Cranberries Grown in States of Massachusetts, Rhode Island, Connecticut, New Jersey, Wisconsin, Michigan, Minnesota, Oregon, Washington, and Long Island in the State of New York; Establishment of Late Payment and Increase in Interest Charges on Delinquent Assessments

SUMMARY: This proposed rule would increase the interest charge from 1

percent to 1\1/2\ percent per month and add a late payment charge of 5

percent on delinquent assessments owed by handlers under Marketing

Order No. 929 covering cranberries grown in ten states. This rule would

contribute to the efficient operation of the program by ensuring that

adequate funds are available to cover budgeted expenses incurred under

the marketing order.

DATES: Comments must be received by December 12, 1994.

ADDRESSES: Interested persons are invited to submit written comments

concerning this proposal. Comments must be sent in triplicate to the

Docket Clerk, Fruit and Vegetable Division, AMS, USDA, Room 2525-S,

P.O. Box 96456, Washington, D.C. 20090-6456. All comments should

reference the docket number and the date and page number of this issue

of the Federal Register and will be made available for public

inspection in the Office of the Docket Clerk during regular business

hours.

FOR FURTHER INFORMATION CONTACT: Mark Hessel or Patricia Petrella,

Marketing Specialists, Marketing Order Administration Branch, F&V, AMS,

USDA, Room 2522-S, P.O. Box 96456, Washington, D.C. 20090-6456:

telephone: (202) 720-5127.

SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing

Agreement and Order No. 929 (7 CFR Part 929), as amended, regulating

the handling of cranberries grown in ten states, 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 (Department) is issuing this rule in

conformance with Executive Order 12866.

This proposal has been reviewed under Executive Order 12778, Civil

Justice Reform. This rule is not intended to have retroactive effect.

This proposal 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 in equity to review the

Secretary's ruling on the petition, provided a bill in equity 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 Administrator of 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 30 handlers of cranberries who are subject

to regulation under the order and approximately 1,050 producers of

cranberries in the regulated area.

Small agricultural service firms 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 cranberries may be classified as

small entities.

The Cranberry Marketing Committee (committee), the agency

responsible for local administration of the order, met on August 23,

1994, and unanimously recommended modifying the administrative rules in

effect under the order concerning delinquent handler assessments. The

modification would increase the interest charge from 1 percent to 1\1/

2\ percent per month and add a late payment charge of 5 percent on

delinquent handler assessments.

Under section 929.41 of the order, each person who first handles

cranberries is required to pay a pro-rata share of the cost of

administering the program. This cost is in the form of a uniform

assessment rate applied to each handler's acquisitions.

Section 929.41 also provides that if a handler does not pay an

assessment within the time prescribed by the committee, the assessment

may be subject to an interest or late payment charge, or both.

Section 929.152 of the rules and regulations in effect under the

order specifies that delinquent assessments be subject to an interest

charge of 1 percent per month on any unpaid assessment balance

beginning 30 days from the due date prescribed by the committee. The

committee currently schedules two assessment payments during the crop

year which begins on September 1. Assessments equal to 100 percent of

the prior crop year's assessment obligation are due on October 1. If a

handler's October 1 payment is not sufficient to meet the current crop

year's assessment obligation then a second payment, making up the

difference, is required by April 1. If the October 1 payment exceeds

the current crop year's assessment obligation then the committee

refunds the difference on or before April 15.

Assessments are the main source of funds to pay committee expenses.

The failure of handlers to pay assessment obligations promptly results

in added expense and operational problems for the committee. The

committee has frequently encountered difficulty in collecting

assessments from some handlers. To attempt to collect, the committee

must incur the added expense of sending out additional invoices and

contacting each delinquent handler by phone, in person, or by fax.

Nonpayment or late payment of assessments hampers the operation of the

committee.

The authority to levy late payment and interest charges on

delinquent assessments was added in 1973 to address the failure of

handlers to pay their assessments promptly. Consequently, in 1978 an

informal rulemaking change (43 FR 29764, July 11, 1978) was approved

which established a one percent interest charge per month to address

this problem.

However, the current interest charge of one percent per month is

not sufficient to induce handlers to comply with the assessment

provisions. Competition in the cranberry industry has increased. The

number of handlers regulated by the order has increased, and many of

these additional handlers have been more reluctant to pay assessments

in a timely manner. The increase in charges on delinquent assessments

would encourage these handlers to pay their assessments more promptly.

Charges would not be imposed until the end of the month if handler

assessments are invoiced up to the 15th of the month and would be

levied at the end of the following month if the handler assessment is

invoiced later than the 15th of the month. Handlers would have ample

time to pay their assessments and avoid incurring the additional

charges. Any amount paid by the handler would be credited upon receipt

in the committee office. These additional charges would apply to any

unpaid assessments which become due to the committee after the

effective date of this rule change.

A 30-day comment period is provided to allow interested persons an

opportunity to respond to this proposal. All written comments timely

received will be considered before a final determination is made on

this matter.

List of Subjects in 7 CFR Part 929

Cranberries, Marketing agreements, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR Part 929 is

proposed to be amended as follows:

1. The authority citation for 7 CFR Part 929 continues to read as

follows:

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

PART 929--CRANBERRIES GROWN IN STATES OF MASSACHUSETTS, RHODE

ISLAND, CONNECTICUT, NEW JERSEY, WISCONSIN, MICHIGAN, MINNESOTA,

OREGON, WASHINGTON, AND LONG ISLAND IN THE STATE OF NEW YORK

2. Section 929.152 is revised to read as follows:

Sec. 929.152 Delinquent assessments.

There shall be a late payment charge of five percent and an

interest charge of 1\1/2\ percent per month applied to any assessment

not received at the committee's office before the end of the month in

which such assessment was first invoiced to the handler: Provided, That

if an assessment is first invoiced later than the 15th of the month, no

late payment or interest charge shall be levied if such assessment is

received at the committee office by the end of the following month in

which the assessment was first invoiced to the handler.

Dated: November 4, 1994.

Eric M. Forman,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-27921 Filed 11-9-94; 8:45 am]

BILLING CODE 3410-02-P