14710 Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Proposed Rules 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Parts 916 and 917 

[Docket No. AMS–FV–07–0012; FV07–916/ 

917–3 PR] 

Late Payment and Interest Charges on 

Past Due Assessments Under the 

Nectarine and Peach Marketing Orders 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule. 

SUMMARY: This rule invites comments 

concerning the collection of assessments 

owed under the nectarine and peach 

marketing orders. The marketing orders 

regulate the handling of nectarines and 

peaches grown in California and are 

administered locally by the Nectarine 

Administrative Committee and the 

Peach Commodity Committee 

(committees). This rule would 

implement authorities contained in the 

marketing order to allow the committees 

to apply late payment and interest 

charges on past due assessments owed 

the committees by handlers. 

DATES: Comments must be received by 

April 13, 2007. 

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this proposal. Comments 

must be sent to the Docket Clerk, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 1400 Independence 

Avenue SW., STOP 0237, Washington, 

DC 20250–0237; Fax: (202) 720–8938; or 

Internet: http://www.regulations.gov. 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, or 

can be viewed at: http:// 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Jennifer Garcia, Marketing Specialist, or 

Kurt J. Kimmel, Regional Manager, 

California Marketing Field Office, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA; Telephone: (559) 487–

5901, Fax: (559) 487–5906, or E-mail: 

Jennifer.Garcia3@usda.gov or 

Kurt.Kimmel@usda.gov. 

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: 

Jay.Guerber@usda.gov. 

SUPPLEMENTARY INFORMATION: This 

proposal is issued under Marketing 

Order Nos. 916 and 917, both as 

amended (7 CFR parts 916 and 917), 

regulating the handling of nectarines 

and peaches grown in California, 

respectively, hereinafter referred to as 

the ‘‘orders.’’ The marketing orders are 

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 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 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. Such 

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 proposal invites comments on 

establishing regulations that would 

allow the committees to apply late 

payment and interest charges on past 

due assessments owed the committees 

by handlers. This proposal was 

unanimously recommended by the 

committees at meetings on November 

30, 2006. 

Sections 916.41 and 917.37 of the 

orders provide authority for the 

committees to assess handlers of 

California nectarines and peaches, 

respectively, to fund authorized 

activities such as research and 

promotion programs. Paragraph (b) of 

these sections was amended on July 21, 

2006 (71 FR 41345), to authorize the 

committees, with the approval of the 

Secretary, to apply late payment 

charges, interest charges, or both on past 

due assessments. 

At meetings on November 30, 2006, 

the committees recommended 

establishing rules and regulations to 

implement these authorities regarding 

late payment and interest charges. 

Although the majority of handlers remit 

their assessments in a timely manner, 

there are some handlers who do not. 

Implementing late payment and interest 

charges would provide an incentive for 

handlers to pay assessments in a timely 

manner and would remove any financial 

advantage for those who do not pay on 

time. 

Specifically, the committees 

recommended that a late payment 

charge be applied to any assessment that 

has not been received in the 

committees’ office, or the envelope 

containing the payment legibly 

postmarked by the U.S. Postal Service, 

within 60 days of the invoice date 

shown on the handler’s assessment 

statement. The committees 

recommended a late payment charge of 

10 percent of the unpaid balance. In 

addition, interest would be applied to 

the unpaid balance and late payment 

charge for the number of days the 

payment is delinquent beyond 60 days. 

The committees recommended that 

interest be applied at the current 

commercial prime rate charged by the 

committees’ bank plus 2 percent 

beginning on the day the assessment 

becomes delinquent. However, USDA 

determined that a set interest rate of 1.5 

percent per month is typical of 

comparable marketing order programs, 

and the proposal has been revised. 

Accordingly, new §§ 916.141 and 

917.137 specifying implementation of 

the 10 percent late charge and 1.5 

percent per month interest rate would 

be added to the rules and regulations of 

the nectarine and peach orders, 

respectively. 

Initial 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 

initial 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 


pwalker on PROD1PC71 with PROPOSALS
Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Proposed Rules 14711 

small entities acting on their own 

behalf. Thus, both statutes have small 

entity orientation and compatibility. 

There are approximately 175 

California nectarine and peach handlers 

subject to regulation under the orders 

covering nectarines and peaches grown 

in California, and about 676 producers 

of these fruits in California. Small 

agricultural service firms, which 

include handlers, are defined by the 

Small Business Administration (SBA) 

(13 CFR 121.201) as those whose annual 

receipts are less than $6,500,000. Small 

agricultural producers are defined by 

the SBA as those having annual receipts 

of less than $750,000. A majority of 

these handlers and producers may be 

classified as small entities. 

The committees’ staff has estimated 

that there are fewer than 26 handlers in 

the industry who could be defined as 

other than small entities. For the 2006 

season, the committees’ staff estimated 

that the average handler price received 

was $9.00 per container or container 

equivalent of nectarines or peaches. A 

handler would have to ship at least 

722,223 containers to have annual 

receipts of $6,500,000. Given data on 

shipments maintained by the 

committees’ staff and the average 

handler price received during the 2006 

season, the committees’ staff estimates 

that small handlers represent 

approximately 85 percent of all the 

handlers within the industry. 

The committees’ staff has also 

estimated that fewer than 68 producers 

in the industry could be defined as 

other than small entities. For the 2006 

season, the committees’ staff estimated 

the average producer price received was 

$4.50 per container or container 

equivalent for nectarines and peaches. A 

producer would have to produce at least 

166,667 containers of nectarines and 

peaches to have annual receipts of 

$750,000. Given data maintained by the 

committees’ staff and the average 

producer price received during the 2006 

season, the committees’ staff estimates 

that small producers represent more 

than 90 percent of the producers within 

the industry. 

With an average producer price of 

$4.50 per container or container 

equivalent, and a combined packout of 

nectarines and peaches of 36,388,996 

containers, the value of the 2006 

packout is estimated to be $163,750,482. 

Dividing this total estimated grower 

revenue figure by the estimated number 

of producers (676) yields an estimate of 

average revenue per producer of about 

$242,234 from the sales of peaches and 

nectarines. 

This proposed rule would add new 

§§ 916.141 and 917.137 to the orders’

rules and regulations, whereby late 

payment and interest charges on 

delinquent assessment payments would 

be implemented under the orders. 

Specifically, handlers not remitting 

their assessment payments within 60 

days of the invoice date would be 

subject to a 10 percent late payment 

penalty and interest charges accruing at 

a rate of 1.5 percent per month. The late 

payment and interest charges would 

serve as an incentive for handlers to 

remit assessment payments when due to 

avoid paying an increased amount to the 

committees. This action is expected to 

facilitate program operations. Authority 

for this action is provided in paragraph 

(b) of §§ 916.41 and 917.37 of the orders. 

This action would apply late payment 

and interest charges to assessments not 

paid within 60 days of the invoice date. 

Only handlers who are late in paying 

their assessments owed the committees 

would be impacted. For example, a 

delinquent invoice with late payment 

and interest charges applied would be 

calculated in the following manner: If a 

handler failed to pay an invoice for 

$5,000 within 60 days of the July 1, 

2007, invoice date, a 10 percent late 

payment charge ($500) would be 

applied to the unpaid balance. In 

addition, interest charges at a rate of 1.5 

percent per month would be added to 

the assessments owed and the accrued 

late payment charge. The 1.5 percent 

per month rate computes to an annual 

rate of 18 percent. This must be divided 

by 365 days to obtain the daily rate. 

This same July 1, 2007, invoice would 

be 62 days delinquent as of September 

1, 2007, bringing the interest charges to 

$168.16 ($5,500 × .18 ÷ 365 × 62). Thus, 

the total assessment due, including late 

payment and interest charges, would be 

$5,668.16 as of September 1, 2007. 

The committees discussed 

alternatives to this change, including 

not implementing late payment and 

interest charges at all. While only a 

small number of handlers fail to make 

assessments payments when due, the 

committees believe that a lack of action 

only compounds the problem. The 

committees considered applying late 

payment and interest charges at a lower 

rate but believe that a higher rate would 

be more likely to encourage compliance 

with the orders’ assessment 

requirements. The joint executive 

committee discussed the issue and 

recommended the 10 percent late 

payment and prime plus 2 percent 

interest charges that the committee 

members unanimously approved and 

recommended to USDA. 

However, as previously mentioned, 

USDA has determined that a set interest 

rate of 1.5 percent per month is typical 

of comparable marketing order 

programs, and the proposal has been 

revised. 

This proposed rule would not impose 

any additional reporting or 

recordkeeping requirements on either 

small or large nectarine and peach 

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. 

The 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, USDA has not identified 

any relevant Federal rules that 

duplicate, overlap or conflict with this 

rule. 

Further, the subcommittee and 

committees’ meetings were widely 

publicized throughout the California 

nectarine and peach industries and all 

interested persons were invited to 

attend the meetings and participate in 

the committees’ deliberations on all 

issues. Like all committee meetings, the 

November 30, 2006, meetings were 

public meetings and all entities of all 

sizes were invited to express views on 

this issue. Finally, interested persons 

are invited to submit information on the 

regulatory and informational impacts of 

this action on small businesses. 

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/ 

fv/moab.html. Any questions about the 

compliance guide should be sent to Jay 

Guerber at the previously mentioned 

address in the FOR FURTHER INFORMATION

CONTACT section. 

A 15-day comment period is provided 

to allow interested persons to respond 

to this proposal. Fifteen days is deemed 

appropriate because this rule would 

need to be in place as soon as possible, 

since the season begins on April 1. All 

written comments timely received will 

be considered before a final 

determination is made on this matter. 

List of Subjects 

7 CFR Part 916 

Marketing agreements, Nectarines, 

Reporting and recordkeeping 

requirements. 

7 CFR Part 917 

Marketing agreements, Peaches, Pears, 

Reporting and recordkeeping 

requirements. 


pwalker on PROD1PC71 with PROPOSALS
14712 Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Proposed Rules 

For the reasons set forth in the 

preamble, 7 CFR parts 916 and 917 are 

proposed to be amended as follows: 

1. The authority citation for 7 CFR 

parts 916 and 917 continues to read as 

follows: 

Authority: 7 U.S.C. 601–674. 

PART 916—NECTARINES GROWN IN 

CALIFORNIA 

2. Add § 916.141 to read as follows: 

§ 916.141 Delinquent assessments. 

(a) The Nectarine Administrative 

Committee shall impose a late payment 

charge on any assessment that has not 

been received in the Nectarine 

Administrative Committee’s office, or 

legibly postmarked by the U.S. Postal 

Service, within 60 days of the invoice 

date shown on the handler’s assessment 

statement. The late payment charge 

shall be 10 percent of the unpaid 

balance. 

(b) In addition to that specified in 

paragraph (a) of this section, the 

Nectarine Administrative Committee 

shall impose an interest charge on any 

assessment payment that has not been 

received in the committee’s office, or 

legibly postmarked by the U.S. Postal 

Service, within 60-days of the invoice 

date. The interest charge shall be 1.5 

percent per month and shall be applied 

to the unpaid balance and late payment 

charge for the number of days all or any 

part of the assessment specified in the 

handler’s assessment statement is 

delinquent beyond the 60-day payment 

period. 

PART 917—PEACHES GROWN IN 

CALIFORNIA 

3. Add § 917.137 to read as follows: 

§ 917.137 Delinquent assessments. 

(a) The Peach Commodity Committee 

shall impose a late payment charge on 

any assessment that has not been 

received in the Peach Commodity 

Committee’s office, or legibly 

postmarked by the U.S. Postal Service, 

within 60 days of the invoice date 

shown on the handler’s assessment 

statement. The late payment charge 

shall be 10 percent of the unpaid 

balance. 

(b) In addition to that specified in 

paragraph (a) of this section, the Peach 

Commodity Committee shall impose an 

interest charge on any assessment 

payment that has not been received in 

the Peach Commodity Committee’s 

office, or legibly postmarked by the U.S. 

Postal Service, within 60 days of the 

invoice date. The interest charge shall 

be 1.5 percent per month and shall be 

applied to the unpaid balance and late 

payment charge for the number of days 

all or any part of the assessment 

specified in the handler’s assessment 

statement is delinquent beyond the 60- 

day payment period. 

Dated: March 23, 2007. 

Kenneth C. Clayton, 

Acting Administrator, Agricultural Marketing 

Service. 

[FR Doc. E7–5789 Filed 3–28–07; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF AGRICULTURE 

Rural Business-Cooperative Service 

Rural Utilities Service 

7 CFR Part 4290 

RIN 0570–AA35 

Rural Business Investment Program 

AGENCY: Rural Business-Cooperative 

Service and the Rural Utilities Service, 

U.S. Department of Agriculture. 

ACTION: Advanced notice of proposed 

rulemaking; comments requested. 

SUMMARY: The Rural BusinessCooperative Service and the Rural 

Utilities Service seek public input 

regarding the possibility of operating the 

Rural Business Investment Program, in 

light of the loss of funding starting in 

the 2007 Fiscal Year, to provide for nonleveraged Rural Business Investment 

Companies. 

DATES: Written or e-mail comments on 

this advance notice of proposed 

rulemaking must be received on or 

before 30 days from the date of 

publication in the Federal Register. 

ADDRESSES: You may submit comments 

to this rule by any of the following 

methods: 

• Agency Web Site: http:// 

www.rurdev.usda.gov/regs. Follow 

instructions for submitting comments 

on the Web Site. 

• E-Mail: comments@wdc.usda.gov. 

Include the RIN No. 0570—in the 

subject line of the message. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Submit written comments via 

the U.S. Postal Service to the Branch 

Chief, Regulations and Paperwork 

Management Branch, U.S. Department 

of Agriculture, STOP 0742, 1400 

Independence Avenue, SW., 

Washington, DC 20250–0742. 

• Hand Delivery/Courier: Submit 

written comments via Federal Express 

Mail or other courier service requiring a 

street address to the Branch Chief, 

Regulations and Paperwork 

Management Branch, U.S. Department 

of Agriculture, 300 7th Street, SW., 7th 

Floor, Washington, DC 20024. 

FOR FURTHER INFORMATION CONTACT: 

Michael Foore, Program Advisor, Rural 

Development, Business and Cooperative 

Programs, 1400 Independence Ave., 

SW., Stop 3201, Washington, DC 20250–

3201, Telephone: (202) 690–4730. 

SUPPLEMENTARY INFORMATION: 

Executive Order 12866 

This advance notice has been 

reviewed under Executive Order 12866 

by the Office of Management and 

Budget and has been determined to be 

significant for the purposes of Executive 

Order 12866. 

Background 

The Rural Development Mission Area 

of the Department of Agriculture (Rural 

Development) is responsible for 

assisting rural communities in 

improving the quality of life for their 

residents and in increasing their 

economic opportunities. Most of the 

programs and activities of Rural 

Development provide assistance in the 

form of loans, loan guarantees, and 

grants. However, Rural Development 

estimates that at least $1.45 trillion of 

equity in rural America is idle and 

could be used to assist the development 

of rural America. 

In an attempt to tap this equity in 

rural America and provide for 

investment capital opportunities which 

are not widely available, Congress 

created the Rural Business Investment 

Program in section 6029 of the Farm 

Security and Rural Investment Act of 

2002 (Pub. L. 107–171; 116 Stat. 134). 

The Rural Business Investment Program 

authorized the Secretary of Agriculture 

to encourage, with financial and 

technical assistance, the creation of 

investment companies, called Rural 

Business Investment Companies, which 

would provide equity investments to 

rural small businesses. These 

investment companies would leverage 

capital raised from private investors, 

including rural residents into 

investments in rural small businesses. 

The legislation strongly encouraged that 

the Secretary of Agriculture operate this 

Program with the assistance of the Small 

Business Administration (SBA) because 

it was modeled after the SBA Small 

Business Investment Program. The 

legislation even provided funding to 

cover SBA’s costs of providing such 

assistance. On June 8, 2004, Rural 

Development promulgated an interim 

rule to implement the Rural Business 

Investment Program [7 CFR part 4290; 

69 FR 32200]. 


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