[Federal Register Volume 82, Number 204 (Tuesday, October 24, 2017)]
[Rules and Regulations]
[Pages 49087-49089]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-22711]



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 Rules and Regulations
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  Federal Register / Vol. 82, No. 204 / Tuesday, October 24, 2017 / 
Rules and Regulations  

[[Page 49087]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Docket No. AMS-SC-17-0048; SC17-983-2 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 2017-18 and subsequent production years from 
$0.0010 to $0.0001 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, and a public member. 
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 October 24, 2017. Comments received by December 26, 
2017, 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, 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 13563 and 13175.
    This rule does not meet the definition of a significant regulatory 
action contained in section 3(f) of Executive Order 12866 and is not 
subject to review by the Office of Management and Budget (OMB). 
Additionally, because this rule does not meet the definition of a 
significant regulatory action, it does not trigger the requirements 
contained in Executive Order 13771. See OMB's Memorandum titled 
``Interim Guidance Implementing Section 2 of the Executive Order of 
January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs'[thinsp]'' (February 2, 2017).
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the 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, 2017, 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 established for the 
Committee for the 2017-18 and subsequent production years from $0.0010 
to $0.0001 per pound of assessed weight pistachios.
    The 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. The Committee also has a public member and an 
alternate public member who have no proprietary involvement with the 
industry. The producers and handlers 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.

[[Page 49088]]

Thus, all directly affected persons have an opportunity to participate 
and provide input.
    For the 2016-17 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 10, 2017, and unanimously recommended 
2017-18 expenditures of $672,900, and met again on August 1, 2017, to 
deliberate and recommend the 2017-18 assessment rate. At that time, the 
Committee recommended an assessment rate of $0.0001 per pound of 
assessed weight pistachios by majority vote. In comparison, last year's 
budgeted expenditures were $922,500, and the assessment rate was 
$0.0010 per pound of pistachios. The assessment rate of $0.0001 is 
$0.0009 lower than the rate currently in effect.
    The major expenditures recommended by the Committee for the 2017-18 
production year include $351,000 for salaries and benefits, $125,000 
for research, and $80,400 for general and administrative expenses. 
Budgeted expenses for these items in the 2016-17 production year were 
$351,000, $375,000, and $80,000, 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 550 million pounds which should 
provide $55,000 in assessment income. Income derived from handler 
assessments, along with interest income, California Pistachio Research 
Board (CPRB) management 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 approximately two production years' budgeted expenses 
as stated in Sec.  983.74(a)(2).
    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 2017-18 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 18 handlers subject to regulation under the order and 
approximately 1,236 producers of pistachios in the production area. The 
Small Business Administration defines small agricultural service firms 
as those whose annual receipts are less than $7,500,000 and small 
agricultural producers as those having annual receipts less than 
$750,000 (13 CFR 121.201).
    Based on Committee data, it is estimated that about 50 percent of 
the handlers annually ship less than $7,500,000 worth of pistachios. 
Nine of the 18 (50 percent) regulated handlers received enough 
pistachios at an average price of $2.50 per pound to be considered 
large handlers, leaving the percentage of small handlers at 50 percent.
    The National Agricultural Statistics Service (NASS) 2012 data on 
pistachio farm size indicates that there were 1,305 pistachio farms, of 
which 945, or 72 percent, were less than 100 acres. NASS 2016 annual 
production data indicates that the per-acre production of pistachios 
was 3,750 pounds. At an average value of $1.68 per pound, each acre of 
pistachios could return $6,300. In order for a producer to have 
$750,000 in annual receipts, the producer would have to have at least 
119 acres. Thus, the majority of handlers and producers in the 
production area may be classified as small entities.
    This rule decreases the assessment rate established for the 
Committee and collected from handlers for the 2017-18 and subsequent 
production years from $0.0010 to $0.0001 per pound of pistachios 
handled. The Committee unanimously recommended 2017-18 expenditures of 
$672,900, and recommended an assessment rate of $0.0001 per pound of 
assessed weight pistachios, by majority vote. The new assessment rate 
is $0.0009 lower than the rate currently in effect. The quantity of 
assessable pistachios for the 2017-18 production year is estimated at 
550 million pounds. Thus, the $0.0001 rate should provide $55,000 in 
assessment income. Income derived from handler's assessments, along 
with interest income, CPRB management income, and funds from the 
Committee's authorized reserve, will be adequate to cover expenses for 
the 2017-18 production year.
    The major expenditures recommended by the Committee for the 2017-18 
production year include $351,000 for salaries and benefits, $125,000 
for research, and $80,400 for general and administrative expenses. 
Budgeted expenses for these items in the 2016-17 production year were 
$351,000, $375,000, and $80,000, respectively.
    The assessment rate decrease is necessary to ensure the Committee's 
financial reserve remains within the limit specified under the order.
    In addition, the Committee had funded research pertaining to 
Sterile Insect Technology (SIT) for Navel Orangeworm control during the 
2016-2017 production year. Beginning with the 2017-18 production year, 
the CPRB will fully fund the SIT research, removing that financial 
burden from the committee. For this reason, the Committee recommended 
decreasing the assessment rate from $0.0010 to $0.0001, by majority 
vote. The income generated from the lower assessment rate combined with 
interest income, CPRB management income, and funds from the financial 
reserve should provide sufficient income to cover anticipated 2017-18 
expenses and maintain the financial reserve within the limit specified 
under the order.
    Prior to arriving at this budget and assessment rate, the Committee 
considered information from various sources. Alternative expenditure 
levels

[[Page 49089]]

were discussed, based upon the relative value of various activities to 
the pistachio industry. The Committee ultimately determined that the 
2017-18 production year expenses of $672,900 were prudent, and the 
assessment income provided by the reduced rate, interest income, CPRB 
management income, and funds from the financial reserve, would permit 
the Committee to meet its expenses, while not adding to the financial 
reserve.
    According to data from NASS, the season average producer price was 
$3.29 per pound of assessed weight pistachios in 2015 and $1.68 per 
pound in 2016. A review of historical and preliminary information 
pertaining to the upcoming production year indicates that the producer 
revenue for the 2017-18 production year could range between 
$924,000,000 and $1,809,500,000. Therefore, the estimated assessment 
revenue for the 2017-18 production year as a percentage of total 
producer revenue could range between 0.00003 and 0.00006 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. Additionally, the Committee's meetings were 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 10, 2017, and August 
1, 2017, meetings were public meetings 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 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 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 that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because handlers are 
aware of this rule, which was recommended at a public meeting. This 
interim rule provides for a 60-day comment period, and all comments 
timely received will be considered prior to finalization of this rule. 
The decreased assessment rate is necessary to fund reasonable and 
necessary expenses of the program, while keeping the funds in the 
reserve within the maximum limit permitted by the order. Moreover, the 
decreased assessment rate reduces the economic burden on handlers.

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 
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.


Sec. Sec.  983.1 through 983.92   [Designated as Subpart A]

0
2. Designate Sec. Sec.  983.1 through 983.92 as subpart A and add a 
heading for subpart A to read as follows:

Subpart A--Order Regulating Handling

    [Subpart Redesignated as Subpart B and Amended]

0
3. Redesignate ``Subpart--Rules and Regulations'' as subpart B and 
revise the heading to read as follows:

Subpart B--Administrative Requirements

    [Subpart Redesignated as Subpart C]

0
4. Redesignate ``Subpart--Assessment Rate'' as subpart C.

0
5. Section 983.253 is revised to read as follows:


Sec.  983.253   Assessment rate.

    On and after September 1, 2017, an assessment rate of $0.0001 per 
pound is established for California, Arizona, and New Mexico 
pistachios.

    Dated: October 16, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2017-22711 Filed 10-23-17; 8:45 am]
 BILLING CODE 3410-02-P