[Federal Register Volume 63, Number 243 (Friday, December 18, 1998)]
[Rules and Regulations]
[Pages 69994-69996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33574]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Docket No. FV99-984-1 FR]
Walnuts Grown in California; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule increases the assessment rate established for the
Walnut Marketing Board (Board) under Marketing Order No. 984 for the
1998-99 and subsequent marketing years from $0.0116 to $0.0133 per
kernelweight pound of certified merchantable walnuts. 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
began on August 1 and ends July 31. The assessment rate will remain in
effect indefinitely unless modified, suspended, or terminated.
EFFECTIVE DATE: December 19, 1998.
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: (559) 487-5901; Fax:
(559) 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 complying with this regulation, or obtain a guide on complying with
fruit, vegetable, and specialty crop marketing agreements and orders by
contacting Jay Guerber, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 2525-S,
Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202) 205-
6632, or E-mail: Jay__N__Guerber@usda.gov. You may view the marketing
agreement and order small business compliance guide at the following
web site: http://www.ams.usda.gov/fv/moab.html.
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 increases 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 certified merchantable walnuts. 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 to administer the program for the 1998-
99 marketing year as shown in the following table.
[[Page 69995]]
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Assessment
income 1998-99 budget Difference
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Current Rate--$0.0116........................................... $2,296,800 $2,620,274 -$323,474
New 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
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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 assessment rate established in this rule will 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 will be in effect for an indefinite
period, the Board will 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 will evaluate
Board recommendations and other available information to determine
whether modification of the assessment rate is needed. Further
rulemaking will be undertaken as necessary. The Board's 1998-99 budget
and those for subsequent marketing 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 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 increases 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 certified
merchantable walnuts. The Board unanimously recommended 1998-99
expenditures of $2,620,274 and an assessment rate of $0.0133 per
kernelweight pound of certified merchantable walnuts. The assessment
rate of $0.0133 is $0.0017 higher than the current 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
------------------------------------------------------------------------
[[Page 69996]]
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.
----------------------------------------------------------------------------------------------------------------
Assessment
income 1998-99 budget Difference
----------------------------------------------------------------------------------------------------------------
Current Rate--$0.0116........................................... $2,296,800 $2,620,274 -$323,474
New 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 information pertaining to
the current 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 estimated assessment revenue for the
1998-99 marketing year as a percentage of total grower revenue should
be less than one percent.
This action increases 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.
This rule imposes 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 proposed rule concerning this action was published in the Federal
Register on November 3, 1998 (63 FR 59246). Copies of the proposed rule
were also mailed or sent via facsimile to all walnut handlers. Finally,
the proposal was made available through the Internet by the Office of
the Federal Register. A 15-day comment period ending November 18, 1998,
was provided for interested persons to respond to the proposal. No
comments were received. Another proposed rule duplicating the earlier
proposal was published on November 6, 1998 (63 FR 59891). The duplicate
proposal also provided a 15-day comment period which ended November 23,
1998. No comments were received in response to the duplicate proposal.
After consideration of all relevant material 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.
Pursuant to 5 U.S.C. 553, it is also found and determined that good
cause exists for not postponing the effective date of this rule until
30 days after publication in the Federal Register because: (1) The
Board needs to have sufficient funds to pay its expenses which are
incurred on a continuous basis; (2) the 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; (3) handlers are aware of this rule which was
recommended at a public meeting; and (4) a 15-day comment period was
provided for interested persons to provide input on the assessment rate
increase and no comments were received.
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
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 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: December 14, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-33574 Filed 12-17-98; 8:45 am]
BILLING CODE 3410-02-P
