[Federal Register Volume 64, Number 160 (Thursday, August 19, 1999)]
[Proposed Rules]
[Pages 45208-45211]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-21666]


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 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.
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  Federal Register / Vol. 64, No. 160 / Thursday, August 19, 1999 / 
Proposed Rules  

[[Page 45208]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Docket No. FV99-984-2 PR]


Walnuts Grown in California; Reporting Walnuts Grown Outside of 
the United States and Received by California Handlers

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule invites comments on revising the 
administrative rules and regulations of the Federal marketing order for 
California walnuts (order) to require handlers to report receipts of 
walnuts grown outside of the United States. This proposal also 
announces the Agricultural Marketing Service's (AMS) intention to 
request a revision to the currently approved information collection 
requirements issued under the order. The order regulates the handling 
of walnuts grown in California and is administered locally by the 
Walnut Marketing Board (Board). Requiring handlers to report to the 
Board receipts of walnuts grown outside of the United States would 
allow the Board to have better information on the total available 
supply of walnuts within California, which includes both California and 
foreign product. This would facilitate program administration.

DATES: Comments must be received by October 18, 1999.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, Fruit 
and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 2525-S, 
Washington, DC 20090-6456; Fax: (202) 720-5698; or E-mail: 
[email protected]. 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: Maureen T. Pello, Marketing 
Specialist, California Marketing Field Office, Fruit and Vegetable 
Programs, AMS, USDA, 2202 Monterey Street, Suite 102B, Fresno, 
California 93721; telephone: (559) 487-5901; Fax: (559) 487-5906; or 
George Kelhart, Technical Advisor, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 
2525-S, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: 
(202) 720-5698. Small businesses may request information on complying 
with this regulation, or obtain a guide on complying with fruit, 
vegetable, and specialty crop marketing agreements and orders by 
contacting Jay Guerber, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 2525-S, 
Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202) 720-
5698, or E-mail: Jay.G[email protected]. You may view the marketing 
agreement and order small business compliance guide at the following 
web site: http://www.ams.usda.gov/fv/moab.html.

SUPPLEMENTARY INFORMATION: This proposal rule is issued under Marketing 
Agreement and Order No. 984, both as amended (7 CFR part 984), 
regulating the handling of walnuts grown in California, 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 of Agriculture (Department) is issuing this proposed 
rule in conformance with Executive Order 12866.
    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This proposal 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 proposed rule invites comments on revising the order's 
administrative rules and regulations to require handlers to report to 
the Board receipts of walnuts grown outside of the United States. This 
would allow the Board to have better information on the total available 
supply of walnuts within California, which includes both California and 
foreign product, which would facilitate program administration. This 
action was unanimously recommended by the Board at a meeting on 
September 11, 1998.
    Section 984.76 of the order provides authority for the Board, with 
the approval of the Secretary, to require handlers to furnish reports 
and information to the Board as needed to enable the Board to perform 
its duties under the order. The Board meets during the season to make 
decisions on various programs authorized under the order. These 
programs include quality control (minimum grade and size requirements 
for both inshell and shelled walnuts placed into channels of commerce), 
volume regulation, and projects regarding production research, and 
marketing research and development.
    The Board would like to have better information on the total supply 
of walnuts within California, which includes both California and 
foreign product. The Board would use this information in its marketing 
policy deliberations each fall when it reviews the crop estimate, 
handler carryover, and other factors to determine whether volume 
regulation would be appropriate. In addition, the Board has some 
concerns that, particularly in short crop years when handlers may 
import more walnuts to meet customer demands, imported walnuts could be

[[Page 45209]]

included in handler inventory reports of California walnuts. Accurate 
information regarding the supply of walnuts within California is needed 
by the Board in its administration of the order.
    According to the National Agricultural Statistics Service, the 10-
year average annual production of California walnuts is 235,000 inshell 
tons. Bureau of Census data indicates that the 10-year average annual 
import figure for walnuts is 1,036.5 shelled tons. However, during 
short crop years in California such as the 1992-93 (203,000 inshell 
tons) and 1996-97 (208,000 inshell tons) seasons, imports increased to 
8,046 and 5,806 shelled tons, respectively.
    Thus, the Board recommended that handlers be required to report to 
the Board receipts of walnuts grown outside of the United States. This 
report, WMB Form No. 7, would be submitted to the Board four times per 
year as follows: On or before November 5 for such walnuts received 
during the period August 1 to October 31; on or before February 5 for 
such walnuts received during the period November 1 to January 31; on or 
before May 5 for such walnuts received during the period February 1 to 
April 30; and on or before August 5 for such walnuts received during 
the period May 1 to July 31. The report would include the quantity of 
such walnuts received, country of origin, and whether such walnuts were 
inshell or shelled.
    The Board also recommended that, with each report, the handler 
submit a copy of a product tag issued by the Dried Fruit Association of 
California (DFA) for compliance purposes. The DFA is a private agency 
designated under the marketing order to provide inspection services for 
handlers to ensure that California walnuts meet minimum grade and size 
requirements in effect under the order. The product tag would indicate 
the name of the person from whom the walnuts were received, the date 
the walnuts were received by the handler, the number of containers and 
U.S. Custom's Service entry number, whether the product is inshell or 
shelled, the quantity of walnuts, country of origin, the name of the 
DFA inspector who issued the tag, and the date such tag was issued. The 
Board believes product tags are necessary to verify handler receipt 
reports for imported walnuts. Accordingly, a new Sec. 984.476 is 
proposed to be added to the orders' administrative rules and 
regulations.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the 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. 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 5,000 producers of walnuts in the 
production area and approximately 50 handlers subject to regulation 
under the order. Small agricultural producers have been defined by the 
Small Business Administration (13 CFR 121.601) as those having annual 
receipts 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 producers of California walnuts may be classified as small 
entities.
    During the 1997-98 season, as a percentage, 33 percent of the 
handlers shipped over 2.4 million kernelweight pounds of walnuts, and 
67 percent of the handlers shipped under 2.4 million kernelweight 
pounds of walnuts. Based on an average price of $2.10 per kernelweight 
pound at the point of first sale, the majority of handlers of 
California walnuts may be classified as small entities.
    This rule would add a new Sec. 984.476 to the order's 
administrative rules and regulations which would require handlers to 
report to the Board receipts of walnuts grown outside of the United 
States. This would allow the Board to have better information on the 
total available supply of walnuts, including California and foreign 
product, which would facilitate program administration. Authority for 
requiring handlers to submit this information to the Board is provided 
in Sec. 984.76 of the order.
    Regarding the impact of the proposed action on affected entities, 
this rule should impose minimal additional costs. The Board estimates 
that about six handlers have imported walnuts over the past few years. 
Such handlers would be required to submit an additional report to the 
Board four times per year along with tags issued by the DFA verifying 
receipts of foreign product. The DFA currently provides inspection 
services for all handlers of California walnuts and would be available 
at no additional cost to issue product tags to handlers receiving 
imports. Handlers would then submit these tags to the Board for 
verification purposes.
    An alternative to the proposed action would be to not collect 
information from handlers on receipts of imported walnuts. However, as 
previously mentioned, the Board would like to have better information 
on the total available supply of walnuts within California, which 
includes both California and foreign product. The only way this 
information can be obtained by the Board is to collect it from 
handlers. This information would facilitate program administration by 
improving the Board's base of information from which to make decisions.
    The Board also recommended that a system be established for 
monitoring walnuts grown outside of the United States that are received 
by California handlers. Under the proposed monitoring system, DFA 
inspectors would check whether or not foreign product had been 
inspected and met the requirements of section 8e of the Act. Under 
section 8e, whenever certain specified commodities are regulated under 
a Federal marketing order, imports of that commodity must meet the same 
or comparable grade, size, quality, and maturity requirements as those 
in effect for the domestic commodity. Walnuts are included under 
section 8e, and thus importers of walnuts are required to have such 
walnuts inspected. However, it is the USDA's responsibility to ensure 
that imported walnuts meet the requirements of section 8e. Thus, we are 
not proceeding with this recommendation.
    Finally, the Board considered whether it would be useful to collect 
information on walnuts grown outside of California, but within the 
United States. However, Board members agreed that the amount of such 
walnuts was so small, it was not worth requiring handlers to report 
such information.
    This action would impose some additional reporting and 
recordkeeping burden on handlers that receive walnuts grown outside of 
the United States. It is estimated that six handlers may import walnuts 
during the season. Such handlers would be required to submit a receipt 
report to the Board four times per year. It is estimated that it would 
take such handlers 5 minutes to complete each report. Thus, the 
additional annual burden should total no more than 2 hours for the 
industry. The information would be collected on WMB Form No. 7. That 
form is being submitted to the Office of Management and Budget (OMB) 
for approval under OMB Control No. 0581-0178. As with other similar 
marketing order programs,

[[Page 45210]]

reports and forms are periodically reviewed to reduce information 
requirements and duplication by industry and public sector agencies.
    The Department has identified one relevant Federal rule regarding 
requirements for walnuts grown outside of the United States. As 
previously stated, walnuts are included under section 8e. Thus, 
importers of walnuts are required to have such walnuts inspected by the 
USDA's inspection service. Importers whose walnuts meet section 8e 
requirements do not have to submit any paperwork to the USDA. However, 
importers whose walnuts fail section 8e requirements, or whose walnuts 
are exempt from section 8e because such walnuts are so immature that 
they cannot be used for drying and sale as dried walnuts (green 
walnuts), or are being sent to designated outlets (animal feed, 
processing, or charity) have to submit paperwork to the USDA. However, 
only a small amount of information requested by the USDA in these 
instances or by the Board through this rule, would be duplicative.
    In addition, the Board's meeting on September 11, 1998, where this 
action was deliberated was a public meeting widely publicized 
throughout the walnut industry. This issue was also deliberated at an 
earlier Board meeting on February 2, 1998, and at a Grades and 
Standards Subcommittee meeting on June 5, 1998. All interested persons 
were invited to attend these meetings and participate in the industry's 
deliberations. Finally, interested persons are invited to submit 
information on the regulatory and informational impacts of this action 
on small businesses.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the AMS announces its intention to request a revision to a 
currently approved information collection for vegetable and specialty 
crop marketing orders, which includes the Federal marketing order for 
California walnuts.
    Title: Vegetable and Specialty Crop Marketing Orders.
    OMB Number: 0581-0178.
    Expiration Date of Approval: July 31, 2000.
    Type of Request: Intent to revise a currently approved information 
collection.
    Abstract: The information collection requirements in this request 
are essential to carry out the intent of the Act, to provide the 
respondents the type of service they request, and to administer the 
California walnut marketing order program, which has been operating 
since 1948.
    On September 11, 1998, the Board unanimously recommended revising 
the order's administrative rules and regulations to require handlers to 
report to the Board receipts of walnuts grown outside of the United 
States. This information would be reported on WMB Form No. 7. This 
notice concerns this report, in addition to the accompanying regulation 
previously discussed regarding requiring this report be submitted by 
handlers to the Board.
    The Board would like to have better information on the total supply 
of walnuts available within California, which includes both California 
and foreign product. The Board would use this information in its 
marketing policy deliberations each fall when it reviews the crop 
estimate, handler carryover, and other factors to determine whether 
volume regulation would be appropriate. In addition, the Board has some 
concerns that, particularly in short crop years when handlers may 
import more walnuts to meet customer demands, imported walnuts could be 
included in handler inventory reports of California walnuts. Accurate 
information regarding the supply of walnuts within California is needed 
by the Board in its administration of the order.
    The information collected is used only by authorized 
representatives of the USDA, including AMS, Fruit and Vegetable 
Programs regional and headquarter's staff, and authorized employees of 
the Board. Authorized Board employees and the industry are the primary 
users of the information and AMS is the secondary user.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 5 minutes per response.
    Respondents: California walnut handlers who receive walnuts grown 
outside of the United States.
    Estimated Number of Respondents: 6.
    Estimated Number of Responses per Respondent: 4.
    Estimated Total Annual Burden on Respondents: 2 hours.
    Comments: Comments are invited on: (1) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (2) the accuracy of the agency's estimate of 
the burden of the proposed collection of information, including the 
validity of the methodology and assumptions used; (3) ways to enhance 
the quality, utility, and clarity of the information to be collected; 
and (4) ways to minimize the burden of the collection of information on 
those who are to respond, including the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology.
    Comments should reference OMB No. 0581-0178 and the Vegetable and 
Specialty Crop Marketing Orders, and be sent to the USDA in care of the 
Docket Clerk at the address above. All comments received will be 
available for public inspection during regular business hours at the 
same address.
    All responses to this notice will be summarized and included in the 
request for OMB approval. All comments will also become a matter of 
public record.
    A 60-day comment period is provided to allow interested persons to 
respond to this proposal.

List of Subjects in 7 CFR Part 984

    Marketing agreements, Nuts, Reporting and recordkeeping 
requirements, Walnuts.

    For the reasons set forth in the preamble, 7 CFR part 984 is 
proposed to be amended as follows:

PART 984--WALNUTS GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR part 984 continues to read as 
follows:

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

    2. A new Sec. 984.476 is added to read as follows:


Sec. 984.476  Report of walnut receipts from outside of the United 
States.

    Each handler who receives walnuts from outside of the United States 
shall file with the Board, on WMB Form No. 7, a report of the receipt 
of such walnuts. The report shall be filed as follows: On or before 
November 5 for such walnuts received during the period August 1 to 
October 31; on or before February 5 for such walnuts received during 
the period November 1 to January 31; on or before May 5 for such 
walnuts received during the period February 1 to April 30; and on or 
before August 5 for such walnuts received during the period May 1 to 
July 31. The report shall include the quantity of such walnuts 
received, the country of origin for such walnuts, and whether such 
walnuts are inshell or shelled. With each report, the handler shall 
submit a copy of a product tag issued by a DFA of California inspector 
for each receipt of such walnuts that includes the name of the person 
from whom such walnuts were received, the date such walnuts were 
received by the handler, the number of containers and the U.S. Custom's 
Service entry number,

[[Page 45211]]

whether such walnuts are inshell or shelled, the quantity of such 
walnuts received, the country of origin for such walnuts, the name of 
the DFA of California inspector who issued the product tag, and the 
date such tag was issued.

    Dated: August 17, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-21666 Filed 8-18-99; 8:45 am]
BILLING CODE 3410-02-P