Irish Potatoes Grown in Washington; Establishment of Interest Charge on Overdue Assessment Payments and Clarification of Operating Reserve Authority

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 946

[FV95-946-2FR]

Irish Potatoes Grown in Washington; Establishment of Interest

Charge on Overdue Assessment Payments and Clarification of Operating

Reserve Authority

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule establishes an interest charge on overdue

assessments under the marketing order and clarifies authority for an

operating reserve not to exceed approximately two fiscal periods'

expenses. This action will contribute to the efficient operation of the

order by ensuring that adequate funds are available to cover authorized

expenses incurred under the order. This rule was recommended by the

State of Washington Potato Committee (Committee), the agency

responsible for the local administration of the order.

EFFECTIVE DATE: May 25, 1995.

FOR FURTHER INFORMATION CONTACT: Dennis L. West, Northwest Marketing

Field Office, Marketing Order Administration Branch, Fruit and

Vegetable Division, AMS, USDA, 1220 SW Third Avenue, room 369,

Portland, Oregon 97204-2807; telephone: (503) 326-2724; or James B.

Wendland, Marketing Order Administration Branch, Fruit and Vegetable

Division, AMS, USDA, P.O. Box 96456, room 2523-S, Washington, D.C.

20090-6456; telephone: (202) 720-2170.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement No. 113 and Marketing Order No. 946 (7 CFR part 946), both as

amended, regulating the handling of Irish potatoes grown in Washington,

hereinafter referred to as the ``order.'' The order is authorized by

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 final

rule in conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12778, Civil

Justice Reform. This action 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

action.

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 of

Agriculture (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 the 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

[[Page 27683]] small entities acting on their own behalf. Thus, both

statutes have small entity orientation and compatibility.

There are approximately 50 handlers of Washington potatoes subject

to regulation under the order and approximately 450 producers of

Washington potatoes in the regulated production 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

whose annual receipts are less than $500,000. The majority of potato

handlers and producers regulated under the order may be classified as

small entities.

This rule (1) establishes an interest charge of one (1) percent per

month to be applied to any assessment balance remaining unpaid after 30

days, and (2) clarifies that funds in the operating reserve may not

exceed approximately two fiscal periods' expenses.

These changes were unanimously recommended by the Committee. The

changes will contribute to the efficient operation of the program by

ensuring that adequate funds are available to cover the Committee's

authorized expenses.

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 the approval

of the Secretary.

The Committee depends upon handler assessment payments for

operating funds. Handlers are invoiced by the Committee on a monthly

basis. However, some handlers are continually late with their

assessment payments, and a few wait until the end of the season to

remit to the Committee what is owed. When assessments are not paid in a

timely manner, the handlers paying assessments on time are placed in an

unfair situation compared with the delinquent handlers, who have use of

that unpaid assessment money for other purposes, including earning

interest in a financial institution.

As part of its collection efforts, the Committee has requested

handlers to promptly submit delinquent assessment payments. However,

such requests have not substantially decreased the frequency of

delinquent payments. To facilitate the collection of assessments needed

for the maintenance and functioning of the Committee, it recommended

the establishment of an interest charge of one (1) percent per month to

be applied to any assessment balance remaining unpaid after 30 days,

and that this one (1) percent interest charge shall be applied monthly

thereafter to the unpaid balance, including any accumulated unpaid

interest. The Committee believes that these charges are high enough to

encourage timely assessment payments. The charges are within the

interest range customarily charged by banks on commercial accounts.

This change will encourage handlers to pay their assessments when

due, thereby eliminating inequities. The Committee believes that this

will be an effective means to ensure timely payments. This action is

expected to reduce the need for Department involvement with compliance

efforts and thereby reduce the costs for the government to administer

the order.

Effective June 5, 1972, Sec. 946.42 of the order was revised to

authorize the Committee to maintain an operating reserve not to exceed

approximately two fiscal periods' operational expenses, or such lower

limits as the Committee, with the approval of the Secretary, may

establish (37 FR 10915; June 1, 1972). Funds in the reserve are

available for use by the Committee for expenses authorized pursuant to

Sec. 946.40. Since June of 1972, the Committee has conducted its

financial operations with a reserve approximating two fiscal periods'

expenses and has not recommended a lower limit.

However, the proviso in paragraph (a) of Sec. 946.142 of Subpart--

Rules and Regulations (7 CFR Sec. 946.100-946.142; 32 FR 16199;

November 28, 1967) limiting the operating reserve to approximately one

fiscal year's expenses has never been updated to bring it into

conformity with amended paragraph (a) of Sec. 946.42 of the order. This

rule makes that conforming change by changing the words ``one fiscal

year's expenses'' at the end of the proviso to ``two fiscal periods'

expenses''.

A proposed rule on these actions was published in the Federal

Register on April 18, 1995, (60 FR 19382). It provided a 15-day comment

period which ended May 3, 1995. No comments were received.

Based on available information, 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 matters presented, the

information and recommendations submitted by the Committee and other

information, it is found that finalizing the proposed rule, without

change, as published in the Federal Register (60 FR 19382, April 18,

1995), will tend to effectuate the declared policy of the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined that good

cause exists for not postponing the effective date of this action until

30 days after publication in the Federal Register because: (1) This

action clarifies authority for an operating financial reserve

approximating two fiscal periods' expenses rather than one; (2) this

action should be in effect as soon as possible so handlers can make

plans for the upcoming shipping season and to encourage any handlers

owing delinquent assessments to promptly pay; (3) this action was

unanimously recommended by the Committee at an open public meeting and

all interested persons had an opportunity to provide input; and (4)

this action provided a 15-day period for submission of written comments

and none were received.

List of Subjects in 7 CFR Part 946

Marketing agreements, Potatoes, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 946 is

amended as follows:

PART 946--IRISH POTATOES GROWN IN WASHINGTON

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

follows:

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

2. A new Sec. 946.141 is added 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 thirty (30) days of the

billing date shown on the handler's assessment statement received from

the Committee. The interest charge shall, after 30 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.

3. In Sec. 946.142, paragraph (a) is revised to read as follows:

Sec. 946.142 Operating reserve.

(a) The Committee, with the approval of the Secretary, may carry

over excess funds into subsequent fiscal periods as an operating

reserve: Provided, That [[Page 27684]] funds in the operating reserve

may not exceed approximately two fiscal periods' expenses.

* * * * *

Dated: May 19, 1995.

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 95-12803 Filed 5-24-95; 8:45 am]

BILLING CODE 3410-02-P