[Federal Register Volume 59, Number 148 (Wednesday, August 3, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-18878]


[[Page Unknown]]

[Federal Register: August 3, 1994]


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DEPARTMENT OF AGRICULTURE
7 CFR Part 997

[Docket No. FV94-997-1IFR]

 

Assessment Obligation for 1994-95 Crop Year Peanuts Under 7 CFR 
Part 997; Peanuts Not Subject to Peanut Marketing Agreement No. 146

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim rule will implement Public Law 103-66. That law 
requires the Department to impose an administrative assessment on 
peanuts received or acquired for the account of handlers who are not 
signatory (non-signatory handlers) to Peanut Marketing Agreement No. 
146 (Agreement). The assessment rate of $.60 per net ton of farmers 
stock peanuts for the 1994-95 crop year will be the same as the 
administrative assessment established by the Department and applied to 
handlers under the Agreement.

EFFECTIVE DATE: The interim final rule is effective August 3, 1994. 
Comments which are received by September 2, 1994 will be considered 
prior to any finalization of this interim final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent in triplicate to the Docket 
Clerk, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456, Room 
2523-S, Washington, D.C. 20090-6456, FAX (202) 720-5698. Comments 
should reference the docket number and the date and page number of this 
issue of the Federal Register and will be available for public 
inspection in the Office of the Docket Clerk during regular business 
hours.

FOR FURTHER INFORMATION: Richard Lower or Mark Slupek, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, Room 
2523-S, P.O. Box 96456, Washington, D.C. 20090-6456; telephone: (202) 
720-2020, FAX (202) 720-5698.

SUPPLEMENTARY INFORMATION: This interim final rule is issued pursuant 
to the requirements of the Agricultural Marketing Agreement Act of 1937 
(Act), as amended (7 U.S.C. 601-674), and as further amended December 
12, 1989, Public Law 101-220, section 4(1), (2), 103 Stat. 1878, and 
August 10, 1993, Public Law 103-66, section 8b(b)(1), 107 Stat. 312.
    The Department is issuing this interim final rule in conformance 
with Executive Order 12866.
    This rule has been reviewed under Executive Order 12778, Civil 
Justice Reform. The Department will establish a 1994-95 crop year 
assessment rate applicable to non-signatory handlers effective July 1, 
1994-June 30, 1995. Segregation 1 farmers stock peanuts received or 
acquired by non-signatory handlers during that crop year will be 
subject to the assessment. This 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 which must be exhausted prior to any judicial challenge to 
the provisions of this interim final rule.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Administrator of the Agricultural Marketing Service 
(AMS) has considered the economic impact of this action on small 
entities.
    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.
    There are approximately 45 handlers of peanuts who have not signed 
the Agreement and, thus, will be subject to the regulations proposed 
herein. The Small Business Administration now defines small 
agricultural service firms (13 CFR 121.601) as those having annual 
receipts of less than $5,000,000 and small agricultural producers as 
those whose annual receipts are less than $500,000. A majority of non-
signatory handlers and peanut producers may be classified as small 
entities.
    Since aflatoxin was found in peanuts in the mid-1960's, the 
domestic peanut industry has sought to minimize aflatoxin contamination 
in peanuts and peanut products. The Agreement was established in 1965 
and plays a very important role in the industry's quality control 
efforts. The Peanut Administrative Committee (Committee) was 
established by the Agreement and works with the Department in 
administering the marketing agreement program. Approximately 95 percent 
of the area peanut crop is marketed by handlers who are signatory to 
the Agreement. Requirements established pursuant to the Agreement 
provide that farmers stock peanuts with visible Aspergillus flavus mold 
(the principal source of aflatoxin) must be diverted to non-edible 
uses. Each lot of shelled peanuts destined for edible channels must be 
officially sampled and chemically tested for aflatoxin by the 
Department or in laboratories approved by the Committee.
    Public Law 101-220, enacted December 12, 1989, amended section 608b 
of the Act to require that all peanuts handled by persons who have not 
entered into the Agreement (non-signers) be subject to quality and 
inspection requirements to the same extent and manner as are required 
under the Agreement. Approximately 5 percent of the U.S. peanut crop is 
marketed by non-signer handlers.
    Under the non-signer provisions, no peanuts may be sold or 
otherwise disposed of for human consumption if the peanuts fail to meet 
the quality requirements of the Agreement. Regulations to implement 
Pub. L. 101-220 were issued and made effective on December 4, 1990 [55 
FR 49980] and amended several times thereafter, and are published in 7 
CFR part 997. All such amendments were made to ensure that the non-
signer handling requirements remain consistent with modifications to 
the handling requirements applied to signatory handlers under the 
Agreement.
    Public Law 103-66 (107 Stat. 312), enacted August 10, 1993, 
provides for mandatory assessment of farmer's stock peanuts acquired by 
non-signatory peanut handlers. Under this law, paragraph (b) of section 
1001, of the Agricultural Reconciliation Act of 1993, specifies that: 
(1) Any assessment (except indemnification assessments) imposed under 
the Agreement on signatory handlers also shall apply to non-signatory 
handlers, and (2) such assessment shall be paid to the Secretary.
    This rule will add new permanent Sec. 997.51 Assessments to Part 
997--Provisions Regulating the Quality of Domestically Produced Peanuts 
Handled by Persons Not Subject to the Peanut Marketing Agreement. 
Notice of the actual assessment rate established for each crop year 
will be issued as a new section as an Implementing Regulation beginning 
with Sec. 997.100 Assessment rate, and be sequentially numbered each 
succeeding year.
    The Committee meets in February or March each year and recommends 
to the Secretary a per ton, administrative assessment of Segregation 1, 
farmers stock peanuts received or acquired by signatory handlers for 
the upcoming crop year. The crop year covers the 12-month period from 
July 1 to June 30. The Committee met on March 16, 1994, and unanimously 
recommended a $.60 administrative assessment per ton of 1994-95 crop 
year Segregation 1 peanuts handled by those handlers who are signatory 
to the Agreement. The Department has initiated rulemaking procedures to 
implement such an administrative assessment on signatory handlers.
    Therefore, pursuant to Pub. L. 103-66, this interim final rule 
provides notice that the Department will assess non-signatory handlers 
a $.60 administrative assessment per net ton of Segregation 1 farmers 
stock peanuts for the 1994-95 crop year. The assessment will be based 
on: (1) Tonnage reported on incoming inspection certificates of each 
handler's Segregation 1 farmers stock peanuts received or acquired for 
the handler's account and (2) tonnage reported on FV-117 ``Weekly 
Report of Uninspected Farmers Stock Seed Peanuts Received for Custom 
Seed Shelling.'' For example, in 1994-95, a handler who receives or 
acquires 100,000 tons of Segregation 1 farmers stock peanuts will pay 
an assessment of $60.
    The assessment will be applied to peanuts intended for human 
consumption and peanuts intended for non-human consumption outlets such 
as seed, oilstock and animal feed. The assessment will be applied to 
peanuts received or acquired for a handler's account, including the 
handler's own production. Assessment will not be applied on Segregation 
1 peanut lots received or acquired by a handler from other handlers or 
from the Commodity Credit Corporation (CCC) program received for non-
edible use, or lots received on behalf of an area association pursuant 
to warehousing services (Sec. 997.20(a)).
    The assessment will be applied, pro rata, on non-signatory handlers 
who perform handling functions defined in Sec. 997.14. Handling is 
defined as engaging in the receiving or acquiring, cleaning and 
shelling, cleaning inshell, or crushing of peanuts and in the shipment 
(except as a common or contract carrier of peanuts owned by another) or 
sale of cleaned inshell or shelled peanuts or other activity causing 
peanuts to enter the current of commerce. Handling does not include the 
sale or delivery of peanuts by a producer to a handler or to an 
intermediary person engaged in delivering peanuts to handlers and the 
sale or delivery of peanuts by such intermediary to a handler.
    Section 997.15 defines a non-signatory handler as any person who 
handles peanuts, in a capacity other than that of a custom cleaner or 
dryer, and assembler, a warehouse person or other intermediary between 
the producer and the non-signatory handler.
    Speculators, brokers, or other entities who take possession of 
Segregation 1 farmers stock peanuts, submit such peanuts for incoming 
inspection, and subsequently enter such peanuts into the channels of 
commerce will pay assessments on such peanuts. Entities who receive or 
acquire farmers stock peanuts for the purpose of custom seed shelling 
will be assessed on the basis of Form FV-117 ``Weekly Report of 
Uninspected Farmers Stock Seed Peanuts Received for Custom Seed 
Shelling.'' Form FV-117 is currently required from such entities. 
Producer/handlers who store peanuts of their own production (farm-
stored peanuts) will, at some point prior to further handling, obtain 
incoming inspection on such peanuts and, at that time, pay the pro-rata 
administrative assessment on such peanuts.
    Only one administrative assessment will be applied to any lot of 
farmers stock peanuts. Non-signatory and signatory handlers will not 
pay an administrative assessment on a lot which they purchase from 
speculators, brokers or other such entities who have already paid an 
administrative assessment on the lot.
    A crop year's original assessment could be increased by the 
Secretary based on a similar increase applied by the Secretary on 
signatory handlers. Such an increase will be applied on all peanuts 
first handled by non-signatory handlers during the crop year in which 
the increased assessment occurred.
    Peanuts will be assessed based on the rate applicable to the crop 
year in which the lot is presented for incoming inspection.
    Also pursuant to Pub. L. 103-66, this rule will establish that non-
signatory handlers pay their administrative assessment to the 
Secretary. The Secretary will bill non-signatory handlers on a periodic 
basis determined by the Secretary. The non-signatory handler will be 
responsible for remitting payment by the date specified. Payment in the 
form of a personal check, cashier's check or money order will be 
remitted to the Department. Audits of each handler's account may be 
conducted by the Department to reconcile incoming, farmers stock volume 
received or acquired and assessments paid.
    Violation of the non-signer regulations may result in a penalty in 
the form of an assessment by the Secretary equal to 140 percent of the 
support price for quota peanuts. The support price for quota peanuts is 
determined under 7 U.S.C. 1445c-3 for the crop year during which the 
violation occurs.
    The established administrative assessment rate will impose some 
additional costs on non-signatory handlers. However, the costs will be 
in the form of uniform assessments on all handlers who are not 
signatory to the Agreement.
    In accordance with the Paperwork Reduction Act of 1988 (44 U.S.C. 
Chapter 35), the information collection requirements that are contained 
in this rule have been previously approved by the Office of Management 
and Budget (OMB) and have been assigned OMB No. 0581-0163.
    Based on available information, the Administrator of the AMS has 
determined that the issuance of this interim final rule will not have a 
significant economic impact on a substantial number of small entities.
    Pursuant to 5 U.S.C. 553, it is also found and determined that, 
upon good cause, it is impracticable, unnecessary, and contrary to the 
public interest to give preliminary notice prior to putting this rule 
into effect, and that good cause exists for not postponing the 
effective date of this action until 30 days after publication in the 
Federal Register because: (1) Public Law 103-66 requires the Department 
to impose an administrative assessment on peanuts received or acquired 
for the account of handlers who are not signatory (non-signatory 
handlers) to Peanut Marketing Agreement No. 146 (Agreement); (2) the 
peanut crop year begins July 1, and to achieve the intended purpose of 
the law this action should be taken promptly; and (3) this rule 
provides a 30-day comment period and any comments received will be 
considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 997

    Food grades and standards, Peanuts, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 997 is 
amended as follows:

PART 997--PROVISIONS REGULATING THE QUALITY OF DOMESTICALLY 
PRODUCED PEANUTS HANDLED BY PERSONS NOT SUBJECT TO THE PEANUT 
MARKETING AGREEMENT

    1. The authority citation for 7 CFR part 997 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

    2. A new center heading and Sec. 997.51 are added to read as 
follows:

Assessments


Sec. 997.51  Assessments.

    Each first handler shall pay to the Secretary, with respect to 
peanuts received or acquired by the handler, including the handler's 
own production, an administrative assessment as approved by the 
Secretary. The rate of assessment shall be the same as the 
administrative assessment approved by the Secretary and applied to 
signatory handlers under the Peanut Marketing Agreement No. 146. Such 
administrative assessment shall be applied during the crop year 
beginning July 1 and ending June 30 of the following year. Each 
handler's pro rata share shall be the rate of assessment fixed by the 
Secretary per net ton of farmers stock peanuts received or acquired, 
other than those peanuts described in Sec. 997.20(a)(1) and (2). During 
the crop year, the Secretary may increase the rate of assessment if 
such an increase is established under the Agreement.
    3. A new center subpart heading and section 997.100 are added to 
read as follows:

Implementing Regulation


Sec. 997.100  Assessments.

    For the 1994-95 crop year, the administrative assessment is $0.60 
per net ton of farmers stock peanuts received or acquired by each first 
handler.

    Dated: July 28, 1994.
Robert C. Keeney,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 94-18878 Filed 8-2-94; 8:45 am]
BILLING CODE 3410-02-P