[Federal Register: August 25, 2006 (Volume 71, Number 165)]
[Proposed Rules]
[Page 50374-50376]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25au06-22]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 50374]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 983
[Docket No. FV06-983-3 PR]
Pistachios Grown in California; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule would decrease the assessment rate established for
the Administrative Committee for Pistachios (committee) for the 2006-07
and subsequent production years from $0.0014 per pound of assessed-
weight pistachios 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, made this
recommendation for the purpose of lowering the monetary reserve to
ensure that the reserve is maintained at a level consistent with order
requirements. Assessments upon commodity 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 would remain in effect indefinitely unless modified, suspended, or
terminated.
DATES: Comments must be received by September 25, 2006.
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, 1400 Independence Avenue, SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938; E-mail: moab.docketclerk@usda.gov; or
Internet: http://www.regulations.gov. Comments should reference the
docket number 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, or can be viewed at:
http://www.ams.usda.gov/fv/moab.html.
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. For the 2004-05 production
year, an assessment rate of $0.0014 per pound of assessed-weight
pistachios received for processing was approved by USDA to continue in
effect indefinitely unless modified, suspended, or terminated. This
proposal would decrease the assessment rate to $0.0007 per pound for
the 2006-07 production year and would continue in effect indefinitely
unless modified, 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 would decrease the assessment rate established for the
committee for the 2006-07 and subsequent production years. Section
983.253 established an assessment rate of $0.0014 per pound of
assessed-weight pistachios for the 2004-05 and subsequent fiscal
periods. 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 order. Continuous
assessment rates remain in effect from fiscal period to fiscal period
unless modified, suspended, or terminated by USDA. This rule proposes
decreasing the assessment rate to $0.0007 per pound for 2006-07 and
would remain in effect during subsequent fiscal periods until modified,
suspended, or terminated by USDA.
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
[[Page 50375]]
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. 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 assessable 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 assessable weight
pistachios received for processing. The assessment rate of $0.0007 is
one-half of the assessment rate currently in effect under the order.
This proposal would lower the reserve to ensure that it remains at a
level consistent with order requirements.
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.
The major expenditures recommended by the committee for the 2005-06
production year include $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 would draw down 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 remains 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 draw
down the reserve in the event that some of the variable components,
such as crop estimate, are understated.
The proposed assessment rate would 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 would be in effect for an indefinite
period, the committee would 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 would evaluate committee
recommendations and other available information to determine whether
modification of the assessment rate is needed. Further rulemaking would
be undertaken as necessary. The committee's 2006-07 budget and those
for subsequent production years would be reviewed and, as appropriate,
approved by USDA.
Initial 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 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. 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 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 would decrease 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 for the purpose of lowering the monetary reserve to ensure that
the reserve is maintained 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. Coupled with
the funds on hand at the beginning of the production year of nearly
$500,000, the committee would have adequate funds to meet the 2006-07
expenses and maintain an adequate reserve that is within the
requirements of the order.
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.
Some 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.
The major expenditures recommended by the committee for the 2006-07
production year include: $80,952 for administrative expenses; $10,000
for compliance expenses;
[[Page 50376]]
$149,954 for salaries; and $100,000 for a contingency reserve.
The major expenditures recommended by the committee for the 2005-06
production year include $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 remains 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 draw
down the reserve in the event that some of the variable components,
such as crop estimate, are understated.
The assessment rate recommended by the committee is one-half of the
current assessment rate. The committee believes that maintaining the
current assessment rate would result in a financial reserve balance
that is higher than needed for operations under the order.
The committee reviewed and unanimously recommended these
expenditures after considering information from their Executive
Subcommittee, which met on March 1, 2006. As noted, the committee
considered both eliminating the assessment rate for one year and
assessing at the proposed rate before recommending the proposed
assessment rate of $0.0007 per pound of assessed-weight pistachios.
This proposed assessment rate is one-half of the assessment rate
currently in effect; and, coupled with carry-in funds and assessments
to be collected, would provide adequate funds for the committee's 2006-
07 production year operations.
A review of historical information and preliminary information
pertaining to the upcoming 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
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 would reduce the burden on handlers, and may reduce the burden on
producers. In addition, the committee's meeting was widely publicized
throughout the production area commodity 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.
Finally, interested persons are invited to submit comments on the
informational and regulatory impacts of this action on small
businesses.
This proposed rule would not impose additional reporting and
recordkeeping on both small and 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 compliance 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 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.
A 30-day comment period is provided to allow interested persons to
respond to this proposed rule. Thirty days is deemed appropriate
because the 2006-07 production year begins on September 1, 2006, and
the marketing order requires that the rate of assessment for each
production year apply to all assessable pistachios handled during such
production year.
List of Subjects in 7 CFR Part 983
Marketing agreements, Pistachios, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 983 is
proposed to be amended as follows:
PART 983--PISTACHIOS GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 983 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
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: August 21, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-14114 Filed 8-24-06; 8:45 am]
BILLING CODE 3410-02-P