98-29727. Walnuts Grown in California; Increased Assessment Rate  

  • [Federal Register Volume 63, Number 215 (Friday, November 6, 1998)]
    [Proposed Rules]
    [Pages 59891-59893]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 98-29727]
    
    
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    Proposed Rules
                                                    Federal Register
    ________________________________________________________________________
    
    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. 63, No. 215 / Friday, November 6, 1998 / 
    Proposed Rules
    
    [[Page 59891]]
    
    
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    DEPARTMENT OF AGRICULTURE
    
    Agricultural Marketing Service
    
    7 CFR Part 984
    
    [Docket No. FV99-984-1 PR]
    
    
    Walnuts Grown in California; Increased Assessment Rate
    
    AGENCY: Agricultural Marketing Service, USDA.
    
    ACTION: Proposed rule.
    
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    SUMMARY: This rule would increase the assessment rate, from $0.0116 to 
    $0.0133 per kernelweight pound of merchantable walnuts certified, 
    established for the Walnut Marketing Board (Board) under Marketing 
    Order No. 984 for the 1998-99 and subsequent marketing years. The Board 
    is responsible for local administration of the marketing order which 
    regulates the handling of walnuts grown in California. Authorization to 
    assess walnut handlers enables the Board to incur expenses that are 
    reasonable and necessary to administer the program. The marketing year 
    begins August 1 and ends July 31. The assessment rate would remain in 
    effect indefinitely unless modified, suspended, or terminated.
    
    DATES: Comments must be received by November 23, 1998.
    
    ADDRESSES: Interested persons are invited to submit written comments 
    concerning this rule. Comments must be sent to the Docket Clerk, Fruit 
    and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, 
    Washington, DC 20090-6456; Fax: (202) 205-6632; or E-mail: 
    moabdocket__clerk@usda.gov. Comments should reference the docket number 
    and the date and page number of this issue of the Federal Register and 
    will be available for public inspection in the Office of the Docket 
    Clerk during regular business hours.
    
    FOR FURTHER INFORMATION CONTACT: Diane Purvis, Marketing Assistant, or 
    Mary Kate Nelson, Marketing Specialist, California Marketing Field 
    Office, Fruit and Vegetable Programs, AMS, USDA, 2202 Monterey Street, 
    Suite 102B, Fresno, California 93721; telephone: (209) 487-5901; Fax: 
    (209) 487-5906; or George Kelhart, Technical Advisor, 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 compliance with this regulation by contacting Jay Guerber, 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.
    
    SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
    Agreement and Order No. 984, both as amended (7 CFR part 984), 
    regulating the handling of walnuts grown in California, hereinafter 
    referred to as the ``order.'' The marketing agreement and order are 
    effective under the Agricultural Marketing Agreement Act of 1937, as 
    amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
        The Department of Agriculture (Department) is issuing this rule in 
    conformance with Executive Order 12866.
        This rule has been reviewed under Executive Order 12988, Civil 
    Justice Reform. Under the marketing order now in effect, California 
    walnut handlers are subject to assessments. Funds to administer the 
    order are derived from such assessments. It is intended that the 
    assessment rate as issued herein will be applicable to all assessable 
    walnuts beginning on August 1, 1998, and continue 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.
        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 the Secretary 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 the Secretary 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 the 
    Secretary'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 rule would increase the assessment rate established for the 
    Board for the 1998-99 and subsequent marketing years from $0.0116 to 
    $0.0133 per kernelweight pound of certified merchantable walnuts.
        The California walnut marketing order provides authority for the 
    Board, with the approval of the Department, to formulate an annual 
    budget of expenses and collect assessments from handlers to administer 
    the program. The members of the Board are producers and handlers of 
    California walnuts. They are familiar with the Board's needs and with 
    the costs for 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 discussed in a public meeting. Thus, 
    all directly affected persons have an opportunity to participate and 
    provide input.
        For the 1997-98 and subsequent marketing years, the Board 
    recommended, and the Department approved, an assessment rate that would 
    continue in effect from marketing year to marketing year unless 
    modified, suspended, or terminated by the Secretary upon recommendation 
    and information submitted by the Board or other information available 
    to the Secretary.
        The Board met on September 11, 1998, and unanimously recommended 
    1998-99 expenditures of $2,620,274 and an assessment rate of $0.0133 
    per kernelweight pound of merchantable walnuts certified. In 
    comparison, last year's budgeted expenditures were $2,391,289. The 
    assessment rate of $0.0133 is $0.0017 higher than the rate currently in 
    effect. The quantity of assessable walnuts for 1998-99 is estimated at 
    198,000,000 kernelweight pounds, which is 9,000,000 kernelweight pounds 
    less than 1997-98. With the anticipated decrease in assessable walnuts 
    and increased budget expenditures, a higher assessment rate is needed 
    to generate sufficient revenue
    
    [[Page 59892]]
    
    to administer the program for the 1998-99 marketing year as shown in 
    the following table.
    
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                                                                        Assessment       Proposed
                                                                          income          budget        Difference
    ----------------------------------------------------------------------------------------------------------------
    Current Rate--$0.0116...........................................      $2,296,800      $2,620,274       -$323,474
    Proposed Rate--$0.0133..........................................       2,633,400       2,620,274         +13,126
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        The following table compares major budget expenditures recommended 
    by the Board for the 1998-99 and 1997-98 marketing years:
    
    ------------------------------------------------------------------------
            Budget expense categories             1998-99         1997-98
    ------------------------------------------------------------------------
    General Expenses........................        $246,643        $240,326
    Office Expenses.........................         163,815         147,126
    Research Expenses.......................       2,115,016       2,128,837
    Production Research Director............          59,800          50,000
    Reserve for Contingencies...............          35,000          25,000
    ------------------------------------------------------------------------
    
        The assessment rate recommended by the Board was derived by 
    dividing anticipated expenses by expected merchantable certifications 
    of California walnuts. As mentioned earlier, merchantable 
    certifications for the year are estimated at 198,000,000 kernelweight 
    pounds which should provide $2,663,400 in assessment income. Unexpended 
    funds may be used temporarily to defray expenses of the subsequent 
    marketing year, but must be made available to the handlers from whom 
    collected within five months after the end of the year (Sec. 984.69.)
        The proposed assessment rate would continue in effect indefinitely 
    unless modified, suspended, or terminated by the Secretary 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 the Department. 
    Board meetings are open to the public and interested persons may 
    express their views at these meetings. The Department 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 1998-99 budget 
    and those for subsequent marketing years would 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 initial 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 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. Thus, both statutes have small 
    entity orientation and compatibility.
        There are approximately 5,000 producers of walnuts in the 
    production area and approximately 48 handlers subject to regulation 
    under the marketing order. Small agricultural producers have been 
    defined by the Small Business Administration (13 CFR 121.601) as those 
    having annual receipts less than $500,000, and small agricultural 
    service firms are defined as those whose annual receipts are less than 
    $5,000,000.
        Last year, as a percentage, 33 percent of the handlers shipped over 
    2.4 million kernelweight pounds of walnuts, and 67 percent of the 
    handlers shipped under 2.4 million kernelweight pounds. Based on an 
    average price of $2.10 per kernelweight pound at point of first sale, 
    the majority of handlers of California walnuts may be classified as 
    small entities.
        This rule would increase the assessment rate established for the 
    Board and collected from handlers for the 1998-99 and subsequent 
    marketing years from $0.0116 to $0.0133 per kernelweight pound of 
    merchantable walnuts certified. The Board unanimously recommended 1998-
    99 expenditures of $2,620,274 and an assessment rate of $0.0133 per 
    kernelweight pound of merchantable walnuts certified. The proposed 
    assessment rate of $0.0133 is $0.0017 higher than the 1997-98 rate. The 
    quantity of assessable walnuts for the 1998-99 marketing year is 
    estimated at 198,000,000 kernelweight pounds. Thus, the $0.0133 rate 
    should provide $2,633,400 in assessment income and be adequate to meet 
    this year's expenses. Unexpended funds may be used temporarily to 
    defray expenses of the subsequent marketing year, but must be made 
    available to the handlers from whom collected within five months after 
    the end of the year (Sec. 984.69).
        The following table compares major budget expenditures recommended 
    by the Board for the 1998-99 and 1997-98 marketing years:
    
    ------------------------------------------------------------------------
            Budget expense categories             1998-99         1997-98
    ------------------------------------------------------------------------
    General Expenses........................        $246,643        $240,326
    Office Expenses.........................         163,815         147,126
    Research Expenses.......................       2,115,016       2,128,837
    Production Research Director............          59,800          50,000
    Reserve for Contingencies...............          35,000          25,000
    ------------------------------------------------------------------------
    
        The higher assessment rate is needed to provide sufficient revenue 
    to administer the program for the 1998-99 marketing year as shown in 
    the following table.
    
    [[Page 59893]]
    
    
    
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                                                                        Assessment       Proposed
                                                                          income          budget        Difference
    ----------------------------------------------------------------------------------------------------------------
    Current Rate--$0.0116...........................................      $2,296,800      $2,620,274       -$323,474
    Proposed Rate--$0.0133..........................................       2,633,400       2,620,274         +13,126
    ----------------------------------------------------------------------------------------------------------------
    
        The Board reviewed and unanimously recommended 1998-99 expenditures 
    of $2,620,274 which included increases in administrative and office 
    expenses, and production research salary, and a decrease for research 
    programs. Prior to arriving at this budget, the Board considered 
    information and recommendations from various sources, such as the 
    Board's Budget and Personnel Committee, the Research Committee, and the 
    Market Development Committee. Alternative expenditure levels were 
    discussed by these groups, based upon the relative value of various 
    research projects to the walnut industry. After a desired expenditure 
    level was determined, the assessment rate of $0.0133 per kernelweight 
    pound of assessable walnuts was determined by dividing the total 
    recommended budget by the quantity of assessable walnuts, estimated at 
    198,000,000 kernelweight pounds for the 1998-99 marketing year. This is 
    approximately $13,000 above the anticipated expenses, which the Board 
    determined to be acceptable.
        A review of historical information and preliminary information 
    pertaining to the upcoming marketing year indicates that the grower 
    price for the 1998-99 season could range between $1.45 and $1.58 per 
    kernelweight pound of walnuts. Therefore, the assessment revenue for 
    the 1998-99 marketing year as a percentage of total grower revenue 
    should be less than one percent.
        This action would increase the assessment obligation imposed on 
    handlers. While assessments impose some additional costs on handlers, 
    the costs are minimal and uniform on all handlers. Some of the 
    additional costs may be passed on to producers. However, these costs 
    are offset by the benefits derived by the operation of the marketing 
    order. In addition, the Board's meeting was widely publicized 
    throughout the California walnut industry, and all interested persons 
    were invited to attend the meeting and participate in Board 
    deliberations on all issues. Like all Board meetings, the September 11, 
    1998, 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 information on the regulatory and 
    informational impacts of this action on small businesses.
        This proposed rule would impose no additional reporting or 
    recordkeeping requirements on either small or large California walnut 
    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.
        The Department has not identified any relevant Federal rules that 
    duplicate, overlap, or conflict with this rule.
        A 15-day comment period is provided to allow interested persons to 
    respond to this proposed rule. Fifteen days is deemed appropriate 
    because: (1) The Board needs to have sufficient funds to pay its 
    expenses which are incurred on a continuous basis; (2) the 1998-99 
    marketing year began on August 1, 1998, and the marketing order 
    requires that the rate of assessment for each marketing year apply to 
    all assessable walnuts handled during such marketing year; and (3) 
    handlers are aware of this action which was unanimously recommended by 
    the Board at a public meeting and is similar to other assessment rate 
    actions issued in past years.
    
    List of Subjects in 7 CFR Part 984
    
        Marketing agreements, Nuts, Reporting and recordkeeping 
    requirements, Walnuts.
    
        For the reasons set forth in the preamble, 7 CFR part 984 is 
    proposed to be amended as follows:
    
    PART 984--WALNUTS GROWN IN CALIFORNIA
    
        1. The authority citation for 7 CFR part 984 continues to read as 
    follows:
    
        Authority: 7 U.S.C. 601-674.
    
        2. Section 984.347 is proposed to be revised to read as follows:
    
    
    Sec. 984.347  Assessment rate.
    
        On and after August 1, 1998, an assessment rate of $0.0133 per 
    kernelweight pound is established for California merchantable walnuts.
    
        Dated: October 21, 1998.
    Larry B. Lace,
    Acting Deputy Administrator, Fruit and Vegetable Programs.
    [FR Doc. 98-29727 Filed 11-5-98; 8:45 am]
    BILLING CODE 3410-02-P
    
    
    

Document Information

Published:
11/06/1998
Department:
Agricultural Marketing Service
Entry Type:
Proposed Rule
Action:
Proposed rule.
Document Number:
98-29727
Dates:
Comments must be received by November 23, 1998.
Pages:
59891-59893 (3 pages)
Docket Numbers:
Docket No. FV99-984-1 PR
PDF File:
98-29727.pdf
CFR: (1)
7 CFR 984.347