[Federal Register Volume 84, Number 134 (Friday, July 12, 2019)]
[Proposed Rules]
[Pages 33182-33185]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-14797]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 981

[Doc. No. AMS-SC-18-0099; SC18-981-1 PR]


Almonds Grown in California; Revisions to the Accepted User 
Program Requirements and New Information Collection

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Almond Board of California (Board) to revise the almond accepted user 
program requirements currently prescribed under the Marketing Order for 
Almonds Grown in California (Order). In addition, this action would 
prohibit the transfer of inedible material between accepted users. This 
proposal also announces the Agricultural Marketing Service's (AMS) 
intention to request approval from the Office of Management and Budget 
(OMB) of a new information collection and to make a conforming change 
to an existing form.

DATES: Comments must be received by August 12, 2019. Comments on the 
forms and information collection must be received by September 10, 
2019.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. 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. All 
comments should reference the document number and the date and page 
number of this issue of the Federal Register and will be made 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 proposal 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 Terry Vawter, 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 action, pursuant to 5 U.S.C. 553, 
proposes an amendment to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This proposed rule is issued under 
Marketing Order No. 981, as amended (7 CFR part 981), regulating the 
handling of almonds grown in California. Part 981 (referred to as 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 Board locally administers the Order and is comprised of 
growers and handlers operating within California.
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 13563 and 13175. This action falls 
within a category of regulatory actions that OMB exempted from 
Executive Order 12866 review. Additionally, because this proposed 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 proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed rule is not intended to have 
retroactive effect.
    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 proposed rule invites comments on revisions to the almond 
accepted user program requirements currently prescribed under the 
Order. This proposal would require accepted users to dispose of 
inedible material within six months of receipt, submit public 
weighmaster weight certificates within 10 business days of receipt of 
inedible material, and submit an accepted user plan annually. In 
addition, this action would prohibit the transfer of inedible material 
between accepted users, establish a new information collection,

[[Page 33183]]

and make conforming changes to an existing form. The Board unanimously 
recommended these changes at its December 4, 2018, meeting.
    Section 981.42 provides authority to the Board to impose quality 
control requirements. Paragraph (a) of that section obligates each 
handler to have their almonds inspected to determine the percentage of 
inedible kernels out of the total kernel weight received. Inspection 
results are sent to the Board. Inedible kernels in excess of two 
percent of the total represent the handler's ``inedible disposition 
obligation'' (obligation). Handlers are required to dispose of their 
obligation by delivering it to the Board or an approved accepted user 
(crusher, feed manufacturer, feeder or dealer in nut waste). This 
section also gives the Board the authority to establish rules and 
regulations necessary and incidental to the administration of the 
inedible program.
    Quality control requirements in section 981.442(a)(7) contain 
criteria to which accepted users must adhere to be eligible to receive 
disposition obligations. These include completing an application and 
business data sheet, as well as maintaining prompt and accurate 
reporting of disposition notices and a public weighmaster weight 
certificate for each lot received. The Board may deny or revoke 
accepted user status at any time if the accepted user fails to meet 
these terms and conditions.
    Proper delivery of the obligation is tracked and credited to the 
handler through the completion of the Board's ``Form 8--Inedible and 
Exempt Outlet Disposition.'' Part A of the form is submitted to the 
Board by the handler and Part B, supported by a public weighmaster 
weight certificate, is submitted to the Board by the accepted user. The 
Order currently does not specify deadlines by which accepted users are 
required to dispose of inedible kernels or when to submit the public 
weighmaster weight certificate to the Board. With no specified 
deadlines, accepted users are not required to dispose of the inedible 
kernels in the same crop year they received the material. This has led 
to handlers not receiving timely credit for their disposition 
obligation.
    The proposed changes in this action would require accepted users to 
dispose of inedible material within six months of receipt and to submit 
public weighmaster weight certificates within 10 business days of 
receipt of inedible material. These changes would improve the 
timeliness and proper tracking of handler disposition obligations.
    This action also proposes a new information collection in the form 
of an annual submission of an accepted user plan. The user plan would 
provide a detailed description of how the accepted user would receive, 
store, use and document inedible material received. This would be an 
additional verification tool during accepted user annual reviews. The 
proposal also clarifies that an application and business sheet must be 
completed and submitted annually, as well. Conforming changes to 
existing forms would also be required.
    Lastly, current regulations do not prohibit the transfer of 
inedible material between accepted users. Since transferring inedible 
material is not prohibited, material may be transferred an unlimited 
number of times between accepted users, which has made handler 
disposition obligations increasingly difficult to properly track and 
verify. Specifying deadlines for submission of required documentation, 
requiring the annual submission of an accepted user plan, along with 
prohibiting the transfer of product between accepted users, would 
increase the effectiveness of the Board's compliance and verification 
activities.

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 are unique in that they are brought about through 
group action of essentially small entities acting on their own behalf.
    There are approximately 6,800 almond growers in the production area 
and approximately 100 almond handlers subject to regulation under the 
Order. Small agricultural service firms are defined by the Small 
Business Administration (SBA) as those having annual receipts of less 
than $7,500,000, and small agricultural producers are defined as those 
having annual receipts of less than $750,000 (13 CFR 121.201).
    The National Agricultural Statistics Service (NASS) reported in its 
most recent (2017) Agricultural Census that there were 7,611 almond 
farms in the production area (California), of which 6,683 had bearing 
acres. The following computation provides an estimate of the proportion 
of agricultural producers (farms) and agricultural service firms 
(handlers) that would be considered small under the SBA definitions.
    The NASS Census data indicate that out of the 6,683 California 
farms with bearing acres of almonds, 4,425 (66 percent) have fewer than 
100 bearing acres.
    For the almond industry's most recently reported crop year (2017), 
NASS reported an average yield of 2,270 pounds per acre and a season 
average grower price of $2.53 per pound. A 100-acre farm with an 
average yield of 2,270 pounds per acre would produce about 227,000 
pounds of almonds. At $2.53 per pound, that farm's production would be 
valued at $574,310. The Census of Agriculture indicates that the 
majority of California's almond farms are smaller than 100 acres; 
therefore, it could be concluded that the majority of growers had 
annual receipts from the sale of almonds in 2017-18 of less than 
$574,310, which is below the SBA threshold of $750,000. Thus, over two-
thirds of California's almond growers may be classified as small 
businesses according to SBA's definition.
    There is no representative handler price available. Therefore, to 
estimate the proportion of almond handlers that may be considered small 
businesses, the unit value per shelled pound of almonds exported was 
used as a reasonable representation of a handler-level price. A unit 
value for a commodity is the value of exports divided by the quantity. 
Data from the Global Agricultural Trade System database of USDA's 
Foreign Agricultural Service showed that the value of almond exports 
from August 2016 to July 2017 (combining shelled and inshell almonds) 
was $4.072 billion. The quantity of almond exports over that time 
period was 1.406 billion pounds, combining shelled exports and the 
shelled equivalent of inshell exports. Dividing the export value by the 
quantity yields a unit value of $2.90 per pound. Subtracting this 
figure from the NASS 2016 estimate of season average grower price per 
pound ($2.44) yields $0.46 per pound as a representative grower-handler 
margin. Applying the $2.90 representative handler price per pound to 
2016-17 handler shipment quantities provided by the Board shows that 
approximately 40 percent of California's almond handlers shipped 
almonds valued under $7,500,000 for that crop year. Therefore, 40 
percent of handlers may be considered small businesses according to the 
SBA definition.

[[Page 33184]]

    This proposal would require, among other things, accepted users to 
dispose of inedible material within six months of receipt, submit 
public weighmaster weight certificates within 10 business days of 
receipt of inedible material, and submit an annual accepted user plan. 
In addition, this action would prohibit the transfer of inedible 
material between accepted users. Authority for this action is provided 
in Sec.  981.42(a) of the Order. The Board recommended this action at a 
meeting on December 4, 2018.
    It is not anticipated that this action would impose additional 
costs on handlers, growers, or accepted users, regardless of size. The 
proposed changes would increase the effectiveness of the Board's 
verification and compliance activities.
    The Board considered alternatives to this action, including not 
changing the current accepted user eligibility requirements. Prior to 
making its recommendation to the Secretary, a taskforce was created by 
the Board to review the accepted user program and make recommendations 
to the Board's Almond Quality, Food Safety and Services Committee 
(Committee). The Committee reviewed the program and the taskforce's 
recommendations and determined that the recommended changes were 
necessary to ensure the continued effectiveness of the program. 
Therefore, the Committee unanimously recommended this action to the 
Board.
    This proposed rule would impose additional reporting and 
recordkeeping requirements on companies that participate in the 
accepted user program. Accepted users would be required to submit a 
user plan to the Board annually. This new form and a sample ``Accepted 
User Plan'' are being submitted to OMB for approval under OMB Control 
No. 0581-0178. Specific burdens for the accepted user plan are detailed 
later in this document in the section titled ``Paperwork Reduction 
Act.'' In addition, this proposed rule would require changes to the 
Board's existing Form ABC 8 and Form ABC 34. The changes are minor and 
the currently approved burden for the forms should not be affected by 
the proposed changes to the forms. The revised forms have been 
submitted to OMB for approval.
    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. USDA has not 
identified any relevant Federal rules that duplicate, overlap or 
conflict with this proposed 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.
    The Board's meeting was widely publicized throughout the almond 
industry, and all interested persons were invited to attend the meeting 
and participate in Board deliberations. Like all Board meetings, the 
December 4, 2018, meeting was a public meeting, and all entities, both 
large and small, were able to express their views on this issue.
    Also, the Board has a number of appointed committees to review 
certain issues and make recommendations to the Board. The Committee met 
and discussed this issue in detail. That meeting was also a public 
meeting, and both large and small entities were able to participate and 
express their views.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
chapter 35), this notice announces AMS's intent to request approval 
from OMB for a new information collection under OMB No. 0581-NEW. The 
new form will be merged with the forms currently approved under OMB No. 
0581-0178 (Vegetable and Specialty Crops).
    Title: Almonds Grown in California; Marketing Order No. 981.
    OMB Number: 0581-NEW.
    Type of Request: New Collection.
    Abstract: The information requirements in this request are 
essential to carry out the intent of the Act to provide the respondents 
the type of service they request, and to administer the almond 
marketing order. USDA is responsible for overseeing the Order 
regulating the handling of almonds grown in California. The Order is 
effective under the Act.
    On December 4, 2018, the Board unanimously recommended that 
accepted users subject to the Order provide the Board with a report 
indicating how inedible material will be received, stored, used and 
documented. This form, titled ``Accepted User Plan'' would be submitted 
directly to the Board by July 31 of each year. The report would provide 
the Board with information on how each accepted user would meet the 
requirements of the accepted user program.
    The Order authorizes the Board to collect certain information as 
required. The information collected would only be used by authorized 
representatives of the USDA, including the AMS Specialty Crops Program 
regional and headquarters staff, and authorized employees of the Board. 
All proprietary information would be kept confidential in accordance 
with the Act and the Order.
    The Board developed this form to assist accepted users in 
documenting the proper handling and disposition of inedible material. 
The purpose of the form would be to ensure compliance with the accepted 
user program requirements.
    Upon OMB approval of the new form and the information collection 
package, AMS will request OMB approval to merge the new form and this 
information collection with the currently approved information 
collection OMB control number 0581-0178 (Vegetable and Specialty 
Crops).
    The proposed request for new information collection under the Order 
is as follows:

Accepted User Plan (Form ABC 30)

    Estimate of Burden: Public reporting burden for this collection is 
estimated to be an average of 2 hours per response.
    Respondents: Accepted users subject to the marketing order 
regulating almonds grown in California.
    Estimated Number of Respondents: 24.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 48 hours.
    Comments are invited on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the Agency, including whether the information will have practical 
utility; (2) the accuracy of the Agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on those who 
are to respond, including the use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    Comments should reference OMB No. 0581-NEW and the Marketing Order 
for Almonds Grown in California and should be sent to the USDA in care 
of the Docket Clerk at the previously mentioned address or at http://www.regulations.gov.
    All responses to this notice will be summarized and included in the 
request for OMB approval. All comments received will become a matter of 
public record and will be available for public inspection during 
regular business

[[Page 33185]]

hours at the address of the Docket Clerk or at http://www.regulations.gov.
    If this proposed rule is finalized, this information collection 
will be merged with the forms currently approved under OMB No. 0581-
0178 (Vegetable and Specialty Crops).
    A 30-day comment period is provided to allow interested persons to 
respond to all parts of this proposal. All written comments timely 
received will be considered before a final determination is made on 
this matter.
    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.

List of Subjects in 7 CFR Part 981

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

    For the reasons set forth in the preamble, 7 CFR part 981 is 
proposed to be amended as follows:

PART 981--ALMONDS GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 981 continues to read as 
follows:

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

0
2. Amend Sec.  981.442 by revising paragraph (a)(7) to read as follows:


Sec.  981.442  Quality Control.

    (a) * * *
    (7) Accepted Users. An accepted user's eligibility shall be subject 
to the following criteria:
    (i) Annual completion of an application with the Board for accepted 
user status;
    (ii) Annual submission of a business data sheet to the Board;
    (iii) Annual submission of an Accepted User Plan (Form ABC 30) to 
the Board by July 31 of each year;
    (iv) The accurate and prompt submission of Form ABC 8 Part B to the 
Board for each lot of almonds received. Each lot of inedible almonds 
received must be supported by a public weighmaster weight certificate 
issued at the request of the accepted user at the time of receipt of 
the lot. Weighmaster weight certificates must be submitted to the Board 
within 10 business days of issuance;
    (v) Disposal of inedible almond material within 6 months of 
receipt; and
    (vi) Disposal of inedible almond material received with no transfer 
of the material between accepted users.
    (vii) The Board may deny or revoke accepted user status at any time 
if the applicant or accepted user fails to meet the terms and 
conditions of Sec.  981.442, or if the applicant or accepted user fails 
to meet the terms and conditions set forth in the accepted user 
application (Form ABC 34).
    (viii) The eligibility of accepted users shall be reviewed annually 
by the Board. Handlers will not receive credit towards their 
disposition obligations pursuant to paragraph (a)(4) of this section 
for inedible lots where the difference between the weight of the lot 
reported by the inspection agency on Form ABC 8 and the weight of the 
lot reported on the public weighmaster weight certificate exceeds 2.0 
percent.
* * * * *

    Dated: July 8, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-14797 Filed 7-11-19; 8:45 am]
 BILLING CODE 3410-02-P