[Federal Register: February 12, 2004 (Volume 69, Number 29)]
[Rules and Regulations]
[Page 6910-6912]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12fe04-3]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Docket No. FV04-984-1 FIR]
Walnuts Grown in California; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final
rule, without change, an interim final rule that decreased the
assessment rate established for the Walnut Marketing Board (Board) for
the 2003-04 and subsequent marketing years from $0.0120 to $0.0101 per
kernelweight pound of assessable walnuts. The decreased assessment rate
should generate sufficient income to meet the Board's 2003-04
anticipated expenses of $2,863,350. The lower assessment rate is
primarily due to a lower budget and a larger crop. The Board locally
administers the marketing order (order) that regulates the handling of
walnuts grown in California. Authorization to assess walnut handlers
enables the Board to incur expenses that are reasonable and necessary
to administer the program. The marketing year began August 1 and ends
July 31. The assessment rate will remain in effect indefinitely unless
modified, suspended, or terminated.
EFFECTIVE DATE: March 15, 2004.
FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Marketing Assistant, or
Richard P. Van Diest, Marketing Specialist, California Marketing Field
Office, Marketing Order Administration Branch, Fruit and Vegetable
Programs, AMS, USDA, 2202 Monterey Street, suite 102B, Fresno,
California 93721; telephone: (559) 487-5901, Fax: (559) 487-5906; or
George Kelhart, Technical Advisor, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue SW., Stop 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue SW., Stop 0237, Washington DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 984, both as amended (7 CFR part 984),
regulating the handling of walnuts grown in California, hereinafter
referred to as the ``order.'' The marketing agreement and order are
effective under the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
USDA is issuing this rule in conformance with Executive Order
12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing order now in effect, California
walnut handlers are subject to assessments. Funds to administer the
order are derived from such assessments. It is intended that the
assessment rate as issued herein will be applicable to all assessable
walnuts beginning on August 1, 2003, and continue until amended,
suspended, or terminated. This rule will not preempt any State or local
laws, 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
[[Page 6911]]
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. Such 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 rule continues to decrease the assessment rate established for
the Board for the 2003-04 and subsequent marketing years from $0.0120
to $0.0101 per kernelweight pound of assessable walnuts.
The California Walnut marketing order provides authority for the
Board, with the approval of USDA, to formulate an annual budget of
expenses and collect assessments from handlers to administer the
program. The members of the Board are producers and handlers of
California walnuts. They are familiar with the Board's needs and with
the costs for goods and services in their local area and are thus in a
position to formulate an appropriate budget and assessment rate. The
assessment rate is formulated and discussed in a public meeting. Thus,
all directly affected persons have an opportunity to participate and
provide input.
For the 2002-03 and subsequent marketing years, the Board
recommended, and USDA approved, an assessment rate of $0.0120 per
kernelweight pound of assessable walnuts that would continue in effect
from year to year unless modified, suspended, or terminated by USDA
upon recommendation and information submitted by the Board or other
information available to USDA.
The Board met on September 12, 2003, and unanimously recommended
2003-04 expenditures of $2,863,350 and an assessment rate of $0.0101
per kernelweight pound of assessable walnuts. In comparison, last
year's budgeted expenditures were $2,970,000. The assessment rate of
$0.0101 is $0.0019 lower than the $0.0120 rate previously in effect.
The lower assessment rate is necessary because this year's crop is
estimated by the California Agricultural Statistics Service (CASS) to
be 315,000 tons (283,500,000 kernelweight pounds merchantable), and the
budget is about 4 percent less than last year's budget. Sufficient
income should be generated at the lower rate for the Board to meet its
anticipated expenses.
Major categories in the budget recommended by the Board for 2003-04
include $2,348,000 for program expenses, which includes marketing and
production research projects, the salary for the production research
director, the cost of the Board's crop acreage survey and production
estimate, and compliance purchases, $334,625 for employee expenses such
as administrative and office salaries, payroll taxes and workers
compensation, and other employee benefits, $83,000 for office expenses
such as rent, office supplies, telephone, fax, postage, printing,
equipment maintenance, and furniture, $82,000 for other operating
expenses, such as management travel, field travel, Board expenses,
general insurance and financial audits, and $15,725 as a reserve for
contingencies. Budgeted expenses for these items in 2002-03 were
$2,438,403, $333,100, $80,500, $79,500, and $38,497, respectively.
The assessment rate recommended by the Board was derived by
dividing anticipated expenses by expected shipments of California
walnuts certified as merchantable. Merchantable shipments for the year
are estimated at 283,500,000 kernelweight pounds, which should provide
$2,863,350 in assessment income and allow the Board to cover its
expenses. Unexpended funds may be used temporarily to defray expenses
of the subsequent marketing year, but must be made available to the
handlers from whom collected within 5 months after the end of the year,
according to Sec. 984.69.
The assessment rate will continue in effect indefinitely unless
modified, suspended, or terminated by USDA upon recommendation and
information submitted by the Board or other available information.
Although this assessment rate is effective for an indefinite
period, the Board will continue to meet prior to or during each
marketing year to recommend a budget of expenses and consider
recommendations for modification of the assessment rate. The dates and
times of Board meetings are available from the Board or USDA. Board
meetings are open to the public and interested persons may express
their views at these meetings. USDA will evaluate Board recommendations
and other available information to determine whether modification of
the assessment rate is needed. Further rulemaking will be undertaken as
necessary. The Board's 2003-04 budget and those for subsequent
marketing years will be reviewed and, as appropriate, approved by USDA.
Final Regulatory Flexibility Analysis
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 final 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 the 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 5,800 producers of walnuts in the
production area and about 43 handlers subject to regulation under the
order. Small agricultural producers are defined by the Small Business
Administration (13 CFR 121.201) as those having annual receipts of less
than $750,000, and small agricultural service firms are defined as
those having annual receipts of less than $5,000,000.
Current industry information shows that 14 of the 43 handlers (32.5
percent) shipped over $5,000,000 of merchantable walnuts and could be
considered large handlers by the Small Business Administration. Twenty-
nine of the 43 walnut handlers (67.5 percent) shipped under $5,000,000
of merchantable walnuts and could be considered small handlers. An
estimated 58 walnut producers, or about 1 percent of the 5,800 total
producers, would be considered large producers with annual incomes over
$750,000. Based on the foregoing, it can be concluded that the majority
of California walnut handlers and producers may be classified as small
entities.
This rule continues to decrease the assessment rate established for
the Board and collected from handlers for the 2003-04 and subsequent
marketing years from $0.0120 to $0.0101 per kernelweight pound of
assessable walnuts. The Board unanimously recommended 2003-04
expenditures of $2,863,350 and an assessment rate of $0.0101 per
kernelweight pound of assessable walnuts. The decreased assessment rate
should generate sufficient income to meet the Board's 2003-04
anticipated expenses. The lower assessment rate is primarily due to a
lower budget and a larger crop.
[[Page 6912]]
Major categories in the budget recommended by the Board for 2003-04
include $2,348,000 for program expenses, which includes marketing and
production research projects, the salary for the production research
director, the cost of the Board's crop acreage survey and production
estimate, and compliance purchases, $334,625 for employee expenses such
as administrative and office salaries, payroll taxes and workers
compensation, and other employee benefits, $83,000 for office expenses
such as rent, office supplies, telephone, fax, postage, printing,
equipment maintenance, and furniture, $82,000 for other operating
expenses, such as management travel, field travel, Board expenses,
general insurance, and financial audits, and $15,725 as a reserve for
contingencies. Budgeted expenses for these items in 2002-03 were
$2,438,403, $333,100, $80,500, $79,500, and $38,497, respectively.
Prior to arriving at this budget, the Board considered information
from various sources, such as the Board's Budget and Personnel
Committee, Research Committee, and Marketing Development Committee.
Alternative expenditure levels were discussed by these groups, based
upon the relative value of various research projects to the walnut
industry. The recommended $0.0101 per kernelweight pound assessment
rate was then determined by dividing the total recommended budget by
the 283,500,000 kernelweight pound estimate of assessable walnuts for
the year. Unexpended funds may be used temporarily to defray expenses
of the subsequent marketing year, but must be made available to the
handlers from whom collected within 5 months after the end of the year
according to Sec. 984.69.
A review of historical information and preliminary information
pertaining to the current marketing year indicates that the grower
price for 2003-04 could range between $0.50 and $0.70 per kernelweight
pound of assessable walnuts. Therefore, the estimated assessment
revenue for the 2003-04 marketing year as a percentage of total grower
revenue could range between 1.4 and 2 percent.
This action continues to decrease the assessment obligation imposed
on handlers. 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 Board's meeting was widely
publicized throughout the walnut industry and all interested persons
were invited to attend the meeting and participate in Board
deliberations on all issues. Like all Board meetings, the September 12,
2003, meeting was a public meeting and all entities, both large and
small, were able to express views on this issue.
This action imposes no additional reporting or recordkeeping
requirements on either small or large California walnut handlers. 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.
An interim final rule concerning this action was published in the
Federal Register on November 21, 2003 (68 FR 65629). Copies of that
rule were also mailed or sent via facsimile to all walnut handlers.
Finally, the interim final rule was made available through the Internet
by the Office of the Federal Register and USDA. A 60-day comment period
was provided for interested persons to respond to the interim final
rule. The comment period ended on January 20, 2004, and no comments
were received.
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/fv/moab.html.
Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
After consideration of all relevant material presented, including
the information and recommendation submitted by the Board 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.
List of Subjects in 7 CFR Part 984
Walnuts, Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
PART 984--WALNUTS GROWN IN CALIFORNIA
0
Accordingly, the interim final rule amending 7 CFR part 984 which was
published at 68 FR 65629 on November 21, 2003, is adopted as a final
rule without change.
Dated: February 5, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-3036 Filed 2-11-04; 8:45 am]
BILLING CODE 3410-02-P