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contains documents other than rules or

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Notices Federal Register

2479

Vol. 61, No. 18

Friday, January 26, 1996

DEPARTMENT OF AGRICULTURE

Office of the Secretary of Agriculture

Waiver of Penalties for Small Business

and Reducing the Frequency of

Reports

AGENCY: Office of the Secretary of

Agriculture, USDA.

ACTION: Notice.

SUMMARY: We are advising the public of

the Department of Agriculture’s policy

for the waiver of penalties for small

businesses and the reduction of the

frequency of reports required to be made

by the public. In April 1995, the

President directed heads of executive

branch agencies to use their discretion

to waive, in appropriate circumstances,

the imposition of all or a portion of

penalties on small businesses and,

where feasible and authorized by law, to

cut by one-half the frequency with

which regularly scheduled reports are

required, by rule or policy, to be

provided to the United States

Government. The Secretary of

Agriculture issued Secretary’s

Memorandum 3031–1, effective October

10, 1995, implementing the President’s

directive.

FOR FURTHER INFORMATION CONTACT:

William Jenson, Senior Counsel,

Regulatory Division, Office of the

General Counsel, USDA, room 2402,

South Building, 14th Street and

Independence Avenue SW.,

Washington, D.C. 20250; (202) 720–

2453.

SUPPLEMENTARY INFORMATION: On April

21, 1995, the President issued a

memorandum to heads of executive

branch agencies directing that each: (1)

use his or her discretion to waive

penalties imposed on small businesses

where appropriate; (2) where feasible

and authorized by law, cut by one-half

the frequency with which regularly

scheduled reports are required, by rule

or policy, to be provided to the United

States Government; and (3) submit a

plan to the Director of the Office of

Management and Budget describing the

actions the agency will take to

implement the President’s April 21,

1995, memorandum. The President’s

memorandum was published in the

Federal Register on April 26, 1995, at

60 FR 20621–20622.

The Department of Agriculture’s plan

to implement the President’s April 21,

1995, memorandum was approved by

the Director of the Office of

Management and Budget, and the

Secretary of Agriculture’s memorandum

implementing the President’s directive

became effective on October 10, 1995.

This notice serves to notify small

businesses and the public of the

Department of Agriculture’s policy

regarding the waiver of penalties for

small businesses, and the Department of

Agriculture’s policy regarding

reductions in the frequency with which

regularly scheduled reports are

required, by rule or policy, to be

provided to the Department of

Agriculture. These Department of

Agriculture policies are set forth in

Secretary’s Memorandum 3031–1 which

reads as follows:

[Secretary’s Memorandum 3031–1]

Waiver of Penalties for Small Business and

Cutting Frequency of Reports

1. Background

The Secretary administers a number of

statutes that authorize the Secretary to

impose penalties for violations of those

statutes, of regulations issued under those

statutes, and of contracts and agreements

executed under those statutes. The Secretary

administers a number of programs under

which the public is required, by regulation or

policy, to provide USDA with regularly

scheduled reports. The President issued a

memorandum on April 21, 1995, to the heads

of executive branch agencies directing that

each:

a. use his or her discretion to waive the

imposition of all or a portion of penalties on

small businesses;

b. cut by one-half the frequency with

which regularly scheduled reports are

required, by rule or policy, to be provided to

the United States Government; and

c. submit a plan to the Director of the

Office of Management and Budget describing

the actions the agency will take to implement

the penalty waiver policy and the reporting

frequency policy described in the President’s

April 21, 1995, memorandum.

2. Purpose

a. This Memorandum implements the

President’s policy to waive penalties for

small businesses and to reduce the frequency

of reports required to be made by the public.

b. Neither the President’s policy to waive

penalties for small businesses and to reduce

the frequency of reports required to be made

by the public nor this Memorandum applies

to:

(1) matters related to law enforcement,

national security, or foreign affairs;

(2) the importation of exportation of

prohibited or restricted items;

(3) United States Government taxes, duties,

fees, revenues, or receipts; or

(4) USDA agencies whose principal

purpose is the collection, analysis, and

dissemination of statistical information.

3. Definitions

For the purposes of this Memorandum, the

following terms shall have the meanings set

forth in this paragraph.

a. Administering agency. The USDA

agency that administers the statute,

regulation, contract, or agreement under

which penalties may be imposed.

b. Corrective action. Action taken by a

small business to correct a violation or to

achieve compliance.

c. Covered penalty. Any penalty that may

be imposed for a violation of a statute,

regulation, contract, or agreement for which:

(1) the violator has made a good faith effort

to comply with the statute, regulation,

contract, or agreement that has been violated;

(2) the violation does not constitute a

violation of criminal law;

(3) the violation did not result in a

significant threat to health, safety, or the

environment;

(4) the violation can be corrected or the

violator can achieve compliance;

(5) an adjudicatory action has not been

instituted; and

(6) the Secretary is permitted by law or has

discretion under applicable statutes,

regulations, contracts, or agreements to waive

all or a portion of the penalty.

d. Good faith effort to comply with the

statute, regulation, contract, or agreement

that has been violated. Conduct that results

in a violation of a statute, regulation,

contract, or agreement, but circumstances

surrounding the violation indicate that (1)

the violator did not know that the conduct

constituted a violation and the violator did

not intend to commit the violation; (2) the

violator made every reasonable effort to

comply with the statute, regulation, contract,

or agreement; or (3) the violator knew that

the conduct constituted a violation, but due

to circumstances beyond the violator’s

control it was impossible for the violator to

comply, and the violator brought the

violation to the attention of appropriate

USDA officials in an expeditious manner.

(The term good faith effort to comply with the

statute, regulation, contract, or agreement
2480 Federal Register / Vol. 61, No. 18 / Friday, January 26, 1996 / Notices

that has been violated does not include any

circumstance in which: the violation was

malicious; the violator had previously been

found to have violated the same statute,

regulation, contract, or agreement; or the

violator had previously been informed that

the conduct that resulted in the violation is

prohibited by statute, regulation, contract, or

agreement.)

e. Penalty. Any sanction that may be

imposed directly by the Secretary. (The term

penalty does not include: liquidated

damages; any restitution for damages suffered

by USDA; any action that either permanently

or temporarily excludes a small business

from entering into a transaction with USDA;

or any sanction that may be imposed by a

USDA grantee or subgrantee even if the

sanction may be imposed as a result of

conditions required by USDA for the grant.)

f. Penalty Modification Coordinator. The

individual appointed by a USDA agency in

accordance with paragraph 5 of this

Memorandum.

g. Secretary. The Secretary of the United

States Department of Agriculture or any

individual to whom the Secretary delegates

authority.

h. Significant threat to health, safety, or the

environment. Any conduct that is likely to

result in:

(1) death, injury, illness, or spread of

diseases or pests to any human, animal, or

plant; or

(2) material harm to the environment.

i. Small business. Any sole proprietorship,

joint venture, partnership, corporation,

association, or other legal entity that:

(1) employed 500 or fewer individuals at

the time of the alleged violation; or

(2) in the tax year immediately preceding

the alleged violation, had gross receipts of

$1,000,000 or less.

j. USDA. The United States Department of

Agriculture.

4. Waiver of Penalties

a. If a penalty may be imposed on the small

business by the Secretary, the administering

agency shall determine whether the penalty

is a covered penalty. If the administering

agency determines the penalty to be a

covered penalty, the administering agency

shall:

(1) provide a copy of this Memorandum to

the small business on which the penalty may

be imposed; and

(2) notify the small business that the

imposition of all or a portion of a penalty can

be waived as agreed by the small business

and the agency, if corrective action can be

achieved within the time to be established in

the sole discretion of the administering

agency. The penalty shall be waived, in

whole or in part, if the administering agency

and the small business agree in writing as to

the waiver of the penalty, the administering

agency establishes the time within which

correction action is to be taken, and the small

business takes corrective action within the

time established by the administering agency.

b. If the small business takes corrective

action, but fails to do so within the time

established in accordance with paragraph

4a(2) of this Memorandum by the

administering agency, the administering

agency may reduce the amount of any

monetary penalty that may be imposed for

the violation up to the amount spent by the

small business for corrective action. When

determining whether to reduce a monetary

penalty in accordance with this

subparagraph, the administering agency shall

take into account the time in which the small

business took corrective action and any

difficulties the small business encountered

when doing so.

c. Any administering agency that waives a

penalty in accordance with paragraph 4a or

4b of this Memorandum shall issue a written

statement to the small business stating that

corrective action has been taken, that the

imposition of all or a portion of the penalty

has been waived, the manner in which the

penalty has been waived, and the amount or

type of any remaining penalty that may be

imposed.

d. The use of appropriate alternative

dispute resolution techniques to assist in the

determination whether a penalty will be

waived as authorized by this Memorandum

is encouraged.

e. Each Under or Assistant Secretary shall

submit a quarterly report, starting January 1,

1996, to the Secretary of Agriculture

describing actions taken pursuant to this

Memorandum. Each quarterly report must

include each penalty that has been waived

during the quarter, the manner in which each

penalty has been waived, the corrective

action taken by the small business, and the

amount or type of any remaining penalty.

5. Penalty Modification Coordinator

Each administering agency that

administers any program under which the

Secretary is permitted by law or has

discretion to waive the imposition of a

penalty shall appoint a Penalty Modification

Coordinator who shall be responsible for the

implementation of paragraphs 4 and 6 of this

Memorandum in the administering agency.

6. Notification

a. Each Penalty Modification Coordinator

shall provide to each employee of the

administering agency who has authority to

assess penalties or to recommend the

assessment of penalties:

(1) a copy of this Memorandum; and

(2) the name, address, and telephone

number of the Penalty Modification

Coordinator, who shall be available to answer

questions concerning the implementation of

this Memorandum posed by agency

employees.

b. Small businesses shall be notified of this

Memorandum by publication of this

Memorandum in the Federal Register.

7. Reporting Frequency

a. Except as provided in paragraph 7c of

this Memorandum, each agency shall reduce

by at least one-half the frequency with which

regularly scheduled reports required, by

regulation or policy in effect on April 21,

1995, must be provided to USDA.

b. Policy changes necessary to comply with

paragraph 7a of this Memorandum shall be

implemented no later than November 1,

1995. Regulatory changes necessary to

comply with paragraph 7a of this

Memorandum shall be effective no later than

January 1, 1996.

c. The frequency with which regularly

scheduled reports shall be provided to USDA

shall not be reduced pursuant to paragraph

7a of this Memorandum if:

(1) the frequency with which the report is

provided to USDA is required by statute;

(2) the report is required to be provided to

USDA as a condition of continued

employment with USDA, execution of a

contract with USDA, or receipt of a loan,

grant, guarantee, or benefit from USDA; or

(3) the Secretary of Agriculture determines

that the reduction of the frequency with

which the regularly scheduled report is

provided to USDA—is not legally

permissible; would not adequately protect

health, safety, or the environment; would be

inconsistent with achieving regulatory

flexibility or reducing regulatory burdens; or

would impede the effective administration of

a USDA program.

8. Effective Date

This Memorandum shall be effective on

October 10, 1995.

9. Effect on Other Agency Penalty Waiver

Policies

To the extent that any administering

agency policy regarding the waiver of

covered penalties is inconsistent with this

Memorandum, the policy shall be revoked or

modified to conform to this Memorandum no

later than November 1, 1995. To the extent

that any administering agency regulations

regarding the waiver of covered penalties is

inconsistent with this Memorandum, the

regulations shall be revoked or modified to

conform to this Memorandum no later than

January 1, 1996. This Memorandum does not

affect any administering agency policy to

waive penalties that is not inconsistent with

this Memorandum.

10. Termination or Modification

This Memorandum may be terminated or

modified by the Secretary of Agriculture at

any time.

11. Judicial Review

This Memorandum is intended only to

improve the internal management of USDA

and does not create any right or benefit,

substantive or procedural, enforceable at law

or equity by a party against the United States,

USDA, the officers or employees of the

United States or USDA, or any other person.

Neither this Memorandum nor the waiver of

any penalty in accordance with this

Memorandum shall affect the date on which

the imposition of a penalty shall be

considered to be final agency action for the

purposes of judicial review.

Done in Washington, D.C., this 22nd day

of January, 1996.

Dan Glickman,

Secretary of Agriculture.

[FR Doc. 96–1415 Filed 1–25–96; 8:45 am]

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