[Federal Register Volume 60, Number 226 (Friday, November 24, 1995)]
[Rules and Regulations]
[Pages 57907-57909]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28694]



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DEPARTMENT OF AGRICULTURE
7 CFR Part 997

[Docket No. FV95-997-1FIR]


Assessment Obligation for 1995-96 Crop Year Peanuts Under 7 CFR 
Part 997; 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, without modification, the provisions of an interim final 
rule 

[[Page 57908]]
which imposed administrative assessments on farmers stock peanuts 
received or acquired by handlers who are not signatory (non-signatory 
handlers) to Peanut Marketing Agreement No. 146 (Agreement). The 
assessment rate for 1995-96 crop year peanuts continues at $.70 per net 
ton. The interim final rule also clarified which categories of farmers 
stock peanuts are assessable and established that non-signatory 
handlers shall submit their pro rata assessment to the Secretary of 
Agriculture. The assessment rate is the same as the administrative 
assessment established by the Department on handlers who are signers of 
the Agreement (signatory handlers).

EFFECTIVE DATE: July 1, 1995, through June 30, 1996.

FOR FURTHER INFORMATION CONTACT: Richard Lower, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, room 
2523-S, PO 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, December 
12, 1989; and Public Law 103-66, section 8b(b)(1), 107 Stat. 312, 
August 10, 1993.
    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 established a 1995-96 crop year 
assessment rate applicable to non-signatory handlers effective July 1, 
1995-June 30, 1996. Farmers stock peanuts received or acquired by non-
signatory handlers during that crop year are 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 specified 
herein. There are also approximately 47,000 producers of peanuts, who 
potentially might do business with these handlers. 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.
    The Agreement was established in 1965 and plays a very important 
role in maintaining 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 domestically produced peanut 
crop is marketed by handlers who are signatory to the Agreement.
    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. Agreement requirements 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 Department 
laboratories or laboratories approved by the Committee.
    Public Law 101-220 amended section 608b of the Act to require that 
all peanuts handled by persons who have not entered into the Agreement 
(non-signatory handlers) 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-signatory handlers.
    Regulations to implement Pub. L. 101-220 were issued and made 
effective on December 4, 1990 (55 FR 49980). The regulations, which 
have been amended several times, are published in 7 CFR part 997--
Provisions Regulating the Quality of Domestically Produced Peanuts 
Handled by Persons Not Subject to the Peanut Marketing Agreement. Under 
these provisions, no peanuts may be sold or otherwise disposed of for 
human consumption if the peanuts fail to meet the edible quality 
requirements of the Agreement. All amendments were made to ensure that 
the non-signer handling requirements remain the same as, or are equal 
to, the handling requirements applied to signatory handlers under the 
Agreement.
    Public Law 103-66 (107 Stat. 312) 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.
    The Committee meets in February or March each year and recommends 
to the Secretary a per ton, administrative assessment of 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 23, 1995, and unanimously recommended a 
$.70 administrative assessment per ton of 1995-96 crop year farmers 
stock peanuts received or acquired by signatory handlers. The 
Department published an interim final rule in the May 17, 1995, issue 
of the Federal Register (60 FR 26348) which imposed such an 
administrative assessment on signatory handlers.
    Peanuts are assessed based on the rate applicable to the crop year 
in which the lot is presented for incoming inspection. Therefore, 
pursuant to Pub. L. 103-66, this final rule provides that, for the 
1995-96 crop year, the Department will assess non-signatory handlers a 
$.70 administrative assessment per net ton of farmers stock peanuts 
received or acquired by non-signatory handlers.
    The interim final rule clarified which categories of farmers stock 
peanuts are assessed. Segregation 1 peanuts are assessed under the 
Agreement and under this regulation. Until recently, all Segregation 2 
and 3 peanuts were subject to assessment. However, the Committee 
recommended that signatory handler assessments should not be applied to 
Segregation 2 and 3 peanuts that are crushed for oil. Crushing 
represents the minimum market value that handlers can receive for poor 
quality peanuts. Thus, it is reasonable that Segregation 2 and 3 
peanuts acquired by non-signatory handlers and disposed of to crushing 
shall not be assessed pursuant to Sec. 997.51. Under some surplus 
market conditions, Segregation 1 peanuts may also be crushed for oil. 
However, such peanuts are not exempt from assessments. 

[[Page 57909]]

    The assessment will be applied to all such peanuts received or 
acquired for a handler's account, including the handler's own 
production. The assessment will continue to 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) Segregation 2 and 3 tonnage received or 
acquired for non-edible uses, except Segregation 2 and 3 peanuts sent 
to crushing.
    Segregation 1 peanuts are defined as farmers stock peanuts with not 
more than 2 percent damaged kernels nor more than 1.00 percent 
concealed damage caused by rancidity, mold, or decay and which are free 
from visible Aspergillus flavus. Segregation 2 peanuts are defined as 
farmers stock peanuts with more than 2 percent damaged kernels or more 
than 1.00 percent concealed damage caused by rancidity, mold, or decay 
and which are free from visible Aspergillus flavus. Segregation 3 
peanuts are defined as farmers stock peanuts with visible Aspergillus 
flavus.
    Handling is defined in Sec. 997.14 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, an assembler, a warehouseman or other intermediary between the 
producer and the person handling: provided, that this term does not 
include handlers signatory to the Peanut Marketing Agreement.''
    Thus, for the 1995-96 crop year, a handler who receives or acquires 
100,000 pounds of Segregation 1 farmers stock peanuts will pay an 
assessment of $35 (100,000 pounds is 50 tons, times 70 cents per ton, 
equals $35).
    The assessment will continue to be applied, pro rata, on each non-
signatory handler who is the first handler to receive or acquire an 
assessable lot of farmers stock peanuts. Only one assessment is applied 
to each farmers stock peanut lot. Assessments will not be applied on 
peanuts received or acquired from other handlers, speculators, buying 
points, brokers, or other entities who have paid assessments on the 
peanuts received or acquired.
    Assessments will not be applied on peanuts received on behalf of an 
area association pursuant to a peanut receiving and warehouse contract.
    Non-signatory 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. At the 
time of incoming inspection, such producer/handlers pay their pro rata 
administrative assessment on such farm stored peanuts.
    Speculators, brokers, or other entities who take possession of 
farmers stock peanuts, submit such peanuts for incoming inspection, and 
subsequently enter such peanuts into edible and non-edible channels of 
commerce will pay assessments on such peanuts unless the peanuts are 
Segregation 2 or 3 peanuts crushed for oil.
    A crop year's original assessment on non-signatory handlers may be 
increased by the Secretary if a similar increase is applied by the 
Secretary on signatory handlers. Such an increase will be applied on 
all assessable peanuts handled by non-signatory handlers during the 
crop year in which the increased assessment occurred.
    Also pursuant to Pub. L. 103-66, this rule continues to require 
that non-signatory handlers pay their administrative assessment to the 
Secretary. The Secretary has begun billing non-signatory handlers on a 
monthly basis. Each non-signatory handler is responsible for remitting 
payment by the date specified. Payment in the form of a personal check, 
cashier's check, or money order shall be remitted to the Department. 
Audits of each handler's account may be conducted by the Department to 
reconcile farmers stock peanuts received or acquired and assessments 
paid.
    Violation of this assessment regulation may result in a penalty in 
the form of an assessment by the Secretary equal to 140 percent of the 
support price of quota peanuts for the crop year during which the 
violation occurs. The support price for quota peanuts is determined 
under 7 U.S.C. 1445c-3.
    The interim final rule was published in the Federal Register on 
August 21, 1995 (60 FR 43353). That rule invited interested persons to 
submit written comments through September 20, 1995. No comments were 
received and the Department is adopting as a final rule, without 
change, the provisions of the interim final rule.
    This administrative assessment rate imposes some additional costs 
on non-signatory handlers. However, the costs are in the form of 
uniform assessments on all handlers who are not signatory to the 
Agreement as well as all signatory handlers.
    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. 
This rule is required by law. This administrative assessment will be 
applied uniformly to all non-signatory handlers.
    After consideration of all relevant matter presented, it is hereby 
found that this rule 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 Act requires collection of 
this assessment. Non-signatory handlers are aware of this requirement 
which was published in the August 21, 1995, issue of the Federal 
Register. The assessment applies to all assessable peanuts handled 
during the 1995-96 crop year, which began on July 1, 1995.

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

    Accordingly, the interim final rule amending 7 CFR part 997 which 
was published at 60 FR 43353 on August 21, 1995, is adopted as a final 
rule without change.

    Dated: November 20, 1995.
Martha B. Ransom,
Acting Deputy Director, Fruit and Vegetable Division.
[FR Doc. 95-28694 Filed 11-22-95; 8:45 am]
BILLING CODE 3410-02-P