[Federal Register Volume 64, Number 200 (Monday, October 18, 1999)]
[Rules and Regulations]
[Pages 56131-56133]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-27133]



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 Rules and Regulations
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  Federal Register / Vol. 64, No. 200 / Monday, October 18, 1999 / 
Rules and Regulations  

[[Page 56131]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Docket No. FV99-984-3 IFR]


Walnuts Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule decreases the assessment rate established for the 
Walnut Marketing Board (Board) for the 1999-2000 and subsequent 
marketing years from $0.0133 per kernelweight pound to $0.0118 per 
kernelweight pound of walnuts handled. The Board is responsible for 
local administration of the marketing order which regulates the 
handling of walnuts grown in California (order). Authorization to 
assess walnut handlers enables the Board to incur expenses that are 
reasonable and necessary to administer the program. The marketing year 
began August 1 and ends July 31. The assessment rate decrease is 
possible because the 1999-2000 assessable poundage is expected to total 
252,000,000 kernelweight pounds (almost 30 percent higher than last 
year). The $0.0118 per kernelweight pound assessment rate will allow 
the Board to cover its 1999-2000 expenses. The assessment rate will 
remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: October 19, 1999. Comments received by December 17, 1999, 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 to the Docket Clerk, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, PO Box 96456, 
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: Diane Purvis, Marketing Assistant, 
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, room 2525-S, PO Box 96456, Washington, 
DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 720-5698. Small 
businesses may request information on complying with this regulation by 
contacting Jay Guerber, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, PO Box 96456, room 2525-S, 
Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 720-
5698, or E-mail: Jay.G[email protected].

SUPPLEMENTARY INFORMATION: This 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 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, California 
walnut 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 
walnuts beginning August 1, 1999, and continue 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.
    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 decreases the assessment rate established for the Board 
for the 1999-2000 and subsequent marketing years from $0.0133 per 
kernelweight pound to $0.0118 per kernelweight pound of walnuts. The 
assessment rate decrease is possible because the 1999-2000 assessable 
poundage is expected to total 252,000,000 kernelweight pounds (almost 
30 percent higher than last year). The $0.0118 per kernelweight pound 
assessment rate will allow the Board to cover its 1999-2000 expenses.
    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 California walnuts. 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 1998-99 and subsequent marketing years, the Board 
recommended, and the Department approved, an assessment rate of $0.0133 
per kernelweight pound of walnuts that would continue in effect from 
marketing year to marketing year unless modified, suspended, or 
terminated by the Secretary upon recommendation and

[[Page 56132]]

information submitted by the Board or other information available to 
the Secretary.
    The Board met on September 10, 1999, and unanimously recommended 
1999-2000 expenditures of $2,967,356 and an assessment rate of $0.0118 
per kernelweight pound of walnuts. In comparison, last year's budgeted 
expenditures were $2,620,274. The assessment rate of $0.0118 is $0.0015 
lower than the rate currently in effect. The lower assessment rate was 
recommended because this year's crop is estimated by the California 
Agricultural Statistics Service (CASS) to be the largest on record at 
280,000 tons. The Board estimates that about 252,000,000 kernelweight 
pounds of the crop will be certified as merchantable and thus be 
subject to assessments. The recommended assessment rate should allow 
the Board to more than cover its expected expenses for 1999-2000.
    The major expenditures recommended by the Board for the 1999-2000 
year include $2,413,038 for marketing and production research expenses, 
$289,709 for general expenses, $179,809 for office expenses, $59,800 
for a production research director, and $25,000 as a contingency. 
Budgeted expenses for these items in 1998-99 were $2,115,016 for 
marketing and production research expenses, $246,643 for general 
expenses, $163,815 for office expenses, $59,800 for a production 
research director, and $35,000 as a contingency, respectively.
    The assessment rate recommended by the Board was derived by 
dividing anticipated expenses by expected merchantable certifications 
of California walnuts. Walnut shipments for the year are estimated at 
about 252,000,000 kernelweight pounds which should provide $2,973,600 
in assessment income. Unexpended funds may be used temporarily to 
defray expenses of the subsequent marketing year, but must be made 
available to the handlers from whom collected within 5 months after the 
end of the year (Sec. 984.69). 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 1999-2000 
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 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 48 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 less than $500,000, and small agricultural 
service firms are defined as those whose annual receipts are less than 
$5,000,000.
    During the 1997-98 marketing year, as a percentage, about 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. Using an average f.o.b. price of $2.10 per 
kernelweight pound, the majority of California walnut handlers may be 
classified as small entities.
    This rule decreases the assessment rate established for the Board 
and collected from handlers for the 1999-2000 and subsequent marketing 
years from $0.0133 per kernelweight pound to $0.0118 per kernelweight 
pound of walnuts. The Board unanimously recommended 1999-2000 
expenditures of $2,967,356 and an assessment rate of $0.0118 per 
kernelweight pound. The assessment rate of $0.0118 is $0.0015 lower 
than the 1998-99 rate. The quantity of assessable walnuts for the 1999-
2000 marketing year is estimated at 252,000,000 kernelweight pounds. 
Thus, the $0.0118 rate should provide $2,973,600 in assessment income 
and be adequate to cover this year's expenses. The lower assessment 
rate was recommended because this year's crop is estimated by the CASS 
to be the largest on record at 280,000 tons.
    The major expenditures recommended by the Board for the 1999-2000 
year include $2,413,038 for marketing and production research expenses, 
$289,709 for general expenses, $179,809 for office expenses, $59,800 
for a production research director, and $25,000 as a contingency. 
Budgeted expenses for these items in 1998-99 were $2,115,016 for 
marketing and production research expenses, $246,643 for general 
expenses, $163,815 for office expenses, $59,800 for a production 
research director, and $35,000 as a contingency, respectively.
    The Board reviewed and unanimously recommended 1999-2000 
expenditures of $2,967,356 which included increases in administrative 
and office expenses and research programs. Prior to arriving at this 
budget, the Board considered information from various sources, such as 
the Board's Budget and Personnel Committee, the Research Committee, and 
the Market Development Committee. Alternative expenditure levels were 
discussed by these groups, based upon the relative value of various 
research projects to the walnut industry. The Board also considered 
alternative assessment rates of $0.0120 and $0.0123 per kernelweight 
pound in case the crop and amount of assessable walnuts are 
underestimated. However, the Board ultimately derived the rate of 
$0.0118 per kernelweight pound of assessable walnuts by dividing the 
total recommended budget by the 252,000,000 kernelweight pound estimate 
of assessable walnuts for the 1999-2000 marketing year.
    A review of historical information and preliminary information 
pertaining to the upcoming marketing year indicates that the grower 
price for the 1999-2000 season should average about $0.65 per 
kernelweight pound of walnuts. Therefore, the estimated assessment 
revenue for the 1999-2000 marketing year as a percentage of total 
grower revenue should be less than 2 percent.
    This action decreases the assessment obligation imposed on 
handlers. Assessments are applied uniformly on all handlers, and some 
of the costs may be passed on to producers. However, decreasing the 
assessment rate reduces the burden on handlers, and may reduce the 
burden on producers. In addition, the Board's meeting was widely 
publicized throughout the California walnut industry and all interested

[[Page 56133]]

persons were invited to attend the meeting and participate in Board 
deliberations on all issues. Like all Board meetings, the September 10, 
1999, 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 imposes no additional reporting or recordkeeping 
requirements on either small or large California walnut 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.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    A small business guide on complying with fruit, vegetable, and 
speciality crop marketing agreements and orders may be viewed at the 
following web site: http://www.ams.usda.gov/fv/moab.html. Any questions 
about the compliance guide should be sent to Jay Guerber at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Board 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 rule until 30 days after publication in the Federal 
Register because: (1) The 1999-2000 marketing year began on August 1, 
1999, and the order requires that the rate of assessment for each 
marketing year apply to all assessable walnuts handled during such 
marketing year; (2) this action decreases the assessment rate for 
assessable walnuts beginning with the 1999-2000 marketing year; (3) 
handlers are aware of this action which was unanimously recommended by 
the Board at a public meeting and is similar to other assessment rate 
actions issued in past years; and (4) this interim final rule provides 
a 60-day comment period, and all comments timely received will be 
considered prior to finalization of this rule.

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 
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. Section 984.347 is revised to read as follows:


Sec. 984.347  Assessment rate.

    On and after August 1, 1999, an assessment rate of $0.0118 per 
kernelweight pound is established for California merchantable walnuts.

    Dated: October 12, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-27133 Filed 10-15-99; 8:45 am]
BILLING CODE 3410-02-P