Almonds Grown in California; Increased Assessment Rate, 46616-46619 [2016-16814]
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46616
Proposed Rules
Federal Register
Vol. 81, No. 137
Monday, July 18, 2016
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 981
[Doc. No. AMS–SC–16–0045; SC16–981–2
PR]
Almonds Grown in California;
Increased Assessment Rate
Agricultural Marketing Service,
USDA.
ACTION: Proposed rule.
AGENCY:
This proposed rule would
implement a recommendation from the
Almond Board of California (Board) to
increase the assessment rate established
for the 2016–17 through the 2018–19
crop years from $0.03 to $0.04 per
pound of almonds handled under the
marketing order (order). Of the $0.04 per
pound assessment, 60 percent (or $0.024
per pound) would be available as creditback for handlers who conduct their
own promotional activities. The
assessment rate would return to $0.03
for the 2019–20 and subsequent crop
years, and the amount available for
handler credit-back would return to
$0.018 per pound (60 percent). The
Board locally administers the order and
is comprised of growers and handlers of
almonds grown in California.
Assessments upon almond handlers are
used by the Board to fund reasonable
and necessary expenses of the program.
The crop year begins August 1 and ends
July 31. The $0.04 assessment rate
would remain in effect until July 31,
2019. Beginning August 1, 2019, the
assessment rate would return to $0.03
and would remain in effect indefinitely
unless modified, suspended, or
terminated.
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SUMMARY:
Comments must be received by
August 2, 2016.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this proposed rule.
Comments must be sent to the Docket
Clerk, Marketing Order and Agreement
Division, Specialty Crops Program,
DATES:
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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 the
comments will be made public on the
internet at the address provided above.
FOR FURTHER INFORMATION CONTACT:
Andrea Ricci, Marketing Specialist or
Jeffery Smutny, Regional Director,
California Marketing Field Office,
Marketing Order and Agreement
Division, Specialty Crops Program,
AMS, USDA; Telephone: (559) 487–
5901, Fax: (559) 487–5906, or Email:
with Andrea.Ricci@ams.usda.gov or
Jeffery.Smutny@ams.usda.gov.
Small businesses may request
information on complying with this
regulation by contacting Antoinette
Carter, Marketing Order and Agreement
Division, Specialty Crops Program,
AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington,
DC 20250–0237; Telephone: (202) 720–
2491, Fax: (202) 720–8938, or Email:
Antoinette.Carter@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This
proposed rule is issued under Marketing
Order No. 981, as amended (7 CFR part
981), regulating the handling of almonds
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 Orders
12866, 13563, and 13175.
This proposed rule has been reviewed
under Executive Order 12988, Civil
Justice Reform. Under the marketing
order now in effect, California almond
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
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all assessable almonds beginning on
August 1, 2016, through July 31, 2019.
Beginning August 1, 2019, the
assessment rate would return to the
current $0.03 and would remain in
effect indefinitely unless modified,
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 for the 2016–17
through 2018–19 crop years from $0.03
to $0.04 per pound of almonds received.
Of the $0.04 per pound assessment, 60
percent (or $0.024 per pound) would be
available as credit-back for handlers
who conduct their own promotional
activities. The assessment rate would
return to $0.03 for the 2019–20 and
subsequent crop years, and the amount
available for handler credit-back would
return to $0.018 per pound (60 percent).
The California almond 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 almonds. They are familiar
with the Board’s needs and with the
costs for goods and services in their
local area and thus are in a position to
formulate an appropriate budget and
assessment rate. The assessment rate is
formulated and discussed in a public
meeting. Therefore, all directly affected
persons have an opportunity to
participate and provide input.
For the 2005–06 and subsequent crop
years, the Board recommended, and
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Federal Register / Vol. 81, No. 137 / Monday, July 18, 2016 / Proposed Rules
USDA approved, an assessment rate of
$0.03 per pound that would continue in
effect from crop year to crop year unless
modified, suspended, or terminated by
USDA upon recommendation and
information submitted by the Board or
other information available to USDA. Of
the $0.03 per pound assessment, 60
percent ($0.018) per pound was made
available as credit-back for handlers
who conducted their own promotional
activities.
The Board met on April 12, 2016, and
unanimously recommended 2016–17
expenditures of $69,897,626 and an
assessment rate of $0.04 per pound of
almonds received. In comparison, last
year’s budgeted expenditures were
$58,998,976. The proposed assessment
rate of $0.04 is $0.01 higher than the
rate currently in effect, and the credit-
back portion of the assessment rate
($0.024 per pound) would be $0.006
more than the credit-back portion
currently in effect.
The Board estimates a production
increase of thirty percent, or 600 million
pounds, by the 2019–20 crop year. This
increase is nearly as much as their
largest market currently consumes. Due
to the size of the increase in forecasted
production, the Board anticipates that
increased market development projects
and new marketing programs are
required to successfully market the
additional supply. Accordingly, the
Board has recommended a new ‘‘Nut of
Choice’’ marketing program.
The Board also anticipates needing
additional funding for the industry’s
new ‘‘Crop of Choice’’ research program,
as well as additional research to address
concerns such as: Changing water
supply and quality systems; air quality
and how it relates to harvesting,
pesticide, and energy use; and bee
health.
The three-year higher assessment rate
is needed to fund the increase in
marketing and research activities. The
Board anticipates that by the 2019–20
crop year, the increase in production
assessed at the reinstated $0.03 per
pound rate should generate sufficient
revenue to cover the anticipated
expenditures at that time. Therefore,
beginning August 1, 2019, the
assessment rate would return to $0.03
per pound.
The following table compares major
budget expenditures recommended by
the Board for the 2015–16 and 2016–17
crop years:
Budget expense categories
2015–16
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Operations Expenses ..............................................................................................................................................
Board Accelerated Innovation Management (AIM) Initiatives .................................................................................
Crop of Choice Initiatives ........................................................................................................................................
Reputation Management .........................................................................................................................................
Production Research ...............................................................................................................................................
Environmental Research .........................................................................................................................................
Scientific Affairs/Nutrition .........................................................................................................................................
Global Market Development ....................................................................................................................................
Nut of Choice Initiatives ...........................................................................................................................................
Technical & Regulatory Affairs ................................................................................................................................
Industry Services .....................................................................................................................................................
Almond Quality & Food Safety ................................................................................................................................
Corporate Technology .............................................................................................................................................
The assessment rate recommended by
the Board was derived by considering
the anticipated 30 percent production
increase in the next three years,
anticipated expenditures plus
additional program expenses, current
production level, and maintaining
adequate operating reserve funds. In its
recommendation, the Board utilized an
estimate of 1,835,290,000 pounds of
assessable almonds for the 2016–17 crop
year. If realized, this would provide
estimated assessment revenue of
$62,262,213, which reflects credit-back
reimbursements and organic
exemptions. In addition, it is
anticipated that $20,907,722 will be
provided by other sources, including
interest income, Market Access Program
(MAP) funds, and operating reserve
funds. When combined, revenue from
these sources would be adequate to
cover budgeted expenses.
Section 981.81 of the order authorizes
the Board to maintain operating reserve
funds consisting of an administrativeresearch portion and a marketing
promotion portion, and states that the
amount allocated to each portion shall
not exceed six months’ budgeted
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expenses for that activity area. Funds in
the reserve at the end of the 2016–17
crop year are estimated to be
approximately $16,581,222, well within
the amount permitted by the order.
The proposed assessment rate would
continue in effect until July 31, 2019.
Beginning August 1, 2019, the
assessment rate would return to $0.03
and 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 would
be in effect for a specified period, the
Board would continue to meet prior to
or during each crop 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
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46617
$7,904,000
1,500,000
0
1,826,350
1,843,331
1,039,790
1,640,000
38,583,756
0
1,045,500
2,436,220
790,800
389,229
2016–17
$8,404,000
1,000,000
5,625,000
2,000,000
1,843,331
1,039,790
1,640,000
38,583,756
5,100,000
1,045,500
2,436,220
790,800
389,229
needed. Further rulemaking would be
undertaken as necessary. The Board’s
2016–17 budget and those for
subsequent crop 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 6,800
almond growers in the production area
and approximately 100 handlers subject
to regulation under the marketing order.
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Federal Register / Vol. 81, No. 137 / Monday, July 18, 2016 / Proposed Rules
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 $7,500,000 (13 CFR 121.201).
The National Agricultural Statistics
Service (NASS) reported in its 2012
Agricultural Census that there were
6,841 almond farms in the production
area (California), of which 6,204 had
bearing acres. The following
computation provides an estimate of the
proportion of producers (farms) and
agricultural service firms (handlers) that
would be considered small under the
SBA definitions.
The NASS Census data indicates that
out of the 6,204 California farms with
bearing acres of almonds, 4,471 (72
percent) have fewer than 100-bearing
acres.
In its most recently reported crop year
(2014), NASS reported an average yield
of 2,150 pounds per acre, and a season
average grower price of $3.19 per
pound. A 100-acre farm with an average
yield of 2,150 pounds per acre would
produce about 215,000 pounds of
almonds. At $3.19 per pound, that
farm’s production would be valued at
$685,850.
Since Census of Agriculture indicates
that the majority of California’s almond
farms are smaller than 100 acres, it
could be concluded that the majority of
growers had annual receipts from the
sale of almonds in 2014–15 of less than
$685,850, well below the SBA threshold
of $750,000. Thus, over 70 percent of
California’s almond growers would be
considered small growers according to
SBA’s definition.
According to information supplied by
the Board, approximately 30 percent of
California’s almond handlers shipped
almonds valued under $7,500,000
during the 2014–15 crop year, and
would therefore be considered small
handlers according to the SBA
definition.
This proposal would increase the
assessment rate collected from handlers
for the 2016–17 through the 2018–19
crop years from $0.03 to $0.04 per
pound of almonds received. Of the
$0.04 per pound assessment, 60 percent
(or $0.024 per pound) would be
available as credit-back for handlers
who conduct their own promotional
activities, consistent with § 981.441 of
the order’s regulations and subject to
Board approval. The Board
unanimously recommended 2016–17
expenditures of $69,897,626 and an
assessment rate of $0.04 per pound of
almonds received. The proposed
assessment rate of $0.04 is $0.01 higher
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than the 2015–16 rate, and the creditback portion of $0.024 per pound would
be $0.006 higher than the current creditback portion of $0.018. The quantity of
assessable almonds for the 2016–17 crop
year is estimated at 1,835,290,000
pounds.
This would provide estimated
assessment revenue of $62,262,213,
which reflects credit-back
reimbursements and organic
exemptions. In addition, it is
anticipated that $20,907,722 will be
provided by other sources, including
interest income, MAP funds, and
operating reserve funds. When
combined, revenue from these sources
would be adequate to cover budgeted
expenses.
The major expenditures
recommended by the Board for the
2016–17 crop year include $8,404,000
for Operations Expenses, $1,000,000 for
Board AIM Initiatives, $5,625,000 for
Crop of Choice Initiatives, $2,000,000
for Reputation Management, $1,843,331
for Production Research, $1,039,790 for
Environmental Research, $1,640,000 for
Scientific Affairs/Nutrition, $38,583,756
for Global Market Development,
$5,100,000 for Nut of Choice Initiatives,
$1,045,500 for Technical & Regulatory
Affairs, $2,436,220 for Industry
Services, $790,800 for Almond Quality
& Food Safety, and $389,229 for
Corporate Technology.
Budgeted expenses for these items in
2015–16 were $7,904,000 for Operations
Expenses, $1,500,000 for Board AIM
Initiatives, $0 for Crop of Choice
Initiatives, $1,826,350 for Reputation
Management, $1,843,331 for Production
Research, $1,039,790 for Environmental
Research, $1,640,000 for Scientific
Affairs/Nutrition, $38,583,756 for
Global Market Development, $0 for Nut
of Choice Initiatives, $1,045,500 for
Technical & Regulatory Affairs,
$2,436,220 for Industry Services,
$790,800 for Almond Quality & Food
Safety, and $389,229 for Corporate
Technology.
The Board estimates a production
increase of thirty percent, or 600 million
pounds, by the 2019–20 crop year. This
increase is nearly as much as their
largest market currently consumes.
Increased market development
investment, as well as new marketing
programs will be required to
successfully market the additional
supply. Additional investment in
research is also needed to address
concerns such as: Changing water
supply and quality systems; air quality
and how it relates to harvesting,
pesticide, and energy use; and bee
health. Accordingly, the three-year
higher assessment rate is needed to fund
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the Board’s new Nut of Choice
marketing program and Crop of Choice
research activities. The Board
anticipates that by the 2019–20 crop
year, the increased production assessed
at the reinstated $0.03 per pound rate
should generate sufficient revenue to
cover the anticipated expenditures at
that time.
Prior to arriving at this budget and
assessment rate, the Board held a
strategic planning session in February
2016. The Board also considered
recommendations made from its various
committees including the Global Market
Development Committee, Production
Research Committee, and
Environmental Committee. Alternative
expenditure levels were discussed,
based upon the relative value of various
activities to the almond industry. The
Board ultimately determined that 2016–
17 expenditures of $69,897,626 were
appropriate, and the recommended
assessment rate plus, income from other
sources and operation reverse funds,
would generate sufficient revenue to
meet its expenses.
A review of historical information and
preliminary information pertaining to
the upcoming crop year indicates that
the grower price for the 2016–17 season
could range between $3.21 and $3.19
per pound of almonds. Therefore, the
estimated assessment revenue for the
2016–17 crop year (disregarding any
amounts credited pursuant to § 981.41
and § 981.441) as a percentage of total
grower revenue could range between
1.24 and 1.25 percent, respectively.
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 almond
industry and all interested persons were
invited to attend the meeting and
participate in Board deliberations on all
issues. Like all Board meetings, the
April 12, 2016, 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
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Management and Budget (OMB) and
assigned OMB No. 0581–0178
(Vegetable and Specialty Crops.) No
changes in those requirements are
necessary as a result of this action.
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 almond 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 action.
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/
rules-regulations/moa/small-businesses.
Any questions about the compliance
guide should be sent to Antoinette
Carter at the previously-mentioned
address in the FOR FURTHER INFORMATION
CONTACT section.
A 15-day comment period is provided
to allow interested persons to respond
to this proposed rule. Fifteen days is
deemed appropriate because: (1) The
2016–17 crop year begins on August 1,
2016, and the marketing order requires
that the rate of assessment for each crop
year apply to all assessable almonds
handled during such crop 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.
List of Subjects in 7 CFR Part 981
Almonds, Marketing agreements,
Nuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, 7 CFR part 981 is proposed to
be amended as follows:
PART 981—ALMONDS GROWN IN
CALIFORNIA
1. The authority citation for 7 CFR
part 981 continues to read as follows:
■
Authority: 7 U.S.C. 601–674.
18:16 Jul 15, 2016
Assessment rate.
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Dated: July 12, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing
Service.
[FR Doc. 2016–16814 Filed 7–15–16; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF AGRICULTURE
Animal and Plant Health Inspection
Service
9 CFR Parts 93, 94, 95, 96, and 98
[Docket No. APHIS–2009–0095]
RIN 0579–AD10
Importation of Sheep, Goats, and
Certain Other Ruminants
Animal and Plant Health
Inspection Service, USDA.
ACTION: Proposed rule.
AGENCY:
We are proposing to amend
the regulations that govern the
importation of animals and animal
products to revise the conditions for the
importation of live sheep, goats, and
certain other non-bovine ruminants, and
products derived from sheep and goats,
with regard to transmissible spongiform
encephalopathies such as bovine
spongiform encephalopathy (BSE) and
scrapie. We are proposing to remove
BSE-related import restrictions on sheep
and goats and most of their products,
and to add import restrictions related to
transmissible spongiform
encephalopathies for certain wild,
zoological, or other non-bovine
ruminant species. The conditions we are
proposing for the importation of
specified commodities are based on
internationally accepted scientific
literature and will in general align our
regulations with guidelines set out in
the World Organization for Animal
Health’s Terrestrial Animal Health
Code.
SUMMARY:
We will consider all comments
that we receive on or before September
16, 2016.
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You may submit comments
by either of the following methods:
• Federal eRulemaking Portal: Go to
https://www.regulations.gov/
#!docketDetail;D=APHIS-2009-0095.
• Postal Mail/Commercial Delivery:
Send your comment to Docket No.
APHIS–2009–0095, Regulatory Analysis
and Development, PPD, APHIS, Station
3A–03.8, 4700 River Road, Unit 118,
Riverdale, MD 20737–1238.
Supporting documents and any
comments we receive on this docket
may be viewed at https://
www.regulations.gov/
#!docketDetail;D=APHIS-2009-0095 or
in our reading room, which is located in
room 1141 of the USDA South Building,
14th Street and Independence Avenue
SW., Washington, DC. Normal reading
room hours are 8 a.m. to 4:30 p.m.,
Monday through Friday, except
holidays. To be sure someone is there to
help you, please call (202) 799–7039
before coming.
FOR FURTHER INFORMATION CONTACT: For
information concerning live animals,
contact Dr. Oriana Beemer, Veterinary
Medical Officer, Animal Permitting and
Negotiating Services, National Import
Export Services, VS, APHIS, 4700 River
Road, Unit 39, Riverdale, MD 20737–
1231; (301) 851–3300.
For information regarding ruminant
products and for other information
regarding this proposed rule, contact Dr.
Christopher Robinson, Director, Animal
Products Permitting and Negotiation
Services, National Import Export
Services, VS, APHIS, 4700 River Road,
Unit 38, Riverdale, MD 20737–1231;
(301) 851–3300.
SUPPLEMENTARY INFORMATION:
ADDRESSES:
For the period August 1, 2016,
through July 31, 2019, the assessment
rate shall be $0.04 per pound for
California almonds. Of the $0.04
assessment rate, 60 percent per
assessable pound is available for
handler credit-back. On and after
August 1, 2019, an assessment rate of
$0.03 per pound is established for
California almonds. Of the $0.03
assessment rate, 60 percent per
assessable pound is available for
handler credit-back.
DATES:
2. Section 981.343 is revised to read
as follows:
■
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§ 981.343
46619
I. Executive Summary
Need for the Regulatory Action
The current bovine spongiform
encephalopathy (BSE)-related import
regulations prohibit the importation of
most live sheep and goats and most
sheep and goat products from countries
that are considered a risk for BSE. The
current regulations allow the
importation of non-pregnant slaughter
or feeder sheep that are under 12
months old from Canada, certain
products from sheep and goats, and
sheep and goat semen. The conditions
we are proposing for the importation of
sheep and goats and their products are
based on internationally accepted
scientific literature and are consistent
with World Organization for Animal
Health (OIE) guidelines. We are
proposing these amendments after
conducting a thorough review of
relevant scientific literature and a
comprehensive evaluation of the issues
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]]>Agencies
[Federal Register Volume 81, Number 137 (Monday, July 18, 2016)]
[Proposed Rules]
[Pages 46616-46619]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-16814]
========================================================================
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. 81, No. 137 / Monday, July 18, 2016 /
Proposed Rules
[[Page 46616]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[Doc. No. AMS-SC-16-0045; SC16-981-2 PR]
Almonds Grown in California; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement a recommendation from the
Almond Board of California (Board) to increase the assessment rate
established for the 2016-17 through the 2018-19 crop years from $0.03
to $0.04 per pound of almonds handled under the marketing order
(order). Of the $0.04 per pound assessment, 60 percent (or $0.024 per
pound) would be available as credit-back for handlers who conduct their
own promotional activities. The assessment rate would return to $0.03
for the 2019-20 and subsequent crop years, and the amount available for
handler credit-back would return to $0.018 per pound (60 percent). The
Board locally administers the order and is comprised of growers and
handlers of almonds grown in California. Assessments upon almond
handlers are used by the Board to fund reasonable and necessary
expenses of the program. The crop year begins August 1 and ends July
31. The $0.04 assessment rate would remain in effect until July 31,
2019. Beginning August 1, 2019, the assessment rate would return to
$0.03 and would remain in effect indefinitely unless modified,
suspended, or terminated.
DATES: Comments must be received by August 2, 2016.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule. Comments must be sent to the Docket
Clerk, Marketing Order and Agreement Division, Specialty Crops 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 the comments will be made public on the internet
at the address provided above.
FOR FURTHER INFORMATION CONTACT: Andrea Ricci, Marketing Specialist or
Jeffery Smutny, Regional Director, California Marketing Field Office,
Marketing Order and Agreement Division, Specialty Crops Program, AMS,
USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or Email: with
Andrea.Ricci@ams.usda.gov or Jeffery.Smutny@ams.usda.gov.
Small businesses may request information on complying with this
regulation by contacting Antoinette Carter, Marketing Order and
Agreement Division, Specialty Crops Program, AMS, USDA, 1400
Independence Avenue SW., STOP 0237, Washington, DC 20250-0237;
Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email:
Antoinette.Carter@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing
Order No. 981, as amended (7 CFR part 981), regulating the handling of
almonds 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 Orders 12866, 13563, and 13175.
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. Under the marketing order now in effect,
California almond 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 almonds beginning on August 1, 2016, through July 31, 2019.
Beginning August 1, 2019, the assessment rate would return to the
current $0.03 and would remain in effect indefinitely unless modified,
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 for the 2016-
17 through 2018-19 crop years from $0.03 to $0.04 per pound of almonds
received. Of the $0.04 per pound assessment, 60 percent (or $0.024 per
pound) would be available as credit-back for handlers who conduct their
own promotional activities. The assessment rate would return to $0.03
for the 2019-20 and subsequent crop years, and the amount available for
handler credit-back would return to $0.018 per pound (60 percent).
The California almond 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 almonds. They are familiar with the Board's needs and with
the costs for goods and services in their local area and thus are in a
position to formulate an appropriate budget and assessment rate. The
assessment rate is formulated and discussed in a public meeting.
Therefore, all directly affected persons have an opportunity to
participate and provide input.
For the 2005-06 and subsequent crop years, the Board recommended,
and
[[Page 46617]]
USDA approved, an assessment rate of $0.03 per pound that would
continue in effect from crop year to crop year unless modified,
suspended, or terminated by USDA upon recommendation and information
submitted by the Board or other information available to USDA. Of the
$0.03 per pound assessment, 60 percent ($0.018) per pound was made
available as credit-back for handlers who conducted their own
promotional activities.
The Board met on April 12, 2016, and unanimously recommended 2016-
17 expenditures of $69,897,626 and an assessment rate of $0.04 per
pound of almonds received. In comparison, last year's budgeted
expenditures were $58,998,976. The proposed assessment rate of $0.04 is
$0.01 higher than the rate currently in effect, and the credit-back
portion of the assessment rate ($0.024 per pound) would be $0.006 more
than the credit-back portion currently in effect.
The Board estimates a production increase of thirty percent, or 600
million pounds, by the 2019-20 crop year. This increase is nearly as
much as their largest market currently consumes. Due to the size of the
increase in forecasted production, the Board anticipates that increased
market development projects and new marketing programs are required to
successfully market the additional supply. Accordingly, the Board has
recommended a new ``Nut of Choice'' marketing program.
The Board also anticipates needing additional funding for the
industry's new ``Crop of Choice'' research program, as well as
additional research to address concerns such as: Changing water supply
and quality systems; air quality and how it relates to harvesting,
pesticide, and energy use; and bee health.
The three-year higher assessment rate is needed to fund the
increase in marketing and research activities. The Board anticipates
that by the 2019-20 crop year, the increase in production assessed at
the reinstated $0.03 per pound rate should generate sufficient revenue
to cover the anticipated expenditures at that time. Therefore,
beginning August 1, 2019, the assessment rate would return to $0.03 per
pound.
The following table compares major budget expenditures recommended
by the Board for the 2015-16 and 2016-17 crop years:
------------------------------------------------------------------------
Budget expense categories 2015-16 2016-17
------------------------------------------------------------------------
Operations Expenses..................... $7,904,000 $8,404,000
Board Accelerated Innovation Management 1,500,000 1,000,000
(AIM) Initiatives......................
Crop of Choice Initiatives.............. 0 5,625,000
Reputation Management................... 1,826,350 2,000,000
Production Research..................... 1,843,331 1,843,331
Environmental Research.................. 1,039,790 1,039,790
Scientific Affairs/Nutrition............ 1,640,000 1,640,000
Global Market Development............... 38,583,756 38,583,756
Nut of Choice Initiatives............... 0 5,100,000
Technical & Regulatory Affairs.......... 1,045,500 1,045,500
Industry Services....................... 2,436,220 2,436,220
Almond Quality & Food Safety............ 790,800 790,800
Corporate Technology.................... 389,229 389,229
------------------------------------------------------------------------
The assessment rate recommended by the Board was derived by
considering the anticipated 30 percent production increase in the next
three years, anticipated expenditures plus additional program expenses,
current production level, and maintaining adequate operating reserve
funds. In its recommendation, the Board utilized an estimate of
1,835,290,000 pounds of assessable almonds for the 2016-17 crop year.
If realized, this would provide estimated assessment revenue of
$62,262,213, which reflects credit-back reimbursements and organic
exemptions. In addition, it is anticipated that $20,907,722 will be
provided by other sources, including interest income, Market Access
Program (MAP) funds, and operating reserve funds. When combined,
revenue from these sources would be adequate to cover budgeted
expenses.
Section 981.81 of the order authorizes the Board to maintain
operating reserve funds consisting of an administrative-research
portion and a marketing promotion portion, and states that the amount
allocated to each portion shall not exceed six months' budgeted
expenses for that activity area. Funds in the reserve at the end of the
2016-17 crop year are estimated to be approximately $16,581,222, well
within the amount permitted by the order.
The proposed assessment rate would continue in effect until July
31, 2019. Beginning August 1, 2019, the assessment rate would return to
$0.03 and 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 would be in effect for a specified
period, the Board would continue to meet prior to or during each crop
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 2016-17 budget and those for subsequent crop 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 6,800 almond growers in the production area
and approximately 100 handlers subject to regulation under the
marketing order.
[[Page 46618]]
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 $7,500,000 (13 CFR 121.201).
The National Agricultural Statistics Service (NASS) reported in its
2012 Agricultural Census that there were 6,841 almond farms in the
production area (California), of which 6,204 had bearing acres. The
following computation provides an estimate of the proportion of
producers (farms) and agricultural service firms (handlers) that would
be considered small under the SBA definitions.
The NASS Census data indicates that out of the 6,204 California
farms with bearing acres of almonds, 4,471 (72 percent) have fewer than
100-bearing acres.
In its most recently reported crop year (2014), NASS reported an
average yield of 2,150 pounds per acre, and a season average grower
price of $3.19 per pound. A 100-acre farm with an average yield of
2,150 pounds per acre would produce about 215,000 pounds of almonds. At
$3.19 per pound, that farm's production would be valued at $685,850.
Since Census of Agriculture indicates that the majority of
California's almond farms are smaller than 100 acres, it could be
concluded that the majority of growers had annual receipts from the
sale of almonds in 2014-15 of less than $685,850, well below the SBA
threshold of $750,000. Thus, over 70 percent of California's almond
growers would be considered small growers according to SBA's
definition.
According to information supplied by the Board, approximately 30
percent of California's almond handlers shipped almonds valued under
$7,500,000 during the 2014-15 crop year, and would therefore be
considered small handlers according to the SBA definition.
This proposal would increase the assessment rate collected from
handlers for the 2016-17 through the 2018-19 crop years from $0.03 to
$0.04 per pound of almonds received. Of the $0.04 per pound assessment,
60 percent (or $0.024 per pound) would be available as credit-back for
handlers who conduct their own promotional activities, consistent with
Sec. 981.441 of the order's regulations and subject to Board approval.
The Board unanimously recommended 2016-17 expenditures of $69,897,626
and an assessment rate of $0.04 per pound of almonds received. The
proposed assessment rate of $0.04 is $0.01 higher than the 2015-16
rate, and the credit-back portion of $0.024 per pound would be $0.006
higher than the current credit-back portion of $0.018. The quantity of
assessable almonds for the 2016-17 crop year is estimated at
1,835,290,000 pounds.
This would provide estimated assessment revenue of $62,262,213,
which reflects credit-back reimbursements and organic exemptions. In
addition, it is anticipated that $20,907,722 will be provided by other
sources, including interest income, MAP funds, and operating reserve
funds. When combined, revenue from these sources would be adequate to
cover budgeted expenses.
The major expenditures recommended by the Board for the 2016-17
crop year include $8,404,000 for Operations Expenses, $1,000,000 for
Board AIM Initiatives, $5,625,000 for Crop of Choice Initiatives,
$2,000,000 for Reputation Management, $1,843,331 for Production
Research, $1,039,790 for Environmental Research, $1,640,000 for
Scientific Affairs/Nutrition, $38,583,756 for Global Market
Development, $5,100,000 for Nut of Choice Initiatives, $1,045,500 for
Technical & Regulatory Affairs, $2,436,220 for Industry Services,
$790,800 for Almond Quality & Food Safety, and $389,229 for Corporate
Technology.
Budgeted expenses for these items in 2015-16 were $7,904,000 for
Operations Expenses, $1,500,000 for Board AIM Initiatives, $0 for Crop
of Choice Initiatives, $1,826,350 for Reputation Management, $1,843,331
for Production Research, $1,039,790 for Environmental Research,
$1,640,000 for Scientific Affairs/Nutrition, $38,583,756 for Global
Market Development, $0 for Nut of Choice Initiatives, $1,045,500 for
Technical & Regulatory Affairs, $2,436,220 for Industry Services,
$790,800 for Almond Quality & Food Safety, and $389,229 for Corporate
Technology.
The Board estimates a production increase of thirty percent, or 600
million pounds, by the 2019-20 crop year. This increase is nearly as
much as their largest market currently consumes. Increased market
development investment, as well as new marketing programs will be
required to successfully market the additional supply. Additional
investment in research is also needed to address concerns such as:
Changing water supply and quality systems; air quality and how it
relates to harvesting, pesticide, and energy use; and bee health.
Accordingly, the three-year higher assessment rate is needed to fund
the Board's new Nut of Choice marketing program and Crop of Choice
research activities. The Board anticipates that by the 2019-20 crop
year, the increased production assessed at the reinstated $0.03 per
pound rate should generate sufficient revenue to cover the anticipated
expenditures at that time.
Prior to arriving at this budget and assessment rate, the Board
held a strategic planning session in February 2016. The Board also
considered recommendations made from its various committees including
the Global Market Development Committee, Production Research Committee,
and Environmental Committee. Alternative expenditure levels were
discussed, based upon the relative value of various activities to the
almond industry. The Board ultimately determined that 2016-17
expenditures of $69,897,626 were appropriate, and the recommended
assessment rate plus, income from other sources and operation reverse
funds, would generate sufficient revenue to meet its expenses.
A review of historical information and preliminary information
pertaining to the upcoming crop year indicates that the grower price
for the 2016-17 season could range between $3.21 and $3.19 per pound of
almonds. Therefore, the estimated assessment revenue for the 2016-17
crop year (disregarding any amounts credited pursuant to Sec. 981.41
and Sec. 981.441) as a percentage of total grower revenue could range
between 1.24 and 1.25 percent, respectively.
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 almond industry and all interested persons
were invited to attend the meeting and participate in Board
deliberations on all issues. Like all Board meetings, the April 12,
2016, 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
[[Page 46619]]
Management and Budget (OMB) and assigned OMB No. 0581-0178 (Vegetable
and Specialty Crops.) No changes in those requirements are necessary as
a result of this action. 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 almond
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 action.
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/rules-regulations/moa/small-businesses. Any questions
about the compliance guide should be sent to Antoinette Carter at the
previously-mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
A 15-day comment period is provided to allow interested persons to
respond to this proposed rule. Fifteen days is deemed appropriate
because: (1) The 2016-17 crop year begins on August 1, 2016, and the
marketing order requires that the rate of assessment for each crop year
apply to all assessable almonds handled during such crop 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.
List of Subjects in 7 CFR Part 981
Almonds, Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 981 is
proposed to be amended as follows:
PART 981--ALMONDS GROWN IN CALIFORNIA
0
1. The authority citation for 7 CFR part 981 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Section 981.343 is revised to read as follows:
Sec. 981.343 Assessment rate.
For the period August 1, 2016, through July 31, 2019, the
assessment rate shall be $0.04 per pound for California almonds. Of the
$0.04 assessment rate, 60 percent per assessable pound is available for
handler credit-back. On and after August 1, 2019, an assessment rate of
$0.03 per pound is established for California almonds. Of the $0.03
assessment rate, 60 percent per assessable pound is available for
handler credit-back.
Dated: July 12, 2016.
Elanor Starmer,
Administrator, Agricultural Marketing Service.
[FR Doc. 2016-16814 Filed 7-15-16; 8:45 am]
BILLING CODE 3410-02-P
