[Federal Register Volume 63, Number 209 (Thursday, October 29, 1998)]
[Rules and Regulations]
[Pages 57891-57893]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28972]



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 Rules and Regulations
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  Federal Register / Vol. 63, No. 209 / Thursday, October 29, 1998 / 
Rules and Regulations  

[[Page 57891]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 997 and 998

[Docket Nos. FV98-997-1 FIR and FV98-998-1 FIR]


Domestically Produced Peanuts; Decreased Assessment Rate

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 change, the provisions of an interim final rule 
which decreased the administrative assessment rate established for the 
Peanut Administrative Committee (Committee) under Marketing Agreement 
No. 146 (Agreement) for the 1998-99 and subsequent crop years from 
$0.35 to $0.33 per net ton of assessable peanuts. 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 to impose the same administrative 
assessment rate on assessable peanuts received or acquired by handlers 
who have not signed the Agreement. The 1998-1999 crop year covers the 
period July 1 through June 30. The assessment rate will remain in 
effect indefinitely unless modified, suspended, or terminated.

EFFECTIVE DATE: November 30, 1998.

FOR FURTHER INFORMATION CONTACT: Jim Wendland 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 complying with this regulation, or obtain a 
guide on complying with marketing agreements and orders for fruits, 
vegetables, and speciality crops, by contacting Jay Guerber, also at 
the above address, telephone, and fax number, or E-mail: 
Jay__N__G[email protected]. You may also view the marketing agreements 
and orders small business compliance guide at the following web site: 
http://www.ams.usda.gov/fv/moab.html.

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'', under 
Marketing Agreement No. 146 (7 CFR part 998), and under the Peanut Non-
Signer Program (7 CFR part 997). The marketing agreement and non-signer 
program, and the regulations issued thereunder regulate 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 the same assessment rate. It is 
intended that the assessment rates finalized herein will be applicable 
to all assessable peanuts beginning July 1, 1998, and continue in 
effect 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 continues the decreased assessment rate established for 
the Committee and non-signer handlers for the 1998-99 and subsequent 
crop years from $0.35 to $0.33 per net ton of assessable peanuts.
    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 Committee members 
include nine handlers and nine 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 a public meeting. 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 1996-97 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 May 27, 1998, and unanimously recommended for 
1998-99 a reduction in the administrative assessment rate from $0.35 to 
$0.33 per net ton of assessable peanuts, and administrative 
expenditures of $495,000. In comparison, last year's budgeted 
administrative expenditures were $525,000. The assessment rate of $0.33 
is $0.02 lower than the rate previously in effect.
    Major expenditures approved for the Committee for the 1998-99 crop 
year compared with those budgeted for 1997-98 (in parentheses) include: 
$58,000 for executive salaries ($55,000), $43,500 for clerical salaries 
($50,000), $129,000 for compliance officers salaries ($125,000), 
$19,000 for payroll taxes ($18,000), $70,000 for employee benefits 
($65,000), $40,000 for committee members travel ($40,000), $55,000 for 
compliance officers travel ($60,000), $13,000 for office rent 
($19,000), and $10,400 for the audit fee ($10,400).
    The Committee had discussed alternatives to this rule, including 
alternative expenditure levels but decided that each of the budgeted 
expenses was reasonable and appropriate. It had also discussed the

[[Page 57892]]

alternative of not decreasing the assessment rate but decided it needed 
to decrease the rate to reduce handlers' costs as much as possible. The 
Committee had also discussed an even lower rate, but decided that an 
assessment rate of less than $0.33 would not generate the income 
necessary to administer the program.
    The assessment rate approved for 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 those peanuts described 
in Sec. 998.31(c) and (d), are subject to the assessments. Assessments 
are due on the 15th of the month following the month in which the 
farmers stock peanuts are received or acquired by signatory handlers. 
Peanut receipts and acquisitions for the year under the Agreement are 
estimated at 1,500,000 tons, which should provide $495,000 in 
assessment income. Approximately 95 percent of the domestically 
produced peanut crop is handled by handlers who signed the Agreement. 
The remaining 5 percent is handled by non-signer handlers.
    The Act provides for the mandatory assessment of farmers 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 with signatory handlers also 
shall apply to non-signatory handlers, and (2) such assessment shall be 
paid to the Secretary. Thus, the assessment rate of $0.33 per net ton 
of assessable peanuts also applies to non-signatory handlers of 
domestic peanuts.
    The assessment rates finalized 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 for signatory 
handlers. 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 1998-99 budget has been approved 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 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 agreements and 
orders issued pursuant to the Act, and 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 80 peanut handlers who are subject to 
regulation under the Agreement or the non-signer program and 
approximately 25,000 commercial peanut producers in the 16-State 
production area. Small agricultural service firms, which include 
handlers, are defined by the Small Business Administration (13 CFR 
121.601) as those having annual receipts of 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 continues the decreased assessment rate established for 
the Committee (as it unanimously recommended) to be collected from 
handlers for the 1998-99 and subsequent crop years from $0.35 to $0.33 
per net ton. The rate is $0.02 less than the 1997-98 rate.
    The Committee had discussed alternatives to this rule, including 
alternative expenditure levels but unanimously voted that each of the 
budgeted expenses was reasonable and appropriate. It had also discussed 
the alternative of not decreasing the assessment rate. However, it had 
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 approved budget for 1998-
99 is $495,000, or $30,000 less than the amount budgeted for 1997-98. 
Based on an estimated 1,500,000 net tons of assessable peanuts, income 
derived from handler assessments during 1998-99 will be adequate to 
cover budgeted expenses.
    Major expenditures approved for the Committee for the 1998-99 crop 
year compared with those budgeted for 1997-98 (in parentheses) include: 
$58,000 for executive salaries ($55,000), $43,500 for clerical salaries 
($50,000), $129,000 for compliance officers salaries ($125,000), 
$19,000 for payroll taxes ($18,000), $70,000 for employee benefits 
($65,000), $40,000 for committee members travel ($40,000), $55,000 for 
compliance officers travel ($60,000), $13,000 for office rent 
($19,000), and $10,400 for the audit fee ($10,400).
    The Committee had reviewed historical information and information 
pertaining to the 1998-99 crop year. The Department expects the area 
for harvest to total 1.48 million acres of peanuts for the 1998 crop. 
The Committee projected shipments for the 1998-99 crop year to be 1.5 
million net tons. Based on 1997-98 crop figures, the approximately 
$560,000 in total assessments collected by the Committee as a 
percentage of the $932,000,000 total peanut crop value was only 0.0006 
percent. With a decreased assessment rate, the relationship of total 
assessment cost as a percentage of total crop value is expected to be 
even smaller for the 1998-99 crop.
    This action finalizes the decreased administrative assessment 
obligation imposed on all domestic peanut handlers, whether signers or 
non-signers. Assessments are applied uniformly on all handlers, and 
some of the costs may be passed on to producers. However, the decreased 
assessment rate reduces the burden on handlers, and may reduce the 
burden on producers. Also, the reduced burdens are offset by the 
benefits derived from the operations of the Agreement and the non-
signer programs. 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 deliberations on 
all issues. Like all Committee meetings, the May 27, 1998, meeting was 
a public meeting and all entities, both large and small, were able to 
express views on this issue. Finally, interested persons were invited 
to submit information on the regulatory and informational impacts of 
this action on small businesses and none were received.
    This action will not impose any additional reporting or 
recordkeeping requirements on either small or large

[[Page 57893]]

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. 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.
    An interim final rule concerning this action was published in the 
Federal Register on August 3, 1998 (63 FR 41182). Copies of that rule 
were mailed by the Committee's staff to all Committee members and 
peanut handlers. In addition, the rule was made available through the 
Internet by the Office of the Federal Register. A 60-day comment period 
was provided for interested persons to respond to the interim final 
rule. The comment period ended October 2, 1998, and no comments were 
received.
    After consideration of all relevant material presented, including 
the information and unanimous 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.

List of Subjects

7 CFR Part 997

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

7 CFR Part 998

    Marketing agreements, Peanuts, Reporting and recordkeeping 
requirements.

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

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

    Accordingly, the interim final rule amending 7 CFR parts 997 and 
998 which was published at 63 FR 41182 on August 3, 1998, is adopted as 
a final rule without change.

    Dated: October 23, 1998.
Larry B. Lace,
Acting Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-28972 Filed 10-28-98; 8:45 am]
BILLING CODE 3410-02-P