[Federal Register Volume 70, Number 39 (Tuesday, March 1, 2005)]
[Rules and Regulations]
[Pages 9843-9846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-3928]



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  Federal Register / Vol. 70, No. 39 / Tuesday, March 1, 2005 / Rules 
and Regulations  

[[Page 9843]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Docket No. FV04-983-2 FR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule establishes 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 establishes assessment 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 began September 1 and ends 
August 31. The assessment rate will remain in effect indefinitely 
unless modified, suspended, or terminated. Requiring handlers to file 
annual reports with the Committee will facilitate the Committee's 
collection of handler assessments.

DATES: Effective Date: March 2, 2005.

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].

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 issued herein will 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. A 
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 establishes the continuing assessment rate established 
for the Committee and for the 2004-05 and subsequent fiscal periods of 
$0.0014 per pound of pistachios received for processing and establishes 
assessment 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 will 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

[[Page 9844]]

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 will 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 will 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 assessment rate established in this rule will 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 will be in effect for an indefinite 
period, the Committee will 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 will evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking will 
be undertaken as necessary. The Committee's 2004-05 budget and those 
for subsequent fiscal periods will 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), will 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. A final order published on January 5, 2005 (70 FR 
661), further delayed the implementation date for Sec.  983.39(b)(4) 
and (5), of the order until August 12, 2005. Therefore, for the 2004-05 
fiscal period, each handler who receives pistachios for processing will 
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 will 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 will not 
be duplicating their efforts and both agencies will receive necessary 
receipts/assessment data. The Committee estimates this action will 
affect 20 handlers of pistachios and further estimates that, on 
average, handlers will 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.

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 shall 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 will 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

[[Page 9845]]

assessments to the Committee by December 15 of the applicable fiscal 
period.

Final 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 final regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 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 establishes 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 establishes reporting requirements under the California 
pistachio order. Requiring handlers to file annual Receipts/Assessment 
Reports with the Committee will 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.
    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 will 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 will be kept within the maximum permitted by the 
order (Sec.  983.56).
    The assessment rate in this rule will 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 will be in effect for an indefinite 
period, the Committee will 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 will evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking will 
be undertaken as necessary. The Committee's 2004-05 budget and those 
for subsequent fiscal periods will 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 will be 
required to file the report and to pay assessments. The report will 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, will be required to 
pay an assessment attributable to the assessed weight of pistachios 
received by that

[[Page 9846]]

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. A final order published on January 5, 2005, (70 
FR 661), further delayed the implementation date for Sec.  983.39(b)(4) 
and (5), of the order until August 12, 2005. Therefore, for the 2004-05 
fiscal period, each handler who receives pistachios for processing will 
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 will 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 are offset by 
the benefits derived by the operation of the marketing order. In 
addition, the Committee's meeting was widely publicized throughout the 
pistachio 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.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), AMS submitted to the Office of Management and Budget a 
revision to approved information collection OMB No. 0581-0215, 
``Pistachios Grown in California.'' This information collection has 
been approved by OMB.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large pistachio handlers. As with all 
Federal marketing order programs, reports and forms are periodically 
reviewed to reduce information requirements and duplication by industry 
and public sector agencies.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    A proposed rule concerning this action was published in the Federal 
Register on December 10, 2004 (69 FR 71749). Copies of the proposed 
rule were also mailed or sent via facsimile to all pistachio handlers. 
Finally, the proposal was made available through the Internet by USDA 
and the Office of the Federal Register. A 60-day comment period ending 
February 8, 2005, was provided for interested persons to respond to the 
proposal.
    One opposing comment was received. The commenter considered a 
continuing assessment rate for the Committee to be an outdated method 
for agricultural marketing. However, the establishment of the 
assessment rate is consistent with the marketing order and the Act 
under which the marketing order is implemented.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance 
guide should be sent to Jay Guerber at the previously mentioned address 
in the FOR FURTHER INFORMATION CONTACT section.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    Pursuant to 5 U.S.C. 553, it also found and determined that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because: (1) The 
fiscal year began September 1, 2004, and the assessment rate applies to 
all pistachios received during the 2004-05 and subsequent seasons; (2) 
handlers received the 2004-05 crop pistachios by October 2004; and (3) 
handlers are required to complete and submit the ACP-1 to the Committee 
by March 15, 2005. Further, handlers are aware of this rule which was 
unanimously recommended at a public meeting. Also a 60-day comment 
period was provided for in the proposed rule.
    This rule will impose some additional reporting and recordkeeping 
on both small and large pistachio handlers. This action will 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.

List of Subjects in 7 CFR Part 983

    Pistachios, Marketing agreements, Reporting and recordkeeping 
requirements.


0
For the reasons set forth in the preamble, 7 CFR part 983 is amended as 
follows:

PART 983--PISTACHIOS GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 983 continues to read as 
follows:

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

0
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 shall 
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: February 24, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-3928 Filed 2-24-05; 1:33 pm]
BILLING CODE 3410-02-P