[Federal Register Volume 59, Number 91 (Thursday, May 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11489]
[[Page Unknown]]
[Federal Register: May 12, 1994]
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DEPARTMENT OF AGRICULTURE
7 CFR Part 998
[Docket No. FV94-998-1IFR]
Expenses, Assessment Rate, and Indemnification Reserve for
Marketing Agreement No. 146 Regulating the Quality of Domestically
Produced Peanuts
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This interim final rule authorizes expenditures for
administration and indemnification, establishes an assessment rate, and
authorizes continuation of an indemnification reserve under Marketing
Agreement 146 (agreement) for the 1994-95 crop year. This rule also
increases the administrative assessment rate for the 1993-94 crop year.
Authorization of this budget enables the Peanut Administrative
Committee (Committee) to incur operating expenses, collect funds to pay
those expenses, and settle indemnification claims during the 1994-95
crop year. Authorization of the increase in the administrative
assessment rate for the 1993-94 crop year enables the Committee to
collect sufficient funds to pay expenses projected for the remainder of
that year. Funds to administer this program are derived from
assessments on handlers who have signed the agreement.
DATES: Section 998.407 is effective July 1, 1994, through June 30,
1995. Section 998.406 is effective July 1, 1993, through June 30, 1994.
Comments received by June 13, 1994, will be considered prior to
issuance of a final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent in triplicate to the Docket
Clerk, Fruit and Vegetable Division, AMS, USDA, PO Box 96456, room
2523-S, Washington, DC 20090-6456, FAX 202-720-5698. 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: Martha Sue Clark, Marketing Order
Administration Branch, Fruit and Vegetable Division, AMS, USDA, PO Box
96456, room 2523-S, Washington, DC 20090-6456, telephone 202-720-9918,
or William G. Pimental, Southeast Marketing Field Office, Fruit and
Vegetable Division, AMS, USDA, PO Box 2276, Winter Haven, FL 33883-
2276, telephone 813-299-4770.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement 146 (7 CFR part 998) regulating the quality of domestically
produced peanuts. This agreement 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 is issuing this rule in conformance with Executive
Order 12866.
This interim final rule has been reviewed under Executive Order
12887, Civil Justice Reform. Under the agreement now in effect, peanut
handlers signatory to the agreement are subject to assessments. Funds
to administer the peanut agreement program are derived from such
assessments, and deductible type insurance for 1994-95 indemnification
expenses. This rule authorizes expenditures and establishes an
assessment rate for the Committee for the crop year beginning July 1,
1994, and increases the administrative assessment rate for the crop
year which began July 1, 1993. 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.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Administrator of the Agricultural Marketing Service
(AMS) has considered the economic impact of this rule on small
entities.
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.
There are approximately 47,000 producers of peanuts in the 16
States covered under the agreement, and approximately 76 handlers
regulated under the agreement. 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
$3,500,000. A majority of the producers may be classified as small
entities, and some of the handlers covered under the agreement are
small entities.
Under the agreement, the assessment rate for a particular crop year
applies to all assessable tonnage handled from the beginning of such
year (i.e., July 1). An annual budget of expenses is prepared by the
Committee and submitted to the Department for approval. The members of
the Committee are handlers and producers of peanuts. They are familiar
with the Committee's needs and with the costs for goods, services, and
personnel for program operations and, thus, are in a position to
formulate appropriate budgets. The budgets are formulated and discussed
at industry-wide meetings. Thus, all directly affected persons have an
opportunity to provide input in recommending the budget, assessment
rate, and indemnification reserve. The handlers of peanuts who are
directly affected have signed the marketing agreement authorizing the
expenses that may be incurred and the imposition of assessments.
The assessment rate recommended by the Committee for the 1994-95
crop year was derived by dividing anticipated expenses by expected
receipts and acquisitions of farmers' stock peanuts. It applies to all
assessable peanuts received or acquired by handlers from July 1, 1994.
Because that rate is applied to actual receipts and acquisitions, it
must be established at a rate which will produce sufficient income to
pay the Committee's expenses.
The Committee met on March 16, 1994, and unanimously recommended
1994-95 crop year administrative expenses of $1,056,000 and an
administrative assessment rate of $0.60 per net ton of assessable
farmers' stock peanuts received or acquired by handlers. In comparison,
1993-94 crop year budgeted administrative expenditures were $1,020,000,
and the administrative assessment rate was initially recommended and
fixed at $0.60 per ton.
Administrative budget items for 1994-95 which have increased
compared to those budgeted for 1993-94 (in parentheses) are: Executive
salaries, $140,146 ($134,304), clerical salaries, $132,500 ($127,479),
field representatives salaries, $290,420 ($278,778), field
representatives travel, $110,000 ($107,000), insurance and bonds,
$8,500 ($7,500), and furniture and equipment, $9,500 ($4,000). Items
which have decreased compared to those budgeted for 1993-94 (in
parentheses) are: Payroll taxes, $43,000 ($45,000), office rent and
parking, $50,000 ($52,500), postage and mailing, $12,000 ($13,000), and
audit fees, $9,200 ($9,500). All other items are budgeted at last
year's amounts. The administrative budget includes $14,234 for
contingencies ($4,439 last year).
The Committee also unanimously recommended 1994 crop
indemnification claims payments of up to $9,000,000 and an
indemnification assessment of $2.00 per net ton of farmers' stock
peanuts received or acquired by handlers to continue its
indemnification program. The 1993-94 crop year indemnification
assessment was $1.00 per net ton. Because of the high number of claims
being processed during the 1993-94 crop year, the Committee recommended
a higher assessment rate so that sufficient reserve funds will be
available. The $9,000,000 of indemnification claims coverage to be
provided on 1994 crop peanuts includes $5,000,000 in excess loss
insurance to be purchased by the Committee--the same as last year.
The cost of the indemnification insurance premium and the costs to
carry out indemnification procedures (sampling and testing of 2-AB and
3-AB Subsamples, and crushing supervision, of indemnified peanuts,
pursuant to Sec. 998.200 (c), are additional indemnification costs
which must be authorized and paid from available indemnification funds.
Such costs are not expected to exceed $2,000,000.
The total assessment rate is $2.60 per ton of assessable peanuts
($0.60 for administrative and $2.00 for indemnification). Assessments
are due on the 15th of the month following the month in which the
farmers' stock peanuts are received or acquired. Application of the
recommended rates to the estimated assessable tonnage of 1,760,000 will
yield $1,056,000 for program administration and $3,520,000 for
indemnification. The indemnification amount, when added to expected
cash carry over from 1993-94 indemnification operations of $12,609,100,
will provide $16,129,100, which should be adequate for the 1994 fund,
and to maintain an adequate reserve.
The 1993-94 budget was published in the Federal Register as an
interim final rule on June 11, 1993 (58 FR 32600), and finalized on
August 13, 1993 (58 FR 43066). The administrative expenses and
assessment rate for the 1993-94 crop year were based on an estimated
assessable tonnage of 1,700,000. Due to an unexpected short crop, the
assessable tonnage is estimated to be only 1,476,377. In order to have
sufficient revenue to cover budgeted expenses of $1,020,000, the
Committee unanimously recommended that the 1993-94 crop year
administrative assessment be increased from $0.60 to $0.70 per net ton
of assessable farmers' stock peanuts.
While this action will impose some additional costs on handlers,
the costs are in the form of uniform assessments on all handlers
signatory to the agreement. Some of the additional costs may be passed
on to producers. However, these costs will be significantly offset by
the benefits derived from the operation of the marketing agreement.
Therefore, the Administrator of the AMS has determined that this action
will not have a significant economic impact on a substantial number of
small entities.
After consideration of all relevant matter presented, including the
information and recommendations 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.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect and that good cause exists for not postponing the effective date
of this action until 30 days after publication in the Federal Register
because: (1) The Committee needs to have sufficient funds to pay its
expenses which are incurred on a continuous basis; (2) the 1993-94 crop
year began on July 1, 1993, and the 1994-95 crop year begins on July 1,
1994, and the marketing agreement requires that the rate of assessment
for the fiscal period apply to all assessable peanuts handled during
the fiscal period; (3) handlers are aware of these actions which were
unanimously recommended by the Committee at a public meeting and are
similar to other budget actions issued in past years; and (4) this
interim final rule provides a 30-day comment period, and all comments
timely received will be considered prior to finalization of this
action.
List of Subjects in 7 CFR Part 998
Marketing agreements, Peanuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 998 is
amended as follows:
PART 998--MARKETING AGREEMENT REGULATING THE QUALITY OF
DOMESTICALLY PRODUCED PEANUTS
1. The authority citation for 7 CFR part 998 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
Note: These sections will not appear in the Annual Code of
Federal Regulations.
2. A new section Sec. 998.407 is added to read as follows:
Sec. 998.407 Expenses, assessment rate, and indemnification reserve.
(a) Administrative expenses. The budget of expenses for the Peanut
Administrative Committee for the crop year beginning July 1, 1994,
shall be in the amount of $1,056,000, such amount being reasonable and
likely to be incurred for the maintenance and functioning of the
Committee and for such purposes as the Secretary may, pursuant to the
provisions of the marketing agreement, determine to be appropriate.
(b) Indemnification expenses. Expenses of the Committee not to
exceed $9,000,000 for indemnification claims payments and claims
expenses, pursuant to the terms and conditions of indemnification
applicable to the 1994 crop effective July 1, 1994, are authorized. In
addition, indemnification expenses, in an undetermined amount estimated
not to exceed $2,000,000, which are incurred by the Committee for
excess loss insurance, sampling and testing fees for 2-AB and 3-AB
Subsamples, and fees for the supervision of the crushing of indemnified
peanuts are also authorized.
(c) Rate of assessment. Each handler shall pay to the Committee, in
accordance with Sec. 998.48 of the marketing agreement, an assessment
at the rate of $2.60 per net ton of farmers' stock peanuts received or
acquired other than from those described in Secs. 998.31(c) and (d). A
total of $0.60 shall be for administrative expenses and a total of
$2.00 shall be for indemnification. Assessments are due on the 15th of
the month following the month in which the farmers' stock peanuts are
received or acquired.
(d) Indemnification reserve. Monetary additions to the
indemnification reserve, established in the 1965 crop year pursuant to
Sec. 998.48 of the agreement, shall continue. That portion of the total
assessment funds accrued from the $2.00 rate not expended on
indemnification claims payments on 1994 crop peanuts and related
expenses shall be kept in such reserve and shall be available to pay
indemnification expenses on subsequent crops.
Sec. 998.406 [Amended]
3. In Sec. 998.406, paragraph (c) is amended by removing ``$1.60''
and adding in its place ``$1.70'' and by removing ``$0.60'' and adding
in its place ``$0.70.''
Dated: May 5, 1994.
Robert C. Keeney,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 94-11489 Filed 5-11-94; 8:45 am]
BILLING CODE 3410-02-P
