[Federal Register Volume 63, Number 148 (Monday, August 3, 1998)]
[Rules and Regulations]
[Pages 41182-41184]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20641]
[[Page 41182]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 997 and 998
[Docket Nos. FV98-997-1 IFR and FV98-998-1 IFR]
Domestically Produced Peanuts; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: This rule decreases the administrative assessment rate
established for the Peanut Administrative Committee (Committee) under
Marketing Agreement No. 146 (Agreement) for the 1998-99 and subsequent
crop years from $0.35 to $0.33 per net ton of assessable peanuts. The
Committee is responsible for local administration of the Agreement
which regulates the handling of peanuts grown in 16 States.
Authorization to assess peanut handlers who have signed the Agreement
enables the Committee to incur expenses that are reasonable and
necessary to administer the program. The Agreement is effective under
the Agricultural Marketing Agreement Act of 1937, as amended (Act). The
Act also requires the Department of Agriculture (Department) to impose
the same administrative assessment rate on assessable peanuts received
or acquired by handlers who have not signed the Agreement. The 1998-
1999 crop year covers the period July 1 through June 30. The assessment
rate will continue in effect indefinitely unless modified, suspended,
or terminated.
DATES: Effective August 4, 1998. Comments received by October 2, 1998,
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 to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-6456; Fax
(202) 205-6632. Comments should reference the docket numbers 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: Jim Wendland, Marketing Specialist, DC
Marketing Field Office, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 2525-S,
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, also at the above address,
telephone, and fax number.
SUPPLEMENTARY INFORMATION: This rule is issued pursuant to the
requirements of the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), hereafter referred to as the ``Act'', under
Marketing Agreement No. 146 (7 CFR part 998), and under the Peanut Non-
Signer Program (7 CFR part 997). The marketing agreement and non-signer
program, and the regulations issued thereunder regulate the quality of
domestically produced peanuts.
The Department is issuing this rule in conformance with Executive
Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Farmers stock peanuts received or acquired by non-
signatory handlers and farmers stock peanuts received or acquired by
handlers signatory to the Agreement, other than from those described in
Sec. 998.31(c) and (d), are subject to the same assessment rate. It is
intended that the assessment rates issued herein will be applicable to
all assessable peanuts beginning July 1, 1998, and continue in effect
until amended, 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. There are no administrative
procedures which must be exhausted prior to any judicial challenge to
the provisions of this rule.
This rule decreases the assessment rate established for the
Committee and non-signer handlers for the 1998-99 and subsequent crop
years from $0.35 to $0.33 per net ton of assessable peanuts.
The Agreement provides authority for the Committee, with the
approval of the Department, to formulate an annual budget of expenses
and collect assessments from handlers to administer the program. Funds
to administer the Agreement program are paid to the Committee and are
derived from signatory handler assessments. The Committee members
include nine handlers and nine producers of peanuts. They are familiar
with the Committee's needs and with the costs for goods and services in
their local areas and, thus, are in a position to formulate an
appropriate budget and assessment rate. The assessment rate is
formulated and discussed in public meetings. Thus, all directly
affected persons have an opportunity to participate and provide input.
The handlers of peanuts who are directly affected have voluntarily
signed the Agreement authorizing the expenses that may be incurred and
the imposition of assessments.
For the 1996-97 and subsequent crop years, the Committee
recommended, and the Department approved, an assessment rate that would
continue in effect from crop year to crop year indefinitely unless
modified, suspended, or terminated by the Secretary, upon
recommendation and information submitted by the Committee or other
information available to the Secretary.
The Committee met on May 27, 1998, and unanimously recommended for
1998-99 a reduction in the administrative assessment rate from $0.35 to
$0.33 per net ton of assessable peanuts, and administrative
expenditures of $495,000. In comparison, last year's budgeted
administrative expenditures were $525,000. The assessment rate of $0.33
is $0.02 less than the rate currently in effect.
Major expenditures recommended by the Committee for the 1998-99
crop year compared with those budgeted for 1997-98 (in parentheses)
include: $58,000 for executive salaries ($55,000), $43,500 for clerical
salaries ($50,000), $129,000 for compliance officers salaries
($125,000), $19,000 for payroll taxes ($18,000), $70,000 for employee
benefits, ($65,000), $40,000 for committee members travel ($40,000),
$55,000 for compliance officers travel ($60,000), $13,000 for office
rent ($19,000), and $10,400 for the audit fee ($10,400).
The Committee discussed alternatives to this rule, including
alternative expenditure levels but decided that each of the budgeted
expenses was reasonable and appropriate. It also discussed the
alternative of not decreasing the assessment rate but decided it needed
to decrease the rate to reduce handlers' costs as much as possible. The
Committee also discussed an even lower rate, but decided that an
assessment rate of less than $0.33 would not generate the income
necessary to administer the program.
The assessment rate recommended by the Committee was derived by
dividing anticipated expenses by expected receipts and acquisitions of
farmers stock peanuts. Farmers stock peanuts received or acquired by
handlers signatory to the Agreement, other than those peanuts described
in Sec. 998.31(c) and (d), are subject to the assessments. Assessments
are due on the 15th of the month following the month in which the
farmers stock peanuts are received or acquired by signatory handlers.
[[Page 41183]]
Peanut receipts and acquisitions for the year under the Agreement are
estimated at 1,500,000 tons, which should provide $495,000 in
assessment income. Approximately 95 percent of the domestically
produced peanut crop is handled by handlers who signed the Agreement.
The remaining 5 percent is handled by non-signer handlers.
The Act provides for mandatory assessment of farmers stock peanuts
acquired by non-signatory peanut handlers. Section 608b of the Act
specifies that: (1) Any assessment (except indemnification assessments)
imposed under the Agreement with signatory handlers also shall apply to
non-signatory handlers, and (2) such assessment shall be paid to the
Secretary. Thus, the assessment rate of $0.33 per net ton of assessable
peanuts also applies to non-signatory handlers of domestic peanuts.
The assessment rates established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by the
Secretary upon recommendation and information submitted by the
Committee or other available information.
Although these assessment rates are effective for an indefinite
period, the Committee will continue to meet prior to or during each
crop year to recommend a budget of expenses and consider
recommendations for modification of the assessment rate for signatory
handlers. The dates and times of Committee meetings are available from
the Committee or the Department. Committee meetings are open to the
public and interested persons may express their views at these
meetings. The Department will evaluate Committee recommendations and
other available information to determine whether modification of the
assessment rate is needed. Further rulemaking will be undertaken as
necessary. The Committee's 1998-99 budget and those for subsequent crop
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 rule 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. There are approximately
80 peanut handlers who are subject to regulation under the Agreement or
the non-signer program and approximately 25,000 commercial peanut
producers in the 16-State production area. Small agricultural service
firms, which include handlers, are 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. Approximately 25 percent
of the signatory handlers, virtually all of the non-signer handlers,
and most of the producers may be classified as small entities.
This rule decreases the assessment rate established for the
Committee and to be collected from handlers for the 1998-99 and
subsequent crop years from $0.35 to $0.33 per net ton. The rate is
$0.02 less than the 1997-98 rate.
The Committee discussed alternatives to this rule, including
alternative expenditure levels but decided that each of the budgeted
expenses was reasonable and appropriate. It also discussed the
alternative of not decreasing the assessment rate. However, it decided
against this course of action. The peanut industry has been in a state
of economic decline since 1991, with the Committee attempting to cut
costs where possible. The Committee's budget for 1998-99 is $495,000,
$30,000 less than the amount budgeted for 1997-98. Based on an
estimated 1,500,000 net tons of assessable peanuts, income derived from
handler assessments during 1998-99 will be adequate to cover budgeted
expenses.
Major expenditures recommended by the Committee for the 1998-99
crop year compared with those budgeted for 1997-98 (in parentheses)
include: $58,000 for executive salaries ($55,000), $43,500 for clerical
salaries($50,000), $129,000 for compliance officers salaries
($125,000), $19,000 for payroll taxes ($18,000), $70,000 for employee
benefits, ($65,000), $40,000 for committee members travel ($40,000),
$55,000 for compliance officers travel ($60,000), $13,000 for office
rent ($19,000), and $10,400 for the audit fee ($10,400).
The Committee reviewed historical information and preliminary
information pertaining to the 1998-99 crop year. The Department
reported 1.463 million acres planted in peanuts for the 1998 crop. The
Committee projected shipments for the 1998-99 crop year to be 1.5
million net tons. Based on 1997-98 crop figures, the approximately
$560,000 in total assessments collected by the Committee as a
percentage of the $932,000,000 total peanut crop value was only 0.0006
percent. With a decreased assessment rate, the relationship of total
assessment cost as a percentage of total crop value is expected to be
even smaller for the 1998-99 crop.
This action decreases the administrative assessment obligation
imposed on all domestic peanut handlers, whether signers or non-
signers. Assessments are applied uniformly on all handlers, and some of
the costs may be passed on to producers. However, decreasing the
assessment rate reduces the burden on handlers, and may reduce the
burden on producers. In addition, the Committee's meeting was widely
publicized throughout the peanut industry and all interested persons
were invited to attend the meeting and participate in deliberations on
all issues. Like all Committee meetings, the May 27, 1998, meeting was
a public meeting and all entities, both large and small, were able to
express views on this issue. Finally, interested persons are invited to
submit information on the regulatory and informational impacts of this
action on small businesses.
This action will not impose any additional reporting or
recordkeeping requirements on either small or large peanut handlers. As
with all Federal marketing agreement and 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 rule.
After consideration of all relevant matter presented, including the
information and recommendation 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) This action reduces the 1997-98 assessment rate for signer
and non-signer handlers; (2) the Committee needs to have sufficient
funds to pay its expenses which are incurred on a continuous basis; (3)
the Act requires the Department to impose an administrative assessment
on assessable peanuts received or acquired for the
[[Page 41184]]
account of signatory and non-signatory handlers; (4) the 1998-99 crop
year began on July 1, 1998, and the Agreement and the Act require that
the rate of assessment for each crop year apply to all assessable
peanuts received or acquired during such crop year; (5) signatory
handlers are aware of this action which was unanimously recommended by
the Committee at a public meeting and is similar to other assessment
rate actions issued in past years; and (6) this interim final rule
provides a 60-day comment period, and all written comments timely
received will be considered prior to finalization of this rule.
List of Subjects
7 CFR Part 997
Food grades and standards, Peanuts, Reporting and recordkeeping
requirements.
7 CFR Part 998
Marketing agreements, Peanuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR parts 997 and 998
are amended as follows:
PART 997--PROVISIONS REGULATING THE QUALITY OF DOMESTICALLY
PRODUCED PEANUTS HANDLED BY PERSONS NOT SUBJECT TO THE PEANUT
MARKETING AGREEMENT
1. The authority citation for 7 CFR parts 997 and 998 continues to
read as follows:
Authority: 7 U.S.C. 601-674.
2. Section 997.101 is revised to read as follows:
Sec. 997.101 Assessment rate.
On and after July 1, 1998, an administrative assessment rate of
$0.33 per net ton of assessable farmers stock peanuts received or
acquired by each non-signatory first handler is established for
peanuts.
PART 998--MARKETING AGREEMENT REGULATING THE QUALITY OF
DOMESTICALLY PRODUCED PEANUTS
3. Section 998.409 is revised to read as follows:
Sec. 998.409 Assessment rate.
On and after July 1, 1998, an administrative assessment rate of
$0.33 per net ton of farmers stock peanuts received or acquired other
than those described in Sec. 998.31(c) and (d) is established for
handlers signatory to the Agreement. Assessments are due on the 15th of
the month following the month in which the farmers stock peanuts are
received or acquired.
Dated: July 28, 1998
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-20641 Filed 7-31-98; 8:45 am]
BILLING CODE 3410-02-P
