Walnuts Grown in California; Assessment Rate

DEPARTMENT OF AGRICULTURE

7 CFR Part 984

[Docket No. FV96-984-1 IFR]

Walnuts Grown in California; Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule establishes an assessment rate for the

Walnut Marketing Board (Board) under Marketing Order No. 984 for the

1996-97 and subsequent marketing years. The Board is responsible for

local administration of the marketing 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.

DATES: Effective on August 1, 1996. Comments received by December 30,

1996 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 in triplicate to the Docket

Clerk, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456, room

2525-S, Washington, DC 20090-6456, FAX 202-720-5698. 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.

FOR FURTHER INFORMATION CONTACT: Mary Kate Nelson, Marketing Assistant,

California Marketing Field Office, Fruit and Vegetable Division, AMS,

USDA, suite 102B, 2202 Monterey Street, Fresno, California 93721,

telephone 209-487-5901; FAX 209-487-5906, or Martha Sue Clark, Program

Assistant, Marketing Order Administration Branch, Fruit and Vegetable

Division, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-

6456, telephone 202-720-9918; FAX 202-720-5698. Small businesses may

request information on compliance with this regulation by contacting:

Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable

Division, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-

6456; telephone 202-720-2491; FAX 202-720-5698.

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 order is effective under the

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

674), hereinafter referred to as the ``Act.''

The Department of Agriculture (Department) 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 August 1, 1996, and continuing until amended,

suspended, or terminated. This rule will not preempt any State or local

laws, regulations, or policies unless they present an irreconcilable

conflict with this rule.

The Act provides that administrative proceedings must be exhausted

before parties may file suit in court. Under section 608c(15)(a) of the

Act, any handler subject to an order may file with 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. Such handler is afforded the opportunity for a hearing 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.

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.

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 in

the production area and approximately 55 handlers subject to regulation

under the marketing order. 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 California walnut marketing order provides authority for the

Board, with the approval of the Department, 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 of 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.

The Board met on September 6, 1996, and unanimously recommended

1996-97 expenditures of $2,301,869 and an

[[Page 60513]]

assessment rate of $0.0117 per kernelweight pound of merchantable

walnuts certified. In comparison, last year's budgeted expenditures

were $2,280,175. The assessment of $0.0117 is $0.0001 higher than last

year's established rate. Major expenditures recommended by the Board

for the 1996-97 marketing year include $232,684 for general expenses,

$150,508 for office expenses, $1,840,677 for research expenses, $48,000

for a production research director, and $30,000 for the reserve.

Budgeted expenses for these items in 1995-96 were $246,847, $140,908,

$1,828,420, $34,000, and $30,000, respectively.

The assessment rate recommended by the Board was derived by

dividing anticipated expenses by expected merchantable certifications

of California walnuts. Walnut shipments for the year are estimated at

198,000,000 kernelweight pounds which will yield $2,316,600 in

assessment income, which will be adequate to cover budgeted 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 five months after the end of the year.

While this rule will impose some additional costs on handlers, the

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

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

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

marketing order. Therefore, the AMS has determined that this rule will

not have a significant economic impact on a substantial number of small

entities. Interested persons are invited to submit information on the

regulatory and informational impacts of this action on small

businesses.

The assessment rate established in this rule will continue in

effect indefinitely unless modified, suspended, or terminated by the

Secretary upon recommendation and 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 the Department.

Board meetings are open to the public and interested persons may

express their views at these meetings. The Department 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 1996-97 budget

and those for subsequent marketing years will be reviewed and, as

appropriate, approved by the Department.

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 Board needs to have sufficient funds to pay

its expenses which are incurred on a continuous basis; (2) the 1996-97

marketing year began on August 1, 1996, and the marketing order

requires that the rate of assessment for each marketing year apply to

all assessable walnuts handled during such marketing year; (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 30-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

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

1. The authority citation for 7 CFR part 984 continues to read as

follows:

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

2. A new subpart titled ``Assessment Rates'' and a new Sec. 984.347

are added to read as follows:

Note: This section will appear in the Code of Federal

Regulations.

Subpart--Assessment Rates

Sec. 984.347 Assessment rate.

On and after August 1, 1996, an assessment rate of $0.0117 per

kernelweight pound is established for California merchantable walnuts.

Dated: November 22, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-30484 Filed 11-27-96; 8:45 am]

BILLING CODE 3410-02-P