[Federal Register Volume 63, Number 36 (Tuesday, February 24, 1998)]
[Rules and Regulations]
[Pages 9131-9133]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4593]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 982
[Docket No. FV97-982-1 FIR]
Hazelnuts Grown in Oregon and Washington; Reduced 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 assessment rate established for the Hazelnut
Marketing Board (Board) under Marketing Order No. 982 for the 1997-98,
and subsequent marketing years. The Board is responsible for the local
administration of the marketing order which regulates the handling of
hazelnuts grown in Oregon and Washington. Authorization to assess
hazelnut handlers enables the Board to incur expenses that are
reasonable and necessary to administer the program. The 1997-98
marketing year covers the period July 1 through June 30. The assessment
rate will continue in effect indefinitely unless modified, suspended,
or terminated.
EFFECTIVE DATE: March 26, 1998.
FOR FURTHER INFORMATION CONTACT: Teresa L. Hutchinson, Northwest
Marketing Field Office, Fruit and Vegetable Programs, AMS, USDA, 1220
SW Third Avenue, Room 369, Portland, OR 97204; telephone: (503) 326-
2724, Fax: (503) 326-7440 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 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 No. 115 and Order No. 982, both as amended (7 CFR part 982),
regulating the handling of hazelnuts grown in Oregon and Washington,
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 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, hazelnut
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 hazelnuts
beginning July 1, 1997, and continuing in effect indefinitely unless
modified, 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 continues in effect the assessment rate established for
the Board for the 1997-98, and subsequent marketing years of $0.004 per
pound of hazelnuts.
The 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 hazelnuts. 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 1996-97, 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 indefinitely
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 August 28, 1997, and unanimously recommended 1997-
98 expenditures of $553,218 and an assessment rate of $0.004 per pound
of hazelnuts. In comparison, last year's budgeted expenditures were
$558,974. The assessment rate of $0.004 is $0.003 less than the rate
previously in effect. At the former rate of $0.007 per pound and an
estimated 1997 hazelnut production of 70,000,000 pounds, the projected
reserve on June 30, 1998, would have exceeded the level the Board
believes is necessary to administer the program. Section 982.62 of the
order allows the Board to establish and maintain an operating monetary
reserve in an amount not to exceed approximately one marketing year's
operational expenses. Last year's actual Board expenditures totaled
$284,894. The reduced assessment rate is expected to result in an
operating reserve of $257,497, which is about equal to what the Board
actually spent last year for program expenses.
The Board discussed lower assessment rates, but decided that an
assessment rate of less than $0.004 would not generate the income
necessary to administer the program with an adequate reserve. Major
expenses recommended by the Board for the 1997-98 marketing year
include $46,864 for personnel service (salaries and benefits), $5,640
for rent, $5,000 for compliance, $17,000 for a crop survey, $269,000
for promotion, and $182,364 for an emergency fund. Budgeted expenses
for these items in 1996-97 were $50,020, $5,640, $5,000, $15,000,
$275,000, and $182,364, respectively.
The assessment rate recommended by the Board was derived by
dividing
[[Page 9132]]
anticipated expenses by expected shipments of hazelnuts. With hazelnut
shipments for the year estimated at 70,000,000 pounds, the $0.004 per
pound assessment rate should provide $280,000 in assessment income.
Income derived from handler assessments, along with interest and funds
from the Board's authorized reserve, will be adequate to cover budgeted
expenses. Funds in the reserve will be kept within the maximum
permitted by the order.
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 is effective 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 1997-98 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 action 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 1,000 producers of hazelnuts in the
production area and approximately 25 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 of less than $500,000 and small agricultural
service firms are defined as those whose annual receipts are less than
$5,000,000. The majority of hazelnut producers and handlers may be
classified as small entities.
This rule continues in effect a decreased assessment rate
established for the Board and collected from handlers for the 1997-98,
and subsequent marketing years. The Board unanimously recommended 1997-
98 expenditures of $553,218 and an assessment rate of $0.004 per pound
of hazelnuts. The assessment rate of $0.004 is $0.003 less than the
rate previously in effect. At the former assessment rate of $0.007 per
pound, the Board's reserve was projected to exceed the level the Board
believes is necessary to administer the program. Therefore, the Board
voted to lower its assessment rate and use more of the reserve to cover
its expenses. Section 982.62 of the order allows the Board to establish
and maintain an operating monetary reserve in an amount not to exceed
approximately one marketing year's operational expenses. Last year's
actual Board expenditures totaled $284,894. The reduced assessment rate
is expected to result in an operating reserve of $257,497, which is
about equal to what the Board actually spent last year for program
expenses.
The Board discussed alternatives to this rule, including
alternative expenditure levels. Lower assessment rates were considered,
but not recommended because they would not generate the income
necessary to administer the program with an adequate reserve. Major
expenses recommended by the Board for the 1997-98 marketing year
include $46,864 for personal services (salaries and benefits), $5,640
for rent, and $5,000 for compliance, $17,000 for a crop survey,
$269,000 for promotion, and $182,364 for an emergency fund. Budgeted
expenses for these items in 1996-97 were $50,020, $5,640, $5,000,
$15,000, $275,000, and $182,364, respectively.
Hazelnut shipments for the year are estimated at 70,000,000 pounds,
which should provide $280,000 in assessment income. Income derived from
handler assessments, along with interest and funds from the Board's
authorized reserve, will be adequate to cover budgeted expenses. Funds
in the reserve will be kept within the maximum permitted by the order.
The maximum permitted of one marketing year's operational expenditures
is specified in Sec. 982.62. The reduced assessment rate is expected to
result in an operating reserve of $257,497, which is about equal to
what the Board spent last year for program expenses.
Recent price information indicates that the grower price for the
1997-98 marketing season will range between $0.32 and $0.43 per pound
of hazelnuts. Therefore, the estimated assessment revenue for the 1997-
98 marketing year as a percentage of total grower revenue will range
between .93 and 1.25 percent.
This action continues to reduce the assessment obligation imposed
on handlers. While this rule will impose some additional costs on
handlers, the costs are minimal and in the form of uniform assessments
on all handlers. Some of the additional costs may be passed on to
producers. However, these costs will be offset by the benefits derived
by the operation of the marketing order.
This rule will 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. 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.
Further, the Board's meeting was widely publicized throughout the
hazelnut industry and all interested persons were invited to attend the
meeting and participate in Board deliberations. Like all Board
meetings, the August 28, 1997, meeting was a public meeting and all
entities, both large and small, were able to express views on this
issue.
An interim final rule concerning this action was published in the
Federal Register on October 14, 1997 (62 FR 53225). The rule was made
available through the Internet by the Office of the Federal Register.
That rule provided for a 60-day comment period which ended December 15,
1997. No comments were received.
After consideration of all relevant matter presented, including the
Board's recommendation, and other information, it is hereby found that
finalizing the interim final rule, without change, as published in the
Federal Register (62 FR 53225, October 14, 1997) will tend to
effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 982
Marketing agreements, Hazelnuts, Reporting and recordkeeping
requirements.
[[Page 9133]]
PART 982--HAZELNUTS GROWN IN OREGON AND WASHINGTON
Accordingly, the interim final rule amending 7 CFR part 982 which
was published at 62 FR 53225 on October 14, 1997, is adopted as a final
rule without change.
Dated: February 17, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-4593 Filed 2-23-98; 8:45 am]
BILLING CODE 3410-02-P
