[Federal Register Volume 84, Number 187 (Thursday, September 26, 2019)]
[Rules and Regulations]
[Pages 50713-50716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20533]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 981

[AMS-SC-18-0018; SC18-981-3]


Almonds Grown in California; Amendments to Marketing Order 981

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rulemaking action amends Marketing Order No. 981, which 
regulates the handling of almonds grown in California. The three 
amendments, which were proposed by the Almond Board of California 
(Board), were approved by producers in a referendum. The amendments 
will change the dates associated with the Board's nomination process, 
modify the term of office start date for Board members, and add 
authority for future revisions to these provisions through the 
development of regulations using informal rulemaking.

DATES: Effective October 28, 2019.

FOR FURTHER INFORMATION CONTACT: Geronimo Quinones, Marketing 
Specialist, or Andrew Hatch, Rulemaking Chief, 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] 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-

[[Page 50714]]

2491, Fax: (202) 720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
finalizes amendments to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This 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.'' 
Section 608c(17) of the Act and the applicable rules of practice and 
procedure governing the formulation of marketing agreements and orders 
(7 CFR part 900) authorizes amendment of the marketing order through 
this informal rulemaking action.
    The Department of Agriculture (USDA) is issuing this 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 Section 2 of the Executive Order of 
January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs'[thinsp]'' (February 2, 2017).
    This action has been reviewed under Executive Order 12988, Civil 
Justice Reform. This 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 no later than 20 days after the date of 
entry of the ruling.
    Section 1504 of the Food, Conservation, and Energy Act of 2008 
(2008 Farm Bill)(Pub. L. 110-246) amended section 608c(17) of the Act, 
which in turn required the addition of supplemental rules of practice 
to 7 CFR part 900 (73 FR 49307; August 21, 2008). The amendment of 
section 608c(17) of the Act and additional supplemental rules of 
practice authorize the use of informal rulemaking (5 U.S.C. 553) to 
amend Federal fruit, vegetable, and nut marketing agreements and 
orders. USDA may use informal rulemaking to amend marketing orders 
based on the nature and complexity of the proposed amendments, the 
potential regulatory and economic impacts on affected entities, and any 
other relevant matters.
    The USDA's Agricultural Marketing Service (AMS) considered these 
factors and determined that amending the Order as proposed could 
appropriately be accomplished through informal rulemaking.
    The proposed amendments were unanimously recommended by the Board 
following deliberations at a public meeting held on December 4, 2017. A 
proposed rule soliciting comments on the proposed amendments was issued 
on July 2, 2018, and published in the Federal Register on July 6, 2018 
(83 FR 31473). One comment was received, but it did not pertain to the 
proposal; therefore, no changes were made to the proposed amendments. A 
proposed rule and referendum order was then issued on November 7, 2018, 
and published in the Federal Register on November 14, 2018 (83 FR 
56742). This document directed that a referendum among almond producers 
be conducted March 25, 2019, through April 5, 2019, to determine 
whether they favored the proposals. To become effective, the amendments 
had to be approved by two-thirds of eligible producers voting in the 
referendum or more than two-thirds of the volume represented in the 
referendum.
    The three amendments were favored by at least 82 percent of the 
producers voting and by at least 89 percent of the volume represented, 
all of which exceed the requirements to pass.
    The amendments in this final rule will change the dates associated 
with the Board's nomination process, modify the term of office start 
date for Board members, and add authority for future revisions to these 
provisions through the development of regulations using informal 
rulemaking.

Final Regulatory Flexibility Analysis

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-612), 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 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 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 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 
2012 Agricultural Census that there were 6,841 almond farms in the 
production area (California), of which 6,204 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 6,204 California 
farms with bearing acres of almonds, 4,471 (72 percent) have fewer than 
100 bearing acres.
    For the almond industry's most recently reported crop year (2016), 
NASS reported an average yield of 2,280 pounds per acre and a season 
average grower price of $2.44 per pound. A 100-acre farm with an 
average yield of 2,280 pounds per acre would produce about 228,000 
pounds of almonds. At $2.44 per pound, that farm's production would be 
valued at $556,320. 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 2016-17 of less than 
$556,320, which is below the SBA threshold of $750,000. Thus, over 70 
percent of California's almond growers would be classified as small 
entities according to SBA's definition.
    To estimate the proportion of almond handlers that would be 
considered small businesses, it was assumed that the unit value per 
shelled pound of almonds exported in a particular year could serve as a 
representative almond

[[Page 50715]]

price at the handler level. A unit value for a commodity is the value 
of exports divided by the quantity. Data from 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 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 showed that 
approximately 40 percent of California's almond handlers shipped 
almonds valued under $7,500,000 during the 2016-17 crop year and would 
therefore be considered small entities according to the SBA definition.
    These amendments, which the Board unanimously recommended on 
December 4, 2017, will change the dates associated with the Board's 
nomination process, modify the term of office start date for Board 
members, and add authority for future revisions to these provisions 
through the development of regulations using informal rulemaking.
    These amendments will have no direct economic effect on producers 
or handlers. Due to changes in the industry, the amendments are 
necessary to ensure the Board's ability to locally administer the 
program. Changing nomination dates, modifying term of office, and 
adding authorizing for future revisions will enable the Board to ensure 
a more efficient and orderly flow of business. It is anticipated that 
both small and large producer and handler businesses will benefit from 
these amendments.
    The Board considered alternatives to the proposals, including 
making no changes at this time. However, this action will streamline 
the Order's operation by aligning Board membership with the beginning 
of the crop year. There will be no change to the composition of the 
Board.

Paperwork Reduction Act

    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. 0581-0178 (Vegetable 
and Specialty Crops). No changes to those requirements are necessary. 
Should any changes become necessary, they would be 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 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 
production area. All interested persons were invited to attend the 
meeting and encouraged to participate in Board deliberations on all 
issues.
    A proposed rule concerning this action was published in the Federal 
Register on July 6, 2018 (83 FR 31473). Copies of the proposed rule 
were sent via email to all Board members and almond handlers. It was 
also made available through the internet by USDA and the Office of the 
Federal Register. A 60-day comment period ending September 4, 2018, was 
provided to allow interested persons to respond to the proposal. One 
comment was received, but it did not pertain to this proposal; 
therefore, no changes were made to the proposed amendments.
    A proposed rule and referendum order was then issued on November 7, 
2018, and published in the Federal Register on November 14, 2018 (83 FR 
56742). This document directed that a referendum among almond producers 
be conducted March 25, 2019, through April 5, 2019, to determine 
whether they favored the proposals. To become effective, the amendments 
had to be approved by two-thirds of eligible producers voting in the 
referendum or by more than two-thirds of the volume represented in the 
referendum.
    All three amendments were favored by at least 82 percent of the 
producers voting and at least 89 percent of the volume represented, all 
of which exceed the requirement to pass.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
https://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.

Order Amending the Marketing Order Regulating the Handling of Almonds 
Grown in California \1\
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    \1\ This Order shall not become effective unless and until the 
requirements of Sec.  900.14 of the rules of practice and procedure 
governing proceedings to formulate marketing agreements and 
marketing orders have been met.
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Findings and Determinations

    (a) Findings and Determinations Upon the Basis of the Rulemaking 
Record.
    The findings hereinafter set forth are supplementary to the 
findings and determinations which were previously made in connection 
with the issuance of the Order; and all said previous findings and 
determinations are hereby ratified and affirmed, except insofar as such 
findings and determinations may be in conflict with the findings and 
determinations set forth herein.
    1. The Order, as amended, and as hereby further amended, and all of 
the terms and conditions thereof, would tend to effectuate the declared 
policy of the Act;
    2. The Order, as amended, and as hereby further amended, regulates 
the handling of almonds grown in California in the same manner as, and 
is applicable only to, persons in the respective classes of commercial 
and industrial activity specified in the Order;
    3. The Order, as amended, and as hereby further amended, is limited 
in application to the smallest regional production area that is 
practicable, consistent with carrying out the declared policy of the 
Act, and the issuance of several orders applicable to subdivisions of 
the production area would not effectively carry out the declared policy 
of the Act;
    4. The Order, as amended, and as hereby further amended, 
prescribes, insofar as practicable, such different terms applicable to 
different parts of the production area as are necessary to give due 
recognition to the differences in the production and marketing of 
almonds produced in the production area; and
    5. All handling of almonds produced in the production area as 
defined in the Order is in the current of interstate or foreign 
commerce or directly burdens, obstructs, or affects such commerce.
    (b) Determinations.
    It is hereby determined that:
    1. Handlers (excluding cooperative associations of producers who 
are not engaged in processing, distributing, or shipping of almonds 
covered under the Order) who during the period August 1, 2017, through 
July 31, 2018, handled not less than 50 percent of the volume of such 
almonds covered by said Order,

[[Page 50716]]

as hereby amended, have signed an amended marketing agreement; and
    2. The issuance of this amendatory Order, further amending the 
aforesaid Order, is favored or approved by at least two-thirds of the 
producers who participated in a referendum on the question of approval 
and who, during the period of August 1, 2017, through July 31, 2018, 
were engaged within the production area in the production of such 
almonds. Such producers also produced for market at least two-thirds of 
the volume of such commodity represented in the referendum.
    3. The issuance of this amendatory Order together with a signed 
marketing agreement advances the interests of growers of almonds in the 
production area pursuant to the declared policy of the Act.

Order Relative to Handling

    It is therefore ordered, that on and after the effective date 
hereof, all handling of almonds grown in California shall be in 
conformity to, and in compliance with, the terms and conditions of the 
said Order as hereby proposed to be amended as follows:
    The provisions amending the Order contained in the proposed rule 
issued by the Administrator on July 2, 2018, and published in the 
Federal Register on July 6, 2018, (83 FR 31473) will be and are the 
terms and provisions of this order amending the marketing order and are 
set forth in full herein.

List of Subjects in 7 CFR Part 981

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

    Dated: September 18, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.

    For the reasons set out in the preamble, 7 CFR part 981 is 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.  981.32 by revising paragraph (a)(1) and adding paragraph 
(a)(3) to read as follows:


Sec.  981.32   Nominations.

    (a) Method. (1) Each year the terms of office of three of the 
members elected pursuant to Sec.  981.31(a) and (b) shall expire, 
except every third year when the term of office for two of those 
members shall expire. Nominees for each respective member and alternate 
member shall be chosen by ballot delivered to the Board. Nominees 
chosen by the Board in this manner shall be submitted by the Board to 
the Secretary on or before June 1 of each year together with such 
information as the Secretary may require. If a nomination for any Board 
member or alternate is not received by the Secretary on or before June 
1, the Secretary may select such member or alternate from persons 
belonging to the group to be represented without nomination. The Board 
shall mail to all handlers and growers, other than the cooperative(s) 
of record, the required ballots with all necessary voting information 
including the names of incumbents willing to accept renomination, and, 
to such growers, the name of any person proposed for nomination in a 
petition signed by at least 15 such growers and filed with the Board on 
or before April 1. Distribution of ballots shall be announced by press 
release, furnishing pertinent information on balloting, issued by the 
Board through newspapers and other publications having general 
circulation in the almond producing areas.
* * * * *
    (3) The Board may recommend, subject to the approval of the 
Secretary, a change to the nomination method, should the Board 
determine that a revision is necessary.
* * * * *

0
3. Amend Sec.  981.33 by revising the first sentence of paragraphs (a) 
and (b) and the last sentence of paragraph (c) and adding paragraph (d) 
to read as follows:


Sec.  981.33   Selection and term of office.

    (a) Members and their respective alternates for positions open on 
the Board shall be selected by the Secretary from persons nominated 
pursuant to Sec.  981.32, or, at the discretion of the Secretary, from 
other qualified persons, for a term of office beginning August 1. * * *
    (b) The term of office of members of the Board shall be for a 
period of three years beginning on August 1 of the years selected 
except where otherwise provided. * * *
    (c) * * * This limitation on tenure shall not apply to alternate 
members.
    (d) The Board may recommend, subject to approval of the Secretary, 
revisions to the start date for the term of office of members of the 
Board.

[FR Doc. 2019-20533 Filed 9-25-19; 8:45 am]
 BILLING CODE 3410-02-P