[Federal Register Volume 80, Number 239 (Monday, December 14, 2015)]
[Proposed Rules]
[Pages 77277-77279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31371]


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 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. 80, No. 239 / Monday, December 14, 2015 / 
Proposed Rules  

[[Page 77277]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Doc. No. AMS-FV-15-0038; FV15-983-1 PR]


Pistachios Grown in California, Arizona, and New Mexico; 
Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Administrative Committee for Pistachios (Committee) to increase the 
assessment rate established for the 2015-16 and subsequent production 
years from $0.0005 to $0.0035 per pound of assessed weight pistachios 
handled under the marketing order for pistachios grown in California, 
Arizona, and New Mexico. The Committee locally administers the order 
and is comprised of producers and handlers of pistachios operating 
within the area of production. Assessments upon pistachio handlers are 
used by the Committee to fund reasonable and necessary expenses of the 
program. The production year begins on 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 December 29, 2015.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk, Marketing Order and Agreement Division, Specialty Crops Program, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; 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.regulations.gov. All comments submitted in response to this 
proposed rule will be included in the record and will be made available 
to the public. Please be advised that the identity of the individuals 
or entities submitting the comments will be made public on the Internet 
at the address provided above.

FOR FURTHER INFORMATION CONTACT: Peter Sommers, Marketing Specialist, 
or Martin Engeler, Regional Director, California Marketing Field 
Office, Marketing Order and Agreement Division, Specialty Crops 
Program, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or 
Email: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 
Fax: (202) 720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing 
Agreement and Order No. 983, as amended (7 CFR part 983), regulating 
the handling of pistachios grown in California, Arizona, and New 
Mexico, 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 proposed rule 
in conformance with Executive Orders 12866, 13563, and 13175.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the marketing order now in effect, 
California, Arizona, and New Mexico 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 on September 
1, 2015, and continue until amended, suspended, or terminated.
    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 proposed rule would increase the assessment rate for the 2015-
16 and subsequent production years from $0.0005 to $0.0035 per pound of 
assessed weight pistachios.
    The California, Arizona, and New Mexico pistachio marketing 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, Arizona, and New Mexico 
pistachios. They are familiar with the Committee's needs and with the 
costs of 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.
    For the 2011-12 and subsequent production years, the Committee 
recommended, and the USDA approved, an assessment rate that would 
continue in effect from production year to production year unless 
modified, suspended, or terminated by USDA based upon recommendation 
and information submitted by the Committee or other information 
available to USDA.
    The Committee met on July 9, 2015 and October 20, 2015 and 
unanimously recommended 2015-16 production year expenditures of 
$1,056,402 and an assessment rate of $0.0035 per pound of assessed 
weight pistachios handled to

[[Page 77278]]

fund Committee expenses. This represents an increase over the prior 
year's budget and assessment rate. In comparison, last year's budgeted 
expenditures were $1,001,400. The assessment rate of $0.0035 is $0.0030 
higher than the rate currently in effect. The Committee's recommended 
2015-16 expenditures are $55,002 higher than last year's budgeted 
expenditures. The reasons for the proposed increase include a 
significant increase in budgeted expenses in 2015 over actual expenses 
in 2014, a significantly smaller crop estimate in 2015, and allocation 
of funds for Sterile Insect Technology/Navel Orange Worm (SIT/NOW) 
research. When applied to the Committee's crop estimate for the 2015-16 
production year of 265 million pounds, the current assessment rate of 
$0.0005 would not generate sufficient income to cover anticipated 
expenses. The proposed assessment rate of $0.0035 per pound of assessed 
weight pistachios would generate assessment income of $927,500. 
Anticipated assessment income combined with financial reserves and 
other income would provide sufficient revenue for the Committee to meet 
its budgeted expenses while maintaining its financial reserve within 
the limit authorized under the order.
    The major expenditures recommended by the Committee for the 2015-16 
production year include $560,000 for SIT/NOW research, $92,402 for 
administrative expenses, $314,000 for salary and related employee 
expenses, $10,000 for compliance expenses, and $80,000 for a 
contingency fund. Budgeted expenses in 2014-15 were $360,000 for 
Technical Assistance Specialty Crop (TASC) Program research, $125,000 
for other research, $117,400 for administrative expenses, $314,000 for 
salary and related employee expenses, $10,000 for compliance expenses, 
and $75,000 for a contingency fund. Actual expenses in 2014-15 were 
significantly lower, at $547,199, as the TASC research was not funded.
    The assessment rate recommended by the Committee was derived by 
considering anticipated expenses and production levels of California, 
Arizona, and New Mexico pistachios, and other pertinent factors. As 
mentioned earlier, pistachio production levels are estimated at 265 
million pounds, which should generate $927,500 in assessment income. 
Anticipated assessment income derived from handler assessments, along 
with other income and financial reserves would provide sufficient 
revenue for the Committee to meet its budgeted expenses while 
maintaining its financial reserve within the limit authorized under the 
order. The significant increase in the assessment rate is due to a 
significant increase in budgeted expenses in 2015 over actual expenses 
in 2014, and also a significantly smaller crop estimate in 2015. The 
financial reserve is estimated to be $239,994 at the end of the 2015-16 
production year.
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by USDA based upon a 
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 the 
Committee's 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 
2015-16 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) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) 
has considered the economic impact of this proposed 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 
businesses 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.
    There are approximately 1,152 producers of pistachios in the 
production area and approximately 19 handlers subject to regulation 
under the marketing order. Small agricultural producers are defined by 
the Small Business Administration as those having annual receipts of 
less than $750,000, and small agricultural service firms are defined as 
those whose annual receipts are less than $7,000,000 (13 CFR 121.201).
    Based on Committee data, it is estimated that about 47 percent of 
the handlers annually ship less than $7,000,000 worth of pistachios, 
and it is also estimated that 68 percent of the producers have annual 
receipts less than $750,000. Thus, the majority of handlers in the 
production area may be classified as large entities, and the majority 
of producers may be classified as small entities.
    This proposal would increase the assessment rate collected from 
handlers for the 2015-16 and subsequent production years from $0.0005 
to $0.0035 per pound of assessed weight pistachios. The Committee 
unanimously recommended 2015-16 expenditures of $1,056,402 and an 
assessment rate of $0.0035 per pound of assessed weight pistachios. The 
proposed assessment rate of $0.0035 is $0.0030 higher than the 2014-15 
rate. The quantity of assessable pistachios for the 2015-16 production 
year is estimated at 265 million pounds. Thus, the $0.0035 rate should 
provide $927,500 in assessment income. Anticipated assessment income 
derived from handler assessments, along with other income and financial 
reserves would provide sufficient revenue for the Committee to meet its 
budgeted expenses while maintaining its financial reserve authorized 
under the order which is approximately two production years' budgeted 
expenses.
    The major expenditures recommended by the Committee for the 2015-16 
production year include $560,000 for SIT/NOW research, $92,401 for 
administrative expenses, $314,000 for salary and related employee 
expenses, $10,000 for compliance expenses, and $80,000 for a 
contingency fund. Budgeted expenses in 2014-15 were $360,000 for TASC 
Program research, $125,000 for other research, $117,400 for 
administrative expenses, $314,000 for salary and related employee 
expenses, $10,000 for compliance expenses, and $75,000 for a 
contingency fund. The reasons for the proposed increase include a 
significant increase in budgeted expenses in 2015 over actual expenses 
in 2014, a significantly smaller crop estimate in 2015, and allocation 
of funds for Sterile Insect Technology/Navel Orange Worm (SIT/NOW) 
research.
    Prior to arriving at this budget and assessment rate, the Committee 
considered alternative expenditure levels but ultimately determined 
that 2015-16 expenditures of $1,056,402 were appropriate and that the 
current assessment rate would generate

[[Page 77279]]

insufficient revenue to meet its expenses.
    According to data from the National Agricultural Statistics 
Service, the season average producer price was $3.48 per pound of 
assessed weight pistachios in 2013 and $3.10 per pound in 2014. A 
review of historical information and preliminary information pertaining 
to the upcoming production year indicates that the producer price for 
the 2015-16 production year could range between $3.48 and $3.10 per 
pound of assessed weight pistachios. Therefore, the estimated 
assessment revenue for the 2015-16 production year as a percentage of 
total producer revenue could range between 0.10 and 0.11 percent.
    This action would increase the assessment obligation imposed on 
handlers. While assessments impose some additional costs on handlers, 
the costs are minimal and uniform on all handlers. These costs would be 
offset by the benefits derived from the operation of the marketing 
order. In addition, the Committee's meeting was widely publicized 
throughout the California, Arizona, and New Mexico pistachio industry, 
and all interested persons were invited to attend and participate in 
Committee deliberations on all issues. Like all Committee meetings, the 
July 9, 2015, and October 20, 2015, meetings were public and all 
entities, both large and small, were able to express views on this 
issue. Finally, interested persons are invited to submit comments on 
this proposed rule, including the regulatory and informational impacts 
of this action on small businesses.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0215. No changes in those requirements are 
necessary as a result of this action. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This proposed rule would impose no additional reporting or 
recordkeeping requirements on either small or large California, 
Arizona, and New Mexico 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.
    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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this action.
    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/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Jeffrey Smutny at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    A 15-day comment period is provided to allow interested persons to 
respond to this proposed rule. Fifteen days is deemed appropriate 
because: (1) The 2015-16 production year began on September 1, 2015, 
and the marketing order requires that the rate of assessment for each 
production year apply to all assessable pistachios handled during such 
production year; (2) the Committee needs to have sufficient funds to 
pay its expenses, which are incurred on a continuous basis; and (3) 
handlers are aware of this action, which was unanimously recommended by 
the Committee at a public meeting.

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, ARIZONA, AND NEW MEXICO

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

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

0
2. Revise Sec.  983.253(a) to read as follows:


Sec.  983.253  Assessment rate.

    (a) On and after September 1, 2015, an assessment rate of $0.0035 
per pound is established for California, Arizona, and New Mexico 
pistachios.
* * * * *

    Dated: December 8, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-31371 Filed 12-11-15; 8:45 am]
BILLING CODE P