2017-15305. Pecans Grown in the States of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas; Establishment of Reporting Requirements ...

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Proposed rule.

SUMMARY:

This proposed rule invites comments on the establishment of reporting requirements under the Federal marketing order for pecans (order). The American Pecan Council (Council) locally administers the order and is comprised of growers and handlers of pecans operating within the production area and a public member. This action would require all pecan handlers to submit two forms to the Council: One for inter-handler transfers and another that includes year-end inventory and pecans handled throughout the year. The Council would use this information to facilitate assessment collection and provide valuable reports to the industry, including the annual marketing policy required by the order. This proposal also announces the Agricultural Marketing Service's (AMS) intention to request approval from the Office of Management and Budget (OMB) of a new information collection.

DATES:

Comments must be received by September 19, 2017. Pursuant to the Paperwork Reduction Act, comments on the information collection burden must be received by September 19, 2017.

ADDRESSES:

Interested persons are invited to submit written comments concerning this proposal. Comments must be sent to the Docket Clerk, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; Fax: [phone]; or Internet: http://www.regulations.gov. All comments should reference the document 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, or can be viewed at: http://www.regulations.gov. All comments submitted in response to this proposal will be included in the record and will be made available to the public. Please be advised that the identity of the individuals or entities submitting the comments will be made public on the Internet at the address provided above.

FOR FURTHER INFORMATION CONTACT:

Jennie M. Varela, Marketing Specialist, or Christian D. Nissen, Regional Director, Southeast Marketing Field Office, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA; Telephone: [phone], Fax: [phone], or Email: [e-mail] or [e-mail].

Small businesses may request information on complying with this regulation by contacting Richard Lower, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: [phone], Fax: [phone], or Email: [e-mail].

SUPPLEMENTARY INFORMATION:

This proposal is issued under Marketing Agreement and Order No. 986, (7 CFR part 986), regulating the handling of pecans grown in the states of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas, 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 (USDA) is issuing this proposed rule in conformance with Executive Orders 13563 and 13175.

This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) has exempted from Executive Order 12866 review. Additionally, because this rule does not meet the definition of a significant regulatory action it does not trigger the requirements contained in Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017 titled ‘Reducing Regulation and Controlling Regulatory Costs’ ” (February 2, 2017).

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. This proposed rule is not intended to have retroactive effect.

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 USDA 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, USDA 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 USDA'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 proposed rule would establish reporting requirements under the order. This action would require all pecan handlers to submit to the Council reports of inter-handler transfers of pecans, inventory, and a summary of pecans handled. This information would be used to facilitate assessment collection and provide valuable reports to the industry, including the annual marketing policy required by the order. This proposal was unanimously recommended by the Council at its April 17, 2017, meeting.

Section 986.61 of the order requires all handlers warehousing pecans as of August 31 be identified as the handler of those pecans and pay the assessment rate accordingly. Section 986.62 provides the Council, with the approval of the Secretary, authority to establish methods and procedures, including necessary reports, to maintain accurate records for inter-handler transfers. Sections 986.75, 986.76, and 986.77 provide authority to prescribe reports of handler inventory, merchantable pecans handled, and pecans received by handlers, respectively. Section 986.78 further provides the Council, with the approval of the Secretary, authority to collect other reports and information from handlers needed to enable the Council to perform its duties. This proposed rule would utilize these authorities to establish new §§ 986.162 and 986.175 under the rules and regulations of the order. These new sections would require handlers of pecans to report to the Council any inter-handler transfers, and the volume of shelled, inshell, and total volume of pecans handled each fiscal year by type using specific Council forms.

At its November 16, 2016 meeting, the first meeting following the order's promulgation, the Council discussed its initial budget, assessment rates, and necessary reporting requirements in order to set up a program that is efficient and responsive to industry needs. During these discussions, the Council established a Statistics and Reporting Committee (Committee) to develop reporting requirements.

Members of the Committee discussed the reporting needs of the industry, reviewed examples of reporting forms from other marketing orders, and met and worked with the staff of another marketing order in developing the proposed reporting requirements. The Committee also worked with USDA to ensure the recommended information collection would provide the information necessary to facilitate the administration of the order.

At its February 23, 2017 meeting, the Council reviewed drafts of seven reporting forms as developed and recommended by the Committee. The Council expressed its interest in having as much electronic reporting as possible, but recognized that many handlers may prefer a paper submission. The Council also considered the timing of when forms would be due and submission dates that would work for all parts of the industry. After a thorough review and some modifications, seven forms were approved by the Council.

At a meeting on April 17, 2017, the Council revisited the recommended reporting requirements and the accompanying forms. Acknowledging the industry was more than halfway through the fiscal year at that time, the Council took action to move forward with the minimum reports necessary to facilitate the collection of assessments and to provide the other information needed for the 2016-17 fiscal year. Specifically, the Council voted to utilize two forms for the current fiscal year, one focusing on inter-handler transfers, and one containing information regarding year-end inventory and pecans handled throughout the fiscal year. The Council agreed it still wanted to move forward with all seven forms for the 2017-18 fiscal year, but considered year-end reporting on two forms as the most viable option for this fiscal year. The remaining five forms will be proposed in a subsequent rulemaking action.

This proposed rule would add two new reporting requirements and two new forms to the rules and regulations under the order by adding §§ 986.162 and 986.175. The pecan industry includes a subset of handlers, defined in the order as accumulators, who compile pecans for the purpose of resale or transfer to another handler. Additionally, small handlers may also sell or transfer pecans to other handlers. During the formal rulemaking hearing, the industry expressed concern that it may be difficult to track pecans moved through accumulators or transferred between handlers. Further, some handlers and accumulators that are small operations may find reporting, recordkeeping, and paying assessments burdensome.

The report of inter-handler transfers would include information on the month of transfer, type of pecans transferred, the volume transferred, the amount of assessments owed on the pecans transferred, identification information and signatures of the two handlers involved, and whether the transferring handler or receiving handler would be responsible for reporting and paying the assessments. This report would help ensure that transferred pecans are not counted twice for volume reporting purposes and would help facilitate the collection of assessments. It would also allow receiving handlers to assume the reporting burden from smaller entities and ensure payment of corresponding assessments.

The Council selected the tenth day of the month following the month of transfer as the due date for reports of inter-handler transfers. Should the tenth day of the month fall on a weekend or holiday, reports would be due by the first business day following the tenth day of the month. However, given that the current season began October 1, 2016, for the 2016-17 fiscal year, all inter-handler transfer forms would need to be submitted by Monday, September 11, 2017. For subsequent fiscal years, reports of inter-handler transfers would be due on a monthly basis as specified above.

In order to correctly collect assessments, provide industry data, and complete a marketing policy for the coming fiscal year, the Council requires accurate reports of what has been handled and what is in inventory going into the next fiscal year. Based on Council discussions, it is also important for the industry to know the variety and form of the pecan in inventory. This information would be vital to the industry as it enters the next harvest, as the amount and type of inventory impacts prices of the new crop. Collection of this data was one of the industry's goals in promulgating the order, as currently there is no source for this type of information across the 15-state production area. This information would be captured in the year-end inventory report.

The year-end inventory report would include information on the handler submitting the form, total pounds by type of pecans inshell and shelled in inventory, inventory committed but not shipped for both export and domestic, and any uncommitted inventory. It would also include information on pecans handled throughout the year, as well as data for total inventory including both shelled and inshell, with shelled volume converted to an inshell basis using the conversion specified in the order (volume shelled × 2). In addition, it would include information regarding total assessments owed, assessments paid to date, and remaining assessments due for that handler.

The order specifies that on August 31 of each year, every handler warehousing inshell pecans shall be identified as the first handler of those pecans and shall be required to pay the required assessment rate. The order also specifies that the marketing policy include an estimate of the handler inventory as of August 31. Consequently, the Council selected September 10 as the due date for the year-end inventory report, or the first business day following the tenth of September should the tenth fall on a weekend or a holiday. The Council believes this would give all handlers sufficient time to submit the information to the Council after August 31. Further, handlers would be required to pay to the Council all remaining unpaid assessments by the due date of the year-end inventory report.

This action would require all pecan handlers to provide the Council with reports of any inter-handler transfers, year-end inventory, and pecans handled throughout the year. This information would facilitate assessment collections, provide valuable reports to the industry, and allow the Council to complete the annual marketing policy required by the order.

The Council also recommended additional reporting requirements, which would be effective for the 2017-18 fiscal year. These requirements are being considered under a separate action.

Initial Regulatory Flexibility Analysis

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), 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 determine whether the regulatory action will have a significant economic impact on a substantial number of small entities and to fit regulatory actions to the scale of businesses 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.

There are approximately 2,500 growers of pecans in the production area and approximately 250 handlers subject to regulation under the marketing order. Small agricultural growers are defined by the Small Business Administration as those having annual receipts less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $7,500,000 (13 CFR 121.201).

According to information from the National Agricultural Statistics Service (NASS), the average grower price for pecans during the 2015-16 season was $2.20 per pound and 254 million pounds were utilized. The value for pecans that year totaled $558.8 million ($2.20 per pound multiplied by 254 million pounds). Taking the total value of production for pecans and dividing it by the total number of pecan growers provides an average return per grower of $223,520. Using the average price and utilization information, and assuming a normal bell-curve distribution of receipts among growers, the majority of growers receive less than $750,000 annually.

Evidence presented at the formal rulemaking hearing indicates an average handler margin of $0.58 per pound. Adding this margin to the average grower price of $2.20 per pound of inshell pecans results in an estimated handler price of $2.78 per pound. With a total 2015 production of 254 million pounds, ($2.78 per pound multiplied by 254 million pounds) the total value of production in 2015 was $706.12 million. Taking the total value of production for pecans and dividing it by the total number of pecan handlers provides an average return per handler of $2,824,480. Using this estimated price, the utilization volume, number of handlers, and assuming a normal bell-curve distribution of receipts among handlers, the majority of handlers have annual receipts of less than $7,500,000. Thus, the majority (a substantial number) of growers and handlers of pecans grown in the states of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas may be classified as small entities.

This proposed rule would establish reporting requirements under the order. This action would require all pecan handlers to provide the Council with reports of any inter-handler transfers, year-end inventory, and pecans handled throughout the year. This information would facilitate the Council's collection of assessments and provide valuable reports to the industry. This rule would establish new §§ 986.162 and 986.175 under the rules and regulations of the order. The authority for this action is provided for in §§ 986.62, 986.75, 986.76, 986.77, and 986.78 of the order.

Requiring reports of transfers, handler inventory, and pecans handled throughout the year would impose an increase in the reporting burden on all pecan handlers. However, this data is already recorded and maintained by handlers as a part of their daily business. Handlers, regardless of size, should be able to readily access this information. Consequently, any additional costs associated with this change would be minimal (not significant) and apply equally to all handlers.

This action should also help the entire industry by providing comprehensive data on pecans handled and year-end inventory. Collection of this data was one of the industry's goals in promulgating the order as there is no other source for this type of data. This information would help with marketing and planning for the industry, as well as provide important information for the collection of assessments and in preparing the annual marketing policy required by the order. The benefits of this rule are expected to be equally available to all pecan growers and handlers, regardless of their size.

The Council discussed other alternatives to this action, including having additional reporting requirements, but determined that in order to efficiently carry out the objectives of the marketing order this first fiscal year, the information collected in these two reports would be sufficient. The Council also considered requiring the inter-handler transfer form to be submitted for each transfer. However, the Council determined that could be burdensome for some handlers and a monthly report would provide the necessary documentation. Therefore, the alternatives were rejected.

This proposal would establish two new reporting requirements and would require two new Council forms. Therefore, this proposed rule would impose an increase in the reporting burden for all handlers, which is discussed in the Paperwork Reduction Act section of this document.

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. USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Further, the Council's meetings were widely publicized throughout the pecan industry and all interested persons were invited to attend the meetings and participate in Council deliberations on all issues. Additionally, the Council's Committee meetings held February 23, 2017, and April 17, 2017, were also public meetings and all entities, both large and small, were able to express views on this issue. Finally, interested persons are invited to submit comments on this proposed rule, including the regulatory and information collection impacts of this action on small businesses.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/​rules-regulations/​moa/​small-businesses. Any questions about the compliance guide should be sent to Richard Lower at the previously-mentioned address in the FOR FURTHER INFORMATION CONTACT section.

A 60-day comment period is provided to allow interested persons to respond to this proposal. All written comments timely received will be considered before a final determination is made on this matter.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), this notice announces AMS's intent to request approval from the Office of Management and Budget (OMB) for a new information collection under OMB No. 0581—NEW. It will be merged with the forms currently approved under OMB No. 0581-0291 “Federal Marketing Order for Pecans.”

Title: Pecans Grown in the States of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas; Marketing Order No. 986.

OMB Number: 0581—NEW.

Type of Request: New Collection.

Abstract: The information requirements in this request are essential to carry out the intent of the Act, to provide the respondents the type of service they request, and to administer the pecan marketing order program.

On April 17, 2017, the Council unanimously recommended that all pecan handlers covered under the order provide the Council with a record of any inter-handler transfers by type and volume. This form, titled “Report of Inter-Handler Transfers of Pecans”, would be submitted directly to the Council by handlers by the tenth day of the month following the transfer(s).

This information collection would improve the accuracy of the Council's data collection by accounting for transferred pecans, and allow smaller handlers to transfer reporting and assessment obligations to another handler.

The Council also recommended that all handlers covered under the order submit an annual report of inventory held by type as well as a summary of pecans handled for the year. This form, titled “Year End Inventory Report”, would be submitted directly to the Council by handlers by September 10. This information collection will facilitate the Council's collection of assessments needed to administer the program and provide necessary data for the industry on volume handled. It would also provide the volume in inventory going into the next fiscal year, which would assist with market planning and provide information for the marketing policy required by the order.

The information collected would only be used by authorized representatives of the USDA, including the AMS Specialty Crops Program regional and headquarters staff, and authorized employees of the Council. Authorized Council employees would be the primary users of the information, and the AMS would be the secondary users. The Council's staff would compile the information and utilize it to account for assessments due, to calculate total pecans handled, and to prepare a marketing policy as required under the order. All proprietary information would be kept confidential in accordance with the Act and the order.

The proposed request for new information collection under the order is as follows:

Report of Inter-Handler Transfer of Pecans

Estimate of Burden: Public reporting burden for this collection of information is estimated to be an average of 0.16 hours per response.

Respondents: Handlers of pecans in Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas.

Estimated Number of Respondents: 30.

Estimated Number of Responses per Respondent: 12.

Estimated Total Annual Burden on Respondents: 60 hours.

Year End Inventory Report

Estimate of Burden: Public reporting burden for this collection of information is estimated to be an average of 0.33 hours per response.

Respondents: Handlers of pecans in Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas.

Estimated Number of Respondents: 250.

Estimated Number of Responses per Respondent: 1.

Estimated Total Annual Burden on Respondents: 125 hours.

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 the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

Comments should reference OMB No. 0581-NEW and the Marketing Order for Pecans Grown in the states of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas, and should be sent to the USDA in care of the Docket Clerk at the previously-mentioned address or at http://www.regulations.gov.

All responses to this notice will be summarized and included in the request for OMB approval. All comments received will become a matter of public record and will be available for public inspection during regular business hours at the address of the Docket Clerk or at http://www.regulations.gov.

If this proposed rule is finalized, this information collection will be merged with the forms currently approved under OMB No. 0581-0291 “Federal Marketing Order for Pecans.”

List of Subjects in 7 CFR Part 986

• Marketing agreements
• Nuts
• Pecans
• Reporting and recordkeeping requirements

For the reasons set forth in the preamble, 7 CFR part 986 is proposed to be amended as follows:

PART 986—PECANS GROWN IN THE STATES OF ALABAMA, ARKANSAS, ARIZONA, CALIFORNIA, FLORIDA, GEORGIA, KANSAS, LOUISIANA, MISSOURI, MISSISSIPPI, NORTH CAROLINA, NEW MEXICO, OKLAHOMA, SOUTH CAROLINA, AND TEXAS

1. The authority citation for 7 CFR part 986 continues to read as follows:

Authority: 7 U.S.C. 601-674.

2. Revise the heading “Subpart B—[Reserved]” to read “Subpart—Rules and Regulations.”

3. Add § 986.162 to subpart B to read as follows:

§ 986.162

Inter-handler transfers.

(a) Inter-handler transfers of inshell pecans, pursuant to § 986.62, shall be reported to the Council on APC Form 4. Handlers shall file reports by the tenth day of the month following the month of transfer. Should the tenth day of the month fall on a weekend or holiday, reports are due by the first business day following the tenth day of the month; Provided, that for the 2016-17 fiscal year, all inter-handler transfer forms shall be submitted by Monday, September 11, 2017. The report shall contain the following information:

(1) Month of transfer;

(2) The type and weight of pecans transferred;

(3) The amount of assessments owed on the pecans transferred;

(4) The names and signatures for both the transferring and receiving handlers;

(5) Handler assuming the reporting and assessment obligations on the pecans transferred.

4. Add § 986.175 to read as follows:

§ 986.175

Handler inventory.

(a) Handlers shall submit to the Council a year-end inventory report following August 31 each fiscal year. Handlers shall file such reports by September 10. Should September 10 fall on a weekend, reports are due by the first business day following September 10. Such reports shall be reported to the Council on APC Form 7 and include:

(1) The name and address of the handler;

(2) The total weight and type of inshell pecans in inventory, regardless of country of origin;

(3) The total weight and type of shelled pecans in inventory, regardless of country of origin;

(4) The total weight and type of inshell pecans committed, not shipped, for export and domestic shipments, and any uncommitted inventory, regardless of country of origin;

(5) The total weight and type of shelled pecans committed, not shipped, for export and domestic shipments, and any uncommitted inventory, regardless of country of origin;

(6) The combined total inventory for inshell and shelled pecans calculated on an inshell basis, and combined weight committed, not shipped, for exports and domestic shipments, and any uncommitted inventory;

(7) Total weight and type of domestic pecans handled for the fiscal year;

(8) Total assessments owed, assessments paid to date, and remaining assessments due to be paid by the due date of the year-end inventory report for the fiscal year.

Dated: July 17, 2017.

Bruce Summers,

Acting Administrator, Agricultural Marketing Service.