[Federal Register Volume 71, Number 221 (Thursday, November 16, 2006)]
[Rules and Regulations]
[Pages 66643-66645]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-9252]



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  Federal Register / Vol. 71, No. 221 / Thursday, November 16, 2006 / 
Rules and Regulations  

[[Page 66643]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Docket No. FV06-983-3 FR]


Pistachios Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule decreases the assessment rate established for the 
Administrative Committee for Pistachios (committee) for the 2006-07 and 
subsequent production years from $0.0014 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 (order), made this recommendation to help reduce the 
monetary reserve and ensure that it remains at a level consistent with 
order requirements. Assessments upon pistachio 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 will remain in effect indefinitely unless modified, suspended, or 
terminated.

EFFECTIVE DATE: November 17, 2006.

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. It is intended that the 
assessment rate as issued herein will be applicable to all assessable 
pistachios beginning September 1, 2006, 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 decreases the assessment rate established for the 
committee for the 2006-07 and subsequent production years from $0.0014 
to $0.0007 per pound of assessed-weight pistachios. The assessment 
obligation for each handler is computed by applying the assessment rate 
to each handler's assessed weight, computed pursuant to Sec.  983.6 of 
the order.
    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 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 (Sec.  983.253). 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 assessed-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 assessed-weight 
pistachios received for processing. The $0.0007 assessment rate is one-
half of the $0.0014 assessment rate. Reducing the assessment rate will 
help reduce the reserve and ensure that it remains at a level 
consistent with order requirements.
    The major expenditures recommended by the committee for the

[[Page 66644]]

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. In comparison, major expenditures for the 
2005-06 production year included: $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 will help to reduce 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 remained 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 reduce 
the reserve in the event that some of the variable components, such as 
crop estimate, are understated.
    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 
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 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 2006-07 budget and those 
for subsequent production years will be reviewed and, as appropriate, 
approved by USDA.

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 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 as 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 decreases 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 to reduce the monetary reserve to ensure that it remains 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. Assessment income coupled with funds on hand 
at the beginning of the production year of nearly $500,000 should 
provide the committee with adequate funds to meet its 2006-07 expenses 
and maintain an adequate reserve that is within the requirements of the 
order.
    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. In comparison, major expenditures for the 2005-06 
production year included: $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 remained 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 believed it should reduce 
the reserve in the event that some of the variable components, such as 
crop estimate, are understated.
    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. 
The committee also reviewed information from its Executive 
Subcommittee, which met on March 1, 2006. Some committee 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.
    A review of historical information and preliminary information 
pertaining to the 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

[[Page 66645]]

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 will reduce the burden on handlers, and may reduce the burden on 
producers. In addition, the committee's meeting was widely publicized 
throughout the California pistachio 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.
    This rule imposes no additional reporting and recordkeeping 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.
    AMS is committed to complying 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 proposed rule concerning this action was published in the Federal 
Register on August 25, 2006 (71 FR 50374). 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 30-day comment period ending 
September 25, 2006, was provided for interested persons to respond to 
the proposal. No comments were received.
    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 is 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 the 2006-07 
production year began on September 1, 2006, and pistachio handlers are 
already receiving 2006-07 crop pistachios from growers. The decreased 
assessment rate applies to all pistachios received during the 2006-07 
year and subsequent seasons. Further, handlers are aware of this rule 
which was unanimously recommended at a public meeting. Also, a 30-day 
comment period was provided for in the proposed rule, and no comments 
were received.

List of Subjects in 7 CFR Part 983

    Marketing agreements, Pistachios, 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. 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: November 14, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 06-9252 Filed 11-14-06; 1:09 pm]
BILLING CODE 3410-02-P