It also encourages the parties to resolve complaints early in the 
reparations process, and compensates the injured party for delays in 
payment from the date payments were originally due.

    Authority: 7 U.S.C. 228.

James E. Link,
Administrator, Grain Inspection, Packers and Stockyards Administration.
[FR Doc. E7-4095 Filed 3-6-07; 8:45 am]
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