[Federal Register Volume 70, Number 140 (Friday, July 22, 2005)]
[Rules and Regulations]
[Pages 42256-42259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-14513]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Docket No. FV05-983-4 IFR]


Pistachios Grown in California; Establishment of Procedures for 
Exempting Handlers From Minimum Quality Testing

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule establishes procedures for exempting handlers from 
quality requirements, including maximum limits for quality defects and 
minimum size, prescribed under the California pistachio marketing order 
(order). The order regulates the handling of pistachios grown in 
California and is administered locally by the Administrative Committee 
for Pistachios (Committee). These procedures will be used by the 
Committee in considering handler requests for exemptions from minimum 
quality testing requirements and when considering revocations of such 
exemptions. Additionally, this rule establishes an appeals process for 
handlers who have been denied an exemption or had an approved exemption 
revoked.

DATES: Effective July 23, 2005; comments received by September 20, 2005 
will be considered prior to issuance of a final rule.

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,

[[Page 42257]]

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

FOR FURTHER INFORMATION CONTACT: Rose Aguayo, California Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA; 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 Order 
No. 983 (7 CFR part 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. This rule is not intended to have retroactive effect. 
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 procedures for use by the Committee in 
exempting handlers from minimum quality (maximum limits for quality 
defects and minimum size) testing requirements prescribed under the 
order. These procedures also will be used by the Committee, or its duly 
authorized agents, when considering the revocation of exemptions for 
good cause, and when considering appeals of handlers who have had 
exemptions denied or revoked.
    Section 983.46 of the pistachio order authorizes the Committee to 
recommend that the Secretary modify or suspend the order provisions 
contained in Sec. Sec.  983.38 through 983.45. These sections are 
scheduled to be implemented on August 1, 2005.
    Section 983.41 of the pistachio order authorizes handler exemptions 
from minimum quality testing requirements for handlers handling less 
than 1 million pounds of assessed weight pistachios per production year 
(September 1-August 31) and specifies that the Committee may grant 
handler exemptions. For the purposes, of this document, the term 
``production year'' is synonymous with ``marketing year''.
    Section 983.70 of the pistachio order exempts handlers who handle 
1,000 pounds or less of dried weight (assessed weight) pistachios 
(dried to 5 percent moisture) during any marketing year from all 
assessment, aflatoxin, and minimum quality requirements.
    Section 983.147 of the pistachio order establishes handler 
reporting requirements (ACP Forms 2-7) and exempts handlers who handle 
1,000 pounds or less of dried weight pistachios from all reporting 
requirements with the exception of ACP Form-4. Handlers who have 
handled or intend to handle 1,000 pounds or less of dried weight 
pistachios during the marketing period (September 1-August 31) must 
submit ACP Form-4 by November 15 each year to the Committee.
    The recommended decision, published on August 4, 2003, (68 FR 
45990) indicates that implementing regulations should be effectuated to 
establish the specific procedures for exempting handlers who handle 
more than 1,000 pounds and less than 1 million pounds of assessed 
weight pistachios per production year (September 1-August 31) from 
minimum quality testing requirements.
    Under these authorities, the Committee at its April 12, 2005, 
meeting, unanimously recommended establishing a new section entitled, 
``Sec.  983.141--Procedures for Exempting Handlers from Minimum Quality 
Testing'' to specify appropriate exemption, revocation, and appeal 
procedures. The Committee believes that standardized procedures would 
ensure that handler requests for exemptions and revocations of such 
exemptions are treated similarly by the Committee, and ensure that all 
applicants are treated equitably.
    The Committee also recommended that handler exemptions under Sec.  
983.41(b) not be granted if a handler failed to file required reports, 
shipped substandard pistachios, or failed to comply with the 
requirements specified in Sec.  983.41 on exemptions for minimum 
quality testing. Revocations of approved exemptions could be 
implemented by the Committee, or its authorized agents, for the same 
reasons.
    Additionally, the Committee recommended that any handler who 
believes that he/she has been improperly denied an exemption or 
improperly had an exemption revoked by the Committee should be allowed 
to appeal the Committee's action to USDA. The Committee recommended 
that the USDA review any appeals and determine their merit. All appeals 
must be submitted in writing and the Committee would provide USDA the 
complete file on each appeal.
    The recommended exemption procedures require the Committee, or its 
authorized agents, to timely notify all handlers of the opportunity to 
apply to be exempted from minimum quality testing so that all 
interested handlers can submit applications on forms provided by the 
Committee by the August 1 deadline; promptly review all requests for 
exemption; verify that the quantity of assessed weight pistachios 
handled by any applicants during the prior production year was less 
than 1 million pounds of assessed weight and that applicants are in 
compliance with the order's inspection, quality, and reporting 
requirements; approve or disapprove requests for exemptions by August 
20 of each year; maintain complete files concerning the approval or 
disapproval of each handler's application; and notify handlers by 
August 30 of approval or disapproval.
    A handler's exemption would be revoked by the Committee, or its 
duly authorized agents, if the handler fails to provide reports 
required under this part

[[Page 42258]]

or has not complied with the provisions on minimal quantity testing in 
Sec.  983.41. Additionally, the Committee, or its duly authorized 
agents, would revoke an approved exemption when a handler audit reveals 
that a handler has handled a million pounds or more of assessed weight 
pistachios during the applicable production year. The revocation of a 
handler's exemption would be made in writing to the handler and specify 
the reason(s) for and the effective date.
    Any handler who believes that he/she has been improperly denied an 
exemption or improperly had an exemption revoked, may appeal to USDA 
for reconsideration within 20 days after notification of the 
Committee's findings. All appeals must be in writing.
    The Committee, or its duly authorized agents, shall forward a file 
with all pertinent information related to the handler's appeal to USDA. 
USDA shall inform the handler and all interested persons of the 
Secretary's decision.
    As previously mentioned, under Sec.  983.70 of the order, this rule 
applies to handlers handling more than 1,000 pounds and less than 1 
million pounds, because handlers who handle 1,000 pounds or less of 
dried weight pistachios are exempt from assessment, aflatoxin, and 
minimum quality requirements and from all reporting requirements under 
Sec.  983.147 of the order's administrative rules and regulations, with 
the exception of ACP Form-4.

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 action on small entities. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and 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 24 handlers of California pistachios who 
are subject to regulation under the order and about 741 producers of 
pistachios in the production area. Small agricultural service firms are 
defined by the Small Business Administration (SBA)(13 CFR 121.201) as 
those having annual receipts of less than $6,000,000 and small 
agricultural producers are defined as those having annual receipts of 
less than $750,000. Seventeen of the 24 handlers subject to regulation 
have annual pistachio receipts of less than $6,000,000. In addition, 
722 of the 741 producers have annual receipts less than $750,000. 
Therefore, a majority of handlers and producers may be classified as 
small entities under the SBA standards.
    This rule establishes procedures for exempting handlers from 
minimum quality (maximum limits for quality defects and minimum size) 
testing requirements prescribed under the order. These procedures will 
be used by the Committee when considering handler requests for 
exemptions from minimum quality testing requirements and when 
considering revocations of such exemptions. Additionally, this rule 
establishes an appeals process for handlers who have been denied an 
exemption or had an approved exemption revoked.
    Section 983.41(a) of the pistachio order allows handlers handling 
less than 1 million pounds of assessed weight pistachios each 
production year (September 1-August 31) to use optional aflatoxin 
testing methods. The optional methods permit the sampling and testing 
of a handler's entire inventory before further processing, and allow 
handlers to segregate their receipts into various lots for sampling and 
testing.
    Section 983.41(b) of the pistachio order authorizes handler 
exemptions from minimum quality testing for handlers handling less than 
1 million pounds of assessed weight pistachios per production year and 
specifies that the Committee may grant such handler exemptions.
    Section 983.70 of the pistachio order exempts handlers who handle 
1,000 pounds or less of dried weight (assessed weight) pistachios 
(dried to 5 percent moisture) during any marketing year from all 
assessment, aflatoxin, and minimum quality requirements. For the 
purposes of this document, the term ``marketing year'' is synonymous 
with the term ``production year'' and covers the period September 1 
through August 31.
    The recommended decision, published on August 4, 2003, (68 FR 
45990) indicated that implementing regulations should be effectuated to 
establish the specific procedures for exempting handlers who handle 
more than 1,000 pounds and less than 1 million pounds of assessed 
weight pistachios per production year (September 1-August 31) from 
minimum quality testing requirements.
    Under these authorities, the Committee at its April 12, 2005, 
meeting, unanimously recommended establishing standardized procedures 
for granting and revoking handler exemption requests, and considering 
handler appeals on exemption decisions. This action will have a 
positive impact on small and large handlers by assuring that all 
exemption applications and reviews are handled following standardized 
procedures.
    The Committee discussed alternatives to this change, including not 
making any changes, but determined that specific procedures were needed 
to facilitate: (1) Exempting handlers from minimum quality testing; (2) 
revoking exemptions when handlers violate the marketing order; and (3) 
processing appeals to the Committee's actions. These procedures are 
expected to ensure that all such requests are treated equitably. The 
Committee vote was 8 in favor, 0 opposed, and 0 abstained.
    The information collection requirements for the ACP Form-5, which 
handlers will complete and forward to the Committee to request 
exemption from minimum quality requirements under the order, was 
previously submitted to the Office of Management and Budget (OMB) and 
approved under OMB No. 0581-0230. Thus, this action will not impose any 
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.
    In addition, USDA has not identified any relevant Federal rules 
that duplicate, overlap or conflict with this rule.
    Further, the Committee's meetings are widely publicized throughout 
the pistachio industry and all interested persons are invited to attend 
the meetings and participate in the Committee's deliberations. Like all 
Committee meetings, the April 12, 2005, meeting was a public meeting 
and all entities, both large and small, were able to express their 
views on these issues.
    Finally, interested persons are invited to submit information on 
the regulatory and informational 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

[[Page 42259]]

address in the FOR FURTHER INFORMATION CONTACT section.
    This rule invites comments on the establishment of minimum quality 
testing exemption procedures under the order. Any comments received 
will be considered prior to finalization of this rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation and other information, it is found that 
this interim final rule, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) This action provides procedures to facilitate the review 
and approval of minimum quality testing exemption requests, denials and 
revocations of such exemptions, and subsequent appeals, if submitted; 
(2) the Committee unanimously recommended the procedures at a public 
meeting and interested parties had an opportunity to provide input; (3) 
handlers are required to file the exemption form with the Committee by 
August 1 of each year; and (4) this rule provides for a 60-day comment 
period and any comments received will be considered prior to 
finalization of this rule.

List of Subjects in 7 CFR Part 983

    Pistachios, Marketing agreements and orders, 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, Sec.  983.141 is added to Subpart-Rules and Regulations 
to read as follows:


Sec.  983.141  Procedures for exempting handlers from minimum quality 
testing.

    (a) Exemption procedures. The Committee, or its duly authorized 
agents, shall notify all handlers each year of the opportunity to apply 
to be exempted from minimum quality testing and handlers shall submit 
such requests on forms furnished by the Committee. The deadline for 
submission shall be August 1. The Committee, or its duly authorized 
agents, shall:
    (1) Promptly review all exemption applications received. In 
reviewing applications for exemption, the Committee, or its duly 
authorized agents, shall determine that the quantity of assessed weight 
pistachios handled during the prior production year was less than 1 
million assessed weight pounds and that the applicants are in 
compliance with the order's reporting requirements and the provisions 
of Sec.  983.41. Handler compliance will be determined through handler 
audits;
    (2) Complete the review and approve or disapprove requests for 
exemptions by August 20;
    (3) Maintain complete files detailing the reason(s) for the 
approval or disapproval of each application for at least three years 
beyond the crop year of applicability; and
    (4) Notify in writing all applicants by August 30 of the approval 
or disapproval of their requests together with the reason(s) for 
disapproval, if applicable.
    (b) Revocation of exemptions. A handler's exemption shall be 
revoked by the Committee, or its duly authorized agents, if the handler 
fails to provide reports required under Sec.  983.147, or has not 
complied with the provisions on minimal quality testing in Sec.  
983.41, of this part. Additionally, the Committee, or its duly 
authorized agents, shall revoke an approved exemption when a handler 
audit reveals that a handler has handled a million pounds or more of 
assessed weight pistachios during the current production year. The 
revocation of a handler's exemption shall be made in writing to the 
handler and shall specify the reason(s) for and the effective date.
    (c) Appeals. (1) Any handler who believes that he/she has been 
improperly denied an exemption or improperly had an exemption revoked, 
may appeal to the Secretary, within 20 days after notification of the 
Committee's, or agents of the Committee's, decisions. All appeals shall 
be in writing. When requested by the Secretary, the Committee, or its 
duly authorized agents, shall forward a file with all pertinent 
information related to any handler appeal. The Secretary shall inform 
the handler and all interested persons of the Secretary's decision.
    (2) If handlers do not file an appeal or if their appeal is denied 
by the Secretary, they shall present all remaining lots of pistachios 
in inventory for minimum quality testing before moving the pistachios 
into the channels of commerce.

    Dated: July 18, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-14513 Filed 7-19-05; 1:38 pm]
BILLING CODE 3410-02-P