[Federal Register: October 23, 2000 (Volume 65, Number 205)]
[Proposed Rules]
[Page 63219-63221]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23oc00-9]
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[[Page 63219]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Docket No. FV00-984-2 PR]
Walnuts Grown in California; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule would increase the assessment rate established for
the Walnut Marketing Board (Board) for the 2000-01 and subsequent
marketing years from $0.0118 to $0.0134 per kernelweight pound of
assessable walnuts. The $0.0016 increase is necessary because this
year's estimate of assessable walnuts is about 13 percent less than
last year's estimate. The Board locally administers the Federal
marketing order which regulates the handling of walnuts grown in
California (order). Authorization to assess walnut handlers enables the
Board to incur expenses that are reasonable and necessary to administer
the program. The marketing year runs from August 1 through July 31. The
assessment rate would remain in effect indefinitely unless modified,
suspended, or terminated.
DATES: Comments must be received by November 22, 2000.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; Fax:
(202) 720-5698, or E-mail: moab.docketclerk@usda.gov. All comments
should reference the docket number and the date and page number of this
issue of the Federal Register and will be made available for public
inspection in the Office of the Docket Clerk during regular business
hours, or can be viewed at: http://www.ams.usda.gov/fv/moab.html.
FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Marketing Assistant, or
Richard P. Van Diest, Marketing Specialist, California Marketing Field
Office, Marketing Order Administration Branch, Fruit and Vegetable
Programs, AMS, USDA, 2202 Monterey Street, suite 102B, Fresno,
California 93721; telephone: (559) 487-5901, Fax: (559) 487-5906; or
George Kelhart, Technical Advisor, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box
96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202)
720-5698.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room
2525-S, Washington DC 20090-6456; telephone: (202) 720-2491, Fax: (202)
720-5698, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 984 (7 CFR part 984), both as amended,
regulating the handling of walnuts grown in California, hereinafter
referred to as the ``order.'' The marketing agreement and order are
effective under the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
The Department of Agriculture (Department) is issuing this rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing order now in effect, California
walnut handlers are subject to assessments. Funds to administer the
order are derived from such assessments. It is intended that the
assessment rate as proposed herein would be applicable to all
assessable walnuts beginning on August 1, 2000, and continue until
amended, suspended, or terminated. This rule will not preempt any State
or local laws, or policies, unless they present an irreconcilable
conflict with this rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with the Secretary a
petition stating that the order, any provision of the order, or any
obligation imposed in connection with the order is not in accordance
with law and request a modification of the order or to be exempted
therefrom. Such handler is afforded the opportunity for a hearing on
the petition. After the hearing the Secretary would rule on the
petition. The Act provides that the district court of the United States
in any district in which the handler is an inhabitant, or has his or
her principal place of business, has jurisdiction to review the
Secretary's ruling on the petition, provided an action is filed not
later than 20 days after the date of the entry of the ruling.
This rule would increase the assessment rate established for the
Board for the 2000-01 and subsequent marketing years from $0.0118 to
$0.0134 per kernelweight pound of assessable walnuts. The $0.0016
increase is necessary because this year's estimate of assessable
walnuts is about 13 percent less than last year's estimate. Thus,
sufficient income would not be generated at the current assessment rate
for the Board to meet its anticipated expenses.
The order provides authority for the Board, with the approval of
the Department, to formulate an annual budget of expenses and collect
assessments from handlers to administer the program. The members of the
Board are producers and handlers of California walnuts. They are
familiar with the Board's needs and with the costs of goods and
services in their local area and are thus in a position to formulate an
appropriate budget and assessment rate. The assessment rate is
formulated and discussed in a public meeting. Thus, all directly
affected persons have an opportunity to participate and provide input.
For the 1999-2000 and subsequent marketing years, the Board
recommended, and the Department approved, an assessment rate of $0.0118
per kernelweight pound of assessable walnuts that would continue in
effect from year to year unless modified, suspended, or terminated by
the Secretary upon recommendation and information submitted by the
Board or other information available to the Secretary.
[[Page 63220]]
The Board met on September 8, 2000, and unanimously recommended
2000-01 expenditures of $2,937,885 and an assessment rate of $0.0134
per kernelweight pound of assessable walnuts. In comparison, last
year's budgeted expenditures were $2,967,356. The recommended
assessment rate is $0.0016 higher than the $0.0118 rate currently in
effect. The higher assessment rate is necessary because this year's
crop is estimated by the California Agricultural Statistics Service
(CASS) to be 245,000 tons (220,500,000 kernelweight pounds
merchantable), which is about 13 percent less than last year's
estimate. Thus, sufficient income would not be generated at the current
rate for the Board to meet its anticipated expenses.
Major expenditures recommended by the Board for the 2000-01 year
include $2,382,455 for marketing and production research projects,
$305,250 for general expenses such as administrative salaries and
insurance, $165,380 for office expenses, $59,800 for a production
research director, and $25,000 as a contingency. Budgeted expenses for
these items last year were $2,413,038 for marketing and production
research projects, $289,709 for general expenses, $179,809 for office
expenses, $59,800 for a production research director, and $25,000 as a
contingency, respectively.
The assessment rate recommended by the Board was derived by
dividing anticipated expenses by expected shipments of California
walnuts certified as merchantable. Merchantable shipments for the year
are estimated at 220,500,000 kernelweight pounds which should provide
$2,954,700 in assessment income and allow the Board to cover its
expenses. Unexpended funds may be used temporarily to defray expenses
of the subsequent marketing year, but must be made available to the
handlers from whom collected within 5 months after the end of the year
(Sec. 984.69). The proposed assessment rate would continue in effect
indefinitely unless modified, suspended, or terminated by the Secretary
upon recommendation and other information submitted by the Board or
other available information.
Although this assessment rate would be in effect for an indefinite
period, the Board would continue to meet prior to or during each
marketing year to recommend a budget of expenses and consider
recommendations for modification of the assessment rate. The dates and
times of Board meetings are available from the Board or the Department.
Board meetings are open to the public and interested persons may
express their views at these meetings. The Department would evaluate
Board recommendations and other available information to determine
whether modification of the assessment rate is needed. Further
rulemaking would be undertaken as necessary. The Board's 2000-01 budget
and those for subsequent marketing years will be reviewed and, as
appropriate, approved by the Department.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this action on small entities. Accordingly, AMS has
prepared this initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and rules issued thereunder, are unique in that
they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 5,000 producers of walnuts in the
production area and about 48 handlers subject to regulation under the
order. Small agricultural producers are defined by the Small Business
Administration (13 CFR 121.201) as those having annual receipts of less
than $500,000, and small agricultural service firms are defined as
those having annual receipts of less than $5,000,000.
Using an average f.o.b. price of $2.10 per kernelweight pound of
walnuts for the 1999-2000 marketing year, handlers would have had to
ship more 2,380,953 pounds of walnuts to exceed sales of $5,000,000.
Approximately 33 percent of the handlers shipped over 2,380,953
kernelweight pounds of walnuts and 67 percent shipped less than that
amount during the 1999-2000 marketing year. Based on the foregoing, it
can be concluded that the majority of California walnut handlers may be
classified as small entities, excluding receipts from other sources. A
majority of the California walnut growers also may be classified as
small entities.
This rule would increase the assessment rate established for the
Board and collected from handlers for the 2000-01 and subsequent
marketing years from $0.0118 to $0.0134 per kernelweight pound of
assessable walnuts. The Board unanimously recommended 2000-01 expenses
of $2,937,885. The recommended $0.0016 increase in the assessment rate
is necessary because this year's estimate of assessable walnuts is
about 13 percent less than last year's estimate. Thus, sufficient
income would not be generated at the current rate for the Board to meet
its anticipated expenses.
Major expenditures recommended by the Board for the 2000-01 year
include $2,382,455 for marketing and production research projects,
$305,250 for general expenses such as administrative salaries and
insurance, $165,380 for office expenses, $59,800 for a production
research director, and $25,000 as a contingency. Budgeted expenses for
these items last year were $2,413,038 for marketing and production
research projects, $289,709 for general expenses, $179,809 for office
expenses, $59,800 for a production research director, and $25,000 as a
contingency, respectively.
Prior to arriving at this budget, the Board considered information
from various sources, such as the Board's Budget and Personnel
Committee, Research Committee, and Marketing Development Committee.
Alternative expenditure levels were discussed by these groups, based
upon the relative value of various research projects to the walnut
industry. The recommended $0.0134 per kernelweight pound assessment
rate was then determined by dividing the total recommended budget by
the 220,500,000 kernelweight pound estimate of assessable walnuts for
the year. This is approximately $16,815 above the anticipated expenses,
which the Board determined to be acceptable. Unexpended funds may be
used temporarily to defray expenses of the subsequent marketing year,
but must be made available to the handlers from whom collected within 5
months after the end of the year (Sec. 984.69).
A review of historical information and preliminary information
pertaining to the current marketing year indicates that the grower
price for 2000-01 could range between $0.50 and $0.70 per kernelweight
pound of assessable walnuts. Therefore, the estimated assessment
revenue for the 2000-01 year as a percentage of total grower revenue
could range between 2.0 and 2.7 percent.
Regarding the impact of this action on affected entities, this
action would increase the assessment rate currently imposed on walnut
handlers. While assessments impose some additional costs on handlers,
the costs are minimal and uniform on all handlers. Some of the
additional costs may be passed on to producers. However, these costs
would be offset by the benefits derived by the operation of the order.
[[Page 63221]]
In addition, the Board's meeting was widely publicized throughout
the walnut industry and all interested persons were invited to attend
and participate in Board deliberations on all issues. Like all Board
meetings, the September 8, 2000, meeting was a public meeting and all
entities, both large and small, were able to express views on this
issue. Finally, all interested persons are invited to submit
information on the regulatory and information impact of this action on
small businesses.
This rule would impose no additional reporting or recordkeeping
requirements on either small or large California walnut handlers. As
with all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sectors agencies. Finally, the
Department has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this rule.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http:/
/www.ams.usda.gov/fv/moab.html. Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
A 30-day comment period is provided to allow interested persons to
respond to this proposed rule. Thirty days is deemed appropriate
because: (1) The 2000-01 marketing year began on August 1, 2000, and
the order requires that the rate of assessment for each marketing year
apply to all merchantable walnuts handled during the year; (2) the
Board needs to have sufficient funds to pay its expenses which are
incurred on a continuous basis; and (3) handlers are aware of this
action which was unanimously recommended at a public meeting and is
similar to other assessment rate actions issued in past years.
List of Subjects in 7 CFR Part 984
Marketing agreements, Nuts, Reporting and recordkeeping
requirements, Walnuts.
For the reasons set forth in the preamble, 7 CFR part 984 is
proposed to be amended as followed:
PART 984--WALNUTS GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 984 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
1. Section 984.347 is revised to read as follows:
Sec. 984.347 Assessment rate.
On and after August 1, 2000, an assessment rate of $0.0134 per
kernelweight pound is established for California merchantable walnuts.
Dated: October 17, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-27107 Filed 10-20-00; 8:45 am]
BILLING CODE 3410-02-P
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