[Federal Register Volume 60, Number 22 (Thursday, February 2, 1995)]
[Rules and Regulations]
[Pages 6394-6395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2581]



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DEPARTMENT OF AGRICULTURE
7 CFR Part 997

[Docket No. FV94-997-1FIR]


Assessment Obligations for Non-signatory Handlers; Peanut 
Handlers Not Subject to Peanut Marketing Agreement No. 146

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a 
final rule, with modifications, the provisions of an interim final rule 
implementing administrative assessments on handlers who are not 
signatory (non-signatory handlers) to Peanut Marketing Agreement No. 
146 (Agreement). The interim final rule provided notice that the 
Department would begin assessing non-signatory handlers during the 
1994-95 crop year. However, because of an unforeseen delay in 
installing an assessment collection database, the Department will not 
begin assessing non-signatory handlers until the 1995-96 crop year. The 
postponement will allow the installation to be completed and all 
affected handlers to be notified prior to the beginning of the 1995-96 
crop year will be established by the Department in the spring of 1995.

EFFECTIVE DATE: March 6, 1995.

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

SUPPLEMENTARY INFORMATION: This 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 rule in conformance with Executive 
Order 12866.
    This rule has been reviewed under Executive Order 12778, Civil 
Justice Reform. The Department will establish a 1995-96 crop year 
assessment rate applicable to non-signatory handlers effective July 1, 
1995-June 30, 1996. 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 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 specified 
herein. The Small Business Administration 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 and certain cleaned inshell 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 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. The most recent amendment was published on August 30, 1994 
[59 FR 44610].
    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. Because of the Department's decision to postpone the 
imposition of assessments on non-signatory handlers until the 1995-96 
crop year, an assessment rate 

[[Page 6395]]
will not be established until the spring of 1995.
    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.
    Therefore, pursuant to Public Law 103-66 and subsequent to the 
receipt of such a recommendation in 1995, the Department will initiate 
rulemaking procedures to assess non-signatory handlers. 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.'' If an administrative assessment 
rate of $.60 per ton were established, a handler who received or 
acquired 50,000 tons of Segregation 1 farmers stock peanuts and 50,000 
tons of uninspected farmers stock peanuts for seed would 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 interim final rule on these issues was published in the Federal 
Register on August 3, 1994 [59 FR 39419]. That rule invited interested 
persons to submit written comments through September 2, 1994. One 
comment supporting the collection of assessments from non-signer peanut 
handlers was received.
    The establishment of an administrative assessment rate may 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 final rule will not have a 
significant economic impact on a substantial number of small entities.

List of Subjects in 7 CFR Part 997

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

    Accordingly, the interim final rule amending 7 CFR part 997 which 
was published at 59 FR 39419 on August 3, 1994, is adopted as a final 
rule with the following change:

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.


Sec. 997.100  [Removed]

    2. In part 997, Sec. 997.100 and the center heading preceding it 
are removed.

    Dated: January 27, 1995.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 95-2581 Filed 2-1-95; 8:45 am]
BILLING CODE 3410-02-P