[Federal Register Volume 60, Number 188 (Thursday, September 28, 1995)]
[Rules and Regulations]
[Pages 50083-50088]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23897]



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DEPARTMENT OF AGRICULTURE
7 CFR Part 997

[Docket No. FV95-997-2IFR]


Amendment of Provisions Regulating Domestically Produced Peanuts 
Handled by Persons Not Subject to the Peanut Marketing Agreement

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule amends for 1995 and subsequent crop years several 
certification and identification requirements established for peanuts 
handled by persons not signatory to Peanut Marketing Agreement No. 146 
(Agreement). This rule provides for a chemical analysis exemption for 
superior grade shelled peanuts and establishes a maximum grade 
tolerance for reconditioning failing peanuts by blanching. Finally, 
this rule adds addresses and updates contact numbers of chemical 
analysis laboratories. The changes concerning peanuts for human 
consumption are consistent with industry operating practices and help 
bring the non-signatory handling requirements into conformity with 
requirements specified in the Agreement. The rule should reduce the 
regulatory burden and handling costs on non-signatory peanut handlers.

DATES: Effective September 28, 1995. Comments received by October 30, 
1995, will be considered prior to issuance of any 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, or 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 CONTACT: Richard Lower, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O. 

[[Page 50084]]
Box 96456, room 2523-S, Washington, D.C. 20090-6456, telephone (202) 
720-2020, facsimile (202) 720-5698.

SUPPLEMENTARY INFORMATION: This interim final rule is issued pursuant 
to requirements of 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 12778, Civil 
Justice Reform. This action will not preempt any State or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule. This action is not intended to have 
retroactive effect. 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 45 handlers of peanuts who have not signed 
the Agreement and, thus, are subject to the regulations contained 
herein. Small agricultural service firms are defined by the Small 
Business Administration (13 CFR 121.601) as those whose annual receipts 
are less than $5,000,000. It is estimated that most of the non-
signatory handlers are small entities. Most of the 47,000 peanut 
producers who might potentially do business with these handlers are 
also small entities. Small agricultural producers have been defined as 
those having annual receipts of less than $500,000.
    In 1994, the reported U.S. production, mostly covered under the 
Agreement, was approximately 4.25 billion pounds of peanuts, a 25 
percent increase from the short 1993 crop. The preliminary 1994 peanut 
crop value is $1.23 billion, up 19 percent from the 1993 crop value.
    After 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. Under authority of the Act, Peanut 
Marketing Agreement No. 146 and the Peanut Administrative Committee 
(Committee) were established by the Secretary in 1965. The Agreement 
was signed by a majority of domestic peanut handlers (signatory 
handlers).
    Public Law 101-220, enacted December 12, 1989, amended section 608b 
of the Act to require that all handlers who have not signed the 
Agreement (non-signatory handlers) be subject to quality, handling, and 
inspection requirements to the same extent and manner as are required 
under the Agreement. Regulations to implement Pub. L. 101-220 were 
issued and made effective on December 4, 1990 (55 FR 49983). It is 
estimated that 5 percent of the domestic peanut crop is marketed by 
non-signatory handlers and the remainder of the crop is handled by 
signatory handlers.
    The objective of the Agreement and the non-signatory handling 
regulations (7 CFR part 997) is to ensure that only wholesome peanuts 
enter edible market channels. Under both regulations, farmers stock 
peanuts with visible Aspergillus flavus mold (the principle source of 
aflatoxin) are required to be diverted to non-edible uses. Both 
regulations also provide that shelled peanuts meeting minimum outgoing 
quality requirements must be chemically analyzed for aflatoxin 
contamination.
    Under the non-signatory 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. The non-signatory handler 
regulations have been amended several times thereafter and are 
published in 7 CFR part 997. All amendments have been made to ensure 
that the non-signatory handling requirements are the same as 
modifications made to the signatory handling requirements under the 
Agreement. Violation of non-signatory 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 section 108B of the Agricultural Act 
of 1949 (7 U.S.C. 1445c-3) for the crop year during which the violation 
occurs.
    Because aflatoxin appears most frequently in damaged, stressed, 
under-developed, and malformed peanut kernels, peanut lots with fewer 
poor quality kernels are less likely to be contaminated. Under 
Sec. 998.200(a) of the Agreement, minimum quality requirements for 
shelled peanuts are found in the ``Other Edible Quality'' table of the 
Agreement. All shelled peanuts destined for edible consumption must 
meet these minimum requirements. Peanuts meeting this minimum grade 
must also be chemically tested for contamination.
    The Agreement also has a higher level of quality requirements 
titled ``Indemnifiable Grades.'' Peanuts meeting the indemnifiable 
grades do not have to be chemically analyzed for aflatoxin.
    The minimum quality requirements specified in the ``Other Edible 
Quality'' table of the Agreement are also specified in the non-
signatory handler regulations in the table titled ``Minimum Grade 
Requirements--Peanut for Human Consumption'' (hereinafter referred to 
as Table 1) in Sec. 997.30(a).
    To be consistent with the Agreement, the Department is establishing 
in this interim final rule, a second table titled ``Superior Quality 
Exemption--Peanuts for Human Consumption'' (hereinafter referred to as 
Table 2) in the outgoing quality requirements in Sec. 997.30(a). The 
quality requirements in Table 2 are the same as those established in 
the Indemnifiable Grades table of the Agreement. Non-signatory handler 
peanuts meeting the Superior Quality Exemption grades are not required 
to be chemically tested for aflatoxin. However, buyers often require 
chemical analysis as an assurance of minimum aflatoxin contamination.
    The Superior Quality Exemption tolerances in these regulations are 
(in percentage of kernels): Unshelled and damaged kernels (1.25); 
combined unshelled, damaged kernels and kernels with minor defects 
(2.00); sound split and broken kernels (3.00 for most varieties); sound 
whole kernels that pass specified screens (3.00 for most varieties); 
combined sound split and broken kernels (4.00 for all varieties); 
foreign material (.10 for some varieties and .20 for other varieties), 
and moisture (9.00).
    Amendments to handling requirements: The Committee meets in 
February or March each year and recommends to the Secretary such rules 
and regulations as may be necessary to keep the Agreement consistent 
with current industry practice. The Committee met on March 22 and 23, 
1995, and unanimously recommended four relaxations in the Agreement 
handling requirements which the Department accepted. The changes were 
published in the July 14, 1995, issue of the Federal Register as an 
interim final rule (60 FR 36205). This interim final rule establishes 
the same relaxations, as appropriate, for the non-signatory handling 
regulations.
    The first amendment relaxes Positive Lot Identification (PLI) and 
quality certification requirements specified in paragraph (g) of 
Sec. 997.20 Shelled 

[[Page 50085]]
peanuts by allowing movement of failing quality shelled peanuts, which 
originated from Segregation 1 peanuts, from one handler to another 
handler without requiring re-inspection and PLI certification by the 
receiving handler. Currently, paragraph (g) provides that handlers may 
acquire from other handlers for remilling, Segregation 1 shelled 
peanuts that fail to meet the requirements for human consumption. The 
peanuts must be accompanied by a valid inspection certificate and be 
positive lot identified. Further, the peanuts must be held and milled 
separate and apart from other receipts or acquisitions of the receiving 
handler and the transaction must be reported to the Division by both 
handlers.
    Under the relaxed handling procedure, receiving handlers are not 
required to hold and remill such peanuts separate from other receipts 
and acquisitions of the handlers and the received peanuts do not have 
to be reinspected. Any peanuts so transferred and handled must still 
meet all the applicable edible quality requirements before being 
disposed of for human consumption.
    Therefore, paragraph (g) of Sec. 997.20 is revised by removing the 
second sentence requiring inspection certification and positive lot 
identification and changing the last sentence to remove reference to 
received peanuts being held and milled separate and apart from other 
peanuts.
    The second amendment relaxes ownership requirements of paragraph 
(f) of Sec. 997.30 Outgoing regulations by allowing handlers to 
transfer peanuts to another handler or to domestic commercial storage 
facilities. Currently, paragraph (f) applies to transfer of peanuts 
from one plant to another of a handler's plants or to commercial 
storage without having the peanuts PLI and certified as meeting quality 
requirements--provided that ownership is retained by the handler and 
that the transfer is only to points within the same production area.
    The amendment extends the provisions of paragraph (f) to allow the 
transfer of peanuts from one handler's facility to another handler's 
facility for further handling. The relaxation allows handlers to make 
the most efficient use of other handling facilities without having to 
pay additional costs entailed in obtaining PLI and quality 
certification of the peanuts. Any peanuts so transferred are still 
subject to all applicable edible quality requirements before being 
disposed of for human consumption. Thus, paragraph (f) of Sec. 997.30 
is revised to include transfer of peanuts between facilities of 
different handlers without quality certification and PLI at the time of 
transfer.
    Similarly, the third amendment revises some PLI and certification 
requirements of paragraphs (a)(1), (a)(2) and (a)(3) of Sec. 997.40 
Reconditioning and disposition of peanuts failing quality requirements. 
Paragraph (a)(1) currently provides that a handler of failing quality, 
Segregation 1 shelled peanuts may remill, move under PLI to a custom 
remiller, sell to another handler, or blanch such peanuts. Paragraph 
(a)(2) provides that such peanuts moved to blanching, or sold to 
another handler for blanching, must be moved under PLI. Paragraph 
(a)(3) requires peanut lots in such transactions to be accompanied by a 
valid grade certificate and moved under PLI. Peanuts so handled should 
be kept separate and apart from other peanuts at the remilling, 
blanching or receiving handler facility.
    Under the relaxed handling procedure, the peanuts do not have to be 
moved under PLI to the remiller, blancher, or receiving handler. 
Further, to be consistent with the changes in the Agreement 
regulations, peanuts so moved no longer have to be kept separate and 
apart from other peanuts at the remilling, blanching or receiving 
handler facility. Thus, paragraphs (a)(1), (a)(2), and (a)(3) are 
revised by removing references to PLI and movement accompanied by valid 
certification. Additionally, provisions are added in the appropriate 
provisions to provide that the transferred peanuts do not have to be 
kept separate and apart at the receiving remilling, blanching, or 
handling facility.
    The Committee members, in proposing the changes in the Agreement 
provisions, believed that the more restrictive level of regulatory 
control for each peanut lot is no longer needed. The changes in this 
rule are based on the fact that current shelling, processing, remilling 
and blanching technologies are generally more efficient than in the 
past. The rule makes it more economical for handlers to use blanchers' 
and remillers' facilities which are generally operated more 
efficiently. These facilities are now located throughout the different 
production areas which also encourages their use.
    The rule is intended to provide handlers more reconditioning 
flexibility by eliminating some certification requirements and PLI of 
peanuts and reducing costs incurred during movement to different 
locations and facilities. The rule should improve handlers' competitive 
positions. Relaxing the regulations will allow freer movement of 
peanuts and more efficient use of facilities. The relaxation of PLI and 
certification requirements will reduce the number of inspections and 
result in lower costs to the entire industry. Fewer inspections are not 
expected to compromise the industry's quality control and lot 
identification objectives.
    This interim final rule also adds and updates addresses and 
telephone and facsimile numbers, where applicable, of approved 
aflatoxin testing laboratories. The laboratories perform chemical 
analyses required by the non-signatory handling regulations. This 
information is provided in paragraph (c)(5)(i) of Sec. 997.30 Outgoing 
regulation. Nine of the laboratories are approved by the USDA/AMS 
Science Division and eight are approved by the Committee. Non-signatory 
handlers may send peanut samples to any laboratory on the list, per 
instructions specified in paragraph (c) of the outgoing regulation. 
This rule also updates information in paragraph (c)(5)(ii) identifying 
the contact point of the USDA Science Division headquarter's office.
    In accordance with the Paperwork Reduction Act of 1988 (44 U.S.C. 
Chapter 35), 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 the above, the Administrator of the AMS has determined 
that this interim final rule will not have a significant economic 
impact on a substantial number of small entities. Written comments, 
timely received, in response to this action, will be considered before 
any finalization of this rule.
    After consideration of all relevant matter presented and other 
information, it is found that the changes set forth below will tend to 
effectuate the declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined, upon 
good cause, that 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) This rule relaxes several handling 
restrictions on peanut handlers not subject to the Agreement; (2) the 
1995 peanut harvest is expected to begin soon and handlers should be 
aware of handling regulations prior to harvesting activities; (3) this 
rule brings the quality requirements under part 997 into conformity 
with those under the 

[[Page 50086]]
Agreement, as required by the Act; and (4) this action provides a 30-
day comment period and any comments received will be considered prior 
to issuance of any final 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. Paragraph (g) of Sec. 997.20 is revised to read as follows:


Sec. 997.20  Incoming regulation.

* * * * *
    (g) Shelled peanuts. Handlers may acquire from other handlers or a 
handler as defined in 7 CFR 998.8, for remilling and subsequent 
disposition to human consumption outlets, shelled peanuts (which 
originated from ``Segregation 1 peanuts'') that fail to meet the 
requirements specified for human consumption in Sec. 997.30(a). 
Transactions made in this manner shall be reported to the Division on 
Form FV-117-3 ``Report of Disposition to and Acquisition from Another 
Handler--Shelled Peanuts Failing Edible Quality Requirements for 
Remilling and Further Handling'' by both the handler selling such 
peanuts and the handler acquiring such peanuts. Further disposition of 
such peanuts shall be regulated by Sec. 997.40.
* * * * *
    3. Section 997.30(a)(1) is amended by redesignating paragraph 
(a)(1) as paragraph (a)(1)(i), revising introductory text preceding the 
table, designating the table as ``Table 1'' and adding a new paragraph 
(a)(1)(ii) to read as follows:


Sec. 997.30  Outgoing regulation.

    (a) Shelled peanuts. (1)(i) No handler shall ship, sell, or 
otherwise dispose of shelled peanuts for human consumption unless such 
peanuts are Positive Lot Identified and certified as meeting the 
requirements specified in Table 1 in this section. * * *
    (ii) Peanuts meeting the specifications in paragraph (a)(1)(i) of 
this section must also be certified ``negative'' as to aflatoxin, prior 
to shipment, unless such peanuts are certified as meeting the superior 
quality requirements in Table 2, and, as such, are exempt from 
aflatoxin certification requirements.

                                           Table 2.--Superior Quality Exemption--Peanuts for Human Consumption                                          
                                                               [Whole kernels and splits]                                                               
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Maximum limitations                                                                  
---------------------------------------------------------------------------------------------------------------------------------------------------------
                          Unshelled       Unshelled                                  Fall through                                                       
                         peanuts and  peanuts, damaged ------------------------------------------------------------------------   Foreign               
Type and grade category    damaged       kernels and                                                                             materials     Moisture 
                           kernels          minor       Sound split and broken    Sound whole kernels            Total           (percent)    (percent) 
                          (percent)   defects(percent)     kernels (percent)           (percent)                                                        
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner U.S. No.1 and            1.25            2.00    3.00%; \17/64\ inch,    3.00%; \16/64\ x \3/4\  4.00%; both screens...          .10         9.00
 better.                                                 round screen.           inch, slot screen.                                                     
Virginia U.S. No.1 and          1.25            2.00    3.00%; \17/64\ inch,    3.00%; \15/64\ x 1      4.00%; both screens...          .10         9.00
 better.                                                 round screen.           inch, slot screen.                                                     
Spanish and Valencia            1.25            2.00    3.00%; \16/64\ inch,    2.00%; \15/64\ x \3/4\  4.00%; both screens...          .10         9.00
 U.S. No.1 and better.                                   round screen.           inch, slot screen.                                                     
Runner U.S. Splits (not         1.25            2.00    2.00%; \17/64\ inch,    3.00%; \14/64\ x \3/4\  4.00%; both screens...          .20         9.00
 more than 4% sound,                                     round screen.           inch, slot screen.                                                     
 whole kernels).                                                                                                                                        
Virginia U.S. Splits            1.25            2.00    3.00%; \17/64\ inch,    3.00%; \14/64\ x 1      4.00%; both screens...          .20         9.00
 (not less than 90%                                      round screen.           inch, slot screen.                                                     
 splits and not more                                                                                                                                    
 than 3.00% sound whole                                                                                                                                 
 kernels and portions                                                                                                                                   
 passing through \20/                                                                                                                                   
 64\ inch round screen).                                                                                                                                
Spanish and Valencia            1.25            2.00    2.00%; \16/64\ inch,    3.00%; \13/64\ x \3/4\  4.00%; both screens...          .20         9.00
 U.S. Splits (not more                                   round screen.           inch, slot screen.                                                     
 than 4% sound, whole                                                                                                                                   
 kernels).                                                                                                                                              
Runner with splits (not         1.25            2.00    3.00%; \17/64\ inch,    3.00%; \16/64\ x \3/4\  4.00%; both screens...          .10        9.00 
 more than 15% sound                                     round screen.           inch, slot screen.                                                     
 splits).                                                                                                                                               

[[Page 50087]]
                                                                                                                                                        
Virginia with splits            1.25            2.00    3.00%; \17/64\ inch,    3.00%; \15/64\ x 1      4.00%; both screens...          .10         9.00
 (not more than 15%                                      round screen.           inch, slot screen.                                                     
 sound splits).                                                                                                                                         
Spanish and Valencia            1.25            2.00    3.00%; \16/64\ inch,    2.00%; \15/64\ x \3/4\  4.00%; both screens...          .10         9.00
 with splits (not more                                   round screen.           inch, slot screen.                                                     
 than 15% sound splits).                                                                                                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------


* * * * *


Sec. 997.30  [Amended]

    3. Section 997.30(a)(2) is amended by removing the first sentence.
    4. Section 997.30(c)(5) and (f) are revised to read as follows:


Sec. 997.30  Outgoing regulation.

* * * * *
    (c) * * *
    (5) Information on making arrangements for the required inspection 
and certification can be obtained by contacting the Fresh Products 
Branch, Fruit and Vegetable Division, Agricultural Marketing Service, 
USDA, P.O. Box 96456, room 2049-S, Washington, DC, 20250, telephone 
(202) 690-0604 or facsimile (202)720-0393.
    (i) Laboratories at the following locations are approved to perform 
the chemical analyses required pursuant to this part. The sampling plan 
and procedures may be obtained from the Science Division.

USDA/AMS Science Division Aflatoxin Laboratories

USDA, AMS, Science Division, 1211 Schley Avenue, Albany, Georgia 31707, 
Tel: (912) 430-8490, Fax: (912) 430-8534
USDA, AMS, Science Division, c/o Golden Peanut Company, 200 W. 
Washington Street (Mail: P.O. Box 488), Ashburn, Georgia 31714, Tel: 
(912) 567-3703, Fax: (912) 567-2006
USDA, AMS, Science Division, c/o Golden Peanut Company, 301 W. Pearl 
Street (Mail: P.O. Box 279), Aulander, North Carolina 27805, Tel: (919) 
345-1661, ext. 156, Fax: (919) 345-1991
USDA, AMS, Science Division, 610 North Main Street, Blakely, Georgia 
31723, Tel: (912) 723-4570, Fax: (912) 723-3294
USDA, AMS, Science Division, c/o Golden Peanut Company, 42 North Ellis 
Street (Mail: P.O. Box 548), Camilla, Georgia 31730, Tel: (912) 336-
0785, ext. 246, Fax: (912) 336-5776
USDA, AMS, Science Division, c/o Stevens Industries, Cargill, Inc., 715 
North Main Street (Mail: P.O. Box 272), Dawson, Georgia 31742, Tel: 
(912) 995-7257, Fax: (912) 995-3268
USDA, AMS, Science Division, 107 S. Fourth Street, Madill, Oklahoma 
73446, Tel: (405) 795-5615, Fax: (405) 795-3645
USDA, AMS, Science Division, 1411 Reeves Street (Mail: P.O. Box 1368), 
Dothan, Alabama 36302, Tel: (205) 792-5185, Fax: (205) 671-7984
USDA, AMS, Science Division, 308 Culloden Street (Mail: P.O. Box 1130), 
Suffolk, Virginia 23434, Tel: (804) 925-2286, Fax: (804) 925-2285

Aflatoxin Laboratories Approved by the Peanut Administrative Committee

Pert Laboratories, P.O. Box 267, Peanut Drive, Edenton, North Carolina 
27932, Tel: (919) 482-4456, Fax: (919) 482-5370
J. Leek Associates, Inc., 1200 Wyandotte (Mail: P.O. Box 50395), 
Albany, Georgia 31705, Tel: (912) 889-8293, Fax: (912) 888-1166
J. Leek Associates, 675 E. Pine (Mail: P.O. Box 368), Colquitt, Georgia 
31737, Tel: (912) 758-3722, Fax: (912) 758-2538
Pert Laboratory South, Highway 82 East Seabrook Drive (Mail: P.O. Box 
149), Sylvester, Georgia 31791, Tel: (912) 776-7676, Fax: (912) 776-
1137
ABC Research, 3437 SW 24th Avenue, Gainesville, Florida 32607-4502, 
Tel: (904) 372-0436, Fax: (904) 378-6483
J. Leek Associates, 502 West Navarro Street (Mail: P.O. Box 6), DeLeon, 
Texas 76444, Tel: (817) 893-3653, Fax: (817) 893-3640
Quanta Lab, 9330 Corporate Drive, Suite 703, Selma, Texas 78154-1257, 
Tel: (210) 651-5799, Fax: (210) 651-9271
Professional Service Ind., Inc., 3 Burwood Lane, San Antonio, Texas 
78216, Tel: (210) 349-5242, Fax: (210) 342-9401.

    (ii) Handlers should contact the nearest laboratory from the list 
in paragraph (c)(5)(i) of this section to arrange to have samples 
chemically analyzed for aflatoxin content, or for further information 
concerning the chemical analyses required pursuant to this part 
handlers may contact: The Science Division, Agricultural Marketing 
Service, USDA, P.O. Box 96456, room 3507-S, Washington, D.C., 20090-
6456, telephone (202) 720-5231, facsimile (202) 720-6496.
* * * * *
    (f) Transfer between plants. Handlers may transfer peanuts to any 
handler or to domestic commercial storage without having such peanuts 
positive lot identified and certified as meeting quality requirements. 
Prior to any subsequent disposition to human consumption outlets, such 
peanuts shall meet all quality requirements applicable for such 
disposition.
* * * * *
    5. In Sec. 997.40, paragraph (a)(1) and the first sentence in 
paragraph (a)(2) are revised, and the first sentence of paragraph 
(a)(3) is removed to read as follows:


Sec. 997.40  Reconditioning and disposition of peanuts failing quality 
requirements.

    (a) Further processing of shelled peanuts failing quality 
requirements--

[[Page 50088]]
(1) Handlers may remill, move to a custom remiller, or sell to or 
contract with another handler, or handler as defined in 7 CFR 998.8, 
for remilling or further handling, shelled peanuts (which originated 
from Segregation 1 peanuts) that fail to meet the requirements of 
Sec. 997.30(a). Transactions made in this manner shall be reported to 
the Department by both the buyer and seller on Form FV-117-4 provided 
by the Department. If, after further handling, such peanuts meeting the 
requirements of Sec. 997.30(a) may be disposed of for human 
consumption. Such peanuts which still do not meet quality requirements 
of Sec. 997.30(a) may be blanched as provided in paragraph (a)(2) of 
this section or disposed of and such disposition reported as provided 
in paragraph (b) of this section.
    (2) Handlers may blanch, or cause to have blanched, shelled peanuts 
(which originated from Segregation 1 peanuts) that fail to meet the 
requirements for human consumption specified in Sec. 997.30(a) because 
of excessive damage, minor defects, moisture, or foreign material or 
are positive to aflatoxin. * * *
* * * * *
    Dated: September 15, 1995.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 95-23897 Filed 9-27-95; 8:45 am]
BILLING CODE 3410-02-P