[Federal Register: November 16, 2006 (Volume 71, Number 221)]
[Rules and Regulations]
[Page 66643-66645]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16no06-1]
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Rules and Regulations
Federal Register
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[[Page 66643]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 983
[Docket No. FV06-983-3 FR]
Pistachios Grown in California; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule decreases the assessment rate established for the
Administrative Committee for Pistachios (committee) for the 2006-07 and
subsequent production years from $0.0014 to $0.0007 per pound of
assessed-weight pistachios. The committee, which locally administers
the marketing order regulating the handling of pistachios grown in
California (order), made this recommendation to help reduce the
monetary reserve and ensure that it remains at a level consistent with
order requirements. Assessments upon pistachio handlers are used by the
committee to fund reasonable and necessary expenses of the program. The
production year begins September 1 and ends August 31. The assessment
rate will remain in effect indefinitely unless modified, suspended, or
terminated.
EFFECTIVE DATE: November 17, 2006.
FOR FURTHER INFORMATION CONTACT: Terry Vawter, Marketing Specialist, or
Kurt J. Kimmel, Regional Manager, 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 E-mail: Terry.Vawter@usda.gov or Kurt.Kimmel@usda.gov.
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, California
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, 2006, 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 decreases the assessment rate established for the
committee for the 2006-07 and subsequent production years from $0.0014
to $0.0007 per pound of assessed-weight pistachios. The assessment
obligation for each handler is computed by applying the assessment rate
to each handler's assessed weight, computed pursuant to Sec. 983.6 of
the order.
Sections 983.52 and 983.53 of the 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
program. In addition, the order authorizes the use of a monetary
reserve to cover program expenses (Sec. 983.56). The monetary reserve
may not exceed approximately two production years' budgeted expenses.
That section also requires the committee to reduce future assessments
so that the reserve funds are less than or equal to two production
years' budgeted expenses.
The members of the committee are producers and handlers of
California pistachios. They are familiar with the committee'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. Therefore, all directly affected persons have an opportunity
to participate and provide input.
For the 2004-05 production year, the committee recommended, and
USDA approved, an assessment rate of $0.0014 per pound of assessed-
weight pistachios (Sec. 983.253). The assessment rate would continue
in effect from production year to production year unless modified,
suspended, or terminated by USDA upon recommendation and information
submitted by the committee or other information available to USDA.
The committee met on May 23, 2006, and unanimously recommended
2006-07 expenditures of $340,906 and an assessment rate of $0.0007 per
pound of assessed-weight pistachios received for processing. By
comparison, expenses for the 2005-06 production year totaled $324,403
and the assessment rate was $0.0014 per pound of assessed-weight
pistachios received for processing. The $0.0007 assessment rate is one-
half of the $0.0014 assessment rate. Reducing the assessment rate will
help reduce the reserve and ensure that it remains at a level
consistent with order requirements.
The major expenditures recommended by the committee for the
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2006-07 production year include: $80,952 for administrative expenses;
$10,000 for compliance expenses; $149,954 for salaries; and $100,000
for a contingency reserve. In comparison, major expenditures for the
2005-06 production year included: $85,046 for administrative expenses;
$10,000 for compliance expenses; $129,357 for salaries; and $100,000
for a contingency reserve.
The committee believes that maintaining the current assessment rate
could eventually result in a financial reserve balance beyond order
requirements that the reserve not exceed approximately two production
years' expenses. Based on this, the committee determined that
decreasing the assessment rate at this time will help to reduce the
monetary reserve and ensure the reserve is maintained at a level
consistent with order requirements.
The assessment rate recommended by the committee was derived by
dividing anticipated expenses minus the reserve funds that will be
utilized to meet expenses by expected receipts (the assessed weight) of
California pistachios during the 2006-07 season ($340,906 minus
$200,906 divided by 200,000,000 pounds = $0.0007 per pound). With
pistachio receipts for the year estimated at 200,000,000 pounds,
assessment income is expected to total $140,000.
If the assessment rate remained at $0.0014 per pound (estimated
$280,000 assessment income), the estimated reserve on August 31, 2007,
would be $448,741. Although this amount would still be within the
order's reserve requirements, the committee believes it should reduce
the reserve in the event that some of the variable components, such as
crop estimate, are understated.
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
production year 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 2006-07 budget and those
for subsequent production 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 50 handlers of California pistachios
subject to regulation under the order and approximately 740 producers
in the production area. The Small Business Administration (13 CFR
121.201) defines small agricultural producers as those having annual
receipts less than $750,000, and defines small agricultural service
firms as those whose annual receipts are less than $6,500,000. Of the
740 producers, approximately 722 have annual receipts of less than
$750,000. Eight of the 50 handlers subject to regulation have annual
pistachio receipts of at least $6,500,000. Thus, the majority of
handlers and producers of California pistachios may be classified as
small entities.
This rule decreases the assessment rate established for the
committee and collected from handlers for the 2006-07 and subsequent
production years from $0.0014 to $0.0007 per pound of assessed-weight
pistachios received for processing. The committee unanimously
recommended 2006-07 expenditures of $340,906 and an assessment rate of
$0.0007 per pound of assessed-weight pistachios. The recommendation was
made to reduce the monetary reserve to ensure that it remains at a
level consistent with order requirements. The quantity of assessed-
weight pistachios anticipated for the 2006-07 production year is
estimated at 200,000,000 pounds. The total assessments collected are
estimated to be $140,000. Assessment income coupled with funds on hand
at the beginning of the production year of nearly $500,000 should
provide the committee with adequate funds to meet its 2006-07 expenses
and maintain an adequate reserve that is within the requirements of the
order.
The major expenditures recommended by the committee for the 2006-07
production year include: $80,952 for administrative expenses; $10,000
for compliance expenses; $149,954 for salaries; and $100,000 for a
contingency reserve. In comparison, major expenditures for the 2005-06
production year included: $85,046 for administrative expenses; $10,000
for compliance expenses; $129,357 for salaries; and $100,000 for a
contingency reserve.
The assessment rate recommended by the committee was derived by
dividing anticipated expenses minus the reserve funds that will be
utilized to meet expenses by expected receipts (the assessed weight) of
California pistachios during the 2006-07 season ($340,906 minus
$200,906 divided by 200,000,000 pounds = $0.0007 per pound). With
pistachio receipts for the year estimated at 200,000,000 pounds,
assessment income is expected to total $140,000.
If the assessment rate remained at $0.0014 per pound (estimated
$280,000 assessment income), the estimated reserve on August 31, 2007,
would be $448,741. Although this amount would still be within the
order's reserve requirements, the committee believed it should reduce
the reserve in the event that some of the variable components, such as
crop estimate, are understated.
At its meeting on May 23, 2006, the committee discussed the
alternative levels of assessments it believed would provide both
adequate funding of expenses and result in a reduced financial reserve.
The committee also reviewed information from its Executive
Subcommittee, which met on March 1, 2006. Some committee members
believed that the reserve funds alone would be adequate to sustain
committee operations in the absence of any assessment rate. Others
believed a smaller assessment rate was prudent, thus keeping consistent
assessment collections from one production year to the next. That way,
the committee reasoned, handlers would be in a better position to plan
for assessments from year to year. After deliberating the value of both
proposals, the committee ultimately unanimously recommended a reduced
assessment rate of $0.0007 per pound of assessed-weight pistachios and
expenses totaling $340,906.
A review of historical information and preliminary information
pertaining to the production year indicates that the grower price for
the 2006-07 production year could range between $1.65 and $1.75 per
pound of assessed-weight pistachios. Therefore, the estimated
[[Page 66645]]
assessment revenue for the 2006-07 production year as a percentage of
total grower revenue could range between .040 and .042 percent.
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, decreasing the assessment
rate will reduce the burden on handlers, and may reduce the burden on
producers. In addition, the committee's meeting was widely publicized
throughout the California pistachio industry and all interested persons
were invited to attend the meeting and encouraged to participate in
committee deliberations on all issues. Like all committee meetings, the
May 23, 2006, meeting was a public meeting and all entities, both large
and small, were able to express views on this issue.
This rule imposes no additional reporting and recordkeeping 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. In addition, 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.
A proposed rule concerning this action was published in the Federal
Register on August 25, 2006 (71 FR 50374). 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 30-day comment period ending
September 25, 2006, was provided for interested persons to respond to
the proposal. 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 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 that good
cause exists for not postponing the effective date of this rule until
30 days after publication in the Federal Register because the 2006-07
production year began on September 1, 2006, and pistachio handlers are
already receiving 2006-07 crop pistachios from growers. The decreased
assessment rate applies to all pistachios received during the 2006-07
year and subsequent seasons. Further, handlers are aware of this rule
which was unanimously recommended at a public meeting. Also, a 30-day
comment period was provided for in the proposed rule, and no comments
were received.
List of Subjects in 7 CFR Part 983
Marketing agreements, Pistachios, 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. Section 983.253 is amended by revising paragraph (a) to read as
follows:
Sec. 983.253 Assessment rate.
(a) On and after September 1, 2006, a continuing assessment rate of
$0.0007 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.
* * * * *
Dated: November 14, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 06-9252 Filed 11-14-06; 1:09 pm]
BILLING CODE 3410-02-P