FR Doc 05-3928

[Federal Register: March 1, 2005 (Volume 70, Number 39)]
[Rules and Regulations]
[Page 9843-9846]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01mr05-1]

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Rules and Regulations
Federal Register
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[[Page 9843]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Docket No. FV04-983-2 FR]

Pistachios Grown in California; Establishment of Continuing
Assessment Rate and Reporting Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule establishes a continuing assessment rate for the
Administrative Committee for Pistachios (Committee) for the 2004-05 and
subsequent fiscal periods of $0.0014 per pound of pistachios received
for processing and establishes assessment reporting requirements under
the California pistachio marketing order (order). The order regulates
the handling of pistachios grown in California and is administered by
the Committee. Authorization to assess pistachio handlers enables the
Committee to incur expenses that are reasonable and necessary to
administer the program. The fiscal period began September 1 and ends
August 31. The assessment rate will remain in effect indefinitely
unless modified, suspended, or terminated. Requiring handlers to file
annual reports with the Committee will facilitate the Committee's
collection of handler assessments.

DATES: Effective Date: March 2, 2005.

FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Analyst, or
Rose Aguayo, Marketing Specialist, California Marketing Field Office,
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. 983, regulating the handling of pistachios
grown in California, 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 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, pistachio
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 pistachios
beginning September 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. 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 rule establishes the continuing assessment rate established
for the Committee and for the 2004-05 and subsequent fiscal periods of
$0.0014 per pound of pistachios received for processing and establishes
assessment reporting requirements under the California pistachio order.
The quantity of pistachios received by the handler for processing is
converted to an assessed weight pursuant to Sec. 983.6 and the
assessment rate is applied to that weight in determining a handler's
assessment obligation for the fiscal period. Requiring handlers to file
annual Receipts/Assessment Reports with the Committee will facilitate
the Committee's collection of handler assessments.

Continuing Assessment Rate

Sections 983.52 and 983.53 of the pistachio order provide authority
for the Committee, with the approval of USDA, to formulate an annual
budget of expenses and to collect assessments from handlers to
administer the marketing order. Each handler who receives pistachios
for processing in each production year (fiscal year) is required to pay
an assessment based on the pro rata share of the expenses authorized by
USDA which are reasonable and likely to be incurred by the Committee
during that year. The assessment obligation for each handler is
computed by applying the assessment rate set by USDA to each handler's
assessed weight computed pursuant to Sec. 983.6 of the pistachio
order.
The members of the Committee are producers and handlers of
California pistachios. They are familiar with the Committee 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.
The Committee met on August 17, 2004, and unanimously recommended
2004-05 expenditures of $271,499 and an assessment rate of $0.0014 per
pound of pistachios received for processing. This was the first public
meeting of the newly formed Committee since the pistachio marketing
order became

[[Page 9844]]

effective on April 6, 2004 (69 FR 17944). The major expenditures
recommended by the Committee for the 2004-05 fiscal period include
$110,249 for administrative expenses; $34,500 for compliance expenses;
$101,750 for salaries; and $25,000 for a contingency reserve.
Because this is a new order and there is no carry-in income, the
Committee is borrowing funds from the California Pistachio Commission
(Commission) until assessments are collected in March 2005. The
Committee discussed the necessity of setting a relatively high
assessment rate for the 2004-05 fiscal period because it is necessary
to generate sufficient funds to reimburse the Commission, to cover the
Committee's 2004-05 expenditures, and to build an adequate reserve to
cover Committee expenditures until the 2005-06 fiscal period's
assessments are available in December 2005.
The assessment rate recommended by the Committee was derived by
dividing anticipated expenses plus funds to establish a reserve by
expected receipts (the assessed weight) of pistachios grown in
California during 2004-05 ($271,499 plus $190,501 divided by
330,000,000 pounds = $0.0014). With pistachio receipts for the year
estimated at 330,000,000 pounds, assessment income is expected to total
of $462,000.
The Committee may carry over excess funds into subsequent
production years (fiscal years) as a reserve, provided that funds
already in the reserve do not exceed approximately two production
years' budgeted expenses. In the event that funds exceed two production
years' budgeted expenses, future assessments will be reduced to bring
the reserves to an amount that is less than or equal to two production
years' budgeted expenses (Sec. 983.56). Funds in the reserve will be
kept within the maximum permitted by the order.
Under Sec. 983.53 the Committee, prior to the beginning of each
production year, shall recommend and the Secretary shall set the
assessment for the following production year, which shall not exceed
one-half of one percent of the average price received by producers in
the preceding production year. According to the Commission's Annual
Report for the 2003-04 crop year, the average price received by
producers was $1.15 per pound. One-half of one percent equals $0.005.
Taking ($0.005) x ($1.15) = $0.00575 for the maximum assessment rate
allowed. The rates considered by the Committee ranged from $0.001 to
$0.0014. The recommended assessment rate of $0.0014 is less than the
maximum provided for in the order.
The assessment rate established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by USDA
upon recommendation and information submitted by the Committee or other
available information.
Although this assessment rate will be in effect for an indefinite
period, the Committee will continue to meet prior to or during each
fiscal period to recommend a budget of expenses and consider
recommendations for modification of the assessment rate. The dates and
times of Committee meetings are available from the Committee or USDA.
Committee meetings are open to the public and interested persons may
express their views at these meetings. USDA 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 2004-05 budget and those
for subsequent fiscal periods will be reviewed and, as appropriate,
approved by USDA.

Reporting Requirements

Section 983.47 of the pistachio order provides authority for
establishing reporting requirements. Under the order, the Committee
may, with the approval of the Secretary, establish reporting
requirements to collect necessary information or data.
At its first meeting, the Committee also unanimously recommended
that handlers file a Receipts/Assessment Report with the Committee to
facilitate the Committee's collection of handler assessments.
Handlers, including custom hullers, who receive pistachios for
processing (removal of green hulls and drying pistachios to 5 percent
moisture), will be required to pay an assessment attributable to the
assessed weight of pistachios received by that handler and to report
that assessed weight to the Committee on the Receipts/Assessment Form.
Pursuant to Sec. 983.6 of the order, the term ``assessed weight''
means the pounds of inshell pistachios, free of internal defects as
defined in Sec. 983.39(b)(4) and (5), with the weight computed at 5
percent moisture, received for processing by a handler within each
production year: Provided, That for loose kernels, the actual weight
shall be multiplied by two to obtain an inshell weight.
A final order published on July 26, 2004 (69 FR 44460), delayed the
implementation date for Sec. 983.39(b)(4) and (5), of the order until
February 1, 2005. A final order published on January 5, 2005 (70 FR
661), further delayed the implementation date for Sec. 983.39(b)(4)
and (5), of the order until August 12, 2005. Therefore, for the 2004-05
fiscal period, each handler who receives pistachios for processing will
be required to furnish the Receipts/Assessment Report to the Committee
and pay all due assessments to the Committee by March 15, 2005. For
subsequent fiscal periods, each handler who receives pistachios for
processing will be required to furnish the Receipts/Assessment Report
and pay all due assessments to the Committee by December 15 of the
applicable fiscal period.
The recommended reporting requirements are similar to those
required by the Commission. Because the Commission is prohibited from
sharing confidential handler information, the Committee recommended
that a Receipt/Assessment Report be developed for Committee use and
that the receipts information already compiled for the Commission be
attached to the newly developed Committee form. Thus, handlers will not
be duplicating their efforts and both agencies will receive necessary
receipts/assessment data. The Committee estimates this action will
affect 20 handlers of pistachios and further estimates that, on
average, handlers will expend approximately 4 minutes per year to
prepare and submit this report to the Committee. These actions are in
the interest of producers and handlers.

Assessment Collection

To facilitate assessment collections under the order, the Committee
unanimously recommended establishing Sec. 983.253. This section sets
the continuing assessment rate and establishes the reporting
requirements necessary to verify that each handler has paid the correct
assessment. Section 925.253 shall read as follows: Sec. 983.253
Assessment rate. (a) On and after September 1, 2004, an assessment rate
of $0.0014 per pound of pistachios received for processing is
established for California Pistachios. The assessment obligation of
each handler will be computed by applying the assessment rate to the
assessed weight computed pursuant to Sec. 983.6. (b) For the 2004-05
fiscal period each handler who receives pistachios for processing shall
furnish the Receipts/Assessment Report to the Committee and pay all due
assessments to the Committee by March 15, 2005. For subsequent fiscal
periods, each handler who receives pistachios for processing shall
furnish the Receipts/Assessment Report and pay all due

[[Page 9845]]

assessments to the Committee by December 15 of the applicable fiscal
period.

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 20 handlers of California pistachios
subject to regulation under the order and approximately 741 producers
in the production area. Small agricultural producers are defined by the
Small Business Administration (13 CFR 121.201) as those having annual
receipts less than $750,000, and small agricultural service firms are
defined as those whose annual receipts are less than $5,000,000. Eight
of the 20 handlers subject to regulation have annual pistachio receipts
of at least $5,000,000. In addition, 722 producers have annual receipts
less than $750,000. Thus, the majority of handlers and producers of
California pistachios may be classified as small entities.
This rule establishes a continuing assessment rate for the
Committee and collected from handlers for the 2004-05 and subsequent
fiscal periods of $0.0014 per pound of pistachios received for
processing and establishes reporting requirements under the California
pistachio order. Requiring handlers to file annual Receipts/Assessment
Reports with the Committee will facilitate the Committee's collection
of handler assessments. Pistachios harvested and received in August of
any year shall be applied to the subsequent production year for order
purposes.

Continuing Assessment Rate

The California pistachio order provides authority for the
Committee, 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 Committee are producers and handlers of
California pistachios. They are familiar with the Committee 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.
The Committee met on August 17, 2004, and unanimously recommended
2004-05 expenditures of $271,499 and an assessment rate of $0.0014 per
pound of pistachios received for processing. This was the first public
meeting of the newly formed Committee since the pistachio marketing
order became effective on April 6, 2004 (69 FR 17944). The major
expenditures recommended by the Committee for the 2004-05 fiscal period
include $110,249 for administrative expenses; $34,500 for compliance
expenses; $101,750 for salaries; and $25,000 for a contingency reserve.
Because this is a new order and there is no carry-in income, the
Committee is borrowing funds from the Commission until assessments are
collected in March 2005. The Committee discussed the necessity of
setting a relatively high assessment rate for the 2004-05 fiscal period
because it is necessary to generate sufficient funds to reimburse the
Commission, to cover the Committee's 2004-05 expenditures, and to build
an adequate reserve to cover Committee expenditures until the 2005-06
fiscal period's assessments are available in December 2005.
The assessment rate recommended by the Committee was derived by
dividing anticipated expenses plus funds to establish a reserve by
expected receipts of pistachios grown in California ($271,499 plus
$190,501 divided by 330,000,000 pounds = $0.0014). With pistachio
receipts for the year estimated at 330,000,000 pounds, assessment
income should total $462,000.
The Committee may carry over such excess into subsequent production
years as a reserve, provided that funds already in the reserve do not
exceed approximately two production years' budgeted expenses. In the
event that funds exceed two productions years' budgeted expenses,
future assessments will be reduced to bring the reserves to an amount
that is less than or equal to two production years' budgeted expenses.
Funds in the reserve will be kept within the maximum permitted by the
order (Sec. 983.56).
The assessment rate in this rule will continue in effect
indefinitely unless modified, suspended, or terminated by USDA upon
recommendation and information submitted by the Committee or other
available information.
Although this assessment rate will be in effect for an indefinite
period, the Committee will continue to meet prior to or during each
fiscal period to recommend a budget of expenses and consider
recommendations for modification of the assessment rate. The dates and
times of Committee meetings are available from the Committee or USDA.
Committee meetings are open to the public and interested persons may
express their views at these meetings. USDA 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 2004-05 budget and those
for subsequent fiscal periods will be reviewed and, as appropriate,
approved by USDA.
The Committee discussed alternative 2004-05 expenditures of
$246,499, which did not include $25,000 for a contingency reserve.
However, the Committee believes that it is important to establish a
contingency reserve for unforeseen expenditures, and, thus, unanimously
recommended expenditures in the amount of $271,499.
A review of historical information and preliminary information
pertaining to the upcoming fiscal period indicates that the grower
price for the 2004-05 season could range between $1.30 and $1.40 per
pound of assessed weight pistachios. Therefore, the estimated
assessment revenue for the 2004-05 fiscal period as a percentage of
total grower revenue could range between .11 and .10 percent.

Reporting Requirements

[[Page 9846]]

handler and to report that assessed weight to the Committee on the
Receipts/Assessment Form. The term ``assessed weight'' is defined in
Sec. 983.6 of the pistachio order.

Assessment Obligations

The computation of assessed weight involves requirements specified
in Sec. Sec. 983.39(b)(4) and (5). A final order published on July 26,
2004, (69 FR 44460), delayed the implementation date of those sections
until February 1, 2005. A final order published on January 5, 2005, (70
FR 661), further delayed the implementation date for Sec. 983.39(b)(4)
and (5), of the order until August 12, 2005. Therefore, for the 2004-05
fiscal period, each handler who receives pistachios for processing will
be required to furnish the Receipts/Assessment Report to the Committee
and pay all due assessments to the Committee by March 15, 2005. For
subsequent fiscal periods, each handler who receives pistachios for
processing will be required to furnish the Receipts/Assessment Report
and pay all due assessments to the Committee by December 15 of the
applicable fiscal period.
While assessments impose some additional costs on handlers, the
costs are minimal and uniform on all handlers. Some of the additional
costs may be passed on to producers. However, these costs are offset by
the benefits derived by the operation of the marketing order. In
addition, the Committee's meeting was widely publicized throughout the
pistachio industry and all interested persons were invited to attend
the meeting and participate in Committee deliberations on all issues.
Like all Committee meetings, the August 17, 2004, meeting was a public
meeting and all entities, both large and small, were able to express
views on this issue.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), AMS submitted to the Office of Management and Budget a
revision to approved information collection OMB No. 0581-0215,
``Pistachios Grown in California.'' This information collection has
been approved by OMB.
This rule imposes no additional reporting or recordkeeping
requirements on either small or large pistachio 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.
A proposed rule concerning this action was published in the Federal
Register on December 10, 2004 (69 FR 71749). Copies of the proposed
rule were also mailed or sent via facsimile to all pistachio handlers.
Finally, the proposal was made available through the Internet by USDA
and the Office of the Federal Register. A 60-day comment period ending
February 8, 2005, was provided for interested persons to respond to the
proposal.
One opposing comment was received. The commenter considered a
continuing assessment rate for the Committee to be an outdated method
for agricultural marketing. However, the establishment of the
assessment rate is consistent with the marketing order and the Act
under which the marketing order is implemented.
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 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 also found and determined that good
cause exists for not postponing the effective date of this rule until
30 days after publication in the Federal Register because: (1) The
fiscal year began September 1, 2004, and the assessment rate applies to
all pistachios received during the 2004-05 and subsequent seasons; (2)
handlers received the 2004-05 crop pistachios by October 2004; and (3)
handlers are required to complete and submit the ACP-1 to the Committee
by March 15, 2005. Further, handlers are aware of this rule which was
unanimously recommended at a public meeting. Also a 60-day comment
period was provided for in the proposed rule.
This rule will impose some additional reporting and recordkeeping
on both small and large pistachio handlers. This action will require
one new Committee form. 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. In
addition, USDA has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this rule.

List of Subjects in 7 CFR Part 983

Pistachios, Marketing agreements, Reporting and recordkeeping
requirements.

0
For the reasons set forth in the preamble, 7 CFR part 983 is amended as
follows:

PART 983--PISTACHIOS GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 983 continues to read as
follows:

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

0
2. In Part 983, a new Subpart--Assessment Rate and Sec. 983.253 are
added to read as follows:

Subpart--Assessment Rate

Sec. 983.253 Assessment rate.

(a) On and after September 1, 2004, a continuing assessment rate of
$0.0014 per pound of assessed weight pistachios is established for
California Pistachios. The assessment obligation of each handler shall
be computed by applying the assessment rate to the assessed weight
computed pursuant to Sec. 983.6.
(b) For the 2004-05 fiscal period each handler who receives
pistachios for processing shall furnish the Receipts/Assessment Report
to the Committee and pay all due assessments to the Committee by March
15, 2005. For subsequent fiscal periods, each handler who receives
pistachios for processing shall furnish the Receipts/Assessment Report
and pay all due assessments to the Committee by December 15 of the
applicable fiscal period.

Dated: February 24, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-3928 Filed 2-24-05; 1:33 pm]

BILLING CODE 3410-02-P