[Federal Register Volume 87, Number 72 (Thursday, April 14, 2022)]
[Rules and Regulations]
[Pages 22105-22108]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-08009]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Doc. No. AMS-SC-21-0068; SC21-983-1 FR]


Increased Assessment Rate for Pistachios

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule implements a recommendation from the Administrative 
Committee for Pistachios (Committee) to increase the assessment rate 
established for the 2021-22 and subsequent production years. The 
assessment rate will remain in effect indefinitely unless modified, 
suspended, or terminated.

DATES: Effective May 16, 2022.

FOR FURTHER INFORMATION CONTACT: 
    Peter Sommers, Marketing Specialist, or Gary Olson, Regional 
Director, West Region Branch, Market Development Division, Specialty 
Crops Program, AMS, USDA; Telephone: (503) 326-2724 or Email: 
[email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Market Development Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 
0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, or Email: 
[email protected].

SUPPLEMENTARY INFORMATION: This action, 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 rule is issued under Marketing Agreement and Order 
No. 983, as amended (7 CFR part 983), regulating the handling of 
pistachios grown in California, Arizona, and New Mexico. Part 983 
(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 Committee locally 
administers the Order and is comprised of producers and handlers of 
pistachios operating within the production area, and a public member.
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 12866 and 13563. Executive Orders 
12866 and 13563 direct agencies to assess all costs and benefits of 
available regulatory alternatives and, if regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts and equity). Executive Order 13563 emphasizes the 
importance of quantifying both costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility. This action falls within 
a category of regulatory actions that the Office of Management and 
Budget (OMB) exempted from Executive Order 12866 review.

[[Page 22106]]

    This rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which 
requires agencies to consider whether their rulemaking actions would 
have tribal implications. Agricultural Marketing Service (AMS) has 
determined this rule is unlikely to have substantial direct effects on 
one or more Indian tribes, on the relationship between the Federal 
Government and Indian tribes, or on the distribution of power and 
responsibilities between the Federal Government and Indian tribes.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the Order now in effect, pistachio handlers are 
subject to assessments. Funds to administer the Order are derived from 
such assessments. The assessment rate established herein is applicable 
to all assessable pistachios for the 2021-22 and subsequent production 
years and will continue until amended, suspended, or terminated. The 
production year runs from September 1 to August 31. 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. 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 no later than 20 days after the date of the 
entry of the ruling.
    This rule increases the assessment rate from $0.00015 per pound of 
pistachios, the rate established for the 2020-21 and subsequent 
production years, to $0.0007 per pound of pistachios for the 2021-22 
and subsequent production years.
    The Order authorizes the Committee, with the approval of AMS, to 
formulate an annual budget of expenses and collect assessments from 
handlers to administer the program. Members are familiar with the 
Committee's needs and with costs of goods and services in their local 
area and are in a position to formulate an appropriate budget and 
assessment rate. The assessment rate is formulated and discussed in a 
public meeting, and all directly affected persons have an opportunity 
to participate and provide input.
    For the 2020-21 and subsequent production years, the Committee 
recommended, and AMS approved, an assessment rate of $0.00015 per pound 
of pistachios. That assessment rate continued in effect from production 
year to production year until modified, suspended, or terminated by AMS 
upon recommendation and information submitted by the Committee or other 
information available to AMS.
    The Committee met on July 20, 2021, and unanimously recommended 
expenditures of $828,000 and an assessment rate of $0.0007 per pound of 
pistachios handled for the 2021-22 and subsequent production years. In 
comparison, the prior year's budgeted expenditures were $679,800. The 
assessment rate of $0.0007 is $0.00055 higher than the rate previously 
in effect. The Committee recommended increasing the assessment rate to 
pay for additional Committee staff in preparation for the retirement of 
key staff positions (manager and administrative assistant) and to 
provide adequate income to cover all of the Committee's budgeted 
expenses for the 2021-22 production year.
    Major expenditures recommended by the Committee for the 2021-22 
production year include $462,500 for personnel expenses, $125,000 for 
research, $100,000 for a contingency fund, $82,700 for administration, 
and $57,800 for office expenses. Budgeted expenses for these items in 
the 2020-21 production year were $336,500, $125,000, $80,000, $80,700, 
and $57,600, respectively.
    The Committee derived the recommended assessment rate by 
considering anticipated expenses, an estimated crop of 975 million 
pounds of pistachios, and the amount of funds available in the 
authorized reserve. Income derived from handler assessments, calculated 
at $682,500 (975,000,000 pounds multiplied by $0.0007 assessment rate), 
along with other income ($220,200), will be adequate to cover budgeted 
expenses of $828,000. Excess assessment revenue would be added to the 
Committee's reserve fund. Funds in the Committee's financial reserve 
are expected to be approximately $385,157 at the end of the 2021-22 
production year, which would be within the Order's requirement of no 
more than approximately two production years' budgeted expenses.
    The assessment rate established by this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by AMS 
upon recommendation and information submitted by the Committee or other 
available information.
    Although this assessment rate will be in effect 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. Dates and 
times of Committee meetings are available from the Committee or AMS. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. AMS 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 2022-23 production year 
budget, and those for subsequent production years, will be reviewed 
and, as appropriate, approved by AMS.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), the AMS has considered the economic 
impact of this rule 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 19 handlers subject to regulation under the 
Order, and approximately 1,624 producers of pistachios in the 
production area. Small agricultural producers are defined by the Small 
Business Administration (SBA) as those having annual receipts of less 
than $1,000,000, and small agricultural service firms have been defined 
as those whose annual receipts are less than $30,000,000 (13 CFR 
121.201).
    According to the National Agricultural Statistics Service (NASS), 
the national average producer price for pistachios for the 2019-20 
production year was $2.75 per pound. Committee data indicates 2019-20 
production year total pistachio production was 582,111,271 pounds. The 
total 2019-20 production year value of the pistachio crop was 
calculated as $1,600,805,995

[[Page 22107]]

(582,111,271 pounds times $2.75 per pound equals $1,600,805,995). 
Dividing the crop value by the estimated number of producers (1,624) 
yields an estimated average receipt per producer of $985,718, which is 
just below the SBA threshold for small producers.
    According to AMS Market News data, the reported terminal price for 
2021 for pistachios ranged between $150.00 to $250.00 per 25-pound 
carton. The average of this range is $200.00 ($150.00 plus $250.00 
divided by 2 equals $200.00). Dividing the average value by the 25-
pound carton yields an estimated average price per pound of $8.00 
($200.00 average value for 25-pound carton divided by 25). Multiplying 
the 2019-20 production year total pistachio production of 582,111,271 
pounds by the estimated average price per pound of $8.00 equals 
$4,656,890,168. Dividing this figure by 19 regulated handlers yields 
estimated average annual handler receipts of $245,099,483, which is 
well above the SBA threshold for small agriculture service firms.
    Therefore, using the above data, and assuming a normal 
distribution, the majority of pistachio producers may be classified as 
small entities and the majority of handlers of pistachios may be 
classified as large entities.
    The assessment rate of $0.0007 that the Committee recommended 
complies with Sec.  983.71(b) of the Order which states that any 
assessment rate must not exceed one-half of one percent of the average 
price received by producers in the preceding production year. The 
average price received by producers in the preceding production year 
was $2.75 per pound of pistachios. Thus, $2.75 times 0.5 percent equals 
$0.01375, which is greater than the assessment rate of $0.0007.
    This rule increases the assessment rate collected from handlers for 
the 2021-22 and subsequent production years from $0.00015 to $0.0007 
per pound of pistachios. The Committee unanimously recommended 2021-22 
production year expenditures of $828,000 and an assessment rate of 
$0.0007 per pound of pistachios handled. The assessment rate of $0.0007 
per pound of pistachios is $0.00055 higher than the current rate. The 
volume of assessable pistachios for the 2021-22 production year is 
estimated to be 975 million pounds. Thus, the $0.0007 per pound 
assessment rate should provide $682,500 in assessment income 
(975,000,000 multiplied by $0.0007). Income derived from handler 
assessments, along with an estimated $220,000 of other income, will be 
adequate to cover budgeted expenses for the 2021-22 production year.
    Major expenditures recommended by the Committee for the 2021-22 
production year include $462,500 for personnel expenses, $125,000 for 
research, $100,000 for a contingency fund, $82,700 for administration, 
and $57,800 for office expenses. Budgeted expenses for these items in 
the 2020-21 production year were $336,500, $125,000, $80,000, $80,700, 
and $57,600, respectively.
    The Committee recommended increasing the assessment rate to cover 
the Committee's budgeted expenses for the 2021-22 production year and 
maintain its financial reserve. Additionally, the Committee has 
approved a hiring search for both the Manager and Administrative 
Assistant, as both are expected to retire in the near future. The 
increased assessment income will accommodate the hiring of additional 
staff to aid in the transition.
    Prior to arriving at this budget and assessment rate 
recommendation, the Committee discussed an alternative that considered 
the timing of when the additional staff salaries would be required to 
assist the management transition. However, the Committee determined 
that the recommended assessment rate will fully fund budgeted expenses, 
avoid utilizing reserves, and permit the Committee to hire the needed 
staff to facilitate the replacement of the key management positions.
    This rule increases 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, these costs are offset by 
the benefits derived by the operation of the Order.
    The Committee's meeting was widely publicized throughout the 
pistachio industry. All interested persons were invited to attend the 
meeting and encouraged to participate in Committee deliberations on all 
issues. Like all Committee meetings, the July 20, 2021, meeting was a 
public meeting, and all entities, both large and small, were able to 
express views on this issue. Interested persons were invited to submit 
comments on this rule, including regulatory and information collection 
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, Pistachios 
Grown in California, Arizona, and New Mexico. No changes in those 
requirements are necessary as a result of this rule. Should any changes 
become necessary, they would be submitted to OMB for approval.
    This rule imposes no additional reporting or recordkeeping 
requirements on either small or large 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.
    AMS has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    A proposed rule concerning this action was published in the Federal 
Register on December 6, 2021 (86 FR 68932). Copies of the proposal were 
provided by the Committee to members and handlers. Finally, the 
proposed rule was made available through the internet by AMS and the 
Federal Register. A 30-day comment period ending January 5, 2022, was 
provided to allow interested persons to respond to the proposal.
    No comments were received. Accordingly, no changes were made to the 
rule as proposed.
    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.
    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 will tend to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 983

    Marketing agreements, Nuts, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service is amending 7 CFR part 983 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.


[[Page 22108]]



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


Sec.  983.253  Assessment rate.

    On and after September 1, 2021, an assessment rate of $0.0007 per 
pound is established for California, Arizona, and New Mexico 
pistachios.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-08009 Filed 4-13-22; 8:45 am]
BILLING CODE P