55 Agric. Dec. 796

Dana Brewer, for Respondent.

Decision and Order issued by Victor W. Palmer, Chief Administrative Law Judge.

Preliminary Statement

On August 16, 1996, the Farm Service Agency (FSA), sent its employee, Nancy K. Beneda notice that it intended to impose a salary offset pursuant to 7 C.F.R.§ 1951.111. The letter informed Ms. Beneda that FSA had reviewed its records and determined that she owed the U.S. Government $99,623.02on an overdue farm loan, which it intends to collect by offsetting fifteen percent of her salary until the debt and all accumulated interest and other costs are paid in full. Pursuant to 7 C.F.R. § 1951.111(e), the letter also informed her of her rights and responsibilities including the right to a hearing by a USDA Administrative Law Judge. Ms. Beneda filed a petition for a hearing on September 16, 1996. The petition did not deny the existence of the debt, but requested that the offset amount be less than fifteen percent. I reviewed the administrative record--consisting of the salary offset notice, hearing petition, notice of acceleration, promissory notes, real estate mortgages, and shared appreciation agreement--and determined that an oral hearing was appropriate. A telephone hearing was held on November 6, 1996, at 11:00 a.m., EST. Ms. Beneda participated, along with her attorney, Dana Brewer. FSA was represented by Mike Robinson, Dean Altenhofen, Amy Roeder, and Jack Salava.

Findings

1. On October 15, 1981, Nancy and Lonnie Beneda borrowed $168,400 from the FSA. The annual interest rate was 13.25 %, and the loan was to be paid in annual installments of $22,861. On February 16, 1989, the note was reamortized and a shared appreciation agreement was entered into in exchange for a write down of the debt. Under the new note, $77,943.23was due at a rate of 11.25 %, in annual installments of $6,756.

2. Nancy and Lonnie Beneda failed to make the loan payments as agreed, and failed to respond to servicing notices sent by the FSA. Accordingly, on August 2, 1996, the FSA sent Mr. and Mrs. Beneda notice that the entire amount due was being accelerated.

3. Nancy Beneda is a federal employee subject to salary offset under 7 C.F.R. § 1951.111. FSA sent Ms. Beneda notice of its intent to offset her

salary on August 16, 1996. She responded with a petition for a hearing on September 16, 1996.

4. Ms. Beneda currently owes $100,875.35 consisting of $73,874.64unpaid principal and $27,000.70unpaid interest, plus any amount due under the terms of the shared appreciation agreement.

5. Ms. Beneda currently earns a salary of $29,533 annually, or a net pay of approximately $747 biweekly. FSA seeks to deduct fifteen percent, which amounts to $112 from each paycheck.

6. Other financial obligations of the Beneda household include automobile payments, credit card debt, and another agricultural loan, which together amount to approximately $2,337.42per month.

7. Other household income includes Mr. Beneda's salary of $1,350 per month, and any farm income; although, the farm suffered an overall loss for 1995.

Conclusions

Ms. Beneda has not denied the existence of the loan but has requested that the offset amount be less then fifteen percent to enable her to meet other financial obligations without suffering financial hardship. The regulations provide that:

If possible, the installment payment will be sufficient in size and frequency to liquidate the debt in approximately 3 years. The size and frequency of installment deductions will bear a reasonable relation to the size of the debt and the employee's ability to pay. Certifying Officials are responsible for determining the size and frequency of the deductions. However, the amount deducted for any period will not exceed 15 percent of the disposable pay from which the deduction is made, unless the employee has agreed in writing to the deduction of a greater amount.

FCER $1981.111(i). Disposable pay is defined as:

Pay due an employee that remains after required deductions for Festeral, State and local income taxes; Social Security taxes, including Meslicap taxex, Federal retirement programs; premiums for life and health insurance benefits, and such other deductions required by law to be withheld

7 C.F.R. § 1951.111(b)(4).

55 Agric. Dec. 796

I have noted Ms. Beneda's other financial obligations, as well as Mr. Lonnie Beneda's salary of $1,350 per month, and the potential for farm income. Upon consideration of the amount of the debt, as well as Ms. Beneda 's ability to pay, I have determined that a deduction of $100 from each paycheck--which is less than 15% of her net, or disposable, pay--is appropriate. Ms. Beneda is able to pay $200 per month; and reducing the amount of the offset any further would be unrealistic considering the enormity of the debt.

Accordingly, $100 shall be deducted each pay period until such time as the entire debt which Ms. Beneda owes to FSA has been paid or satisfied in full. Moreover, interest shall continue to accrue on the debt until it is paid or satisfied in full.

[This Decision and Order became final November 8, 1996.--Editor]

800

DEPARTMENTAL DECISION

In re: MIKE THOMAS.

HPA Docket No. 94-0028.

Decision and Order filed July 15, 1996.

Civil penalty - Disqualification order - Horse soring — Past recollection recorded— Palpation.

The Judicial Officer affirmed the Decision by Judge Hunt (ALJ) in which he found that Respondent entered, for the purpose of showing or exhibiting, a horse in a horse show while the horse was sore. The ALJ assessed a civil penalty of $2,000against Respondent and disqualified Respondent for 1 year from showing, exhibiting, or entering any horse, and from judging, managing, or otherwise participating in any horse show or horse exhibition. A horse may be found to be sore based upon the professional opinion of USDA veterinarians who relied solely upon palpation of the horse's pasterns. The Department's use of palpation is not a "rule" under the Administrative Procedure Act. Thus, the use of palpation need not be preceded by rule making in accordance with the notice-and-comment procedures in the Administrative Procedure Act, (5 U.S.C. § 553). Hearsay evidence is admissible under the Administrative Procedure Act, (5 U.S.C. § 556(d)), and the Rules of Practice governing this proceeding, (7 C.F.R. §§ 1.130.151). Past recollection recorded in the form of affidavits and a summary made while the events were fresh in the witnesses minds is reliable, probative, and substantial. Young v. United States Dep't of Agric., 53 F.3d 728 (5th Cir. 1995), is not controlling in this proceeding. The facts and circumstances of this case reveal no basis for an exception to the general policy of imposing the minimum 1-year disqualification period on Respondent, in addition to a $2,000 civil penalty.

Sharlene A. Deskins, for Complainant.

Earl Rogers, III, Morehead, KY, for Respondent.

Initial decision issued by James W. Hunt, Administrative Law Judge.
Decision and Order issued by William G. Jenson, Judicial Officer.

A. Complainant's Past-Recollection Recorded Evidence Was Properly
Admitted and Is Reliable, Probative, and Substantial

22

B. Young Is Not Controlling

41

C. Palpation Alone Is Sufficient to Establish That Jubilee's True Love
Was Sore When Entered

45

1.

Palpation Is a Highly Reliable Method of Determining
Whether a Horse Is Sore

45

This case is a disciplinary proceeding instituted pursuant to the Horse Protection Act, as amended, (15 U.S.C. §§ 1821-1831) (hereinafter the Act), and the Rules of Practice Governing Formal Adjudicatory Administrative Proceedings Instituted By The Secretary, (7 C.F.R.§§ 1.130-.151)(hereinafter the Rules of Practice).

The proceeding was instituted by a Complaint filed on April 4, 1994, by the Acting Administrator, Animal and Plant Health Inspection Service, United States Department of Agriculture (hereinafter Complainant). The Complaint alleges that on March 26, 1993, Mike Thomas (hereinafter Respondent) entered for the purpose of showing or exhibiting a horse known as "Jubilee's