[Federal Register Volume 71, Number 165 (Friday, August 25, 2006)]
[Proposed Rules]
[Pages 50374-50376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-14114]


 ========================================================================
 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. 71, No. 165 / Friday, August 25, 2006 / 
Proposed Rules  

[[Page 50374]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Docket No. FV06-983-3 PR]


Pistachios Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule would decrease the assessment rate established for 
the Administrative Committee for Pistachios (committee) for the 2006-07 
and subsequent production years from $0.0014 per pound of assessed-
weight pistachios to $0.0007 per pound of assessed-weight pistachios. 
The committee, which locally administers the marketing order regulating 
the handling of pistachios grown in California, made this 
recommendation for the purpose of lowering the monetary reserve to 
ensure that the reserve is maintained at a level consistent with order 
requirements. Assessments upon commodity handlers are used by the 
committee to fund reasonable and necessary expenses of the program. The 
production year begins September 1 and ends August 31. The assessment 
rate would remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Comments must be received by September 25, 2006.

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: Terry Vawter, Marketing Specialist, or 
Kurt J. Kimmel, Regional Manager, 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 E-mail: [email protected] or [email protected].
    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, California 
pistachio handlers are subject to assessments. Funds to administer the 
order are derived from such assessments. For the 2004-05 production 
year, an assessment rate of $0.0014 per pound of assessed-weight 
pistachios received for processing was approved by USDA to continue in 
effect indefinitely unless modified, suspended, or terminated. This 
proposal would decrease the assessment rate to $0.0007 per pound for 
the 2006-07 production year and would continue in effect indefinitely 
unless modified, 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 decrease the assessment rate established for the 
committee for the 2006-07 and subsequent production years. Section 
983.253 established an assessment rate of $0.0014 per pound of 
assessed-weight pistachios for the 2004-05 and subsequent fiscal 
periods. 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 order. Continuous 
assessment rates remain in effect from fiscal period to fiscal period 
unless modified, suspended, or terminated by USDA. This rule proposes 
decreasing the assessment rate to $0.0007 per pound for 2006-07 and 
would remain in effect during subsequent fiscal periods until modified, 
suspended, or terminated by USDA.
    Sections 983.52 and 983.53 of the 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 
program. In addition, the order authorizes the use of a monetary 
reserve to cover program expenses (Sec.  983.56). The monetary reserve 
may not exceed approximately two production years' budgeted expenses. 
That section also requires the committee to reduce future assessments 
so that the reserve funds are less than or equal to two production 
years' budgeted expenses.
    The members of the committee are producers and handlers of 
California pistachios. They are familiar with the committee's needs and 
with the costs

[[Page 50375]]

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. 
Therefore, all directly affected persons have an opportunity to 
participate and provide input.
    For the 2004-05 production year, the committee recommended, and 
USDA approved, an assessment rate of $0.0014 per pound of assessed-
weight pistachios. The assessment rate would continue in effect from 
production year to production year unless modified, suspended, or 
terminated by USDA upon recommendation and information submitted by the 
committee or other information available to USDA.
    The committee met on May 23, 2006, and unanimously recommended 
2006-07 expenditures of $340,906 and an assessment rate of $0.0007 per 
pound of assessable weight pistachios received for processing. By 
comparison, expenses for the 2005-06 production year totaled $324,403 
and the assessment rate was $0.0014 per pound of assessable weight 
pistachios received for processing. The assessment rate of $0.0007 is 
one-half of the assessment rate currently in effect under the order. 
This proposal would lower the reserve to ensure that it remains at a 
level consistent with order requirements.
    The major expenditures recommended by the committee for the 2006-07 
production year include: $80,952 for administrative expenses; $10,000 
for compliance expenses; $149,954 for salaries; and $100,000 for a 
contingency reserve.
    The major expenditures recommended by the committee for the 2005-06 
production year include $85,046 for administrative expenses; $10,000 
for compliance expenses; $129,357 for salaries; and $100,000 for a 
contingency reserve.
    The committee believes that maintaining the current assessment rate 
could eventually result in a financial reserve balance beyond order 
requirements that the reserve not exceed approximately two production 
years' expenses. Based on this, the committee determined that 
decreasing the assessment rate at this time would draw down the 
monetary reserve and ensure the reserve is maintained at a level 
consistent with order requirements.
    The assessment rate recommended by the committee was derived by 
dividing anticipated expenses minus the reserve funds that will be 
utilized to meet expenses by expected receipts (the assessed weight) of 
California pistachios during the 2006-07 season ($340,906 minus 
$200,906 divided by 200,000,000 pounds = $0.0007 per pound). With 
pistachio receipts for the year estimated at 200,000,000 pounds, 
assessment income is expected to total $140,000.
    If the assessment rate remains at $0.0014 per pound (estimated 
$280,000 assessment income), the estimated reserve on August 31, 2007, 
would be $448,741. Although this amount would still be within the 
order's reserve requirements, the committee believes it should draw 
down the reserve in the event that some of the variable components, 
such as crop estimate, are understated.
    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 
production year 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 2006-07 budget and those 
for subsequent production years would be reviewed and, as appropriate, 
approved by USDA.

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 50 handlers of California pistachios 
subject to regulation under the order and approximately 740 producers 
in the production area. The Small Business Administration (13 CFR 
121.201) defines small agricultural producers as those having annual 
receipts less than $750,000, and defines small agricultural service 
firms those whose annual receipts are less than $6,500,000. Of the 740 
producers, approximately 722 have annual receipts of less than 
$750,000. Eight of the 50 handlers subject to regulation have annual 
pistachio receipts of at least $6,500,000. Thus, the majority of 
handlers and producers of California pistachios may be classified as 
small entities.
    This rule would decrease the assessment rate established for the 
committee and collected from handlers for the 2006-07 and subsequent 
production years from $0.0014 to $0.0007 per pound of assessed-weight 
pistachios received for processing. The committee unanimously 
recommended 2006-07 expenditures of $340,906 and an assessment rate of 
$0.0007 per pound of assessed-weight pistachios. The recommendation was 
made for the purpose of lowering the monetary reserve to ensure that 
the reserve is maintained at a level consistent with order 
requirements. The quantity of assessed-weight pistachios anticipated 
for the 2006-07 production year is estimated at 200,000,000 pounds. The 
total assessments collected are estimated to be $140,000. Coupled with 
the funds on hand at the beginning of the production year of nearly 
$500,000, the committee would have adequate funds to meet the 2006-07 
expenses and maintain an adequate reserve that is within the 
requirements of the order.
    At its meeting on May 23, 2006, the committee discussed the 
alternative levels of assessments it believed would provide both 
adequate funding of expenses and result in a reduced financial reserve. 
Some members believed that the reserve funds alone would be adequate to 
sustain committee operations in the absence of any assessment rate. 
Others believed a smaller assessment rate was prudent, thus keeping 
consistent assessment collections from one production year to the next. 
That way, the committee reasoned, handlers would be in a better 
position to plan for assessments from year to year.
    After deliberating the value of both proposals, the committee 
ultimately unanimously recommended a reduced assessment rate of $0.0007 
per pound of assessed-weight pistachios and expenses totaling $340,906.
    The major expenditures recommended by the committee for the 2006-07 
production year include: $80,952 for administrative expenses; $10,000 
for compliance expenses;

[[Page 50376]]

$149,954 for salaries; and $100,000 for a contingency reserve.
    The major expenditures recommended by the committee for the 2005-06 
production year include $85,046 for administrative expenses; $10,000 
for compliance expenses; $129,357 for salaries; and $100,000 for a 
contingency reserve.
    The assessment rate recommended by the committee was derived by 
dividing anticipated expenses minus the reserve funds that will be 
utilized to meet expenses by expected receipts (the assessed weight) of 
California pistachios during the 2006-07 season ($340,906 minus 
$200,906 divided by 200,000,000 pounds = $0.0007 per pound). With 
pistachio receipts for the year estimated at 200,000,000 pounds, 
assessment income is expected to total $140,000.
    If the assessment rate remains at $0.0014 per pound (estimated 
$280,000 assessment income), the estimated reserve on August 31, 2007, 
would be $448,741. Although this amount would still be within the 
order's reserve requirements, the committee believes it should draw 
down the reserve in the event that some of the variable components, 
such as crop estimate, are understated.
    The assessment rate recommended by the committee is one-half of the 
current assessment rate. The committee believes that maintaining the 
current assessment rate would result in a financial reserve balance 
that is higher than needed for operations under the order.
    The committee reviewed and unanimously recommended these 
expenditures after considering information from their Executive 
Subcommittee, which met on March 1, 2006. As noted, the committee 
considered both eliminating the assessment rate for one year and 
assessing at the proposed rate before recommending the proposed 
assessment rate of $0.0007 per pound of assessed-weight pistachios. 
This proposed assessment rate is one-half of the assessment rate 
currently in effect; and, coupled with carry-in funds and assessments 
to be collected, would provide adequate funds for the committee's 2006-
07 production year operations.
    A review of historical information and preliminary information 
pertaining to the upcoming production year indicates that the grower 
price for the 2006-07 production year could range between $1.65 and 
$1.75 per pound of assessed-weight pistachios. Therefore, the estimated 
assessment revenue for the 2006-07 production year as a percentage of 
total grower revenue could range between .040 and .042 percent.
    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, decreasing the assessment 
rate would reduce the burden on handlers, and may reduce the burden on 
producers. 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 encouraged to 
participate in committee deliberations on all issues. Like all 
committee meetings, the May 23, 2006, meeting was a public meeting and 
all entities, both large and small, were able to express views on this 
issue.
    Finally, interested persons are invited to submit comments on the 
informational and regulatory impacts of this action on small 
businesses.
    This proposed rule would not impose additional reporting and 
recordkeeping on both small and 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.
    AMS is committed to compliance with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance 
guide should be sent to Jay Guerber at the previously mentioned address 
in the FOR FURTHER INFORMATION CONTACT section.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. Thirty days is deemed appropriate 
because the 2006-07 production year begins on September 1, 2006, and 
the marketing order requires that the rate of assessment for each 
production year apply to all assessable pistachios handled during such 
production year.

List of Subjects in 7 CFR Part 983

    Marketing agreements, Pistachios, 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. Section 983.253 is amended by revising paragraph (a) to read as 
follows:


Sec.  983.253  Assessment rate.

    (a) On and after September 1, 2006, a continuing assessment rate of 
$0.0007 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.
* * * * *

    Dated: August 21, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-14114 Filed 8-24-06; 8:45 am]
BILLING CODE 3410-02-P