[Federal Register Volume 67, Number 123 (Wednesday, June 26, 2002)]
[Proposed Rules]
[Pages 43045-43056]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-15917]


 ========================================================================
 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. 67, No. 123 / Wednesday, June 26, 2002 / 
Proposed Rules  

[[Page 43045]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Docket No. AO-F&V-983-2 FV02-983-01]


Pistachios Grown in California; Hearing on Proposed Marketing 
Agreement and Order No. 983

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Notice of public hearing on proposed marketing agreement and 
order.

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SUMMARY: Notice is hereby given of a public hearing to consider a 
proposed marketing agreement and order under the Agricultural Marketing 
Agreement Act of 1937 to cover pistachios grown in California. The 
proposal was submitted on behalf of the California pistachio industry 
by the Proponents Committee for a Federal Marketing Order for 
Pistachios. The proposed order would set standards for the quality of 
pistachios produced and handled in California by establishing a maximum 
aflatoxin tolerance level, maximum limits for defects, a minimum size 
requirement, and mandatory inspection and certification. The program 
would be financed by assessments on pistachio handlers and would be 
administered by a committee of growers and handlers nominated by the 
industry and appointed by the Department of Agriculture (USDA).

DATES: The hearing will be held in Fresno, California, from July 23 to 
July 25, 2002. The hearing session on Tuesday, July 23, will begin at 
8:00 a.m. and end at 5:00 p.m. The hearing session on Wednesday, July 
25, will begin at 8:00 a.m. and end at 4:00 p.m. If an additional 
hearing session is necessary, the hearing will continue at 8:00 a.m. on 
Thursday, July 25, 2002.

ADDRESSES: The hearing location is: The Fresno Metropolitan Flood 
Control District, Board of Directors' Chambers, 5469 East Olive Street, 
Fresno, California, 93727.

FOR FURTHER INFORMATION CONTACT: Melissa Schmaedick, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, Agricultural 
Marketing Service (AMS), USDA, Post Office Box 1035, Moab, UT 84532, 
telephone: (435) 259-7988, fax: (435) 259-4945; or Anne M. Dec, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue SW, Stop 0237, Washington, DC 
20250-0237; telephone: (202) 720-2491, fax: (202) 720-8938. Small 
businesses may request information on this proceeding by contacting Jay 
Guerber, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, 1400 Independence Avenue SW, Stop 0237, 
Washington, DC 20250-0237; telephone: (202) 720-2491, fax: (202) 720-
8938.

SUPPLEMENTARY INFORMATION: This administrative action is instituted 
pursuant to the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.'' 
This action is governed by the provisions of sections 556 and 557 of 
title 5 of the United States Code and, therefore, is excluded from the 
requirements of Executive Order 12866.
    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) seeks to 
ensure that within the statutory authority of a program, the regulatory 
and informational requirements are tailored to the size and nature of 
small businesses. Interested persons are invited to present evidence at 
the hearing on the possible regulatory and informational impacts of the 
proposal on small businesses.
    The marketing agreement and order proposed herein have been 
reviewed under Executive Order 12988, Civil Justice Reform. They are 
not intended to have retroactive effect. If issued, the proposed 
amendments 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. A handler is afforded the opportunity for a hearing 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.
    The hearing is called pursuant to the provisions of the Act and the 
applicable rules of practice and procedure governing the formulation of 
marketing agreements and orders (7 CFR part 900).
    This proposal is the result of nearly three years of efforts 
undertaken by the Proponents Committee (committee), a committee 
representing producers and handlers of pistachios in California. The 
committee was established in 2000 as a result of renewed industry 
interest in a Federal marketing order. An earlier attempt to establish 
a Federal marketing order in 1996 on behalf of the pistachio industry 
by the California Pistachio Commission (Commission) and the Western 
Pistachio Association (Association) was terminated in 2000 due to lack 
of industry support for certain proposed provisions. The current 
proposal is different from that which was previously proposed since 
many controversial issues have either been removed or resolved through 
more exacting specification in the proposed regulations. The Proponents 
Committee is independent of the Commission and the Association.
    The proponent group contends that the proposed marketing order 
program would ensure consistency in the quality of California 
pistachios, thereby increasing consumer demand and confidence in the 
product, and enhancing producer returns.
    Presently, industry quality control practices are limited to 
voluntary testing for aflatoxin and other quality requirements under a 
California Pistachio Marketing Agreement (agreement) entered into by a 
number of pistachio handlers under authority of the California 
Department of Food and Agriculture. The agreement is limited to issues 
relating to the blending of artificially opened pistachios with those 
naturally opened, and the bleaching of pistachios. Aflatoxin testing 
and

[[Page 43046]]

sampling guidelines are only for exports to specified countries.
    The proposal for an order has been widely discussed within the 
California pistachio industry for at least 10 years, including 
discussions related to the 1996 proposal. None of the recommendations 
or proposals discussed herein have received approval by the Secretary 
of Agriculture.
    Testimony is invited at the hearing on the proposed marketing 
agreement and order (hereinafter referred to as the order) and all of 
its provisions, as well as any appropriate modifications or 
alternatives.
    The public hearing is held for the purpose of:
    (a) Receiving evidence about the economic and marketing conditions 
that relate to the proposed order and to appropriate modifications 
thereof;
    (b) Determining whether the handling of pistachios produced in the 
production area is in the current of interstate commerce or directly 
burdens, obstructs, or affects interstate commerce and foreign 
commerce;
    (c) Determining whether there is a need for a marketing agreement 
and order for pistachios;
    (d) Determining the economic impact of the proposed order on the 
industry in the proposed production area and on the public affected by 
such program; and
    (e) Determining whether the proposed order or any appropriate 
modification thereof would tend to effectuate the declared policy of 
the Act.
    All persons wishing to submit written material as evidence at the 
hearing should be prepared to submit four copies of such material at 
the hearing and should have prepared testimony available for 
presentation at the hearing.
    From the time the notice of hearing is issued and until the 
issuance of a final decision in this proceeding, USDA employees 
involved in the decisional process are prohibited from discussing the 
merits of the hearing issues on an ex-parte basis with any person 
having an interest in the proceeding. The prohibition applies to 
employees in the following organizational units: Office of the 
Secretary of Agriculture; Office of the Administrator, AMS; Office of 
the General Counsel; and the Fruit and Vegetable Programs, AMS.
    Procedural matters are not subject to the above prohibition and may 
be discussed at any time.
    Provisions of the proposed marketing agreement and order follow. 
Those sections identified with an asterisk (*) apply only to the 
proposed marketing agreement.

List of Subjects in Proposed 7 CFR Part 983

    Marketing agreements, Pistachios, Reporting and recordkeeping 
requirements.

    The marketing agreement and order proposed by the Proponents 
Committee for a Federal Marketing Order for Pistachios Grown in 
California would add a new part 983 to read as follows:

PART 983--PISTACHIOS GROWN IN CALIFORNIA

Subpart--Order Regulating Handling

Definitions

Sec.
983.1   Accredited laboratory.
983.2   Act.
983.3   Affiliation.
983.4   Aflatoxin.
983.5   Aflatoxin inspection certificate.
983.6   Assessed weight.
983.7   Certified pistachios.
983.8   Committee.
983.9   Confidential data or information.
983.10   Department or USDA.
983.11   Districts.
983.12   Domestic shipments.
983.13   Edible pistachios.
983.14   Handle.
983.15   Handler.
983.16   Inshell pistachios.
983.17   Inspector.
983.18   Lot.
983.19   Minimum quality requirements.
983.20   Minimum quality certificate.
983.21   Part and subpart.
983.22   Person.
983.23   Pistachios.
983.24   Processing.
983.25   Producer.
983.26   Production area.
983.27   Production year.
983.28   Proprietary capacity.
983.29   Secretary.
983.30   Shelled pistachios.
983.31   Substandard pistachios.

Administrative Committee

983.32   Establishment and membership.
983.33   Initial members and nomination of successor members.
983.34   Procedure.
983.35   Powers.
983.36   Duties.

Marketing Policy

983.37   Marketing policy.

Regulation

983.38   Aflatoxin levels.
983.39   Minimum quality levels.
983.40   Failed lots/rework procedure.
983.41   Testing of minimal quantities.
983.42   Commingling.
983.43   Reinspection.
983.44   Inspection, certification and identification.
983.45   Substandard pistachios.
983.46   Modification or suspension of regulations.

Reports, Books and Records

983.47   Reports.
983.48   Confidential information.
983.49   Records.
983.50   Verification of reports.
983.51   Random verification audits.

Expenses and Assessments

983.52   Expenses.
983.53   Assessments.
983.54   Contributions.
983.55   Delinquent assessments.
983.56   Accounting.

Miscellaneous Provisions

983.57   Compliance.
983.58   Rights of the Secretary.
983.59   Personal liability.
983.60   Separability.
983.61   Derogation.
983.62   Duration of immunities.
983.63   Agents.
983.64   Effective time.
983.65   Suspension or termination.
983.66   Referendum.
983.67   Procedure upon termination.
983.68   Effect of termination or amendment.
983.69   Non-commercial exemption.
983.70   Relationship with the California Pistachio Commission.
*983.90   Counterparts.
*983.91   Additional parties.
*983.92   Order with marketing agreement.

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

Definitions


Sec. 983.1  Accredited laboratory.

    An accredited laboratory is a laboratory that has been approved or 
accredited by the U.S. Department of Agriculture for testing aflatoxin.


Sec. 983.2  Act.

    Act means Public Act No. 10, 73rd Congress (May 12, 1933), as 
amended and as re-enacted and amended by the Agricultural Marketing 
Order Act of 1937, as amended (48 Stat. 31, as amended; 7 U.S.C. 601 et 
seq.).


Sec. 983.3  Affiliation.

    Affiliation. This term normally appears as ``affiliate of'', or 
``affiliated with'', and means a person such as a producer or handler 
who is: a producer or handler that directly, or indirectly through one 
or more intermediaries, owns or controls, or is controlled by, or is 
under common control with the producer or handler specified; or a 
producer or handler that directly, or indirectly through one or more 
intermediaries, is connected in a proprietary capacity, or shares the 
ownership or control of the specified producer or handler with one or 
more other producers or handlers. As used in this part, the term 
``control'' (including the terms ``controlling'', ``controlled by'', 
and ``under the common control with'') means the possession, direct or 
indirect, of the power to direct or cause

[[Page 43047]]

the direction of the management and policies of a handler or a 
producer, whether through voting securities, membership in a 
cooperative, by contract or otherwise.


Sec. 983.4  Aflatoxin.

    Aflatoxins are a group of mycotoxins produced by the molds 
Aspergillus flavus and Aspergillus parasiticus. Aflatoxins are 
naturally occurring compounds produced by molds, which can be spread in 
improperly processed and stored nuts, dried fruits and grains.


Sec. 983.5  Aflatoxin inspection certificate.

    Aflatoxin inspection certificate is a certificate issued by an 
accredited laboratory or by a USDA laboratory.


Sec. 983.6  Assessed weight.

    Assessed weight means pounds of edible inshell pistachios received 
for processing by a handler within each production year with the weight 
computed at 5 percent moisture: Provided, That for loose kernels, the 
actual weight shall be multiplied by two to obtain an inshell weight; 
or based on such other elements as may be recommended by the committee 
and approved by the Secretary.


Sec. 983.7  Certified pistachios.

    Certified pistachios are those for which aflatoxin inspection and 
minimum quality certificates have been issued.


Sec. 983.8  Committee.

    Committee means the administrative committee for pistachios 
established pursuant to Sec. 983.32.


Sec. 983.9  Confidential data or information.

    Confidential data or information submitted to the committee 
consists of data or information constituting a trade secret or 
disclosure of the trade position, financial condition, or business 
operations of a particular entity or its customers.


Sec. 983.10  Department or USDA.

    Department or USDA means the United States Department of 
Agriculture.


Sec. 983.11  Districts.

    (a) Districts shall consist of the following:
    (1) District 1 consists of Tulare, Kern, San Bernardino, San Luis 
Obispo, Santa Barbara, Ventura, Los Angeles, Orange, Riverside, San 
Diego, and Imperial Counties of California.
    (2) District 2 consists of Kings, Fresno, Madera, and Merced 
Counties of California.
    (3) District 3 consists of all counties in California where 
pistachios are produced that are not included in Districts 1 and 2.
    (b) With the approval of the Secretary, the boundaries of any 
district may be changed by a two-thirds vote of the committee, to 
ensure proper representation. The boundaries need not coincide with 
county lines. In addition, the boundaries in the production area may be 
adjusted to conform to changes to the boundaries of the districts 
established for those of the California Pistachio Commission upon the 
recommendation of the committee and approval of the Secretary.


Sec. 983.12  Domestic shipments.

    Domestic shipments means shipments to the fifty states of the 
United States or to territories of the United States.


Sec. 983.13  Edible pistachios.

    Edible pistachios are those which do not exceed the level of 
defects under Sec. 983.38 and Sec. 983.39.


Sec. 983.14  Handle.

    Handle means to engage in:
    (a) Receiving pistachios;
    (b) Hulling and drying pistachios; and/or
    (c) Further preparing pistachios by sorting, sizing, shelling, 
roasting, cleaning, salting, and/or packaging for marketing in or 
transporting to any and all markets in the current of interstate or 
foreign commerce: Provided, however, That transportation within the 
production area between handlers and from the orchard to the processing 
facility is not handling.


Sec. 983.15  Handler.

    Handler means any person who handles pistachios.


Sec. 983.16  Inshell pistachios.

    Inshell pistachios means pistachios that have a shell that has not 
been removed.


Sec. 983.17  Inspector.

    Inspector means any inspector authorized by the USDA to inspect 
pistachios.


Sec. 983.18  Lot.

    Lot means any quantity of pistachios that is submitted for testing 
purposes under this part.


Sec. 983.19  Minimum quality requirements.

    Minimum quality requirements are permissible maximum defects and 
minimum size levels for inshell pistachios and kernels specified in 
Sec. 983.39.


Sec. 983.20  Minimum quality certificate.

    Minimum quality certificate is a certificate issued by the USDA or 
Federal/State Inspection Service.


Sec. 983.21  Part and subpart.

    Part means the order regulating the handling of pistachios grown in 
the State of California, and all rules, regulations and supplementary 
orders issued thereunder. The aforesaid order regulating the handling 
of pistachios grown in California shall be a subpart of such part.


Sec. 983.22  Person.

    Person means an individual, partnership, limited liability 
corporation, corporation, trust, association, or any other business 
unit.


Sec. 983.23  Pistachios.

    Pistachios means the nuts of the pistachio tree of the genus 
Pistacia vera grown in the production area whether inshell or shelled.


Sec. 983.24  Processing.

    Processing means hulling and drying pistachios in preparation for 
market.


Sec. 983.25  Producer.

    Producer means any person engaged within the production area in a 
proprietary capacity in the production of pistachios for sale.


Sec. 983.26  Production area.

    Production area means the State of California.


Sec. 983.27  Production year.

    Production year is synonymous with ``fiscal period'' and means the 
period beginning on September 1 and ending on August 31 of each year or 
such other period as may be recommended by the committee and approved 
by the Secretary.


Sec. 983.28  Proprietary capacity.

    Proprietary capacity means the capacity or interest of a producer 
or handler that, either directly or through one or more intermediaries, 
is a property owner together with all the appurtenant rights of an 
owner including the right to vote the interest in that capacity as an 
individual, a shareholder, member of a cooperative, partner, trustee or 
in any other capacity with respect to any other business unit.


Sec. 983.29  Secretary.

    Secretary means the Secretary of Agriculture of the United States 
or any officer or employee of the United States Department of 
Agriculture who is, or who may hereafter be, authorized to act in his/
her stead.

[[Page 43048]]

Sec. 983.30  Shelled pistachios.

    Shelled pistachios means pistachio kernels, or portions of kernels, 
after the pistachio shells have been removed.


Sec. 983.31  Substandard pistachios.

    Substandard pistachios means pistachios, inshell or shelled, which 
do not comply with the maximum aflatoxin and/or minimum quality 
regulations of this part.

Administrative Committee


Sec. 983.32  Establishment and membership.

    There is hereby established an administrative committee for 
pistachios to administer the terms and provisions of this part. This 
committee, consisting of eleven (11) member positions, each of whom 
shall have an alternate, shall be allocated as follows:
    (a) Handlers. Two of the members shall represent handlers, as 
follows:
    (1) One handler member nominated by one vote for each handler; and
    (2) One handler member nominated by voting based on each handler 
casting one vote for each ton of the assessed weight of pistachios 
processed by such handler during the two production years preceding the 
production year in which the nominations are made.
    (b) Producers. Eight members shall represent producers. Producers 
within the respective districts shall nominate four producers from 
District 1, three producers from District 2 and one producer from 
District 3.
    (c) Public member. One member shall be a public member who is 
neither a producer nor a handler and shall have all the powers, rights 
and privileges of any other member of the committee. The public member 
and alternate public member shall be nominated by the committee and 
selected by the Secretary.


Sec. 983.33  Initial members and nomination of successor members.

    Nomination of committee members and alternates shall follow the 
procedure set forth in this section or as may be changed as recommended 
by the committee and approved by the Secretary.
    (a) Initial members. Nominations for initial members shall be 
conducted by the Secretary by either holding meetings of handlers and 
producers, or by mail.
    (b) Successor producer members. Subsequent to the first nomination 
of committee members under this part, persons to be nominated to serve 
on the committee as producer members shall be selected pursuant to 
nomination procedures that shall be established by the committee with 
the approval of the Secretary: Provided, That any qualified individuals 
who seek nomination shall submit to the committee an intent to seek 
office in one designated district on such form and with such 
information as the committee shall designate; ballots, accompanied by 
the names of all such candidates, with spaces to indicate voters' 
choices and spaces for write-in candidates, together with voting 
instructions, shall be mailed to all producers who are on record with 
the committee within the respective districts; the person receiving the 
highest number of votes shall be the member nominee for that district, 
and the person receiving the second highest number of votes shall be 
the alternate member nominee. In case of a tie vote, the nominee shall 
be selected by a drawing.
    (c) Handlers. Only handlers, including duly authorized officers or 
employees of handlers, may participate in the nomination of the two 
handler member nominees and their alternates. Nomination of the two 
handler members and their alternates shall be as follows:
    (1) For one handler member nomination, each handler entity shall be 
entitled to one vote;
    (2) For the second handler member nomination, each handler entity 
shall be entitled to cast one vote respectively for each ton of 
assessed weight of pistachios processed by that handler during the two 
production years preceding the production year in which the nominations 
are made. For the purposes of nominating handler members and alternates 
by volume, the assessed weight of pistachios shall be credited to the 
handler responsible under the order for the payment of assessments of 
those pistachios. The committee with the approval of the Secretary, may 
revise the handler representation on the committee if the committee 
ceases to be representative of the industry.
    (d) Producers. Only producers, including duly authorized officers 
or employees of producers, may participate in the nomination of 
nominees for producer members and their alternates. Each producer shall 
be entitled to cast only one vote, whether directly or through an 
authorized officer or employee, for each position to be filled in the 
district in which the producer produces pistachios. If a producer is 
engaged in producing pistachios in more than one district, such 
producer shall select the district in which to participate in the 
nomination. If a person is both a producer and a handler of pistachios, 
such person may participate in both producer and handler nominations, 
provided, however, that a single member may not hold concurrent seats 
as both a producer and handler.
    (e) Member's affiliation. Not more than two members and not more 
than two alternate members shall be persons employed by or affiliated 
with producers or handlers that are affiliated with the same handler 
and/or producer. Additionally, only one member and one alternate in any 
one district representing producers and only one member and one 
alternate representing handlers shall be employed by, or affiliated 
with the same handler and/or producer. No handler, and all of its 
affiliated handlers, can be represented by more than one handler 
member.
    (f) Cooperative affiliation. In the case of a producer cooperative, 
a producer shall not be deemed to be connected in a proprietary 
capacity with the cooperative notwithstanding any outstanding retains, 
contributions or financial indebtedness owed by the cooperative to a 
producer if the producer has not marketed pistachios through the 
cooperative during the current and one preceding production year. A 
cooperative that has as its members one or more other cooperatives that 
are handlers shall not be considered as a handler for the purpose of 
nominating or voting under this part.
    (g) Alternate members. Each member of the committee shall have an 
alternate member to be nominated in the same manner as the member. Any 
alternate serving in the same district as a member where both are 
employed by, or connected in a proprietary capacity with the same 
corporation, firm, partnership, association, or business organization, 
shall serve as the alternate to that member. An alternate member, in 
the absence of the member for whom that alternate is selected shall 
serve in place of that member on the committee, and shall have and be 
able to exercise all the rights, privileges, and powers of the member 
when serving on the committee. In the event of death, removal, 
resignation, or the disqualification of a member, the alternate shall 
act as a member on the committee until a successor member is selected 
and has been qualified.
    (h) Selection by Secretary. Nominations under paragraph (g) of this 
section received by the committee for all handler and producer members 
and alternate member positions shall be certified and sent to the 
Secretary at least 60 days prior to the beginning of each two-year term 
of office, together with all necessary data and other information 
deemed by the committee to be pertinent or requested by the Secretary. 
From those nominations, the Secretary shall select the ten members

[[Page 43049]]

of the committee and an alternate for each member.
    (i) Acceptance. Each person to be selected by the Secretary as a 
member or as an alternate member of the committee shall, prior to such 
selection, qualify by advising the Secretary that if selected, such 
person agrees to serve in the position for which that nomination has 
been made.
    (j) Failure to nominate. If nominations are not made within the 
time and manner specified in this part, the Secretary may, without 
regard to nominations, select the committee members and alternates 
qualified to serve on the basis of the representation provided for in 
Sec. 983.32.
    (k) Term of office. Selected producer members and producer 
alternate members of the committee shall serve for terms of two years: 
Provided that four of the initially selected producer members and one 
handler member and their alternates shall, by a drawing, be seated for 
terms of one year so that approximately half of the memberships' terms 
expire each year. Each member and alternate member shall continue to 
serve until a successor is selected and has qualified. The term of 
office shall begin on July 1st of each year. Committee members and 
alternates may serve up to four consecutive, two-year terms of office. 
In no event shall any member or alternate serve more than eight 
consecutive years on the Commission. For purposes of determining when a 
member or alternate has served four consecutive terms, the accrual of 
terms shall begin following any period of at least twelve consecutive 
months out of office.
    (l) Qualifications. (1) Each producer member and alternate shall 
be, at the time of selection and during the term of office, a producer 
or an officer, or employee, of a producer in the district for which 
nominated.
    (2) Each handler member and alternate shall be, at the time of 
selection and during the term of office, a handler or an officer, 
employee, or agent of a handler.
    (3) Any member or alternate member who at the time of selection was 
employed by or an agent of a person or affiliated with the person who 
is nominated, that member shall, upon termination of that relationship, 
become disqualified to serve further as a member and that position 
shall be deemed vacant.
    (4) No person nominated to serve as a public member or alternate 
public member shall have a financial interest in any pistachio growing 
or handling operation.
    (5) The committee, with the approval of the Secretary, may issue 
rules and regulations covering the qualifications for members or 
alternate members.
    (m) Vacancy. Any vacancy on the committee occurring by the failure 
of any person selected to the committee as a member or alternate member 
due to a change in status making the member ineligible to serve, or due 
to death, removal, or resignation, shall be filled, by a majority vote 
of the committee for the unexpired portion of the term. However, that 
person shall fulfill all the qualifications set forth in this part as 
required for the member whose office that person is to fill. The 
qualifications of any person to fill a vacancy on the committee shall 
be certified in writing to the Secretary. The Secretary shall notify 
the committee if the Secretary determines that any such person is not 
qualified.


Sec. 983.34  Procedure.

    (a) Quorum. A quorum of the committee shall be any seven voting 
committee members. The vote of a majority of members present at a 
meeting at which there is quorum shall constitute the act of the 
committee: Provided, That actions of the committee with respect to the 
following issues shall require at least seven concurring votes of the 
voting members regarding any recommendation to the Secretary for 
adoption or change in:
    (1) Minimum quality levels;
    (2) Aflatoxin levels;
    (3) Inspection programs;
    (4) The establishment of the committee.
    (b) Voting. Members of the committee may participate in a meeting 
by attendance in person or through the use of a conference telephone or 
similar communication equipment, as long as all members participating 
in such a meeting can communicate with one another. An action required 
or permitted to be taken by the committee may be taken without a 
meeting, if all members of the committee shall consent in writing to 
that action.
    (c) Compensation. The members of the committee and their alternates 
shall serve without compensation, but members and alternates acting as 
members shall be allowed their necessary expenses: Provided, That the 
committee may request the attendance of one or more alternates not 
acting as members at any meeting of the committee, and such alternates 
may be allowed their necessary expenses; and, Provided further, That 
the public member and the alternate for the public member may be paid 
reasonable compensation in addition to necessary expenses.


Sec. 983.35  Powers.

    The committee shall have the following powers:
    (a) To administer the provisions of this part in accordance with 
its terms;
    (b) To make and adopt bylaws, rules and regulations to effectuate 
the terms and provisions of this part with the approval of the 
Secretary;
    (c) To receive, investigate, and report to the Secretary complaints 
of violations of this part; and
    (d) To recommend to the Secretary amendments to this part.


Sec. 983.36  Duties.

    The committee shall have, among others, the following duties:
    (a) To adopt bylaws and rules for the conduct of its meetings and 
the selection of such officers from among its membership, including a 
chairperson and vice-chairperson, as may be necessary, and define the 
duties of such officers; and adopt such other bylaws, regulations and 
rules as may be necessary to accomplish the purposes of the Act and the 
efficient administration of this part;
    (b) To employ or contract with such persons or agents as the 
committee deems necessary and to determine the duties and compensation 
of such persons or agents;
    (c) To select such subcommittees as may be necessary;
    (d) To submit to the Secretary a budget for each fiscal period, 
prior to the beginning of such period, including a report explaining 
the items appearing therein and a recommendation as to the rates of 
assessments for such period;
    (e) To keep minutes, books, and records which will reflect all of 
the acts and transactions of the committee and which shall be subject 
to examination by the Secretary;
    (f) To prepare periodic statements of the financial operations of 
the committee and to make copies of each statement available to 
producers and handlers for examination at the office of the committee;
    (g) To cause its financial statements to be audited by a certified 
public accountant at least once each fiscal year and at such times as 
the Secretary may request. Such audit shall include an examination of 
the receipt of assessments and the disbursement of all funds. The 
committee shall provide the Secretary with a copy of all audits and 
shall make copies of such audits, after the removal of any confidential 
individual or handler information that may be contained in them, 
available for

[[Page 43050]]

examination at the offices of the committee;
    (h) To act as intermediary between the Secretary and any producer 
or handler with respect to the operations of this part;
    (i) To investigate and assemble data on the growing, handling, 
shipping and marketing conditions with respect to pistachios;
    (j) To apprize the Secretary of all committee meetings in a timely 
manner;
    (k) To submit to the Secretary such available information as the 
Secretary may request;
    (l) To investigate compliance with the provisions of this part;
    (m) To provide, through communication to producers and handlers, 
information regarding the activities of the committee and to respond to 
industry inquiries about committee activities;
    (n) To oversee the collection of assessments levied under this 
part;
    (o) To borrow such funds, subject to the approval of the Secretary 
and not to exceed the expected expenses of one fiscal year, as are 
necessary for administering its responsibilities and obligations under 
this part.

Marketing Policy


Sec. 983.37  Marketing policy.

    Prior to August 1st each year, the committee shall prepare and 
submit to the Secretary a report setting forth its recommended 
marketing policy covering quality regulations for the pending crop. In 
the event it becomes advisable to modify such policy, because of 
changed crop conditions, the committee shall formulate a new policy and 
shall submit a report thereon to the Secretary. In developing the 
marketing policy, the committee shall give consideration to the 
production, harvesting, processing and storage conditions of that crop. 
The committee may also give consideration to current prices being 
received and the probable general level of prices to be received for 
pistachios by producers and handlers. Notice of the committee's 
marketing policy, and of any modifications thereof, shall be given 
promptly by reasonable publicity, to producers and handlers.

Regulations


Sec. 983.38  Aflatoxin levels.

    (a) Maximum level. No handler shall ship for domestic human 
consumption, pistachios that exceed an aflatoxin level of more than 
15.0 ppb. All shipments must also be covered by an aflatoxin inspection 
certificate. Pistachios that fail to meet the aflatoxin requirements 
shall be disposed in such manner as described in Failed lots/rework 
procedure of this part.
    (b) Change in level. The committee may recommend to the Secretary 
changes in the aflatoxin level specified in this section. If the 
Secretary finds on the basis of such recommendation or other 
information that such an adjustment of the aflatoxin level would tend 
to effectuate the declared policy of the Act, such change shall be made 
accordingly.
    (c) Transfers between handlers. Transfers between handlers within 
the production area are exempt from the aflatoxin regulation of this 
section.
    (d) Aflatoxin testing procedures. To obtain an aflatoxin inspection 
certificate, each lot to be certified shall be uniquely identified, be 
traceable from testing through shipment by the handler and be subjected 
to the following:
    (1) Samples for testing. Prior to testing, a sample shall be drawn 
from each lot and divided between those pistachios for aflatoxin 
testing and those for minimum quality testing (``lot samples'') in 
sufficient weight to comply with Table 1, Table 2 and Table 4 of this 
part.
    (2) Test samples for aflatoxin. Prior to submission of samples to 
an accredited laboratory for aflatoxin analysis, three samples shall be 
created equally from the pistachios designated for aflatoxin testing in 
compliance with the requirements of the following Tables 1 and 2 
(``test samples''). The test samples shall be prepared by, or under the 
supervision of, an inspector, or as approved under an alternative USDA-
recognized inspection program. The test samples shall be designated by 
an inspector as Test Sample 1, Test Sample 2, and 
Test Sample 3. Each sample shall be placed in a suitable 
container, with the lot number clearly identified, and then submitted 
to an accredited laboratory. The gross weight of the inshell lot sample 
for aflatoxin testing and the number of samplings required are shown in 
the following Table 1. The gross weight of the kernel lot sample for 
aflatoxin testing and the number of incremental samples required is 
shown in the following Table 2.

                 Table 1.--Inshell Pistachio Lot Sampling Increments for Aflatoxin Certification
----------------------------------------------------------------------------------------------------------------
                                                                Number of
                                                               incremental     Total weight of   Weight of test
                    Lot weight  (lbs.)                       samples for the     lot sample          sample
                                                               lot sample        (kilograms)       (kilograms)
----------------------------------------------------------------------------------------------------------------
220 or less...............................................                10               3.0               1.0
221-440...................................................                15               4.5               1.5
441-1100..................................................                20               6.0               2.0
1101-2200.................................................                30               9.0               3.0
2201-4400.................................................                40              12.0               4.0
4401-11,000...............................................                60              18.0               6.0
11,001-22,000.............................................                80              24.0               8.0
22,001-150,000............................................               100              30.0              10.0
----------------------------------------------------------------------------------------------------------------


             Table 2.--Shelled Pistachio Kernel Lot Sampling Increments for Aflatoxin Certification
----------------------------------------------------------------------------------------------------------------
                                                                Number of
                                                               incremental     Total weight of   Weight of test
                    Lot weight  (lbs.)                       samples for the     lot sample          sample
                                                               lot sample        (kilograms)       (kilograms)
----------------------------------------------------------------------------------------------------------------
220 or less...............................................                10               1.5                .5
221-440...................................................                15               2.3               .75
441-1100..................................................                20               3.0               1.0
1101-2200.................................................                30               4.5               1.5
2201-4400.................................................                40               6.0               2.0
4401-11,000...............................................                60               9.0               3.0
11,001-22,000.............................................                80              12.0               4.0

[[Page 43051]]

 
22,001-150,000............................................               100              15.0               5.0
----------------------------------------------------------------------------------------------------------------

    (3) Testing of pistachios. Test samples shall be received and 
logged by an accredited laboratory and each test sample shall be 
analyzed and prepared as described in the applicable provisions of the 
official methods of analysis of the Association of Analytical 
Communities (AOAC). A portion of the ground composite shall be analyzed 
chemically for total aflatoxin using High Pressure Liquid Chromatograph 
(HPLC), Vicam method (Aflatest) or other methods as described in the 
applicable provisions of Official Methods of Analysis of the AOAC. The 
aflatoxin level shall be calculated on a kernel weight basis. For 
inshell tests where shell and kernels are ground together, it shall be 
assumed the shell accounts for 50% of the lot weight so aflatoxin 
results shall be doubled.
    (4) Certification of lots ``negative'' as to aflatoxin. Lots shall 
be certified as ``negative'' on the aflatoxin inspection certificate, 
if Test Sample 1 has an aflatoxin level at or below 5.0 ppb. 
If the aflatoxin level of Test Sample 1 is above 5.0 ppb, the 
accredited laboratory shall analyze Test Sample 2 and results 
of Test Samples 1 and 2 shall be averaged. A lot will be certified as 
negative as to aflatoxin and the laboratory shall issue an aflatoxin 
inspection certificate if the averaged results are at or below 10.0 
ppb. If the averaged results are above 10.0 ppb, Test Sample 3 
shall be analyzed and all three test sample results shall be averaged. 
If all three results average 15.0 ppb or less the lot will be certified 
as negative as to aflatoxin and the laboratory shall issue an aflatoxin 
inspection certificate. If any sample analyzed results in an aflatoxin 
level over 15.0 ppb, the lot shall fail regardless of which test sample 
number it may be. If the lot fails, the accredited laboratory shall 
fill out a failed lot notification report as specified in Sec. 983.40. 
The accredited laboratory shall send a copy of this report to the 
committee and to the failed lot's owner within 10 working days of 
failure. The aflatoxin inspection certificate shall certify each lot 
using a certification form identifying each lot by weight and date. 
This certification expires for the lot or remainder of the lot after 12 
months.
    (5) Certification of aflatoxin levels. Each accredited laboratory 
shall complete aflatoxin testing and reporting and shall certify that 
every lot of California pistachios shipped domestically does not exceed 
the aflatoxin levels as required in Sec. 983.38(d)(4). Each handler 
shall keep a record of each test, along with a record of final shipping 
disposition. These records must be maintained for three years, and are 
subject to audit by the Secretary or the committee at any time.
    (6) Test samples that are not used for analysis. If a handler does 
not elect to use Test Samples 2 or 3 for 
certification purposes the handler may request the laboratory to return 
them to the handler.


Sec. 983.39  Minimum quality levels.

    (a) Maximum defect and minimum size. No handler shall ship for 
domestic human consumption, pistachios that exceed permissible maximum 
defect and minimum size levels shown in the following Table 3:

            Table 3.--Maximum Defect and Minimum Size Levels
------------------------------------------------------------------------
                                                     Maximum permissible
                                                    defects  (percent by
                      Factor                               weight)
                                                   ---------------------
                                                     Inshell    Kernels
------------------------------------------------------------------------
                        EXTERNAL (SHELL) DEFECTS
 
a. Non-splits & not split on suture...............       10.0  .........
    (1) Maximum non-splits allowed................        4.0  .........
b. Adhering hull material.........................        2.0  .........
c. Dark stain.....................................        3.0  .........
d. Damage by other means, other than a, b and c          10.0  .........
 above, which materially detracts from the
 appearance or the edible or marketing quality of
 the individual shell or the lot..................
------------------------------------------------------------------------
                        INTERNAL (KERNEL) DEFECTS
------------------------------------------------------------------------
a. Damage.........................................        6.0        3.0
    Immature kernel (Fills <75%--50% of
     the shell)
    Kernel spotting (Affects 1/8 aggregate
     surface)
b. Serious damage.................................        4.0        2.5
    Minor insect or vertebrate injury/insect
     damage, insect evidence, mold, rancidity,
     decay
    (1) Maximum insect damage allowed.............        2.0        0.5
------------------------------------------------------------------------
        Total external or internal defects allowed        9.0  .........
------------------------------------------------------------------------
                              OTHER DEFECTS
------------------------------------------------------------------------
a. Shell pieces and blanks (Fills <50% of the             2.0  .........
 shell)...........................................
    (1) Maximum blanks allowed....................        1.0  .........
b. Foreign material...............................       0.25        0.1
    No glass, metal or live insects permitted

[[Page 43052]]

 
c. Particles and dust.............................       0.25  .........
d. Loose kernels..................................        6.0  .........
------------------------------------------------------------------------
                                                     Minimum permissible
                                                            size
                                                     (percent by weight)
------------------------------------------------------------------------
a. Maximum allowable inshell pistachios that will         5.0  .........
 pass through a 30/64ths inch round hole screen...
------------------------------------------------------------------------

    (b) Definitions applicable to permissible maximum defect and 
minimum size levels: The following definitions shall apply to inshell 
pistachio and pistachio kernel maximum defect and minimum size:
    (1) ``Loose kernels'' means edible kernels or kernel portions that 
are out of the shell and which cannot be considered particles and dust.
    (2) ``External (shell) defects'' means any abnormal condition 
affecting the hard covering around the kernel. Such defects include, 
but are not limited to, non-split shells, shells not split on suture, 
adhering hull material or dark stains.
    (3) Damage by external (shell) defects shall also include any 
specific defect described in paragraphs (b)(3)(i) through (iv) of this 
section or an equally objectionable variation of any one of these 
defects, any other defect or any combination of defects which 
materially detracts from the appearance or the edibility or the 
marketing quality of the individual shell or the lot.
    (i) Non-split shells means shells are not opened or are partially 
opened and will not allow an \18/1000\ (.018) inch thick by \1/4\ (.25) 
inch wide gauge to slip into the opening.
    (ii) Not split on suture means shells are split other than on the 
suture and will allow an \18/1000\ (.018) inch thick by \1/4\ (.25) 
inch wide gauge to slip into the opening.
    (iii) Adhering hull material means an aggregate amount of hull 
covers more than one-eighth (\1/8\) of the total shell surface, or when 
readily noticeable on dyed shells.
    (iv) Dark stain on raw or roasted nuts means an aggregate amount of 
dark brown, dark gray or black discoloration affects more than one-
eighth of the total shell surface or, on dyed nuts, when readily 
noticeable. Speckled discoloration on the stem end, bottom quarter of 
the nut is not considered damage.
    (4) Internal (kernel) defects means any damage affecting the 
kernel. Such damage includes, but is not limited to evidence of 
insects, immature kernels, rancid kernels, mold or decay.
    (i) Damage by internal (kernel) defects shall also include any 
specific defect described in paragraphs (b)(4)(i)(A) and (B) of this 
section, or an equally objectionable variation of any one of these 
defects, any other defect, or any combination of defects, which 
materially detracts from the appearance or the edibility or the 
marketing quality of the individual kernel or of the lot.
    (A) Immature kernels in inshell are excessively thin kernels, or 
when a kernel fills less than three-fourths, but not less than one-half 
of the shell cavity. ``Immature kernels'' in shelled pistachios are 
excessively thin kernels and can have black, brown or gray surface with 
a dark interior color and the immaturity has adversely affected the 
flavor of the kernel.
    (B) Kernel spotting refers to dark brown or dark gray spots 
aggregating more than one-eighth of the surface of the kernel.
    (ii) Serious damage by internal (kernel) defects means any specific 
defect described in paragraphs (b)(4)(ii)(A) through (E) of this 
section, or an equally objectionable variation of any one of these 
defects, which seriously detracts from the appearance or the edibility 
or the marketing quality of the individual kernel or of the lot.
    (A) Minor insect or vertebrate injury means the kernel shows 
conspicuous evidence of feeding.
    (B) Insect damage means an insect, insect fragment, web or frass 
attached to the kernel. No live insects shall be permitted.
    (C) Mold which is readily visible on the shell or kernel.
    (D) Rancidity means the kernel is distinctly rancid to taste. 
Staleness of flavor shall not be classed as rancidity.
    (E) Decay means \1/16\th or more of the kernel surface is 
decomposed.
    (5) Other defects means defects that cannot be considered internal 
defects or external defects. Such defects include, but are not limited 
to shell pieces, blanks, foreign materials or particles and dust. The 
following shall be considered other defects:
    (i) Shell pieces means open inshell without a kernel, half shells 
or pieces of shell which are loose in the sample.
    (ii) Blanks means a non-split shell not containing a kernel or 
containing a kernel that fills less than one-half of the shell cavity.
    (iii) Foreign material means leaves, sticks, loose hulls or hull 
pieces, dirt, rocks, insects or insect fragments not attached to nuts, 
or any substance other than pistachio shells or kernels. Glass, metal 
or live insects shall not be permitted.
    (iv) Particles and dust means pieces of nut kernels that will pass 
through \5/64\ inch round opening.
    (v) Undersized means inshell pistachios that fall through a \30/
64\-inch round hole screen.
    (c) Minimum quality certificate. Each shipment for domestic human 
consumption must be covered by a USDA certificate certifying a minimum 
quality or higher. Pistachios that fail to meet the minimum quality 
specifications shall be disposed of in such manner as described in 
Sec. 983.40.
    (d) Transfers between handlers. Transfers between handlers within 
the production area are exempt from the minimum quality regulation of 
this section.
    (e) Minimum quality testing procedures. To obtain a minimum quality 
certificate, each lot to be certified shall be uniquely identified, 
shall be traceable from testing through shipment by the handler and 
shall be subjected to the following procedure:
    (1) Sampling of pistachios for maximum defects and minimum size. 
The gross weight of the inshell and kernel sample, and number of 
samplings required to meet the minimum quality regulation, is shown in 
the following Table 4. These samples shall be drawn from the lot that 
is to be certified pursuant to Sec. 983.38(d)(1) under the

[[Page 43053]]

supervision of an inspector or as approved under an alternative USDA 
recognized inspection program.

        Table 4.--Inshell and Kernel Pistachio Lot Sampling Increments for Minimum Quality Certification
----------------------------------------------------------------------------------------------------------------
                                              Number of
                                             incremental     Total weight of      Weight of     Weight of kernel
           Lot weight  (lbs.)              samples for the     lot sample       inshell test       test sample
                                             lot sample          (grams)       sample (grams)        (grams)
----------------------------------------------------------------------------------------------------------------
220 or less.............................                10               500               500               100
221-440.................................                15               500               500               100
441-1100................................                20               600               500               100
1101-2200...............................                30               900               500               100
2201-4400...............................                40              1200               500               100
4401-11,000.............................                60              1800               500               100
11,001-22,000...........................                80              2400              1000               200
22,001-150,000..........................               100              3000              1000               200
----------------------------------------------------------------------------------------------------------------

    (2) Testing of pistachios for maximum defect and minimum size. The 
sample shall be analyzed according to USDA protocol to insure that the 
lot does not exceed maximum defects and meets at least the minimum size 
levels as specified in Table 3 of this part. For inshell pistachios, 
those nuts with dark stain, adhering hull, and those exhibiting 
apparent serious defects shall be shelled for internal kernel analysis. 
The USDA protocol appears in USDA inspection instruction manual 
``Pistachios in the Shell, Shipping Point and Market Inspection 
Instructions,'' June 1994: revised September 1994, HU-125-9(b). Copies 
may be obtained from the Fresh Products Branch, Agricultural Marketing 
Service, USDA. Contact information may be found at http://www.ams.usda.gov/fv/fvstand.htm.
    (f) Certification of minimum quality. Each inspector shall complete 
minimum quality testing and reporting and shall certify that every lot 
of California pistachios or portion thereof shipped domestically meets 
minimum quality levels as required in paragraph (a)(1) of this section. 
A record of each test, along with a record of final shipping 
disposition, shall be kept by each handler. These records must be 
maintained for three years, and are subject to audit by the committee 
at any time.


Sec. 983.40  Failed lots/rework procedure.

    (a) Substandard pistachios. Each lot of substandard pistachios may 
be reworked to meet minimum quality requirements.
    (b) Failed lot reporting. If a lot fails to meet the aflatoxin and/
or the minimum quality requirements of this part, a failed lot 
notification report shall be completed and sent to the committee within 
10 working days of the test failure. This form must be completed and 
submitted to the committee each time a lot fails either aflatoxin or 
the minimum quality testing. The accredited laboratories shall send the 
failed lot notification reports for aflatoxin tests to the committee, 
and the handler under the supervision of an inspector, shall send the 
failed lot notification reports for the lots that do not meet the 
minimum quality requirements to the committee.
    (c) Inshell rework procedure for aflatoxin. If inshell rework is 
selected as a remedy to meet the aflatoxin requirements of this part, 
then 100% of the product within that lot shall be removed from the bulk 
and/or retail packaging containers and reworked to remove the portion 
of the lot that caused the failure. Reworking shall consist of 
mechanical, electronic or manual procedures normally used in the 
handling of pistachios. After the rework procedure has been completed 
the total weight of the accepted product and the total weight of the 
rejected product shall be reported to the committee. The reworked lot 
shall be sampled and tested for aflatoxin as specified in Sec. 983.38 
except that the lot sample size and the test sample size shall be 
doubled. The reworked lot shall also be sampled and tested for the 
minimum quality requirements. If, after the lot has been reworked and 
tested, it fails the aflatoxin test for a second time, the lot may be 
shelled and the kernels reworked, sampled and tested in the manner 
specified for an original lot of kernels, or the failed lot may be used 
for non-human consumption or otherwise disposed of.
    (d) Kernel rework procedure for aflatoxin. If pistachio kernel 
rework is selected as a remedy to meet the aflatoxin requirements of 
Sec. 983.38, then 100% of the product within that lot shall be removed 
from the bulk and/or retail packaging containers and reworked to remove 
the portion of the lot that caused the failure. Reworking shall consist 
of mechanical, electronic or manual procedures normally used in the 
handling of pistachios. After the rework procedure has been completed 
the total weight of the accepted product and the total weight of the 
rejected product shall be reported to the committee. The reworked lot 
shall be sampled and tested for aflatoxin as specified in Sec. 983.38.
    (e) Minimum quality rework procedure for inshell pistachios and 
kernels. If rework is selected as a remedy to meet the minimum quality 
requirements of Sec. 983.39, then 100% of the product within that lot 
shall be removed from the bulk and/or retail packaging containers and 
processed to remove the portion of the lot that caused the failure. 
Reworking shall consist of mechanical, electronic or manual procedures 
normally used in the handling of pistachios. The reworked lot shall be 
sampled and tested for the minimum quality requirements as specified in 
the minimum quality regulations of Sec. 983.39.


Sec. 983.41  Testing of minimal quantities.

    (a) Aflatoxin. Handlers who handle less than 1 million pounds of 
assessed weight per year, have the option of utilizing one of two 
following methods for testing for aflatoxin:
    (1) The handler may have an inspector sample and test all of the 
hulled and dried pistachios before testing for aflatoxin certification.
    (2) The handler may segregate receipts into various lots at the 
handler's discretion and have an inspector sample and test specific 
lots. Any lots that have less than 15.0 ppb aflatoxin can be certified 
by an inspector to be negative as to aflatoxin. Any lots that are found 
to be above 15.0 ppb may be tested after reworking in the same manner 
as specified in Sec. 983.40.
    (b) Minimum quality. Handlers who handle less than 1 million pounds 
of assessed weight can apply to the committee for an exception from 
minimum quality testing. If the

[[Page 43054]]

committee grants an exception, then the handler must pull and retain 
samples of the lots and make samples available for review by the 
committee. The handler shall maintain the samples for 90 days.


Sec. 983.42  Commingling.

    After a lot is issued an aflatoxin inspection certificate and 
minimum quality certificate, it may be commingled with other certified 
lots.


Sec. 983.43  Reinspection.

    Whenever the committee has reason to believe that pistachios may 
have been damaged or deteriorated while in storage, the committee may 
reject the then effective inspection certificate and require the owner 
of the pistachios to have a reinspection to establish whether or not 
such pistachios may be shipped for human consumption.


Sec. 983.44  Inspection, certification and identification.

    Upon recommendation of the committee and approval of the Secretary, 
all pistachios that are required to be inspected and certified in 
accordance with this part, shall be identified by appropriate seals, 
stamps, tags, or other identification to be furnished by the committee 
and affixed to the containers by the handler under the direction and 
supervision of an inspector. All inspections shall be at the expense of 
the handler.


Sec. 983.45  Substandard pistachios.

    The committee shall, with the approval of the Secretary, establish 
such reporting and disposition procedures as it deems necessary to 
ensure that pistachios which do not meet the outgoing maximum aflatoxin 
tolerance and minimum quality requirements prescribed by Sec. 983.39 
shall not be shipped for domestic human consumption.


Sec. 983.46  Modification or suspension of regulations.

    (a) In the event that the committee, at any time, finds that, by 
reason of changed conditions, the regulations contained in Sec. 983.38 
through Sec. 983.45 should be modified or suspended, it shall, by a 
vote of at least seven members, so recommend to the Secretary.
    (b) Whenever the Secretary finds from the recommendations and 
information submitted by the committee or from other available 
information, that the aflatoxin or minimum quality regulations 
(Sec. 983.38 or Sec. 983.39) should be modified, suspended, or 
terminated with respect to any or all shipments of pistachios in order 
to effectuate the declared policy of the Act, the Secretary shall 
modify or suspend such regulation. If the Secretary finds that a 
regulation obstructs or does not tend to effectuate the declared policy 
of the Act, the Secretary shall suspend or terminate such regulation.

Reports, Books and Records


Sec. 983.47  Reports.

    Upon the request of the committee, with the approval of the 
Secretary, each handler shall furnish such reports and information on 
such forms as are needed to enable the Secretary and the committee to 
perform their functions and enforce the regulations under this part. 
The committee shall provide a uniform report format for the handlers.


Sec. 983.48  Confidential information.

    All reports and records furnished or submitted by handlers to the 
committee which include confidential data or information constituting a 
trade secret or disclosing the trade position, financial condition, or 
business operations of the particular handler or their customers shall 
be received by, and at all times kept in the custody and under the 
control of, one or more employees of the committee, who shall disclose 
such data and information to no person except the Secretary. However, 
such data or information may be disclosed only with the approval of the 
Secretary, to the committee when reasonably necessary to enable the 
committee to carry out its functions under this part.


Sec. 983.49  Records.

    Each handler shall maintain such records of pistachios received, 
held and shipped by him, as will substantiate any required reports and 
will show performance under this part. With the exception of records 
required to be retained under Sec. 983.38(d)(5), such records shall be 
retained for at least 2 years beyond the crop year of their 
applicability.


Sec. 983.50  Random verification audits.

    (a) All handlers' pistachio inventory shall be subject to random 
verification audits by the committee to ensure compliance with the 
terms of the order, and regulations adopted pursuant thereto.
    (b) Committee staff or agents of the committee, based on 
information from the industry or knowledge of possible violations, may 
make buys of handler product in retail locations. If it is determined 
that violations of the order have occurred as a result of the buys, the 
matter will be referred to the Secretary for appropriate action.


Sec. 983.51  Verification of reports.

    For the purpose of checking and verifying reports filed by handlers 
or the operation of handlers under the provisions of this part, the 
Secretary and the committee, through their duly authorized agents, 
shall have access to any premises where pistachios and records relating 
thereto may be held by any handler and at any time during reasonable 
business hours, shall be permitted to inspect any pistachios so held by 
such handler and any and all records of such handler with respect to 
the acquisition, holding, or disposition of all pistachios which may be 
held or which may have been shipped by him.

Expenses and Assessments


Sec. 983.52  Expenses.

    The committee is authorized to incur such expenses as the Secretary 
finds are reasonable and likely to be incurred by it during each 
production year for the maintenance and functioning of the committee 
and for such other purposes as the Secretary may, pursuant to the 
provisions of this part, determine to be appropriate.


Sec. 983.53  Assessments.

    (a) Each handler who receives pistachios for processing in each 
production year shall pay the committee on demand, an assessment based 
on the pro rata share of the expenses authorized by the Secretary for 
that year attributable to the assessed weight of pistachios received by 
that handler in that year.
    (b) The committee, prior to the beginning of each production year, 
shall recommend and the Secretary shall set the assessment for the 
following production year, which shall not exceed one-half of one 
percent of the average price received by producers in the preceding 
production year. The committee, with the approval of the Secretary, may 
revise the assessment established prior to October 1 of each year if it 
determines, based on information including crop volume, that the action 
is necessary, and if the revision does not exceed the assessment 
limitations specified in this section and the modification is made 
prior to the date established for payment of the assessment.


Sec. 983.54  Contributions.

    The committee may accept voluntary contributions but these shall 
only be used to pay for committee expenses.


Sec. 983.55  Delinquent assessments.

    (a) Any handler who fails to file a return or pay any assessment 
within the time required by the committee shall

[[Page 43055]]

pay to the committee a penalty of 10 percent of the amount of the 
assessment determined to be past due and, in addition, interest on the 
unpaid balance at the rate of one and one-half percent per month. If 
delinquent for more than 60 days, then the committee can request that 
USDA stop providing certificates to the delinquent handler. The amount 
of the assessment may be changed by the Secretary upon recommendation 
of the committee.
    (b) In addition to any other penalty imposed, the committee may 
require any person who fails to pay any assessment or related charge 
pursuant to this section to furnish and maintain a surety bond in a 
form and amount and for a period of time specified by the committee as 
assurance that all payments to the committee will be made when due.


Sec. 983.56  Accounting.

    (a) If, at the end of a production year, the assessments collected 
are in excess of expenses incurred, such excess shall be accounted for 
in accordance with one of the following:
    (1) If such excess is not retained in a reserve, as provided in 
paragraph (a)(2) of this section, it shall be refunded proportionately 
to the persons from whom it was collected in accordance with 
Sec. 983.53: Provided, That any sum paid by a person in excess of his/
her pro rata share or the expenses during any production year may be 
applied by the committee at the end of such production year as credit 
for such person, toward the committee's fiscal operations of the 
following production year;
    (2) The committee, with the approval of the Secretary, may carry 
over such excess into subsequent production years as a reserve: 
Provided, That funds already in the reserve do not exceed approximately 
two production years' budgeted expenses. In the event that funds exceed 
two production years' budgeted expenses, future assessments will be 
reduced to bring the reserves to an amount that is less than or equal 
to two production years' budgeted expenses. Such reserve funds may be 
used:
    (i) To defray expenses, during any production year, prior to the 
time assessment income is sufficient to cover such expenses;
    (ii) To cover deficits incurred during any production year when 
assessment income is less than expenses;
    (iii) To defray expenses incurred during any period when any or all 
provisions of this part are suspended or are inoperative; and
    (iv) To cover necessary expenses of liquidation in the event of 
termination of this part. Upon such termination, any funds not required 
to defray the necessary expenses of liquidation shall be disposed of in 
such manner as the Secretary may determine to be appropriate: Provided, 
That to the extent practical, such funds shall be returned pro rata to 
the persons from whom such funds were collected;
    (b) All funds received by the committee pursuant to the provisions 
of this part shall be used solely for the purpose specified in this 
part and shall be accounted for in the manner provided in this part. 
The Secretary may at any time require the committee and its members to 
account for all receipts and disbursements; and
    (c) Upon the removal or expiration of the term of office of any 
member of the committee, such member shall account for all receipts and 
disbursements for which that member was personally responsible, deliver 
all committee property and funds in the possession of such member to 
the committee, and execute such assignments and other instruments as 
may be necessary or appropriate to vest in the committee full title to 
all of the committee property, funds, and claims vested in such member 
pursuant to this part.

Miscellaneous Provisions


Sec. 983.57  Compliance.

    Except as provided in this part, no handler shall handle 
pistachios, the handling of which has been prohibited or otherwise 
limited by the Secretary in accordance with provisions of this part; 
and no handler shall handle pistachios except in conformity to the 
provision of this part.


Sec. 983.58  Rights of the Secretary.

    The members of the committee (including successors or alternates) 
and any agent or employee appointed or employed by the committee, shall 
be subject to removal or suspension at the discretion of the Secretary, 
at any time. Each and every decision, determination, or other act of 
the committee shall be subject to the continuing right of the Secretary 
to disapprove of the same at any time, and upon such disapproval, shall 
be deemed null and void.


Sec. 983.59  Personal liability.

    No member or alternate member of the committee, nor any employee, 
representative, or agent of the committee shall be held personally 
responsible to any handler, either individually, or jointly with 
others, in any way whatsoever, to any person, for errors in judgment, 
mistakes, or other acts, either of commission or omission, as such 
member, alternate member, employee, representative, or agent, except 
for acts of dishonesty, willful misconduct, or gross negligence.


Sec. 983.60  Separability.

    If any provision of this part is declared invalid, or the 
applicability thereof to any person, circumstance, or thing is held 
invalid, the validity of the remainder, or the applicability thereof to 
any other person, circumstance, or thing, shall not be affected 
thereby.


Sec. 983.61  Derogation.

    Nothing contained in this part is, or shall be construed to be, in 
derogation or in modification of the rights of the Secretary or of the 
United States to exercise any powers granted by the Act or otherwise, 
or, in accordance with such powers, to act in the premises whenever 
such action is deemed advisable.


Sec. 983.62  Duration of immunities.

    The benefits, privileges, and immunities conferred upon any person 
by virtue of this part shall cease upon its termination, except with 
respect to acts done under and during the existence thereof.


Sec. 983.63  Agent.

    The Secretary may, by a designation in writing, name any person, 
including any officer or employee of the United States Government, or 
name any service, division or branch in the United States Department of 
Agriculture, to act as agent or representative of the Secretary in 
connection with any of the provisions of this part.


Sec. 983.64  Effective time.

    The provisions of this part, as well as any amendments, shall 
become effective at such time as the Secretary may declare, and shall 
continue in force until terminated or suspended in one of the ways 
specified in Sec. 983.66 or Sec. 983.67.


Sec. 983.65  Suspension or termination.

    The Secretary shall terminate or suspend the operation of any or 
all of the provisions of this part, whenever he finds that such 
provisions do not tend to effectuate the declared policy of the Act.


Sec. 983.66  Referendum.

    (a) The Secretary may at any time terminate the provisions of this 
part.
    (b) The Secretary shall terminate or suspend the operations of any 
or all of the provisions of this part whenever it is found that such 
provisions do not tend to effectuate the declared policy of the act.

[[Page 43056]]

    (c) The Secretary shall terminate the provisions of this part at 
the end of any fiscal period whenever it is found that such termination 
is favored by a majority of producers who, during a representative 
period, have been engaged in the production of pistachios: Provided, 
That such majority has, during such representative period, produced for 
market more than fifty percent of the volume of such pistachios 
produced for market, but such termination shall be announced at least 
90 days before the end of the current fiscal period.
    (d) Within six years of [the effective date of this part] the 
Secretary shall conduct a referendum to ascertain whether continuance 
of this part is favored by producers. Subsequent referenda to ascertain 
continuance shall be conducted every six years thereafter. The 
Secretary may terminate the provisions of this part at the end of any 
fiscal period in which the Secretary has found that continuance of this 
part is not favored by a two thirds (\2/3\) majority of voting 
producers, or a two thirds (\2/3\) majority of volume represented 
thereby, who, during a representative period determined by the 
Secretary, have been engaged in the production for market of pistachios 
in the production area. Such termination shall be announced on or 
before the end of the production year.
    (e) The provisions of this part shall, in any event, terminate 
whenever the provisions of the Act authorizing them cease.


Sec. 983.67  Procedure upon termination.

    Upon the termination of this part, the members of the committee 
then functioning shall continue as joint trustees, for the purpose of 
liquidating the affairs of the committee. Action by such trustees shall 
require the concurrence of a majority of said trustees. Such trustees 
shall continue in such capacity until discharged by the Secretary, and 
shall account for all receipts and disbursements and deliver all 
property on hand, together with all books and records of the committee 
and the joint trustees, to such persons as the Secretary may direct; 
and shall upon the request of the Secretary, execute such assignments 
or other instruments necessary or appropriate to vest in such person 
full title and right to all the funds, properties, and claims vested in 
the committee or the joint trustees, pursuant to this part. Any person 
to whom funds, property, or claims have been transferred or delivered 
by the committee or the joint trustees, pursuant to this section, shall 
be subject to the same obligations imposed upon the members of said 
committee and upon said joint trustees.


Sec. 983.68  Effect of termination or amendment.

    Unless otherwise expressly provided by the Secretary, the 
termination of this part or of any regulation issued pursuant thereto, 
or the issuance of any amendment to either thereof, shall not:
    (a) Affect or waive any right, duty, obligation, or liability which 
shall have arisen or which may thereafter arise, in connection with any 
provisions of this part or any regulation issued thereunder,
    (b) Release or extinguish any violation of this part or any 
regulation issued thereunder, or
    (c) Affect or impair any rights or remedies of the Secretary, or of 
any other persons, with respect to such violation.


Sec. 983.69  Exemption.

    Any handler may handle pistachios within the production area free 
of the regulatory and assessment provisions of this part if such 
pistachios are handled in quantities not exceeding 1,000 dried pounds 
during any marketing year. This subpart may be changed as recommended 
by the committee and approved by the Secretary.


Sec. 983.70  Relationship with the California Pistachio Commission.

    In conducting committee activities and other objectives under this 
part, the committee may deliberate, consult, cooperate and exchange 
information with the California Pistachio Commission. Any sharing of 
information gathered under this subpart shall be kept confidential in 
accordance with provisions under section 10(i) of the Act.


Sec. 983.90  Counterparts.

    Handlers may sign an agreement with the Secretary indicating their 
support for this marketing order. This agreement may be executed in 
multiple counterparts by each handler. If more than fifty percent of 
the handlers, weighted by the volume of pistachios handled during a 
representative period, enter into such an agreement, then a marketing 
agreement shall exist for the pistachio marketing order. This marketing 
agreement shall not alter the terms of this part. Upon the termination 
of this part, the marketing agreement has no further force or effect.


Sec. 983.91  Additional parties.

    After this part becomes effective, any handler may become a party 
to the marketing agreement if a counterpart is executed by the handler 
and delivered to the Secretary.


Sec. 983.92  Order with marketing agreement.

    Each signatory handler hereby requests the Secretary to issue, 
pursuant to the Act, an order for regulating the handling of pistachios 
in the same manner as is provided for in this agreement.

    Dated: June 19, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-15917 Filed 6-25-02; 8:45 am]
BILLING CODE 3410-02-P