[Federal Register Volume 65, Number 115 (Wednesday, June 14, 2000)]
[Proposed Rules]
[Pages 37300-37302]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-15014]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 982

[Docket No. FV00-982-2 PR]


Hazelnuts Grown in Oregon and Washington; Increased Assessment 
Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would increase the assessment rate established for 
the Hazelnut Marketing Board (Board) for the 2000-2001 and subsequent 
marketing years from $0.004 to $0.005 per pound of hazelnuts handled. 
The Board locally administers 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 marketing year 
begins July 1 and ends June 30. The assessment rate would remain in 
effect indefinitely unless modified, suspended, or terminated.

DATES: Comments must be received by July 14, 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, room 2525-S, P.O. 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, or can be 
viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Teresa L. Hutchinson, Northwest 
Marketing Field Office, Fruit and Vegetable Programs, AMS, USDA, 1220 
SW Third Avenue, suite 385, Portland, Oregon 97204; telephone: (503) 
326-2724, Fax: (503) 326-7440; or George Kelhart, Technical Advisor, 
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) 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, P.O. 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 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 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, hazelnut 
handlers are subject to assessments. Funds to administer the order are 
derived from such assessments. It is intended that the assessment rate 
as proposed herein would be applicable to all assessable hazelnuts 
beginning on July 1, 2000, and continue until amended, suspended, or 
terminated. This rule would 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 would increase the assessment rate established for the 
Board for the 2000-2001 and subsequent marketing years from $0.004 to 
$0.005 per pound of hazelnuts handled.
    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 and budget were 
recommended by a mail vote. The recommendation will be discussed and 
reconfirmed at the Board's next scheduled public meeting. Thus, all 
directly affected persons will have an opportunity to participate and 
provide input.
    For the 1997-98 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 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, in a mail vote completed at the end of April 2000, 
unanimously recommended 2000-2001 expenditures of $596,293 and an 
assessment rate of $0.005 per pound of hazelnuts. In comparison, last 
year's budgeted expenditures were $568,457. The assessment rate of 
$0.005 is $0.001 higher than the rate currently in effect. At the 
current rate of $0.004 per pound and an estimated 2000-2001 hazelnut

[[Page 37301]]

production of 50,000,000 pounds, the Board believes that the projected 
reserve on June 30, 2001, would not be adequate to administer the 
program. The increased assessment rate is expected to result in an 
operating reserve of $150,147 at the end of the 2000-2001 marketing 
year.
    The major expenditures recommended by the Board for the 2000-2001 
marketing year include $39,613 for personal services (salaries and 
benefits), $7,416 for rent, $5,000 for compliance, $23,000 for the crop 
estimate, $275,000 for promotion, and $182,364 for an emergency fund. 
Budgeted expenses for these items in 1999-2000 were $51,385, $7,308, 
$5,000, $21,000, $275,000, and $182,364, respectively. The Board would 
consider using emergency funds for authorized activities when it is 
reasonably certain that its estimate of assessable hazelnuts is 
reached. It would not be able to make this determination until December 
2000, the month in which the hazelnut harvest and deliveries to 
handlers usually are completed.
    The Board based its recommended assessment rate increase on the 
2000-2001 crop estimate, the 2000-2001 marketing year expenditures 
estimate, as well as the current and projected balance of the operating 
reserve. Hazelnut shipments for the 2000-2001 marketing year are 
estimated at 50,000,000 pounds, which should provide $250,000 in 
assessment income. Income derived from handler assessments, along with 
interest income ($13,000) and funds from the Board's authorized reserve 
($333,293), would be adequate to cover budgeted expenses. Funds in the 
reserve (currently $483,440) would be kept within the maximum permitted 
by the order (approximately one marketing year's operational expenses). 
Excess funds may be maintained and used by the Board until December 1 
following the end of a marketing year (Sec. 982.62(b)). The Board shall 
refund to each handler upon request, or credit to the handler's account 
with the Board, the handler's share of such excess prior to January 1.
    The proposed assessment rate would 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 would be in effect for an indefinite 
period, the Board would continue to conduct a mail vote prior to or 
during each marketing year to recommend a budget of expenses and 
consider recommendations for modification of the assessment rate. Any 
mail votes would be discussed and reconfirmed at a public meeting. 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 would 
evaluate Board recommendations and other available information to 
determine whether modification of the assessment rate is needed. 
Further rulemaking would be undertaken as necessary. The Board's 2000-
2001 budget and those for subsequent marketing years would 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, the 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 800 producers of hazelnuts in the 
production area and approximately 22 handlers subject to regulation 
under the marketing order. Small agricultural producers are defined by 
the Small Business Administration (SBA) (13 CFR 121.201) 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. Currently, about 86 percent of hazelnut handlers could be 
considered small businesses under SBA's definition, excluding receipts 
from other sources. It is estimated that virtually all hazelnut 
producers have annual receipts of less than $500,000, excluding 
receipts from other sources. Thus, the majority of handlers and 
producers of hazelnuts may be classified as small entities.
    This rule would increase the assessment rate established for the 
Board and collected from handlers for the 2000-2001 and subsequent 
marketing years from $0.004 to $0.005 per pound of hazelnuts. The 
Board, in a mail vote completed at the end of April 2000, unanimously 
recommended 2000-2001 expenditures of $596,293 and an assessment rate 
of $0.005 per pound. The proposed assessment rate of $0.005 per pound 
is $0.001 higher than the $0.004 per pound rate currently in effect. 
The quantity of assessable hazelnuts for the 2000-2001 marketing year 
is estimated at 50,000,000 pounds. Income derived from handler 
assessments, along with interest income and funds from the Board's 
authorized reserve, would be adequate to cover budgeted expenses.
    The major expenditures recommended by the Board for the 2000-2001 
marketing year include $39,613 for personal services (salaries and 
benefits), $7,416 for rent, $5,000 for compliance, $23,000 for the crop 
estimate, $275,000 for promotion, and $182,364 for an emergency fund. 
Budgeted expenses for these items in 1999-2000 were $51,385, $7,308, 
$5,000, $21,000, $275,000, and $182,364, respectively. As mentioned 
earlier, the Board would not make any decision on using emergency funds 
until December 2000, at the earliest.
    The Board based its recommended assessment rate increase on the 
2000-2001 crop estimate, the 2000-2001 marketing year expenditures 
estimate, as well as the current and projected balance of the operating 
reserve. Hazelnut shipments for the 2000-2001 marketing year are 
estimated at 50,000,000 pounds, which should provide $250,000 in 
assessment income. Income derived from handler assessments, along with 
interest income ($13,000) and funds from the Board's authorized reserve 
($333,293), would be adequate to cover budgeted expenses. Funds in the 
reserve (currently $483,440) would be kept within the maximum permitted 
by the order (approximately one marketing year's operational expenses). 
Excess funds may be maintained and used by the Board until December 1 
following the end of a marketing year (Sec. 982.62(b)). The Board is 
required to refund or credit, upon request, each handler's share of the 
excess prior to January 1.
    The Board reviewed and unanimously recommended 2000-2001 
expenditures of $596,293. With the 2000-2001 marketing year assessable 
hazelnut crop estimated at 50,000,000 pounds, or 26,000,000 pounds less 
than for 1999-2000, the Board recommended the assessment rate increase 
to prevent its operating reserve from going lower than $150,000. The 
Board believes that a reserve less than this is too low. Prior to 
arriving at this budget, the Board considered information from various 
sources, such as the Proration Committee, the Budget Committee, and the 
Marketing and Promotion Committee. Alternative expenditure levels were 
discussed by these groups,

[[Page 37302]]

based upon the relative value of various research, marketing, and 
promotion projects to the hazelnut industry.
    A review of historical information and preliminary information 
pertaining to the upcoming marketing year indicates that the grower 
price for the 2000-2001 marketing year could range between $0.32 and 
$0.49 per pound of hazelnuts. Therefore, the estimated assessment 
revenue for the 2000-2001 marketing year as a percentage of total 
grower revenue could range between 1.02 and 1.56 percent.
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. Some of the 
additional costs may be passed on to producers. However, these costs 
would be offset by the benefits derived by the operation of the 
marketing order. In addition, interested persons are invited to submit 
information on the regulatory and informational impacts of this action 
on small businesses.
    This proposed rule would impose no 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.
    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 
specialty crop marketing agreements and orders may be viewed at: 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 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because: (1) The 2000-2001 marketing year begins on July 1, 2000, and 
the marketing order requires that the rate of assessment for each 
marketing year apply to all assessable hazelnuts handled during such 
marketing year; (2) the Board needs to have sufficient funds to pay its 
expenses which are incurred on a continuous basis; and (3) handlers are 
aware of this action which was unanimously recommended by the Board in 
a mail vote and is similar to other assessment rate actions issued in 
past years.

List of Subjects in 7 CFR Part 982

    Filberts, Hazelnuts, Marketing agreements, Nuts, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR part 982 is 
proposed to be amended as follows:

PART 982--HAZELNUTS GROWN IN OREGON AND WASHINGTON

    1. The authority citation for 7 CFR part 982 continues to read as 
follows:

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

    2. Section 982.340 is revised to read as follows:


Sec. 982.340  Assessment rate.

    On and after July 1, 2000, an assessment rate of $0.005 per pound 
is established for Oregon and Washington hazelnuts.

    Dated: June 8, 2000.
James R. Frazier,
Acting Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-15014 Filed 6-13-00; 8:45 am]
BILLING CODE 3410-02-P