[Federal Register Volume 60, Number 137 (Tuesday, July 18, 1995)]
[Rules and Regulations]
[Pages 36635-36636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17533]



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 Rules and Regulations
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  Federal Register / Vol. 60, No. 137 / Tuesday, July 18, 1995 / Rules 
and Regulations  


[[Page 36635]]


DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 998

[Docket No. FV95-998-1FIR]


Expenses, Assessment Rate, and Indemnification Reserve for 
Marketing Agreement No. 146 Regulating the Quality of Domestically 
Produced Peanuts

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 appropriate changes, the provisions of an interim 
final rule that authorized expenditures for administration and 
indemnification, established an assessment rate, and authorized 
continuation of an indemnification reserve under Marketing Agreement 
146 (agreement) for the 1995-96 crop year. The rule also increased the 
administrative assessment rate for the 1994-95 crop year. Authorization 
of this budget enables the Peanut Administrative Committee (Committee) 
to incur operating expenses, collect funds to pay those expenses, and 
settle indemnification claims during the 1994-95 crop year. 
Authorization of the increase in the administrative assessment rate for 
the 1994-95 crop year enables the Committee to collect sufficient funds 
to pay expenses projected for the remainder of that year. Funds to 
administer this program are derived from assessments on handlers who 
have signed the agreement.

EFFECTIVE DATE: Section 998.408 is effective July 1, 1995, through June 
30, 1996. Section 998.407 was effective July 1, 1994, through June 30, 
1995.

FOR FURTHER INFORMATION CONTACT: Martha Sue Clark, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O. 
Box 96456, room 2523-S, Washington, DC 20090-6456, telephone 202-720-
9918, or William G. Pimental, Southeast Marketing Field Office, Fruit 
and Vegetable Division, AMS, USDA, P.O. Box 2276, Winter Haven, FL 
33883-2276, telephone 941-299-4770.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement 146 (7 CFR part 998) regulating the quality of domestically 
produced peanuts. This agreement is 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 is issuing this rule in conformance with Executive 
Order 12866.
    This rule has been reviewed under Executive Order 12778, Civil 
Justice Reform. Under the agreement now in effect, peanut handlers 
signatory to the agreement are subject to assessments. Funds to 
administer the peanut agreement program are derived from such 
assessments. This rule authorizes expenditures and establishes an 
assessment rate for the Committee for the crop year which began July 1, 
1995, and ends June 30, 1996, and increases the administrative 
assessment rate for the crop year which began July 1, 1994, and ended 
June 30, 1995. 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 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 rule 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 47,000 producers of peanuts in the 16 
States covered under the agreement, and approximately 76 handlers 
regulated under the agreement. Small agricultural producers have been 
defined by the Small Business Administration (13 CFR 121.601) as those 
having annual receipts of less than $500,000, and small agricultural 
service firms are defined as those whose annual receipts are less than 
$5,000,000. A majority of the producers may be classified as small 
entities, and some of the handlers covered under the agreement are 
small entities.
    Under the agreement, the assessment rate for a particular crop year 
applies to all assessable tonnage handled from the beginning of such 
year (i.e., July 1). An annual budget of expenses is prepared by the 
Committee and submitted to the Department for approval. The members of 
the Committee are handlers and producers of peanuts. They are familiar 
with the Committee's needs and with the costs for goods, services, and 
personnel for program operations and, thus, are in a position to 
formulate appropriate budgets. The budgets are formulated and discussed 
at industry-wide meetings. Thus, all directly affected persons have an 
opportunity to provide input in recommending the budget, assessment 
rate, and indemnification reserve. The handlers of peanuts who are 
directly affected have signed the marketing agreement authorizing the 
expenses that may be incurred and the imposition of assessments.
    The assessment rate recommended by the Committee for the 1995-96 
crop year was derived by dividing anticipated expenses by expected 
receipts and acquisitions of farmers' stock peanuts. It applies to all 
assessable peanuts received or acquired by handlers from July 1, 1995. 
Because that rate is applied to actual receipts and acquisitions, it 
must be established at a rate which will produce sufficient income to 
pay the Committee's expenses.
    The Committee met on March 23, 1995, and unanimously recommended 
1995-96 crop year administrative expenses of $1,067,500 and an 
administrative assessment rate of $0.70 per net ton of assessable 
farmers' stock peanuts received or acquired by handlers. In comparison, 
1994-95 crop year budgeted administrative expenditures were $1,056,000, 
and the administrative assessment rate was initially recommended and 
fixed at $0.60 per ton.
    Administrative budget items for 1995-96 which have increased 
compared to those budgeted for 1994-95 

[[Page 36636]]
(in parentheses) are: Executive salaries, $145,051 ($140,146), clerical 
salaries, $138,856 ($132,500), field representatives salaries, $304,344 
($290,420), payroll taxes, $44,000 ($43,000), employee benefits, 
$148,000 ($145,000), insurance and bonds, $9,500 ($8,500), postage and 
mailing, $13,200 ($12,000), and audit fees, $10,400 ($9,200). Items 
which have decreased compared to those budgeted for 1994-95 (in 
parentheses) are: Office rent and parking, $44,360 ($50,000), furniture 
and equipment, $4,000 ($9,500), and lab data processing, $1,000 
($1,500). All other items are budgeted at last year's amounts. The 
administrative budget includes $4,789 for contingencies ($14,234 last 
year).
    The Committee also unanimously recommended 1995 crop 
indemnification claims payments of up to $7,000,000 and an 
indemnification assessment of $1.00 per net ton of farmers' stock 
peanuts received or acquired by handlers to continue its 
indemnification program. For the 1994 crop, indemnification claims 
payments of up to $9,000,000 and an assessment rate of $2.00 per net 
ton were established. The decreases for 1995 reflect the Committee's 
desire to lower indemnification costs.
    The costs to carry out indemnification procedures (sampling and 
testing of 2-AB and 3-AB Subsamples, and crushing supervision, of 
indemnified peanuts, pursuant to Sec. 998.200(c)), are paid from 
available indemnification funds. Such costs are not expected to exceed 
$2,000,000.
    The total assessment rate is $1.70 per ton of assessable peanuts 
($0.70 for administrative and $1.00 for indemnification). Assessments 
are due on the 15th of the month following the month in which the 
farmers' stock peanuts are received or acquired. Application of the 
recommended rates to the estimated assessable tonnage of 1,525,000 will 
yield $1,067,500 for program administration and $1,525,000 for 
indemnification. The indemnification amount, when added to expected 
cash carry over from 1994-95 indemnification operations of $8,700,000, 
will provide $10,225,000, which should be adequate for the 1995 fund, 
and to maintain an adequate reserve.
    The 1994-95 budget was published in the Federal Register as an 
interim final rule on May 12, 1994 (59 FR 24633), and finalized on 
August 3, 1994 (59 FR 39421). The administrative expenses and 
assessment rate for the 1994-95 crop year were based on an estimated 
assessable tonnage of 1,760,000. Due to handlers purchasing fewer 
peanuts than originally projected, the assessable tonnage is expected 
to be only 1,676,000. In order to have sufficient revenue to cover 
budgeted expenses of $1,056,000, the Committee unanimously recommended 
that the 1994-95 crop year administrative assessment be increased from 
$0.60 to $0.63 per net ton of assessable farmers' stock peanuts.
    An interim final rule was published in the Federal Register on May 
17, 1995 (60 FR 26348). That interim final rule added Sec. 998.408 
which authorized expenditures for administration and indemnification, 
established an assessment rate, and authorized continuation of an 
indemnification reserve for the Committee. That rule also amended 
Sec. 998.407, paragraph (c) to increase the administrative assessment 
rate for the 1994-95 crop year. That rule provided that interested 
persons could file comments through June 16, 1995. One comment was 
received from the Assistant Manager of the Peanut Administrative 
Committee regarding an incorrect indemnification expense figure 
appearing two places on page 26349 in the interim final rule. The 
Committee pointed out that in column one in the third full paragraph 
and in column three in paragraph (b) Indemnification expenses, the 
$500,000 figure should be corrected to read $2,000,000. These two 
corrections have been made in this finalization of the interim final 
rule.
    While this action will impose some additional costs on handlers, 
the costs are in the form of uniform assessments on all handlers 
signatory to the agreement. Some of the additional costs may be passed 
on to producers. However, these costs will be significantly offset by 
the benefits derived from the operation of the marketing agreement. 
Therefore, the Administrator of the AMS has determined that this action 
will not have a significant economic impact on a substantial number of 
small entities.
    After consideration of all relevant matter presented, including the 
information and recommendations submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    It is further found that good cause exists for not postponing the 
effective date of this action until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because the Committee needs to have 
sufficient funds to pay its expenses which are incurred on a continuous 
basis. The 1994-95 crop year began on July 1, 1994, and the 1995-96 
crop year for the program began on July 1, 1995, and the marketing 
agreement requires that the rate of assessment for the crop year apply 
to all assessable peanuts handled during the crop year. In addition, 
handlers are aware of this action which was recommended by the 
Committee at a public meeting and published in the Federal Register as 
an interim final rule.

List of Subjects in 7 CFR Part 998

    Marketing agreements, Peanuts, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR Part 998 is 
amended as follows:
    Accordingly, the interim final rule adding Sec. 998.408 and 
amending Sec. 998.407, which was published at (60 FR 26348) on May 17, 
1995, is adopted as a final rule with the following change:

PART 998--MARKETING AGREEMENT REGULATING THE QUALITY OF 
DOMESTICALLY PRODUCED PEANUTS

    1. The authority citation for 7 CFR Part 998 continues to read as 
follows:

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

    2. In Sec. 998.408, paragraph (b) is revised to read as follows:

    Note: This section will not appear in the Code of Federal 
Regulation.


Sec. 998.408  Expenses, assessment rate, and indemnification reserve.

* * * * *
    (b) Indemnification expenses. Expenses of the Committee not to 
exceed $7,000,000 for indemnification claims payments and claims 
expenses, pursuant to the terms and conditions of indemnification 
applicable to the 1995 crop effective July 1, 1995, are authorized. In 
addition, indemnification expenses, in an undetermined amount estimated 
not to exceed $2,000,000, which are incurred by the Committee for 
sampling and testing fees for 2-AB and 3-AB Subsamples, and fees for 
the supervision of the crushing of indemnified peanuts are also 
authorized.
* * * * *
    Dated: July 10, 1995.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 95-17533 Filed 7-17-95; 8:45 am]
BILLING CODE 3410-02-P