[Federal Register Volume 65, Number 149 (Wednesday, August 2, 2000)]
[Rules and Regulations]
[Pages 47245-47247]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19566]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 982

[Docket No. FV00-982-2 FR]


Hazelnuts Grown in Oregon and Washington; Increased Assessment 
Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule increases 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 
began July 1 and ends June 30. The assessment rate will remain in 
effect indefinitely unless modified, suspended, or terminated.

EFFECTIVE DATE: August 3, 2000.

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 final 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 order is 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 final 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 issued herein will be applicable to all assessable hazelnuts 
beginning on July 1, 2000, 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 increases 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

[[Page 47246]]

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 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 previously in effect. At a rate 
of $0.004 per pound and an estimated 2000-2001 hazelnut production of 
50,000,000 pounds, the Board believes that the projected reserve on 
June 30, 2001, would not have been 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 will 
consider using emergency funds for authorized activities when it is 
reasonably certain that its estimate of assessable hazelnuts is 
reached. It will 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, and 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), will be adequate to cover budgeted expenses. Funds in the 
reserve will 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 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 will be in effect for an indefinite 
period, the Board will 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 will 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 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 2000-
2001 budget has been reviewed and approved. Budgets for subsequent 
marketing years will also 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 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 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 of 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. Further, 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 increases 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 assessment rate of $0.005 per pound is $0.001 higher than 
the $0.004 per pound rate previously 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, will 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 will 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, and the current and projected balance of the operating 
reserve. Hazelnut shipments for the 2000-2001 marketing year are 
estimated at 50,000,000

[[Page 47247]]

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), will be 
adequate to cover budgeted expenses. Funds in the reserve will 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, including the Proration Committee, the Budget Committee, and 
the Marketing and Promotion Committee. Alternative expenditure levels 
were discussed by these groups, 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 producer 
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 
producer revenue could range between 1.02 and 1.56 percent.
    This action increases 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 
are offset by the benefits derived by the operation of the marketing 
order. In addition, interested persons were invited to submit 
information on the regulatory and informational impacts of this action 
on small businesses.
    This rule imposes 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 proposed rule concerning this action was published in the Federal 
Register on June 14, 2000 (65 FR 37300). Copies of the proposed rule 
were also mailed or sent via facsimile to Board members. Finally, the 
proposal was made available through the Internet by the Office of the 
Federal Register. A 30-day comment period ending July 14, 2000, was 
provided for interested persons to respond to the proposal. No comments 
were received.
    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.
    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 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 
2000-2001 marketing year began 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 
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: July 28, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-19566 Filed 8-1-00; 8:45 am]
BILLING CODE 3410-02-U