83_FR_5200 83 FR 5175 - Perishable Agricultural Commodities Act (PACA): Guidance on Growers' Trust Protection Eligibility and Clarification of “Written Notification”

83 FR 5175 - Perishable Agricultural Commodities Act (PACA): Guidance on Growers' Trust Protection Eligibility and Clarification of “Written Notification”

DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

Federal Register Volume 83, Issue 25 (February 6, 2018)

Page Range5175-5179
FR Document2018-02066

The U.S. Department of Agriculture (USDA), Agricultural Marketing Service (AMS), is amending the regulations under the Perishable Agricultural Commodities Act (PACA or Act) to enhance clarity and improve the administration and enforcement of the PACA. The revisions will provide greater direction to the industry as to how growers and other principals that employ selling agents may preserve their PACA trust rights. The revisions will also clarify the definition of ``written notification'' as the term is used in 6(b) of the PACA, and the jurisdiction of USDA to investigate alleged PACA violations.

Federal Register, Volume 83 Issue 25 (Tuesday, February 6, 2018) 
[Federal Register Volume 83, Number 25 (Tuesday, February 6, 2018)]
[Rules and Regulations]
[Pages 5175-5179]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-02066]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

========================================================================


Federal Register / Vol. 83, No. 25 / Tuesday, February 6, 2018 / 
Rules and Regulations

[[Page 5175]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 46

[Document Number AMS-FV-15-0045]
RIN 0581-AD50


Perishable Agricultural Commodities Act (PACA): Guidance on 
Growers' Trust Protection Eligibility and Clarification of ``Written 
Notification''

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The U.S. Department of Agriculture (USDA), Agricultural 
Marketing Service (AMS), is amending the regulations under the 
Perishable Agricultural Commodities Act (PACA or Act) to enhance 
clarity and improve the administration and enforcement of the PACA. The 
revisions will provide greater direction to the industry as to how 
growers and other principals that employ selling agents may preserve 
their PACA trust rights. The revisions will also clarify the definition 
of ``written notification'' as the term is used in 6(b) of the PACA, 
and the jurisdiction of USDA to investigate alleged PACA violations.

DATES: Effective Date: March 8, 2018.

FOR FURTHER INFORMATION CONTACT: Travis Hubbs, Chief, Investigative 
Enforcement Branch, 202-720-6873, or [email protected].

SUPPLEMENTARY INFORMATION: 

Background of Growers' Trust Protection

    Congress examined the sufficiency of the PACA fifty years after its 
inception and determined that prevalent financing practices in the 
perishable agricultural commodities industry were placing the industry 
in jeopardy. Particularly, Congress focused on the increase in the 
number of buyers who failed to pay, or were slow in paying their 
suppliers, and the impact of such payment practices on small suppliers 
who could not withstand a significant loss or delay in receipt of 
monies owed. Congress was also concerned by the common practice of 
produce buyers granting liens on their inventories to their lenders, 
which covered all proceeds and receivables from the sales of perishable 
agricultural commodities, while produce suppliers remained unpaid. This 
practice elevated the lenders to a secured creditor position in the 
case of the buyer's insolvency, while the sellers of perishable 
agricultural commodities remained unsecured creditors with little or no 
legal protection or means of recovery in a suit for damages.
    Deeming this situation a ``burden on commerce,'' Congress amended 
the PACA in 1984 (Pub. L. 98-273) to include a statutory trust 
provision, which provides increased credit security in the absence of 
prompt payment for perishable agricultural commodities.
    Pursuant to this 1984 amendment, perishable agricultural 
commodities, inventories of food or other derivative products, and any 
receivables or proceeds from the sale of such commodities or products 
are to be held in a non-segregated floating trust for the benefit of 
unpaid sellers. This trust is created by operation of law upon the 
purchase of such goods, and the produce buyer is the statutory trustee 
for the benefit of the produce seller.
    The trust is a non-segregated ``floating trust'' made up of all of 
a buyer's commodity-related assets, under which there may be a 
commingling of trust assets. There is no need to identify specific 
trust assets through each step of the accrual and disposal process. 
Since commingling is contemplated, all trust assets would be subject to 
the claims of unpaid sellers, suppliers and agents to the extent of the 
amount owed them. As each supplier gives ownership, possession, or 
control of perishable agricultural commodities to a buyer, and 
preserves its trust rights, that supplier becomes a participant in the 
trust. Consequently, trust participants remain trust beneficiaries 
until they have been paid in full.
    Since 1984, the District Courts of the United States have had 
jurisdiction to entertain actions by trust beneficiaries to enforce 
payment from the trust (7 U.S.C. 499e(c)(5)). Therefore, in the event 
of a business failure, produce creditors may enforce their trust rights 
by filing a trust action against the buyer in federal district court. 
In the event of a bankruptcy by a produce buyer, that is, the produce 
``debtor,'' the debtor's trust assets are not property of the 
bankruptcy estate and are not available for distribution to secured 
lenders and other creditors until all valid PACA trust claims have been 
satisfied.
    Because of the PACA trust provisions, unpaid sellers, including 
those outside the United States, have recovered hundreds of millions of 
dollars that most likely would not otherwise have been collected. The 
PACA trust provisions protect not only growers, but also other firms 
trading in fruits and vegetables since each buyer in the marketing 
chain becomes a seller in its own turn and can preserve its own trust 
eligibility accordingly. Because each creditor that buys produce can 
preserve trust rights for the benefit of its own suppliers, any money 
recovered from a buyer that goes out of business is passed back through 
preceding sellers until ultimately the grower also realizes the 
financial benefits of the trust provisions. This is particularly 
important in the produce industry due to the highly perishable nature 
of the commodities as well as the many hands such commodities 
customarily pass through to the end customer.
    In 1995, Congress amended the PACA (Pub. L. 104-48), changing 
several requirements of the PACA trust. Changes included no longer 
requiring sellers or suppliers to file notices of intent to preserve 
trust benefits with USDA, and allowing PACA licensees to have their 
invoices or other billing documents serve as the trust notice. The PACA 
offers two approaches to unpaid sellers, suppliers, and agents to 
preserve trust protection. One option allows PACA licensees to declare 
at the time of sale that the produce is sold subject to the PACA trust, 
providing protection in the event that payment is late or the payment 
instrument is not honored. This option allows PACA licensees to protect 
their trust rights by including specified language on their invoices or 
other billing statements (7 U.S.C. 499e(c)(4)). The second option for 
PACA licensees to preserve their trust rights, and the sole method for 
all non-licensed sellers, requires the seller to provide a separate, 
independent notice to the

[[Page 5176]]

buyer of its intent to preserve its trust benefits. The notice must 
include sufficient details to identify each transaction covered by the 
trust (7 U.S.C. 499e(c)(3)).
    Recent court decisions have invalidated the trust claims of unpaid 
growers against their growers' agent because the growers did not file a 
trust notice directly with the growers' agent. Growers' agents sell and 
distribute produce for or on behalf of growers and may provide such 
services as financing, planting, harvesting, grading, packing, labor, 
seed, and containers. The growers have argued that it is not necessary 
to file a trust notice with their growers' agent because growers' 
agents are required to preserve the growers' rights as a trust 
beneficiary against the buyer (7 CFR 46.46(d)(2)). Some courts have 
ruled that while the growers' agent is required to preserve the 
growers' trust benefits with the buyer of the produce, the grower has 
the responsibility to preserve its trust benefits with the growers' 
agent. This action provides guidance to growers to clarify their 
responsibilities in preserving their trust rights.

``Written Notification'' Background

    The 1995 amendments to the PACA require written notification to 
USDA as a precursor to investigations of alleged violations of the 
PACA. In recent years, produce entities have challenged the USDA's 
jurisdiction to conduct investigations based on their narrow reading of 
the definition of ``written notification'' stated in Sec.  46.49 of the 
regulations (7 CFR 46.49). The amendment of Sec.  46.49 (7 CFR 46.49) 
makes it clear that public filings such as bankruptcy petitions, civil 
trust actions, and judgments constitute written notification. Moreover, 
AMS clarifies that the filing of a written notification with USDA may 
be accomplished by a myriad of means including, but not limited to, 
delivery by regular or commercial mail service, hand delivery, or 
electronic means such as email, text, or facsimile message. 
Furthermore, a written notification published in any public forum 
including, but not limited to, a newspaper or internet website, will be 
considered filed with USDA upon its visual inspection by any office or 
official of USDA responsible for administering the Act. Clarification 
of the meaning of ``written notification'' ensures that PACA licensees 
and entities operating subject to the PACA understand the breadth of 
documentation that could trigger USDA's authority to initiate an 
investigation of alleged PACA violations.

Notice of Proposed Rulemaking and Final Rule

    In order to enhance clarity and improve the administration and 
enforcement of the PACA, a proposed rule to amend PACA regulations was 
published in the Federal Register on December 14, 2016 [81 FR 90255]. 
The comment period initially closed on February 13, 2017. However, the 
comment period was extended an additional 30 days. The reopening of the 
comment period was published in the Federal Register on February 17, 
2017. The second comment period closed on March 15, 2017.
    This final rule amends 7 CFR 46.46 by revising paragraphs (d) and 
(f)(1)(vi) to clarify that growers or other types of principals who 
employ agents to sell perishable agricultural commodities on their 
behalf are among the class of ``suppliers or sellers'' referenced in 
section 5(c) of the PACA (7 U.S.C. 499e(c)) and, as such, must preserve 
their trust benefits against their agents. The revision of paragraph 
(f)(1)(iv) will identify additional types of documents that can be used 
in a notice of intent to preserve trust benefits.
    This final rule also amends 7 CFR 46.49 by revising it to clarify 
the meaning of ``written notification'' as the term is used in section 
6(b) of the PACA (7 U.S.C. 499f(b)). Additionally, to reflect current 
industry practices and advancements in electronic communication, AMS 
revises Sec.  46.49(d) (7 CFR 46.49(d)) to allow the Secretary to serve 
a notice or response, as it relates to paragraph (d), by any electronic 
means, such as registered email, that provides proof of receipt to the 
electronic mail address or phone number of the subject of the 
investigation.

Comments

    AMS received timely filed comments from three parties. One 
commenter did not address the proposed amendments to the regulations.
    The second commenter, a California agricultural trade association, 
strongly supported the revision to Sec.  46.49 (7 CFR 46.49) stating, 
that ``[t]his clarification now will insure that the industry . . . 
will understand the breadth of documentation that could trigger USDA's 
authority to initiate an investigation of alleged PACA violations.'' 
This commenter generally supported the proposed amendment to Sec.  
46.46 (7 CFR 46.46) and recommended that ``a mechanism for non-licensed 
growers be instituted to allow for a simplified method and clear 
pathway which allows growers to preserve their PACA Trust rights.'' 
This commenter also suggested the possibility of ``a reduced license 
fee for growers based on their volume,'' allowing them to obtain a PACA 
license ``at a reduced rate that permits them to utilize the automatic 
method of preserving Trust rights by applying the necessary PACA 
language to their billing documents.''
    We do not adopt the suggestion for a reduced fee for growers based 
on the grower's volume because it raises significant concerns with 
respect to implementation on the part of the agency. Adopting a PACA 
license fee structure based on a grower's ``volume'' as the commenter 
suggested would require that growers disclose sales and financial 
information currently not requested or required of growers to obtain a 
PACA license, thereby placing an additional burden on the growers to 
supply confidential information. Similarly, it would subject growers to 
regular monitoring and verification of the growers' sales information. 
As the commenter recognizes, the PACA stipulates that only PACA 
licensees can preserve their trust rights by including trust language 
on their invoices or other billing documents. Growers are currently not 
required to obtain a PACA license, but may choose to do so at the 
established fee, thus enabling them to include the statutory trust 
language on their billing documents. The statute currently does not 
provide for the creation of a separate fee structure for growers or a 
simplified method that allows unlicensed growers to preserve their 
trust rights as proposed by the commenter.
    The third commenter, an attorney, did not comment on the proposed 
amendment of Sec.  46.46 (7CFR 46.46) but strongly objected to the 
proposed revisions to Sec.  46.49 (7 CFR 46.49), alleging that they 
unlawfully expand USDA's authority, contrary to the PACA. The commenter 
raised four primary concerns with the revision, contending that:
    1. The revision circumvents the clear statutory language of PACA. 
The commenter states that, with respect to initiating an investigation, 
``instead of merely acknowledging new types of triggering media, the 
proposed rule goes too far by removing the necessary middle man (i.e., 
an ``interested person'') required by Congress.'' The commenter 
contends that the proposed revision circumvents the requirement that an 
interested person must file written notice with the USDA or with an 
employee of the USDA administering the Act.
    2. The proposed revision renders portions of PACA meaningless,

[[Page 5177]]

bypassing jurisdictional requirements. The commenter contends that the 
proposed revision circumvents the filing requirement, claiming, for 
instance, that, ``[i]f an employee of the USDA administering PACA can 
merely look at a document and the same will be deemed filed, the 
meaning of the term ``filing'' is lost. Further, there would be no 
``interested person'' making the filing subject to penalty for 
falsity,'' and there would be no filing of a notice, no delivery to 
USDA, and no ``written notification'' to inform USDA of an alleged 
violation of the PACA.
    3. The proposed revision frustrates PACA's election of remedies 
provision under 7 U.S.C. 499e(5). The commenter reasons that ``[t]he 
proposed amendment frustrates this election of remedies, in that it 
would allow the filing of a complaint or other similar legal document 
in a court of competent jurisdiction (e.g., U.S. District Court or U.S. 
Bankruptcy Court) to be deemed a filed written notification sufficient 
to initiate an investigation by the USDA as well.''
    4. The proposed revision frustrates the purpose and practical 
application of 7 CFR 46.46(e)(3). The commenter asserts that the 
proposed revision would allow the USDA to ignore parties' decision not 
to notify or involve USDA in a private dispute and ``to exceed its 
jurisdictional grant and insert itself into the private contractual 
affairs of businesses in the industry.''
    We disagree with the commenter's assertion that the revision 
unlawfully expands USDA's authority, contrary to the PACA. Congress 
established the PACA in 1930 to protect buyers and sellers of fresh and 
frozen fruits and vegetables, and the statute and the accompanying 
regulations have been amended over time to remain relevant to the 
industry that the PACA serves. The proposed revisions to Sec.  46.49 (7 
CFR 46.49) recognize the current realities of the information age that 
were not readily available when Congress last amended the PACA in 1995. 
The USDA cannot ignore public information that is relevant to the 
implementation of the PACA simply because Congress did not anticipate 
the expanding availability of digital information. Currently, 
information is much more likely to be generated, stored, and 
disseminated in electronic or digital format. The USDA has an 
obligation to properly enforce the PACA as Congress intended, 
protecting the buyers and sellers of perishable agricultural 
commodities. When electronic information is readily available to USDA, 
its hands should not be tied and the information ignored, when those it 
is tasked to protect could be negatively affected by that lack of 
action.
    The 1995 amendments to the PACA require written notification as a 
precursor to the investigation of alleged violations of the PACA. The 
amendments were designed to protect against arbitrary or capricious 
investigations of licensees and unwarranted prosecutions; the 
amendments ensured that a source outside the agency of the Department 
of Agriculture that administers the Act, including but not limited to 
``any other interested person who has knowledge of or information 
regarding a possible violation'', provided the impetus for 
investigation. The proposed revisions to Sec.  46.49 (7 CFR 46.49) do 
not alter that proposition or erode those protections.
    As stated, the proposed revisions are intended to address societal 
advances in information transmittal and communication, and 
technological evolution of the industry that the PACA serves. They in 
no way circumvent the requirement that a written notification be made 
by an ``interested party'' that is impartial, insofar as that party is 
not charged with administering the Act. Nor do they in any way reduce 
the reliability of the written notification; the submitters of a 
written notification, prior to the revisions, were not subject to 
penalty for unreliability or falsity (as is suggested by the third 
commenter), nor are they post-revisions.
    It has always been the purview of the USDA to determine the 
reliability of any written notice and to decide whether an 
investigation based on that notice is reasonable and warranted.
    Section 6(c) of the PACA (7 U.S.C. 499e(c)) concerns investigations 
of complaints and notifications listed in both paragraphs (a) and (b) 
of section 6 of the Act. This section states that: ``[i]f there appears 
to be, in the opinion of the Secretary, reasonable grounds for 
investigating a complaint made under subsection (a) or a written 
notification made under subsection (b), the Secretary shall investigate 
such complaint or notification.'' USDA will evaluate the information it 
receives and determine if an investigation is warranted. If the 
information is meaningless, meritless or unverifiable, USDA will not 
initiate an investigation.
    Written allegations from an outside source (outside the PACA 
Division), are merely precursors to a possible investigation under the 
PACA. It is USDA's responsibility to determine if violations against 
the PACA were committed, regardless of whether USDA receives an 
allegation directly from an interested party or from a competent source 
(e.g., State government documents, court filings, official bankruptcy 
records). When USDA receives notice of an allegation, the allegation 
must necessarily be examined, processed, and deliberated upon to assess 
whether reasonable grounds exist to investigate. There are intervening 
steps between the receipt of a written notice and an investigation.
    The proposed amendment adds an alternative manner in which written 
notifications may be filed with USDA. The original method of filing 
contained in the regulations remains unchanged. Public records (court 
filings, news articles, etc.) that allege a violation of the PACA 
constitute written notification, and upon review by USDA, are deemed 
``filed'' and may be sufficient to warrant the initiation of an 
investigation. The complaining party has to file or submit its 
complaint to some entity that has the authority to make its complaint 
public in order for USDA to be able to view it. An alleged violator of 
the PACA should not be able to avoid a possible administrative 
enforcement investigation simply because its accuser did not provide 
its written notification directly to USDA.
    The third commenter states that the proposed revisions frustrate 
the PACA's election of remedies provision (7 U.S.C. 499e(5)) and the 
purpose and practical application of 7 CFR 46.46(e)(3). Those sections 
of the Act and regulations outline the remedies available to any 
private person or persons seeking to recover monetary damages resulting 
from any PACA violation(s), and eligibility of that person or persons 
to claim trust benefits under the Act. The proposed revisions to Sec.  
46.49 (7 CFR 46.49) pertain only to the authority of USDA to 
investigate alleged PACA violation(s) for administrative enforcement 
purposes pursuant to section 6(b) of the Act. The proposed regulatory 
amendments neither implicate nor frustrate the intent or application of 
the election of remedies or trust provisions of the Act and regulations 
referenced by the commenter.
    For the reasons outlined above, the proposed revisions to 
Sec. Sec.  46.46 and 46.49 (7 CFR 46.46 and 46.49) remain unchanged in 
the final rule.

Executive Orders 12866, 13563, and 13771

    This final rule has been reviewed under Executive Order 12866 
supplemented by Executive Order 13563 and it has been determined that 
this final rule is not considered a significant regulatory action under 
section 3(f) of Executive Order 12866 and, therefore, it was not 
reviewed by

[[Page 5178]]

the Office of Management and Budget. This rule is not an Executive 
Order 13771 regulatory action because this rule is not significant 
under Executive Order 12866.

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform, and is not intended to have retroactive effect. 
This final rule will not preempt any State or local laws, regulations, 
or policies, unless they present an irreconcilable conflict with this 
rule. There are no administrative procedures that must be exhausted 
prior to any judicial challenge to the provisions of this final rule.

Executive Order 13175

    This final rule 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 
will not have significant Tribal implications.

Final Regulatory Flexibility Act

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601 et seq.), USDA has considered the economic 
impact of this final rule on small entities. The purpose of the RFA is 
to fit regulatory actions to the scale of businesses subject to such 
actions in order that small businesses will not be unduly or 
disproportionately burdened. Accordingly, Agricultural Marketing 
Service (AMS) has prepared this final regulatory flexibility analysis.
    Small agricultural service firms are defined by the Small Business 
Administration as those having annual receipts of less than $7,500,000, 
and small agricultural producers are defined as those having annual 
receipts of less than $750,000 (13 CFR 121.201). There are 
approximately 14,500 firms licensed under the PACA, a majority of which 
could be classified as small entities. Historically, the produce 
industry has been an entry-level job market. There is a constant 
turnover involving the closing and opening of businesses. Produce firms 
generally start as small business entities.
    AMS believes that these amendments to the PACA regulations will 
help all growers, sellers, and suppliers of produce, small or large, to 
protect their rights under the PACA trust, resulting in the potential 
recovery of millions of dollars in unpaid produce debt. Moreover, AMS 
believes that these regulatory amendments more accurately reflect the 
intent of Congress when it amended the PACA to require written 
notification as a precursor to investigations by the Secretary of 
Agriculture.
    AMS believes this final rule increases the clarity of the PACA 
regulations and improves AMS's enforcement of the PACA. AMS has 
determined that this rule will have no significant economic impact on a 
substantial number of small entities.

Paperwork Reduction Act

    In accordance with OMB regulations (5 CFR part 1320) that implement 
the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the 
information collection and recordkeeping requirements that are covered 
by this final rule are currently approved under OMB number 0581-0031. 
No changes to those requirements are necessary as a result of this 
action. Should any changes become necessary, they will be submitted to 
OMB for approval.

E-Government Act Compliance

    USDA is committed to complying with the E-Government Act, which 
requires Government agencies in general to provide the public the 
option of submitting information or transacting business electronically 
to the maximum extent possible. Forms are available on the PACA website 
at http://www.ams.usda.gov/rules-regulations/paca and can be printed, 
completed, and submitted by email, facsimile, or postal delivery.

List of Subjects in 7 CFR Part 46

    Agricultural commodities, Brokers, Penalties, Reporting and 
recordkeeping requirements. For the reasons set forth in the preamble, 
7 CFR part 46 is amended as follows:

PART 46--[AMENDED]

0
 1. The authority citation for part 46 continues to read as follows:

    Authority:  7 U.S.C. 499a-499t.


0
2. Amend Sec.  46.46 by revising paragraphs (d) and (f)(1)(iv) to read 
as follows:


Sec.  46.46  Statutory trust.

* * * * *
    (d) Trust maintenance. (1) Licensees and persons subject to license 
are required to maintain trust assets in a manner so that the trust 
assets are freely available to satisfy outstanding obligations to 
sellers of perishable agricultural commodities. Any act or omission 
which is inconsistent with this responsibility, including dissipation 
of trust assets, is unlawful and in violation of section 2 of the Act 
(7 U.S.C. 499b). Growers, licensees, and persons subject to license may 
file trust actions against licensees and persons operating subject to 
license. Licensees and persons subject to license are bound by the 
trust provisions of the Act (7 U.S.C. 499(e)).
    (2) Principals, including growers, who employ agents to sell 
perishable agricultural commodities on their behalf are ``suppliers'' 
and/or ``sellers'' as those words are used in section 5(c)(2) and (3) 
of the Act (7 U.S.C. 499e(c)(2) and (3)), and therefore must preserve 
their trust rights against their agents by filing a notice of intent to 
preserve trust rights with their agents as set forth in paragraph (f) 
of this section.
    (3) Agents who sell perishable agricultural commodities on behalf 
of their principals must preserve their principals' trust benefits 
against the buyers by filing a notice of intent to preserve trust 
rights with the buyers. Any act or omission which is inconsistent with 
this responsibility, including failure to give timely notice of intent 
to preserve trust benefits, is unlawful and in violation of section 2 
of the Act (7 U.S.C. 499b).
* * * * *
    (f) * * *
    (1) * * *
    (iv) The amount past due and unpaid; except that if a supplier, 
seller or agent engages a commission merchant or growers' agent to sell 
or market their produce, the supplier, seller or agent that has not 
received a final accounting from the commission merchant or growers' 
agent shall only be required to provide information in sufficient 
detail to identify the transaction subject to the trust.
* * * * *

0
 3. Section 46.49 is revised to read as follows:


Sec.  46.49  Written notifications and complaints.

    (a) Written notification, as used in section 6(b) of the Act (7 
U.S.C. 499f (b)), means:
    (1) Any written statement reporting or complaining of a violation 
of the Act made by any officer or agency of any State or Territory 
having jurisdiction over licensees or persons subject to license, or a 
person filing a complaint under section 6(a), or any other interested 
person who has knowledge of or information regarding a possible 
violation of the Act, other than an employee of an agency of USDA 
administering the Act;
    (2) Any written notice of intent to preserve the benefits of, or 
any claim for payment from, the trust established under section 5 of 
the Act (7 U.S.C. 499e);

[[Page 5179]]

    (3) Any official certificate(s) of the United States Government or 
States or Territories of the United States; or
    (4) Any public legal filing or other published document describing 
or alleging a violation of the Act.
    (b) Any written notification may be filed by delivering the written 
notification to any office of USDA or any official of USDA responsible 
for administering the Act. Any written notification published in any 
public forum, including, but not limited to, a newspaper or an internet 
website shall be deemed filed upon visual inspection by any office of 
USDA or any official of USDA responsible for administering the Act. A 
written notification which is so filed, or any expansion of an 
investigation resulting from any indication of additional violations of 
the Act found as a consequence of an investigation based on written 
notification or complaint, also shall be deemed to constitute a 
complaint under section 13(a) of the Act (7 U.S.C. 499m(a)).
    (c) Upon becoming aware of a complaint under section 6(a) or 
written notification under 6(b) of the Act (7 U.S.C. 499f (a) or (b)) 
by means described in paragraph (a) and (b) of this section, the 
Secretary will determine if reasonable grounds exist to conduct an 
investigation of such complaint or written notification for 
disciplinary action. If the investigation substantiates the existence 
of violations of the Act, a formal disciplinary complaint may be issued 
by the Secretary as described in section 6(c)(2) of the Act (7 U.S.C. 
499f(c)(2)).
    (d) Whenever an investigation, initiated as described in section 
6(c) of the Act (7 U.S.C. 499f(c)(2)), is commenced, or expanded to 
include new violations of the Act, notice shall be given by the 
Secretary to the subject of the investigation within thirty (30) days 
of the commencement or expansion of the investigation. Within one 
hundred and eighty (180) days after giving initial notice, the 
Secretary shall provide the subject of the investigation with notice of 
the status of the investigation, including whether the Secretary 
intends to issue a complaint under section 6(c)(2) of the Act (7 U.S.C. 
499f(e)(2)), terminate the investigation, or continue or expand the 
investigation. Thereafter, the subject of the investigation may request 
in writing, no more frequently than every ninety (90) days, a status 
report from the Director of the PACA Division who shall respond to the 
written request within fourteen (14) days of receiving the request. 
When an investigation is terminated, the Secretary shall, within 
fourteen (14) days, notify the subject of the termination of the 
investigation. In every case in which notice or response is required 
under this paragraph (d), such notice or response shall be accomplished 
by personal service; or by posting the notice or response by certified 
or registered mail, or commercial or private delivery service to the 
last known address of the subject of the investigation; or by sending 
the notice or response by any electronic means such as registered 
email, that provides proof of receipt to the electronic mail address or 
phone number of the subject of the investigation.

    Dated: January 29, 2018.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2018-02066 Filed 2-5-18; 8:45 am]
 BILLING CODE 3410-02-P

5175 Rules and Regulations Federal Register Vol. 83, No. 25 Tuesday, February 6, 2018 This section of the FEDERAL REGISTER the impact of such payment practices on event of a business failure, produce contains regulatory documents having general small suppliers who could not creditors may enforce their trust rights applicability and legal effect, most of which withstand a significant loss or delay in by filing a trust action against the buyer are keyed to and codified in the Code of receipt of monies owed. Congress was in federal district court. In the event of Federal Regulations, which is published under also concerned by the common practice a bankruptcy by a produce buyer, that 50 titles pursuant to 44 U.S.C. 1510. of produce buyers granting liens on is, the produce ‘‘debtor,’’ the debtor’s The Code of Federal Regulations is sold by their inventories to their lenders, which trust assets are not property of the the Superintendent of Documents. covered all proceeds and receivables bankruptcy estate and are not available from the sales of perishable agricultural for distribution to secured lenders and commodities, while produce suppliers other creditors until all valid PACA DEPARTMENT OF AGRICULTURE remained unpaid. This practice elevated trust claims have been satisfied. the lenders to a secured creditor Because of the PACA trust provisions, Agricultural Marketing Service position in the case of the buyer’s unpaid sellers, including those outside insolvency, while the sellers of the United States, have recovered 7 CFR Part 46 perishable agricultural commodities hundreds of millions of dollars that [Document Number AMS–FV–15–0045] remained unsecured creditors with little most likely would not otherwise have or no legal protection or means of been collected. The PACA trust RIN 0581–AD50 recovery in a suit for damages. provisions protect not only growers, but Perishable Agricultural Commodities Deeming this situation a ‘‘burden on also other firms trading in fruits and Act (PACA): Guidance on Growers’ commerce,’’ Congress amended the vegetables since each buyer in the Trust Protection Eligibility and PACA in 1984 (Pub. L. 98–273) to marketing chain becomes a seller in its Clarification of ‘‘Written Notification’’ include a statutory trust provision, own turn and can preserve its own trust which provides increased credit eligibility accordingly. Because each AGENCY: Agricultural Marketing Service, security in the absence of prompt creditor that buys produce can preserve USDA. payment for perishable agricultural trust rights for the benefit of its own ACTION: Final rule. commodities. suppliers, any money recovered from a Pursuant to this 1984 amendment, buyer that goes out of business is passed SUMMARY: The U.S. Department of perishable agricultural commodities, back through preceding sellers until Agriculture (USDA), Agricultural inventories of food or other derivative ultimately the grower also realizes the Marketing Service (AMS), is amending products, and any receivables or financial benefits of the trust provisions. the regulations under the Perishable proceeds from the sale of such This is particularly important in the Agricultural Commodities Act (PACA or commodities or products are to be held produce industry due to the highly Act) to enhance clarity and improve the in a non-segregated floating trust for the perishable nature of the commodities as administration and enforcement of the benefit of unpaid sellers. This trust is well as the many hands such PACA. The revisions will provide created by operation of law upon the commodities customarily pass through greater direction to the industry as to purchase of such goods, and the to the end customer. how growers and other principals that produce buyer is the statutory trustee In 1995, Congress amended the PACA employ selling agents may preserve for the benefit of the produce seller. (Pub. L. 104–48), changing several their PACA trust rights. The revisions The trust is a non-segregated ‘‘floating requirements of the PACA trust. will also clarify the definition of trust’’ made up of all of a buyer’s Changes included no longer requiring ‘‘written notification’’ as the term is commodity-related assets, under which sellers or suppliers to file notices of used in 6(b) of the PACA, and the there may be a commingling of trust intent to preserve trust benefits with jurisdiction of USDA to investigate assets. There is no need to identify USDA, and allowing PACA licensees to alleged PACA violations. specific trust assets through each step of have their invoices or other billing DATES: Effective Date: March 8, 2018. the accrual and disposal process. Since documents serve as the trust notice. The FOR FURTHER INFORMATION CONTACT: commingling is contemplated, all trust PACA offers two approaches to unpaid Travis Hubbs, Chief, Investigative assets would be subject to the claims of sellers, suppliers, and agents to preserve Enforcement Branch, 202–720–6873, or unpaid sellers, suppliers and agents to trust protection. One option allows PACAinvestigations@ams.usda.gov. the extent of the amount owed them. As PACA licensees to declare at the time of SUPPLEMENTARY INFORMATION: each supplier gives ownership, sale that the produce is sold subject to possession, or control of perishable the PACA trust, providing protection in Background of Growers’ Trust agricultural commodities to a buyer, and the event that payment is late or the Protection preserves its trust rights, that supplier payment instrument is not honored. Congress examined the sufficiency of becomes a participant in the trust. This option allows PACA licensees to the PACA fifty years after its inception Consequently, trust participants remain protect their trust rights by including and determined that prevalent financing trust beneficiaries until they have been specified language on their invoices or daltland on DSKBBV9HB2PROD with RULES practices in the perishable agricultural paid in full. other billing statements (7 U.S.C. commodities industry were placing the Since 1984, the District Courts of the 499e(c)(4)). The second option for PACA industry in jeopardy. Particularly, United States have had jurisdiction to licensees to preserve their trust rights, Congress focused on the increase in the entertain actions by trust beneficiaries and the sole method for all non-licensed number of buyers who failed to pay, or to enforce payment from the trust (7 sellers, requires the seller to provide a were slow in paying their suppliers, and U.S.C. 499e(c)(5)). Therefore, in the separate, independent notice to the VerDate Sep<11>2014 17:43 Feb 05, 2018 Jkt 244001 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 E:\FR\FM\06FER1.SGM 06FER1

5176 Federal Register / Vol. 83, No. 25 / Tuesday, February 6, 2018 / Rules and Regulations buyer of its intent to preserve its trust Notice of Proposed Rulemaking and PACA Trust rights.’’ This commenter benefits. The notice must include Final Rule also suggested the possibility of ‘‘a sufficient details to identify each In order to enhance clarity and reduced license fee for growers based on transaction covered by the trust (7 improve the administration and their volume,’’ allowing them to obtain U.S.C. 499e(c)(3)). enforcement of the PACA, a proposed a PACA license ‘‘at a reduced rate that Recent court decisions have permits them to utilize the automatic rule to amend PACA regulations was invalidated the trust claims of unpaid method of preserving Trust rights by published in the Federal Register on growers against their growers’ agent applying the necessary PACA language December 14, 2016 [81 FR 90255]. The because the growers did not file a trust to their billing documents.’’ comment period initially closed on notice directly with the growers’ agent. We do not adopt the suggestion for a February 13, 2017. However, the reduced fee for growers based on the Growers’ agents sell and distribute produce for or on behalf of growers and comment period was extended an grower’s volume because it raises may provide such services as financing, additional 30 days. The reopening of the significant concerns with respect to planting, harvesting, grading, packing, comment period was published in the implementation on the part of the labor, seed, and containers. The growers Federal Register on February 17, 2017. agency. Adopting a PACA license fee have argued that it is not necessary to The second comment period closed on structure based on a grower’s ‘‘volume’’ file a trust notice with their growers’ March 15, 2017. as the commenter suggested would agent because growers’ agents are This final rule amends 7 CFR 46.46 by require that growers disclose sales and required to preserve the growers’ rights revising paragraphs (d) and (f)(1)(vi) to financial information currently not as a trust beneficiary against the buyer clarify that growers or other types of requested or required of growers to (7 CFR 46.46(d)(2)). Some courts have principals who employ agents to sell obtain a PACA license, thereby placing ruled that while the growers’ agent is perishable agricultural commodities on an additional burden on the growers to required to preserve the growers’ trust their behalf are among the class of supply confidential information. benefits with the buyer of the produce, ‘‘suppliers or sellers’’ referenced in Similarly, it would subject growers to the grower has the responsibility to section 5(c) of the PACA (7 U.S.C. regular monitoring and verification of preserve its trust benefits with the 499e(c)) and, as such, must preserve the growers’ sales information. As the growers’ agent. This action provides their trust benefits against their agents. commenter recognizes, the PACA guidance to growers to clarify their The revision of paragraph (f)(1)(iv) will stipulates that only PACA licensees can responsibilities in preserving their trust identify additional types of documents preserve their trust rights by including rights. that can be used in a notice of intent to trust language on their invoices or other preserve trust benefits. billing documents. Growers are ‘‘Written Notification’’ Background This final rule also amends 7 CFR currently not required to obtain a PACA The 1995 amendments to the PACA 46.49 by revising it to clarify the license, but may choose to do so at the require written notification to USDA as meaning of ‘‘written notification’’ as the established fee, thus enabling them to a precursor to investigations of alleged term is used in section 6(b) of the PACA include the statutory trust language on violations of the PACA. In recent years, (7 U.S.C. 499f(b)). Additionally, to their billing documents. The statute produce entities have challenged the reflect current industry practices and currently does not provide for the USDA’s jurisdiction to conduct advancements in electronic creation of a separate fee structure for investigations based on their narrow communication, AMS revises § 46.49(d) growers or a simplified method that reading of the definition of ‘‘written (7 CFR 46.49(d)) to allow the Secretary allows unlicensed growers to preserve notification’’ stated in § 46.49 of the to serve a notice or response, as it their trust rights as proposed by the regulations (7 CFR 46.49). The relates to paragraph (d), by any commenter. amendment of § 46.49 (7 CFR 46.49) electronic means, such as registered The third commenter, an attorney, did makes it clear that public filings such as email, that provides proof of receipt to not comment on the proposed bankruptcy petitions, civil trust actions, the electronic mail address or phone amendment of § 46.46 (7CFR 46.46) but and judgments constitute written number of the subject of the strongly objected to the proposed notification. Moreover, AMS clarifies investigation. revisions to § 46.49 (7 CFR 46.49), that the filing of a written notification alleging that they unlawfully expand with USDA may be accomplished by a Comments USDA’s authority, contrary to the myriad of means including, but not AMS received timely filed comments PACA. The commenter raised four limited to, delivery by regular or from three parties. One commenter did primary concerns with the revision, commercial mail service, hand delivery, not address the proposed amendments contending that: or electronic means such as email, text, to the regulations. 1. The revision circumvents the clear or facsimile message. Furthermore, a The second commenter, a California statutory language of PACA. The written notification published in any agricultural trade association, strongly commenter states that, with respect to public forum including, but not limited supported the revision to § 46.49 (7 CFR initiating an investigation, ‘‘instead of to, a newspaper or internet website, will 46.49) stating, that ‘‘[t]his clarification merely acknowledging new types of be considered filed with USDA upon its now will insure that the industry . . . triggering media, the proposed rule goes visual inspection by any office or will understand the breadth of too far by removing the necessary official of USDA responsible for documentation that could trigger middle man (i.e., an ‘‘interested administering the Act. Clarification of USDA’s authority to initiate an person’’) required by Congress.’’ The the meaning of ‘‘written notification’’ investigation of alleged PACA commenter contends that the proposed ensures that PACA licensees and violations.’’ This commenter generally daltland on DSKBBV9HB2PROD with RULES revision circumvents the requirement entities operating subject to the PACA supported the proposed amendment to that an interested person must file understand the breadth of § 46.46 (7 CFR 46.46) and recommended written notice with the USDA or with documentation that could trigger that ‘‘a mechanism for non-licensed an employee of the USDA administering USDA’s authority to initiate an growers be instituted to allow for a the Act. investigation of alleged PACA simplified method and clear pathway 2. The proposed revision renders violations. which allows growers to preserve their portions of PACA meaningless, VerDate Sep<11>2014 17:43 Feb 05, 2018 Jkt 244001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 E:\FR\FM\06FER1.SGM 06FER1

Federal Register / Vol. 83, No. 25 / Tuesday, February 6, 2018 / Rules and Regulations 5177 bypassing jurisdictional requirements. be negatively affected by that lack of documents, court filings, official The commenter contends that the action. bankruptcy records). When USDA proposed revision circumvents the filing The 1995 amendments to the PACA receives notice of an allegation, the requirement, claiming, for instance, require written notification as a allegation must necessarily be that, ‘‘[i]f an employee of the USDA precursor to the investigation of alleged examined, processed, and deliberated administering PACA can merely look at violations of the PACA. The upon to assess whether reasonable a document and the same will be amendments were designed to protect grounds exist to investigate. There are deemed filed, the meaning of the term against arbitrary or capricious intervening steps between the receipt of ‘‘filing’’ is lost. Further, there would be investigations of licensees and a written notice and an investigation. no ‘‘interested person’’ making the filing unwarranted prosecutions; the The proposed amendment adds an subject to penalty for falsity,’’ and there amendments ensured that a source alternative manner in which written would be no filing of a notice, no outside the agency of the Department of notifications may be filed with USDA. delivery to USDA, and no ‘‘written Agriculture that administers the Act, The original method of filing contained notification’’ to inform USDA of an including but not limited to ‘‘any other in the regulations remains unchanged. alleged violation of the PACA. interested person who has knowledge of Public records (court filings, news 3. The proposed revision frustrates or information regarding a possible articles, etc.) that allege a violation of PACA’s election of remedies provision violation’’, provided the impetus for the PACA constitute written under 7 U.S.C. 499e(5). The commenter investigation. The proposed revisions to notification, and upon review by USDA, reasons that ‘‘[t]he proposed § 46.49 (7 CFR 46.49) do not alter that are deemed ‘‘filed’’ and may be amendment frustrates this election of proposition or erode those protections. sufficient to warrant the initiation of an remedies, in that it would allow the As stated, the proposed revisions are investigation. The complaining party filing of a complaint or other similar intended to address societal advances in has to file or submit its complaint to legal document in a court of competent information transmittal and some entity that has the authority to jurisdiction (e.g., U.S. District Court or communication, and technological make its complaint public in order for U.S. Bankruptcy Court) to be deemed a evolution of the industry that the PACA USDA to be able to view it. An alleged filed written notification sufficient to serves. They in no way circumvent the violator of the PACA should not be able initiate an investigation by the USDA as requirement that a written notification to avoid a possible administrative well.’’ be made by an ‘‘interested party’’ that is enforcement investigation simply 4. The proposed revision frustrates impartial, insofar as that party is not because its accuser did not provide its the purpose and practical application of charged with administering the Act. Nor written notification directly to USDA. 7 CFR 46.46(e)(3). The commenter do they in any way reduce the reliability The third commenter states that the asserts that the proposed revision would of the written notification; the proposed revisions frustrate the PACA’s allow the USDA to ignore parties’ submitters of a written notification, election of remedies provision (7 U.S.C. decision not to notify or involve USDA prior to the revisions, were not subject 499e(5)) and the purpose and practical in a private dispute and ‘‘to exceed its to penalty for unreliability or falsity (as application of 7 CFR 46.46(e)(3). Those jurisdictional grant and insert itself into is suggested by the third commenter), sections of the Act and regulations the private contractual affairs of nor are they post-revisions. outline the remedies available to any businesses in the industry.’’ It has always been the purview of the private person or persons seeking to We disagree with the commenter’s USDA to determine the reliability of any recover monetary damages resulting assertion that the revision unlawfully written notice and to decide whether an from any PACA violation(s), and expands USDA’s authority, contrary to investigation based on that notice is eligibility of that person or persons to the PACA. Congress established the reasonable and warranted. claim trust benefits under the Act. The PACA in 1930 to protect buyers and Section 6(c) of the PACA (7 U.S.C. proposed revisions to § 46.49 (7 CFR sellers of fresh and frozen fruits and 499e(c)) concerns investigations of 46.49) pertain only to the authority of vegetables, and the statute and the complaints and notifications listed in USDA to investigate alleged PACA accompanying regulations have been both paragraphs (a) and (b) of section 6 violation(s) for administrative amended over time to remain relevant to of the Act. This section states that: ‘‘[i]f enforcement purposes pursuant to the industry that the PACA serves. The there appears to be, in the opinion of the section 6(b) of the Act. The proposed proposed revisions to § 46.49 (7 CFR Secretary, reasonable grounds for regulatory amendments neither 46.49) recognize the current realities of investigating a complaint made under implicate nor frustrate the intent or the information age that were not subsection (a) or a written notification application of the election of remedies readily available when Congress last made under subsection (b), the or trust provisions of the Act and amended the PACA in 1995. The USDA Secretary shall investigate such regulations referenced by the cannot ignore public information that is complaint or notification.’’ USDA will commenter. relevant to the implementation of the evaluate the information it receives and For the reasons outlined above, the PACA simply because Congress did not determine if an investigation is proposed revisions to §§ 46.46 and anticipate the expanding availability of warranted. If the information is 46.49 (7 CFR 46.46 and 46.49) remain digital information. Currently, meaningless, meritless or unverifiable, unchanged in the final rule. information is much more likely to be USDA will not initiate an investigation. generated, stored, and disseminated in Written allegations from an outside Executive Orders 12866, 13563, and electronic or digital format. The USDA source (outside the PACA Division), are 13771 has an obligation to properly enforce the merely precursors to a possible This final rule has been reviewed PACA as Congress intended, protecting investigation under the PACA. It is under Executive Order 12866 daltland on DSKBBV9HB2PROD with RULES the buyers and sellers of perishable USDA’s responsibility to determine if supplemented by Executive Order agricultural commodities. When violations against the PACA were 13563 and it has been determined that electronic information is readily committed, regardless of whether USDA this final rule is not considered a available to USDA, its hands should not receives an allegation directly from an significant regulatory action under be tied and the information ignored, interested party or from a competent section 3(f) of Executive Order 12866 when those it is tasked to protect could source (e.g., State government and, therefore, it was not reviewed by VerDate Sep<11>2014 17:43 Feb 05, 2018 Jkt 244001 PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 E:\FR\FM\06FER1.SGM 06FER1

5178 Federal Register / Vol. 83, No. 25 / Tuesday, February 6, 2018 / Rules and Regulations the Office of Management and Budget. amended the PACA to require written Growers, licensees, and persons subject This rule is not an Executive Order notification as a precursor to to license may file trust actions against 13771 regulatory action because this investigations by the Secretary of licensees and persons operating subject rule is not significant under Executive Agriculture. to license. Licensees and persons Order 12866. AMS believes this final rule increases subject to license are bound by the trust the clarity of the PACA regulations and provisions of the Act (7 U.S.C. 499(e)). Executive Order 12988 (2) Principals, including growers, who improves AMS’s enforcement of the This final rule has been reviewed PACA. AMS has determined that this employ agents to sell perishable under Executive Order 12988, Civil rule will have no significant economic agricultural commodities on their behalf Justice Reform, and is not intended to impact on a substantial number of small are ‘‘suppliers’’ and/or ‘‘sellers’’ as those have retroactive effect. This final rule entities. words are used in section 5(c)(2) and (3) will not preempt any State or local laws, of the Act (7 U.S.C. 499e(c)(2) and (3)), regulations, or policies, unless they Paperwork Reduction Act and therefore must preserve their trust present an irreconcilable conflict with In accordance with OMB regulations rights against their agents by filing a this rule. There are no administrative (5 CFR part 1320) that implement the notice of intent to preserve trust rights procedures that must be exhausted prior Paperwork Reduction Act of 1995 (44 with their agents as set forth in to any judicial challenge to the U.S.C. Chapter 35), the information paragraph (f) of this section. provisions of this final rule. collection and recordkeeping (3) Agents who sell perishable requirements that are covered by this agricultural commodities on behalf of Executive Order 13175 their principals must preserve their final rule are currently approved under This final rule has been reviewed in OMB number 0581–0031. No changes to principals’ trust benefits against the accordance with the requirements of those requirements are necessary as a buyers by filing a notice of intent to Executive Order 13175, consultation result of this action. Should any changes preserve trust rights with the buyers. and Coordination with Indian Tribal become necessary, they will be Any act or omission which is governments. The review reveals that submitted to OMB for approval. inconsistent with this responsibility, this regulation will not have substantial including failure to give timely notice of and direct effects on Tribal governments E-Government Act Compliance intent to preserve trust benefits, is and will not have significant Tribal USDA is committed to complying unlawful and in violation of section 2 of implications. with the E-Government Act, which the Act (7 U.S.C. 499b). requires Government agencies in general * * * * * Final Regulatory Flexibility Act to provide the public the option of (f) * * * Pursuant to requirements set forth in submitting information or transacting (1) * * * the Regulatory Flexibility Act (RFA) (5 business electronically to the maximum (iv) The amount past due and unpaid; U.S.C. 601 et seq.), USDA has extent possible. Forms are available on except that if a supplier, seller or agent considered the economic impact of this the PACA website at http:// engages a commission merchant or final rule on small entities. The purpose www.ams.usda.gov/rules-regulations/ growers’ agent to sell or market their of the RFA is to fit regulatory actions to paca and can be printed, completed, produce, the supplier, seller or agent the scale of businesses subject to such and submitted by email, facsimile, or that has not received a final accounting actions in order that small businesses postal delivery. from the commission merchant or will not be unduly or disproportionately growers’ agent shall only be required to burdened. Accordingly, Agricultural List of Subjects in 7 CFR Part 46 provide information in sufficient detail Marketing Service (AMS) has prepared Agricultural commodities, Brokers, to identify the transaction subject to the this final regulatory flexibility analysis. Penalties, Reporting and recordkeeping trust. Small agricultural service firms are requirements. For the reasons set forth * * * * * defined by the Small Business in the preamble, 7 CFR part 46 is ■ 3. Section 46.49 is revised to read as Administration as those having annual amended as follows: follows: receipts of less than $7,500,000, and small agricultural producers are defined PART 46—[AMENDED] § 46.49 Written notifications and as those having annual receipts of less complaints. than $750,000 (13 CFR 121.201). There ■ 1. The authority citation for part 46 (a) Written notification, as used in are approximately 14,500 firms licensed continues to read as follows: section 6(b) of the Act (7 U.S.C. 499f under the PACA, a majority of which Authority: 7 U.S.C. 499a–499t. (b)), means: could be classified as small entities. ■ 2. Amend § 46.46 by revising (1) Any written statement reporting or Historically, the produce industry has paragraphs (d) and (f)(1)(iv) to read as complaining of a violation of the Act been an entry-level job market. There is follows: made by any officer or agency of any a constant turnover involving the State or Territory having jurisdiction closing and opening of businesses. § 46.46 Statutory trust. over licensees or persons subject to Produce firms generally start as small * * * * * license, or a person filing a complaint business entities. (d) Trust maintenance. (1) Licensees under section 6(a), or any other AMS believes that these amendments and persons subject to license are interested person who has knowledge of to the PACA regulations will help all required to maintain trust assets in a or information regarding a possible growers, sellers, and suppliers of manner so that the trust assets are freely violation of the Act, other than an produce, small or large, to protect their available to satisfy outstanding daltland on DSKBBV9HB2PROD with RULES employee of an agency of USDA rights under the PACA trust, resulting in obligations to sellers of perishable administering the Act; the potential recovery of millions of agricultural commodities. Any act or (2) Any written notice of intent to dollars in unpaid produce debt. omission which is inconsistent with this preserve the benefits of, or any claim for Moreover, AMS believes that these responsibility, including dissipation of payment from, the trust established regulatory amendments more accurately trust assets, is unlawful and in violation under section 5 of the Act (7 U.S.C. reflect the intent of Congress when it of section 2 of the Act (7 U.S.C. 499b). 499e); VerDate Sep<11>2014 17:43 Feb 05, 2018 Jkt 244001 PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 E:\FR\FM\06FER1.SGM 06FER1

Federal Register / Vol. 83, No. 25 / Tuesday, February 6, 2018 / Rules and Regulations 5179 (3) Any official certificate(s) of the days, notify the subject of the clementine, and tangerine fruit from United States Government or States or termination of the investigation. In Colombia beginning February 6, 2018. Territories of the United States; or every case in which notice or response We will consider all comments that we (4) Any public legal filing or other is required under this paragraph (d), receive on or before April 9, 2018. published document describing or such notice or response shall be alleging a violation of the Act. ADDRESSES: You may submit comments accomplished by personal service; or by (b) Any written notification may be by either of the following methods: posting the notice or response by filed by delivering the written certified or registered mail, or • Federal eRulemaking Portal: Go to notification to any office of USDA or commercial or private delivery service http://www.regulations.gov/#!docket any official of USDA responsible for to the last known address of the subject Detail;D=APHIS-2017-0074. administering the Act. Any written of the investigation; or by sending the • Postal Mail/Commercial Delivery: notification published in any public notice or response by any electronic Send your comment to Docket No. forum, including, but not limited to, a means such as registered email, that APHIS–2017–0074, Regulatory Analysis newspaper or an internet website shall provides proof of receipt to the and Development, PPD, APHIS, Station be deemed filed upon visual inspection electronic mail address or phone 3A–03.8, 4700 River Road Unit 118, by any office of USDA or any official of number of the subject of the Riverdale, MD 20737–1238. USDA responsible for administering the investigation. Act. A written notification which is so Supporting documents and any filed, or any expansion of an Dated: January 29, 2018. comments we receive on this docket investigation resulting from any Bruce Summers, may be viewed at http:// indication of additional violations of the Acting Administrator, Agricultural Marketing www.regulations.gov/#!docketDetail;D= Act found as a consequence of an Service. APHIS-2017-0074 or in our reading investigation based on written [FR Doc. 2018–02066 Filed 2–5–18; 8:45 am] room, which is located in room 1141 of notification or complaint, also shall be BILLING CODE 3410–02–P the USDA South Building, 14th Street deemed to constitute a complaint under and Independence Avenue SW, section 13(a) of the Act (7 U.S.C. Washington, DC. Normal reading room 499m(a)). DEPARTMENT OF AGRICULTURE hours are 8 a.m. to 4:30 p.m., Monday (c) Upon becoming aware of a through Friday, except holidays. To be complaint under section 6(a) or written Animal and Plant Health Inspection sure someone is there to help you, notification under 6(b) of the Act (7 Service please call (202) 799–7039 before U.S.C. 499f (a) or (b)) by means coming. described in paragraph (a) and (b) of this 7 CFR Part 319 FOR FURTHER INFORMATION CONTACT: Ms. section, the Secretary will determine if [Docket No. APHIS–2017–0074] Claudia Ferguson, Senior Regulatory reasonable grounds exist to conduct an Policy Specialist, Regulatory investigation of such complaint or Supplemental Requirements for written notification for disciplinary Coordination and Compliance, PPQ, Importation of Fresh Citrus From action. If the investigation substantiates APHIS, 4700 River Road Unit 133, Colombia Into the United States the existence of violations of the Act, a Riverdale, MD 20737–1236; (301) 851– formal disciplinary complaint may be AGENCY: Animal and Plant Health 2352. issued by the Secretary as described in Inspection Service, USDA. SUPPLEMENTARY INFORMATION: section 6(c)(2) of the Act (7 U.S.C. ACTION: Notification of supplemental Under the regulations in ‘‘Subpart– 499f(c)(2)). requirements; request for comments. Fruits and Vegetables’’ (7 CFR 319.56– (d) Whenever an investigation, 1 through 319.56–81, referred to below initiated as described in section 6(c) of SUMMARY: We are notifying the public of our decision to supplement our as the regulations), the Animal and the Act (7 U.S.C. 499f(c)(2)), is requirements governing the importation Plant Health Inspection Service (APHIS) commenced, or expanded to include of fresh sweet orange, grapefruit, of the United States Department of new violations of the Act, notice shall mandarin, clementine, and tangerine Agriculture (USDA) prohibits or be given by the Secretary to the subject fruit from Colombia into the United restricts the importation of fruits and of the investigation within thirty (30) States and are requesting public vegetables into the United States from days of the commencement or comment on these changes. We have certain parts of the world in an effort to expansion of the investigation. Within determined that, in order to mitigate the prevent plant pests from being one hundred and eighty (180) days after current pest risks posed by the introduced into and spread within the giving initial notice, the Secretary shall importation of these commodities from United States. provide the subject of the investigation with notice of the status of the Colombia into the United States, it is Section 319.56–3, which includes investigation, including whether the necessary to supplement the general import requirements for fruits Secretary intends to issue a complaint phytosanitary requirements now in and vegetables, authorizes the under section 6(c)(2) of the Act (7 U.S.C. place with additional requirements. importation of fresh sweet orange 499f(e)(2)), terminate the investigation, This action will help to protect the (Citrus sinensis (L.), grapefruit (Citrus or continue or expand the investigation. United States against plant pests while paradisi MacFad), mandarin (Citrus Thereafter, the subject of the allowing the resumption of imports of reticulata Blanco), clementine (Citrus investigation may request in writing, no fresh sweet orange, grapefruit, clementina Hort. Ex Tanaka), and more frequently than every ninety (90) mandarin, clementine, and tangerine tangerine (Citrus tangerine Tanaka) fruit daltland on DSKBBV9HB2PROD with RULES days, a status report from the Director of fruit from Colombia, which were from Colombia into the United States. the PACA Division who shall respond to suspended in 2016 due to the discovery The general import requirements the written request within fourteen (14) of new plant pests in South America. include an import permit issued by days of receiving the request. When an DATES: These requirements will be APHIS and inspection of the fruit by investigation is terminated, the authorized for use on fresh sweet APHIS officials at the port of first Secretary shall, within fourteen (14) orange, grapefruit, mandarin, arrival. Additionally, as a condition of VerDate Sep<11>2014 17:43 Feb 05, 2018 Jkt 244001 PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 E:\FR\FM\06FER1.SGM 06FER1


Document Created: 2018-02-06 00:30:32
Document Modified: 2018-02-06 00:30:32
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesEffective Date: March 8, 2018.
ContactTravis Hubbs, Chief, Investigative Enforcement Branch, 202-720-6873, or [email protected]
FR Citation83 FR 5175 
RIN Number0581-AD50
CFR AssociatedAgricultural Commodities; Brokers; Penalties; Reporting and Recordkeeping Requirements; For the Reasons Set Forth in the Preamble and 7 Cfr Part 46 Is Amended As Follows:
2024 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR