[Federal Register Volume 62, Number 180 (Wednesday, September 17, 1997)]
[Rules and Regulations]
[Pages 48749-48751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24689]



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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 997 and 998

[Docket No. FV97-998-3 IFR]


Amended Assessment Rate for Domestically Produced Peanuts Handled 
by Persons Not Subject to Marketing Agreement No. 146, and for 
Marketing Agreement No. 146 Regulating the Quality of Domestically 
Produced Peanuts

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule decreases the administrative assessment rate 
established for the Peanut Administrative Committee (Committee) under 
Marketing Agreement No. 146 (agreement) for the 1997-98 and subsequent 
crop years. The Committee is responsible for local administration of 
the agreement which regulates the handling of peanuts grown in 16 
States. Authorization to assess peanut handlers who have signed the 
agreement enables the Committee to incur expenses that are reasonable 
and necessary to administer the program. The agreement is effective 
under the Agricultural Marketing Agreement Act of 1937, as amended 
(Act). The Act also requires the Department of Agriculture (Department) 
to impose the same administrative assessment rate on assessable peanuts 
received or acquired by handlers who have not signed the agreement. The 
1997-1998 crop year covers the period July 1 through June 30. The 
assessment rate will continue in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Effective September 18, 1997. Comments received by October 17, 
1997, will be considered prior to issuance of a 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 
2525-S, Washington, DC 20090-6456; 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: Tammie M. Bryant, Program Assistant, 
or Jim Wendland, Marketing Specialist, Marketing Order Administration 
Branch, Fruit and Vegetable Division, DC Marketing Field Office, AMS, 
USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-6456; 
telephone: (202) 720-1755, Fax: (202) 720-5698. Small businesses may 
request information on compliance with this regulation by contacting 
Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable 
Division, AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-
6456; telephone: (202) 720-2491, Fax: (202) 720-5698.

SUPPLEMENTARY INFORMATION: This rule is issued pursuant to the 
requirements of the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereafter referred to as the ``Act''; and 
under Marketing Agreement No. 146 (7 CFR part 998) regulating the 
quality of domestically produced peanuts.
    The Department is issuing this rule in conformance with Executive 
Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Farmers' stock peanuts received or acquired by non-
signatory handlers and farmers' stock peanuts received or acquired by 
handlers signatory to the agreement, other than from those described in 
Sec. 998.31 (c) and (d), are subject to assessments. It is intended 
that the assessment rates issued herein will be applicable to all 
assessable peanuts beginning July 1, 1997, and continuing until 
amended, suspended, or terminated. This rule will not preempt any State 
or local laws, regulations, or policies, unless they present an 
irreconcilable conflict with this rule. There are no administrative 
procedures which must be exhausted prior to any judicial challenge to 
the provisions of this rule.
    This rule decreases the assessment rate established for the 
Committee for the 1997-98 and subsequent crop years from $0.70 to $0.35 
per net ton.
    The agreement provides authority for the Committee, with the 
approval of the Department, to formulate an annual budget of expenses 
and collect assessments from handlers to administer the program. Funds 
to administer the agreement program are paid to the Committee and are 
derived from signatory handler assessments. The members of the 
Committee are handlers and producers of peanuts. They are familiar with 
the Committee's needs and with the costs for goods and services in 
their local areas and, thus, are in a position to formulate an 
appropriate budget and assessment rate. The assessment rate is 
formulated and discussed in public meetings. Thus, all directly 
affected persons have an opportunity to participate and provide input. 
The handlers of peanuts who are directly affected have voluntarily 
signed the agreement authorizing the expenses that may be incurred and 
the imposition of assessments.
    For the 1997-98 and subsequent crop years, the Committee 
recommended, and the Department approved, an assessment rate that would 
continue in effect from crop year to crop year indefinitely unless 
modified, suspended, or terminated by the Secretary, upon 
recommendation and information submitted by the Committee or other 
information available to the Secretary.
    The Committee met on April 30, 1997, and unanimously recommended 
1997-98 administrative expenditures of $525,000, and an administrative 
assessment rate of $0.35 per net ton of assessable farmers' stock 
peanuts received or acquired by handlers. The Committee also voted not 
to recommend an assessment rate for indemnification for handler losses 
due to aflatoxin contamination. Adequate funds are included in the 
Committee's indemnification reserve for such expenses during the 1997-
98 crop year. In comparison, last year's budgeted administrative 
expenditures were $1,025,500. Major expenditures recommended by the 
Committee for the 1997-98 crop year compared with those budgeted for 
1996-97 (in parentheses)include: $55,000 for executive salaries 
($112,450), $50,000 for clerical salaries ($131,500), $125,000 for 
field representatives (3 compliance officers rather than 7 fieldmen) 
salaries ($296,700), $18,000 for payroll taxes ($42,000), $65,000 for 
employee benefits, ($148,000), $40,000 for committee members travel 
($40,000), $5,000 for staff travel ($5,000), $60,000 for field 
representatives travel ($110,000), $9,800 for insurance and bonds 
($9,800), $19,000 for office rent and parking ($46,200), $10,000 for 
office supplies and stationery ($14,000), $10,400 for postage and 
mailing ($13,200), $11,000 for telephone and telegraph ($15,000), 
$6,000 for repairs and maintenance agreements ($6,000), $10,400 for the 
audit fee ($10,400), and $15,800 for the contingency reserve ($10,250).
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected receipts and acquisitions of 
farmers' stock peanuts. Farmers' stock peanuts received or acquired by 
handlers signatory to the agreement, other than

[[Page 48750]]

from those described in Sec. 998.31 (c) and (d), are subject to the 
assessments. Farmers' stock peanuts received or acquired by non-
signatory handlers by law are subject to the same assessment rate. 
Assessments are due on the 15th of the month following the month in 
which the farmers' stock peanuts are received or acquired. Peanut 
receipts and acquisitions for the year under the agreement are 
estimated at 1,500,000 tons, which should provide $525,000 in 
assessment income. Approximately 95 percent of the domestically 
produced peanut crop is marketed by handlers who are signatory to the 
agreement. The remaining 5 percent of the U.S. peanut crop is marketed 
by non-signer handlers.
    The Act provides for mandatory assessment of farmer's stock peanuts 
acquired by non-signatory peanut handlers. Section 608b of the Act 
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 assessment rates established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by the 
Secretary upon recommendation and information submitted by the 
Committee or other available information.
    Although these assessment rates are effective for an indefinite 
period, the Committee will continue to meet prior to or during each 
crop year to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or the 
Department. Committee meetings are open to the public and interested 
persons may express their views at these meetings. The Department will 
evaluate Committee recommendations and other available information to 
determine whether modification of the assessment rate is needed. 
Further rulemaking will be undertaken as necessary. The Committee's 
1997-98 budget and those for subsequent crop years will be reviewed 
and, as appropriate, approved by the Department.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    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 
80 peanut handlers who are subject to regulation under the agreement or 
the non-signer program and approximately 25,000 peanut producers in the 
16-State production area. Small agricultural service firms, which 
include handlers, have been defined by the Small Business 
Administration (13 CFR 121.601) as those whose annual receipts are less 
than $5,000,000, and small agricultural producers are defined as those 
having annual receipts of less than $500,000. Approximately 25 percent 
of the signatory handlers, virtually all of the non-signer handlers, 
and most of the producers may be classified as small entities.
    This rule decreases the assessment rate established for the 
Committee and collected from handlers for the 1997-98 and subsequent 
crop years from $0.70 to $0.35 per net ton. The recommended assessment 
rate is $0.35 less than the rate currently in effect.
    The Committee discussed alternatives to this rule, including 
alternative expenditure levels. The Committee also discussed the 
alternative of not decreasing the assessment rate. However, it decided 
against this course of action. The peanut industry has been in a state 
of economic decline since 1991, with the Committee attempting to cut 
costs where possible. The Committee's budget for 1997-98 is $525,000; 
this is $500,500 less than the amount budgeted for 1996-97. Based on an 
estimated 1,500,000 net tons of assessable peanuts, income derived from 
handler assessments during 1997-98 will be adequate to cover budgeted 
expenses.
    This action will reduce the assessment obligation imposed on 
handlers. While this rule will impose some costs on handlers, the costs 
are minimal and in the form of a uniform assessment on all handlers. 
Some of these costs may be passed on to producers. However, these costs 
will be offset by the benefits derived from the operation of the 
agreement. This administrative assessment is required by law to also be 
applied uniformly to all non-signatory handlers and should be of 
benefit to all. In addition, the Committee's meeting was widely 
publicized throughout the peanut industry and all interested persons 
were invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the April 30, 
1997, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue. Finally, interested 
persons are invited to submit information on the regulatory and 
informational impacts of this action on small businesses.
    This action will not impose any additional reporting or 
recordkeeping requirements on either small or large peanut handlers. As 
with all Federal marketing agreement and order programs, reports and 
forms are periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule. After consideration of 
all relevant matter presented, including the information and 
recommendation submitted by the Committee and other available 
information, it is hereby found that this rule, as hereinafter set 
forth, will tend to effectuate the declared policy of the Act.
    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 action reduces the current assessment rate; (2) the 
Committee needs to have sufficient funds to pay its expenses which are 
incurred on a continuous basis; (3) the Act requires the Department to 
impose an administrative assessment on assessable peanuts received or 
acquired for the account of signatory and non-signatory handlers; (4) 
the 1997-98 crop year began on July 1, 1997, and the agreement and the 
Act require that the rate of assessment for each crop year apply to all 
assessable peanuts received or acquired during such crop year; (5) 
handlers are aware of this action which was unanimously recommended by 
the Committee at a public meeting and is similar to other assessment 
rate actions issued in past years; and (6) this interim final rule 
provides a 30-day comment period, and all comments timely received will 
be considered prior to finalization of this rule.

List of Subjects

7 CFR Part 997

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

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7 CFR Part 998

    Marketing agreements, Peanuts, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR parts 997 and 998 
are amended as follows:
    1. The authority citation for 7 CFR parts 997 and 998 continues to 
read as follows:

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

PART 997--PROVISIONS REGULATING THE QUALITY OF DOMESTICALLY 
PRODUCED PEANUTS HANDLED BY PERSONS NOT SUBJECT TO THE PEANUT 
MARKETING AGREEMENT


Sec. 997.101  [Amended]

    2. Section 997.101 is amended by removing ``July 1, 1996,'' and 
adding in its place ``July 1, 1997,'' and by removing ``$0.70'' and 
adding in its place ``$0.35.''

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


Sec. 998.409  [Amended]

    3. Section 998.409 is amended by removing ``July 1, 1996,'' and 
adding in its place ``July 1, 1997,'' and by removing ``$0.70'' and by 
adding in its place ``$0.35.''

    Dated: September 12, 1997.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 97-24689 Filed 9-16-97; 8:45 am]
BILLING CODE 3410-02-P