[Federal Register: February 10, 2005 (Volume 70, Number 27)]
[Rules and Regulations]
[Page 7002-7004]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10fe05-3]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Docket No. FV04-984-2 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, an interim final rule which decreased the assessment rate
established for the Walnut Marketing Board (Board) for the 2004-05 and
subsequent marketing years from $0.0101 to $0.0094 per kernelweight
pound of assessable walnuts. The Board locally administers the
marketing order (order) which 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 14, 2005.
FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Analyst, or
Kurt J. Kimmel, Regional Manager, 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, 2004, and continue 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.
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. 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 in effect the action that decreased the
assessment rate established for the Board for the 2004-05 and
subsequent marketing years from $0.0101 to $0.0094 per kernelweight
pound of assessable walnuts.
The order provides authority for the Board, with the approval of
the 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 2003-04 and subsequent marketing years, the Board
recommended, and USDA approved, an assessment rate of $0.0101 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 10, 2004, and unanimously recommended
2004-05 expenditures of $2,749,500 and an assessment rate of $0.0094
per kernelweight pound of assessable walnuts. In comparison, last
year's budgeted expenditures were $2,863,350. The assessment rate of
$0.0094 is $0.0007 lower than the $0.0101 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 325,000 tons (292,500,000 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 2004-05
include $2,037,500 for research and marketing programs ($1,393,500 for
market research and development, $550,000 for production research, and
$94,000 to the California Agricultural Statistics Service for a crop
estimate), $332,000 for employee expenses (administrative and office
salaries, payroll taxes, workers compensation, and other employee
benefits), $97,000 for office expenses (rent, office supplies,
telephone, fax, postage, printing, equipment maintenance, and
furniture), $96,000 for other operating expenses (management travel,
field travel, insurance, and financial audits), $5,000
[[Page 7003]]
for controlled (compliance check) purchases, $75,000 for a production
research director, and $107,000 as a reserve for contingency. Budgeted
expenses for these items in 2003-04 were $2,438,000, $334,625, $83,000,
$82,000, $5,000, $73,000, and $15,725, 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 292,500,000 kernelweight pounds which should provide
$2,749,500 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 established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by USDA
upon recommendation and other 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 2004-05 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 in effect the action that decreased the
assessment rate established for the Board and collected from handlers
for the 2004-05 and subsequent marketing years from $0.0101 to $0.0094
per kernelweight pound of assessable walnuts. The Board unanimously
recommended 2004-05 expenditures of $2,749,500. The decreased
assessment rate should generate sufficient income to meet the Board's
2004-05 anticipated expenses. The lower assessment rate is primarily
due to a lower budget and based on an estimated crop of 325,000 tons
for the year (292,500,000 kernelweight pounds estimated merchantable).
Major categories in the budget recommended by the Board for 2004-05
include $2,037,500 for research and marketing programs ($1,393,500 for
market research and development, $550,000 for production research, and
$94,000 to the California Agricultural Statistics Service for a crop
estimate), $332,000 for employee expenses (administrative and office
salaries, payroll taxes, workers compensation, and other employees
benefits), $97,000 for office expenses (rent, office supplies,
telephone, fax, postage, printing, equipment maintenance, and
furniture), $96,000 for other operating expenses (management travel,
field travel, Board expenses, insurance, and financial audits), $5,000
for controlled (compliance check) purchases, $75,000 for a production
research director, and $107,000 as a reserve for contingency. Budgeted
expenses for these items in 2003-04 were $2,438,000, $334,625, $83,000,
$82,000, $5,000, $73,000, and $15,725, 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 $0.0094 per kernelweight pound assessment
rate was then determined by dividing the total recommended budget by
the 292,500,000 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 2004-05 could range between $0.50 and $0.70 per kernelweight
pound of assessable walnuts. Therefore, the estimated assessment
revenue for the 2004-05 marketing year as a percentage of total grower
revenue could range between 1.3 and 1.9 percent.
This action continues in effect the action that decreased 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 10, 2004, 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.
[[Page 7004]]
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 October 29, 2004 (69 FR 63043). 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 USDA
and the Office of the Federal Register. A 60-day comment period was
provided for interested persons to respond to the interim final rule.
The comment period ended on December 28, 2004, and one comment was
received.
The commenter believes that the Board and this marketing order
program should be terminated in favor of a free market system. However,
the Act authorizes this marketing order program. Further, this comment
does not relate to the Board's assessment rate decrease. Thus, no
changes are being made based on the comment submitted.
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 69 FR 63043 on October 29, 2004, is adopted as a final
rule without change.
Dated: February 7, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-2603 Filed 2-9-05; 8:45 am]
BILLING CODE 3410-02-P