[Federal Register: November 21, 2002 (Volume 67, Number 225)]
[Rules and Regulations]
[Page 70146-70148]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21no02-5]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Docket No. FV02-984-1 IFR]
Walnuts Grown in California; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule decreases the assessment rate established for the
Walnut Marketing Board (Board) for the 2002-03 and subsequent marketing
years from $0.0124 to $0.0120 per kernelweight pound of assessable
walnuts. The decreased assessment rate should generate sufficient
income to meet the Board's 2002-03 anticipated expenses of $2,970,000.
The lower assessment rate is due to a reduced budget that is about 5
percent less than last year's budget. 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 runs from August 1 through July 31. The
assessment rate will remain in effect indefinitely unless modified,
suspended, or terminated.
DATES: Effective November 22, 2002. Comments received by January 21,
2003, will be considered prior to issuance of a final rule.
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, or E-mail: moab.docketclerk@usda.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: 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.''
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
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, 2002, 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 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 Board
for the 2002-03 and subsequent marketing years from $0.0124 to $0.0120
per kernelweight pound of assessable walnuts.
The California Walnut marketing 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 2001-02 and subsequent marketing years, the Board
recommended, and USDA approved, an assessment rate of $0.0124 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 13, 2002, and unanimously recommended
2002-03 expenditures of $2,970,000 and an assessment rate of $0.0120
per kernelweight pound of assessable walnuts. In comparison, last
year's
[[Page 70147]]
budgeted expenditures were $3,124,800. The recommended assessment rate
is $0.0004 lower than the $0.0124 rate currently in effect. The lower
assessment rate is necessary because this year's crop is estimated by
the California Agricultural Statistics Service (CASS) to be 275,000
tons (247,500,000 kernelweight pounds merchantable), and the budget is
about 5 percent less than last year's budget. Thus, 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 the
2002-03 year include $2,438,403 for program expenses, including
marketing and production research projects, $333,100 for employee
expenses such as administrative and office salaries, payroll tax and
benefits, $80,500 for office expenses, $79,500 for other operating
expenses, and $38,497 as a reserve for a contingency. Budgeted expenses
for these items in 2001-02 were $2,566,569 for program expenses
including marketing and production research projects, $313,200 for
employee expenses, $130,600 for office expenses, $76,000 for other
operating expenses, and $38,431 as a reserve for a contingency,
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 247,500,000 kernelweight pounds which should provide
$2,970,000 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 2002-03 budget and those for subsequent
marketing years will 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 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.
Currently 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 income 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 decreases the assessment rate established for the Board
and collected from handlers for the 2002-03 and subsequent marketing
years from $0.0124 to $0.0120 per kernelweight pound of assessable
walnuts. The Board unanimously recommended 2002-03 expenditures of
$2,970,000. The decreased assessment rate should generate sufficient
income to meet the Board's 2002-03 anticipated expenses. The lower
assessment rate is due to a reduced budget that is about 5 percent less
than last year's budget.
Major categories in the budget recommended by the Board for the
2002-03 year include $2,438,403 for program expenses, including
marketing and production research projects, $333,100 for employee
expenses such as administrative and office salaries, payroll tax and
benefits, $80,500 for office expenses, $79,500 for other operating
expenses, and $38,497 as a reserve for a contingency. Budgeted expenses
for these items in 2001-02 were $2,566,569 for program expenses
including marketing and production research projects, $313,200 for
employee expenses, $130,600 for office expenses, $76,000 for other
operating expenses, and $38,431 as a reserve for a contingency,
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 $0.0120 per kernelweight pound assessment
rate was then determined by dividing the total recommended budget by
the 247,500,000 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 2002-03 could range between $0.50 and $0.70 per kernelweight
pound of assessable walnuts. Therefore, the estimated assessment
revenue for the 2002-03 year as a percentage of total grower revenue
could range between 1.7 and 2.5 percent.
This action decreases 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
[[Page 70148]]
issues. Like all Board meetings, the September 13, 2002 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 information on the regulatory and informational impacts of this
action on small businesses.
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.
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.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect, and 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 2002-03 marketing year began on August 1,
2002, and the order requires that the rate of assessment for each
marketing year apply to all merchantable walnuts handled during the
year; (2) this action decreases the assessment rate for merchantable
California walnuts; (3) handlers are aware of this action which was
unanimously recommended by the Board at a public meeting and is similar
to other assessment rate actions issued in past years; and (4) this
interim final rule provides a 60-day comment period, and all comments
timely received will be considered prior to finalization of this rule.
List of Subjects in 7 CFR Part 984
Walnuts, Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 984 is
amended as follows:
PART 984-WALNUTS GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 984 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 984.347 is revised to read as follows:
Sec. 984.347 Assessment rate.
On and after August 1, 2002, an assessment rate of $0.0120 per
kernelweight pound is established for California merchantable walnuts.
Dated: November 14, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-29601 Filed 11-20-02; 8:45 am]
BILLING CODE 3410-02-P