[Federal Register Volume 69, Number 237 (Friday, December 10, 2004)]
[Proposed Rules]
[Pages 71749-71753]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27157]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Docket No. FV04-983-2 PR]


Pistachios Grown in California; Establishment of Continuing 
Assessment Rate and Reporting Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would establish a continuing assessment rate for the 
Administrative Committee for Pistachios (Committee) for the 2004-05 and 
subsequent fiscal periods of $0.0014 per pound of pistachios received 
for processing and would establish reporting requirements under the 
California pistachio marketing order (order). The order regulates the 
handling of pistachios grown in California and is administered by the 
Committee. Authorization to assess pistachio handlers enables the 
Committee to incur expenses that are reasonable and necessary to 
administer the program. The fiscal period begins September 1 and ends 
August 31. The assessment rate would remain in effect indefinitely 
unless modified, suspended, or terminated. Requiring handlers to file 
annual reports with the Committee would facilitate the Committee's 
collection of handler assessments.

DATES: Comments must be received by February 8, 2005.

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, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; E-mail: [email protected]; or 
Internet: http://www.regulations.gov. Comments should reference the 
docket number and the date and page number of this issue of the Federal 
Register and will be available for public inspection in the Office of 
the Docket Clerk during regular business hours, or can be viewed at: 
http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Analyst, or 
Rose Aguayo, Marketing Specialist, California Marketing Field Office, 
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, 1400 
Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; 
telephone: (202) 720-2491, Fax: (202) 720-8938.
    Small businesses may request information on complying with this 
regulation 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, or E-mail: [email protected].

[[Page 71750]]


SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement and Order No. 983, regulating the handling of pistachios 
grown in California, hereinafter referred to as the ``order.'' The 
order is effective under the Agricultural Marketing Agreement Act of 
1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the 
``Act.''
    The Department of Agriculture (USDA) 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, pistachio 
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 pistachios 
beginning September 1, 2004, and continue until amended, suspended, or 
terminated. This rule will not preempt any State or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA 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 USDA 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 USDA'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 establish a continuing assessment rate for the 
Committee for the 2004-05 and subsequent fiscal periods of $0.0014 per 
pound of pistachios received for processing and would establish 
reporting requirements under the California pistachio order. The 
quantity of pistachios received by the handler for processing is 
converted to an assessed weight pursuant to Sec.  983.6 and the 
assessment rate is applied to that weight in determining a handler's 
assessment obligation for the fiscal period. Requiring handlers to file 
annual Receipts/Assessment Reports with the Committee would facilitate 
the Committee's collection of handler assessments.

Continuing Assessment Rate

    Sections 983.52 and 983.53 of the pistachio order provide authority 
for the Committee, with the approval of USDA, to formulate an annual 
budget of expenses and to collect assessments from handlers to 
administer the marketing order. Each handler who receives pistachios 
for processing in each production year (fiscal year) is required to pay 
an assessment based on the pro rata share of the expenses authorized by 
USDA which are reasonable and likely to be incurred by the Committee 
during that year. The assessment obligation for each handler is 
computed by applying the assessment rate set by USDA to each handler's 
assessed weight computed pursuant to Sec.  983.6 of the pistachio 
order.
    The members of the Committee are producers and handlers of 
California pistachios. They are familiar with the Committee needs and 
with the costs for goods and services in their local area, and are, 
thus, in a position to formulate an appropriate budget and assessment 
rate. The assessment rate is formulated and discussed in a public 
meeting. Thus, all directly affected persons have an opportunity to 
participate and provide input.
    The Committee met on August 17, 2004, and unanimously recommended 
2004-05 expenditures of $271,499 and an assessment rate of $0.0014 per 
pound of pistachios received for processing. This was the first public 
meeting of the newly formed Committee since the pistachio marketing 
order became effective on April 6, 2004 (69 FR 17944). The major 
expenditures recommended by the Committee for the 2004-05 fiscal period 
include $ 110,249 for administrative expenses; $34,500 for compliance 
expenses; $101,750 for salaries; and $25,000 for a contingency reserve.
    Because this is a new order and there is no carry-in income, the 
Committee is borrowing funds from the California Pistachio Commission 
(Commission) until assessments are collected in March 2005. The 
Committee discussed the necessity of setting a relatively high 
assessment rate for the 2004-05 fiscal period because it is necessary 
to generate sufficient funds to reimburse the Commission, to cover the 
Committee's 2004-05 expenditures, and to build an adequate reserve to 
cover Committee expenditures until the 2005-06 fiscal period's 
assessments are available in December 2005.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses plus funds to establish a reserve by 
expected receipts (the assessed weight) of pistachios grown in 
California during 2004-05 ($271,499 plus $190,501 divided by 
330,000,000 pounds = $0.0014. With pistachio receipts for the year 
estimated at 330,000,000 pounds, assessment income is expected to total 
of $462,000.
    The Committee may carry over excess funds into subsequent 
production years (fiscal 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 would be reduced to bring 
the reserves to an amount that is less than or equal to two production 
years' budgeted expenses (Sec.  983.56). Funds in the reserve would be 
kept within the maximum permitted by the order.
    Under Sec.  983.53 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. According to the Commission's Annual 
Report for the 2003-04 crop year, the average price received by 
producers was $1.15 per pound. One half of one percent equals $0.005. 
Taking ($0.005) x ($1.15) = $0.00575 for the maximum assessment rate 
allowed. The rates considered by the Committee ranged from $0.001 to 
$0.0014. The recommended assessment rate of $0.0014 is less than the 
maximum provided for in the order.
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA upon recommendation 
and information submitted by the Committee or other available 
information.
    Although this assessment rate would be in effect for an indefinite 
period, the Committee would continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA would evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking would 
be undertaken as necessary. The Committee's 2004-05 budget and those

[[Page 71751]]

for subsequent fiscal periods would be reviewed and, as appropriate, 
approved by USDA.

Reporting Requirements

    Section 983.47 of the pistachio order provides authority for 
establishing reporting requirements. Under the order, the Committee 
may, with the approval of the Secretary, establish reporting 
requirements to collect necessary information or data.
    At its first meeting, the Committee also unanimously recommended 
that handlers file a Receipts/Assessment Report with the Committee to 
facilitate the Committee's collection of handler assessments.
    Handlers, including custom hullers, who receive pistachios for 
processing (removal of green hulls and drying pistachios to 5 percent 
moisture), would be required to pay an assessment attributable to the 
assessed weight of pistachios received by that handler and to report 
that assessed weight to the Committee on the Receipts/Assessment Form. 
Pursuant to Sec.  983.6 of the order, the term ``assessed weight'' 
means the pounds of inshell pistachios, free of internal defects as 
defined in Sec.  983.39(b)(4) and (5), with the weight computed at 5 
percent moisture, received for processing by a handler within each 
production year: Provided, That for loose kernels, the actual weight 
shall be multiplied by two to obtain an inshell weight.
    A final order published on July 26, 2004, (69 FR 44460), delayed 
the implementation date for Sec.  983.39(b)(4) and (5), of the order 
until February 1, 2005. Therefore, for the 2004-05 fiscal period, each 
handler who receives pistachios for processing would be required to 
furnish the Receipts/Assessment Report to the Committee and pay all due 
assessments to the Committee by March 15, 2005. For subsequent fiscal 
periods, each handler who receives pistachios for processing would be 
required to furnish the Receipts/Assessment Report and pay all due 
assessments to the Committee by December 15 of the applicable fiscal 
period.
    The recommended reporting requirements are similar to those 
required by the Commission. Because the Commission is prohibited from 
sharing confidential handler information, the Committee recommended 
that a Receipt/Assessment Report be developed for Committee use and 
that the receipts information already compiled for the Commission be 
attached to the newly developed Committee form. Thus, handlers would 
not be duplicating their efforts and both agencies would receive 
necessary receipts/assessment data. The Committee estimates this action 
would affect 20 handlers of pistachios and further estimates that, on 
average, handlers would expend approximately 4 minutes per year to 
prepare and submit this report to the Committee. These actions are in 
the interest of producers and handlers. Detailed information on these 
burdens is contained in the Paperwork Reduction Act section of this 
document.

Assessment Collection

    To facilitate assessment collections under the order, the Committee 
unanimously recommended establishing Sec.  983.253. This section sets 
the continuing assessment rate and establishes the reporting 
requirements necessary to verify that each handler has paid the correct 
assessment. Section 925.253 would read as follows: ``Sec.  983.253 
Assessment rate. (a) On and after September 1, 2004, an assessment rate 
of $0.0014 per pound of pistachios received for processing is 
established for California Pistachios. The assessment obligation of 
each handler would be computed by applying the assessment rate to the 
assessed weight computed pursuant to Sec.  983.6. (b) For the 2004-05 
fiscal period each handler who receives pistachios for processing shall 
furnish the Receipts/Assessment Report to the Committee and pay all due 
assessments to the Committee by March 15, 2005. For subsequent fiscal 
periods, each handler who receives pistachios for processing shall 
furnish the Receipts/Assessment Report and pay all due assessments to 
the Committee by December 15 of the applicable fiscal period.''

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 20 handlers of California pistachios 
subject to regulation under the order and approximately 741 producers 
in the production area. Small agricultural producers are defined by the 
Small Business Administration (13 CFR 121.201) as those having annual 
receipts less than $750,000, and small agricultural service firms are 
defined as those whose annual receipts are less than $5,000,000. Eight 
of the 20 handlers subject to regulation have annual pistachio receipts 
of at least $5,000,000. In addition, 722 producers have annual receipts 
less than $750,000. Thus, the majority of handlers and producers of 
California pistachios may be classified as small entities.
    This rule would establish a continuing assessment rate for the 
Committee and collected from handlers for the 2004-05 and subsequent 
fiscal periods of $0.0014 per pound of pistachios received for 
processing and would establish reporting requirements under the 
California pistachio order. Requiring handlers to file annual Receipts/
Assessment Reports with the Committee would facilitate the Committee's 
collection of handler assessments. Pistachios harvested and received in 
August of any year shall be applied to the subsequent production year 
for order purposes.

Continuing Assessment Rate

    The California pistachio order provides authority for the 
Committee, with the approval of USDA, to formulate an annual budget of 
expenses and collect assessments from handlers to administer the 
program. The members of the Committee are producers and handlers of 
California pistachios. They are familiar with the Committee needs and 
with the costs for goods and services in their local area, and are thus 
in a position to formulate an appropriate budget and assessment rate. 
The assessment rate is formulated and discussed in a public meeting. 
Thus, all directly affected persons have an opportunity to participate 
and provide input.
    The Committee met on August 17, 2004, and unanimously recommended 
2004-05 expenditures of $271,499 and an assessment rate of $0.0014 per 
pound of pistachios received for processing. This was the first public 
meeting of the newly formed Committee since the pistachio marketing 
order became effective on April 6, 2004 (69 FR 17944). The major 
expenditures recommended by the Committee for the 2004-05 fiscal period 
include $110,249 for administrative expenses; $34,500 for compliance 
expenses; $101,750 for salaries; and $25,000 for a contingency reserve.

[[Page 71752]]

    Because this is a new order and there is no carry-in income, the 
Committee is borrowing funds from the Commission until assessments are 
collected in March 2005. The Committee discussed the necessity of 
setting a relatively high assessment rate for the 2004-05 fiscal period 
because it is necessary to generate sufficient funds to reimburse the 
Commission, to cover the Committee's 2004-05 expenditures, and to build 
an adequate reserve to cover Committee expenditures until the 2005-06 
fiscal period's assessments are available in December 2005.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses plus funds to establish a reserve by 
expected receipts of pistachios grown in California ($271,499 plus 
$190,501 divided by 330,000,000 pounds = $0.0014. With pistachio 
receipts for the year estimated at 330,000,000 pounds, assessment 
income should total $462,000.
    The Committee 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 productions years' budgeted expenses, 
future assessments would be reduced to bring the reserves to an amount 
that is less than or equal to two production years' budgeted expenses. 
Funds in the reserve would be kept within the maximum permitted by the 
order (Sec.  983.56).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA upon recommendation 
and information submitted by the Committee or other available 
information.
    Although this assessment rate would be in effect for an indefinite 
period, the Committee would continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA would evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking would 
be undertaken as necessary. The Committee's 2004-05 budget and those 
for subsequent fiscal periods would be reviewed and, as appropriate, 
approved by USDA.
    The Committee discussed alternative 2004-05 expenditures of 
$246,499, which did not include $25,000 for a contingency reserve. 
However, the Committee believes that it is important to establish a 
contingency reserve for unforeseen expenditures, and, thus, unanimously 
recommended expenditures in the amount of $271,499.
    A review of historical information and preliminary information 
pertaining to the upcoming fiscal period indicates that the grower 
price for the 2004-05 season could range between $1.30 and $1.40 per 
pound of assessed weight pistachios. Therefore, the estimated 
assessment revenue for the 2004-05 fiscal period as a percentage of 
total grower revenue could range between .11 and .10 percent.

Reporting Requirements

    Section 983.47 of the pistachio order provides authority for 
establishing reporting requirements. Under the order, the Committee 
may, with the approval of the Secretary, establish reporting 
requirements to collect necessary information or data.
    To facilitate the collection of handler assessments, the Committee 
also unanimously recommended that handlers file a Receipts/Assessment 
Report with the Committee. Both small and large handlers would be 
required to file the report and to pay assessments. The report would be 
filed by handlers (including custom hullers) who receive pistachios for 
processing (removal of green hulls and drying pistachios to 5 percent 
moisture).
    Handlers who receive pistachios for processing, would be required 
to pay an assessment attributable to the assessed weight of pistachios 
received by that handler and to report that assessed weight to the 
Committee on the Receipts/Assessment Form. The term ``assessed weight'' 
is defined in Sec.  983.6 of the pistachio order.

Assessment Obligations

    The computation of assessed weight involves requirements specified 
in Sec. Sec.  983.39(b)(4) and (5). A final order published on July 26, 
2004, (69 FR 44460), delayed the implementation date of those sections 
until February 1, 2005. Therefore, for the 2004-05 fiscal period, each 
handler who receives pistachios for processing would be required to 
furnish the Receipts/Assessment Report to the Committee and pay all due 
assessments to the Committee by March 15, 2005. For subsequent fiscal 
periods, each handler who receives pistachios for processing would be 
required to furnish the Receipts/Assessment Report and pay all due 
assessments to the Committee by December 15 of the applicable fiscal 
period.
    While assessments impose some additional costs on handlers, the 
costs are minimal and uniform on all handlers. Some of the additional 
costs may be passed on to producers. However, these costs would be 
offset by the benefits derived by the operation of the marketing order. 
In addition, the Committee's meeting was widely publicized throughout 
the production area commodity industry and all interested persons were 
invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the August 
17, 2004, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue.
    Interested persons are invited to submit comments on the 
informational and regulatory impacts of this action on small 
businesses. 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.
    This rule would impose some additional reporting and recordkeeping 
on both small and large pistachio handlers. This action would require 
one new Committee form. As with all Federal marketing order programs, 
reports and forms are periodically reviewed to reduce information 
requirements and duplication by industry and public sector agencies. In 
addition, USDA has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), AMS is submitting to the Office of Management and Budget a 
revision to approved information collection OMB No. 0581-0215, 
``Pistachios Grown in California.''

Abstract

    These information collection requirements are essential to carry 
out the intent of the Act, to provide respondents the type of service 
they request, and to administer the California pistachio marketing 
order program, which was established in 2004.
    Under the order, the committee may, with the approval of the 
Secretary, establish reporting requirements to collect necessary 
information or data.

[[Page 71753]]

    On August 17, 2004, the Committee met and unanimously recommended 
establishing a reporting requirement under the order similar to that 
applied under the California Pistachio Commission. Because the 
Commission is prohibited from sharing confidential handler information, 
the committee recommended that a receipt/assessment report be developed 
for committee use and that the receipts information already compiled 
for the Commission be attached to the newly developed committee form. 
Thus, handlers would not be duplicating their efforts and both agencies 
would receive necessary receipts/assessment data.
    The information collected will be used only by authorized 
representatives of the USDA, including AMS, Fruit and Vegetable 
Programs regional and headquarters' staff, and authorized Committee 
employees. Authorized Committee employees are the primary users of the 
information and AMS is the secondary user. The name of the form is the 
Administrative Committee for Pistachios (ACP)-1; Receipts/Assessment 
Report.

Total Annual Estimated Burden

    The total burden for the information collection under the order is 
as follows:
    Estimate of Burden: 4 minutes per response.
    Respondents: Qualified handlers or producers.
    Estimated Number of Respondents: 20.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Average Burden on Respondents): 1 hour and 
20 minutes.
    Comments: Sixty days are provided for comments. Comments are 
invited on: (1) Whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information would have practical utility; (2) the 
accuracy of the agency's estimate of the burden of the proposed 
collection of information, including the validity of the methodology 
and assumptions used; (3) ways to enhance the quality, utility, and 
clarity of the information to be collected; and (4) ways to minimize 
the burden of the collection of information on those who are to 
respond, including the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    Comments should reference OMB No. 0581-0215 and the marketing order 
for pistachios grown in California, and be sent to USDA in care of the 
Docket Clerk at the previously mentioned address. All comments received 
will be available for public inspection during regular business hours 
at the same address. All responses to this notice on informational 
impacts will be summarized and included in the request for OMB approval 
of the above described form. All comments will become a matter of 
public record.

List of Subjects in 7 CFR Part 983

    Pistachios, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 983 is 
proposed to be amended as follows:

PART 983--PISTACHIOS GROWN IN CALIFORNIA

    1. The authority citation for 7 CFR part 983 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.
    2. In part 983, a new Subpart--Assessment Rate and Sec.  983.253 
are added to read as follows:

Subpart--Assessment Rate


Sec.  983.253  Assessment rate.

    (a) On and after September 1, 2004, a continuing assessment rate of 
$0.0014 per pound of assessed weight pistachios is established for 
California Pistachios. The assessment obligation of each handler would 
be computed by applying the assessment rate to the assessed weight 
computed pursuant to Sec.  983.6.
    (b) For the 2004-05 fiscal period each handler who receives 
pistachios for processing shall furnish the Receipts/Assessment Report 
to the Committee and pay all due assessments to the Committee by March 
15, 2005. For subsequent fiscal periods, each handler who receives 
pistachios for processing shall furnish the Receipts/Assessment Report 
and pay all due assessments to the Committee by December 15 of the 
applicable fiscal period.

    Dated: December 7, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-27157 Filed 12-7-04; 2:54 pm]
BILLING CODE 3410-02-P