80 FR 50225 - Paper and Paper-Based Packaging Promotion, Research and Information Order; Late Payment and Interest Charges on Past Due Assessments

DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

Federal Register Volume 80, Issue 160 (August 19, 2015)

This proposal invites comments on prescribing late payment and interest charges on past due assessments under the Paper and Paper- Based Packaging Promotion, Research and Information Order (Order). The Order is administered by the Paper and Packaging Board (Board) with oversight by the U.S. Department of Agriculture (USDA). Under the Order, assessments are collected from manufacturers and importers and used for projects to promote paper and paper-based packaging. This proposal would implement authority contained in the Order that allows the Board to collect late payment and interest charges on past due assessments. Two additional changes are proposed to reflect current practices and update the Order and regulations. This action would contribute to effective administration of the program and was unanimously recommended by the Board.

[Federal Register Volume 80, Number 160 (Wednesday, August 19, 2015)]
[Proposed Rules]
[Pages 50225-50228]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-20437]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 80, No. 160 / Wednesday, August 19, 2015 / 
Proposed Rules

[[Page 50225]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1222

[Document Number AMS-FV-14-0082]


Paper and Paper-Based Packaging Promotion, Research and 
Information Order; Late Payment and Interest Charges on Past Due 
Assessments

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposal invites comments on prescribing late payment and 
interest charges on past due assessments under the Paper and Paper-
Based Packaging Promotion, Research and Information Order (Order). The 
Order is administered by the Paper and Packaging Board (Board) with 
oversight by the U.S. Department of Agriculture (USDA). Under the 
Order, assessments are collected from manufacturers and importers and 
used for projects to promote paper and paper-based packaging. This 
proposal would implement authority contained in the Order that allows 
the Board to collect late payment and interest charges on past due 
assessments. Two additional changes are proposed to reflect current 
practices and update the Order and regulations. This action would 
contribute to effective administration of the program and was 
unanimously recommended by the Board.

DATES: Comments must be received by October 19, 2015.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments may be submitted on the Internet at: 
http://www.regulations.gov or to the Promotion and Economics Division, 
Fruit and Vegetable Program, AMS, USDA, 1400 Independence Avenue SW., 
Room 1406-S, Stop 0244, Washington, DC 20250-0244; facsimile: (202) 
205-2800. All comments should reference the document number and the 
date and page number of this issue of the Federal Register and will be 
made available for public inspection, including name and address, if 
provided, in the above office during regular business hours. Comments 
may also be viewed at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Marlene Betts, Marketing Specialist, 
Promotion and Economics Division, Fruit and Vegetable Program, AMS, 
USDA, 1400 Independence Avenue SW., Room 1406-S, Stop 0244, Washington, 
DC 20250-0244; telephone: (202) 720-9915; or electronic mail: 
[email protected].

SUPPLEMENTARY INFORMATION: This proposal is issued under the Order (7 
CFR part 1222). The Order is authorized under the Commodity Promotion, 
Research and Information Act of 1996 (1996 Act) (7 U.S.C. 7411-7425).

Executive Order 12866 and Executive Order 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules and promoting flexibility. 
This action has been designated as a ``non-significant regulatory 
action'' under section 3(f) of Executive Order 12866. Accordingly, the 
Office of Management and Budget has waived the review process.

Executive Order 13175

    This action has been reviewed in accordance with the requirements 
of Executive Order 13175, Consultation and Coordination with Indian 
Tribal Governments. The review reveals that this regulation would not 
have substantial and direct effects on Tribal governments and would not 
have significant Tribal implications.

Executive Order 12988

    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. It is not intended to have retroactive effect. Section 
524 of the 1996 Act (7 U.S.C. 7423) provides that it shall not affect 
or preempt any other Federal or State law authorizing promotion or 
research relating to an agricultural commodity.
    Under section 519 of the 1996 Act (7 U.S.C. 7418), a person subject 
to an order may file a written petition with USDA stating that an 
order, any provision of an order, or any obligation imposed in 
connection with an order, is not established in accordance with the 
law, and request a modification of an order or an exemption from an 
order. Any petition filed challenging an order, any provision of an 
order, or any obligation imposed in connection with an order, shall be 
filed within two years after the effective date of an order, provision, 
or obligation subject to challenge in the petition. The petitioner will 
have the opportunity for a hearing on the petition. Thereafter, the 
USDA will issue a ruling on the petition. The 1996 Act provides that 
the district court of the United States for any district in which the 
petitioner resides or conducts business shall have the jurisdiction to 
review a final ruling on the petition, if the petitioner files a 
complaint for that purpose not later than 20 days after the date of the 
entry of USDA's final ruling.

Background

    This proposal invites comments on prescribing late payment and 
interest charges on past due assessments under the Order. The Order is 
administered by the Board with oversight by USDA. Under the Order, 
assessments are collected from manufacturers and importers and used for 
projects to promote paper and paper-based packaging. This proposal 
would implement authority contained in the Order and the 1996 Act that 
allows the Board to collect late payment and interest charges on past 
due assessments. This action was unanimously recommended by the Board 
and would contribute to effective administration of the program.
    Section 1222.52(a) of the Order specifies that the Board's programs 
and expenses shall be paid by assessments on manufacturers and 
importers and other income or funds available to the Board. Paragraph 
(g) of that section specifies further that when a manufacturer or 
importer fails to pay the assessment within 60 calendar days of the 
date it is due, the Board may

[[Page 50226]]

impose a late payment charge and interest. The late payment charge and 
rate of interest must be prescribed in regulations issued by the 
Secretary. All late assessments would be subject to the specified late 
payment charge and interest.
    The Order became effective on January 23, 2014. Assessment 
collection began on March 1, 2014. Manufacturers and importers must pay 
their assessments owed to the Board by the 30th calendar day of the 
month following the end of the quarter in which the paper and paper-
based packaging was manufactured or imported. For example, assessments 
for paper manufactured or imported during the months of January, 
February and March are due to the Board by April 30.
    Entities that domestically manufacture or import to the United 
States less than 100,000 short tons of paper and paper-based packaging 
in a year are exempt from paying assessments. If an entity is both a 
manufacturer and an importer, the entity's combined quantity of paper 
and paper-based packaging manufactured and imported during a marketing 
year counts toward the 100,000 short ton exemption.
    Assessment funds are used for promotion activities that are 
intended to benefit all industry members. Thus, it is important that 
all assessed entities pay their assessments in a timely manner. 
Entities who fail to pay their assessments on time would be able to 
reap the benefits of Board programs at the expense of others. In 
addition, they would be able to utilize funds for their own use that 
should otherwise be paid to the Board to finance Board programs.

Board Recommendation

    At a meeting held September 25, 2014, the Board unanimously 
recommended implementing the Order authority regarding late payment and 
interest charges. Specifically, the Board recommended that a late 
payment charge be imposed on any manufacturer or importer who fails to 
make timely remittance to the Board of the total assessments for which 
such manufacturer or importer is liable. The late payment charge would 
be imposed on any assessments not received within 60 calendar days of 
the date they are due. This one-time late payment charge would be equal 
to 10 percent of the assessments due before interest charges have 
accrued.
    The Board also recommended that an interest rate of 1\1/2\ percent 
per month be added to the outstanding balance, including any late 
payment charge and accrued interest, of any accounts for which payment 
has not been received within 60 calendar days after the assessments are 
due. Interest would continue to accrue monthly until the outstanding 
balance is paid to the Board.
    This action is expected to help facilitate program administration 
by providing an incentive for entities to remit their assessments in a 
timely manner, with the intent of creating a fair and equitable process 
among all assessed entities. Accordingly, a new Subpart C would be 
added to the Order for provisions implementing the paper and paper-
based packaging Order, and a new Sec.  1222.520 would be added to 
Subpart C.
    This proposal would also make two additional changes to the Order. 
This proposed rule would revise the term Board as defined in Sec.  
1222.2 from the Paper and Paper-Based Packaging Board to the Paper and 
Packaging Board. This change would simplify the term and bring the 
Order in line with current industry use. Conforming changes would also 
be made to Sec.  1222.40(a) and the heading immediately prior to this 
section where the term is also referenced. In addition, in Sec.  
1222.108, the OMB control number would be changed from 0581-NEW to 
0581-0281, the control number assigned by the OMB.

Initial Regulatory Flexibility Act Analysis

    In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601-612), AMS is required to examine the impact of the proposed rule on 
small entities. Accordingly, AMS has considered the economic impact of 
this action on such entities.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
disproportionately burdened. The Small Business Administration defines, 
in 13 CFR part 121, small agricultural producers as those having annual 
receipts of no more than $750,000 and small agricultural service firms 
(manufacturers and importers) as those having annual receipts of no 
more than $7.0 million.
    According to the Board, there are 69 manufacturers in the United 
States that produce the types of paper and paper-based packaging 
covered under the Order. Using an average price of $806 per short 
ton,\1\ a manufacturer who produces less than about 8,680 short tons of 
paper and paper-based packaging per year would be considered a small 
entity. It is estimated that no more than four manufacturers produced 
less than 8,680 short tons per year. Thus, the majority of 
manufacturers would not be considered small businesses.
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    \1\ Industry sources do not publish information on average price 
for paper and paper-based packaging. A reasonable estimate for 
average price of paper and paper-based packaging is the value per 
ton of paper and paper-based packaging exports. According to U.S. 
Census data, the average value of paper and paper-based packaging 
exports in 2014 was approximately $806 per short ton.
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    Based on U.S. Customs and Border Protection (Customs) data, it is 
estimated that in 2014 there were 2,800 importers of paper and paper-
based packaging. Ninety importers, or about 3 percent, imported more 
than $7.0 million worth of paper and paper-based packaging. Thus, the 
majority of importers would be considered small entities. However, all 
of the 20 entities that imported 100,000 short tons or more (the 
Order's exemption threshold) also imported more than $7.0 million worth 
of paper and paper-based packaging. Therefore, none of the 20 importers 
covered under the Order would be considered small businesses.
    Based on domestic production of approximately 66.1 million short 
tons in 2014 and an average price of $806 per short ton, the domestic 
paper and paper-based packaging industry is valued at approximately 
$53.3 billion. According to Customs data, the value of paper and paper-
based packaging imports in 2014 was about $5.9 billion.
    This proposal invites comments on prescribing late payment and 
interest charges on past due assessments under the Order. The Order is 
administered by the Board with oversight by USDA. Under the Order, 
assessments are collected from manufacturers and importers and used for 
projects to promote paper and paper-based packaging. This rule would 
add a new Sec.  1222.520 that would specify a late payment charge of 10 
percent of the assessments due and interest at a rate of 1\1/2\ percent 
per month on the outstanding balance, including any late payment charge 
and accrued interest. This section would be included in a new Subpart 
C--Provisions for Implementing the Paper and Paper-Based Packaging 
Promotion, Research and Information Order. This action was unanimously 
recommended by the Board and is authorized under Sec.  1222.52(g) of 
the Order and section 517(e) of the 1996 Act. In addition, two 
additional changes are proposed to reflect current practices and update 
the Order and regulations. These changes are: (1) Revising the name of 
the Board

[[Page 50227]]

from the Paper and Paper-Based Packaging Board to the Paper and 
Packaging Board; and (2) the OMB control number would be changed from 
0581-NEW to 0581-0281, the control number assigned by the OMB.
    Regarding the economic impact of this proposed rule on affected 
entities, this action would impose no costs on manufacturers and 
importers who pay their assessments on time. It would merely provide an 
incentive for entities to remit their assessments in a timely manner. 
For all entities who are delinquent in paying assessments, both large 
and small, the charges would be applied the same. As for the impact on 
the industry as a whole, this action would help facilitate program 
administration by providing an incentive for entities to remit their 
assessments in a timely manner, with the intent of creating a fair and 
equitable process among all assessed entities.
    Additionally, as previously mentioned, the Order provides for an 
exemption for entities that domestically manufacture or import less 
than 100,000 short tons annually. It is estimated that 24 out of the 69 
domestic manufacturers, or 35 percent, produce less than 100,000 short 
tons per year and are thus exempt from paying assessments under the 
Order. Of the 2,800 importers of paper and paper packaging, it is 
estimated that 2,780, or 99 percent, import less than 100,000 short 
tons per year and are also exempt from paying assessments. Thus, about 
45 domestic manufacturers and 20 importers pay assessments under the 
Order.
    The alternative to this proposed action would be to maintain the 
status quo and not impose late payment and interest charges on past due 
assessments. However, the Board determined that implementing these 
charges would help facilitate program administration by encouraging 
entities to pay their assessments in a timely manner. The Board 
reviewed the late payment and interest charges applied by other 
research and promotion programs and concluded that a 10 percent late 
payment charge and interest at a rate of 1\1/2\ percent per month on 
the outstanding balance would be appropriate.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection and recordkeeping requirements 
that are imposed by the Order have been approved previously under OMB 
control number 0581-0281. This proposed rule would not result in a 
change to the information collection and recordkeeping requirements 
previously approved and would impose no additional reporting and 
recordkeeping burden on manufacturers and importers of paper and paper-
based packaging.
    As with all Federal promotion programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies. USDA has not 
identified any relevant Federal rules that duplicate, overlap, or 
conflict with this proposed rule.
    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.
    Regarding outreach efforts, the Board met on September 25, 2014, 
and unanimously made its recommendation. The Board's meetings, 
including meetings held via teleconference, are open to the public and 
interested persons are invited to participate and express their views.
    We have performed this initial RFA regarding the impact of this 
proposed action on small entities and we invite comments concerning 
potential effects of this action on small businesses.
    While this proposed rule set forth below has not received the 
approval of USDA, it has been determined that it is consistent with and 
would effectuate the purposes of the 1996 Act.
    A 60-day comment period is provided to allow interested persons to 
respond to this proposal. All written comments received in response to 
this proposed rule by the date specified will be considered prior to 
finalizing this action.

List of Subjects in 7 CFR Part 1222

    Administrative practice and procedure, Advertising, Consumer 
information, Marketing agreements, Paper and paper-based packaging 
promotion, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR part 1222 is 
proposed to be amended as follows:

PART 1222--PAPER AND PAPER-BASED PACKAGING PROMOTION, RESEARCH AND 
INFORMATION ORDER

0
1. The authority citation for 7 CFR part 1222 continues to read as 
follows:

     Authority: 7 U.S.C. 7411-7425; 7 U.S.C. 7401.

0
2. Section 1222.2 is revised to read as follows:


Sec.  1222.2  Board.

    Board means the Paper and Packaging Board established pursuant to 
Sec.  1222.40, or such other name as recommended by the Board and 
approved by the Department.
0
3. Revise the undesignated center heading preceding Sec.  1222.40 to 
read as follows:
PAPER AND PACKAGING BOARD
0
4. Amend Sec.  1222.40 by revising the first sentence of paragraph (a) 
to read as follows:


Sec.  1222.40  Establishment and membership.

    (a) Establishment of the Board. There is hereby established a Paper 
and Packaging Board to administer the terms and provisions of this 
Order. * * *
* * * * *
0
5. Section 1222.108 is revised to read as follows:


Sec.  1222.108  OMB control number.

    The control number assigned to the information collection 
requirement in this subpart by the Office of Management and Budget 
pursuant to the Paperwork Reduction Act of 1995, 44 U.S.C. is OMB 
control number 0581-0281.
0
7. Add subpart C, consisting of Sec.  1222.520, to read as follows:
Subpart C--Provisions Implementing the Paper and Paper-Based Packaging 
Promotion, Research and Information Order
Sec.
1222.520 Late payment and interest charges for past due assessments.


Sec.  1222.520  Late payment and interest charges for past due 
assessments.

    (a) A late payment charge shall be imposed on any manufacturer or 
importer who fails to make timely remittance to the Board of the total 
assessments for which such manufacturer or importer is liable. The late 
payment shall be imposed on any assessments not received within 60 
calendar days of the date they are due. This one-time late payment 
charge shall be 10 percent of the assessments due before interest 
charges have accrued.
    (b) In addition to the late payment charge, 1\1/2\ percent per 
month interest on the outstanding balance, including any late payment 
and accrued interest, will be added to any accounts for which payment 
has not been received by the Board within 60 calendar days after the 
assessments are due. Such interest will continue to accrue monthly 
until the outstanding balance is paid to the Board.


[[Page 50228]]


    Dated: August 13, 2015.
Rex A. Barnes,
Associate Administrator.
[FR Doc. 2015-20437 Filed 8-18-15; 8:45 am]
 BILLING CODE 3410-02-P