Pistachios Grown in California, Arizona, Nevada, New Mexico, and Utah; Hearing on Proposed Marketing Agreement and Order No. 983

SUMMARY: Notice is hereby given of a public hearing to be held to

consider a proposed marketing agreement and order to cover pistachios

grown in California, Arizona, Nevada, New Mexico, and Utah. The

proposed program would include authority for mandatory inspection, and

grade, pack, container and labeling requirements. A proposal for a

marketing order was submitted on behalf of the pistachio industry by

the California Pistachio Commission (Commission) and the Western

Pistachio Association (Association), which purport to represent nearly

all of the industry. The program would be financed by assessments on

handlers of pistachios grown in the production area. Assessment rates

would be established by the Secretary of Agriculture (Secretary), based

on the recommendations of a committee appointed by the Secretary to

administer the program. The committee would consist of 10 members and

their alternates.

DATES: The hearing will be held in Fresno, California, beginning on

August 20, 1996, at 9:00 a.m. If necessary, additional sessions will be

held in Fresno on August 21-23.

ADDRESSES: The hearing will be held in the State Building's room 1036,

2550 Mariposa Mall, at the corner of Tulare and ``O'' Street, Fresno,

California, 93721.

FOR FURTHER INFORMATION CONTACT: Copies of this notice of hearing may

be obtained from:

(1) Maureen T. Pello, Marketing Specialist, California Marketing

Field Office, USDA, AMS, 2202 Monterey Street, suite 102B, Fresno,

California 93721, telephone (209) 487-5901, Fax (209) 487-5906; or

(2) James B. Wendland, Marketing Specialist, Marketing Order

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

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

2170, Fax (202) 720-5698.

(3) Small businesses may request information on compliance with

this proposal by contacting: Jay Guerber, Marketing Order

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

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

2491; Fax # (202) 720-5698.

SUPPLEMENTARY INFORMATION: This action is governed by the provisions of

sections 556 and 557 of title 5 of the United States Code and is

therefore excluded from the requirements of Executive Order 12866. The

hearing is called pursuant to the provisions of the Agricultural

Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674),

hereinafter referred to as the ``Act.''

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) seeks to

ensure that within the statutory authority of a program, the regulatory

and informational requirements are tailored to the size and nature of

small businesses. Interested persons are invited to present evidence at

the hearing on the possible regulatory and informational impacts of the

proposal on small businesses.

The marketing agreement and order proposed herein have been

reviewed under Executive Order 12988, Civil Justice Reform. They are

not intended to have retroactive effect. If issued, the proposed

agreement and order would 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 request a modification of the order or to be exempted

therefrom. A 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 to review the Secretary's

ruling on the petition, provided an action is filed not later than 20

days after the date of the entry of the ruling.

Over the last five years, the Commission and the Association have

facilitated discussions within the pistachio industry regarding the

merits of establishing a Federal marketing order program. Industry

members have concluded that a marketing order program, with authority

for mandatory inspection, and grade, pack, and container requirements,

is needed to enable the pistachio industry to improve returns to

growers. The industry believes that an effective quality control

program can be implemented to expand its markets, improve grower

returns, and increase consumer satisfaction.

The proposal for an order has been widely discussed within the

pistachio industry for at least five years, but has not yet received

the approval of the Secretary of Agriculture.

Testimony is invited at the hearing on the proposed marketing

agreement and order (hereinafter referred to as the order) and on all

the recommendations and proposals contained in this notice, as well as

any appropriate modifications or alternatives.

The hearing will be held for the purposes of:

(a) Receiving evidence about the economic and marketing conditions

which relate to the proposed marketing agreement and order and to any

appropriate modifications thereof;

(b) Determining whether the handling of pistachios produced in the

production area is in the current of interstate or foreign commerce or

directly burdens, obstructs, or affects interstate or foreign commerce;

(c) Determining whether there is a need for a marketing agreement

and order for pistachios;

[[Page 39912]]

(d) Determining the economic impact of the proposed marketing

agreement and order on the industry in the proposed production area and

on the public affected by such a program; and

(e) Determining whether the proposed marketing agreement and order

or any appropriate modification thereof would tend to effectuate the

declared policy of the Act.

All persons wishing to submit written material as evidence at the

hearing should be prepared to submit four copies of such material at

the hearing and should have prepared testimony available for

presentation at the hearing.

From the time this notice of hearing is issued and until the

issuance of a final decision in this proceeding, U.S. Department of

Agriculture (Department) employees involved in the decisional process

are prohibited from discussing the merits of the hearing issues on an

ex-parte basis with anyone having an interest in the proceeding. The

prohibition applies to employees in the following organizational units:

Office of the Secretary of Agriculture; Office of the Administrator,

Agricultural Marketing Service; Office of the General Counsel; and the

Fruit and Vegetable Division, Agricultural Marketing Service.

Procedural matters are not subject to the above prohibition and may

be discussed at any time.

Provisions of the proposed marketing agreement and order follow.

Those sections identified with an asterisk (*) apply only to the

proposed marketing agreement and are proposed by the Agricultural

Marketing Service.

List of Subjects in 7 CFR Part 983

Marketing agreements, Pistachios, Reporting and recordkeeping

requirements.

For the reasons set forth in the preamble, it is proposed that

Title 7 of the CFR, Chapter IX be amended as follows:

1. Part 983 is proposed to be added as follows:

PART 983--PISTACHIOS GROWN IN CALIFORNIA, ARIZONA, NEVADA, NEW

MEXICO, AND UTAH

Subpart--Order Regulating Handling

Definitions

Sec.

983.1 Secretary.

983.2 Act.

983.3 Person.

983.4 Production area.

983.5 Pistachios.

983.6 Varieties.

983.7 Shelled pistachio.

983.8 Kernel weight.

983.9 Inshell pistachio.

983.10 Naturally opened pistachios.

983.11 Artificially opened pistachios.

983.12 Merchantable pistachios.

983.13 Substandard pistachios.

983.14 Bleaching.

983.15 Blending.

983.16 Grower.

983.17 To process.

983.18 Handler.

983.19 To handle.

983.20 Production year.

983.21 Committee.

983.22 District.

983.23 Books and records.

983.24 Pack.

983.25 Container.

983.26 Part and subpart.

Administrative Committee

983.30 Establishment and membership.

983.31 Term of office.

983.32 Nomination procedures.

983.33 Selection.

983.34 Failure to nominate.

983.35 Acceptance.

983.36 Vacancies.

983.37 Alternate members.

983.38 Procedure.

983.39 Powers.

983.40 Duties.

983.41 Compensation and expenses.

983.42 Annual report.

Expenses and Assessments

983.50 Expenses.

983.51 Assessments.

983.53 Accounting.

Regulations

983.60 Marketing policy.

983.61 Recommendation for regulations.

983.62 Issuance of regulations.

983.63 Modification, suspension, or termination of regulations.

983.64 Inspection and certification.

983.65 Substandard pistachios.

983.66 Exemptions.

Reports

983.70 Reports and recordkeeping.

983.71 Confidential information.

983.72 Other reports.

Miscellaneous Provisions

983.80 Compliance.

983.81 Right of the Secretary.

983.82 Termination or suspension of order.

983.83 Procedure upon termination.

983.84 Effect of termination or amendment.

983.85 Personal liability.

983.86 Separability.

983.87 Derogation.

983.88 Duration of immunities.

983.89 Agents.

983.90* Counterparts.

983.91* Additional parties.

983.92* Order with marketing agreement.

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

Definitions

Sec. 983.1 Secretary.

Secretary means the Secretary of Agriculture of the United States

or any officer or employee of the Department of Agriculture who has

been delegated, or to whom authority may hereafter be delegated, the

authority to act for the Secretary.

Sec. 983.2 Act.

Act means Public Act No. 10, 73d Congress (May 12, 1933), as

amended and as reenacted and amended by the Agricultural Marketing

Agreement Act of 1937, as amended (48 Stat. 31, as amended; 7 U.S.C.

601 et seq.).

Sec. 983.3 Person.

Person means an individual, partnership, corporation, trust,

association, or any other business unit.

Sec. 983.4 Production area.

Production area includes the following States: California, Arizona,

Nevada, New Mexico, and Utah.

Sec. 983.5 Pistachios.

Pistachios means the nut of the pistachio tree of the genus

Pistacia vera grown in the production area.

Sec. 983.6 Varieties.

Varieties means and includes all classifications, subdivisions, or

other types of pistachios according to those definitive characteristics

now or hereafter recognized by the United States Department of

Agriculture or recommended by the Committee and approved by the

Secretary. The Committee, with the approval of the Secretary, may

exempt any individual variety from any or all regulations issued under

this part.

Sec. 983.7 Shelled pistachio.

Shelled pistachio means a pistachio kernel, or portion of a kernel,

after the pistachio shell has been removed.

Sec. 983.8 Kernel weight.

Kernel weight means the weight of the kernels, without shells, in a

quantity or lot of pistachios. The term does not include inedible

pieces or particles of pistachio kernels.

Sec. 983.9 Inshell pistachio.

Inshell pistachio means a pistachio that has a shell that has not

been removed.

Sec. 983.10 Naturally opened pistachios.

Naturally opened pistachios means pistachios that are inshell and

have opened naturally on the tree. This definition may be modified

based on a recommendation made by the Committee and approved by the

Secretary.

Sec. 983.11 Artificially opened pistachios.

Artificially opened pistachios means pistachios that are inshell

and have not opened naturally on the tree but have

[[Page 39913]]

been opened by hand, mechanical, or other means. This definition may be

modified based on a recommendation made by the Committee and approved

by the Secretary.

Sec. 983.12 Merchantable pistachios.

Merchantable pistachios means inshell and shelled pistachios that

meet the minimum grade regulations in effect pursuant to Sec. 983.62.

Sec. 983.13 Substandard pistachios.

Substandard pistachios means pistachios, inshell or shelled, that

do not meet the minimum grade regulations in effect pursuant to

Sec. 983.62.

Sec. 983.14 Bleaching.

Bleaching means to cause pistachios to be treated, directly or

indirectly, with hydrogen peroxide, or other chemicals or products to

remove shell stains.

Sec. 983.15 Blending.

Blending means to commingle or cause to be commingled, artificially

opened pistachios with naturally opened pistachios.

Sec. 983.16 Grower.

Grower is synonymous with producer and means any person engaged in

a proprietary capacity in the commercial production of pistachios.

Sec. 983.17 To process.

To process means to hull and dry, in preparation for market,

pistachios from one's own production or pistachios received from

another producer.

Sec. 983.18 Handler.

Handler means any person engaged in the activities defined in

Sec. 983.19. For purposes of this part, there are two types of

handlers, processing and non-processing. A processing handler is a

handler who engages in the activities defined in Sec. 983.19(a). A non-

processing handler is a handler who engages in the activities defined

in Sec. 983.19(b).

Sec. 983.19 To handle.

(a) By a processing handler.

(1) To handle means to process pistachios; or

(2) To process pistachios and further prepare them for market by

sorting, sizing, shelling, roasting, cleaning, salting, packaging, or

cause such pistachios to be placed in the current of commerce by

marketing, distributing, selling, consigning or shipping.

(b) By a non-processing handler.

(1) To handle means to receive pistachios after they have been

processed and further prepare them for market by sorting, sizing,

shelling, roasting, cleaning, salting or packaging; or

(2) To receive pistachios after they have been processed and

further prepare them for market as described in paragraph (b)(1) of

this section and cause such pistachios to be placed in the current of

commerce by marketing, distributing, selling, consigning or shipping.

(c) To handle shall not include the transportation of pistachios by

a common or contract carrier owned by another person or the

transportation of pistachios within the production area from the

orchard to the processing facility.

Sec. 983.20 Production year.

Production year is synonymous with fiscal period and marketing

season and means the period beginning on September 1 and ending on

August 31 of each year or such other period as may be recommended by

the Committee and approved by the Secretary.

Sec. 983.21 Committee.

Committee means the Pistachio Administrative Committee established

pursuant to Sec. 983.30.

Sec. 983.22 District.

District means any of the following geographical areas within the

production area:

(a) District 1 shall include the California counties of Tulare,

Kern, San Bernardino, San Luis Obispo, Santa Barbara, Ventura, Los

Angeles, Orange, Riverside, San Diego, and Imperial;

(b) District 2 shall include the California counties of Kings,

Fresno, Madera, and Merced;

(c) District 3 shall consist of all counties in the State of

California which are not included in Districts 1 and 2; and

(d) District 4 shall consist of all counties in the States of

Arizona, Nevada, New Mexico, and Utah.

Sec. 983.23 Books and records.

Books and records means books, papers, records, copies of income-

tax reports, accounts, correspondence, contracts, documents, memoranda,

or other data pertaining to matters relating to the activities subject

to the provisions of this part.

Sec. 983.24 Pack.

Pack means the specific arrangement, weight, count, or grade of a

quantity of pistachios in a particular type and size of container, or

any combination thereof.

Sec. 983.25 Container.

Container means a jar, box, bag, bin, carton, case, package, or any

other type of receptacle used in the packaging or handling of

pistachios.

Sec. 983.26 Part and subpart.

Part means the order regulating the handling of pistachios grown in

the States of California, Arizona, Nevada, New Mexico, and Utah, and

all rules, regulations, and supplementary orders issued thereunder, and

the aforesaid order shall be a subpart of such part.

Administrative Committee

Sec. 983.30 Establishment and membership.

A Pistachio Administrative Committee, consisting of 10 members and

alternates, is hereby established. Each member shall have an alternate

member who shall have the same qualifications as the member for whom he

or she is an alternate. Seven grower members shall be from Districts 1,

2, and 3. An additional grower member shall be an at-large member and

shall be the grower who has produced the largest quantity of pistachios

from any district during the production year prior to nomination. Of

the seven growers from Districts 1, 2, and 3, three members shall be

from District 1, three shall be from District 2, and one shall be from

District 3. One processing handler member shall be an at-large member

and shall have processed the largest quantity of assessed pistachios

from any district during the year prior to nomination. The tenth member

shall be from District 4 and can be either a processing handler or

grower.

Sec. 983.31 Term of office.

Elected grower members and grower alternate members of the

Committee shall serve for terms of two years, but initial elected

grower members and alternates shall, through a lottery, be seated for

terms of 1 or 2 years so that approximately half of the memberships'

terms expire each year. Initial terms for members and alternate members

filling mandated seats shall be as follows: District 4 member--2 years,

largest grower member--1 year, largest processing handler member--1

year. Each member and alternate member shall continue to serve until

his or her successor is selected and has qualified. The term of office

shall begin on July 1st of each year, or as soon thereafter as

possible, or such other date as recommended by the Committee and

approved by the Secretary. Committee members and alternates may serve

up to four consecutive, two-year terms of office.

[[Page 39914]]

Sec. 983.32 Nomination procedures.

Nomination of Committee members and alternates shall follow the

procedures set forth below:

(a) For purposes of nominating the members and alternates of the

initial Committee, the Secretary shall conduct nominations by mail;

(b) Except as provided in paragraph (c) of this section, the

Committee shall hold, or cause to be held, not later than March 1st of

each year, or such other date as may be specified by the Secretary, a

meeting or meetings of growers in each district for the purpose of

designating nominees to serve as grower members and alternates on the

Committee. Any such meetings shall be supervised by the Committee,

which shall prescribe such procedures as shall be reasonable and fair

to all persons concerned;

(c) Nominations in any or all districts may be conducted by mail in

a manner recommended by the Committee and approved by the Secretary;

(d) If a nomination meeting is held, only persons present at

nomination meetings may participate in nominations. Growers who

commercially produce pistachios during the current production year will

be eligible to vote. Any person nominated by growers shall certify that

he or she is engaged in the business of producing pistachios for market

as an owner, director or employee of a producing entity. Each grower

shall be entitled to cast only one vote for each position to be filled

in the district in which such grower produces. No grower shall

participate in the nomination of members in more than one district. If

a grower grows pistachios in more than one district, such grower shall

select the district in which such grower will so participate and notify

the Committee of such choice. Proxy voting shall not be permitted;

(e) Nominees shall provide background information for the purpose

of informing voters about their qualifications. Candidates for

nomination shall, upon the request of the Committee, submit all

necessary documents in order to establish qualifications for

nomination; and

(f) Not more than three members and three alternates on the

Committee shall be persons employed by, or connected in a proprietary

capacity with, the same corporation, firm, partnership, association, or

business organization. In addition, only one elected member and one

elected alternate in any one district shall be employed by, or

connected in a proprietary capacity with, the same corporation, firm,

partnership, association, or business organization, exclusive of the

at-large members. Any alternate serving in the same district as a

member where both are employed by, or connected in a proprietary

capacity with the same corporation, firm, partnership, association, or

business organization, shall serve as the alternate to that member. In

the case of a producer cooperative, a person will not be deemed to be

connected in a proprietary capacity with the cooperative,

notwithstanding any outstanding retains, contributions, or other

financial indebtedness owed by the cooperative to the person, if the

person has not marketed pistachios through the cooperative pursuant to

a membership agreement during the current and the preceding marketing

season. The qualifications of a member or alternate must continue

throughout the entire term of office.

(g) For the at-large grower member position, the Committee shall

notify the grower who has produced the largest quantity of pistachios

from any district during the production year prior to nomination. Such

grower shall provide the Committee with the names of the member and

alternate who he or she nominates to serve on the Committee. The

Committee shall then provide those names to the Secretary.

(h) For the at-large handler member position, the Committee shall

notify the processing handler who processed the largest quantity of

assessed pistachios from any district during the year prior to

nomination. Such handler shall provide the Committee with the names of

the member and alternate who he or she nominates to serve on the

Committee. The Committee shall then provide those names to the

Secretary.

(i) For the District 4 position, which can be filled by a grower or

handler, only growers will be eligible to nominate and vote for persons

to fill that member and alternate position.

Sec. 983.33 Selection.

From the nominations made pursuant to Sec. 983.32 or from other

qualified persons, the Secretary shall select the 10 members of the

Committee and an alternate for each such member.

Sec. 983.34 Failure to nominate.

If nominations are not made within the time and in the manner

prescribed in Sec. 983.32, the Secretary may, without regard to

nominations, select the members and alternate members of the Committee

on the basis of the representation provided for in Sec. 983.30.

Sec. 983.35 Acceptance.

Each person to be selected by the Secretary as a member or as an

alternate member of the Committee shall, prior to such selection,

qualify by advising the Secretary that he/she agrees to serve in the

position for which nominated for selection.

Sec. 983.36 Vacancies.

To fill any vacancy occasioned by the failure of any person

selected as a member or as an alternate member of the Committee to

qualify, or in the event of the death, removal, resignation, or

disqualification of any member or alternate member of the Committee, a

successor for the unexpired term of such member or alternate member of

the Committee shall be nominated and selected, in the manner specified

in Secs. 983.32 and 983.33. If the names of nominees to fill any such

vacancy are not made available to the Secretary within a reasonable

time after such vacancy occurs, the Secretary may fill such vacancy

without regard to nominations, which selection shall be made on the

basis of representation provided for in Sec. 983.30.

Sec. 983.37 Alternate members.

An alternate member of the Committee, during the absence of the

member for whom that individual is an alternate, shall act in the place

and stead of such member and perform such other duties as assigned. In

the event of the death, removal, resignation, or disqualification of a

member, the alternate of such member shall act for him or her until a

successor for such member is selected and has qualified.

Sec. 983.38 Procedure.

(a) Six members of the Committee or alternate members acting for

members, shall constitute a quorum at an assembled meeting of the

Committee, and any action of the Committee shall require the concurring

vote of at least six members: Provided, That actions of the Committee

with respect to the following issues shall require at least eight

concurring votes regarding any recommendation for adoption or change

in:

(1) Minimum grade and quality regulations;

(2) Packaging regulations;

(3) Aflatoxin regulations;

(4) Either a food chemical regulation or a regulation regarding the

blending of artificially and naturally opened pistachios;

(5) Any change caused by establishment or changes in inspection

programs;

(6) Any change in bylaws, administrative or nomination procedures;

[[Page 39915]]

(7) Approval of an annual budget exceeding \1/2\ of one percent

(.5%) of the farm gate crop value; and

(8) Approval to borrow funds as necessary.

(b) The Committee may provide for meetings by telephone, telegraph,

facsimile, or other means of communication, and any vote cast at such

meetings shall be confirmed promptly in writing: Provided: That if an

assembled meeting is held, all votes shall be cast in person.

Sec. 983.39 Powers.

The Committee shall have the following powers:

(a) To administer the provisions of this part in accordance with

its terms;

(b) To make and adopt rules and regulations to effectuate the terms

and provisions of this part;

(c) To receive, investigate, and report to the Secretary complaints

of violations of this part; and

(d) To recommend to the Secretary amendments to this part.

Sec. 983.40 Duties.

The Committee shall have among others, the following duties:

(a) To select from among its members such officers and adopt bylaws

and rules for the conduct of its meetings as it deems advisable, and to

define the duties of such officers;

(b) To submit to the Secretary prior to the beginning of each

fiscal period a budget for such fiscal period, including a report and

explanation of the items appearing therein and a recommendation as to

the rate of assessment for such period;

(c) To act as intermediary between the Secretary and any processing

handler and grower;

(d) To investigate and assemble data on the growing, handling and

marketing conditions with respect to pistachios;

(e) To keep minutes, books and records which will clearly reflect

all of its acts and transactions, and such minutes, books and records

shall be available for examination by the Secretary at any time;

(f) To furnish to the Secretary such available information as

requested;

(g) To appoint such employees as it deems necessary and determine

their salaries, define their duties and fix the bonds of the Committee;

(h) To cause the books of the Committee to be audited by one or

more certified public accountants approved by the Committee at least

once for each marketing year and at such other times as the Committee

deems necessary or as the Secretary may request, and to file with the

Secretary reports of all audits, including quarterly financial reports

made, and to make available to the industry, such audits that do not

contain confidential data;

(i) To give the Secretary the same notice of the meetings of the

Committee as is given to its members;

(j) To furnish to the Secretary a written report of the proceedings

of each meeting of the Committee;

(k) To follow the Secretary's guidelines in considering and

recommending regulatory actions;

(l) To investigate compliance with the provisions of this part; and

(m) With the approval of the Secretary, to redefine the districts

into which the production area is divided and to reapportion the

representation of any district on the Committee: Provided, That any

such changes shall reflect, insofar as practicable, shifts in pistachio

production within the districts and the production area.

Sec. 983.41 Compensation and expenses.

The members of the Committee, and the alternate members when acting

as members, shall serve without compensation but shall be allowed their

necessary actual expenses, as approved by the Committee: Provided, That

the Committee may request the attendance of one or more alternates not

acting as members at any meeting of the Committee, and such alternates

may be allowed their necessary expenses.

Sec. 983.42 Annual report.

The Committee shall, as soon as is practicable after the close of

each marketing season, prepare and mail an annual report to the

Secretary and make a copy available to each grower and handler who

requests a copy of the report.

Expenses and Assessments

Sec. 983.50 Expenses.

The Committee is authorized to incur such expenses as the Secretary

finds are reasonable and likely to be incurred during each production

year for the maintenance and functioning of the Committee and for such

other purposes as the Secretary may, pursuant to the provisions of this

part, determine to be appropriate. The funds to cover such expenses

shall be acquired in the manner prescribed in Sec. 983.51.

Sec. 983.51 Assessments.

(a) As his or her pro rata share of the expenses which the

Secretary finds are reasonable and likely to be incurred by the

Committee during a production year, each processing handler during such

period shall pay to the Committee, upon demand, assessments on all

pistachios so processed. Assessments shall be based on pounds of

edible, inshell pistachios processed. The payment of assessments for

the maintenance and functioning of the Committee may be required under

this part throughout the period it is in effect, irrespective of

whether particular provisions thereof are suspended or become

inoperative.

(b) The Secretary shall fix the rate of assessment to be paid by

each such person during a production year in an amount designed to

secure sufficient funds to cover the expenses which may be incurred

during such period. Such expenses may include an item for accumulation

and maintenance of an operating reserve fund not to exceed

approximately two production years' budgeted expenses. At any time

during or after the production year, the Secretary may increase the

rate of assessment in order to secure sufficient funds to cover any

later finding by the Secretary relative to the expenses which may be

incurred: Provided, That any assessment, excluding any amount collected

pursuant to Sec. 983.64(e), must be limited to a maximum assessment of

\1/2\ of one percent (.5%) of the latest farm-gate crop value unless

the annual budget exceeding that amount has been approved in accordance

with the super majority required in Sec. 983.38(a). The Committee may

accept the payment of assessments in advance, and may also borrow money

for such purposes.

(c) Any processing handler who fails to pay an assessment within

the time required by the Committee shall pay to the Committee a late

charge of 10 percent of the amount of the assessment determined to be

past due and, in addition, interest on the unpaid balance at the rate

of 1\1/2\ percent per month or such other figures as recommended by the

Committee and approved by the Secretary.

Sec. 983.53 Accounting.

(a) If, at the end of a production year, the assessments collected

are in excess of expenses incurred, such excess shall be accounted for

in accordance with one of the following:

(1) If such excess is not retained in a reserve, as provided in

paragraph (a)(2) of this section, it shall be refunded proportionately

to the persons from whom it was collected in accordance with

Sec. 983.51(a): Provided, That any sum paid by a person in excess of

his or her pro rata share of the expenses during any production year

may be applied by the Committee at the end of such production year as

credit for such person, toward the Committee's fiscal

[[Page 39916]]

operations of the following production year;

(2) The Committee, with the approval of the Secretary, may carry

over such excess into subsequent production years as a reserve:

Provided, That funds already in the reserve do not exceed approximately

two production year's budgeted expenses. Such reserve funds may be

used:

(i) To defray expenses, during any production year, prior to the

time assessment income is sufficient to cover such expenses;

(ii) to cover deficits incurred during any production year when

assessment income is less than expenses;

(iii) to defray expenses incurred during any period when any or all

provisions of this part are suspended or are inoperative; and,

(iv) to cover necessary expenses of liquidation in the event of

termination of this part. Upon such termination, any funds not required

to defray the necessary expenses of liquidation shall be disposed of in

such manner as the Secretary may determine to be appropriate: Provided,

That to the extent practical, such funds shall be returned pro rata to

the persons from whom such funds were collected;

(b) All funds received by the Committee pursuant to the provisions

of this part shall be used solely for the purpose specified in this

part and shall be accounted for in the manner provided in this part.

The Secretary may at any time require the Committee and its members to

account for all receipts and disbursements; and

(c) Upon the removal or expiration of the term of office of any

member of the Committee, such member shall account for all receipts and

disbursements and deliver all Committee property and funds in his or

her possession to the Committee, and shall execute such assignments and

other instruments as may be necessary or appropriate to vest in the

Committee full title to all of the Committee property, funds, and

claims vested in such member pursuant to this part.

Regulations

Sec. 983.60 Marketing policy.

Each season prior to making any recommendations pursuant to

Sec. 983.61, the Committee may adopt a report setting forth its

marketing policy for the ensuing season. Such marketing policy report

may contain information relative to:

(a) The estimated total production of pistachios within the

production area;

(b) The expected general quality of pistachios in the production

area and in other areas;

(c) The expected demand conditions for pistachios in different

market outlets;

(d) The expected shipments of pistachios produced in the production

area and in areas outside the production area;

(e) Supplies of competing commodities;

(f) Other factors having a bearing on the marketing of pistachios;

and

(g) The type of regulations expected to be recommended during the

season.

Sec. 983.61 Recommendation for regulations.

(a) Whenever the Committee deems it advisable to regulate the

handling of any variety or varieties of pistachios in the manner

provided in Sec. 983.62, it shall so recommend to the Secretary.

(b) In arriving at its recommendations for regulation pursuant to

paragraph (a) of this section, the Committee shall give consideration

to current information with respect to the factors affecting the supply

and demand for pistachios during the period or periods when it is

proposed that such regulations should be made effective. With each

recommendation for regulation, the Committee shall submit to the

Secretary the data and information on which the recommendation is

predicated and other available information as the Secretary may

request.

Sec. 983.62 Issuance of regulations.

(a) The Secretary shall regulate, in the manner specified in this

section, the handling of pistachios whenever the Secretary finds, from

the recommendations and information submitted by the Committee, or from

other available information, that such regulations will tend to

effectuate the declared policy of the act. Such regulations may:

(1) Limit during any period or periods, the shipment of pistachios

by establishing, in terms of grades, minimum standards of quality,

including standards for aflatoxin, bleaching, and the blending of

artificially and naturally opened pistachios;

(2) Limit during any period or periods, the use of specified

containers for shipment;

(3) Fix the size, capacity, weight, dimensions, markings, labeling,

or pack of the container, or containers, which may be used in the

packaging or processing of pistachios; and

(4) Prescribe different requirements under paragraphs (a)(1)

through (a)(3) of this section for the handling of any variety of

pistachios to destinations within any geographical area or market type

identified and recommended by the Committee and approved by the

Secretary.

(b) The Committee shall be informed immediately of any such

regulation issued by the Secretary and the Committee shall promptly

give notice thereof to processing handlers and non-processing handlers,

each of whom will be bound by any such regulation.

Sec. 983.63 Modification, suspension, or termination of regulations.

(a) In the event the Committee at any time finds that, by reason of

changed conditions, any regulations issued pursuant to Sec. 983.62

should be modified, suspended, or terminated, it shall so recommend to

the Secretary.

(b) Whenever the Secretary finds from the recommendations and

information submitted by the Committee or from other available

information, that a regulation should be modified, suspended, or

terminated with respect to any or all shipments of pistachios in order

to effectuate the declared policy of the act, the Secretary shall

modify, suspend, or terminate such regulation. If the Secretary finds

that a regulation obstructs or does not tend to effectuate the declared

policy of the act, the Secretary shall suspend or terminate such

regulation. On the same basis and in like manner the Secretary may

terminate any such modification or suspension.

Sec. 983.64 Inspection and certification.

(a) Incoming inspection. Whenever the processing of any variety of

pistachios is regulated pursuant to Sec. 983.62, each processing

handler who receives pistachios from a grower to hull and dry may be

required to have such pistachios inspected by the Federal or Federal-

State Inspection Service or such other inspection service as may be

recommended by the Committee and approved by the Secretary. Such

pistachios shall be certified as meeting the applicable requirements of

such regulation.

(b) Outgoing inspection. Whenever the handling of any variety of

pistachios is regulated pursuant to Sec. 983.62, each person who

handles pistachios, prior to the sale, consignment, shipment, marketing

or distribution of such pistachios, may be required to have such

pistachios inspected by the Federal or Federal-State Inspection Service

or such other inspection service as may be recommended by the Committee

and approved by the Secretary. Such pistachios shall be certified as

meeting the applicable requirements of such regulation: Provided, That

inspection and certification shall be required for pistachios which

previously have been

[[Page 39917]]

so inspected and certified, only if such pistachios have been regraded,

resorted, repackaged, or in any other way further prepared for market.

(c) Promptly after inspection and certification as prescribed in

paragraphs (a) or (b) of this section, each such handler shall submit,

or cause to be submitted, to the Committee a copy of the certificate of

inspection issued with respect to such pistachios. The Committee may,

with the approval of the Secretary, prescribe rules and regulations to

waive the inspection requirements of this section where it is

determined that it is not practicable to provide inspection at the time

and place designated: Provided, That all shipments made under such

waiver shall comply with all regulations in effect.

(d) The Committee may, with the approval of the Secretary,

establish a period prior to shipment during which the inspections

required by this section must be performed.

(e) The Committee may enter into an agreement with the Federal and

Federal-State Inspection Services or other approved inspection

services, with respect to the costs of the inspection required by

paragraphs (a) and (b) of this section, and may collect from handlers

their respective pro rata shares of such costs.

(f) The Committee, with the approval of the Secretary, may

prescribe rules and regulations to administer this section.

Sec. 983.65 Substandard pistachios.

The Committee shall, with the approval of the Secretary, establish

such reporting and disposition procedures as it deems necessary to

ensure that pistachios which do not meet the effective incoming and/or

outgoing minimum standards do not enter normal market outlets for

merchantable pistachios.

Sec. 983.66 Exemptions.

The Committee, with the approval of the Secretary, may prescribe

exemptions based on minimum quantity or other factors for certain

shipments of pistachios from the provisions specified in Secs. 983.51

and 983.64. The Committee, with the approval of the Secretary, may

prescribe safeguards to prevent pistachios handled pursuant to this

section from entering the channels of trade for other than the purpose

authorized.

Reports

Sec. 983.70 Reports and recordkeeping.

(a) Upon request of the Committee, made with the approval of the

Secretary, each handler shall furnish to the Committee, in such manner

and at such time as it may prescribe, such reports and other

information as may be necessary for the Committee to perform its duties

under this part.

(b) Such reports may include, but are not necessarily limited to,

the following:

(1) The name, address, telephone number of the handler, and other

identifying information as appropriate;

(2) The quantities of pistachios, shelled and inshell, received by

such handler;

(3) The quantities of pistachios, shelled and inshell, disposed of

by such handler;

(4) The manner of disposition and disposition dates of such

pistachios;

(5) The quantity of pistachios, shelled and inshell, held in

inventory by such handler;

(6) The quantity of merchantable pistachios processed;

(7) A listing of such handler's growers including name, address,

telephone number and location of grower acreage; and

(8) Identification of the inspection certificate or waiver pursuant

to which the pistachios were processed.

(c) Each handler shall maintain for at least four succeeding years

such records of the pistachios received and disposed of by such handler

as may be necessary to verify reports submitted to the Committee

pursuant to this section.

Sec. 983.71 Confidential information.

All reports and records furnished or submitted by handlers to the

Committee which include data or information constituting a trade secret

or disclosing the trade position, financial condition, or business

operations of the particular handlers or their customers or growers

shall be received by, and at all times kept in the custody and under

the control of, one or more employees of the Committee, who shall

disclose such information to no person except the Secretary.

Compilations of general reports from data submitted by handlers is

authorized, subject to the prohibition of disclosure of individual

handler identity or operations.

Sec. 983.72 Other reports.

Upon the request of the Committee, with the approval of the

Secretary, each handler shall furnish such other reports and

information as are needed to enable the Committee to perform its

functions under this part.

Miscellaneous Provisions

Sec. 983.80 Compliance.

(a) Except as provided in this part, no person shall handle

pistachios, the shipment of which has been prohibited by the Secretary

in accordance with the provisions of this part; and no person shall

handle pistachios except in conformity with the provisions of this part

and the regulations issued under this part.

(b) For the purpose of checking and verifying reports filed by

handlers, the Committee, through its duly authorized representatives,

shall have access to any handler's premises during regular business

hours, and shall be permitted at any such times to inspect such

premises and any pistachios held by such handler, and any and all

records of the handler with respect to his or her acquisition, sales,

uses and shipments of pistachios. Each handler shall furnish all labor

and equipment necessary to make such inspections.

Sec. 983.81 Right of the Secretary.

The members of the Committee (including successors and alternates)

and any agents, employees or representatives appointed or employed by

the Committee thereof, shall be subject to removal or suspension by the

Secretary, in his or her discretion, at any time. Each and every

regulation, decision, determination, or other act of the Committee

shall be subject to the continuing right of the Secretary to disapprove

of the same at any time, and upon such disapproval, the disapproved

action of the Committee shall be deemed void, except as to acts done in

reliance thereon or in accordance therewith prior to such disapproval

by the Secretary.

Sec. 983.82 Termination or suspension of order.

(a) The Secretary shall terminate or suspend the operation of any

or all of the provisions of this part whenever the Secretary finds that

such provisions do not tend to effectuate the declared policy of the

Act.

(b) The Secretary shall conduct a referendum within the month of

November of every fifth year after the effective date of this part (but

not during the same year as the California Pistachio Commission's

referendum), to ascertain whether continuance of this part is favored

by the growers. The Secretary shall continue the operation of this part

if either one of the following is found:

(1) Sixty-five percent or more of the growers who vote in the

referendum vote in favor of continuation, and the growers so voting

marketed at least 50 percent or more of the total quantity of

pistachios marketed in the preceding production year by all of the

growers who vote in the referendum; or

[[Page 39918]]

(2) That a majority of growers who vote in the referendum vote in

favor of continuation, and that the growers so voting marketed 65

percent or more of the total quantity of pistachios marketed in the

preceding production year by all of the growers who vote in the

referendum.

(c) The Committee shall consider all petitions from growers

submitted to it for termination of this part. It may recommend that the

Secretary conduct a special referendum upon receipt of a petition

signed by 15 percent of the growers by number who produced not less

than 15 percent of the volume in the immediately preceding season. If a

referendum meets the preceding criteria, then procedures would follow

paragraph (b) of this section.

(d) The Secretary shall terminate the provisions of this part at

the end of any production year whenever the Secretary finds by

referendum or otherwise that such termination is favored by a majority

of the growers of pistachios in the production area: Provided, That

such majority have, during the production year, produced more than 50

percent of the volume of the pistachios produced for market within the

production area. Such termination shall become effective only if

announced by the Secretary on or before June 1.

(e) The provisions of this part, as well as any amendments, shall

become effective at such time as the Secretary may declare, and shall

continue in force until terminated or suspended in one of the ways

specified in this section.

(f) The provisions of this part shall, in any event, terminate

whenever the provisions of the Act authorizing them cease to be in

effect.

Sec. 983.83 Procedure upon termination.

(a) Upon the termination of this part, the members of the Committee

then functioning shall continue as joint trustees, for the purpose of

liquidating the affairs of the Committee, continue as trustee of all

funds, and property then in its possession, and under its control,

including claims for any funds unpaid or property not delivered at the

time of such termination. Action by such trustees shall require the

concurrence of a majority of said trustees.

(b) The said trustees shall:

(1) Continue in such capacity until discharged by the Secretary;

(2) From time to time account for all receipts and disbursements

and deliver all property on hand, together with all books and records

of the Committee and the joint trustees, to such persons as the

Secretary may direct; and

(3) Upon the request of the Secretary, execute such assignments or

other instruments necessary or appropriate to vest in such person full

title and right to all the funds, properties, and claims vested in the

Committee or the joint trustees, pursuant thereto.

(c) Any person to whom funds, property, or claims have been

transferred or delivered by the Committee or the joint trustees,

pursuant to this section, shall be subject to the same obligations

imposed upon the members of said Committee and upon said joint

trustees.

Sec. 983.84 Effect of termination or amendment.

Unless otherwise expressly provided by the Secretary, the

termination of this part or of any regulation issued pursuant thereto,

or the issuance of any amendments to either thereof, shall not:

(a) Affect or waive any right, duty, obligation, or liability which

shall have arisen or which may thereafter arise, in connection with any

provision of this part or any regulation issued thereunder;

(b) Release or extinguish any violation of this part or any

regulation issued thereunder; and

(c) Affect or impair any rights or remedies of the Secretary, or of

any other persons, with respect to any such violations.

Sec. 983.85 Personal liability.

No member or alternate member of the Committee, nor any employee,

representative, or agent of the Committee shall be held personally

responsible, either individually or jointly with others, in any way

whatsoever, to any person, for errors in judgment, mistakes, or other

acts, either of commission or omission, as such member, alternate

member, employee, representative, or agent, except for acts of

dishonesty, willful misconduct, or gross negligence.

Sec. 983.86 Separability.

If any provision of this part is declared invalid, or the

applicability thereof to any person, circumstance, or thing is held

invalid, the validity of the remainder of this part or the

applicability thereof to any other person, circumstance, or thing,

shall not be affected thereby.

Sec. 983.87 Derogation.

Nothing contained in this part is, or shall be construed to be, in

derogation or in modification of the rights of the Secretary or of the

United States (a) to exercise any powers granted by the Act or

otherwise, or (b), in accordance with such powers, to act in the

premise whenever such action is deemed advisable.

Sec. 983.88 Duration of immunities.

The benefits, privileges, and immunities conferred upon any person

by virtue of this part shall cease upon its termination, except with

respect to acts done under and during the existence of this part.

Sec. 983.89 Agents.

The Secretary may, by a designation in writing, name any person,

including any officer or employee of the United States Government, or

name any, division or agency in the United States Department of

Agriculture, to act as the Secretary's agent or representative in

connection with any of the provisions of this part.

* Sec. 983.90 Counterparts.

Handlers may sign an agreement with the Secretary indicating their

support for the marketing order. This agreement may be executed in

multiple counterparts by each handler. If fifty percent of the

handlers, weighted by the volume of pistachios handled during a

representative period, enter into such an agreement, then a marketing

agreement shall exist for the pistachio marketing order.

* Sec. 983.91 Additional parties.

After the marketing order becomes effective, any handler may become

a party to the marketing agreement if a counterpart is executed by him

or her and delivered to the Secretary.

* Sec. 983.92 Order with marketing agreement.

Each signatory handler hereby requests the Secretary to issue,

pursuant to the Act, an order providing for regulating the handling of

pistachios in the same manner as is provided for in this agreement.

Dated: July 26, 1996.

Lon Hatamiya,

Administrator.

[FR Doc. 96-19550 Filed 7-29-96; 9:14 am]

BILLING CODE 3410-02-P