BUSINESS NOTES.

TREASURY RATES DECLINE: Interest rates on short-term Treasury securities declined in Monday's auction to the lowest level in three weeks.

The Treasury Department sold $6.5 billion in three-month bills at an average discount rate of 5.14 percent, down from 5.18 percent last week. Another $6.5 billion was sold in six-month bills at an average rate of 5.30 percent, down from 5.31 percent.

EPITOPE SUES SUBSIDIARY'S EX-OWNERS: Epitope Inc. said it filed a lawsuit against the former owners of its fruit and vegetable distribution subsidiary after the unit was implicated in the outbreak of hepatitis A in Michigan schools.

The suit seeks to rescind Epitope's $6 million purchase of the subsidiary, which was completed in December. It also seeks $20 million in damages for fraud and breach of contract.

The subsidiary, Andrew & Williamson Sales Co., sold strawberries that have been implicated by health officials as the most likely cause of the Hepatitis outbreak, which has sickened about 150 people.

Epitope said last week that Andrew & Williamson had mislabeled the strawberries as grown and processed in the U.S., when they were actually grown in Mexico. The Department of Agriculture's school lunch program requires only U.S.-grown produce. Mislabeling is a criminal offense.

FTC INVESTIGATES BEER ADS: The Federal Trade Commission has opened an inquiry into whether two major beer marketers - Miller Brewing Co. and Anheuser-Busch - aim advertising at underage drinkers, company officials said Monday.

Both companies said they are cooperating with the agency, and one, Anheuser-Busch, issued a statement saying, ``We do not target our advertising toward young people, period.''

An FTC official said it is agency policy not to confirm or deny that an investigation is under way.

Both Miller and Anheuser-Busch mounted ad campaigns last year on the television network MTV, an estimated about half of whose audience is underage, according to Advertising Age, which first reported on the FTC investigation.

BUNK BEDS RECALLED: Manufacturers are recalling 3,100 wooden and metal bunk beds because openings on the top bunk can trap a child's head, federal officials said Monday.

The Consumer Product Safety Commission reports that 38 children have died after getting their heads caught in such a space.

The manufacturers participating in this recall are:

Acme Trading Corp. of Vernon. Metal bunk bed, model 2441; distributed from July 1996 to January 1997 in California, Colorado, Illinois, Nebraska, Oklahoma, Oregon and Texas.

Chicken & Egg Furniture of Seattle. Horizontal and Spindle and Rung Blakely wooden bunk beds; distributed from 1987 to 1997 in California, Colorado, Idaho, Illinois, Minnesota, Montana, Nevada, Oregon, Washington and Wisconsin.

IEM Furniture of Commerce. Metal bunk beds, models 2155B, 2155G, 2155W, 2153B, 2153 G, 2153W; distributed from 1994 to 1996 in California, Nevada, Oregon and Washington.

Silver Eagle Corp., of Sacramento. Wooden bunk beds and loft beds when used in bunk configuration, model Loft-1, CBD-Bunk-TT, CSH-Bunk-TT, RBD-Loft, REC-Bunk-TT; distributed from 1995 to 1997 in California, Nevada, Oregon and Washington.