Walnuts Grown in California; Increased Assessment Rate, 57101-57104 [2013-22571]

Download as PDF Federal Register / Vol. 78, No. 180 / Tuesday, September 17, 2013 / Proposed Rules fiscal period; (2) the Committee 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 Committee at a public meeting and is similar to other assessment rate actions issued in past years. List of Subjects in 7 CFR Part 915 Avocados, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, 7 CFR part 915 is proposed to be amended as follows: PART 915—AVOCADOS GROWN IN SOUTH FLORIDA 1. The authority citation for 7 CFR part 915 continues to read as follows: ■ Authority: 7 U.S.C. 601–674. 2. Section 915.235 is revised to read as follows: ■ § 915.235 Assessment rate. On and after April 1, 2013, an assessment rate of $0.30 per 55-pound container or equivalent is established for avocados grown in South Florida. Dated: September 11, 2013. Rex A. Barnes, Associate Administrator, Agricultural Marketing Service. [FR Doc. 2013–22539 Filed 9–16–13; 8:45 am] BILLING CODE 3410–02–P DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 984 [Doc. No. AMS–FV–13–0056; FV13–984–1 PR] Walnuts Grown in California; Increased Assessment Rate Agricultural Marketing Service, USDA. ACTION: Proposed rule. AGENCY: This proposed rule would increase the assessment rate established for the California Walnut Board (Board) for the 2013–14 and subsequent marketing years from $0.0175 to $0.0189 per kernelweight pound of merchantable 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 tkelley on DSK3SPTVN1PROD with PROPOSALS SUMMARY: VerDate Mar<15>2010 17:59 Sep 16, 2013 Jkt 229001 August 31. The assessment rate would remain in effect indefinitely unless modified, suspended, or terminated. DATES: Comments must be received by October 17, 2013. ADDRESSES: Interested persons are invited to submit written comments on this proposed rule. Comments must be sent to the Docket Clerk, Marketing Order and Agreement Division, Fruit and Vegetable Program, 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 proposed 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 comments will be made public on the Internet at the address provided above. FOR FURTHER INFORMATION CONTACT: Andrea Ricci, Marketing Specialist, or Martin Engeler, Regional Director, California Marketing Field Office, Marketing Order and Agreement Division, Fruit and Vegetable Program, AMS, USDA; Telephone: (559) 487– 5901, Fax: (559) 487–5906, or Email: Andrea.Ricci@ams.usda.gov or Martin.Engeler@ams.usda.gov. Small businesses may request information on complying with this regulation by contacting Jeffrey Smutny, Marketing Order and Agreement Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250–0237; Telephone: (202) 720– 2491, Fax: (202) 720–8938, or Email: Jeffrey.Smutny@ams.usda.gov. SUPPLEMENTARY INFORMATION: This proposed 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 proposed rule in conformance with Executive Order 12866. This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, California walnut PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 57101 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, 2013, 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 proposed rule would increase the assessment rate established for the Board for the 2013–14 and subsequent marketing years from $0.0175 to $0.0189 per kernelweight pound of merchantable 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 of goods and services in their local area and are therefore 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 2011–12 and subsequent marketing years, the Board recommended, and USDA approved, an assessment rate of $0.0175 per kernelweight pound of merchantable 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 6, 2013, and unanimously recommended 2013–14 expenditures of $10,166,860 and an assessment rate of $0.0189 per E:\FR\FM\17SEP1.SGM 17SEP1 tkelley on DSK3SPTVN1PROD with PROPOSALS 57102 Federal Register / Vol. 78, No. 180 / Tuesday, September 17, 2013 / Proposed Rules kernelweight pound of merchantable walnuts. In comparison, last year’s budgeted expenditures were $8,840,000. The assessment rate of $0.0189 is $0.0014 per pound higher than the rate currently in effect. The quantity of assessable walnuts for the 2013–14 marketing year is estimated at 486,000 tons (inshell), which is 6,000 tons higher than last year’s. At the recommended higher assessment rate of $0.0189 per kernelweight pound, the Board should collect approximately $8,266,860 in assessment income. Assessment income plus funds from the Board’s authorized prior year’s carry-in financial reserve and Foreign Agricultural Service (FAS) funding would be adequate to cover its 2013–14 anticipated expenditures of $10,166,860. The major expenditures recommended by the Board for the 2013–14 marketing year includes $830,000 for employee expenses, $146,500 for office expenses, $225,000 for operating expenses, and $8,965,360 for program expenses which include domestic market development, production research, post-harvest research, and industry communications. In comparison, budgeted expenses for these items for the 2012–13 marketing year were $797,000, $119,000, $219,000, and $7,705,000, respectively. The assessment rate recommended by the Board was derived by evaluating expected shipments of California walnuts certified as merchantable, budgeted expenses, the level of available prior year’s carry-in financial reserve, and the desired 2013–14 ending financial reserve. The Board met on June 6, 2013, and unanimously approved using a three prior years’ average to formulate the 2013–14 estimate of 486,000 tons (inshell) for merchantable shipments. Pursuant to § 984.51(b) of the order, this figure is converted to a merchantable kernelweight basis using a factor of 0.45 (486,000 tons × 2,000 pounds per ton × 0.45), which yields 437,400,000 kernelweight pounds. The Board determined that it could utilize $1.9 million from its carry-in financial reserve and still maintain an adequate 2013–2014 ending financial reserve. The remaining $8,266,860 needed to meet budgeted expenses would need to be raised through assessments. Dividing the $8,266,860 in necessary assessment revenue by 2013 estimated merchantable shipments of 437,400,000 kernelweight pounds, results in an assessment rate of $0.0189. Income derived from handler assessments, combined with funds from the Board’s authorized prior year’s carry-in financial VerDate Mar<15>2010 17:59 Sep 16, 2013 Jkt 229001 reserve, plus FAS funding for the last year of a three year project would adequately cover budgeted expenses. Reserve funds by the end of the 2013– 14 marketing year are projected to be $6,234,895, which is well within the maximum permitted by the order of approximately two marketing years’ 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 to modify 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 2013–14 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 proposed rule 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 businesses 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. PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 There are approximately 4,100 growers of California walnuts in the production area and approximately 90 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (SBA) as those having annual receipts of less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $7,000,000. (13 CFR 121.201) Current census data from the USDA’s National Agricultural Statistics Service (NASS), indicates that approximately 90 percent of California’s walnut farms are smaller than 100 acres. NASS reports that the average yield for the 2011–12 crop was 1.88 tons per acre and the average price received for the 2011–12 crop was $2,900 per ton. A 100-acre farm with an average yield of 1.88 tons per acre would therefore have been expected to produce about 188 tons of walnuts during the 2011–12 season. At $2,900 per ton, that farm’s production would have had an approximate value of $545,200. 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 $545,200 in 2011– 12, which is well below the SBA threshold of $750,000. Thus, the majority of California’s walnut growers would be classified as small growers according to SBA’s definition. According to information supplied by the industry, approximately 40 percent of California’s walnut handlers shipped merchantable walnuts valued under $7,000,000 during the 2011–12 marketing year and would therefore be considered small handlers according to the SBA definition. This proposed rule would increase the assessment rate established for the Board and collected from handlers for the 2013–14 and subsequent marketing years from $0.0175 to $0.0189 per kernelweight pound of merchantable walnuts. The Board unanimously recommended 2013–14 expenditures of $10,166,860 and an assessment rate of $0.0189 per kernelweight pound of merchantable walnuts. The proposed assessment rate of $0.0189 is $0.0014 higher than the 2012–13 rate. The quantity of merchantable walnuts for the 2013–14 marketing year is estimated at 486,000 tons inshell weight, or 437,400,000 pounds kernelweight. Thus, the $0.0189 rate should provide $8,266,860 in assessment income. Assessment income, along with funds from the Board’s authorized prior year’s carry-in financial reserve, plus FAS funding for the last year of a three year E:\FR\FM\17SEP1.SGM 17SEP1 tkelley on DSK3SPTVN1PROD with PROPOSALS Federal Register / Vol. 78, No. 180 / Tuesday, September 17, 2013 / Proposed Rules project would adequately cover its 2013–14 anticipated expenditures of $10,166,860. The major expenditures recommended by the Board for the 2013–14 marketing year includes $830,000 for employee expenses, $146,500 for office expenses, $225,000 for operating expenses, and $8,965,360 for program expenses which include domestic market development, production research, post-harvest research, and industry communications. In comparison, budgeted expenses for these items for the 2012–13 marketing year were $797,000, $119,000, $219,000, and $7,705,000, respectively. The Board reviewed and unanimously recommended 2013–14 expenditures of $10,166,860. 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 recommended by the Board was derived by evaluating expected shipments of California walnuts certified as merchantable, budgeted expenses, the level of available prior year’s carry-in financial reserve, and the desired 2013– 14 ending financial reserve. The Board met on June 6, 2013, and unanimously approved using a three prior years’ average to formulate the 2013–14 estimate of 486,000 tons (inshell) for merchantable shipments. Pursuant to § 984.51(b) of the order, this figure is converted to a merchantable kernelweight basis using a factor of 0.45 (486,000 tons × 2,000 pounds per ton × 0.45), which yields 437,400,000 kernelweight pounds. The Board determined that it could utilize $1.9 million from its carry-in financial reserve and still maintain an adequate 2013–2014 ending financial reserve. The remaining $8,266,860 necessary to meet budgeted expenses would need to be raised through assessments. Thus, dividing the $8,266,860 in necessary assessment revenue by 2013 estimated shipments of 437,400,000 kernelweight pounds results in an assessment rate of $0.0189. Based on the crop estimate of 486,000 tons inshell weight, or 437,400,000 pounds kernelweight, the Board determined that the revenue generated from an assessment rate of $0.0189 per kernelweight pounds of merchantable walnuts, combined with funds from the prior years’ carry-in financial reserve, plus FAS funding for the last year of a three year project would adequately cover budgeted expenses while providing an adequate 2013–14 ending financial reserve. VerDate Mar<15>2010 17:59 Sep 16, 2013 Jkt 229001 According to NASS, the season average grower prices for the years 2010 and 2011 were $2,040 and $2,900 per ton, respectively. These prices provide a range within which the 2013–14 season average prices could fall. Dividing these average grower prices by 2,000 pounds per ton provides an inshell price per pound range of $1.02 to $1.45. Dividing these inshell prices per pound by the 0.45 conversion factor (inshell to kernelweight) established in the order, yields a 2013–14 price range estimate of $2.27 to $3.22 per kernelweight pound of merchantable walnuts. Utilizing these estimates and the assessment rate of $0.0189 per kernelweight pound, estimated assessment revenue as a percentage of total estimated grower revenue should likely range between 0.59 and 0.83 percent for the 2013–14 marketing year (assessment rate divided by price per kernelweight pound). Thus, the assessment revenue should be well below one percent of estimated grower revenue for the 2013–14 marketing year. This proposal 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 from the operation of the marketing order. In addition, the Board’s meeting was widely publicized throughout the California walnut industry. All interested persons were invited to attend the meeting and participate in Board deliberations on all issues. Like all Board meetings, the June 6, 2013, meeting was a public meeting. All entities, both large and small, were able to express their 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 PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 57103 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 more opportunities for citizens to access Government information and services, and for other purposes. USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this action. A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: www.ams.usda.gov/ MarketingOrderSmallBusinessGuide. Any questions about the compliance guide should be sent to Jeffery Smutny 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 2013–14 marketing year begins on September 1, 2013, and the marketing order requires that the rate of assessment for each marketing year apply to all merchantable 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. 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: ■ § 984.347 Assessment rate. On and after September 1, 2013, an assessment rate of $0.0189 per kernelweight pound is established for California merchantable walnuts. E:\FR\FM\17SEP1.SGM 17SEP1 57104 Federal Register / Vol. 78, No. 180 / Tuesday, September 17, 2013 / Proposed Rules Dated: September 11, 2013. Rex A. Barnes, Associate Administrator, Agricultural Marketing Service. [FR Doc. 2013–22571 Filed 9–16–13; 8:45 am] BILLING CODE 3410–02–P DEPARTMENT OF TRANSPORTATION Examining the AD Docket Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA–2013–0812; Directorate Identifier 2013–CE–023–AD] RIN 2120–AA64 Airworthiness Directives; Diamond Aircraft Industries Airplanes Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). AGENCY: We propose to adopt a new airworthiness directive (AD) for Diamond Aircraft Industries Model DA 40 and DA 40 F 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 fatigue strength found in the aft main spar does not ensure unlimited lifetime structural integrity. We are issuing this proposed AD to require actions to address the unsafe condition on these products. DATES: We must receive comments on this proposed AD by November 1, 2013. ADDRESSES: 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 Diamond Aircraft Industries GmbH, N.A. OttoStr.5, A–2700 Wiener Neustadt, Austria; telephone: +43 2622 26700; fax: +43 2622 26780; email: office@diamond- tkelley on DSK3SPTVN1PROD with PROPOSALS SUMMARY: VerDate Mar<15>2010 17:59 Sep 16, 2013 Jkt 229001 air.at; Internet: https:// www.diamondaircraft.com/contact/ technical.php. 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. 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: Mike Kiesov, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone: (816) 329–4144; fax: (816) 329–4090; email: mike.kiesov@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–2013–0812; Directorate Identifier 2013–CE–023–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:// 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 EASA AD No.: 2013–0145, dated July 15, 2013 (referred to after this as ‘‘the MCAI’’), to correct an unsafe condition for the specified products. The MCAI states: Structural fatigue testing of the DA 40 aeroplane carried out for an extension of the PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 Major Structural Inspection (MSI) interval has shown that the fatigue strength of the aft main spar in the cabin area does not ensure unlimited lifetime. This condition, if not corrected, could adversely affect the structural integrity of the aeroplane. Diamond Aircraft Industries (DAI) issued Mandatory Service Bulletin (MSB) 40–074/ MSB D4–094/MSB F4–028, including Work Instruction (WI) WI–MSB 40–074/WI–MSB D4–094/WI–MSB F4–028 (published as a single document), providing instructions to reinforce the aft main spar in the cabin area. For the reasons described above, this AD requires modification of the aft main spar in the cabin area. Note: Aeroplanes with modified aft main spar are eligible for an increased MSI threshold of 6000 flight hours (FH) since first flight of the aeroplane and increased MSI intervals not to exceed 4000 FH thereafter. You may obtain further information by examining the MCAI in the AD docket. Relevant Service Information Diamond Aircraft Industries GmbH has issued Mandatory Service Bulletin MSB 40–074, MSB D4–094, and MSB F4–028 (co-published as a single document), dated May 10, 2013; and Diamond Aircraft Industries GmbH Work Instructions WI–MSB 40–074, WI–MSB D4–094, and WI–MSB F4–028, (co-published as a single document), dated May 10, 2013. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. FAA’s Determination and Requirements of the Proposed AD This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design. Costs of Compliance We estimate that this proposed AD will affect 747 products of U.S. registry. We also estimate that it would take about 6 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Required parts would cost about $100 per product. Based on these figures, we estimate the cost of the proposed AD on U.S. E:\FR\FM\17SEP1.SGM 17SEP1

Agencies

[Federal Register Volume 78, Number 180 (Tuesday, September 17, 2013)]
[Proposed Rules]
[Pages 57101-57104]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-22571]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Doc. No. AMS-FV-13-0056; FV13-984-1 PR]

Walnuts Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule would increase the assessment rate
established for the California Walnut Board (Board) for the 2013-14 and
subsequent marketing years from $0.0175 to $0.0189 per kernelweight
pound of merchantable 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 October 17, 2013.

ADDRESSES: Interested persons are invited to submit written comments on
this proposed rule. Comments must be sent to the Docket Clerk,
Marketing Order and Agreement Division, Fruit and Vegetable Program,
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
proposed 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 comments will be made public on the Internet at
the address provided above.

FOR FURTHER INFORMATION CONTACT: Andrea Ricci, Marketing Specialist, or
Martin Engeler, Regional Director, California Marketing Field Office,
Marketing Order and Agreement Division, Fruit and Vegetable Program,
AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or Email:
Andrea.Ricci@ams.usda.gov or Martin.Engeler@ams.usda.gov.
Small businesses may request information on complying with this
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Jeffrey.Smutny@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This proposed 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 proposed rule
in conformance with Executive Order 12866.
This proposed 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, 2013, 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 proposed rule would increase the assessment rate established
for the Board for the 2013-14 and subsequent marketing years from
$0.0175 to $0.0189 per kernelweight pound of merchantable 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 of goods and services in their local area and are therefore
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 2011-12 and subsequent marketing years, the Board
recommended, and USDA approved, an assessment rate of $0.0175 per
kernelweight pound of merchantable 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 6, 2013, and unanimously recommended 2013-14
expenditures of $10,166,860 and an assessment rate of $0.0189 per

[[Page 57102]]

kernelweight pound of merchantable walnuts. In comparison, last year's
budgeted expenditures were $8,840,000. The assessment rate of $0.0189
is $0.0014 per pound higher than the rate currently in effect. The
quantity of assessable walnuts for the 2013-14 marketing year is
estimated at 486,000 tons (inshell), which is 6,000 tons higher than
last year's. At the recommended higher assessment rate of $0.0189 per
kernelweight pound, the Board should collect approximately $8,266,860
in assessment income. Assessment income plus funds from the Board's
authorized prior year's carry-in financial reserve and Foreign
Agricultural Service (FAS) funding would be adequate to cover its 2013-
14 anticipated expenditures of $10,166,860.
The major expenditures recommended by the Board for the 2013-14
marketing year includes $830,000 for employee expenses, $146,500 for
office expenses, $225,000 for operating expenses, and $8,965,360 for
program expenses which include domestic market development, production
research, post-harvest research, and industry communications. In
comparison, budgeted expenses for these items for the 2012-13 marketing
year were $797,000, $119,000, $219,000, and $7,705,000, respectively.
The assessment rate recommended by the Board was derived by
evaluating expected shipments of California walnuts certified as
merchantable, budgeted expenses, the level of available prior year's
carry-in financial reserve, and the desired 2013-14 ending financial
reserve. The Board met on June 6, 2013, and unanimously approved using
a three prior years' average to formulate the 2013-14 estimate of
486,000 tons (inshell) for merchantable shipments. Pursuant to Sec.
984.51(b) of the order, this figure is converted to a merchantable
kernelweight basis using a factor of 0.45 (486,000 tons x 2,000 pounds
per ton x 0.45), which yields 437,400,000 kernelweight pounds. The
Board determined that it could utilize $1.9 million from its carry-in
financial reserve and still maintain an adequate 2013-2014 ending
financial reserve. The remaining $8,266,860 needed to meet budgeted
expenses would need to be raised through assessments. Dividing the
$8,266,860 in necessary assessment revenue by 2013 estimated
merchantable shipments of 437,400,000 kernelweight pounds, results in
an assessment rate of $0.0189. Income derived from handler assessments,
combined with funds from the Board's authorized prior year's carry-in
financial reserve, plus FAS funding for the last year of a three year
project would adequately cover budgeted expenses.
Reserve funds by the end of the 2013-14 marketing year are
projected to be $6,234,895, which is well within the maximum permitted
by the order of approximately two marketing years' 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 to modify 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 2013-14 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 proposed rule 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
businesses 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 4,100 growers of California walnuts in the
production area and approximately 90 handlers subject to regulation
under the marketing order. Small agricultural producers are defined by
the Small Business Administration (SBA) as those having annual receipts
of less than $750,000, and small agricultural service firms are defined
as those whose annual receipts are less than $7,000,000. (13 CFR
121.201)
Current census data from the USDA's National Agricultural
Statistics Service (NASS), indicates that approximately 90 percent of
California's walnut farms are smaller than 100 acres.
NASS reports that the average yield for the 2011-12 crop was 1.88
tons per acre and the average price received for the 2011-12 crop was
$2,900 per ton.
A 100-acre farm with an average yield of 1.88 tons per acre would
therefore have been expected to produce about 188 tons of walnuts
during the 2011-12 season. At $2,900 per ton, that farm's production
would have had an approximate value of $545,200. 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 $545,200 in 2011-12, which is well below the SBA threshold of
$750,000. Thus, the majority of California's walnut growers would be
classified as small growers according to SBA's definition.
According to information supplied by the industry, approximately 40
percent of California's walnut handlers shipped merchantable walnuts
valued under $7,000,000 during the 2011-12 marketing year and would
therefore be considered small handlers according to the SBA definition.
This proposed rule would increase the assessment rate established
for the Board and collected from handlers for the 2013-14 and
subsequent marketing years from $0.0175 to $0.0189 per kernelweight
pound of merchantable walnuts. The Board unanimously recommended 2013-
14 expenditures of $10,166,860 and an assessment rate of $0.0189 per
kernelweight pound of merchantable walnuts. The proposed assessment
rate of $0.0189 is $0.0014 higher than the 2012-13 rate. The quantity
of merchantable walnuts for the 2013-14 marketing year is estimated at
486,000 tons inshell weight, or 437,400,000 pounds kernelweight. Thus,
the $0.0189 rate should provide $8,266,860 in assessment income.
Assessment income, along with funds from the Board's authorized prior
year's carry-in financial reserve, plus FAS funding for the last year
of a three year

[[Page 57103]]

project would adequately cover its 2013-14 anticipated expenditures of
$10,166,860.
The major expenditures recommended by the Board for the 2013-14
marketing year includes $830,000 for employee expenses, $146,500 for
office expenses, $225,000 for operating expenses, and $8,965,360 for
program expenses which include domestic market development, production
research, post-harvest research, and industry communications. In
comparison, budgeted expenses for these items for the 2012-13 marketing
year were $797,000, $119,000, $219,000, and $7,705,000, respectively.
The Board reviewed and unanimously recommended 2013-14 expenditures
of $10,166,860. 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 recommended by the Board was derived by evaluating
expected shipments of California walnuts certified as merchantable,
budgeted expenses, the level of available prior year's carry-in
financial reserve, and the desired 2013-14 ending financial reserve.
The Board met on June 6, 2013, and unanimously approved using a three
prior years' average to formulate the 2013-14 estimate of 486,000 tons
(inshell) for merchantable shipments. Pursuant to Sec. 984.51(b) of
the order, this figure is converted to a merchantable kernelweight
basis using a factor of 0.45 (486,000 tons x 2,000 pounds per ton x
0.45), which yields 437,400,000 kernelweight pounds. The Board
determined that it could utilize $1.9 million from its carry-in
financial reserve and still maintain an adequate 2013-2014 ending
financial reserve. The remaining $8,266,860 necessary to meet budgeted
expenses would need to be raised through assessments. Thus, dividing
the $8,266,860 in necessary assessment revenue by 2013 estimated
shipments of 437,400,000 kernelweight pounds results in an assessment
rate of $0.0189.
Based on the crop estimate of 486,000 tons inshell weight, or
437,400,000 pounds kernelweight, the Board determined that the revenue
generated from an assessment rate of $0.0189 per kernelweight pounds of
merchantable walnuts, combined with funds from the prior years' carry-
in financial reserve, plus FAS funding for the last year of a three
year project would adequately cover budgeted expenses while providing
an adequate 2013-14 ending financial reserve.
According to NASS, the season average grower prices for the years
2010 and 2011 were $2,040 and $2,900 per ton, respectively. These
prices provide a range within which the 2013-14 season average prices
could fall. Dividing these average grower prices by 2,000 pounds per
ton provides an inshell price per pound range of $1.02 to $1.45.
Dividing these inshell prices per pound by the 0.45 conversion factor
(inshell to kernelweight) established in the order, yields a 2013-14
price range estimate of $2.27 to $3.22 per kernelweight pound of
merchantable walnuts.
Utilizing these estimates and the assessment rate of $0.0189 per
kernelweight pound, estimated assessment revenue as a percentage of
total estimated grower revenue should likely range between 0.59 and
0.83 percent for the 2013-14 marketing year (assessment rate divided by
price per kernelweight pound). Thus, the assessment revenue should be
well below one percent of estimated grower revenue for the 2013-14
marketing year.
This proposal 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 from the operation of the
marketing order. In addition, the Board's meeting was widely publicized
throughout the California walnut industry. All interested persons were
invited to attend the meeting and participate in Board deliberations on
all issues. Like all Board meetings, the June 6, 2013, meeting was a
public meeting. All entities, both large and small, were able to
express their 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
more opportunities for citizens to access Government information and
services, and for other purposes.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this action.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at:
www.ams.usda.gov/MarketingOrderSmallBusinessGuide. Any questions about
the compliance guide should be sent to Jeffery Smutny 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 2013-14 marketing year begins on September 1, 2013,
and the marketing order requires that the rate of assessment for each
marketing year apply to all merchantable 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.

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

0
1. The authority citation for 7 CFR part 984 continues to read as
follows:

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

0
2. Section 984.347 is revised to read as follows:

Sec. 984.347 Assessment rate.

On and after September 1, 2013, an assessment rate of $0.0189 per
kernelweight pound is established for California merchantable walnuts.

[[Page 57104]]

Dated: September 11, 2013.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2013-22571 Filed 9-16-13; 8:45 am]
BILLING CODE 3410-02-P

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