[Federal Register Volume 72, Number 211 (Thursday, November 1, 2007)]
[Proposed Rules]
[Pages 61820-61821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-21477]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 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. 72, No. 211 / Thursday, November 1, 2007 / 
Proposed Rules  

[[Page 61820]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 47

[Docket Number AMS-FV-06-0217; FV07-376]
RIN 0581-AC72


Amendments to Rules of Practice Regulations Under the Perishable 
Agricultural Commodities Act (PACA) To Increase Reparation Complaint 
Filing and Handling Fees

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Agriculture (USDA) is proposing to amend the 
Rules of Practice under the Perishable Agricultural Commodities Act 
(PACA) (7 CFR part 47) to increase informal complaint filing fees and 
formal complaint handling fees. The proposal would increase from $60 to 
$100 the fee for filing an informal complaint; and would increase from 
$300 to $500 the fee for handling a formal complaint.

DATES: Written or electronic comments received December 31, 2007 will 
be considered prior to issuance of a final rule.

ADDRESSES: You may submit written or electronic comments to:
    (1) PACA Complaint Fee Comments, AMS, F&V Programs, PACA Branch, 
1400 Independence Avenue, SW., Room 2095-S, Washington, DC 20250-0242.
    (2) Fax: 202-690-4413.
    (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 Complaint Fee Comments.'' Comments 
will be available for public inspection from 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: John Koller, Director, Dispute 
Resolution Section, 202-720-1442.

SUPPLEMENTARY INFORMATION: This proposed rule is issued under authority 
of section 15 of the PACA (7 U.S.C. 499o).
    The Perishable Agricultural Commodities Act (PACA or Act) 
establishes a code of fair trade practices covering 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. In this way, the law fosters an efficient 
nationwide distribution system for fresh and frozen fruits and 
vegetables, benefiting the whole marketing chain from farmer to 
consumer. USDA's Agricultural Marketing Service (AMS) administers and 
enforces the PACA.
    The PACA program is financed by license and user fees and has an 
annual operating budget of approximately $10 million. Currently, annual 
expenses exceed revenue by $3 million, a disparity that is projected to 
increase each year by another 3 to 5 percent. Greater than half of the 
program's expenditures are payroll and related expenses, followed at a 
distant second by the cost of maintaining office space through rent, 
communications, and utility expenses. The PACA license and complaint 
filing fees have remained unchanged since 1995, in part due to a one-
time Congressional appropriation of $30.45 million deposited into the 
PACA reserve fund on October 1, 2000.
    One of the most important functions of the Act is to require that 
PACA licensees fulfill their contractual obligations, and the Act 
provides a forum, before the Secretary, where firms that buy and sell 
fruits and vegetables can settle commercial disputes outside of the 
civil court system and recover damages for losses they have suffered. 
These cases are called reparation cases. In 1995, Section 6 of the PACA 
(7 U.S.C. 499f) was amended to require a $60 filing fee for filing an 
informal reparation complaint and a $300 handling fee for filing a 
formal reparation complaint with USDA under the PACA. Section 6 of the 
PACA also authorized the Secretary of Agriculture to alter the filing 
and handling fees by rulemaking. During its January 2007 meeting, the 
Fruit and Vegetable Industry Advisory Committee (Committee) recommended 
to the Secretary that the fee for filing an informal reparation 
complaint be increased to $100, and the handling fee for filing a 
formal reparation complaint be increased to $500. The Secretary 
accepted the Committee's recommendation. This proposed rule would 
implement the Committee's recommendation by increasing from $60 to $100 
the fee for filing an informal reparation complaint; and increasing 
from $300 to $500 the fee for handling a formal reparation complaint.
    PACA Rules of Practice applicable to reparation complaint 
proceedings inform the industry of USDA's procedures and requirements 
for the handling of informal and formal complaints under the Act (7 
CFR, Part 47). Section 47.3(a) of the current Rules of Practice (7 CFR 
47.3(a)) requires that a $60 filing fee accompany any written 
correspondence and related documents pertaining to the transaction(s) 
involved in the dispute before AMS can process and open an informal 
reparation complaint on behalf of the complainant.
    When an informal reparation complaint is filed, AMS makes every 
effort to assist the parties in reaching a settlement of their dispute 
while gathering documents as part of its investigation. Mediation 
services are also offered to the parties throughout the informal 
handling of the complaint. If an informal settlement cannot be reached, 
however, the complainant is given the opportunity to file a formal 
reparation complaint. Section 47.6(c) of the current Rules of Practice 
(7 CFR 47.6(c)) requires that a complainant filing a formal reparation 
complaint pay a $300 handling fee to AMS to initiate formal complaint 
proceedings. Under formal complaint procedures, USDA's Judicial Officer 
issues a binding decision in the case.
    In Fiscal Year 2007, there were 1,418 informal reparation 
complaints and 325 formal reparation complaints filed with AMS under 
the PACA. Over 91 percent of the informal complaints filed under the 
Act were resolved informally within 4 months. These complaints involved 
produce transactions valued at over

[[Page 61821]]

$17.5 million. USDA issued formal decision and orders in 322 cases 
involving award amounts totaling approximately $5.6 million. The 
largest award issued by USDA in Fiscal Year 2007 ordered payment of 
over $257,000 to a fruit and vegetable dealer.
    In Fiscal Year 2006, AMS received 1,559 informal reparation 
complaints of which 92 percent were resolved informally within a 4-
month timeframe. In Fiscal Year 2006, informal settlements exceeded 
$18.7 million. There were 300 formal reparation complaints filed under 
the Act that year.
    AMS does not expect this proposal to raise a significant amount of 
revenue for the PACA program (estimated at $144,000 annually), but by 
increasing the fees for filing informal and formal reparation 
complaints, AMS believes that the burden for financing the PACA program 
is shifted more towards those who benefit directly from using PACA 
program services.

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.), USDA 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 (13 CFR part 121) as those 
with less than 500 employees. The PACA requires all businesses that 
operate subject to its provisions to maintain a license issued by USDA. 
There are approximately 14,500 PACA licensees, a majority of which may 
be classified as small entities.
    Over the past 4 years, the number of informal and formal reparation 
complaints filed with AMS under the PACA has gradually decreased. AMS 
believes that this decrease is due in part to enhanced PACA customer 
service focused on educating members of the produce industry of their 
rights and responsibilities under the PACA, as well as increased 
efforts to settle informal reparation complaints through mediation.
    It is doubtful that any barrier to the use of USDA's PACA 
reparation procedure would be created by raising the filing and 
handling fees for informal and formal reparation complaints. Most 
complaints involve produce transactions valued in the thousands of 
dollars, making the proposed increase from $60 to $100 for filing an 
informal reparation complaint insignificant by comparison. In addition, 
the handling fee for filing a formal reparation complaint is 
recoverable as part of the amount awarded by USDA if the complainant 
prevails in the case. AMS believes that those who wish to initiate 
formal proceedings in a reparation case would consider the proposed 
increase in the formal reparation complaint handling fee from $300 to 
$500 to be insignificant as well.
    Given the preceding discussion, AMS has determined that the 
provisions of the proposed rule would not have a significant 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 record keeping 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.

List of Subjects in 7 CFR Part 47

    Administrative practice and procedure, Agricultural commodities, 
Brokers.

    For the reasons set forth in the preamble, AMS proposes to amend 7 
CFR part 47 as follows:

PART 47--[AMENDED]

    1. The authority citation for part 47 is revised to read as 
follows:

    Authority: 7 U.S.C. 499f; 5 U.S.C 553; 7 CFR 
2.22(a)(1)(viii)(L), 2.79(a)(8)(xiii).

    2. In Sec.  47.3, paragraph (a)(4) is revised as follows:


Sec.  47.3  Institution of proceedings.

    (a) * * *
    (1) * * *
    (2) * * *
    (3) * * *
    (4) The informal complaint shall be accompanied by a filing fee of 
$100 as authorized by the Act.
* * * * *
    3. In Sec.  47.6, paragraph (c) is revised as follows:


Sec.  47.6  Formal complaints.

* * * * *
    (c) Service upon respondent; proof of service. Upon receipt by the 
Fruit and Vegetable Programs of the formal complaint, the accompanying 
papers and the $500 handling fee authorized by the Act, a copy thereof 
shall be served by the Fruit and Vegetable Programs upon the respondent 
in accordance with Sec. 47.4 of this Part. If the complaint is not in 
the proper form, the Fruit and Vegetable Programs shall return it and 
inform the complainant of the deficiencies therein.
* * * * *

    Dated: October 26, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E7-21477 Filed 10-31-07; 8:45 am]
BILLING CODE 3410-02-P