[Federal Register Volume 84, Number 228 (Tuesday, November 26, 2019)]
[Rules and Regulations]
[Pages 64967-64969]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25661]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 84, No. 228 / Tuesday, November 26, 2019 /
Rules and Regulations
[[Page 64967]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[Doc. No. AMS-SC-18-0099; SC19-981-1 FR]
Almonds Grown in California; Revisions to the Accepted User
Program Requirements and New Information Collection
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule implements 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). This rule prohibits the transfer of
inedible material between accepted users, implements a new information
collection form and makes a conforming change to an existing form.
DATES: Effective December 26, 2019.
FOR FURTHER INFORMATION CONTACT: Peter R. 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 final rule, pursuant to 5 U.S.C. 553,
amends regulations issued to carry out a marketing order as defined in
7 CFR 900.2(j). This final 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 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 final 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' '' (February 2, 2017).
This rule 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 not later than 20 days after the date of
the entry of the ruling.
This final rule requires 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
prohibits the transfer of inedible material between accepted users,
establishes a new information collection, and makes a conforming change
to an existing form. The Board unanimously recommended these changes at
its December 4, 2018, meeting.
Section 981.42 provides authority for 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
requirements to which accepted users must adhere to be eligible to
receive disposition obligations. These include completing an
application and business data sheet, maintaining prompt and accurate
reporting of disposition notices, and providing 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
[[Page 64968]]
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.
This final rule requires 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 are expected to improve the timeliness and
proper tracking of handler disposition obligations.
This rule requires submission of an annual accepted user plan,
which provides a detailed description of how the accepted user
receives, stores, uses, and documents inedible material received. This
is an additional verification tool during accepted user annual reviews.
The rule also specifies that an application and business sheet must be
completed and submitted annually, as well. Additionally, this rule
implements conforming changes to an existing form.
Current regulations do not prohibit the transfer of inedible
material between accepted users; therefore, material may be transferred
an unlimited number of times between accepted users, making 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, will
increase the effectiveness of the Board's compliance and verification
activities.
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 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 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 $30,000,000, and small agricultural producers are defined as those
having annual receipts of less than $1,000,000 (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 $1,000,000. 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 $30,000,000 for that crop year. Therefore, 40
percent of handlers may be considered small businesses according to the
SBA definition.
This rule requires, 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, submit an annual accepted user plan, and prohibits
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.
These changes are expected to 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 rule imposes additional reporting and recordkeeping
requirements on companies that voluntarily participate in the accepted
user program. Accepted users are required to dispose of inedible
material within six months of receipt, submit public weighmaster weight
certificates within 10 business days of receipt of inedible material,
submit an annual accepted user plan, and are prohibited from
transferring inedible materials.
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 final rule. No public comments
[[Page 64969]]
were received regarding 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 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.
A proposed rule concerning this action was published in the Federal
Register on July 12, 2019 (84 FR 33182). Copies of the proposed rule
were provided to Board members and California almond handlers.
Additionally, the proposed rule was made available through the internet
by USDA and the Office of the Federal Register. A 30-day comment period
ending August 12, 2019, was provided to allow interested persons to
respond to the proposal. No comments were received. Accordingly, USDA
will make no changes to the rule as proposed.
AMS submitted a request to OMB for approval to modify three
existing forms and create one new form in relation to the accepted user
program. Once approved, the new information collection will be merged
with the forms currently approved under OMB No. 0581-0178 Vegetable and
Specialty Crops. This process for seeking approval of information
collection requirements complies with the Paperwork Reduction Act of
1995 (44 U.S.C. Chapter 35). Should additional changes become
necessary, AMS will submit them to OMB for approval.
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 Board 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 981
Almonds, Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 981 is
amended as follows:
PART 981--ALMONDS GROWN IN CALIFORNIA
0
1. The authority citation for part 981 continues to read as follows:
Authority: 7 U.S.C. 601-674.
0
2. In Sec. 981.442, revise 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 documented 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: November 21, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-25661 Filed 11-25-19; 8:45 am]
BILLING CODE 3410-02-P