80 FR 80207 - 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 247 (December 24, 2015)

This rule prescribes 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 rule implements the authority contained in the Order that allows the Board to collect late payment and interest charges on past due assessments. Two additional changes are being made to reflect current practices and update the Order and regulations. This action contributes to effective administration of the program and was unanimously recommended by the Board.

[Federal Register Volume 80, Number 247 (Thursday, December 24, 2015)]
[Rules and Regulations]
[Pages 80207-80209]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-32448]



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Federal Register / Vol. 80, No. 247 / Thursday, December 24, 2015 / 
Rules and Regulations

[[Page 80207]]



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.

ACTION: Final rule.

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SUMMARY: This rule prescribes 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 rule implements the 
authority contained in the Order that allows the Board to collect late 
payment and interest charges on past due assessments. Two additional 
changes are being made to reflect current practices and update the 
Order and regulations. This action contributes to effective 
administration of the program and was unanimously recommended by the 
Board.

DATES: Effective Date: January 25, 2016.

FOR FURTHER INFORMATION CONTACT: Marlene Betts, Marketing Specialist, 
Promotion and Economics Division, Specialty Crops 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 rule 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 (OMB) 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 will not 
have substantial and direct effects on Tribal governments and would not 
have significant Tribal implications.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. It is not intended to have a 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 rule prescribes 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 implements 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 will contribute to the 
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 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 
will 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

[[Page 80208]]

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. Entities who fail to pay 
their assessments on time could reap the benefits of Board programs at 
the expense of others. In addition, they could utilize funds for their 
own use that should otherwise be paid to the Board to finance Board 
programs. Thus, it is important that all assessed entities pay their 
assessments in a timely manner.

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 will 
be imposed on any assessments not received within 60 calendar days of 
the date they are due. This one-time late payment charge will 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 will 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 is added to 
the Order for provisions implementing the paper and paper-based 
packaging Order, and a new Sec.  1222.520 is added to Subpart C.
    This rule also makes two additional changes to the Order. This rule 
will 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 will simplify the term and bring the Order in line with 
current industry use. Conforming changes will 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 will be changed from 0581-NEW to 0581-0281, the control 
number assigned by the OMB.

Final 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 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.
---------------------------------------------------------------------------

    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 rule prescribes 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 will add a new Sec.  1222.520 that 
will 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 will 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 being 
made to reflect current practices and update the Order and regulations. 
These changes are: (1) Revising the name of the Board from the Paper 
and Paper-Based Packaging Board to the Paper and Packaging Board; and 
(2) the OMB control number will be changed from 0581-NEW to 0581-0281, 
the control number assigned by the OMB.
    Regarding the economic impact of this rule on affected entities, 
this action imposes no costs on manufacturers and importers who pay 
their assessments on time. It merely provides 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 
will be applied the same. As for the impact on the industry as a whole, 
this action will 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

[[Page 80209]]

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 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 will 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 rule will not result in a change to the 
information collection and recordkeeping requirements previously 
approved and will 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 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.
    A proposed rule concerning this action was published in the Federal 
Register on August 19, 2015 (80 FR 50225). The proposal was made 
available through the Internet by USDA and the Office of the Federal 
Register. A 60-day comment period ending October 19, 2015, was provided 
to allow interested persons to submit comments. One comment was 
received in favor of implementing the late payment and interest 
charges.
    After consideration of all relevant matters presented, including 
the information and recommendation submitted by the Board and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, is consistent with and will effectuate the 
purposes of the 1996 Act.

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 
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. Chapter 35 
is OMB control number 0581-0281 and 0505-0001.

0
6. 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 
charge 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.

    Dated: December 21, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-32448 Filed 12-23-15; 8:45 am]
BILLING CODE 3410-02-P