[Federal Register Volume 65, Number 205 (Monday, October 23, 2000)]
[Proposed Rules]
[Pages 63219-63221]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-27107]


 ========================================================================
 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. 205 / Monday, October 23, 2000 / 
Proposed Rules  

[[Page 63219]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Docket No. FV00-984-2 PR]


Walnuts Grown in California; 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 Walnut Marketing Board (Board) for the 2000-01 and subsequent 
marketing years from $0.0118 to $0.0134 per kernelweight pound of 
assessable walnuts. The $0.0016 increase is necessary because this 
year's estimate of assessable walnuts is about 13 percent less than 
last year's estimate. The Board locally administers the Federal 
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 runs from August 1 through July 31. The 
assessment rate would remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Comments must be received by November 22, 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]. All comments 
should reference the docket number and the date and page number of this 
issue of the Federal Register and will be made 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: Toni Sasselli, Marketing Assistant, or 
Richard P. Van Diest, 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, 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 and Order No. 984 (7 CFR part 984), both as amended, 
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 proposed herein would be applicable to all 
assessable walnuts beginning on August 1, 2000, and continue until 
amended, suspended, or terminated. This rule will not preempt any State 
or local laws, 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 2000-01 and subsequent marketing years from $0.0118 to 
$0.0134 per kernelweight pound of assessable walnuts. The $0.0016 
increase is necessary because this year's estimate of assessable 
walnuts is about 13 percent less than last year's estimate. Thus, 
sufficient income would not be generated at the current assessment rate 
for the Board to meet its anticipated 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 of 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 1999-2000 and subsequent marketing years, the Board 
recommended, and the Department approved, an assessment rate of $0.0118 
per kernelweight pound of assessable walnuts that would continue in 
effect from year to year unless modified, suspended, or terminated by 
the Secretary upon recommendation and information submitted by the 
Board or other information available to the Secretary.

[[Page 63220]]

    The Board met on September 8, 2000, and unanimously recommended 
2000-01 expenditures of $2,937,885 and an assessment rate of $0.0134 
per kernelweight pound of assessable walnuts. In comparison, last 
year's budgeted expenditures were $2,967,356. The recommended 
assessment rate is $0.0016 higher than the $0.0118 rate currently in 
effect. The higher assessment rate is necessary because this year's 
crop is estimated by the California Agricultural Statistics Service 
(CASS) to be 245,000 tons (220,500,000 kernelweight pounds 
merchantable), which is about 13 percent less than last year's 
estimate. Thus, sufficient income would not be generated at the current 
rate for the Board to meet its anticipated expenses.
    Major expenditures recommended by the Board for the 2000-01 year 
include $2,382,455 for marketing and production research projects, 
$305,250 for general expenses such as administrative salaries and 
insurance, $165,380 for office expenses, $59,800 for a production 
research director, and $25,000 as a contingency. Budgeted expenses for 
these items last year were $2,413,038 for marketing and production 
research projects, $289,709 for general expenses, $179,809 for office 
expenses, $59,800 for a production research director, and $25,000 as a 
contingency, respectively.
    The assessment rate recommended by the Board was derived by 
dividing anticipated expenses by expected shipments of California 
walnuts certified as merchantable. Merchantable shipments for the year 
are estimated at 220,500,000 kernelweight pounds which should provide 
$2,954,700 in assessment income and allow the Board to cover its 
expenses. 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 proposed assessment rate would continue in effect 
indefinitely unless modified, suspended, or terminated by the Secretary 
upon recommendation and other 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 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 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 2000-01 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 action 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 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 about 48 handlers subject to regulation under the 
order. Small agricultural producers are 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 having annual receipts of less than $5,000,000.
    Using an average f.o.b. price of $2.10 per kernelweight pound of 
walnuts for the 1999-2000 marketing year, handlers would have had to 
ship more 2,380,953 pounds of walnuts to exceed sales of $5,000,000.
    Approximately 33 percent of the handlers shipped over 2,380,953 
kernelweight pounds of walnuts and 67 percent shipped less than that 
amount during the 1999-2000 marketing year. Based on the foregoing, it 
can be concluded that the majority of California walnut handlers may be 
classified as small entities, excluding receipts from other sources. A 
majority of the California walnut growers also may be classified as 
small entities.
    This rule would increase the assessment rate established for the 
Board and collected from handlers for the 2000-01 and subsequent 
marketing years from $0.0118 to $0.0134 per kernelweight pound of 
assessable walnuts. The Board unanimously recommended 2000-01 expenses 
of $2,937,885. The recommended $0.0016 increase in the assessment rate 
is necessary because this year's estimate of assessable walnuts is 
about 13 percent less than last year's estimate. Thus, sufficient 
income would not be generated at the current rate for the Board to meet 
its anticipated expenses.
    Major expenditures recommended by the Board for the 2000-01 year 
include $2,382,455 for marketing and production research projects, 
$305,250 for general expenses such as administrative salaries and 
insurance, $165,380 for office expenses, $59,800 for a production 
research director, and $25,000 as a contingency. Budgeted expenses for 
these items last year were $2,413,038 for marketing and production 
research projects, $289,709 for general expenses, $179,809 for office 
expenses, $59,800 for a production research director, and $25,000 as a 
contingency, respectively.
    Prior to arriving at this budget, the Board considered information 
from various sources, such as the Board's Budget and Personnel 
Committee, Research Committee, and Marketing Development Committee. 
Alternative expenditure levels were discussed by these groups, based 
upon the relative value of various research projects to the walnut 
industry. The recommended $0.0134 per kernelweight pound assessment 
rate was then determined by dividing the total recommended budget by 
the 220,500,000 kernelweight pound estimate of assessable walnuts for 
the year. This is approximately $16,815 above the anticipated expenses, 
which the Board determined to be acceptable. 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).
    A review of historical information and preliminary information 
pertaining to the current marketing year indicates that the grower 
price for 2000-01 could range between $0.50 and $0.70 per kernelweight 
pound of assessable walnuts. Therefore, the estimated assessment 
revenue for the 2000-01 year as a percentage of total grower revenue 
could range between 2.0 and 2.7 percent.
    Regarding the impact of this action on affected entities, this 
action would increase the assessment rate currently imposed on walnut 
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 order.

[[Page 63221]]

    In addition, the Board's meeting was widely publicized throughout 
the walnut industry and all interested persons were invited to attend 
and participate in Board deliberations on all issues. Like all Board 
meetings, the September 8, 2000, meeting was a public meeting and all 
entities, both large and small, were able to express views on this 
issue. Finally, all interested persons are invited to submit 
information on the regulatory and information impact of this action on 
small businesses.
    This rule would impose 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 sectors agencies. Finally, 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 2000-01 marketing year began on August 1, 2000, and 
the order requires that the rate of assessment for each marketing year 
apply to all merchantable walnuts handled during the 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 at a public meeting and is 
similar to other assessment rate actions issued in past years.

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 followed:

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.

    1. Section 984.347 is revised to read as follows:


Sec. 984.347  Assessment rate.

    On and after August 1, 2000, an assessment rate of $0.0134 per 
kernelweight pound is established for California merchantable walnuts.

    Dated: October 17, 2000.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 00-27107 Filed 10-20-00; 8:45 am]
BILLING CODE 3410-02-P