Walnuts Grown in California; Assessment Rate

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Docket No. FV96-984-1 FIR]

Walnuts Grown in California; 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

establishing 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.

EFFECTIVE DATE: August 1, 1996.

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

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

USDA, 2202 Monterey Street, suite 102B, Fresno, CA 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, PO. Box 96456, room 2525-S, 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, PO. 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 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 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. 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.

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

[[Page 6111]]

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 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 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 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.

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

1996-97 expenditures of $2,301,869 and an 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 rate of $0.0117 is $0.0001 higher than last year's

established rate. Major expenditures recommended by the Board for the

1996-97 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.

An interim final rule regarding this action was published in the

November 29, 1996, issue of the Federal Register (61 FR 60512). That

rule provided for a 30-day comment period. No comments were received.

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 by 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.

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 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) an interim final rule was published on this action and

provided for a 30-day comment period; no comments were received.

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 61 FR 60512 on November 29, 1996, is adopted as a

final rule without change.

Dated: February 5, 1997.

Robert C. Keeney

Director, Fruit and Vegetable Division.

[FR Doc. 97-3284 Filed 2-10-97; 8:45 am]

BILLING CODE 3410-02-P