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 Charges and Increase in Interest Charges on Delinquent Assessments

SUMMARY: This final rule increases the interest charge from 1 percent

to 1\1/2\ percent per month and adds 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 contributes to

the efficient operation of the program by ensuring that adequate funds

are available to cover budgeted expenses incurred under the marketing

order.

EFFECTIVE DATE: This final rule becomes effective February 2, 1995.

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 final rule 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 final rule has been reviewed under Executive Order 12778,

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

effect. This final 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 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 increases the interest charge from 1 percent to 1\1/2\

percent per month and adds 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

[[Page 2]] 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

encourages these handlers to pay their assessments more promptly.

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

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

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

later than the 15th of the month. Handlers have ample time to pay their

assessments and avoid incurring the additional charges. Any amount paid

by the handler will be credited upon receipt in the committee office.

These additional charges apply to any unpaid assessments which become

due to the committee after the effective date of this rule change.

A proposed rule concerning this action was published in the Federal

Register on November 10, 1994 [59 FR 56007], with a 30-day comment

period ending December 12, 1994. No comments were received.

Based on the above, the Administrator of the AMS has determined

that this action will not have a significant economic impact on a

substantial number of small entities.

After consideration of all relevant matter presented, including the

information and recommendations 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.

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

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: December 27, 1994.

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-32287 Filed 12-30-94; 8:45 am]

BILLING CODE 3410-02-P