# Assessment Obligations for Non-signatory Handlers; Peanut Handlers Not Subject to Peanut Marketing Agreement No. 146

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URL: https://www.frixlaw.com/law-library/documents/fr%3A95-2581

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** February 2, 1995
- **Citation:** 60 FR 6394

## Text

DEPARTMENT OF AGRICULTURE
7 CFR Part 997

[Docket No. FV94-997-1FIR]

Assessment Obligations for Non-signatory Handlers; Peanut
Handlers Not Subject to Peanut Marketing Agreement No. 146

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a
final rule, with modifications, the provisions of an interim final rule
implementing administrative assessments on handlers who are not
signatory (non-signatory handlers) to Peanut Marketing Agreement No.
146 (Agreement). The interim final rule provided notice that the
Department would begin assessing non-signatory handlers during the
1994-95 crop year. However, because of an unforeseen delay in
installing an assessment collection database, the Department will not
begin assessing non-signatory handlers until the 1995-96 crop year. The
postponement will allow the installation to be completed and all
affected handlers to be notified prior to the beginning of the 1995-96
crop year will be established by the Department in the spring of 1995.

EFFECTIVE DATE: March 6, 1995.

FOR FURTHER INFORMATION CONTACT: Richard Lower or Mark Slupek,
Marketing Order Administration Branch, Fruit and Vegetable Division,
AMS, USDA, Room 2523-S, P.O. Box 96456, Washington, DC 20090-6456;
telephone: (202) 720-2020, FAX (202) 720-5698.

SUPPLEMENTARY INFORMATION: This final rule is issued pursuant to the
requirements of the Agricultural Marketing Agreement Act of 1937 (Act),
as amended [7 U.S.C. 601-674], and as further amended December 12,
1989, Public Law 101-220, section 4 (1), (2), 103 Stat. 1878, and
August 10, 1993, Public Law 103-66, section 8b(b)(1), 107 Stat. 312.
The Department is issuing this rule in conformance with Executive
Order 12866.
This rule has been reviewed under Executive Order 12778, Civil
Justice Reform. The Department will establish a 1995-96 crop year
assessment rate applicable to non-signatory handlers effective July 1,
1995-June 30, 1996. Segregation 1 farmers stock peanuts received or
acquired by non-signatory handlers during that crop year will be
subject to the assessment. This rule will not preempt any State or
local laws, regulations, or policies, unless they present an
irreconcilable conflict with this rule. There are no administrative
procedures which must be exhausted prior to any judicial challenge to
the provisions of this final rule.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Administrator of the Agricultural Marketing Service
(AMS) has considered the economic impact of this action 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.
There are approximately 45 handlers of peanuts who have not signed
the Agreement and, thus, will be subject to the regulations specified
herein. The Small Business Administration defines small agricultural
service firms [13 CFR 121.601] as those having annual receipts of less
than $5,000,000 and small agricultural producers as those whose annual
receipts are less than $500,000. A majority of non-signatory handlers
and peanut producers may be classified as small entities.
Since aflatoxin was found in peanuts in the mid-1960's, the
domestic peanut industry has sought to minimize aflatoxin contamination
in peanuts and peanut products. The Agreement was established in 1965
and plays a very important role in the industry's quality control
efforts. The Peanut Administrative Committee (Committee) was
established by the Agreement and works with the Department in
administering the marketing agreement program. Approximately 95 percent
of the area peanut crop is marketed by handlers who are signatory to
the Agreement. Requirements established pursuant to the Agreement
provide that farmers stock peanuts with visible Aspergillus flavus mold
(the principal source of aflatoxin) must be diverted to non-edible
uses. Each lot of shelled peanuts and certain cleaned inshell peanuts
destined for edible channels must be officially sampled and chemically
tested for aflatoxin by the Department or in laboratories approved by
the Committee.
Public Law 101-220, enacted December 12, 1989, amended section 608b
of the Act to require that all peanuts handled by persons who have not
entered into the Agreement (non-signers) be subject to quality and
inspection requirements to the same extent and manner as are required
under the Agreement. Approximately 5 percent of the U.S. peanut crop is
marketed by non-signer handlers.
Under the non-signer provisions, no peanuts may be sold or
otherwise disposed of for human consumption if the peanuts fail to meet
the quality requirements of the Agreement. Regulations to implement
Pub. L. 101-220 were made effective on December 4, 1990 [55 FR 49980],
and amended several times thereafter, and are published in 7 CFR part
997. All such amendments were made to ensure that the non-signer
handling requirements remain consistent with modifications to the
handling requirements applied to signatory handlers under the
Agreement. The most recent amendment was published on August 30, 1994
[59 FR 44610].
Public Law 103-66 [107 Stat. 312], enacted August 10, 1993,
provides for mandatory assessment of farmer's stock peanuts acquired by
non-signatory peanut handlers. Under this law, paragraph (b) of section
1001, of the Agricultural Reconciliation Act of 1993, specifies that:
(1) Any assessment (except indemnification assessments) imposed under
the Agreement on signatory handlers also shall apply to non-signatory
handlers, and (2) such assessment shall be paid to the Secretary.
This rule will add new permanent Sec. 997.51 Assessments to part
997--Provisions Regulating the Quality of Domestically Produced Peanuts
Handled by Persons Not Subject to the Peanut Marketing Agreement.
Notice of the actual assessment rate established for each crop year
will be issued as a new section as an Implementing Regulation beginning
with Sec. 997.100 Assessment rate, and be sequentially numbered each
succeeding year. Because of the Department's decision to postpone the
imposition of assessments on non-signatory handlers until the 1995-96
crop year, an assessment rate

[[Page 6395]]
will not be established until the spring of 1995.
The Committee meets in February or March each year and recommends
to the Secretary a per ton, administrative assessment of Segregation 1,
farmers stock peanuts received or acquired by signatory handlers for
the upcoming crop year. The crop year covers the 12-month period from
July 1 to June 30.
Therefore, pursuant to Public Law 103-66 and subsequent to the
receipt of such a recommendation in 1995, the Department will initiate
rulemaking procedures to assess non-signatory handlers. The assessment
will be based on: (1) Tonnage reported on incoming inspection
certificates of each handler's Segregation 1 farmers stock peanuts
received or acquired for the handler's account and (2) tonnage reported
on FV-117 ``Weekly Report of Uninspected Farmers Stock Seed Peanuts
Received for Custom Seed Shelling.'' If an administrative assessment
rate of $.60 per ton were established, a handler who received or
acquired 50,000 tons of Segregation 1 farmers stock peanuts and 50,000
tons of uninspected farmers stock peanuts for seed would pay an
assessment of $60.
The assessment will be applied to peanuts intended for human
consumption and peanuts intended for non-human consumption outlets such
as seed, oilstock and animal feed. The assessment will be applied to
peanuts received or acquired for a handler's account, including the
handler's own production. Assessment will not be applied on Segregation
1 peanut lots received or acquired by a handler from other handlers or
from the Commodity Credit Corporation (CCC) program received for non-
edible use, or lots received on behalf of an area association pursuant
to warehousing services [Sec. 997.20(a)].
The assessment will be applied, pro rata, on non-signatory handlers
who perform handling functions defined in Sec. 997.14. Handling is
defined as engaging in the receiving or acquiring, cleaning and
shelling, cleaning inshell, or crushing of peanuts and in the shipment
(except as a common or contract carrier of peanuts owned by another) or
sale of cleaned inshell or shelled peanuts or other activity causing
peanuts to enter the current of commerce. Handling does not include the
sale or delivery of peanuts by a producer to a handler or to an
intermediary person engaged in delivering peanuts to handlers and the
sale or delivery of peanuts by such intermediary to a handler.
Section 997.15 defines a non-signatory handler as any person who
handles peanuts, in a capacity other than that of a custom cleaner or
dryer, and assembler, a warehouse person or other intermediary between
the producer and the non-signatory handler.
Speculators, brokers, or other entities who take possession of
Segregation 1 farmers stock peanuts, submit such peanuts for incoming
inspection, and subsequently enter such peanuts into the channels of
commerce will pay assessments on such peanuts. Entities who receive or
acquire farmers stock peanuts for the purpose of custom seed shelling
will be assessed on the basis of Form FV-117 ``Weekly Report of
Uninspected Farmers Stock Seed Peanuts Received for Custom Seed
Shelling.'' Form FV-117 is currently required from such entities.
Producer/handlers who store peanuts of their own production (farm-
stored peanuts) will, at some point prior to further handling, obtain
incoming inspection on such peanuts and, at that time, pay the pro-rata
administrative assessment on such peanuts.
Only one administrative assessment will be applied to any lot of
farmers stock peanuts. Non-signatory and signatory handlers will not
pay an administrative assessment on a lot which they purchase from
speculators, brokers or other such entities who have already paid an
administrative assessment on the lot.
A crop year's original assessment could be increased by the
Secretary based on a similar increase applied by the Secretary on
signatory handlers. Such an increase will be applied on all peanuts
first handled by non-signatory handlers during the crop year in which
the increased assessment occurred.
Peanuts will be assessed based on the rate applicable to the crop
year in which the lot is presented for incoming inspection.
Also pursuant to Pub. L. 103-66, this rule will establish that non-
signatory handlers pay their administrative assessment to the
Secretary. The Secretary will bill non-signatory handlers on a periodic
basis determined by the Secretary. The non-signatory handler will be
responsible for remitting payment by the date specified. Payment in the
form of a personal check, cashier's check or money order will be
remitted to the Department. Audits of each handler's account may be
conducted by the Department to reconcile incoming, farmers stock volume
received or acquired and assessments paid.
Violation of the non-signer regulations may result in a penalty in
the form of an assessment by the Secretary equal to 140 percent of the
support price for quota peanuts. The support price for quota peanuts is
determined under 7 U.S.C. 1445c-3 for the crop year during which the
violation occurs.
The interim final rule on these issues was published in the Federal
Register on August 3, 1994 [59 FR 39419]. That rule invited interested
persons to submit written comments through September 2, 1994. One
comment supporting the collection of assessments from non-signer peanut
handlers was received.
The establishment of an administrative assessment rate may impose
some additional costs on non-signatory handlers. However, the costs
will be in the form of uniform assessments on all handlers who are not
signatory to the Agreement.
In accordance with the Paperwork Reduction Act of 1988 [44 U.S.C.
Chapter 35], the information collection requirements that are contained
in this rule have been previously approved by the Office of Management
and Budget (OMB) and have been assigned OMB No. 0581-0163.
Based on available information, the Administrator of the AMS has
determined that the issuance of this final rule will not have a
significant economic impact on a substantial number of small entities.

List of Subjects in 7 CFR Part 997

Food grades and standards, Peanuts, Reporting and recordkeeping
requirements.

Accordingly, the interim final rule amending 7 CFR part 997 which
was published at 59 FR 39419 on August 3, 1994, is adopted as a final
rule with the following change:

PART 997--PROVISIONS REGULATING THE QUALITY OF DOMESTICALLY
PRODUCED PEANUTS HANDLED BY PERSONS NOT SUBJECT TO THE PEANUT
MARKETING AGREEMENT

1. The authority citation for 7 CFR part 997 continues to read as
follows:

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

Sec. 997.100 [Removed]

2. In part 997, Sec. 997.100 and the center heading preceding it
are removed.

Dated: January 27, 1995.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 95-2581 Filed 2-1-95; 8:45 am]
BILLING CODE 3410-02-P

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A95-2581. Public record. Not legal advice.