[Federal Register Volume 63, Number 36 (Tuesday, February 24, 1998)]
[Rules and Regulations]
[Pages 9131-9133]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4593]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 982

[Docket No. FV97-982-1 FIR]


Hazelnuts Grown in Oregon and Washington; Reduced Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Agriculture (Department) is adopting as a 
final rule, without change, the provisions of an interim final rule 
which decreased the assessment rate established for the Hazelnut 
Marketing Board (Board) under Marketing Order No. 982 for the 1997-98, 
and subsequent marketing years. The Board is responsible for the local 
administration of the marketing order which regulates the handling of 
hazelnuts grown in Oregon and Washington. Authorization to assess 
hazelnut handlers enables the Board to incur expenses that are 
reasonable and necessary to administer the program. The 1997-98 
marketing year covers the period July 1 through June 30. The assessment 
rate will continue in effect indefinitely unless modified, suspended, 
or terminated.

EFFECTIVE DATE: March 26, 1998.

FOR FURTHER INFORMATION CONTACT: Teresa L. Hutchinson, Northwest 
Marketing Field Office, Fruit and Vegetable Programs, AMS, USDA, 1220 
SW Third Avenue, Room 369, Portland, OR 97204; telephone: (503) 326-
2724, Fax: (503) 326-7440 or George J. Kelhart, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, Room 
2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 
720-2491, Fax: (202) 205-6632. Small businesses may request information 
on compliance with this regulation by contacting Jay Guerber, Marketing 
Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 
Room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: 
(202) 720-2491, Fax: (202) 205-6632.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 115 and Order No. 982, both as amended (7 CFR part 982), 
regulating the handling of hazelnuts grown in Oregon and Washington, 
hereinafter referred to as the ``order.'' The marketing agreement and 
order are effective under the Agricultural Marketing Agreement Act of 
1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the 
``Act.''
    The Department is issuing this rule in conformance with Executive 
Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, hazelnut 
handlers are subject to assessments. Funds to administer the order are 
derived from such assessments. It is intended that the assessment rate 
as issued herein will be applicable to all assessable hazelnuts 
beginning July 1, 1997, and continuing in effect indefinitely unless 
modified, 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.
    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. Such 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.
    This rule continues in effect the assessment rate established for 
the Board for the 1997-98, and subsequent marketing years of $0.004 per 
pound of hazelnuts.
    The order provides authority for the Board, with the approval of 
the Department, to formulate an annual budget of expenses and collect 
assessments from handlers to administer the program. The members of the 
Board are producers and handlers of hazelnuts. They are familiar with 
the Board's needs and with the costs for goods and services in their 
local area and are thus in a position to formulate an appropriate 
budget and assessment rate. The assessment rate is formulated and 
discussed in a public meeting. Thus, all directly affected persons have 
an opportunity to participate and provide input.
    For the 1996-97, and subsequent marketing years, the Board 
recommended, and the Department approved, an assessment rate that would 
continue in effect from marketing year to marketing year indefinitely 
unless modified, suspended, or terminated by the Secretary upon 
recommendation and information submitted by the Board or other 
information available to the Secretary.
    The Board met on August 28, 1997, and unanimously recommended 1997-
98 expenditures of $553,218 and an assessment rate of $0.004 per pound 
of hazelnuts. In comparison, last year's budgeted expenditures were 
$558,974. The assessment rate of $0.004 is $0.003 less than the rate 
previously in effect. At the former rate of $0.007 per pound and an 
estimated 1997 hazelnut production of 70,000,000 pounds, the projected 
reserve on June 30, 1998, would have exceeded the level the Board 
believes is necessary to administer the program. Section 982.62 of the 
order allows the Board to establish and maintain an operating monetary 
reserve in an amount not to exceed approximately one marketing year's 
operational expenses. Last year's actual Board expenditures totaled 
$284,894. The reduced assessment rate is expected to result in an 
operating reserve of $257,497, which is about equal to what the Board 
actually spent last year for program expenses.
    The Board discussed lower assessment rates, but decided that an 
assessment rate of less than $0.004 would not generate the income 
necessary to administer the program with an adequate reserve. Major 
expenses recommended by the Board for the 1997-98 marketing year 
include $46,864 for personnel service (salaries and benefits), $5,640 
for rent, $5,000 for compliance, $17,000 for a crop survey, $269,000 
for promotion, and $182,364 for an emergency fund. Budgeted expenses 
for these items in 1996-97 were $50,020, $5,640, $5,000, $15,000, 
$275,000, and $182,364, respectively.
    The assessment rate recommended by the Board was derived by 
dividing

[[Page 9132]]

anticipated expenses by expected shipments of hazelnuts. With hazelnut 
shipments for the year estimated at 70,000,000 pounds, the $0.004 per 
pound assessment rate should provide $280,000 in assessment income. 
Income derived from handler assessments, along with interest and funds 
from the Board's authorized reserve, will be adequate to cover budgeted 
expenses. Funds in the reserve will be kept within the maximum 
permitted by the order.
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by the 
Secretary upon recommendation and information submitted by the Board or 
other available information.
    Although this assessment rate is effective for an indefinite 
period, the Board will continue to meet prior to or during each 
marketing year to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Board meetings are available from the Board or the Department. 
Board meetings are open to the public and interested persons may 
express their views at these meetings. The Department will evaluate 
Board recommendations and other available information to determine 
whether modification of the assessment rate is needed. Further 
rulemaking will be undertaken as necessary. The Board's 1997-98 budget 
and those for subsequent marketing 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 action on small entities. Accordingly, AMS has 
prepared this final 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. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 1,000 producers of hazelnuts in the 
production area and approximately 25 handlers subject to regulation 
under the marketing order. Small agricultural producers have been 
defined by the Small Business Administration (13 CFR 121.601) as those 
having annual receipts of less than $500,000 and small agricultural 
service firms are defined as those whose annual receipts are less than 
$5,000,000. The majority of hazelnut producers and handlers may be 
classified as small entities.
    This rule continues in effect a decreased assessment rate 
established for the Board and collected from handlers for the 1997-98, 
and subsequent marketing years. The Board unanimously recommended 1997-
98 expenditures of $553,218 and an assessment rate of $0.004 per pound 
of hazelnuts. The assessment rate of $0.004 is $0.003 less than the 
rate previously in effect. At the former assessment rate of $0.007 per 
pound, the Board's reserve was projected to exceed the level the Board 
believes is necessary to administer the program. Therefore, the Board 
voted to lower its assessment rate and use more of the reserve to cover 
its expenses. Section 982.62 of the order allows the Board to establish 
and maintain an operating monetary reserve in an amount not to exceed 
approximately one marketing year's operational expenses. Last year's 
actual Board expenditures totaled $284,894. The reduced assessment rate 
is expected to result in an operating reserve of $257,497, which is 
about equal to what the Board actually spent last year for program 
expenses.
    The Board discussed alternatives to this rule, including 
alternative expenditure levels. Lower assessment rates were considered, 
but not recommended because they would not generate the income 
necessary to administer the program with an adequate reserve. Major 
expenses recommended by the Board for the 1997-98 marketing year 
include $46,864 for personal services (salaries and benefits), $5,640 
for rent, and $5,000 for compliance, $17,000 for a crop survey, 
$269,000 for promotion, and $182,364 for an emergency fund. Budgeted 
expenses for these items in 1996-97 were $50,020, $5,640, $5,000, 
$15,000, $275,000, and $182,364, respectively.
    Hazelnut shipments for the year are estimated at 70,000,000 pounds, 
which should provide $280,000 in assessment income. Income derived from 
handler assessments, along with interest and funds from the Board's 
authorized reserve, will be adequate to cover budgeted expenses. Funds 
in the reserve will be kept within the maximum permitted by the order. 
The maximum permitted of one marketing year's operational expenditures 
is specified in Sec. 982.62. The reduced assessment rate is expected to 
result in an operating reserve of $257,497, which is about equal to 
what the Board spent last year for program expenses.
    Recent price information indicates that the grower price for the 
1997-98 marketing season will range between $0.32 and $0.43 per pound 
of hazelnuts. Therefore, the estimated assessment revenue for the 1997-
98 marketing year as a percentage of total grower revenue will range 
between .93 and 1.25 percent.
    This action continues to reduce the assessment obligation imposed 
on handlers. While this rule will impose some additional costs on 
handlers, the costs are minimal and in the form of uniform assessments 
on all handlers. Some of the additional costs may be passed on to 
producers. However, these costs will be offset by the benefits derived 
by the operation of the marketing order.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large hazelnut handlers. As with all 
Federal marketing order programs, reports and forms are periodically 
reviewed to reduce information requirements and duplication by industry 
and public sector agencies. In addition, as noted in the initial 
regulatory flexibility analysis, the Department has not identified any 
relevant Federal rules that duplicate, overlap, or conflict with this 
rule.
    Further, the Board's meeting was widely publicized throughout the 
hazelnut industry and all interested persons were invited to attend the 
meeting and participate in Board deliberations. Like all Board 
meetings, the August 28, 1997, meeting was a public meeting and all 
entities, both large and small, were able to express views on this 
issue.
    An interim final rule concerning this action was published in the 
Federal Register on October 14, 1997 (62 FR 53225). The rule was made 
available through the Internet by the Office of the Federal Register. 
That rule provided for a 60-day comment period which ended December 15, 
1997. No comments were received.
    After consideration of all relevant matter presented, including the 
Board's recommendation, and other information, it is hereby found that 
finalizing the interim final rule, without change, as published in the 
Federal Register (62 FR 53225, October 14, 1997) will tend to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 982

    Marketing agreements, Hazelnuts, Reporting and recordkeeping 
requirements.

[[Page 9133]]

PART 982--HAZELNUTS GROWN IN OREGON AND WASHINGTON

    Accordingly, the interim final rule amending 7 CFR part 982 which 
was published at 62 FR 53225 on October 14, 1997, is adopted as a final 
rule without change.

    Dated: February 17, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-4593 Filed 2-23-98; 8:45 am]
BILLING CODE 3410-02-P