[Federal Register Volume 61, Number 148 (Wednesday, July 31, 1996)]
[Proposed Rules]
[Pages 39911-39918]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19550]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 61, No. 148 / Wednesday, July 31, 1996 / 
Proposed Rules  

[[Page 39911]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Docket No. FV96-983-1 PR; AO F&V-983-1]


Pistachios Grown in California, Arizona, Nevada, New Mexico, and 
Utah; Hearing on Proposed Marketing Agreement and Order No. 983

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Notice of public hearing on proposed marketing agreement and 
order.

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SUMMARY: Notice is hereby given of a public hearing to be held to 
consider a proposed marketing agreement and order to cover pistachios 
grown in California, Arizona, Nevada, New Mexico, and Utah. The 
proposed program would include authority for mandatory inspection, and 
grade, pack, container and labeling requirements. A proposal for a 
marketing order was submitted on behalf of the pistachio industry by 
the California Pistachio Commission (Commission) and the Western 
Pistachio Association (Association), which purport to represent nearly 
all of the industry. The program would be financed by assessments on 
handlers of pistachios grown in the production area. Assessment rates 
would be established by the Secretary of Agriculture (Secretary), based 
on the recommendations of a committee appointed by the Secretary to 
administer the program. The committee would consist of 10 members and 
their alternates.

DATES: The hearing will be held in Fresno, California, beginning on 
August 20, 1996, at 9:00 a.m. If necessary, additional sessions will be 
held in Fresno on August 21-23.

ADDRESSES: The hearing will be held in the State Building's room 1036, 
2550 Mariposa Mall, at the corner of Tulare and ``O'' Street, Fresno, 
California, 93721.

FOR FURTHER INFORMATION CONTACT: Copies of this notice of hearing may 
be obtained from:
    (1) Maureen T. Pello, Marketing Specialist, California Marketing 
Field Office, USDA, AMS, 2202 Monterey Street, suite 102B, Fresno, 
California 93721, telephone (209) 487-5901, Fax (209) 487-5906; or
    (2) James B. Wendland, Marketing Specialist, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O. 
Box 96456, room 2523-S, Washington, DC 20090-6456, telephone (202) 720-
2170, Fax (202) 720-5698.
    (3) Small businesses may request information on compliance with 
this proposal by contacting: Jay Guerber, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O. 
Box 96456, room 2523-S, Washington, DC 20090-6456; telephone (202) 720-
2491; Fax # (202) 720-5698.

SUPPLEMENTARY INFORMATION: This action is governed by the provisions of 
sections 556 and 557 of title 5 of the United States Code and is 
therefore excluded from the requirements of Executive Order 12866. The 
hearing is called pursuant to the provisions of the Agricultural 
Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), 
hereinafter referred to as the ``Act.''
    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) seeks to 
ensure that within the statutory authority of a program, the regulatory 
and informational requirements are tailored to the size and nature of 
small businesses. Interested persons are invited to present evidence at 
the hearing on the possible regulatory and informational impacts of the 
proposal on small businesses.
    The marketing agreement and order proposed herein have been 
reviewed under Executive Order 12988, Civil Justice Reform. They are 
not intended to have retroactive effect. If issued, the proposed 
agreement and order would not preempt any State or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with the Secretary a 
petition stating that the order, any provision of the order, or any 
obligation imposed in connection with the order is not in accordance 
with law and request a modification of the order or to be exempted 
therefrom. A handler is afforded the opportunity for a hearing on the 
petition. After the hearing, the Secretary would rule on the petition. 
The Act provides that the district court of the United States in any 
district in which the handler is an inhabitant, or has his or her 
principal place of business, has jurisdiction to review the Secretary's 
ruling on the petition, provided an action is filed not later than 20 
days after the date of the entry of the ruling.
    Over the last five years, the Commission and the Association have 
facilitated discussions within the pistachio industry regarding the 
merits of establishing a Federal marketing order program. Industry 
members have concluded that a marketing order program, with authority 
for mandatory inspection, and grade, pack, and container requirements, 
is needed to enable the pistachio industry to improve returns to 
growers. The industry believes that an effective quality control 
program can be implemented to expand its markets, improve grower 
returns, and increase consumer satisfaction.
    The proposal for an order has been widely discussed within the 
pistachio industry for at least five years, but has not yet received 
the approval of the Secretary of Agriculture.
    Testimony is invited at the hearing on the proposed marketing 
agreement and order (hereinafter referred to as the order) and on all 
the recommendations and proposals contained in this notice, as well as 
any appropriate modifications or alternatives.
    The hearing will be held for the purposes of:
    (a) Receiving evidence about the economic and marketing conditions 
which relate to the proposed marketing agreement and order and to any 
appropriate modifications thereof;
    (b) Determining whether the handling of pistachios produced in the 
production area is in the current of interstate or foreign commerce or 
directly burdens, obstructs, or affects interstate or foreign commerce;
    (c) Determining whether there is a need for a marketing agreement 
and order for pistachios;

[[Page 39912]]

    (d) Determining the economic impact of the proposed marketing 
agreement and order on the industry in the proposed production area and 
on the public affected by such a program; and
    (e) Determining whether the proposed marketing agreement and order 
or any appropriate modification thereof would tend to effectuate the 
declared policy of the Act.
    All persons wishing to submit written material as evidence at the 
hearing should be prepared to submit four copies of such material at 
the hearing and should have prepared testimony available for 
presentation at the hearing.
    From the time this notice of hearing is issued and until the 
issuance of a final decision in this proceeding, U.S. Department of 
Agriculture (Department) employees involved in the decisional process 
are prohibited from discussing the merits of the hearing issues on an 
ex-parte basis with anyone having an interest in the proceeding. The 
prohibition applies to employees in the following organizational units: 
Office of the Secretary of Agriculture; Office of the Administrator, 
Agricultural Marketing Service; Office of the General Counsel; and the 
Fruit and Vegetable Division, Agricultural Marketing Service.
    Procedural matters are not subject to the above prohibition and may 
be discussed at any time.
    Provisions of the proposed marketing agreement and order follow. 
Those sections identified with an asterisk (*) apply only to the 
proposed marketing agreement and are proposed by the Agricultural 
Marketing Service.

List of Subjects in 7 CFR Part 983

    Marketing agreements, Pistachios, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, it is proposed that 
Title 7 of the CFR, Chapter IX be amended as follows:
    1. Part 983 is proposed to be added as follows:

PART 983--PISTACHIOS GROWN IN CALIFORNIA, ARIZONA, NEVADA, NEW 
MEXICO, AND UTAH

Subpart--Order Regulating Handling

Definitions

Sec.
983.1  Secretary.
983.2  Act.
983.3  Person.
983.4  Production area.
983.5  Pistachios.
983.6  Varieties.
983.7  Shelled pistachio.
983.8  Kernel weight.
983.9  Inshell pistachio.
983.10  Naturally opened pistachios.
983.11  Artificially opened pistachios.
983.12  Merchantable pistachios.
983.13  Substandard pistachios.
983.14  Bleaching.
983.15  Blending.
983.16  Grower.
983.17  To process.
983.18  Handler.
983.19  To handle.
983.20  Production year.
983.21  Committee.
983.22  District.
983.23  Books and records.
983.24  Pack.
983.25  Container.
983.26  Part and subpart.

Administrative Committee

983.30  Establishment and membership.
983.31  Term of office.
983.32  Nomination procedures.
983.33  Selection.
983.34  Failure to nominate.
983.35  Acceptance.
983.36  Vacancies.
983.37  Alternate members.
983.38  Procedure.
983.39  Powers.
983.40  Duties.
983.41  Compensation and expenses.
983.42  Annual report.

Expenses and Assessments

983.50  Expenses.
983.51  Assessments.
983.53  Accounting.

Regulations

983.60  Marketing policy.
983.61  Recommendation for regulations.
983.62  Issuance of regulations.
983.63  Modification, suspension, or termination of regulations.
983.64  Inspection and certification.
983.65  Substandard pistachios.
983.66  Exemptions.

Reports

983.70  Reports and recordkeeping.
983.71  Confidential information.
983.72  Other reports.

Miscellaneous Provisions

983.80  Compliance.
983.81  Right of the Secretary.
983.82  Termination or suspension of order.
983.83  Procedure upon termination.
983.84  Effect of termination or amendment.
983.85  Personal liability.
983.86  Separability.
983.87  Derogation.
983.88  Duration of immunities.
983.89  Agents.
983.90*  Counterparts.
983.91*  Additional parties.
983.92*  Order with marketing agreement.

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

Definitions


Sec. 983.1  Secretary.

    Secretary means the Secretary of Agriculture of the United States 
or any officer or employee of the Department of Agriculture who has 
been delegated, or to whom authority may hereafter be delegated, the 
authority to act for the Secretary.


Sec. 983.2  Act.

    Act means Public Act No. 10, 73d Congress (May 12, 1933), as 
amended and as reenacted and amended by the Agricultural Marketing 
Agreement Act of 1937, as amended (48 Stat. 31, as amended; 7 U.S.C. 
601 et seq.).


Sec. 983.3  Person.

    Person means an individual, partnership, corporation, trust, 
association, or any other business unit.


Sec. 983.4  Production area.

    Production area includes the following States: California, Arizona, 
Nevada, New Mexico, and Utah.


Sec. 983.5  Pistachios.

    Pistachios means the nut of the pistachio tree of the genus 
Pistacia vera grown in the production area.


Sec. 983.6  Varieties.

    Varieties means and includes all classifications, subdivisions, or 
other types of pistachios according to those definitive characteristics 
now or hereafter recognized by the United States Department of 
Agriculture or recommended by the Committee and approved by the 
Secretary. The Committee, with the approval of the Secretary, may 
exempt any individual variety from any or all regulations issued under 
this part.


Sec. 983.7  Shelled pistachio.

    Shelled pistachio means a pistachio kernel, or portion of a kernel, 
after the pistachio shell has been removed.


Sec. 983.8  Kernel weight.

    Kernel weight means the weight of the kernels, without shells, in a 
quantity or lot of pistachios. The term does not include inedible 
pieces or particles of pistachio kernels.


Sec. 983.9  Inshell pistachio.

    Inshell pistachio means a pistachio that has a shell that has not 
been removed.


Sec. 983.10  Naturally opened pistachios.

    Naturally opened pistachios means pistachios that are inshell and 
have opened naturally on the tree. This definition may be modified 
based on a recommendation made by the Committee and approved by the 
Secretary.


Sec. 983.11  Artificially opened pistachios.

    Artificially opened pistachios means pistachios that are inshell 
and have not opened naturally on the tree but have

[[Page 39913]]

been opened by hand, mechanical, or other means. This definition may be 
modified based on a recommendation made by the Committee and approved 
by the Secretary.


Sec. 983.12  Merchantable pistachios.

    Merchantable pistachios means inshell and shelled pistachios that 
meet the minimum grade regulations in effect pursuant to Sec. 983.62.


Sec. 983.13  Substandard pistachios.

    Substandard pistachios means pistachios, inshell or shelled, that 
do not meet the minimum grade regulations in effect pursuant to 
Sec. 983.62.


Sec. 983.14  Bleaching.

    Bleaching means to cause pistachios to be treated, directly or 
indirectly, with hydrogen peroxide, or other chemicals or products to 
remove shell stains.


Sec. 983.15  Blending.

    Blending means to commingle or cause to be commingled, artificially 
opened pistachios with naturally opened pistachios.


Sec. 983.16  Grower.

    Grower is synonymous with producer and means any person engaged in 
a proprietary capacity in the commercial production of pistachios.


Sec. 983.17  To process.

    To process means to hull and dry, in preparation for market, 
pistachios from one's own production or pistachios received from 
another producer.


Sec. 983.18  Handler.

    Handler means any person engaged in the activities defined in 
Sec. 983.19. For purposes of this part, there are two types of 
handlers, processing and non-processing. A processing handler is a 
handler who engages in the activities defined in Sec. 983.19(a). A non-
processing handler is a handler who engages in the activities defined 
in Sec. 983.19(b).


Sec. 983.19  To handle.

    (a) By a processing handler.
    (1) To handle means to process pistachios; or
    (2) To process pistachios and further prepare them for market by 
sorting, sizing, shelling, roasting, cleaning, salting, packaging, or 
cause such pistachios to be placed in the current of commerce by 
marketing, distributing, selling, consigning or shipping.
    (b) By a non-processing handler.
    (1) To handle means to receive pistachios after they have been 
processed and further prepare them for market by sorting, sizing, 
shelling, roasting, cleaning, salting or packaging; or
    (2) To receive pistachios after they have been processed and 
further prepare them for market as described in paragraph (b)(1) of 
this section and cause such pistachios to be placed in the current of 
commerce by marketing, distributing, selling, consigning or shipping.
    (c) To handle shall not include the transportation of pistachios by 
a common or contract carrier owned by another person or the 
transportation of pistachios within the production area from the 
orchard to the processing facility.


Sec. 983.20  Production year.

    Production year is synonymous with fiscal period and marketing 
season and means the period beginning on September 1 and ending on 
August 31 of each year or such other period as may be recommended by 
the Committee and approved by the Secretary.


Sec. 983.21  Committee.

    Committee means the Pistachio Administrative Committee established 
pursuant to Sec. 983.30.


Sec. 983.22  District.

    District means any of the following geographical areas within the 
production area:
    (a) District 1 shall include the California counties of Tulare, 
Kern, San Bernardino, San Luis Obispo, Santa Barbara, Ventura, Los 
Angeles, Orange, Riverside, San Diego, and Imperial;
    (b) District 2 shall include the California counties of Kings, 
Fresno, Madera, and Merced;
    (c) District 3 shall consist of all counties in the State of 
California which are not included in Districts 1 and 2; and
    (d) District 4 shall consist of all counties in the States of 
Arizona, Nevada, New Mexico, and Utah.


Sec. 983.23  Books and records.

    Books and records means books, papers, records, copies of income-
tax reports, accounts, correspondence, contracts, documents, memoranda, 
or other data pertaining to matters relating to the activities subject 
to the provisions of this part.


Sec. 983.24  Pack.

    Pack means the specific arrangement, weight, count, or grade of a 
quantity of pistachios in a particular type and size of container, or 
any combination thereof.


Sec. 983.25  Container.

    Container means a jar, box, bag, bin, carton, case, package, or any 
other type of receptacle used in the packaging or handling of 
pistachios.


Sec. 983.26  Part and subpart.

    Part means the order regulating the handling of pistachios grown in 
the States of California, Arizona, Nevada, New Mexico, and Utah, and 
all rules, regulations, and supplementary orders issued thereunder, and 
the aforesaid order shall be a subpart of such part.

Administrative Committee


Sec. 983.30  Establishment and membership.

    A Pistachio Administrative Committee, consisting of 10 members and 
alternates, is hereby established. Each member shall have an alternate 
member who shall have the same qualifications as the member for whom he 
or she is an alternate. Seven grower members shall be from Districts 1, 
2, and 3. An additional grower member shall be an at-large member and 
shall be the grower who has produced the largest quantity of pistachios 
from any district during the production year prior to nomination. Of 
the seven growers from Districts 1, 2, and 3, three members shall be 
from District 1, three shall be from District 2, and one shall be from 
District 3. One processing handler member shall be an at-large member 
and shall have processed the largest quantity of assessed pistachios 
from any district during the year prior to nomination. The tenth member 
shall be from District 4 and can be either a processing handler or 
grower.


Sec. 983.31  Term of office.

    Elected grower members and grower alternate members of the 
Committee shall serve for terms of two years, but initial elected 
grower members and alternates shall, through a lottery, be seated for 
terms of 1 or 2 years so that approximately half of the memberships' 
terms expire each year. Initial terms for members and alternate members 
filling mandated seats shall be as follows: District 4 member--2 years, 
largest grower member--1 year, largest processing handler member--1 
year. Each member and alternate member shall continue to serve until 
his or her successor is selected and has qualified. The term of office 
shall begin on July 1st of each year, or as soon thereafter as 
possible, or such other date as recommended by the Committee and 
approved by the Secretary. Committee members and alternates may serve 
up to four consecutive, two-year terms of office.

[[Page 39914]]

Sec. 983.32  Nomination procedures.

    Nomination of Committee members and alternates shall follow the 
procedures set forth below:
    (a) For purposes of nominating the members and alternates of the 
initial Committee, the Secretary shall conduct nominations by mail;
    (b) Except as provided in paragraph (c) of this section, the 
Committee shall hold, or cause to be held, not later than March 1st of 
each year, or such other date as may be specified by the Secretary, a 
meeting or meetings of growers in each district for the purpose of 
designating nominees to serve as grower members and alternates on the 
Committee. Any such meetings shall be supervised by the Committee, 
which shall prescribe such procedures as shall be reasonable and fair 
to all persons concerned;
    (c) Nominations in any or all districts may be conducted by mail in 
a manner recommended by the Committee and approved by the Secretary;
    (d) If a nomination meeting is held, only persons present at 
nomination meetings may participate in nominations. Growers who 
commercially produce pistachios during the current production year will 
be eligible to vote. Any person nominated by growers shall certify that 
he or she is engaged in the business of producing pistachios for market 
as an owner, director or employee of a producing entity. Each grower 
shall be entitled to cast only one vote for each position to be filled 
in the district in which such grower produces. No grower shall 
participate in the nomination of members in more than one district. If 
a grower grows pistachios in more than one district, such grower shall 
select the district in which such grower will so participate and notify 
the Committee of such choice. Proxy voting shall not be permitted;
    (e) Nominees shall provide background information for the purpose 
of informing voters about their qualifications. Candidates for 
nomination shall, upon the request of the Committee, submit all 
necessary documents in order to establish qualifications for 
nomination; and
    (f) Not more than three members and three alternates on the 
Committee shall be persons employed by, or connected in a proprietary 
capacity with, the same corporation, firm, partnership, association, or 
business organization. In addition, only one elected member and one 
elected alternate in any one district shall be employed by, or 
connected in a proprietary capacity with, the same corporation, firm, 
partnership, association, or business organization, exclusive of the 
at-large members. Any alternate serving in the same district as a 
member where both are employed by, or connected in a proprietary 
capacity with the same corporation, firm, partnership, association, or 
business organization, shall serve as the alternate to that member. In 
the case of a producer cooperative, a person will not be deemed to be 
connected in a proprietary capacity with the cooperative, 
notwithstanding any outstanding retains, contributions, or other 
financial indebtedness owed by the cooperative to the person, if the 
person has not marketed pistachios through the cooperative pursuant to 
a membership agreement during the current and the preceding marketing 
season. The qualifications of a member or alternate must continue 
throughout the entire term of office.
    (g) For the at-large grower member position, the Committee shall 
notify the grower who has produced the largest quantity of pistachios 
from any district during the production year prior to nomination. Such 
grower shall provide the Committee with the names of the member and 
alternate who he or she nominates to serve on the Committee. The 
Committee shall then provide those names to the Secretary.
    (h) For the at-large handler member position, the Committee shall 
notify the processing handler who processed the largest quantity of 
assessed pistachios from any district during the year prior to 
nomination. Such handler shall provide the Committee with the names of 
the member and alternate who he or she nominates to serve on the 
Committee. The Committee shall then provide those names to the 
Secretary.
    (i) For the District 4 position, which can be filled by a grower or 
handler, only growers will be eligible to nominate and vote for persons 
to fill that member and alternate position.


Sec. 983.33  Selection.

    From the nominations made pursuant to Sec. 983.32 or from other 
qualified persons, the Secretary shall select the 10 members of the 
Committee and an alternate for each such member.


Sec. 983.34  Failure to nominate.

    If nominations are not made within the time and in the manner 
prescribed in Sec. 983.32, the Secretary may, without regard to 
nominations, select the members and alternate members of the Committee 
on the basis of the representation provided for in Sec. 983.30.


Sec. 983.35  Acceptance.

    Each person to be selected by the Secretary as a member or as an 
alternate member of the Committee shall, prior to such selection, 
qualify by advising the Secretary that he/she agrees to serve in the 
position for which nominated for selection.


Sec. 983.36  Vacancies.

    To fill any vacancy occasioned by the failure of any person 
selected as a member or as an alternate member of the Committee to 
qualify, or in the event of the death, removal, resignation, or 
disqualification of any member or alternate member of the Committee, a 
successor for the unexpired term of such member or alternate member of 
the Committee shall be nominated and selected, in the manner specified 
in Secs. 983.32 and 983.33. If the names of nominees to fill any such 
vacancy are not made available to the Secretary within a reasonable 
time after such vacancy occurs, the Secretary may fill such vacancy 
without regard to nominations, which selection shall be made on the 
basis of representation provided for in Sec. 983.30.


Sec. 983.37  Alternate members.

    An alternate member of the Committee, during the absence of the 
member for whom that individual is an alternate, shall act in the place 
and stead of such member and perform such other duties as assigned. In 
the event of the death, removal, resignation, or disqualification of a 
member, the alternate of such member shall act for him or her until a 
successor for such member is selected and has qualified.


Sec. 983.38  Procedure.

    (a) Six members of the Committee or alternate members acting for 
members, shall constitute a quorum at an assembled meeting of the 
Committee, and any action of the Committee shall require the concurring 
vote of at least six members: Provided, That actions of the Committee 
with respect to the following issues shall require at least eight 
concurring votes regarding any recommendation for adoption or change 
in:
    (1) Minimum grade and quality regulations;
    (2) Packaging regulations;
    (3) Aflatoxin regulations;
    (4) Either a food chemical regulation or a regulation regarding the 
blending of artificially and naturally opened pistachios;
    (5) Any change caused by establishment or changes in inspection 
programs;
    (6) Any change in bylaws, administrative or nomination procedures;

[[Page 39915]]

    (7) Approval of an annual budget exceeding \1/2\ of one percent 
(.5%) of the farm gate crop value; and
    (8) Approval to borrow funds as necessary.
    (b) The Committee may provide for meetings by telephone, telegraph, 
facsimile, or other means of communication, and any vote cast at such 
meetings shall be confirmed promptly in writing: Provided: That if an 
assembled meeting is held, all votes shall be cast in person.


Sec. 983.39  Powers.

    The Committee shall have the following powers:
    (a) To administer the provisions of this part in accordance with 
its terms;
    (b) To make and adopt rules and regulations to effectuate the terms 
and provisions of this part;
    (c) To receive, investigate, and report to the Secretary complaints 
of violations of this part; and
    (d) To recommend to the Secretary amendments to this part.


Sec. 983.40  Duties.

    The Committee shall have among others, the following duties:
    (a) To select from among its members such officers and adopt bylaws 
and rules for the conduct of its meetings as it deems advisable, and to 
define the duties of such officers;
    (b) To submit to the Secretary prior to the beginning of each 
fiscal period a budget for such fiscal period, including a report and 
explanation of the items appearing therein and a recommendation as to 
the rate of assessment for such period;
    (c) To act as intermediary between the Secretary and any processing 
handler and grower;
    (d) To investigate and assemble data on the growing, handling and 
marketing conditions with respect to pistachios;
    (e) To keep minutes, books and records which will clearly reflect 
all of its acts and transactions, and such minutes, books and records 
shall be available for examination by the Secretary at any time;
    (f) To furnish to the Secretary such available information as 
requested;
    (g) To appoint such employees as it deems necessary and determine 
their salaries, define their duties and fix the bonds of the Committee;
    (h) To cause the books of the Committee to be audited by one or 
more certified public accountants approved by the Committee at least 
once for each marketing year and at such other times as the Committee 
deems necessary or as the Secretary may request, and to file with the 
Secretary reports of all audits, including quarterly financial reports 
made, and to make available to the industry, such audits that do not 
contain confidential data;
    (i) To give the Secretary the same notice of the meetings of the 
Committee as is given to its members;
    (j) To furnish to the Secretary a written report of the proceedings 
of each meeting of the Committee;
    (k) To follow the Secretary's guidelines in considering and 
recommending regulatory actions;
    (l) To investigate compliance with the provisions of this part; and
    (m) With the approval of the Secretary, to redefine the districts 
into which the production area is divided and to reapportion the 
representation of any district on the Committee: Provided, That any 
such changes shall reflect, insofar as practicable, shifts in pistachio 
production within the districts and the production area.


Sec. 983.41  Compensation and expenses.

    The members of the Committee, and the alternate members when acting 
as members, shall serve without compensation but shall be allowed their 
necessary actual expenses, as approved by the Committee: Provided, That 
the Committee may request the attendance of one or more alternates not 
acting as members at any meeting of the Committee, and such alternates 
may be allowed their necessary expenses.


Sec. 983.42  Annual report.

    The Committee shall, as soon as is practicable after the close of 
each marketing season, prepare and mail an annual report to the 
Secretary and make a copy available to each grower and handler who 
requests a copy of the report.

Expenses and Assessments


Sec. 983.50  Expenses.

    The Committee is authorized to incur such expenses as the Secretary 
finds are reasonable and likely to be incurred during each production 
year for the maintenance and functioning of the Committee and for such 
other purposes as the Secretary may, pursuant to the provisions of this 
part, determine to be appropriate. The funds to cover such expenses 
shall be acquired in the manner prescribed in Sec. 983.51.


Sec. 983.51  Assessments.

    (a) As his or her pro rata share of the expenses which the 
Secretary finds are reasonable and likely to be incurred by the 
Committee during a production year, each processing handler during such 
period shall pay to the Committee, upon demand, assessments on all 
pistachios so processed. Assessments shall be based on pounds of 
edible, inshell pistachios processed. The payment of assessments for 
the maintenance and functioning of the Committee may be required under 
this part throughout the period it is in effect, irrespective of 
whether particular provisions thereof are suspended or become 
inoperative.
    (b) The Secretary shall fix the rate of assessment to be paid by 
each such person during a production year in an amount designed to 
secure sufficient funds to cover the expenses which may be incurred 
during such period. Such expenses may include an item for accumulation 
and maintenance of an operating reserve fund not to exceed 
approximately two production years' budgeted expenses. At any time 
during or after the production year, the Secretary may increase the 
rate of assessment in order to secure sufficient funds to cover any 
later finding by the Secretary relative to the expenses which may be 
incurred: Provided, That any assessment, excluding any amount collected 
pursuant to Sec. 983.64(e), must be limited to a maximum assessment of 
\1/2\ of one percent (.5%) of the latest farm-gate crop value unless 
the annual budget exceeding that amount has been approved in accordance 
with the super majority required in Sec. 983.38(a). The Committee may 
accept the payment of assessments in advance, and may also borrow money 
for such purposes.
    (c) Any processing handler who fails to pay an assessment within 
the time required by the Committee shall pay to the Committee a late 
charge of 10 percent of the amount of the assessment determined to be 
past due and, in addition, interest on the unpaid balance at the rate 
of 1\1/2\ percent per month or such other figures as recommended by the 
Committee and approved by the Secretary.


Sec. 983.53  Accounting.

    (a) If, at the end of a production year, the assessments collected 
are in excess of expenses incurred, such excess shall be accounted for 
in accordance with one of the following:
    (1) If such excess is not retained in a reserve, as provided in 
paragraph (a)(2) of this section, it shall be refunded proportionately 
to the persons from whom it was collected in accordance with 
Sec. 983.51(a): Provided, That any sum paid by a person in excess of 
his or her pro rata share of the expenses during any production year 
may be applied by the Committee at the end of such production year as 
credit for such person, toward the Committee's fiscal

[[Page 39916]]

operations of the following production year;
    (2) The Committee, with the approval of the Secretary, may carry 
over such excess into subsequent production years as a reserve: 
Provided, That funds already in the reserve do not exceed approximately 
two production year's budgeted expenses. Such reserve funds may be 
used:
    (i) To defray expenses, during any production year, prior to the 
time assessment income is sufficient to cover such expenses;
    (ii) to cover deficits incurred during any production year when 
assessment income is less than expenses;
    (iii) to defray expenses incurred during any period when any or all 
provisions of this part are suspended or are inoperative; and,
    (iv) to cover necessary expenses of liquidation in the event of 
termination of this part. Upon such termination, any funds not required 
to defray the necessary expenses of liquidation shall be disposed of in 
such manner as the Secretary may determine to be appropriate: Provided, 
That to the extent practical, such funds shall be returned pro rata to 
the persons from whom such funds were collected;
    (b) All funds received by the Committee pursuant to the provisions 
of this part shall be used solely for the purpose specified in this 
part and shall be accounted for in the manner provided in this part. 
The Secretary may at any time require the Committee and its members to 
account for all receipts and disbursements; and
    (c) Upon the removal or expiration of the term of office of any 
member of the Committee, such member shall account for all receipts and 
disbursements and deliver all Committee property and funds in his or 
her possession to the Committee, and shall execute such assignments and 
other instruments as may be necessary or appropriate to vest in the 
Committee full title to all of the Committee property, funds, and 
claims vested in such member pursuant to this part.

Regulations


Sec. 983.60  Marketing policy.

    Each season prior to making any recommendations pursuant to 
Sec. 983.61, the Committee may adopt a report setting forth its 
marketing policy for the ensuing season. Such marketing policy report 
may contain information relative to:
    (a) The estimated total production of pistachios within the 
production area;
    (b) The expected general quality of pistachios in the production 
area and in other areas;
    (c) The expected demand conditions for pistachios in different 
market outlets;
    (d) The expected shipments of pistachios produced in the production 
area and in areas outside the production area;
    (e) Supplies of competing commodities;
    (f) Other factors having a bearing on the marketing of pistachios; 
and
    (g) The type of regulations expected to be recommended during the 
season.


Sec. 983.61  Recommendation for regulations.

    (a) Whenever the Committee deems it advisable to regulate the 
handling of any variety or varieties of pistachios in the manner 
provided in Sec. 983.62, it shall so recommend to the Secretary.
    (b) In arriving at its recommendations for regulation pursuant to 
paragraph (a) of this section, the Committee shall give consideration 
to current information with respect to the factors affecting the supply 
and demand for pistachios during the period or periods when it is 
proposed that such regulations should be made effective. With each 
recommendation for regulation, the Committee shall submit to the 
Secretary the data and information on which the recommendation is 
predicated and other available information as the Secretary may 
request.


Sec. 983.62  Issuance of regulations.

    (a) The Secretary shall regulate, in the manner specified in this 
section, the handling of pistachios whenever the Secretary finds, from 
the recommendations and information submitted by the Committee, or from 
other available information, that such regulations will tend to 
effectuate the declared policy of the act. Such regulations may:
    (1) Limit during any period or periods, the shipment of pistachios 
by establishing, in terms of grades, minimum standards of quality, 
including standards for aflatoxin, bleaching, and the blending of 
artificially and naturally opened pistachios;
    (2) Limit during any period or periods, the use of specified 
containers for shipment;
    (3) Fix the size, capacity, weight, dimensions, markings, labeling, 
or pack of the container, or containers, which may be used in the 
packaging or processing of pistachios; and
    (4) Prescribe different requirements under paragraphs (a)(1) 
through (a)(3) of this section for the handling of any variety of 
pistachios to destinations within any geographical area or market type 
identified and recommended by the Committee and approved by the 
Secretary.
    (b) The Committee shall be informed immediately of any such 
regulation issued by the Secretary and the Committee shall promptly 
give notice thereof to processing handlers and non-processing handlers, 
each of whom will be bound by any such regulation.


Sec. 983.63  Modification, suspension, or termination of regulations.

    (a) In the event the Committee at any time finds that, by reason of 
changed conditions, any regulations issued pursuant to Sec. 983.62 
should be modified, suspended, or terminated, it shall so recommend to 
the Secretary.
    (b) Whenever the Secretary finds from the recommendations and 
information submitted by the Committee or from other available 
information, that a regulation should be modified, suspended, or 
terminated with respect to any or all shipments of pistachios in order 
to effectuate the declared policy of the act, the Secretary shall 
modify, suspend, or terminate such regulation. If the Secretary finds 
that a regulation obstructs or does not tend to effectuate the declared 
policy of the act, the Secretary shall suspend or terminate such 
regulation. On the same basis and in like manner the Secretary may 
terminate any such modification or suspension.


Sec. 983.64  Inspection and certification.

    (a) Incoming inspection. Whenever the processing of any variety of 
pistachios is regulated pursuant to Sec. 983.62, each processing 
handler who receives pistachios from a grower to hull and dry may be 
required to have such pistachios inspected by the Federal or Federal-
State Inspection Service or such other inspection service as may be 
recommended by the Committee and approved by the Secretary. Such 
pistachios shall be certified as meeting the applicable requirements of 
such regulation.
    (b) Outgoing inspection. Whenever the handling of any variety of 
pistachios is regulated pursuant to Sec. 983.62, each person who 
handles pistachios, prior to the sale, consignment, shipment, marketing 
or distribution of such pistachios, may be required to have such 
pistachios inspected by the Federal or Federal-State Inspection Service 
or such other inspection service as may be recommended by the Committee 
and approved by the Secretary. Such pistachios shall be certified as 
meeting the applicable requirements of such regulation: Provided, That 
inspection and certification shall be required for pistachios which 
previously have been

[[Page 39917]]

so inspected and certified, only if such pistachios have been regraded, 
resorted, repackaged, or in any other way further prepared for market.
    (c) Promptly after inspection and certification as prescribed in 
paragraphs (a) or (b) of this section, each such handler shall submit, 
or cause to be submitted, to the Committee a copy of the certificate of 
inspection issued with respect to such pistachios. The Committee may, 
with the approval of the Secretary, prescribe rules and regulations to 
waive the inspection requirements of this section where it is 
determined that it is not practicable to provide inspection at the time 
and place designated: Provided, That all shipments made under such 
waiver shall comply with all regulations in effect.
    (d) The Committee may, with the approval of the Secretary, 
establish a period prior to shipment during which the inspections 
required by this section must be performed.
    (e) The Committee may enter into an agreement with the Federal and 
Federal-State Inspection Services or other approved inspection 
services, with respect to the costs of the inspection required by 
paragraphs (a) and (b) of this section, and may collect from handlers 
their respective pro rata shares of such costs.
    (f) The Committee, with the approval of the Secretary, may 
prescribe rules and regulations to administer this section.


Sec. 983.65  Substandard pistachios.

    The Committee shall, with the approval of the Secretary, establish 
such reporting and disposition procedures as it deems necessary to 
ensure that pistachios which do not meet the effective incoming and/or 
outgoing minimum standards do not enter normal market outlets for 
merchantable pistachios.


Sec. 983.66  Exemptions.

    The Committee, with the approval of the Secretary, may prescribe 
exemptions based on minimum quantity or other factors for certain 
shipments of pistachios from the provisions specified in Secs. 983.51 
and 983.64. The Committee, with the approval of the Secretary, may 
prescribe safeguards to prevent pistachios handled pursuant to this 
section from entering the channels of trade for other than the purpose 
authorized.

Reports


Sec. 983.70  Reports and recordkeeping.

    (a) Upon request of the Committee, made with the approval of the 
Secretary, each handler shall furnish to the Committee, in such manner 
and at such time as it may prescribe, such reports and other 
information as may be necessary for the Committee to perform its duties 
under this part.
    (b) Such reports may include, but are not necessarily limited to, 
the following:
    (1) The name, address, telephone number of the handler, and other 
identifying information as appropriate;
    (2) The quantities of pistachios, shelled and inshell, received by 
such handler;
    (3) The quantities of pistachios, shelled and inshell, disposed of 
by such handler;
    (4) The manner of disposition and disposition dates of such 
pistachios;
    (5) The quantity of pistachios, shelled and inshell, held in 
inventory by such handler;
    (6) The quantity of merchantable pistachios processed;
    (7) A listing of such handler's growers including name, address, 
telephone number and location of grower acreage; and
    (8) Identification of the inspection certificate or waiver pursuant 
to which the pistachios were processed.
    (c) Each handler shall maintain for at least four succeeding years 
such records of the pistachios received and disposed of by such handler 
as may be necessary to verify reports submitted to the Committee 
pursuant to this section.


Sec. 983.71  Confidential information.

    All reports and records furnished or submitted by handlers to the 
Committee which include data or information constituting a trade secret 
or disclosing the trade position, financial condition, or business 
operations of the particular handlers or their customers or growers 
shall be received by, and at all times kept in the custody and under 
the control of, one or more employees of the Committee, who shall 
disclose such information to no person except the Secretary. 
Compilations of general reports from data submitted by handlers is 
authorized, subject to the prohibition of disclosure of individual 
handler identity or operations.


Sec. 983.72  Other reports.

    Upon the request of the Committee, with the approval of the 
Secretary, each handler shall furnish such other reports and 
information as are needed to enable the Committee to perform its 
functions under this part.

Miscellaneous Provisions


Sec. 983.80  Compliance.

    (a) Except as provided in this part, no person shall handle 
pistachios, the shipment of which has been prohibited by the Secretary 
in accordance with the provisions of this part; and no person shall 
handle pistachios except in conformity with the provisions of this part 
and the regulations issued under this part.
    (b) For the purpose of checking and verifying reports filed by 
handlers, the Committee, through its duly authorized representatives, 
shall have access to any handler's premises during regular business 
hours, and shall be permitted at any such times to inspect such 
premises and any pistachios held by such handler, and any and all 
records of the handler with respect to his or her acquisition, sales, 
uses and shipments of pistachios. Each handler shall furnish all labor 
and equipment necessary to make such inspections.


Sec. 983.81  Right of the Secretary.

    The members of the Committee (including successors and alternates) 
and any agents, employees or representatives appointed or employed by 
the Committee thereof, shall be subject to removal or suspension by the 
Secretary, in his or her discretion, at any time. Each and every 
regulation, decision, determination, or other act of the Committee 
shall be subject to the continuing right of the Secretary to disapprove 
of the same at any time, and upon such disapproval, the disapproved 
action of the Committee shall be deemed void, except as to acts done in 
reliance thereon or in accordance therewith prior to such disapproval 
by the Secretary.


Sec. 983.82  Termination or suspension of order.

    (a) The Secretary shall terminate or suspend the operation of any 
or all of the provisions of this part whenever the Secretary finds that 
such provisions do not tend to effectuate the declared policy of the 
Act.
    (b) The Secretary shall conduct a referendum within the month of 
November of every fifth year after the effective date of this part (but 
not during the same year as the California Pistachio Commission's 
referendum), to ascertain whether continuance of this part is favored 
by the growers. The Secretary shall continue the operation of this part 
if either one of the following is found:
    (1) Sixty-five percent or more of the growers who vote in the 
referendum vote in favor of continuation, and the growers so voting 
marketed at least 50 percent or more of the total quantity of 
pistachios marketed in the preceding production year by all of the 
growers who vote in the referendum; or

[[Page 39918]]

    (2) That a majority of growers who vote in the referendum vote in 
favor of continuation, and that the growers so voting marketed 65 
percent or more of the total quantity of pistachios marketed in the 
preceding production year by all of the growers who vote in the 
referendum.
    (c) The Committee shall consider all petitions from growers 
submitted to it for termination of this part. It may recommend that the 
Secretary conduct a special referendum upon receipt of a petition 
signed by 15 percent of the growers by number who produced not less 
than 15 percent of the volume in the immediately preceding season. If a 
referendum meets the preceding criteria, then procedures would follow 
paragraph (b) of this section.
    (d) The Secretary shall terminate the provisions of this part at 
the end of any production year whenever the Secretary finds by 
referendum or otherwise that such termination is favored by a majority 
of the growers of pistachios in the production area: Provided, That 
such majority have, during the production year, produced more than 50 
percent of the volume of the pistachios produced for market within the 
production area. Such termination shall become effective only if 
announced by the Secretary on or before June 1.
    (e) The provisions of this part, as well as any amendments, shall 
become effective at such time as the Secretary may declare, and shall 
continue in force until terminated or suspended in one of the ways 
specified in this section.
    (f) The provisions of this part shall, in any event, terminate 
whenever the provisions of the Act authorizing them cease to be in 
effect.


Sec. 983.83  Procedure upon termination.

    (a) Upon the termination of this part, the members of the Committee 
then functioning shall continue as joint trustees, for the purpose of 
liquidating the affairs of the Committee, continue as trustee of all 
funds, and property then in its possession, and under its control, 
including claims for any funds unpaid or property not delivered at the 
time of such termination. Action by such trustees shall require the 
concurrence of a majority of said trustees.
    (b) The said trustees shall:
    (1) Continue in such capacity until discharged by the Secretary;
    (2) From time to time account for all receipts and disbursements 
and deliver all property on hand, together with all books and records 
of the Committee and the joint trustees, to such persons as the 
Secretary may direct; and
    (3) Upon the request of the Secretary, execute such assignments or 
other instruments necessary or appropriate to vest in such person full 
title and right to all the funds, properties, and claims vested in the 
Committee or the joint trustees, pursuant thereto.
    (c) Any person to whom funds, property, or claims have been 
transferred or delivered by the Committee or the joint trustees, 
pursuant to this section, shall be subject to the same obligations 
imposed upon the members of said Committee and upon said joint 
trustees.


Sec. 983.84  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination of this part or of any regulation issued pursuant thereto, 
or the issuance of any amendments to either thereof, shall not:
    (a) Affect or waive any right, duty, obligation, or liability which 
shall have arisen or which may thereafter arise, in connection with any 
provision of this part or any regulation issued thereunder;
    (b) Release or extinguish any violation of this part or any 
regulation issued thereunder; and
    (c) Affect or impair any rights or remedies of the Secretary, or of 
any other persons, with respect to any such violations.


Sec. 983.85  Personal liability.

    No member or alternate member of the Committee, nor any employee, 
representative, or agent of the Committee shall be held personally 
responsible, either individually or jointly with others, in any way 
whatsoever, to any person, for errors in judgment, mistakes, or other 
acts, either of commission or omission, as such member, alternate 
member, employee, representative, or agent, except for acts of 
dishonesty, willful misconduct, or gross negligence.


Sec. 983.86  Separability.

    If any provision of this part is declared invalid, or the 
applicability thereof to any person, circumstance, or thing is held 
invalid, the validity of the remainder of this part or the 
applicability thereof to any other person, circumstance, or thing, 
shall not be affected thereby.


Sec. 983.87  Derogation.

    Nothing contained in this part is, or shall be construed to be, in 
derogation or in modification of the rights of the Secretary or of the 
United States (a) to exercise any powers granted by the Act or 
otherwise, or (b), in accordance with such powers, to act in the 
premise whenever such action is deemed advisable.


Sec. 983.88  Duration of immunities.

    The benefits, privileges, and immunities conferred upon any person 
by virtue of this part shall cease upon its termination, except with 
respect to acts done under and during the existence of this part.


Sec. 983.89  Agents.

    The Secretary may, by a designation in writing, name any person, 
including any officer or employee of the United States Government, or 
name any, division or agency in the United States Department of 
Agriculture, to act as the Secretary's agent or representative in 
connection with any of the provisions of this part.


* Sec. 983.90  Counterparts.

    Handlers may sign an agreement with the Secretary indicating their 
support for the marketing order. This agreement may be executed in 
multiple counterparts by each handler. If fifty percent of the 
handlers, weighted by the volume of pistachios handled during a 
representative period, enter into such an agreement, then a marketing 
agreement shall exist for the pistachio marketing order.


* Sec. 983.91  Additional parties.

    After the marketing order becomes effective, any handler may become 
a party to the marketing agreement if a counterpart is executed by him 
or her and delivered to the Secretary.


* Sec. 983.92  Order with marketing agreement.

    Each signatory handler hereby requests the Secretary to issue, 
pursuant to the Act, an order providing for regulating the handling of 
pistachios in the same manner as is provided for in this agreement.

    Dated: July 26, 1996.
Lon Hatamiya,
Administrator.
[FR Doc. 96-19550 Filed 7-29-96; 9:14 am]
BILLING CODE 3410-02-P