[Federal Register Volume 82, Number 227 (Tuesday, November 28, 2017)]
[Rules and Regulations]
[Pages 56152-56155]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-25735]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 986

[Doc. No. AMS-SC-17-0032, SC17-986-2 FR]


Pecans Grown in the States of Alabama, Arkansas, Arizona, 
California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, 
North Carolina, New Mexico, Oklahoma, South Carolina, and Texas; 
Establishment of Reporting Requirements and New Information Collection

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation made by the American 
Pecan Council (Council) to establish reporting requirements under the 
Federal marketing order for pecans (Order). The Council locally 
administers the Order and is comprised of growers and handlers of 
pecans operating within the production area and one public member. This 
action requires all pecan handlers to submit two forms to the Council: 
one for inter-handler transfers and another that includes year-end 
inventory and pecans handled throughout the year. The Council will use 
this information to facilitate assessment collection and provide 
valuable reports to the industry, including the annual marketing policy 
required by the Order.

DATES: Effective December 28, 2017.

FOR FURTHER INFORMATION CONTACT: Jennie M. Varela, Marketing 
Specialist, or Christian D. Nissen, Regional Director, Southeast 
Marketing Field Office, Marketing Order and Agreement Division, 
Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3375, Fax: 
(863) 291-8614, 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 final rule is issued under Marketing 
Agreement and Order No. 986 (7 CFR part 986) regulating the handling of 
pecans grown in the states of Alabama, Arkansas, Arizona, California, 
Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North 
Carolina, New Mexico, Oklahoma, South Carolina, and Texas, 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 final rule in 
conformance with Executive Orders 13563 and 13175. This action falls 
within a category of regulatory actions that the Office of Management 
and Budget (OMB) exempted from Executive Order 12866 review. 
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

[[Page 56153]]

Section 2 of the Executive Order of January 30, 2017, titled `Reducing 
Regulation and Controlling Regulatory Costs'[thinsp]'' (February 2, 
2017).
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the Marketing Order now in effect, pecan 
handlers are subject to assessments. Funds to administer the order are 
derived from such assessments. It is intended that the reporting 
requirements issued herein will be applicable to all assessable pecans 
beginning October 1, 2016, to facilitate the collection of assessments.
    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. A 
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 final rule establishes reporting requirements under the Order. 
This action requires all pecan handlers to submit to the Council 
reports of inter-handler transfers of pecans, inventory, and a summary 
of pecans handled. This information will be used to facilitate 
assessment collection and provide valuable reports to the industry, 
including the annual marketing policy required by the Order. The 
Council unanimously recommended this action at its April 17, 2017, 
meeting.
    Section 986.61 of the Order requires all handlers warehousing 
pecans as of August 31 be identified as the handler of those pecans and 
pay the assessment rate accordingly. Section 986.62 provides the 
Council, with the approval of the Secretary of Agriculture (Secretary), 
authority to establish methods and procedures, including necessary 
reports, to maintain accurate records for inter-handler transfers. 
Sections 986.75, 986.76, and 986.77 provide authority to prescribe 
reports of handler inventory, merchantable pecans handled, and pecans 
received by handlers, respectively. Section 986.78 further provides the 
Council, with the approval of the Secretary, authority to collect other 
reports and information from handlers needed to enable the Council to 
perform its duties. This final rule would utilize these authorities to 
establish new Sec. Sec.  986.162 and 986.175 under the rules and 
regulations of the Order. These new sections would require handlers of 
pecans to report to the Council any inter-handler transfers, and the 
volume of shelled, inshell, and total volume of pecans handled each 
fiscal year by type using specific Council forms.
    At its November 16, 2016, meeting, the first meeting following the 
Order's promulgation, the Council discussed its initial budget, 
assessment rates, and necessary reporting requirements in order to set 
up a program that is efficient and responsive to industry needs. During 
these discussions, the Council established a Statistics and Reporting 
Committee (Committee) to develop reporting requirements.
    Members of the Committee discussed the reporting needs of the 
industry, reviewed examples of reporting forms from other marketing 
orders, and met and worked with the staff of another marketing order in 
developing the reporting requirements. The Committee also worked with 
USDA to ensure the recommended information collection would provide the 
information necessary to facilitate the administration of the Order.
    At its February 23, 2017, meeting, the Council reviewed drafts of 
seven reporting forms as developed and recommended by the Committee. 
The Council expressed its interest in having as much electronic 
reporting as possible but recognized that many handlers may prefer a 
paper submission. The Council also considered the timing of when forms 
would be due and submission dates that would work for all parts of the 
industry. After a thorough review and some modifications, seven forms 
were approved by the Council.
    At a meeting on April 17, 2017, the Council revisited the 
recommended reporting requirements and the accompanying forms. 
Acknowledging the industry was more than halfway through the fiscal 
year at that time, the Council took action to move forward with the 
minimum reports necessary to facilitate the collection of assessments 
and to provide the other information needed for the 2016-17 fiscal 
year. Specifically, the Council voted to utilize two forms for that 
fiscal year: One focusing on inter-handler transfers, and one 
containing information regarding year-end inventory and pecans handled 
throughout the fiscal year. The Council agreed it still wanted to move 
forward with all seven forms for the 2017-18 fiscal year but considered 
year-end reporting on two forms as the most viable option for the first 
fiscal year of the Order. The remaining five forms will be proposed in 
a subsequent rulemaking action.
    This final rule adds two new reporting requirements and two new 
forms to the rules and regulations under the Order by adding Sec. Sec.  
986.162 and 986.175. The pecan industry includes a subset of handlers, 
defined in the Order as accumulators, who compile pecans for the 
purpose of resale or transfer to another handler. Additionally, small 
handlers may also sell or transfer pecans to other handlers. During the 
formal rulemaking hearing, the industry expressed concern that it may 
be difficult to track pecans moved through accumulators or transferred 
between handlers. Further, some handlers and accumulators that are 
small operations may find reporting, recordkeeping, and paying 
assessments burdensome.
    The report of inter-handler transfers includes information on the 
month of transfer, type of pecans transferred, the volume transferred, 
the amount of assessments owed on the pecans transferred, 
identification information and signatures for the two handlers 
involved, and whether the transferring handler or receiving handler 
would be responsible for reporting and paying the assessments. This 
report helps ensure that transferred pecans are not counted twice for 
volume reporting purposes and will help facilitate the collection of 
assessments. It will also allow receiving handlers to assume the 
reporting burden from smaller entities and ensure payment of 
corresponding assessments.
    The Council selected the tenth day of the month following the month 
of transfer as the due date for reports of inter-handler transfers. 
Should the tenth day of the month fall on a weekend or holiday, reports 
would be due by the first business day following the tenth day of the 
month. Given that the final rule will publish after the September date, 
the due date will be extended to December 28, 2017. For subsequent 
fiscal years, reports of inter-handler transfers will be due on a 
monthly basis as specified above.
    In order to correctly collect assessments, provide industry data, 
and complete a marketing policy for the coming fiscal year, the Council 
requires accurate reports of what has been handled and what is in 
inventory going into the next fiscal year. Based on Council 
discussions, it is also important for the industry to know the variety 
and form of the pecans in inventory. This information will be vital to 
the industry as it enters the next harvest, as the amount and type of 
inventory impacts

[[Page 56154]]

prices of the new crop. Collection of this data was one of the 
industry's goals in promulgating the Order, as currently there is no 
source for this type of information across the 15-state production 
area. This information will be captured in the year-end inventory 
report.
    The year-end inventory report includes information on the handler 
submitting the form, total pounds by type of pecans inshell and shelled 
in inventory, inventory committed but not shipped for both export and 
domestic, and any uncommitted inventory. It also includes information 
on pecans handled throughout the year, as well as data for total 
inventory, including both shelled and inshell, with shelled volume 
converted to an inshell basis using the conversion specified in the 
order (volume shelled x 2). In addition, it includes information 
regarding total assessments owed, assessments paid to date, and 
remaining assessments due for that handler.
    The Order specifies that on August 31 of each year, every handler 
warehousing inshell pecans shall be identified as the first handler of 
those pecans and shall be required to pay the required assessment rate. 
The Order also specifies that the marketing policy include an estimate 
of the handler inventory as of August 31. Consequently, the Council 
selected September 10 as the due date for the year-end inventory 
report, or the first business day following the tenth of September, 
should the tenth fall on a weekend or a holiday. The Council believes 
this would give all handlers sufficient time to submit the information 
to the Council after August 31. Further, handlers would be required to 
pay to the Council all remaining unpaid assessments by the due date of 
the year-end inventory report. As the recommended September 10 due date 
has passed, for the 2016-17 fiscal year, this report will be due 
December 28, 2017.
    This action requires all pecan handlers to provide the Council with 
reports of any inter-handler transfers, year-end inventory, and pecans 
handled throughout the year. This information will facilitate 
assessment collections, provide valuable reports to the industry, and 
allow the Council to complete the annual marketing policy required by 
the order.
    The Council also recommended additional reporting requirements, 
which would be effective for the 2017-18 fiscal year. These 
requirements are being considered under a separate action.

Final 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 action on small entities. 
Accordingly, AMS has prepared this final regulatory flexibility 
analysis.
    The purpose of the RFA is to determine whether the regulatory 
action will have a significant economic impact on a substantial number 
of small entities and 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 2,500 growers of pecans in the production 
area and approximately 250 handlers subject to regulation under the 
marketing order. Small agricultural growers are defined by the Small 
Business Administration (SBA) as those having annual receipts less than 
$750,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $7,500,000 (13 CFR 121.201).
    According to information from the National Agricultural Statistics 
Service (NASS), the average grower price for pecans during the 2015-16 
season was $2.20 per pound, and 254 million pounds were utilized. The 
value for pecans that year totaled $558.8 million ($2.20 per pound 
multiplied by 254 million pounds). Taking the total value of production 
for pecans and dividing it by the total number of pecan growers 
provides an average return per grower of $223,520. Using the average 
price and utilization information, and assuming a normal bell-curve 
distribution of receipts among growers, the majority of growers receive 
less than $750,000 annually.
    Evidence presented at the formal rulemaking hearing indicates an 
average handler margin of $0.58 per pound. Adding this margin to the 
average grower price of $2.20 per pound of inshell pecans results in an 
estimated handler price of $2.78 per pound. With a total 2015 
production of 254 million pounds, the total value of production in 2015 
was $706.12 million ($2.78 per pound multiplied by 254 million pounds). 
Taking the total value of production for pecans and dividing it by the 
total number of pecan handlers provides an average return per handler 
of $2,824,480. Using this estimated price, the utilization volume, 
number of handlers, and assuming a normal bell-curve distribution of 
receipts among handlers, the majority of handlers have annual receipts 
of less than $7,500,000. Thus, the majority of growers and handlers of 
pecans grown in the states of Alabama, Arkansas, Arizona, California, 
Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North 
Carolina, New Mexico, Oklahoma, South Carolina, and Texas may be 
classified as small entities.
    This final rule establishes reporting requirements under the order. 
This action requires all pecan handlers to provide the Council with 
reports of any inter-handler transfers, year-end inventory, and pecans 
handled throughout the year. This information will facilitate the 
Council's collection of assessments and provide valuable reports to the 
industry. This rule establishes new Sec. Sec.  986.162 and 986.175 
under the rules and regulations of the order. The authority for this 
action is provided for in Sec. Sec.  986.62, 986.75, 986.76, 986.77, 
and 986.78 of the order.
    Requiring reports of transfers, handler inventory, and pecans 
handled throughout the year will impose an increase in the reporting 
burden on all pecan handlers. However, this data is already recorded 
and maintained by handlers as a part of their daily business. Handlers, 
regardless of size, should be able to readily access this information. 
Consequently, any additional costs associated with this change would be 
minimal (not significant) and apply equally to all handlers.
    This action should also help the entire industry by providing 
comprehensive data on pecans handled and year-end inventory. Collection 
of this data was one of the industry's goals in promulgating the order 
as there is no other source for this type of data. This information 
should help with marketing and planning for the industry, as well as 
provide important information for the collection of assessments and in 
preparing the annual marketing policy required by the order. The 
benefits of this rule are expected to be equally available to all pecan 
growers and handlers, regardless of their size.
    The Council discussed other alternatives to this action, including 
having additional reporting requirements, but determined that in order 
to efficiently carry out the objectives of the marketing order this 
first fiscal year, the information collected in these two reports would 
be sufficient. The Council also considered requiring the inter-handler 
transfer form

[[Page 56155]]

to be submitted for each transfer. However, the Council determined that 
could be burdensome for some handlers, and a monthly report would 
provide the necessary documentation. Therefore, the alternatives were 
rejected.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), this collection has been submitted to OMB with the 
reference number 0581-0303. Upon approval, the collection will be 
merged with OMB No. 0581-0291, ``Federal Marketing Order for Pecans.'' 
This final rule establishes the use of two new Council forms, which 
impose a total annual burden increase of 185 hours. The forms, Report 
of Inter-Handler Transfer of Pecans and Year End Inventory Report, 
require the minimum information necessary to effectively carry out the 
requirements of the order. The information would enable the Council to 
facilitate assessment collection and provide valuable reports to the 
industry.
    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.
    As noted in the initial regulatory flexibility analysis, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this rule. Further, the public comment received 
concerning the proposal did not address the initial regulatory 
flexibility analysis.
    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.
    The Council's meetings were widely publicized throughout the pecan 
industry and all interested persons were invited to attend the meetings 
and participate in Council deliberations on all issues. Additionally, 
the Council's Committee meetings held February 23, 2017, and April 17, 
2017, were also public meetings and all entities, both large and small, 
were able to express views on this issue.
    A proposed rule concerning this action was published in the Federal 
Register on July 21, 2017 (82 FR 33829). Copies of the rule were sent 
via email to all Council members and known pecan handlers. Finally, the 
rule was made available through the internet by USDA and the Office of 
the Federal Register. A 60-day comment period ending September 19, 
2017, was provided to allow interested persons to respond to the 
proposal.
    One comment was received in favor of the proposed information 
collection. The commenter stated the proposed requirements were 
necessary in order to better assess the pecan crop. Accordingly, no 
changes will be made to the rule as proposed, based on the comments 
received. Minor editorial changes were made to the rule for the purpose 
of clarity. The name of Subpart B was corrected to read as SUBPART B--
Administrative Provisions and the lists in Sec. Sec.  986.162 and 
986.175 now include an ``and.''
    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 matter presented, including the 
information and recommendation submitted by the Council 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.

List of Subjects in 7 CFR Part 986

    Marketing agreements, Nuts, Pecans, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 986 is 
amended as follows:

PART 986--PECANS GROWN IN THE STATES OF ALABAMA, ARKANSAS, ARIZONA, 
CALIFORNIA, FLORIDA, GEORGIA, KANSAS, LOUISIANA, MISSOURI, 
MISSISSIPPI, NORTH CAROLINA, NEW MEXICO, OKLAHOMA, SOUTH CAROLINA, 
AND TEXAS

0
1. The authority citation for 7 CFR part 986 continues to read as 
follows:

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

0
2. Add Sec.  986.162 to read as follows:


Sec.  986.162   Inter-handler transfers.

    (a) Inter-handler transfers of inshell pecans, pursuant to Sec.  
986.62, shall be reported to the Council on APC Form 4. Handlers shall 
file reports by the tenth day of the month following the month of 
transfer. Should the tenth day of the month fall on a weekend or 
holiday, reports are due by the first business day following the tenth 
day of the month; Provided, that for the 2016-17 fiscal year, all 
inter-handler transfer forms shall be submitted by December 28, 2017. 
The report shall contain the following information:
    (1) Month of transfer;
    (2) The type and weight of pecans transferred;
    (3) The amount of assessments owed on the pecans transferred;
    (4) The names and signatures for both the transferring and 
receiving handlers; and
    (5) Handler assuming the reporting and assessment obligations on 
the pecans transferred.

0
3. Add Sec.  986.175 to read as follows:


Sec.  986.175   Handler inventory.

    (a) Handlers shall submit to the Council a year-end inventory 
report following August 31 each fiscal year. Handlers shall file such 
reports by September 10. Should September 10 fall on a weekend, reports 
are due by the first business day following September 10; Provided, 
that for the 2016-17 fiscal year, all inventory reports shall be 
submitted by December 28, 2017. Such reports shall be reported to the 
Council on APC Form 7 and include:
    (1) The name and address of the handler;
    (2) The total weight and type of inshell pecans in inventory, 
regardless of country of origin;
    (3) The total weight and type of shelled pecans in inventory, 
regardless of country of origin;
    (4) The total weight and type of inshell pecans committed, not 
shipped, for export and domestic shipments, and any uncommitted 
inventory, regardless of country of origin;
    (5) The total weight and type of shelled pecans committed, not 
shipped, for export and domestic shipments, and any uncommitted 
inventory, regardless of country of origin;
    (6) The combined total inventory for inshell and shelled pecans 
calculated on an inshell basis, and combined weight committed, not 
shipped, for exports and domestic shipments, and any uncommitted 
inventory;
    (7) Total weight and type of domestic pecans handled for the fiscal 
year; and
    (8) Total assessments owed, assessments paid to date, and remaining 
assessments due to be paid by the due date of the year-end inventory 
report for the fiscal year.

    Dated: November 22, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2017-25735 Filed 11-27-17; 8:45 am]
 BILLING CODE 3410-02-P