[Federal Register Volume 63, Number 209 (Thursday, October 29, 1998)]
[Rules and Regulations]
[Pages 57891-57893]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28972]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 63, No. 209 / Thursday, October 29, 1998 /
Rules and Regulations
[[Page 57891]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 997 and 998
[Docket Nos. FV98-997-1 FIR and FV98-998-1 FIR]
Domestically Produced Peanuts; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (Department) is adopting, as a
final rule, without change, the provisions of an interim final rule
which decreased the administrative assessment rate established for the
Peanut Administrative Committee (Committee) under Marketing Agreement
No. 146 (Agreement) for the 1998-99 and subsequent crop years from
$0.35 to $0.33 per net ton of assessable peanuts. Authorization to
assess peanut handlers who have signed the Agreement enables the
Committee to incur expenses that are reasonable and necessary to
administer the program. The Agreement is effective under the
Agricultural Marketing Agreement Act of 1937, as amended (Act). The Act
also requires the Department to impose the same administrative
assessment rate on assessable peanuts received or acquired by handlers
who have not signed the Agreement. The 1998-1999 crop year covers the
period July 1 through June 30. The assessment rate will remain in
effect indefinitely unless modified, suspended, or terminated.
EFFECTIVE DATE: November 30, 1998.
FOR FURTHER INFORMATION CONTACT: Jim Wendland or George J. Kelhart,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-6456;
telephone: (202) 720-2491, Fax: (202) 205-6632. Small businesses may
request information on complying with this regulation, or obtain a
guide on complying with marketing agreements and orders for fruits,
vegetables, and speciality crops, by contacting Jay Guerber, also at
the above address, telephone, and fax number, or E-mail:
Jay__N__Guerber@usda.gov. You may also view the marketing agreements
and orders small business compliance guide at the following web site:
http://www.ams.usda.gov/fv/moab.html.
SUPPLEMENTARY INFORMATION: This rule is issued pursuant to the
requirements of the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), hereafter referred to as the ``Act'', under
Marketing Agreement No. 146 (7 CFR part 998), and under the Peanut Non-
Signer Program (7 CFR part 997). The marketing agreement and non-signer
program, and the regulations issued thereunder regulate the quality of
domestically produced peanuts.
The Department is issuing this rule in conformance with Executive
Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Farmers stock peanuts received or acquired by non-
signatory handlers and farmers stock peanuts received or acquired by
handlers signatory to the Agreement, other than from those described in
Sec. 998.31(c) and (d), are subject to the same assessment rate. It is
intended that the assessment rates finalized herein will be applicable
to all assessable peanuts beginning July 1, 1998, and continue in
effect until amended, suspended, or terminated. This rule will not
preempt any State or local laws, regulations, or policies, unless they
present an irreconcilable conflict with this rule. There are no
administrative procedures which must be exhausted prior to any judicial
challenge to the provisions of this rule.
This rule continues the decreased assessment rate established for
the Committee and non-signer handlers for the 1998-99 and subsequent
crop years from $0.35 to $0.33 per net ton of assessable peanuts.
The Agreement provides authority for the Committee, with the
approval of the Department, to formulate an annual budget of expenses
and collect assessments from handlers to administer the program. Funds
to administer the Agreement program are paid to the Committee and are
derived from signatory handler assessments. The Committee members
include nine handlers and nine producers of peanuts. They are familiar
with the Committee's needs and with the costs for goods and services in
their local areas, and thus, are in a position to formulate an
appropriate budget and assessment rate. The assessment rate is
formulated and discussed in a public meeting. Thus, all directly
affected persons have an opportunity to participate and provide input.
The handlers of peanuts who are directly affected have voluntarily
signed the Agreement authorizing the expenses that may be incurred and
the imposition of assessments.
For the 1996-97 and subsequent crop years, the Committee
recommended, and the Department approved, an assessment rate that would
continue in effect from crop year to crop year indefinitely unless
modified, suspended, or terminated by the Secretary, upon
recommendation and information submitted by the Committee or other
information available to the Secretary.
The Committee met on May 27, 1998, and unanimously recommended for
1998-99 a reduction in the administrative assessment rate from $0.35 to
$0.33 per net ton of assessable peanuts, and administrative
expenditures of $495,000. In comparison, last year's budgeted
administrative expenditures were $525,000. The assessment rate of $0.33
is $0.02 lower than the rate previously in effect.
Major expenditures approved for the Committee for the 1998-99 crop
year compared with those budgeted for 1997-98 (in parentheses) include:
$58,000 for executive salaries ($55,000), $43,500 for clerical salaries
($50,000), $129,000 for compliance officers salaries ($125,000),
$19,000 for payroll taxes ($18,000), $70,000 for employee benefits
($65,000), $40,000 for committee members travel ($40,000), $55,000 for
compliance officers travel ($60,000), $13,000 for office rent
($19,000), and $10,400 for the audit fee ($10,400).
The Committee had discussed alternatives to this rule, including
alternative expenditure levels but decided that each of the budgeted
expenses was reasonable and appropriate. It had also discussed the
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alternative of not decreasing the assessment rate but decided it needed
to decrease the rate to reduce handlers' costs as much as possible. The
Committee had also discussed an even lower rate, but decided that an
assessment rate of less than $0.33 would not generate the income
necessary to administer the program.
The assessment rate approved for the Committee was derived by
dividing anticipated expenses by expected receipts and acquisitions of
farmers stock peanuts. Farmers stock peanuts received or acquired by
handlers signatory to the Agreement, other than those peanuts described
in Sec. 998.31(c) and (d), are subject to the assessments. Assessments
are due on the 15th of the month following the month in which the
farmers stock peanuts are received or acquired by signatory handlers.
Peanut receipts and acquisitions for the year under the Agreement are
estimated at 1,500,000 tons, which should provide $495,000 in
assessment income. Approximately 95 percent of the domestically
produced peanut crop is handled by handlers who signed the Agreement.
The remaining 5 percent is handled by non-signer handlers.
The Act provides for the mandatory assessment of farmers stock
peanuts acquired by non-signatory peanut handlers. Section 608b of the
Act specifies that: (1) Any assessment (except indemnification
assessments) imposed under the Agreement with signatory handlers also
shall apply to non-signatory handlers, and (2) such assessment shall be
paid to the Secretary. Thus, the assessment rate of $0.33 per net ton
of assessable peanuts also applies to non-signatory handlers of
domestic peanuts.
The assessment rates finalized in this rule will continue in effect
indefinitely unless modified, suspended, or terminated by the Secretary
upon recommendation and information submitted by the Committee or other
available information.
Although these assessment rates are effective for an indefinite
period, the Committee will continue to meet prior to or during each
crop year to recommend a budget of expenses and consider
recommendations for modification of the assessment rate for signatory
handlers. The dates and times of Committee meetings are available from
the Committee or the Department. Committee meetings are open to the
public and interested persons may express their views at these
meetings. The Department 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 1998-99 budget has been approved and those
for subsequent crop years will be reviewed and, as appropriate,
approved by the Department.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (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
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing agreements and
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. Thus, both
statutes have small entity orientation and compatibility.
There are approximately 80 peanut handlers who are subject to
regulation under the Agreement or the non-signer program and
approximately 25,000 commercial peanut producers in the 16-State
production area. Small agricultural service firms, which include
handlers, are defined by the Small Business Administration (13 CFR
121.601) as those having annual receipts of less than $5,000,000, and
small agricultural producers are defined as those having annual
receipts of less than $500,000. Approximately 25 percent of the
signatory handlers, virtually all of the non-signer handlers, and most
of the producers may be classified as small entities.
This rule continues the decreased assessment rate established for
the Committee (as it unanimously recommended) to be collected from
handlers for the 1998-99 and subsequent crop years from $0.35 to $0.33
per net ton. The rate is $0.02 less than the 1997-98 rate.
The Committee had discussed alternatives to this rule, including
alternative expenditure levels but unanimously voted that each of the
budgeted expenses was reasonable and appropriate. It had also discussed
the alternative of not decreasing the assessment rate. However, it had
decided against this course of action. The peanut industry has been in
a state of economic decline since 1991, with the Committee attempting
to cut costs where possible. The Committee's approved budget for 1998-
99 is $495,000, or $30,000 less than the amount budgeted for 1997-98.
Based on an estimated 1,500,000 net tons of assessable peanuts, income
derived from handler assessments during 1998-99 will be adequate to
cover budgeted expenses.
Major expenditures approved for the Committee for the 1998-99 crop
year compared with those budgeted for 1997-98 (in parentheses) include:
$58,000 for executive salaries ($55,000), $43,500 for clerical salaries
($50,000), $129,000 for compliance officers salaries ($125,000),
$19,000 for payroll taxes ($18,000), $70,000 for employee benefits
($65,000), $40,000 for committee members travel ($40,000), $55,000 for
compliance officers travel ($60,000), $13,000 for office rent
($19,000), and $10,400 for the audit fee ($10,400).
The Committee had reviewed historical information and information
pertaining to the 1998-99 crop year. The Department expects the area
for harvest to total 1.48 million acres of peanuts for the 1998 crop.
The Committee projected shipments for the 1998-99 crop year to be 1.5
million net tons. Based on 1997-98 crop figures, the approximately
$560,000 in total assessments collected by the Committee as a
percentage of the $932,000,000 total peanut crop value was only 0.0006
percent. With a decreased assessment rate, the relationship of total
assessment cost as a percentage of total crop value is expected to be
even smaller for the 1998-99 crop.
This action finalizes the decreased administrative assessment
obligation imposed on all domestic peanut handlers, whether signers or
non-signers. Assessments are applied uniformly on all handlers, and
some of the costs may be passed on to producers. However, the decreased
assessment rate reduces the burden on handlers, and may reduce the
burden on producers. Also, the reduced burdens are offset by the
benefits derived from the operations of the Agreement and the non-
signer programs. In addition, the Committee's meeting was widely
publicized throughout the peanut industry and all interested persons
were invited to attend the meeting and participate in deliberations on
all issues. Like all Committee meetings, the May 27, 1998, meeting was
a public meeting and all entities, both large and small, were able to
express views on this issue. Finally, interested persons were invited
to submit information on the regulatory and informational impacts of
this action on small businesses and none were received.
This action will not impose any additional reporting or
recordkeeping requirements on either small or large
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peanut handlers. As with all Federal marketing agreement and order
programs, reports and forms are periodically reviewed to reduce
information requirements and duplication by industry and public sector
agencies. In addition, as noted in the initial regulatory flexibility
analysis, the Department has not identified any relevant Federal rules
that duplicate, overlap, or conflict with this rule.
An interim final rule concerning this action was published in the
Federal Register on August 3, 1998 (63 FR 41182). Copies of that rule
were mailed by the Committee's staff to all Committee members and
peanut handlers. In addition, the rule was made available through the
Internet by the Office of the Federal Register. A 60-day comment period
was provided for interested persons to respond to the interim final
rule. The comment period ended October 2, 1998, and no comments were
received.
After consideration of all relevant material presented, including
the information and unanimous recommendation submitted by the Committee
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
7 CFR Part 997
Food grades and standards, Peanuts, Reporting and recordkeeping
requirements.
7 CFR Part 998
Marketing agreements, Peanuts, Reporting and recordkeeping
requirements.
PART 997--PROVISIONS REGULATING THE QUALITY OF DOMESTICALLY
PRODUCED BY PERSONS NOT SUBJECT TO THE PEANUT MARKETING AGREEMENT
PART 998--MARKETING AGREEMENT REGULATING THE QUALITY OF
DOMESTICALLY PRODUCED PEANUTS
Accordingly, the interim final rule amending 7 CFR parts 997 and
998 which was published at 63 FR 41182 on August 3, 1998, is adopted as
a final rule without change.
Dated: October 23, 1998.
Larry B. Lace,
Acting Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-28972 Filed 10-28-98; 8:45 am]
BILLING CODE 3410-02-P
