[Federal Register Volume 62, Number 69 (Thursday, April 10, 1997)]
[Proposed Rules]
[Pages 17569-17572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9187]
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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. 62, No. 69 / Thursday, April 10, 1997 /
Proposed Rules
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[Docket No. FV-97-981-2 PR]
Almonds Grown in California; Interhandler Transfers of Reserve
Obligation
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposal invites comments on implementing regulations to
authorize interhandler transfers of reserve obligations. This rule also
announces the Agricultural Marketing Service's (AMS) intention to
request a revision to the currently approved information collection
requirements issued under the marketing order. The almond marketing
order regulates the handling of almonds grown in California and is
administered locally by the Almond Board of California (Board). This
rule would allow the Board to implement authority contained in the
marketing order to authorize handlers to transfer reserve withholding
obligations to other handlers. It would provide handlers with an
additional option to satisfy reserve obligations. If implemented, this
rule would enhance the utility and flexibility of the volume control
regulations while benefiting producers, handlers, and consumers.
DATES: Comments must be received by June 9, 1997.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments must be sent in triplicate to the
Docket Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S,
P.O. Box 96456, Washington, DC 20090-6456, Fax (202) 720-5698. All
comments should reference the docket number and the date and page
number of this issue of the Federal Register and will be made available
for public inspection in the Office of the Docket Clerk during regular
business hours.
FOR FURTHER INFORMATION CONTACT: Kathleen M. Finn, Marketing
Specialist, Marketing Order Administration Branch, F&V, AMS, USDA, room
2530-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202)
720-1509, Fax (202) 720-5698; or Martin Engeler, California Marketing
Field Office, Marketing Order Administration Branch, F&V, AMS, USDA,
2202 Monterey Street, suite 102B, Fresno, California 93721; telephone:
(209) 487-5901, Fax (209) 487-5906. Small businesses may request
information on compliance with this regulation by contacting Jay
Guerber, Marketing Order Administration Branch, F&V, AMS, USDA, room
2525-S, P.O. Box 96456, Washington, DC, 20090-6456, telephone: (202)
720-2491 or Fax (202) 720-5698.
SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing
Agreement and Order No. 981 (7 CFR part 981), both as amended,
regulating the handling of almonds grown in California, hereinafter
referred to as the ``order.'' 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 Department of Agriculture (Department) is issuing this rule in
conformance with Executive Order 12866.
This proposal has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is not intended to have retroactive effect.
This proposal 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. A 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 date of the entry of the ruling.
This proposal invites comments on implementing regulations
authorizing interhandler transfers of reserve obligations. Sections
981.45 through 981.60 set forth the authority to implement volume
control regulations under the order by establishing salable and reserve
percentages of almonds. Annually, the Board meets to review projected
crop estimates and marketing conditions for the coming season.
Variations in production can cause wide fluctuations in prices. These
swings in supplies and price levels can result in market instability
and uncertainty for growers, handlers, buyers, and consumers.
If it is determined a reserve is warranted, the Board recommends to
the Secretary the salable and reserve percentages to be placed on the
almond crop. If a reserve is established, handlers are required to
refrain from selling to normal market outlets a quantity of almonds
equal to the reserve percentage. This percentage becomes the handlers'
reserve withholding obligation. Handlers must either maintain product
in inventory for possible release at a later date or dispose of product
to secondary reserve outlets to satisfy their reserve obligation. The
last season a reserve was in effect was during the 1994-95 crop year.
Section 981.55 of the order was amended by final order dated June
26, 1996 (61 FR 32917) to include a provision that allows handlers to
transfer reserve withholding obligation to other handlers. Prior to the
amendment to the order, Sec. 981.55 authorized only the transfer of
almonds (not reserve almonds) or reserve credits to other handlers.
Reserve credits are issued to handlers when they dispose of almonds to
secondary outlets in satisfaction of their reserve obligation. Handlers
can transfer excess credits to other handlers. The receiving handler
can use the credit to meet all or a portion of its reserve obligation.
This section of the order further states that the terms and conditions
implementing the provision must be recommended by the Board and
approved by the Secretary. Adding a third option by
[[Page 17570]]
amendment to the order was intended to provide more flexibility for
handlers in satisfying their reserve obligation.
At a Board meeting held on February 18, 1997, the Board unanimously
recommended implementing the third option under Section 981.55
concerning reserve withholding obligation transfers by making
appropriate changes to the rules and regulations. This proposal would
enhance the utility and flexibility of the volume control regulations.
It would provide handlers with an additional method of satisfying
reserve obligations.
Currently, Sec. 981.455 contains three paragraphs setting forth
rules and regulations regarding interhandler transfers of almonds.
These paragraphs set forth procedures for: (1) Transferring non-reserve
almonds; (2) transferring reserve credits; and (3) transferring
inedible almond obligations. The Board's proposal recommends adding a
new paragraph including procedures for transferring reserve withholding
obligations.
This rule would expand the options available to handlers in the
event a reserve is implemented. The ability to transfer reserve
obligations would particularly benefit those handlers who do not stay
in business all year and do not have facilities for storage of reserve
almonds. Such handlers are traditionally the smaller handlers in the
industry. Storage and other costs associated with maintaining reserve
inventory or disposing of product to secondary outlets could be
reduced. This rule would provide another option for handlers to choose
from in satisfying their reserve obligations that may better suit their
operation.
The objective of the reserve provisions is to keep a certain
quantity of almonds off the market in order to maintain market
stability. The additional flexibility in the reserve provisions is
expected to improve compliance among handlers, which in turn would
maintain the integrity of the volume control regulations.
In order to ensure that adequate procedures are in place to monitor
transfer of reserve obligations among handlers, the Board recommended
modifying ABC Form 11 which currently covers interhandler transfers of
reserve credits. New information would be added to the form to properly
document reserve obligation transfers. Almond handlers wanting to
transfer their reserve obligation to another handler would complete one
portion of revised Form 11 and forward the form to the receiving
handler. The receiving handler would complete their portion of the form
and submit it to the Board. Authorized Board personnel would review,
and if appropriate, approve the transfer. The Board would then submit
copies of the forms to involved parties.
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 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 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 97 handlers of California almonds who are
subject to regulation under the marketing order and approximately 7,000
almond producers in the regulated area. Small agricultural service
firms have been 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.
Currently, about 58 percent of the handlers ship under $5 million
of almonds and 42 percent ship over $5 million on an annual basis. In
addition, based on acreage, production, and grower prices reported by
the National Agricultural Statistics Service, and the total number of
almond growers, the average annual grower revenue is approximately
$156,000. In view of the foregoing, it can be concluded that the
majority of handlers and producers of California almonds may be
classified as small entities.
Sections 981.45 through 981.60 of the almond marketing order
provide authority to implement volume control regulations by
establishing salable and reserve percentages of almonds. If it is
determined a reserve is warranted, the Board recommends to the
Secretary the salable and reserve percentages to be placed on the
almond crop. If a reserve is established, handlers are required to not
sell to normal market outlets a quantity of almonds equal to the
reserve percentage. Handlers must either maintain product in inventory
for possible release at a later date or dispose of product to lower
value reserve outlets to satisfy their reserve obligation. These lower
value outlets are primarily crushing for oil and animal feed.
Section 981.55 of the order provides authority for the interhandler
transfer of almonds and reserve credits. This section was recently
amended to include authority for interhandler transfer of reserve
obligations. This proposed rule would implement the authority to
transfer reserve withholding obligations by revising Sec. 981.455 of
the administrative rules and regulations accordingly. This proposal
would provide another option, in addition to those that appear in that
section, for handlers to satisfy their reserve obligations. The ability
to transfer reserve obligations would particularly benefit those
handlers who do not stay in business all year and do not have
facilities for storage of reserve almonds. Such handlers are
traditionally the smaller handlers in the industry. Storage and other
costs associated with maintaining reserve inventory or disposing of
product to secondary outlets could be reduced. This rule would provide
another option for handlers to choose from in satisfying their reserve
obligations that may better suit their operation.
In past years, handlers either had to maintain product in inventory
or dispose of it in approved reserve outlets to satisfy their
withholding obligation, as discussed earlier. Those handlers choosing
to maintain product in inventory must locate storage facilities and
incur storage costs they may not otherwise incur, until the reserve is
lifted. Storage costs vary, depending upon factors such as the type of
facilities utilized and quantities involved. These costs are generally
in the range of one cent per pound per month, with additional charges
for moving product into and out of storage facilities. These costs
could be incurred for approximately six months to a year and a half
depending on the ultimate disposition of the reserve.
Those handlers choosing to dispose of their reserve to approved
outlets may save on storage costs, but receive a lower return on the
sales than they may receive if sold in normal market channels if the
reserve is ultimately released. Price levels for almonds used for
crushing into oil are in the range of 28 to 35 cents per pound, while
animal feed brings about two to three cents per pound. Price levels for
sales to normal market outlets vary significantly from year to year
depending on available supplies and market conditions. The additional
option that would be provided by this proposal would allow handlers to
make arrangements to transfer their reserve obligation to other
handlers. Handlers could choose the most cost effective method of
satisfying
[[Page 17571]]
their reserve obligations that best suits their operations. This
proposed rule would provide more flexibility if volume control
regulations under the almond marketing order are issued.
A current form is being revised for handlers to supply the transfer
information to the Board for its approval. The current form (ABC Form
11) provides for handlers to transfer reserve credits. Information
would be added to this form to collect information on transfers of
withholding obligation. No additional burden would be added to the form
because handlers would choose one of the options on the form. The forms
current burden time of 5 minutes would not be changed. This action
would not impose any significant additional reporting or recordkeeping
requirements on either small or large almond handlers. The benefits of
providing another tool to the industry to assist them in making
business decisions far outweigh the estimated 5 minutes it would take
to complete the form. Further, any additional reporting may be offset
by reduced reporting for those handlers choosing to utilize this option
in lieu of other options available for satisfying reserve obligations.
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 proposed rule. Information
generated by State, Federal, and private sector reports pertains to
almonds in general and does not contain specific producer and handler
information. Therefore, such information would not be detailed enough
to be used for the specific purposes required under the order.
The amendment to the marketing order was voted on in a referendum
and was overwhelmingly supported by almond growers. This proposal would
establish procedures to implement the amendment that authorized
transfers of reserve obligations. There are no alternatives that would
result in the additional flexibility sought by the industry.
In addition, the Board's meeting was widely publicized throughout
the almond industry and all interested persons were invited to attend
the meeting and participate in committee deliberations on all issues.
Like all Board meetings, the February 18, 1997, meeting was a public
meeting and all entities, both large and small, were able to express
views on this issue. The Board itself is composed of ten members, of
which five are handlers and five are growers, the majority of whom are
small entities. Finally, interested persons are invited to submit
information on the regulatory and informational impacts of this action
on small businesses.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the AMS announces its intention to request a revision to a
currently approved information collection for almonds grown in
California.
Title: Almonds Grown in California, Marketing Order 981.
OMB Number: 0581-0071.
Expiration Date of Approval: August 31, 1999.
Type of Request: Intent to extend and revise a currently approved
information collection.
Abstract: The information collection requirements in this request
are essential to carry out the intent of the AMAA, to provide the
respondents the type of service they request, and to administer the
California almond marketing order program, which has been operating
since 1950.
Several provisions of the marketing order were amended as a result
of extensive formal rulemaking proceedings, including a referendum of
growers. Section 981.55 of the Order was amended to authorize handlers
to transfer reserve withholding obligations during the effective period
of a reserve. On February 18, 1997, the Board unanimously recommended
implementing accompanying regulations to correspond with this
amendment. This notice entails modifying ABC Form 11, which covers
reserve credit transfers, to include transfers of reserve withholding
obligation.
Handlers are already required to complete the form only during
reserve years if they transfer reserve credits. This modification would
authorize another option for handlers to dispose of their reserve
obligation. This rule would necessitate adding data to this form
requiring information from handlers on reserve obligation transfers.
Almond handlers wanting to transfer their reserve obligation to another
handler would complete their portion of the revised ABC Form 11. The
initiating handler would forward the partially completed Form 11 to the
handler agreeing to assume the obligation. When the receiving handler
completes their portion of the form, it would transfer the form to
authorized Board personnel for approval of the transfer. Following the
authorization, the transfer would be deemed complete. Only handlers
wanting to transfer reserve or reserve credits would be required to
complete the form.
The information collected is used only by authorized
representatives of the USDA, including AMS, Fruit and Vegetable
Division regional and headquarters staff, and authorized employees of
the Board. Authorized Board employees and the industry are the primary
users of the information and AMS is the secondary user.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 0.083 hours per response.
Respondents: California almond growers, handlers and accepted users
of inedible almonds.
Estimated Number of Respondents: 7,658.
Estimated Number of Responses per Respondent: 6,022.
Estimated Total Annual Burden on Respondents: 2,512 hours.
Comments: Comments are invited on: (1) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information will
have practical utility; (2) the accuracy of the agency's estimate of
the burden of the proposed collection of information, including the
validity of the methodology and assumptions used; (3) ways to enhance
the quality, utility, and clarity of the information to be collected;
and (4) ways to minimize the burden of the collection of information on
those who are to respond, including through the use of appropriate
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology.
Comments should reference OMB No. 0581-0071 and the California
Almond Marketing Order No. 981, and be sent to USDA in care of Kathleen
Finn at the address above. All comments received will be available for
public inspection during regular business hours at the same address.
All responses to this notice will be summarized and included in the
request for OMB approval. All comments will also become a matter of
public record.
A 60-day comment period is provided to allow interested persons to
respond to this proposal.
List of Subjects in 7 CFR Part 981
Almonds, Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
[[Page 17572]]
For the reasons set forth in the preamble, 7 CFR part 981 is
proposed to be amended as follows:
PART 981--ALMONDS GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 981 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
Sec. 981.455 [Amended]
2. In Sec. 981.455, paragraph (c) is redesignated as paragraph (d)
and a new paragraph (c) is proposed to be added to read as follows:
Sec. 981.455 Interhandler transfers.
* * * * *
(c) Transfers of reserve withholding obligation. A handler may
transfer reserve withholding obligation to other handlers pursuant to
Sec. 981.55 after having filed with the Board an ABC Form 11 executed
by both handlers. The Board shall approve the transfer upon receipt of
the properly completed form.
* * * * *
Dated: April 4, 1997.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 97-9187 Filed 4-9-97; 8:45 am]
BILLING CODE 3410-02-P
