[Federal Register Volume 60, Number 137 (Tuesday, July 18, 1995)]
[Rules and Regulations]
[Pages 36635-36636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17533]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 60, No. 137 / Tuesday, July 18, 1995 / Rules
and Regulations
[[Page 36635]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 998
[Docket No. FV95-998-1FIR]
Expenses, Assessment Rate, and Indemnification Reserve for
Marketing Agreement No. 146 Regulating the Quality of Domestically
Produced Peanuts
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (Department) is adopting as a
final rule, with appropriate changes, the provisions of an interim
final rule that authorized expenditures for administration and
indemnification, established an assessment rate, and authorized
continuation of an indemnification reserve under Marketing Agreement
146 (agreement) for the 1995-96 crop year. The rule also increased the
administrative assessment rate for the 1994-95 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 1994-95 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.
EFFECTIVE DATE: Section 998.408 is effective July 1, 1995, through June
30, 1996. Section 998.407 was effective July 1, 1994, through June 30,
1995.
FOR FURTHER INFORMATION CONTACT: Martha Sue Clark, Marketing Order
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O.
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, P.O. Box 2276, Winter Haven, FL
33883-2276, telephone 941-299-4770.
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 rule has been reviewed under Executive Order 12778, 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. This rule authorizes expenditures and establishes an
assessment rate for the Committee for the crop year which began July 1,
1995, and ends June 30, 1996, and increases the administrative
assessment rate for the crop year which began July 1, 1994, and ended
June 30, 1995. 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
$5,000,000. 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 1995-96
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, 1995.
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 23, 1995, and unanimously recommended
1995-96 crop year administrative expenses of $1,067,500 and an
administrative assessment rate of $0.70 per net ton of assessable
farmers' stock peanuts received or acquired by handlers. In comparison,
1994-95 crop year budgeted administrative expenditures were $1,056,000,
and the administrative assessment rate was initially recommended and
fixed at $0.60 per ton.
Administrative budget items for 1995-96 which have increased
compared to those budgeted for 1994-95
[[Page 36636]]
(in parentheses) are: Executive salaries, $145,051 ($140,146), clerical
salaries, $138,856 ($132,500), field representatives salaries, $304,344
($290,420), payroll taxes, $44,000 ($43,000), employee benefits,
$148,000 ($145,000), insurance and bonds, $9,500 ($8,500), postage and
mailing, $13,200 ($12,000), and audit fees, $10,400 ($9,200). Items
which have decreased compared to those budgeted for 1994-95 (in
parentheses) are: Office rent and parking, $44,360 ($50,000), furniture
and equipment, $4,000 ($9,500), and lab data processing, $1,000
($1,500). All other items are budgeted at last year's amounts. The
administrative budget includes $4,789 for contingencies ($14,234 last
year).
The Committee also unanimously recommended 1995 crop
indemnification claims payments of up to $7,000,000 and an
indemnification assessment of $1.00 per net ton of farmers' stock
peanuts received or acquired by handlers to continue its
indemnification program. For the 1994 crop, indemnification claims
payments of up to $9,000,000 and an assessment rate of $2.00 per net
ton were established. The decreases for 1995 reflect the Committee's
desire to lower indemnification costs.
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 paid from
available indemnification funds. Such costs are not expected to exceed
$2,000,000.
The total assessment rate is $1.70 per ton of assessable peanuts
($0.70 for administrative and $1.00 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 1,525,000 will
yield $1,067,500 for program administration and $1,525,000 for
indemnification. The indemnification amount, when added to expected
cash carry over from 1994-95 indemnification operations of $8,700,000,
will provide $10,225,000, which should be adequate for the 1995 fund,
and to maintain an adequate reserve.
The 1994-95 budget was published in the Federal Register as an
interim final rule on May 12, 1994 (59 FR 24633), and finalized on
August 3, 1994 (59 FR 39421). The administrative expenses and
assessment rate for the 1994-95 crop year were based on an estimated
assessable tonnage of 1,760,000. Due to handlers purchasing fewer
peanuts than originally projected, the assessable tonnage is expected
to be only 1,676,000. In order to have sufficient revenue to cover
budgeted expenses of $1,056,000, the Committee unanimously recommended
that the 1994-95 crop year administrative assessment be increased from
$0.60 to $0.63 per net ton of assessable farmers' stock peanuts.
An interim final rule was published in the Federal Register on May
17, 1995 (60 FR 26348). That interim final rule added Sec. 998.408
which authorized expenditures for administration and indemnification,
established an assessment rate, and authorized continuation of an
indemnification reserve for the Committee. That rule also amended
Sec. 998.407, paragraph (c) to increase the administrative assessment
rate for the 1994-95 crop year. That rule provided that interested
persons could file comments through June 16, 1995. One comment was
received from the Assistant Manager of the Peanut Administrative
Committee regarding an incorrect indemnification expense figure
appearing two places on page 26349 in the interim final rule. The
Committee pointed out that in column one in the third full paragraph
and in column three in paragraph (b) Indemnification expenses, the
$500,000 figure should be corrected to read $2,000,000. These two
corrections have been made in this finalization of the interim final
rule.
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.
It is further found that good cause exists for not postponing the
effective date of this action until 30 days after publication in the
Federal Register (5 U.S.C. 553) because the Committee needs to have
sufficient funds to pay its expenses which are incurred on a continuous
basis. The 1994-95 crop year began on July 1, 1994, and the 1995-96
crop year for the program began on July 1, 1995, and the marketing
agreement requires that the rate of assessment for the crop year apply
to all assessable peanuts handled during the crop year. In addition,
handlers are aware of this action which was recommended by the
Committee at a public meeting and published in the Federal Register as
an interim final rule.
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:
Accordingly, the interim final rule adding Sec. 998.408 and
amending Sec. 998.407, which was published at (60 FR 26348) on May 17,
1995, is adopted as a final rule with the following change:
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.
2. In Sec. 998.408, paragraph (b) is revised to read as follows:
Note: This section will not appear in the Code of Federal
Regulation.
Sec. 998.408 Expenses, assessment rate, and indemnification reserve.
* * * * *
(b) Indemnification expenses. Expenses of the Committee not to
exceed $7,000,000 for indemnification claims payments and claims
expenses, pursuant to the terms and conditions of indemnification
applicable to the 1995 crop effective July 1, 1995, are authorized. In
addition, indemnification expenses, in an undetermined amount estimated
not to exceed $2,000,000, which are incurred by the Committee for
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.
* * * * *
Dated: July 10, 1995.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 95-17533 Filed 7-17-95; 8:45 am]
BILLING CODE 3410-02-P
