Almonds Grown in California; Interest and Late Payment Charges on Past Due Assessments

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 981

[Docket No. FV-96-981-4PR]

Almonds Grown in California; Interest and Late Payment Charges on

Past Due Assessments

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposal invites comments on implementing interest and

late payment charges on past due assessments owed under the almond

marketing order. The marketing order regulates the handling of almonds

grown in California and is administered locally by the Almond Board of

California (Board). This rule would allow the Board to implement

authority contained in the marketing order to impose late payment and

interest charges for past due assessments owed the Board by handlers,

and should contribute to the efficient administration of the program.

DATES: Comments must be received by October 15, 1996.

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, DC 20090-6456, Fax # (202) 720-5698. 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: Kathleen M. Finn, Marketing

Specialist, Marketing Order Administration Branch, F&V, AMS, USDA, room

2523-S, P.O. Box 96456, Washington, DC 20090-6456: telephone: (202)

720-1509, Fax # (202) 720-5698; or Martin Engeler, California Marketing

Field Office, Marketing Order Administration Branch, F&V, AMS, USDA,

2202 Monterey Street, suite 102B, Fresno, California 93721; telephone:

(209) 487-5901, Fax # (209) 487-5906. Small businesses may request

information on

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compliance with this regulation by contacting: Jay Guerber, Marketing

Order Administration Branch, Fruit and Vegetable Division, AMS, USDA,

P.O. Box 96456, room 2523-S, Washington, DC 20090- 6456; telephone

(202) 720-2491; Fax # (202) 720-5698.

SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing

Order No. 981 (7 CFR Part 981), as amended, regulating the handling of

almonds grown in California, hereinafter referred to as the ``order.''

This 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 12988, 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 to review the Secretary's

ruling on the petition, provided an action 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 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 115 handlers and approximately 7,000

producers of almonds in the regulated area. Small agricultural service

firms, which includes handlers, 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 California almonds may be classified as small

entities.

This proposal invites comments on implementing regulations

concerning collection of assessments under the California almond

marketing order. This rule would allow the Board to impose interest and

late payment charges on past due assessment accounts. Although the vast

majority of handlers are timely in remitting their assessments, there

are a few who are not. This rule would provide incentive for handlers

to remit assessments in a timely manner, with the intent of creating a

fair and equitable process among all industry handlers. It would not

impose any costs on handlers who pay their assessments on time, and

should contribute to the efficient administration of the program.

Therefore, the AMS has determined that this action will not have a

significant economic effect on a substantial number of small entities.

Interested persons are invited to submit information on the regulatory

and informational impacts of this action on small businesses.

Section 981.81 of the almond marketing order provides authority for

the Board to assess handlers of California almonds to fund authorized

activities. This section was recently amended to authorize the Board,

with the approval of the Secretary, to impose interest and late payment

charges on past due assessments.

The Board met on July 24, 1996, and unanimously recommended

implementing the order authority regarding interest and late payment

charges. Although most handlers remit assessments in a timely manner,

historically there have been a few who do not. Those handlers are able

to reap the benefits of Board programs at the expense of others. In

addition, they are able to utilize funds for their own use that should

otherwise be paid to the Board to finance Board programs. In effect,

this provides handlers with an interest free loan.

Implementing interest and late payment charges would provide an

incentive for handlers to pay assessments on time, which would improve

compliance with the order. It would decrease the number of actions

taken against handlers failing to pay assessments on time through

administrative remedies or the Federal courts. These remedies,

currently the only recourse against handlers who fail to pay

assessments, can be costly and time consuming and often add to an

already overburdened legal system. This rule would remove any economic

advantage gained by those handlers who do not pay on time, thus helping

to ensure a program that is equitable to all. This is also consistent

with standard business practices.

For 1996-97 crop year assessments, the Board recommended interest

charges of one and one half percent per month for assessments 30 days

or more late. In addition, assessments remaining unpaid for 60 days

would be charged a 10 percent late payment charge. For prior crop year

assessments past due, the Board recommended an interest rate of one and

one half percent per month and a late payment charge of 20 percent,

after handlers are provided an initial grace period to come into

compliance.

While the Board's recommendation contemplated calculating interest

and late payment charges from the original invoice date, the Department

has determined that no interest or late payment charges would accrue

prior to the effective date of this rule. Interest or late payment

charges would only be applicable to assessments accrued and billed

after the effective date of this rule.

A 30-day comment period is provided to allow interested persons 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 981

Almonds, Marketing agreements, Nuts, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, 7 CFR part 981 is

proposed to be amended as follows:

PART 981--ALMONDS GROWN IN CALIFORNIA

1. The authority citation for 7 CFR part 981 continues to read as

follows:

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

2. A new Sec. 981.481 is proposed to be added to read as follows:

Sec. 981.481 Interest and late payment charges.

(a) Pursuant to Sec. 981.81, the Board shall impose an interest

charge on any handler whose assessment payment has not been received in

the Board's office, or the envelope containing the payment legibly

postmarked by the U.S. Postal Service, within 30 days of the invoice

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date shown on the handler's statement. The interest charge shall be a

rate of one and one half percent per month and shall be applied to the

unpaid assessment balance for the number of days all or any part of the

unpaid balance is delinquent beyond the 30 day payment period.

(b) In addition to the interest charge specified in paragraph (a)

of this section, the Board shall impose a late payment charge on any

handler whose payment has not been received in the Board's office, or

the envelope containing the payment legibly postmarked by the U.S.

Postal Service, within 60 days of the invoice date. The late payment

charge shall be 10 percent of the unpaid balance.

Dated: September 6, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-23456 Filed 9-12-96; 8:45 am]

BILLING CODE 3410-02-P