[Federal Register Volume 65, Number 66 (Wednesday, April 5, 2000)]
[Proposed Rules]
[Pages 17809-17811]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-8300]


 ========================================================================
 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. 65, No. 66 / Wednesday, April 5, 2000 / 
Proposed Rules  

[[Page 17809]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Docket No. FV00-984-1 PR]


Walnuts Grown in California; Report Regarding Interhandler 
Transfers of Walnuts

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) regarding reports of interhandler transfers 
of walnuts. The order regulates the handling of walnuts grown in 
California and is administered locally by the Walnut Marketing Board 
(Board). Currently, handlers report to the Board transfers of walnuts 
between handlers on monthly shipment reports. This rule would require 
handlers to report such interhandler transfers on a separate form. This 
action would facilitate program administration by providing the Board 
with more accurate and complete information on transfers and shipments.

DATES: Comments must be received by June 5, 2000.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, PO 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, Marketing Order 
Administration Branch, 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, PO 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 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: [email protected].

SUPPLEMENTARY INFORMATION: This proposed 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 or 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 regarding reports of interhandler 
transfers of walnuts. Currently, handlers report to the Board transfers 
of walnuts between handlers on monthly shipment reports. This rule 
would require handlers to report such interhandler transfers on a 
separate form. This action would facilitate program administration by 
providing the Board with more accurate and complete information on 
transfers and shipments. This action was unanimously recommended by the 
Board at a meeting on February 18, 2000.
    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.
    Section 984.59 of the order provides authority for handlers to 
transfer walnuts between handlers. Paragraph (a) of that section states 
that inshell walnuts may be sold or delivered by one handler to another 
for packing or shelling within California. In such cases, the receiving 
handler assumes marketing order obligations with respect to the 
transferred walnuts, including assessment and inspection requirements. 
Paragraph (b) of Sec. 984.59 pertains to transfers of walnuts when 
volume regulation is in effect. Specifically, handlers may, for 
purposes of meeting their reserve obligation, acquire walnuts from 
other handlers. In such cases, the buying handler assumes marketing 
order obligations with respect to the transferred walnuts, including 
assessment, reserve, and inspection

[[Page 17810]]

requirements. Paragraph (c) of Sec. 984.59 provides that, with the 
exceptions stated in paragraphs (a) and (b) of Sec. 984.59, whenever 
transfers of walnuts are made between handlers, the first handler 
thereof shall assume all marketing order obligations pertaining to the 
walnuts.
    Currently, handlers are required to report interhandler transfers 
on monthly shipment reports, WMB Form No. 6. However, the monthly 
shipment reports do not require handlers to indicate the date the 
walnuts were transferred, and whether the transferred walnuts were 
certified by the Dried Fruit Association (DFA). The agency designated 
under the order to provide inspection services for handlers. Also, the 
reports do not indicate the date the walnuts were received by the 
handler accepting the walnuts, or include a confirmation by the 
accepting handler that such walnuts were received. This information on 
transfers would be useful to the Board as it reconciles handler 
shipments and inventories.
    The Board recommended that a new form be developed specific to 
interhandler transfers. A handler who transferred walnuts to another 
handler would have to complete and submit WMB Form No. 8 to the Board 
within 10-calendar days following the transfer. The report would have 
the following information: (1) The date of the transfer; (2) the net 
weight, in pounds, of the walnuts transferred; (3) whether such walnuts 
were certified by the DFA; (4) whether such walnuts were inshell or 
shelled; (5) the name and address of the transferring handler; and (6) 
the name and address of the receiving handler. The transferring handler 
would be required to send two copies of the report to the receiving 
handler at the same time the transferring handler would submit the 
report to the Board. The receiving handler would then certify, on one 
copy of the report, that he or she received the walnuts. The receiving 
handler would then submit the report to the Board within 10-calendar 
days after the walnuts, or copies of the report, have been received, 
whichever is later. Transfers of reserve walnuts during periods of 
volume regulation would continue to be reported on WMB Form No. 17.
    This rule would provide the Board with more accurate and complete 
information regarding handler transfers and shipments of walnuts, 
thereby facilitating program administration. Accordingly, a new 
Sec. 984.459 is proposed to be added to the order's administrative 
rules and regulations.
    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 50 handlers subject to regulation 
under the order. Small agricultural producers have been defined by the 
Small Business Administration (13 CFR 121.201) 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 producers of California walnuts may be classified as 
small entities.
    During the 1998-99 season, as a percentage, 24 percent of the 
handlers shipped over 2.6 million kernelweight pounds of walnuts, and 
76 percent of the handlers shipped under 2.6 million kernelweight 
pounds of walnuts. Based on an average price of $1.88 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. 984.459 to the order's 
administrative rules and regulations which would require handlers to 
report transfers of walnuts between handlers on a separate form. 
Currently, interhandler transfers are reported on handlers' monthly 
shipment reports. This action would facilitate program administration 
by providing the Board with more accurate and complete information on 
transfers and shipments. Authority for requiring handlers to submit 
this information to the Board is provided in Secs. 984.59 and 984.76 of 
the order.
    Regarding the impact of the proposed action on affected entities, 
this rule would impose a minimal, additional reporting burden on 
handlers who transfer walnuts. Handlers who transfer walnuts are 
already reporting transfers to the Board on monthly shipment reports. 
This action would require such handlers to report transfers on a 
separate form. Board staff estimates that there are about 25 
interhandler transfers per year (20 total during the months of October, 
November, and December, and 0-1 during the other 9 months). This action 
is designed to provide the Board with more accurate and complete 
information on shipments and transfers which would facilitate program 
administration.
    Regarding alternatives to the recommended action, the Board and 
industry members discussed at the Board's February 18, 2000, meeting 
different time frames for the submission of the separate, interhandler 
transfer report. A 5-day time frame was considered whereby transferring 
handlers would submit their report to the Board within 5 days of the 
transfer, and the receiving handler would submit their report within 5 
days of receiving the walnuts. However, the Board believed that 5 days 
was too short a time frame for handlers, and recommended the 10-day 
time frame.
    This action would impose some additional reporting and 
recordkeeping burden on handlers. As previously mentioned, it is 
estimated that there are about 25 interhandler transfers per year. It 
would take handlers about 10 minutes to complete the new form for a 
total industry burden of about 4 hours per year. With interhandler 
transfers no longer on monthly shipment reports, the burden for 
handlers to complete the monthly shipment report would be reduced from 
15 to 10 minutes per report, or from a total of 3 to 2 hours per year. 
Thus, the total annual increase in burden for the industry is estimated 
at 3 hours. The revised shipment report and the new, interhandler 
transfer report have been submitted to the Office of Management and 
Budget (OMB) for approval under OMB Control No. 0581-0178. As with 
other similar 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.
    In addition, the Board's meeting on February 18, 2000, where this 
action was deliberated was a public meeting
    In addition, the Board's meeting on February 18, 2000, where this 
action was deliberated was a public meeting widely publicized 
throughout the walnut industry. All interested persons were invited to 
attend the meeting and participate in the Board's deliberations. 
Finally, interested persons are invited to submit information on the 
regulatory and informational impacts of this action on small 
businesses.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may

[[Page 17811]]

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.
    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. 984.459 is added to read as follows:


Sec. 984.459  Reports of interhandler transfers.

    (a) Any handler who transfers walnuts to another handler within the 
State of California shall submit to the Board, not later than 10-
calendar days following such transfer, a report showing the following:
    (1) The date of transfer;
    (2) The net weight, in pounds, of the walnuts transferred;
    (3) Whether such walnuts were certified by the inspection service;
    (4) Whether such walnuts were inshell or shelled;
    (5) The name and address of the transferring handler; and
    (6) The name and address of the receiving handler.
    (b) The transferring handler shall send two copies of the report to 
the receiving handler at the time the report is submitted to the Board. 
The receiving handler shall certify, on one copy of the report, to the 
receipt of such walnuts and submit it to the Board within 10-calendar 
days after the walnuts, or copies of such report, have been received, 
whichever is later.

    Dated: March 30, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-8300 Filed 4-4-00; 8:45 am]
BILLING CODE 3410-02-P