[Federal Register Volume 88, Number 216 (Thursday, November 9, 2023)]
[Proposed Rules]
[Pages 77233-77236]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-24793]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 88, No. 216 / Thursday, November 9, 2023 / 
Proposed Rules  

[[Page 77233]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 982

[Doc. No. AMS-SC-23-0034]


Hazelnuts Grown in Oregon and Washington; Decreased Assessment 
Rate

AGENCY: Agricultural Marketing Service, Department of Agriculture 
(USDA).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Hazelnut Marketing Board (Board) to decrease the assessment rate 
established for the 2023-2024 marketing year and subsequent marketing 
years. The proposed assessment rate would remain in effect indefinitely 
unless modified, suspended, or terminated.

DATES: Comments must be received by December 11, 2023 to be assured 
consideration.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments can be sent to the Docket 
Clerk, Market Development Division, Specialty Crops Program, AMS, USDA, 
1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237. 
Comments can also be submitted to the Docket Clerk electronically by 
Email: [email protected] or via the internet at: https://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register. 
Comments submitted in response to this proposed rule will be included 
in the record and will be made available to the public and can be 
viewed at: https://www.regulations.gov. 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: Virginia Tjemsland, Marketing 
Specialist, or Gary Olson, Chief, 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) 720-8085, or Email: 
[email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
proposes to amend regulations issued to carry out a marketing order as 
defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing 
Agreement No. 115 and Order No. 982, both as amended (7 CFR part 982), 
regulating the handling of hazelnuts grown in Oregon and Washington. 
Part 982 (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 comprises growers and handlers of hazelnuts 
operating within the area of production, and a public member.
    The Agricultural Marketing Service (AMS) is issuing this proposed 
rule in conformance with Executive Orders 12866, 13563, and 14094. 
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. Executive 
Order 14094 supplements and reaffirms Executive Orders 12866 and 13563 
and directs agencies to conduct proactive outreach to engage interested 
and affected parties through a variety of means, such as through field 
offices, and alternative platforms and media. This action falls within 
a category of regulatory actions that the Office of Management and 
Budget (OMB) exempted from Executive Order 12866 review.
    This proposed 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. AMS has determined that this proposed 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 proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the Order now in effect, hazelnut handlers 
are subject to assessments. Funds to administer the Order are derived 
from such assessments. It is intended that the assessment rate would be 
applicable to all assessable hazelnuts for the 2023-2024 marketing 
year, and continue until amended, suspended, or terminated.
    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 
requesting 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 not later than 20 days after the date of 
the entry of the ruling.
    Section 982.61 provides authority for the Board, 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 Board's needs and with the costs of goods and 
services in their local area and are, thus, in a position to formulate 
an appropriate budget and assessment rate. The assessment rate is 
formulated and

[[Page 77234]]

discussed in a public meeting. Thus, all directly affected persons have 
an opportunity to participate and provide input.
    For the 2017-2018 marketing year and subsequent marketing years, 
the Board recommended, and AMS approved, an assessment rate of $12 per 
ton (equivalent to $0.006 per pound) of hazelnuts. That rate continues 
in effect from marketing year to marketing year until modified, 
suspended, or terminated by AMS upon recommendation and information 
submitted by the Board or other information available to AMS. This 
proposed rule would decrease the assessment rate from $0.006 per pound 
to $0.005 per pound for the 2023-2024 marketing year and subsequent 
marketing years.
    The Board met on June 29, 2023, and recommended 2023-2024 marketing 
year expenditures of $1,815,000 and an assessment rate of $10 per ton 
(the equivalent of $0.005 per pound) of hazelnuts handled for the 2023-
2024 marketing year and subsequent marketing years. In comparison, last 
year's budgeted expenditures were $2,378,550. The proposed assessment 
rate of $0.005 per pound is $0.001 lower than the rate currently in 
effect. The Board recommended decreasing the assessment rate to better 
align assessment revenue with budgeted expenses and to reduce the 
financial burden on the industry in a period of low commodity prices. 
The Board projects handler receipts of 85,000 tons (170 million pounds) 
of hazelnuts for the 2023-2024 marketing year, which is 10,000 tons (20 
million pounds) more than was projected for the 2022-2023 marketing 
year.
    The expenditures totaling $1,815,000 recommended by the Board for 
the 2023-2024 marketing year include $670,000 for promotional 
activities, $300,000 for contingency/undesignated, $100,000 for 
marketing research, $100,000 for research endowment, $378,000 for 
administrative activities, and $267,000 for miscellaneous expenses. By 
comparison, budgeted expenditures for the 2022-2023 marketing year for 
promotional activities, contingency, marketing research, research 
endowment, administrative activities and miscellaneous expenses were 
$1,251,200, $200,000, $150,000, $100,000, $347,350, and $330,000, 
respectively. The Board's 2023-2024 marketing year budget was reduced 
to account for generally lower commodity prices and decreased industry 
revenue.
    The expected 170 million pounds of assessable hazelnuts from the 
2023 crop would generate $850,000 in assessment revenue at the proposed 
assessment rate (170 million pounds multiplied by $0.005 assessment 
rate). The remaining $965,000 needed to cover budgeted expenditures 
would come from new grant funds and reserve funds carried over from 
previous marketing years. The Board anticipates $495,000 in federal 
grants administered by USDA's Foreign Agricultural Service.\1\ The 
remaining $470,000 necessary to cover budgeted expenditures would come 
from its monetary reserve. The recommended assessment rate should be 
appropriate to ensure that the Board has sufficient revenue, along with 
grants awarded and reserve funds, to fully fund its recommended 2023-
2024 marketing year budgeted expenditures and still maintain a level of 
reserve funds that the Board believes is appropriate.
---------------------------------------------------------------------------

    \1\ Specifically, $110,000 in Agricultural Trade Promotion 
program funds, $300,000 in Market Access Program funds, and $85,000 
in Technical Assistance for Specialty Crop program funds.
---------------------------------------------------------------------------

    The Board derived the recommended assessment rate by considering 
anticipated expenses, an estimated 2023 crop volume of 170 million 
pounds of assessable hazelnuts, grants that have been awarded, and the 
amount of funds available in the authorized reserve. Income derived 
from handler assessments ($850,000), and funds from other sources 
($965,000), is expected to be adequate to cover budgeted expenses 
($1,815,000).
    The proposed assessment rate would continue in effect indefinitely 
unless modified, suspended, or terminated by AMS upon recommendation 
and information submitted by the Board or other available information.
    Although this assessment rate would be in effect for an indefinite 
period, the Board would continue to meet prior to or during each 
marketing year to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Board meetings are available from the Board or AMS. Board 
meetings are open to the public and interested persons may express 
their views at these meetings. AMS would evaluate Board recommendations 
and other available information to determine whether modification of 
the assessment rate is needed. Further rulemaking would be undertaken 
as necessary. The Board's 2023-2024 marketing year budget and those for 
subsequent marketing years will be reviewed and, as appropriate, 
approved by AMS.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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, and the rules issued thereunder, are unique in 
that they are brought about through group action of typically small 
entities acting on their own behalf.
    There are approximately 1,103 producers of hazelnuts in the 
production area and 14 handlers subject to regulation under the Order. 
At the time this analysis was prepared, small agricultural producers of 
hazelnuts were defined by the Small Business Administration (SBA) as 
those having annual receipts equal to or less than $3,750,000 (North 
American Industry Classification System code 111335), and small 
agricultural service firms were defined as those whose annual receipts 
are equal to or less than $34,000,000 (North American Industry 
Classification System code 115114) (13 CFR 121.201).
    According to the National Agricultural Statistics Service (NASS), 
the average producer price received for hazelnuts sold in Oregon 
specifically in 2022 was $1,300 per ton. Total production of hazelnuts 
for the 2022 season was reported by the NASS to be 68,000 tons. Using 
the average price and production data from the 2022 crop year, the most 
recent year for which there is NASS data available, the total 2022 crop 
value of hazelnuts could be estimated to be $88,400,000 (68,000 tons 
times $1,300 per ton). Dividing the crop value by the estimated number 
of producers (1,103) yields estimated average receipts per hazelnut 
producer of $80,145, which is well below the SBA threshold for small 
producers.
    In addition, according to AMS Market News data, the reported 
average 2021-2022 marketing year shipping point price for hazelnuts was 
$126.82 per 50-pound container, or $2.54 per pound ($126.82 per 50-
pound container divided by 50 pounds). Multiplying the 2022 hazelnut 
production of 136,000,000 pounds (68,000 tons) by the estimated average 
price per pound of $2.54 equals $345,440,000 of estimated handler 
receipts. Dividing this figure by the 14 regulated handlers yields 
estimated average annual handler receipts of approximately $24,674,286 
($345,440,000 divided by 14 handlers), which is below the SBA threshold 
for small agricultural service firms. Therefore, using the above data, 
most of

[[Page 77235]]

the producers and handlers of hazelnuts may be classified as small 
entities.
    This proposal would decrease the assessment rate collected from 
handlers for the 2023-2024 marketing year and subsequent marketing 
years from $0.006 to $0.005 per pound of assessable hazelnuts. The 
Board unanimously recommended 2023-2024 marketing year expenditures of 
$1,815,000 and an assessment rate of $10 per ton ($0.005 per pound) of 
assessable hazelnuts. The proposed assessment rate of $0.005 per pound 
is $.001 lower than the current rate. The Board expects the industry to 
handle 85,000 tons (170 million pounds) of assessable hazelnuts during 
the 2023-2024 marketing year. Thus, at the $0.005 per pound rate, the 
Board anticipates $850,000 in assessment income (170 million pounds 
multiplied by $0.005 per pound). The Board also expects to use grant 
funds and the Board's monetary reserve to cover the remaining $965,000 
of expenses. Income derived from handler assessments, along with grants 
and reserve funds, should be adequate to meet budgeted expenditures for 
the 2023-2024 marketing year.
    The major expenditures recommended by the Board for the 2023-2024 
marketing year include $670,000 for promotional activities, $300,000 
for contingency/undesignated, $100,000 for marketing research, $100,000 
for research endowment, $378,000 for administrative activities, and 
$267,000 for miscellaneous expenses. Budgeted expenditures for the 
2022-2023 marketing year were $1,251,200 for promotional activities, 
$200,000 for contingency/undesignated, $150,000 for marketing research, 
$100,000 for research endowment, $347,350 for administrative 
activities, and $330,000 for miscellaneous, respectively.
    The Board's 2023-2024 marketing year budget was reduced $563,550 
from the prior year's budget to account for generally lower commodity 
prices and decreased industry revenue. In addition, the Board 
recommended decreasing the assessment rate to reduce the financial 
burden on the handlers and growers during the current environment of 
depressed prices. In recent years, the Board has utilized reserve funds 
to partially fund its budgeted expenditures. The Board's 2023-2024 
marketing year budget again utilizes funds from the financial reserve 
to subsidize expenditures, but at a lower amount than in previous 
years. With this action, the Board's reserve balance would be 
maintained at a level that the Board believes is appropriate and is 
compliant with the provisions of the Order.
    Prior to arriving at the budget and proposed assessment rate, the 
Board discussed various alternatives, including maintaining the current 
assessment rate of $0.006 per pound and reducing the assessment rate to 
$0.0055 per pound ($11 per ton). However, the Board determined that the 
recommended assessment rate would be able to reduce the financial 
burden on the industry and still fund most of the Board's budgeted 
expenses without drawing down reserves at an unsustainable rate. The 
assessment rate of $0.005 per pound of hazelnuts was derived by 
considering anticipated expenses, the projected volume of assessable 
hazelnuts, the projected monetary balance held in reserve, and 
additional pertinent factors.
    A review of NASS information indicates that the average producer 
price for the 2022 crop year was $0.65 per pound ($1,300 per ton). 
Further, NASS reported the quantity of hazelnuts harvested in the 2022 
crop year was 136 million pounds (68,000 tons), which yields estimated 
total producer revenue for 2022 of $88,400,000 ($0.65 per pound 
multiplied by 136 million pounds). Therefore, utilizing the assessment 
rate of $0.005 per pound, the estimated assessment revenue as a 
percentage of total producer revenue would be approximately 0.77 
percent ($0.005 per pound multiplied by 136 million pounds divided by 
$88,400,000 and multiplied by 100).
    This proposed action would decrease the assessment obligation 
imposed on handlers. Assessments are applied uniformly on all handlers, 
and some of the costs may be passed on to growers. However, these costs 
are expected to be offset by the benefits derived by the operation of 
the Order.
    The Board's meetings are widely publicized throughout the 
production area. The hazelnut industry and all interested persons are 
invited to attend the meetings and participate in Board deliberations 
on all issues. Like all Board meetings, the June 29, 2023, meeting was 
a public meeting and all entities, both large and small, were able to 
express views on this issue. Finally, interested persons are invited to 
submit comments on this proposed rule, including the 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. 0581-0178, Vegetable 
and Specialty Crops. No changes in those requirements would be 
necessary as a result of this proposed rule. Should any changes become 
necessary, they would be submitted to OMB for approval.
    This proposed rule would not impose any additional reporting or 
recordkeeping requirements on either small or large hazelnut 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, and for other purposes.
    AMS has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this proposed rule.
    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 recommendations submitted by the Committee and 
other available information, USDA has determined that this proposed 
rule is consistent with and will effectuate the purposes of the Act.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposed rule. All written comments timely received 
will be considered before a final determination is made on this rule.

List of Subjects in 7 CFR Part 982

    Marketing agreements, Nuts, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service proposes to amend 7 CFR part 982 as follows:

PART 982--HAZELNUTS GROWN IN OREGON AND WASHINGTON

0
1. The authority citation for 7 CFR part 982 continues to read as 
follows:

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

0
2. Revise 982.340 to read as follows:


Sec.  982.340  Assessment rate.

    On and after July 1, 2023, an assessment rate of $0.005 per pound 
is

[[Page 77236]]

established for Oregon and Washington hazelnuts.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-24793 Filed 11-8-23; 8:45 am]
BILLING CODE P