[Federal Register Volume 81, Number 180 (Friday, September 16, 2016)]
[Rules and Regulations]
[Pages 63679-63682]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-22248]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Docket No. AMS-SC-16-0076 SC16-983-2 IR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This rule implements a recommendation from the Administrative 
Committee for Pistachios (Committee) for a decrease in the assessment 
rate established for the 2016-17 and subsequent production years from 
$0.0035 to $0.0010 per pound of assessed weight pistachios handled 
under the marketing order (order). 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 September 1 and 
ends August 31. The assessment rate will remain in effect indefinitely 
unless modified, suspended, or terminated.

DATES: Effective September 19, 2016; Comments received by November 15, 
2016 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 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 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 comments will be 
made public on the Internet at the address provided above.

FOR FURTHER INFORMATION CONTACT: Peter R. Sommers, Marketing 
Specialist,

[[Page 63680]]

or Jeffrey Smutny, 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 Richard Lower, 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 rule is issued under Marketing 
Agreement and Order No. 983, both 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 rule in 
conformance with Executive Orders 12866, 13563, and 13175.
    This 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 issued herein will be applicable 
to all assessable pistachios beginning September 1, 2016, 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 rule decreases the assessment rate for the 2016-17 and 
subsequent production years from $0.0035 to $0.0010 per pound of 
assessed weight pistachios.
    The California, Arizona, and New Mexico 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, Arizona, and New Mexico 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. Thus, all directly 
affected persons have an opportunity to participate and provide input.
    For the 2015-16 and subsequent production years, the Committee 
recommended and USDA approved an assessment rate that 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 July 12, 2016, and unanimously recommended 
2016-17 expenditures of $922,500, and an assessment rate of $0.0010 per 
pound of assessed weight pistachios. In comparison, last year's 
budgeted expenditures were $1,056,402, and the assessment rate was 
$0.0035 per pound of pistachios. The assessment rate of $0.0010 is 
$0.0025 lower than the rate currently in effect.
    The major expenditures recommended by the Committee for the 2016-17 
production year include $333,000 for salaries and benefits, $250,000 
for research, and $19,500 for general and administrative expenses. 
Budgeted expenses for these items in the 2015-16 production year were 
$316,500, $560,000, and $19,500, respectively.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of California, 
Arizona, and New Mexico pistachios. Pistachio shipments for the 
production year are estimated at 750 million pounds which should 
provide $750,000 in assessment income. Income derived from handler 
assessments, along with interest income and funds from the Committee's 
authorized reserve, will be adequate to cover budgeted expenses. Funds 
in the reserve will be kept within the maximum limit permitted by the 
order, which is two production years' budgeted expenses.
    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 is effective 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 2016-17 production year 
budget and those for subsequent production years will 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 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 19 handlers subject to regulation under the 
marketing order. The Small Business Administration defines small 
agricultural producers as those having annual receipts less than 
$750,000, and small agricultural service firms as those whose annual 
receipts are less than $7,500,000. (13 CFR 121.201)
    Based on Committee data, it is estimated that about 53 percent of 
the handlers annually ship less than $7,500,000 worth of pistachios, 
and it is also estimated that 68 percent of the producers have annual 
receipts less

[[Page 63681]]

than $750,000. Thus, the majority of handlers in the production area 
and more than two-thirds of the producers may be classified as small 
entities.
    This rule decreases the assessment rate collected from handlers for 
the 2016-17 and subsequent production years from $0.0035 to $0.0010 per 
pound of pistachios handled. The Committee unanimously recommended 
2016-17 expenditures of $922,500 and an assessment rate of $0.0010 per 
pound of assessed weight pistachios, which is $0.0025 lower than the 
2015-16 rate currently in effect. The quantity of assessable pistachios 
for the 2016-17 production year is estimated at 750 million pounds. 
Thus, the $0.0010 rate should provide $750,000 in assessment income. 
Income derived from handler's assessments, along with interest and 
funds from the Committee's authorized reserve, should be adequate to 
cover expenses for the 2016-17 production year.
    The major expenditures recommended by the Committee for the 2016-17 
production year include $333,000 for salaries and benefits, $250,000 
for research, and $19,500 for general and administrative expenses. 
Budgeted expenses for these items in the 2015-16 production year were 
$316,500, $560,000, and $19,500, respectively.
    The assessment rate decrease is necessary to reduce expected income 
from an assessment rate set at $0.0035 per pound. The income from that 
assessment rate would result in the Committee's financial reserve being 
higher than is permitted under the order. The $0.0035 rate was 
established to provide sufficient income when the crop was expected to 
be approximately half of a normal crop. For these reasons, the 
Committee unanimously voted to decrease the assessment rate from 
$0.0035 to $0.0010. The income generated from the lower recommended 
rate combined with funds from the financial reserve should provide 
sufficient income to cover anticipated 2016-17 expenses and maintain 
the financial reserve within the limit specified under the marketing 
order.
    Prior to arriving at this budget and assessment rate, the Committee 
considered information from various sources. Alternative expenditure 
levels were discussed, based upon the relative value of various 
activities to the pistachio industry. The Committee ultimately 
determined that the 2016-17 production year expenses of $922,500 were 
prudent, and the assessment income provided by the reduced rate and 
funds from the financial reserve would permit the committee to meet its 
expenses.
    According to data from the National Agricultural Statistics 
Service, the season average producer price was $3.57 per pound of 
assessed weight pistachios in 2014 and $2.48 per pound in 2015. A 
review of historical and preliminary information pertaining to the 
upcoming production year indicates that the producer revenue for the 
2016-17 production year could range between $1,860,000,000 and 
$2,677,500,000. Therefore, the estimated assessment revenue for the 
2016-17 production year as a percentage of total producer revenue could 
range between 0.0004 and 0.00028 percent.
    This action decreases the assessment obligation imposed on 
handlers. Assessments are applied uniformly on all handlers, and some 
of the costs may be passed on to producers. However, decreasing the 
assessment rate reduces the burden on handlers, and may reduce the 
burden on producers. In addition, the Committee meeting was widely 
publicized throughout the California, Arizona, and New Mexico pistachio 
industry, and all interested persons were invited to attend the 
meetings and encouraged to participate in Committee deliberations on 
all issues.
    Like all Committee meetings, the July 12, 2016, meeting was a 
public meeting and all entities, both large and small, were able to 
express views on this issue. Industry members also discussed various 
assessment rates, potential crop size, and estimated expenses at this 
meeting. Finally, interested persons are invited to submit comments on 
this interim 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, ``Vegetable and Specialty Crop Marketing 
Orders.'' No changes in those requirements as a result of this action 
are necessary. Should any changes become necessary, they would be 
submitted to OMB for approval.
    This action imposes 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 rule.
    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 Richard Lower 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 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) The 2016-17 production year begins on September 
1, 2016, and the order requires that the rate of assessment for each 
production year apply to all assessable pistachios handled during such 
production year; (2) the action decreases the assessment rate for 
assessable pistachios beginning with the 2016-17 production year; (3) 
handlers are aware of this action which was unanimously recommended by 
the Committee at a public meeting and is similar to other assessment 
rate actions issued in past years; and (4) this interim rule provides a 
60-day comment period, and all comments timely received will be 
considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 983

    Pistachios, Marketing agreements, Reporting and recordkeeping 
requirements.

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

[[Page 63682]]

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. Section 983.253 is revised to read as follows:


Sec.  983.253   Assessment rate.

    On and after September 1, 2016, an assessment rate of $0.0010 per 
pound is established for California, Arizona, and New Mexico 
pistachios.

    Dated: September 12, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing Service.
[FR Doc. 2016-22248 Filed 9-15-16; 8:45 am]
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