[Federal Register Volume 73, Number 236 (Monday, December 8, 2008)]
[Rules and Regulations]
[Pages 74346-74348]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-29045]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[Docket No. AMS-FV-08-0037; FV08-946-2 FR]


Irish Potatoes Grown in Washington; Modification of Late Payment 
and Interest Charge Regulation

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule modifies the late payment and interest charge 
regulation prescribed under the Washington potato marketing order. The 
marketing order regulates the handling of Irish potatoes grown in 
Washington, and is administered locally by the State of Washington 
Potato Committee (Committee). This rule revises the date interest is 
charged on late assessment payments from 30 to 60 days from the billing 
date shown on the handler's assessment statement received from the 
Committee. This rule will contribute to the efficient operation of the 
marketing order by reducing billing for nominal late payment interest 
charges on handlers who pay within 60 days of the billing date, while 
continuing those interest charges necessary to encourage payment, 
thereby ensuring that adequate funds are available to cover the 
Committee's authorized expenses.

DATES: Effective Date: December 9, 2008.

FOR FURTHER INFORMATION CONTACT: Teresa Hutchinson or Gary Olson, 
Northwest Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, Telephone: (503) 326-
2724, Fax: (503) 326-7440, or e-mail: [email protected] or 
[email protected].
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 
720-2491, Fax: (202) 720-8938, or e-mail: [email protected].

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Order No. 946, as amended (7 CFR part 946), regulating the handling of 
Irish potatoes grown in Washington, hereinafter referred to as the 
``order.'' The 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 (USDA) 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 USDA 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, USDA 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 USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This final rule modifies the late payment and interest charge 
regulation prescribed under the order. This rule revises the date 
interest is charged on late assessment payments from 30 to 60 days from 
the billing date shown on the handler's assessment statement received 
from the Committee. This rule will contribute to the efficient 
operation of the order by reducing the number of nominal billings for 
late payment interest charges on handlers who pay within 60 days of the 
billing date, while continuing those interest charges necessary to 
encourage payment, thereby ensuring that adequate funds are available 
to cover the Committee's authorized expenses.
    The Washington potato marketing order provides authority for the 
Committee, with the approval of USDA, to formulate an annual budget of 
expenses and collect assessments from handlers to administer the 
program. The members of the Committee are producers and handlers of 
Washington potatoes. They are familiar with the Committee's needs and 
the costs for goods and services in their local area and are thus in a 
position to formulate an appropriate budget and assessment rate. The 
assessment rate and the authority to recommend late payment charges or 
interest charges on late payment, are formulated and discussed at a 
public meeting. Thus, all directly affected persons have an opportunity 
to participate and provide input.
    Section 946.41 of the order specifies that if handlers do not pay 
their assessments within the time prescribed by the Committee, the 
assessments may be increased by a late payment charge or an interest 
charge, or both, at rates prescribed by the Committee with approval of 
USDA.
    Prior to this regulatory change, section 946.141 of the order's 
administrative rules and regulations prescribed that the Committee 
impose a monthly interest charge of one percent of the unpaid balance 
on any handler who fails to pay his or her assessment within thirty 
days of the billing date. The interest charge regulation has been 
effective since May 25, 1995 (60 FR 27683). At that time, the committee 
expressed difficulty with handlers that were continually late with 
their assessment payments and recommended the interest charge to be 
incurred 30 days after the billing date. It was believed that the 
charges were high enough to encourage timely payment and that this 
would be an effective means to ensure the Committee had adequate funds 
to administer the program.
    The Committee unanimously recommended this rule during a video 
conference meeting held on April 16, 2008, followed by an unanimous 
mail vote. The Committee has determined that most handlers pay their 
assessments within 60 days but there are a few that pay later than 60 
days. The interest billing that occurs 30 days after the billing date 
has proven to be administratively cumbersome as the amounts billed are 
nominal amounts and many times the handler's payment is received 
shortly after the bill including interest is mailed.
    As an example, the Committee's budget for the current fiscal year 
(2008-2009) is $38,600 and estimated assessment income is $35,000. 
Since there are approximately 43 handlers, the average each handler 
will pay in assessments is approximately $814. Committee records 
indicate that for the most recent fiscal year, there were 316 invoices 
billed to handlers. The average amount on an invoice was $110.44, with

[[Page 74347]]

a high of $626.54 and a low of $0.18. Therefore, the interest amount 
owed on a payment that is 30 days late, but not more than 60, would 
often be less than a dollar, rarely more than five dollars. The 
Committee believes that handlers that pay later than 60 days would be 
considered a greater risk for nonpayment than handlers who pay within 
60 days.
    The Committee recommended retaining Sec.  946.141, but recommended 
modifying the regulation by providing an additional 30 days for 
handlers to pay. By waiting until 60 days past the billing date to 
charge interest on late assessment payments, the Committee will only 
have to charge interest to the few handlers who do not pay within 60 
days. The Committee believes the interest charge applied after 60 days 
will continue to encourage handlers to pay promptly.

Final Regulatory Flexibility Analysis

    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. Accordingly, AMS has 
prepared this final regulatory flexibility analysis.
    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.
    Currently, there are approximately 43 handlers of Washington 
potatoes who are subject to regulation under the marketing order and 
approximately 267 potato producers in the regulated area. Small 
agricultural service firms are defined by the Small Business 
Administration (SBA) (13 CFR 121.201) as those having annual receipts 
of less than $7,000,000, and small agricultural producers are defined 
as those having annual receipts of less than $750,000.
    During the 2006-2007 marketing year, 9,932,874 hundredweight of 
Washington potatoes were inspected under the order and sold into the 
fresh market by 43 handlers, according to Committee data. The Committee 
reports that an industry consensus estimate of an average fresh potato 
f.o.b. price is $8.45 per hundredweight. Multiplying the 2006-2007 
fresh shipments of 9,932,874 hundredweight by the average f.o.b. price 
of $8.45 yields a handler-level fresh market crop value of $83,932,785. 
Dividing $83,933,785 by 43 handlers gives an average annual sales value 
per handler estimate of about $1,951,949. The Committee estimates that 
41, or about 95 percent of these 43 handlers, had annual receipts of 
less than $7,000,000.
    A comparable computation can be made to estimate annual average 
revenue per producer. Based on information provided by the National 
Agricultural Statistics Service, the 2006 season average producer price 
for Washington potatoes was $6.25 per hundredweight. Multiplying the 
2006-2007 fresh shipments of 9,932,874 hundredweight by the average 
producer price of $6.25 provides a producer-level fresh market crop 
value of $62,080,463. Dividing $62,080,463 by 267 Washington potato 
producers yields an average annual fresh market sales value per 
producer of approximately $232,511.
    In view of the foregoing, it can be concluded that the majority of 
the Washington potato producers and handlers may be classified as small 
entities.
    This final rule changes the date interest is charged on late 
assessment payments from 30 to 60 days past the billing date. This rule 
will contribute to the efficient operation of the marketing order by 
reducing billing for nominal late payment interest charges on handlers 
who pay within 60 days of the billing date, while continuing those 
interest charges necessary to encourage payment, thereby ensuring that 
adequate funds are available to cover the Committee's authorized 
expenses.
    The authority for late payment and interest charges is provided in 
Sec.  946.41 of the order. Section 946.141 of the order's 
administrative rules and regulations prescribes the amount of interest 
charged and when interest charges are imposed.
    This change is expected to reduce the cost to administer the order.
    Regarding the impact of this rule on affected entities, 
modification of the late payment and interest charge regulation is 
expected to benefit handlers. Most handlers pay their assessments 
within 60 days of the billing date. Only a few handlers pay later than 
60 days. Imposing the interest charge on late assessment payments at 60 
days instead of 30 days past due will allow the Committee to operate 
more efficiently by only billing after 60 days to handlers whose late 
payments are considered more serious and a greater risk. The benefits 
of this rule are not expected to be disproportionately greater or 
lesser for small entities than large entities.
    The Committee discussed several alternatives to this 
recommendation, including not changing the date interest charges would 
be imposed and suspending the entire section. However, the Committee 
believed that it is important that interest charges be continued to 
encourage handlers to pay assessments in a timely manner. Further, the 
additional 30 days should allow adequate time to receive assessment 
payments by mail and allow the Committee to reduce administrative 
costs.
    This final rule will not impose any additional reporting or 
recordkeeping requirements on either small or large potato handlers. As 
with all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    As noted in the initial regulatory flexibility analysis, USDA has 
not identified any relevant Federal rules that duplicate, overlap or 
conflict with this rule.
    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.
    In addition, the Committee's meeting was widely publicized 
throughout the Washington potato industry and all interested persons 
were invited to participate in Committee deliberations. Like all 
Committee meetings, the April 16, 2008, meeting was a public meeting 
and all entities, both large and small, were able to express views on 
this issue.
    A proposed rule concerning this action was published in the Federal 
Register on October 20, 2008 (73 FR 62215). Copies of the rule were 
mailed or sent via facsimile to all Committee members and potato 
handlers. The rule was also made available through the Internet by USDA 
and the Office of the Federal Register. A 15-day comment period ending 
November 4, 2008, was provided to allow interested persons to respond 
to the proposal. No comments were received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide. Any questions about the compliance guide should be sent to 
Jay Guerber at the previously mentioned address in the FOR FURTHER 
INFORMATION CONTACT section.
    After consideration of all relevant matter presented, including the

[[Page 74348]]

information and recommendation submitted by the Committee 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 handlers are already being 
billed for assessments and this rule will allow an additional 30 days 
to remit assessment payments. Further, handlers are aware of this rule, 
which was recommended at a public meeting. Also, a 15-day comment 
period was provided for in the proposed rule.

List of Subjects in 7 CFR Part 946

    Marketing agreements, Potatoes, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, 7 CFR part 946 is amended as 
follows:

PART 946--IRISH POTATOES GROWN IN WASHINGTON

0
1. The authority citation for 7 CFR part 946 continues to read as 
follows:

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


0
2. Section 946.141 is revised to read as follows:


Sec.  946.141  Late payment and interest charge.

    The Committee shall impose an interest charge on any handler who 
fails to pay his or her assessment within sixty (60) days of the 
billing date shown on the handler's assessment statement received from 
the Committee. The interest charge shall, after 60 days, be one percent 
of the unpaid assessment balance. In the event the handler fails to pay 
the delinquent assessment, the one percent interest charge shall be 
applied monthly thereafter to the unpaid balance, including any 
accumulated unpaid interest. Any amount paid by a handler as an 
assessment, including any charges imposed pursuant to this paragraph, 
shall be credited when the payment is received in the Committee office.

    Dated: December 3, 2008.
James E. Link,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-29045 Filed 12-5-08; 8:45 am]
BILLING CODE 3410-02-P