Walnuts Grown in California; Expenses and Assessment Rate

DEPARTMENT OF AGRICULTURE

7 CFR Part 984

[Docket No. FV94-984-1FIR]

Walnuts Grown in California; Expenses and Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a

final rule, without change, the provisions of an interim final rule

that authorized expenses and established an assessment rate that will

generate funds to pay those expenses. Authorization of this budget

enables the Walnut Marketing Board (Board) to incur expenses that are

reasonable and necessary to administer the program. Funds to administer

this program are derived from assessments on handlers.

EFFECTIVE DATE: August 1, 1994, through July 31, 1995.

FOR FURTHER INFORMATION CONTACT: Martha Sue Clark, Marketing Order

Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O.

Box 96456, room 2523-S, Washington, DC 20090-6456, telephone 202-720-

9918, or Richard P. Van Diest, California Marketing Field Office, Fruit

and Vegetable Division, AMS, USDA, Suite 102B, 2202 Monterey Street,

Fresno, CA 93721, telephone 209-487-5901.

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. 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 is issuing this rule in conformance

with Executive Order 12866.

This rule has been reviewed under Executive Order 12778, Civil

Justice Reform. Under the provisions of the marketing order now in

effect, California walnuts are subject to assessments. It is intended

that the assessment rate as issued herein will be applicable to all

assessable walnuts handled during the 1994-95 marketing year, which

began August 1, 1994, and ends July 31, 1995. This final 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 the Secretary 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 requesting 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 the Secretary 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 in equity to review

the Secretary's ruling not later than 20 days after the date of the

entry of the ruling.

Pursuant to the requirements set forth in the Regulatory

Flexibility Act (RFA), the Administrator of the Agricultural Marketing

Service (AMS) has considered the economic impact of this rule on small

entities.

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 5,000 producers of California walnuts under

this marketing order, and approximately 65 handlers. Small agricultural

producers have been defined by the Small Business Administration (13

CFR 121.601) as those having annual receipts of less than $500,000, and

small agricultural service firms are defined as those whose annual

receipts are less than $5,000,000. The majority of California walnut

producers and handlers may be classified as small entities.

The budget of expenses for the 1994-95 marketing year was prepared

by the Walnut Marketing Board, the agency responsible for local

administration of the marketing order, and submitted to the Department

for approval. The members of the Board are producers and handlers of

California walnuts. They are familiar with the Board's needs and with

the costs of goods and services in their local area and are thus in a

position to formulate an appropriate budget. The budget was formulated

and discussed in a public meeting. Thus, all directly affected persons

have had an opportunity to participate and provide input.

The assessment rate recommended by the Board was derived by

dividing anticipated expenses by expected merchantable certifications

of California walnuts. Because that rate will be applied to the actual

quantity of certified merchantable walnuts, it must be established at a

rate that will provide sufficient income to pay the Board's expenses.

The Board met September 9, 1994, and unanimously recommended a

1994-95 budget of $2,170,772, $229,125 more than the previous year.

Budget items for 1994-95 which have increased compared to those

budgeted for 1993-94 (in parentheses) are: Administrative salaries,

$101,712 ($101,331), Board expenses, $35,000 ($32,000), office rent,

$26,419 ($25,704), domestic market research and development, $953,000

($875,000), walnut production research, $718,302 ($438,488), crop

survey, $45,000 ($43,000), and crop estimate, $60,000 ($52,000). Items

which have decreased compared to the amount budgeted for 1993-94 (in

parentheses) are: Social security and hospital insurance taxes, $8,129

($9,700), group life, retirement, and medical, $44,370 ($47,485),

office salaries, $40,740 ($40,771), equipment maintenance and

warranties, $10,000 ($12,000), furniture, fixtures, and automobiles,

$5,000 ($20,000), and production research director, $40,000 ($91,068).

The Board also eliminated funding for export market research and

development and the reserve for contingencies for which $20,000 and

$50,000 were recommended last year, respectively. All other items are

budgeted at last year's amounts.

The Board also unanimously recommended an assessment rate of

$0.0111 per kernelweight pound, $0.0021 more than the previous year.

This rate, when applied to anticipated shipments of 198,000,000

kernelweight pounds of merchantable walnuts, will yield $2,197,800 in

assessment income, which will be adequate to cover budgeted expenses.

Unexpended funds may be used temporarily during the first five months

of the subsequent marketing year, but must be made available to the

handlers from whom collected within that period.

An interim final rule was published in the Federal Register on

October 31, 1994 (59 FR 54375). That interim final rule added

Sec. 989.345 to authorize expenses and establish an assessment rate for

the Committee. That rule provided that interested persons could file

comments through November 30, 1994. No comments were received.

While this action will impose some additional costs on handlers,

the costs are in the form of uniform assessments on handlers. Some of

the additional costs may be passed on to producers. However, these

costs will be offset by the benefits derived by the operation of the

marketing order. Therefore, the Administrator of the AMS has determined

that this action will not have a significant economic impact on a

substantial number of small entities.

After consideration of all relevant matter presented, including the

information and recommendations 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.

It is further found that good cause exists for not postponing the

effective date of this action until 30 days after publication in the

Federal Register (5 U.S.C. 553) because the Committee needs to have

sufficient funds to pay its expenses which are incurred on a continuous

basis. The 1994-95 fiscal period began on August 1, 1994. The marketing

order requires that the rate of assessment for the fiscal period apply

to all assessable walnuts handled during the fiscal period. In

addition, handlers are aware of this action which was unanimously

recommended by the Committee at a public meeting and published in the

Federal Register as an interim final rule.

List of Subjects in 7 CFR Part 984

Marketing agreements, Nuts, Reporting and recordkeeping

requirements, Walnuts.

For the reasons set forth in the preamble, 7 CFR part 984 is

amended as follows:

PART 984--WALNUTS GROWN IN CALIFORNIA

Accordingly, the interim final rule amending 7 CFR part 984 which

was published at 59 FR 54375 on October 31, 1994, is adopted as a final

rule without change.

Dated: December 19, 1994.

Eric M. Forman,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-31611 Filed 12-22-94; 8:45 am]

BILLING CODE 3410-02-W