DOWNLOAD PDF INCREASE LICENSE FEES UNDER PERISHABLE AGRICULTURAL COMMODITIES ACT OF 1930.

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1 Chapter 1 : PACA - Collection of Attorney's Fees; PACA Trust Legend Stokes Law Office The Perishable Agricultural Commodities Act, (PACA) â Pub.L. (June 10, ), as amended), codified as Chapter 20A (sections a through s) of Title 7 of the United States Code, is a United States law that authorizes the regulation of the buying and selling of fresh and frozen fruits and vegetables to prevent unfair trading practices and to assure that sellers will be paid promptly. AMS has identified several long-term goals, including 1 Mediation and arbitration--improving the mediation process allows commercial disputes to be resolved more quickly. More timely processing of PACA enforcement actions better protects sellers from unfair or unscrupulous practices. Buyers and sellers of perishable fruits and vegetables are required to be licensed before they conduct business. Does the program track the value of commodities that are lost year to year as a result of fraud? The program works to decrease the time frame for resolving commercial disputes through the use of new computer technology and process improvements and by encouraging increased use of different forms of alternative dispute resolution. These efforts increase the percentage of commercial disputes that are settled quickly. AMS provides beneficiaries with several different options they can use in applying for and renewing licenses in order to reduce time, including online access. To sustain a "Yes" please provide additional information explaining the rationale for using output measures, and how these measures meaningfully support the program. The program reviews its goals and progress semi-annually to update and improve its targets and timeframes for its long-term measures. The plan includes standards for timeliness, rates of settlement of commercial disputes, and overall customer service. The program has benchmarked these time frames against business leaders in private industry and the government. Within 5 years, the program will reduce the handling time of informal disputes from the current 8 months to 6 months, a 25 percent improvement. To reduce the timeframe for commercial dispute resolution, the program must ensure that its informal resolution process proceeds quickly. Part of the enforcement process is the compilation and analysis of evidence from a field investigation and the resulting report. The program plans to reduce processing time by increasing the percentage of completion within 30 days. AMS is working toward a faster licensing process that will provide better services by providing applicants with electronic access. The annual licensing goal directly corresponds to the long-term goal. The program tracks its progress toward meeting these annual performance measures monthly. The purpose of the question is to determine whether the program has targets for its annual measures. The program does not have targets that demonstrate increased efficiency and progress towards its annual measures. AMS can take action against the misuse of quality labeling on fresh fruits, vegetables, and specialty products under the Perishable Agricultural Commodities Act. Fresh products grading personnel are responsible for notifying the PACA program when they suspect violations of the Act to help ensure fair trading. The program plans to strengthen its cooperative relationship with USDA OGC as part of its strategy to reduce the timeframe for filing of enforcement actions. The Advisory Committee is an independent group of individuals comprised of all segments of the fruit and vegetable industry, including wholesalers, distributors, retailers, processors, and shippers. The Committee is familiar with the mission and goals of the PACA program and is able to provide independent and sound recommendations for program improvement. The program contracted with a private consulting firm, Holistic Solutions HSI, to conduct a review focused on the organizational structure of the program in July of The review examined work flow, work load, staffing, regional boundaries, field office structure, and office location from the perspective of how these factors impact efficient mission delivery. After completing this review HSI submitted short term, mid-term and long-term recommendations to agency management. The review contained a range of recommendations designed to make operations more cost effective by consolidating and centralizing license functions and streamlining handling of complaint, enforcement actions, and licenses. The suggestions have been analyzed by AMS management. The recommended changes have now been submitted to the Fruit and Vegetable Industry Advisory Committee prior to the implementation of any major changes to Page 1

2 the program. For this program, budget requests are in the form of license fee proposals. AMS reviews the financial state of the program each fiscal quarter to ensure that anticipated revenue and operating reserve balances will be adequate to recover all direct and indirect costs the program is projected to incur for the current and at least two subsequent years. If fee rates are not expected to recover projected costs, program managers are expected to consider ways to reduce costs or increase fees. Budget documentation clearly identifies the full costs and performance goals of the program. This program must recover the cost of providing services while maintaining resource and customer service levels. AMS prepares an annual and legislatively mandated biennial review of fees. Program costs include direct and indirect costs such as salary and related personnel costs, travel, rent, postage, equipment purchase and maintenance, and a proportionate share of division and agency administrative and supervisory costs. The PACA Branch has undertaken numerous improvement measures directly related to its key program goals as the result of its strategic planning efforts. Page 2

3 Chapter 2 : 7 U.S. Code  c - Licenses US Law LII / Legal Information Institute The Perishable Agricultural Commodities Act (PACA) was enacted at the request of the fruit and vegetable industry to promote fair trade in the industry. Licenses a License required; penalties for violations After December 10,, no person shall at any time carry on the business of a commission merchant, dealer, or broker without a license valid and effective at such time. Such payment shall be deposited in the Treasury of the United States in the same manner as regular license fees. The Secretary may by regulation prescribe the information to be contained in such application and to be furnished thereafter. Thereafter, the licensee shall pay such license fees annually or at such longer interval as the Secretary may prescribe. The Secretary shall take due account of savings to the program when determining an appropriate interval for renewal of licenses. The Secretary shall establish and alter license fees only by rulemaking under section of title 5, except that the Secretary may not alter the fees required under paragraph 3 or 4 for retailers and grocery wholesalers that are dealers. Any increase in license fees prescribed by the Secretary under this paragraph shall not take effect unless the Secretary determines that, without such increase, the funds on hand as of the end of the fiscal year in which the increase takes effect will be less than 25 percent of the projected budget to administer this chapter and such Act for the next fiscal year. In no case may a license fee increase by the Secretary take effect before the end of the three-year period beginning on November 15, In either case, a retailer or grocery wholesaler paying a fee under this paragraph shall not be required to pay any fee for renewal of the license for subsequent years. B For anniversary dates occurring during the one-year period beginning at the end of the period in subparagraph A, the licensee shall pay a renewal fee in an amount equal to 75 percent of the amount paid by the licensee under subparagraph A. C For anniversary dates occurring during the one-year period beginning at the end of the period in subparagraph B, the licensee shall pay a renewal fee in an amount equal to 50 percent of the amount paid by the licensee under subparagraph A. D After the end of the three-year period beginning on November 15,, the licensee shall not be required to pay any fee if the licensee seeks renewal of the license. Any reserve funds in the Perishable Agricultural Commodities Act Fund may be invested by the Secretary in insured or fully-collateralized interest-bearing accounts or, at the discretion of the Secretary, by the Secretary of the Treasury in United States Government debt instruments. Any interest earned on such reserve funds shall be credited to the Perishable Agricultural Commodities Act Fund and shall be available for the same purposes as the fees deposited in such fund. Financial statements prescribed by the Director of the Office of Management and Budget for the last completed fiscal year, and as estimated for the current and ensuing fiscal years, shall be included in the budget as submitted to the Congress annually. The Secretary may disapprove the use of a trade name if, in his opinion, the use of the trade name by the licensee would be deceptive, misleading, or confusing to the trade, and the Secretary may, after notice and opportunity for a hearing, suspend for a period not to exceed ninety days the license of any licensee who continues to use a trade name which the Secretary has disapproved for use by such licensee. The Secretary may refuse to issue a license to an applicant if he finds that the trade name in which the applicant proposes to do business would be deceptive, misleading, or confusing to the trade if used by such applicant. June 10,, ch. July 1,, 35 F. References in Text The Act to prevent the destruction or dumping of farm produce, approved March 3,, referred to in subsec. For complete classification of this Act to the Code, see Tables. Codification Section was formerly classified to section of this title. Effective Date of Amendment Amendment by Pub. Transfer of Functions Functions vested by law including reorganization plan in Bureau of the Budget or Director of Bureau of the Budget transferred to President by section of Reorg. Section of Reorg. See part I of Reorg. Page 3

4 Chapter 3 : Perishable Agricultural Commodities Act of - Wikipedia Increase license fees under Perishable agricultural commodities act of hearing before the Subcommittee on Domestic Marketing and Consumer Relations of the Committee on Agriculture, House of Representatives, Ninety-first Congress, first session, on H.R. July 17, The primary purposes of the PACA are to prevent unfair and fraudulent conduct in the marketing and selling of perishable agricultural commodities and to facilitate the orderly flow of perishable agricultural commodities in interstate and foreign commerce. A full listing of the conduct that a commission merchant, dealer, or broker is prohibited from engaging in is set forth at 7 U. The injured person or persons may enforce such liability by bringing an action in federal district court or by filing a reparations proceeding against the commission merchant, dealer, or broker. The PACA sets forth several requirements and conditions associated with the licensing requirement including, but not limited to, standards governing the application for a license and the required fees; grounds on which the Secretary may refuse to issue a license; and the authority of the Secretary to withhold the issuance of a license pending an investigation of the applicant. Statutory Trust In, Congress amended the PACA to include a statutory trust for the benefit of unpaid sellers of perishable agricultural commodities. The PACA provides that [p]erishable agricultural commodities received by a commission merchant, dealer, or broker in all transactions, and all inventories of food or other products derived from perishable agricultural commodities, and any receivables or proceeds from the sale of such commodities or products, shall be held by such commission merchant, dealer, or broker in trust for the benefit of all unpaid suppliers or sellers of such commodities or agents involved in the transaction, until full payment of the sums owing in connection with such transactions has been received by such unpaid suppliers, sellers, or agents. When a controversy arises as to which assets are part of the PACA trust, the buyer has the burden of establishing which assets, if any, are not subject to the PACA trust. The PACA beneficiary only has the burden of proving the amount of its claim and that a floating pool of assets exists into which the produce-related assets have been commingled. Because the buyer holds those assets for the benefit of the seller. An unpaid seller may preserve the benefits of the trust by providing a written notice to the commission merchant, broker, or dealer of intent to preserve such benefits. See also 7 C. The written notice must be given to the commission merchant, broker, or dealer within thirty calendar days i after expiration of the time prescribed by which payment must be made, as set forth in the regulations issued by the Secretary, ii after expiration of such other time by which payment must be made, as the parties have expressly agreed to in writing before entering into the transaction, or iii after the time the supplier, seller, or agent has received notice that the payment instrument promptly presented for payment has been dishonored. If this agreement extends the time for payment for more than thirty days, however, the seller cannot qualify for coverage under the trust. First, the bill or invoice statement must contain the terms of payment, and each party must maintain a copy of the agreement in its own records. Second, the face of the billing or invoice statement must contain the following statement: The perishable agricultural commodities listed on this invoice are sold subject to the statutory trust authorized by section 5 c of the Perishable Agricultural Commodities Act 7 U. The seller of these commodities retains a trust claim over these commodities, all inventories of food or other products derived from these commodities, and any receivables or proceeds from the sale of these commodities until full payment is received. Reparations proceedings provide a remedy in addition to remedies available under applicable state laws or common law and are governed by the PACA Rules of Practice for Reparation Proceedings, 7 C. The informal complaint must provide a brief statement of the facts supporting the allegations against the commission merchant, dealer, or broker and must be filed within nine months from the date in which the violation occurred. After receiving all information and supporting evidence provided by the person filing the informal complaint, the Secretary must conduct an investigation. See also 7 U. If the informal complaint and the investigation seem to warrant such action, subject to certain exceptions, the Secretary in an Page 4

5 effort to effect an amicable or informal adjustment of the matter, shall give written notice to the person complained against of the facts or conduct concerning which complaint is made, and shall afford such person an opportunity, within a reasonable time. If an amicable or informal settlement is not reached, the complaining party may file a formal complaint. The formal complaint must contain the information required for filing an informal complaint and a statement of the damages claimed. After the parties have properly responded to all claims and counterclaims, if any, the matter is assigned a docket number and scheduled for a hearing. If the Secretary determines that a violation has occurred, it must determine the amount of damages owed and enter an order stating the date by which the offender must pay those damages. Either party may appeal a reparation order to the district court in which the hearing was held within thirty days from the date the order was entered. Disciplinary proceedings under the PACA differ from reparations proceedings in that private parties do not bring disciplinary proceedings. Disciplinary proceedings are commenced, similar to reparations proceedings, by the filing of an informal complaint. Page 5

6 Chapter 4 : 7 U.S. Code  a - Short title and definitions US Law LII / Legal Information Institute The Department of Agriculture (USDA) is proposing to amend the regulations under the Perishable Agricultural Commodities Act (PACA or Act) and the PACA Rules of Practice (other than formal disciplinary proceedings) to increase license and complaint filing fees. 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. Additionally, the regulations would be amended to remove the provisions to phase out license fees by retailers and grocery wholesalers and the provisions to phase in triennial license renewal for retailers and grocery wholesalers as these processes have already occurred. We also propose to eliminate the multi-year license renewal option for commission merchants, brokers, and dealers. Written or electronic comments received by May 10, will be considered prior to issuance of a final rule. You may submit written or electronic comments to: VerDate Nov The Perishable Agricultural Commodities Act PACA or Act of establishes a code of fair trade practices covering the marketing of fresh and frozen fruits and vegetables in interstate and foreign commerce. The PACA protects growers, shippers, distributors, and retailers dealing in those commodities by prohibiting unfair and fraudulent trade practices. In this way, the law fosters an efficient nationwide distribution system for fresh and frozen fruits and vegetables, benefiting the whole marketing chain from farmer to consumer. The PACA Branch proactively works for the fruit and vegetable industry promoting interstate and foreign commerce through dispute resolution, licensing, and outreach programs facilitating fair trade practices. The PACA enforces Federal regulations outside the civil court system by upholding contract requirements. The PACA also mandates full and prompt payment, removes unscrupulous individuals from the trade when needed, and provides expert advice on trust protection. PO Law â 48, Stat. As a result of gains in technology and office consolidations this program now employs approximately 80 full time staff members in three regional offices and Washington, DC. During the last quarter of FY, or possibly the first quarter of FY, the PACA Branch operating fund will fall below 25 percent of projected annual program costs. Without a fee increase in FY, the program will exhaust its reserves by the second quarter of FY, and would soon need to begin reducing its level of services to the industry. SGM, Public Law â We propose that the fee increase become effective October 1, The proposed funding increase, provided that there is no significant increase in multi-year license renewals prior to its effective date, is expected to allow the PACA Branch to maintain its current level of services until FY Currently, licensees may choose to renew their licenses on an annual, biennial, or triennial basis. AMS expects the PACA program will have adequate financing until FY based on the current number of licensees and economic factors, when the reserve is again projected to fall below 25 percent. Currently, 17 percent hold the two-year or threeyear licenses. The above revenue projections assume that there is no significant increase in multi-year renewals before the proposed fee increase becomes effective. During FY the operating reserve will be exhausted, generating no investment income. When USDA proposed revisions to the PACA regulations implementing the Amendments 61 FR, September 10,, it noted that the next fee increase would need to be significant due to the phase out of the requirement that retailers pay license fees. Dealers whose fruit and vegetable purchases or sales do not exceed the 2, pound threshold are exempt from the license requirement. The initial increase in receipts from fees collected following the enactment of the Amendments allowed the PACA fund to build up operating reserves. Accordingly, an amendment terminating the option to renew on a biennial or triennial basis, which would become effective thirty days after publication of the final rule is proposed. This amendment will not apply to retailers and grocery wholesalers, who will continue to be licensed on a triennial basis. Both the phase-in and phaseout processes have been completed. Executive Orders and This proposed rule has been determined to be not significant for the purposes of Executive Order, and therefore, has not been reviewed by the Office of Management and Budget. This proposed rule has been reviewed under Executive Order, Civil Justice Reform, and is not intended to have retroactive effect. This proposed rule will not preempt any State or local laws, Page 6

7 regulations, or policies, unless they present an irreconcilable conflict with this rule. There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of this rule. 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. The PACA is enforced through a licensing system and is userfee financed primarily through a license fee. As of October 1, there were 14, PACA licensees, a majority of which may be classified as small entities. Retailers and grocery wholesalers represent 4, licensees. Their PACA license is effective for three years, renewed at no cost. Today, retailers account for The proposed fee increase will have no impact on operating costs of retailers and grocery wholesalers. Therefore, retailers and grocery wholesalers will not be unduly burdened by the proposed rule. A large number of these small agricultural service firms would be impacted by this proposed PACA fee increase. While the maximum amount VerDate Nov Currently, only 56 licensees or 0. Larger firms operating at multiple branch locations would face larger fee increases. As the renewal of PACA licenses has become highly automated and renewal notices are sent to all licensees well before the renewal date, elimination of the option biennial or triennial licenses should not impose a substantial burden upon small businesses holding such licenses. Chapter 35, the information collection and recordkeeping requirements are currently approved under OMB number â The forms covered under this information collection require the minimum information necessary to effectively carry out the requirements of the order, and their use is necessary to fulfill the intent of the PACA as expressed in the order, and the rules and regulations issued under the order. E-Government Act Compliance AMS 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. Currently, forms are transmitted by fax machine and postal delivery. For reasons set forth in the preamble, 7 CFR part 46 is proposed to be amended as follows: The authority citation for part 46 continues to read as follows: Chapter 5 : Perishable Agricultural Commodities Act Overview - National Agricultural Law Center The Department of Agriculture (USDA) is amending the regulations issued under the Perishable Agricultural Commodities Act (PACA or Act) to increase license fees. Specifically, annual license fees of $ are increased to $ Fees for branch locations are increased from $ for branch locations in excess of nine, to $ for each branch location. Chapter 6 : The Perishable Agricultural Commodities Act (PACA) However, in FY, AMS received a one-time appropriation of $ million under the Agricultural Risk Protection Act of (P.L. ) so that license fees would not need to be raised. USDA had proposed a PACA license fee increase in February, but withdrew it in August after P.L. became law in June. Chapter 7 : calendrierdelascience.com: Perishable Agricultural Commodities Act Section 1(b) of the Perishable Agricultural Commodities Act, (7 U.S.C. a(b)), is amended by adding at the end the following new paragraphs: ''(11) The term 'retailer' means a person that is a dealer engaged in the business of selling any perishable agricultural commodity at retail. Page 7