Walnuts Grown in California; Increased Assessment Rate, 50703-50706 [2011-20788]
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50703
Proposed Rules
Federal Register
Vol. 75, No. 158
Tuesday, August 16, 2011
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Doc. No. AMS–FV–11–0062; FV11–984–1
PR]
Walnuts Grown in California; Increased
Assessment Rate
Agricultural Marketing Service,
USDA.
ACTION: Proposed rule.
AGENCY:
This rule would increase the
assessment rate established for the
California Walnut Board (Board) for the
2011–12 and subsequent marketing
years from $0.0174 to $0.0175 per
kernelweight pound of assessable
walnuts. The Board locally administers
the marketing order which regulates the
handling of walnuts grown in
California. Assessments upon walnut
handlers are used by the Board to fund
reasonable and necessary expenses of
the program. The marketing year begins
September 1 and ends August 31. The
assessment rate would remain in effect
indefinitely unless modified,
suspended, or terminated.
DATES: Comments must be received by
September 15, 2011.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this rule. Comments must be
sent to the Docket Clerk, Marketing
Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1400
Independence Avenue, SW., STOP
0237, Washington, DC 20250–0237; Fax:
(202) 720–8938; or Internet: https://
www.regulations.gov. Comments should
reference the document 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, or can be viewed at:
https://www.regulations.gov. All
comments submitted in response to this
rule will be included in the record and
will be made available to the public.
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SUMMARY:
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Please be advised that the identity of the
individuals or entities submitting the
comments will be made public on the
Internet at the address provided above.
FOR FURTHER INFORMATION CONTACT: Jeff
Smutny, Marketing Specialist, or Kurt J.
Kimmel, Regional Manager, California
Marketing Field Office, Marketing Order
Administration Branch, Fruit and
Vegetable Programs, AMS, USDA;
Telephone: (559) 487–5901, Fax: (559)
487–5906, or E-mail:
Jeffrey.Smutny@ams.usda.gov or
Kurt.Kimmel@ams.usda.gov.
Small businesses may request
information on complying with this
regulation by contacting Laurel May,
Marketing Order Administration
Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence
Avenue, SW., Stop 0237, Washington,
DC 20250–0237; Telephone: (202) 720–
2491, Fax: (202) 720–8938, or E-mail:
Laurel.May@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This rule
is issued under Marketing Order No.
984, 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
(USDA) 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 proposed herein
would be applicable to all assessable
walnuts beginning on September 1,
2011, and continue until amended,
suspended, or terminated.
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 USDA 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
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a hearing on the petition. After the
hearing, USDA 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 USDA’s ruling on the petition,
provided an action is filed not later than
20 days after the date of the entry of the
ruling.
This rule would increase the
assessment rate established for the
Board for the 2011–12 and subsequent
marketing years from $0.0174 to $0.0175
per kernelweight pound of assessable
walnuts.
The California walnut marketing
order provides authority for the Board,
with the approval of USDA, to formulate
an annual budget of expenses and
collect assessments from handlers to
administer the program. The members
of the Board are growers 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.
For the 2010–11 and subsequent
marketing years, the Board
recommended, and USDA approved, an
assessment rate of $0.0174 per
kernelweight pound of assessable
walnuts that would continue in effect
from year to year unless modified,
suspended, or terminated by USDA
upon recommendation and information
submitted by the Board or other
information available to USDA.
The Board met on June 9, 2011, and
unanimously recommended 2011–12
expenditures of $7,402,450 and an
assessment rate of $0.0175 per
kernelweight pound of assessable
walnuts. In comparison, last year’s
budgeted expenditures were $6,812,000.
The assessment rate of $0.0175 is
$0.0001 per pound higher than the rate
currently in effect. The quantity of
assessable walnuts for the 2011–12
marketing year is estimated at 470,000
tons (inshell), which is 35,000 tons
more than the 435,000 during the 2010–
11 marketing year. At the recommended
higher assessment rate of $0.0175 per
kernelweight pound, the Board should
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collect approximately $7,402,500 in
assessment income, which would be
adequate to cover its 2011–12 budgeted
expenses of $7,402,450.
The following table compares major
budget expenditures recommended by
the Board for the 2010–11 and 2011–12
marketing years:
Budget expense categories
2010–11
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Employee Expenses ........................................................................................................................................
Travel/Board Expenses/Annual Audit ..............................................................................................................
Office Expenses ...............................................................................................................................................
Program Expenses Including Research:
Controlled Purchases ...............................................................................................................................
Crop Acreage Survey ...............................................................................................................................
Crop Estimate ...........................................................................................................................................
Production Research Director ..................................................................................................................
Production Research ................................................................................................................................
Sustainability Project ................................................................................................................................
Grades and Standards Research .............................................................................................................
Block Grant Research ..............................................................................................................................
Domestic Market Development ................................................................................................................
Reserve for Contingency ..........................................................................................................................
The assessment rate recommended by
the Board was derived by dividing
anticipated expenses by expected
shipments of California walnuts
certified as merchantable. The 470,000
ton (inshell) estimate for merchantable
shipments is an average of the two prior
years’ shipments. The Board met on
June 9, 2011, and unanimously
approved using a two prior years’
average to formulate the 2011–12
estimate. Pursuant to § 984.51(b) of the
order, this figure is converted to a
merchantable kernelweight basis using a
factor of 0.45 (470,000 tons × 2,000
pounds per ton × 0.45), which yields
423,000,000 kernelweight pounds. At
$0.0175 per pound, the new assessment
rate should generate $7,402,500 in
assessment income and allow the Board
to cover its expenses.
Section 984.69 of the order authorizes
the Board to maintain a financial reserve
of not more than two years’ budgeted
expenses. Excess assessment funds may
be retained in the reserve or may be
used temporarily to defray expenses of
the subsequent marketing year, but if so
used, must be made available to the
handlers from whom they were
collected within five months after the
end of the marketing year.
The proposed assessment rate would
continue in effect indefinitely unless
modified, suspended, or terminated by
USDA 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 USDA.
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Board meetings are open to the public
and interested persons may express
their views at these meetings. USDA
would evaluate Board recommendations
and other available information to
determine whether modification of the
assessment rate is needed. Further
rulemaking would be undertaken as
necessary. The Board’s 2011–12 budget
and those for subsequent marketing
years would be reviewed and, as
appropriate, approved by USDA.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA)
(5 U.S.C. 601–612), the Agricultural
Marketing Service (AMS) has
considered the economic impact of this
action on small entities. Accordingly,
AMS has prepared this initial regulatory
flexibility analysis.
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.
There are approximately 4,500
growers of California walnuts in the
production area and approximately 74
handlers subject to regulation under the
marketing order. Small agricultural
producers are defined by the Small
Business Administration (SBA) (13 CFR
121.201) as those having annual receipts
of less than $750,000, and small
agricultural service firms are defined as
those having annual receipts of less than
$7,000,000.
According to the 2007 Census of
Agriculture, approximately 89 percent
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2011–12
$577,500
208,000
118,850
$693,500
218,000
117,750
20,000
95,000
105,000
88,500
1,042,000
0
125,000
0
4,400,000
32,250
20,000
95,000
115,000
88,500
1,036,000
25,000
150,000
200,000
4,635,000
8,700
of California’s walnut farms were
smaller than 100 acres.
USDA’s National Agricultural
Statistics Service (NASS) reports that
the average yield for the 2010–11 crop
was 2.22 tons per acre. NASS also
reported the average price received for
the 2010–11 crop was $2,110 per ton.
A 100-acre farm with an average yield
of 2.22 tons per acre would therefore
have been expected to produce about
222 tons of walnuts during 2010–11. At
$2,110 per ton, that farm’s production
would have had an approximate value
of $468,420. Assuming that the majority
of California’s walnut farms are smaller
than 100 acres, it could be concluded
that the majority of the growers had
receipts of less than $468,420 in 2010–
11, which is well below the SBA
threshold of $750,000. Thus, the
majority of California’s walnut growers
would be considered small growers
according to SBA’s definition.
According to information supplied by
the industry, approximately two-thirds
of California’s walnut handlers shipped
merchantable walnuts valued under
$7,000,000 during the 2010–11
marketing year and would therefore be
considered small handlers according to
the SBA definition.
This rule would increase the
assessment rate established for the
Board and collected from handlers for
the 2011–12 and subsequent marketing
years from $0.0174 to $0.0175 per
kernelweight pound of assessable
walnuts. The Board unanimously
recommended 2011–12 expenditures of
$7,402,450 and an assessment rate of
$0.0175 per kernelweight pound of
assessable walnuts. The proposed
assessment rate of $0.0175 is $0.0001
higher than the 2010–11 rate. The
quantity of assessable walnuts for the
2011–12 marketing year is estimated at
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470,000 tons inshell weight, or
423,000,000 pounds kernelweight.
Thus, the $0.0175 rate should provide
$7,402,500 in assessment income and be
adequate to meet this year’s expenses.
The increased assessment rate is
primarily due to increased budget
expenditures.
The following table compares major
budget expenditures recommended by
the Board for the 2010–11 and 2011–12
marketing years:
Budget expense categories
2010–11
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Employee Expenses ........................................................................................................................................
Travel/Board Expenses/Annual Audit ..............................................................................................................
Office Expenses ...............................................................................................................................................
Program Expenses Including Research:
Controlled Purchases ...............................................................................................................................
Crop Acreage Survey ...............................................................................................................................
Crop Estimate ...........................................................................................................................................
Production Research Director ..................................................................................................................
Production Research ................................................................................................................................
Sustainability Project ................................................................................................................................
Grades and Standards Research .............................................................................................................
Block Grant Research ..............................................................................................................................
Domestic Market Development ................................................................................................................
Reserve for Contingency ..........................................................................................................................
The Board reviewed and unanimously
recommended 2011–12 expenditures of
$7,402,450. Prior to arriving at this
budget, the Board considered alternative
expenditure levels but ultimately
decided that the recommended levels
were reasonable to properly administer
the order. The assessment rate of
$0.0175 per kernelweight pound of
assessable walnuts was derived by
dividing anticipated expenses of
$7,402,450 by expected shipments of
California walnuts certified as
merchantable. Merchantable shipments
for the year are estimated at 423,000,000
pounds, which should provide
$7,402,500 in assessment income and
allow the Board to cover its expenses.
Unexpended funds may be retained in
a financial reserve, provided that funds
in the financial reserve do not exceed
approximately two years’ budgeted
expenses. If not retained in a financial
reserve, 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 5 months after
the end of the year, according to
§ 984.69 of the order.
According to NASS, the season
average grower prices for the years 2009
and 2010 were $1,710 and $2,110 per
ton, respectively. These prices provide a
range within which the 2011–12 season
average price could fall. Dividing these
average grower prices by 2,000 pounds
per ton provides an inshell price per
pound range of $0.86 to $1.06. Dividing
these inshell prices per pound by the
0.45 conversion factor (inshell to
kernelweight) established in the order
yields a 2011–12 price range estimate of
$1.91 to $2.36 per kernelweight pound
of assessable walnuts.
To calculate the percentage of grower
revenue represented by the assessment
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rate, the assessment rate of $0.0175 per
kernelweight pound is divided by the
low and high estimates of the price
range. The estimated assessment
revenue for the 2011–12 marketing year
as a percentage of total grower revenue
will thus likely range between .74 and
.92 percent.
This action would increase the
assessment obligation imposed on
handlers. While assessments impose
some additional costs on handlers, the
costs are minimal and uniform on all
handlers. Some of the additional costs
may be passed on to growers. However,
these costs would be offset by the
benefits derived by the operation of the
marketing order. In addition, the
Board’s meeting was widely publicized
throughout the California walnut
industry, and all interested persons
were invited to attend the meeting and
participate in Board deliberations on all
issues. Like all Board meetings, the June
9, 2011, meeting was a public meeting
and all entities, both large and small,
were able to express views on this issue.
Finally, interested persons are invited to
submit comments on this proposed rule,
including the regulatory and
informational impacts of this action on
small businesses.
In accordance with the Paperwork
Reduction Act of 1995, (44 U.S.C.
chapter 35), the order’s information
collection requirements have been
previously approved by the Office of
Management and Budget (OMB) and
assigned OMB No. 0581–0178 (Walnuts
Grown in California). No changes in
those requirements as a result of this
action are necessary. Should any
changes become necessary, they would
be submitted to OMB for approval.
This proposed rule would impose no
additional reporting or recordkeeping
requirements on either small or large
PO 00000
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Sfmt 4702
50705
2011–12
$577,500
208,000
118,850
$693,500
218,000
117,750
20,000
95,000
105,000
88,500
1,042,000
0
125,000
0
4,400,000
32,250
20,000
95,000
115,000
88,500
1,036,000
25,000
150,000
200,000
4,635,000
8,700
California walnut handlers. As with all
Federal marketing order programs,
reports and forms are periodically
reviewed to reduce information
requirements and duplication by
industry and public sector agencies.
AMS is committed to complying with
the E-Government Act, to promote the
use of the Internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services, and for other purposes.
USDA has not identified any relevant
Federal rules that duplicate, overlap, or
conflict with this rule.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
MarketingOrderSmallBusinessGuide.
Any questions about the compliance
guide should be sent to Laurel May at
the previously mentioned address in the
FOR FURTHER INFORMATION CONTACT
section.
A 30-day comment period is provided
to allow interested persons to respond
to this proposed rule. Thirty days is
deemed appropriate because: (1) The
2011–12 marketing year begins on
September 1, 2011, and the marketing
order requires that the rate of
assessment for each marketing year
apply to all assessable walnuts handled
during the year; (2) the Board needs to
have sufficient funds to pay its
expenses, which are incurred on a
continuous basis; and (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.
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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 proposed to
be amended as follows:
PART 984—WALNUTS GROWN IN
CALIFORNIA
1. The authority citation for 7 CFR
part 984 continues to read as follows:
The proposed AD would require actions
that are intended to address the unsafe
condition described in the MCAI.
DATES: We must receive comments on
this proposed AD by September 30,
2011.
You may send comments by
any of the following methods:
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: (202) 493–2251.
• Mail: U.S. Department of
Transportation, Docket Operations,
M–30, West Building Ground Floor,
Room W12–140, 1200 New Jersey
Avenue, SE., Washington, DC 20590.
• Hand Delivery: U.S. Department of
Transportation, Docket Operations,
M–30, West Building Ground Floor,
Room W12–140, 1200 New Jersey
Avenue, SE., Washington, DC 20590,
between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
For service information identified in
this proposed AD, contact SOCATA—
Direction des Services, 65921 Tarbes
Cedex 9, France; telephone: +33 (0)5 62
41 73 00; fax: +33 (0)5 62 41 7–54; or
in the United States contact SOCATA
North America, Inc., North Perry
Airport, 7501 South Airport Road,
Pembroke Pines, Florida 33023;
telephone: (954) 893–1400; fax: (954)
964–4141; Internet: https://
www.socatanorthamerica.com. You may
review copies of the referenced service
information at the FAA, Small Airplane
Directorate, 901 Locust, Kansas City,
Missouri 64106. For information on the
availability of this material at the FAA,
call (816) 329–4148.
ADDRESSES:
Authority: 7 U.S.C. 601–674.
2. Section 984.347 is revised to read
as follows:
§ 984.347
to allow in-flight handling of the standby
compass lighting cover when energized.
This condition, if not corrected, may
compromise the ability of the pilot to safely
operate the aeroplane under certain flight
conditions due to the increase of workload.
Assessment rate.
On and after September 1, 2011, an
assessment rate of $0.0175 per
kernelweight pound is established for
California merchantable walnuts.
Dated: August 10, 2011.
David R. Shipman,
Acting Administrator, Agricultural Marketing
Service.
[FR Doc. 2011–20788 Filed 8–15–11; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2011–0868; Directorate
Identifier 2011–CE–027–AD]
RIN 2120–AA64
Airworthiness Directives; SOCATA
Airplanes
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Notice of proposed rulemaking
(NPRM).
AGENCY:
SUMMARY:
Examining the AD Docket
A TBM700 operator reported an occurrence
where, as a result of handling the standby
compass lighting bulb cover in flight, both
essential bus bars (ESS BUS 1 and ESS BUS
2) failed, leading to loss of a number of
instruments and navigation systems.
The technical investigations carried out by
SOCATA have shown that the cause of this
occurrence was that the electrical protection
of some TBM 700 aeroplanes is insufficient
You may examine the AD docket on
the Internet at https://
www.regulations.gov; or in person at the
Docket Management Facility between
9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays. The AD
docket contains this proposed AD, the
regulatory evaluation, any comments
received, and other information. The
street address for the Docket Office
(telephone (800) 647–5527) is in the
ADDRESSES section. Comments will be
available in the AD docket shortly after
receipt.
FOR FURTHER INFORMATION CONTACT:
Albert Mercado, Aerospace Engineer,
FAA, Small Airplane Directorate, 901
Locust, Room 301, Kansas City,
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We propose to adopt a new
airworthiness directive (AD) for certain
SOCATA Model TBM 700 Airplanes.
This proposed AD results from
mandatory continuing airworthiness
information (MCAI) originated by an
aviation authority of another country to
identify and correct an unsafe condition
on an aviation product. The MCAI
describes the unsafe condition as:
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12:46 Aug 15, 2011
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Missouri 64106; telephone: (816) 329–
4119; fax: (816) 329–4090; e-mail:
albert.mercado@faa.gov.
SUPPLEMENTARY INFORMATION:
Comments Invited
We invite you to send any written
relevant data, views, or arguments about
this proposed AD. Send your comments
to an address listed under the
ADDRESSES section. Include ‘‘Docket No.
FAA–2011–0868; Directorate Identifier
2011–CE–027–AD’’ at the beginning of
your comments. We specifically invite
comments on the overall regulatory,
economic, environmental, and energy
aspects of this proposed AD. We will
consider all comments received by the
closing date and may amend this
proposed AD because of those
comments.
We will post all comments we
receive, without change, to https://
www.regulations.gov, including any
personal information you provide. We
will also post a report summarizing each
substantive verbal contact we receive
about this proposed AD.
Discussion
The European Aviation Safety Agency
(EASA), which is the Technical Agent
for the Member States of the European
Community, has issued AD No. 2011–
0130, dated July 8, 2011 (referred to
after this as ‘‘the MCAI’’), to correct an
unsafe condition for the specified
products. The MCAI states:
A TBM700 operator reported an occurrence
where, as a result of handling the standby
compass lighting bulb cover in flight, both
essential bus bars (ESS BUS 1 and ESS BUS
2) failed, leading to loss of a number of
instruments and navigation systems.
The technical investigations carried out by
SOCATA have shown that the cause of this
occurrence was that the electrical protection
of some TBM 700 aeroplanes is insufficient
to allow in-flight handling of the standby
compass lighting cover when energized.
This condition, if not corrected, may
compromise the ability of the pilot to safely
operate the aeroplane under certain flight
conditions due to the increase of workload.
To address this unsafe condition, SOCATA
have developed a modification which
consists of installing a protection fuse on the
wire at the standby compass connector,
introduced by SOCATA Service Bulletin (SB)
70–192–34.
For the reasons described above, this AD
requires installation of a protection of the
electrical wire at the standby compass
connector.
You may obtain further information by
examining the MCAI in the AD docket.
Relevant Service Information
DAHER–SOCATA has issued TBM
Aircraft Mandatory Service Bulletin SB
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]]>Agencies
[Federal Register Volume 76, Number 158 (Tuesday, August 16, 2011)]
[Proposed Rules]
[Pages 50703-50706]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-20788]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 75, No. 158 / Tuesday, August 16, 2011 /
Proposed Rules
[[Page 50703]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Doc. No. AMS-FV-11-0062; FV11-984-1 PR]
Walnuts Grown in California; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This rule would increase the assessment rate established for
the California Walnut Board (Board) for the 2011-12 and subsequent
marketing years from $0.0174 to $0.0175 per kernelweight pound of
assessable walnuts. The Board locally administers the marketing order
which regulates the handling of walnuts grown in California.
Assessments upon walnut handlers are used by the Board to fund
reasonable and necessary expenses of the program. The marketing year
begins September 1 and ends August 31. The assessment rate would remain
in effect indefinitely unless modified, suspended, or terminated.
DATES: Comments must be received by September 15, 2011.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938; or Internet: https://www.regulations.gov. Comments should reference the document 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, or can be viewed at: https://www.regulations.gov. All comments submitted in response to this rule
will be included in the record and will be made available to the
public. Please be advised that the identity of the individuals or
entities submitting the comments will be made public on the Internet at
the address provided above.
FOR FURTHER INFORMATION CONTACT: Jeff Smutny, Marketing Specialist, or
Kurt J. Kimmel, Regional Manager, California Marketing Field Office,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or E-mail:
Jeffrey.Smutny@ams.usda.gov or Kurt.Kimmel@ams.usda.gov.
Small businesses may request information on complying with this
regulation by contacting Laurel May, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue, SW., Stop 0237, Washington, DC 20250-0237; Telephone: (202)
720-2491, Fax: (202) 720-8938, or E-mail: Laurel.May@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order
No. 984, 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 (USDA) 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 proposed herein would be applicable to all
assessable walnuts beginning on September 1, 2011, and continue until
amended, suspended, or terminated.
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 USDA 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, USDA 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 USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This rule would increase the assessment rate established for the
Board for the 2011-12 and subsequent marketing years from $0.0174 to
$0.0175 per kernelweight pound of assessable walnuts.
The California walnut marketing order provides authority for the
Board, with the approval of USDA, to formulate an annual budget of
expenses and collect assessments from handlers to administer the
program. The members of the Board are growers 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.
For the 2010-11 and subsequent marketing years, the Board
recommended, and USDA approved, an assessment rate of $0.0174 per
kernelweight pound of assessable walnuts that would continue in effect
from year to year unless modified, suspended, or terminated by USDA
upon recommendation and information submitted by the Board or other
information available to USDA.
The Board met on June 9, 2011, and unanimously recommended 2011-12
expenditures of $7,402,450 and an assessment rate of $0.0175 per
kernelweight pound of assessable walnuts. In comparison, last year's
budgeted expenditures were $6,812,000. The assessment rate of $0.0175
is $0.0001 per pound higher than the rate currently in effect. The
quantity of assessable walnuts for the 2011-12 marketing year is
estimated at 470,000 tons (inshell), which is 35,000 tons more than the
435,000 during the 2010-11 marketing year. At the recommended higher
assessment rate of $0.0175 per kernelweight pound, the Board should
[[Page 50704]]
collect approximately $7,402,500 in assessment income, which would be
adequate to cover its 2011-12 budgeted expenses of $7,402,450.
The following table compares major budget expenditures recommended
by the Board for the 2010-11 and 2011-12 marketing years:
------------------------------------------------------------------------
Budget expense categories 2010-11 2011-12
------------------------------------------------------------------------
Employee Expenses................... $577,500 $693,500
Travel/Board Expenses/Annual Audit.. 208,000 218,000
Office Expenses..................... 118,850 117,750
Program Expenses Including Research:
Controlled Purchases............ 20,000 20,000
Crop Acreage Survey............. 95,000 95,000
Crop Estimate................... 105,000 115,000
Production Research Director.... 88,500 88,500
Production Research............. 1,042,000 1,036,000
Sustainability Project.......... 0 25,000
Grades and Standards Research... 125,000 150,000
Block Grant Research............ 0 200,000
Domestic Market Development..... 4,400,000 4,635,000
Reserve for Contingency......... 32,250 8,700
------------------------------------------------------------------------
The assessment rate recommended by the Board was derived by
dividing anticipated expenses by expected shipments of California
walnuts certified as merchantable. The 470,000 ton (inshell) estimate
for merchantable shipments is an average of the two prior years'
shipments. The Board met on June 9, 2011, and unanimously approved
using a two prior years' average to formulate the 2011-12 estimate.
Pursuant to Sec. 984.51(b) of the order, this figure is converted to a
merchantable kernelweight basis using a factor of 0.45 (470,000 tons x
2,000 pounds per ton x 0.45), which yields 423,000,000 kernelweight
pounds. At $0.0175 per pound, the new assessment rate should generate
$7,402,500 in assessment income and allow the Board to cover its
expenses.
Section 984.69 of the order authorizes the Board to maintain a
financial reserve of not more than two years' budgeted expenses. Excess
assessment funds may be retained in the reserve or may be used
temporarily to defray expenses of the subsequent marketing year, but if
so used, must be made available to the handlers from whom they were
collected within five months after the end of the marketing year.
The proposed assessment rate would continue in effect indefinitely
unless modified, suspended, or terminated by USDA 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 USDA. Board
meetings are open to the public and interested persons may express
their views at these meetings. USDA would evaluate Board
recommendations and other available information to determine whether
modification of the assessment rate is needed. Further rulemaking would
be undertaken as necessary. The Board's 2011-12 budget and those for
subsequent marketing years would be reviewed and, as appropriate,
approved by USDA.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS)
has considered the economic impact of this action on small entities.
Accordingly, AMS has prepared this initial regulatory flexibility
analysis.
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.
There are approximately 4,500 growers of California walnuts in the
production area and approximately 74 handlers subject to regulation
under the marketing order. Small agricultural producers are defined by
the Small Business Administration (SBA) (13 CFR 121.201) as those
having annual receipts of less than $750,000, and small agricultural
service firms are defined as those having annual receipts of less than
$7,000,000.
According to the 2007 Census of Agriculture, approximately 89
percent of California's walnut farms were smaller than 100 acres.
USDA's National Agricultural Statistics Service (NASS) reports that
the average yield for the 2010-11 crop was 2.22 tons per acre. NASS
also reported the average price received for the 2010-11 crop was
$2,110 per ton.
A 100-acre farm with an average yield of 2.22 tons per acre would
therefore have been expected to produce about 222 tons of walnuts
during 2010-11. At $2,110 per ton, that farm's production would have
had an approximate value of $468,420. Assuming that the majority of
California's walnut farms are smaller than 100 acres, it could be
concluded that the majority of the growers had receipts of less than
$468,420 in 2010-11, which is well below the SBA threshold of $750,000.
Thus, the majority of California's walnut growers would be considered
small growers according to SBA's definition.
According to information supplied by the industry, approximately
two-thirds of California's walnut handlers shipped merchantable walnuts
valued under $7,000,000 during the 2010-11 marketing year and would
therefore be considered small handlers according to the SBA definition.
This rule would increase the assessment rate established for the
Board and collected from handlers for the 2011-12 and subsequent
marketing years from $0.0174 to $0.0175 per kernelweight pound of
assessable walnuts. The Board unanimously recommended 2011-12
expenditures of $7,402,450 and an assessment rate of $0.0175 per
kernelweight pound of assessable walnuts. The proposed assessment rate
of $0.0175 is $0.0001 higher than the 2010-11 rate. The quantity of
assessable walnuts for the 2011-12 marketing year is estimated at
[[Page 50705]]
470,000 tons inshell weight, or 423,000,000 pounds kernelweight. Thus,
the $0.0175 rate should provide $7,402,500 in assessment income and be
adequate to meet this year's expenses. The increased assessment rate is
primarily due to increased budget expenditures.
The following table compares major budget expenditures recommended
by the Board for the 2010-11 and 2011-12 marketing years:
------------------------------------------------------------------------
Budget expense categories 2010-11 2011-12
------------------------------------------------------------------------
Employee Expenses................... $577,500 $693,500
Travel/Board Expenses/Annual Audit.. 208,000 218,000
Office Expenses..................... 118,850 117,750
Program Expenses Including Research:
Controlled Purchases............ 20,000 20,000
Crop Acreage Survey............. 95,000 95,000
Crop Estimate................... 105,000 115,000
Production Research Director.... 88,500 88,500
Production Research............. 1,042,000 1,036,000
Sustainability Project.......... 0 25,000
Grades and Standards Research... 125,000 150,000
Block Grant Research............ 0 200,000
Domestic Market Development..... 4,400,000 4,635,000
Reserve for Contingency......... 32,250 8,700
------------------------------------------------------------------------
The Board reviewed and unanimously recommended 2011-12 expenditures
of $7,402,450. Prior to arriving at this budget, the Board considered
alternative expenditure levels but ultimately decided that the
recommended levels were reasonable to properly administer the order.
The assessment rate of $0.0175 per kernelweight pound of assessable
walnuts was derived by dividing anticipated expenses of $7,402,450 by
expected shipments of California walnuts certified as merchantable.
Merchantable shipments for the year are estimated at 423,000,000
pounds, which should provide $7,402,500 in assessment income and allow
the Board to cover its expenses. Unexpended funds may be retained in a
financial reserve, provided that funds in the financial reserve do not
exceed approximately two years' budgeted expenses. If not retained in a
financial reserve, 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 5 months after the end of
the year, according to Sec. 984.69 of the order.
According to NASS, the season average grower prices for the years
2009 and 2010 were $1,710 and $2,110 per ton, respectively. These
prices provide a range within which the 2011-12 season average price
could fall. Dividing these average grower prices by 2,000 pounds per
ton provides an inshell price per pound range of $0.86 to $1.06.
Dividing these inshell prices per pound by the 0.45 conversion factor
(inshell to kernelweight) established in the order yields a 2011-12
price range estimate of $1.91 to $2.36 per kernelweight pound of
assessable walnuts.
To calculate the percentage of grower revenue represented by the
assessment rate, the assessment rate of $0.0175 per kernelweight pound
is divided by the low and high estimates of the price range. The
estimated assessment revenue for the 2011-12 marketing year as a
percentage of total grower revenue will thus likely range between .74
and .92 percent.
This action would increase the assessment obligation imposed on
handlers. While assessments impose some additional costs on handlers,
the costs are minimal and uniform on all handlers. Some of the
additional costs may be passed on to growers. However, these costs
would be offset by the benefits derived by the operation of the
marketing order. In addition, the Board's meeting was widely publicized
throughout the California walnut industry, and all interested persons
were invited to attend the meeting and participate in Board
deliberations on all issues. Like all Board meetings, the June 9, 2011,
meeting was a public meeting and all entities, both large and small,
were able to express views on this issue. Finally, interested persons
are invited to submit comments on this proposed rule, including the
regulatory and informational impacts of this action on small
businesses.
In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C.
chapter 35), the order's information collection requirements have been
previously approved by the Office of Management and Budget (OMB) and
assigned OMB No. 0581-0178 (Walnuts Grown in California). No changes in
those requirements as a result of this action are necessary. Should any
changes become necessary, they would be submitted to OMB for approval.
This proposed rule would impose no additional reporting or
recordkeeping requirements on either small or large California walnut
handlers. As with all Federal marketing order programs, reports and
forms are periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies.
AMS is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: https://www.ams.usda.gov/MarketingOrderSmallBusinessGuide. Any questions about
the compliance guide should be sent to Laurel May at the previously
mentioned address in the FOR FURTHER INFORMATION CONTACT section.
A 30-day comment period is provided to allow interested persons to
respond to this proposed rule. Thirty days is deemed appropriate
because: (1) The 2011-12 marketing year begins on September 1, 2011,
and the marketing order requires that the rate of assessment for each
marketing year apply to all assessable walnuts handled during the year;
(2) the Board needs to have sufficient funds to pay its expenses, which
are incurred on a continuous basis; and (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.
[[Page 50706]]
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
proposed to be 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. Section 984.347 is revised to read as follows:
Sec. 984.347 Assessment rate.
On and after September 1, 2011, an assessment rate of $0.0175 per
kernelweight pound is established for California merchantable walnuts.
Dated: August 10, 2011.
David R. Shipman,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2011-20788 Filed 8-15-11; 8:45 am]
BILLING CODE 3410-02-P
