Walnuts Grown in California; Decreased Assessment Rate, 33775-33778 [2017-15304]
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33775
Rules and Regulations
Federal Register
Vol. 82, No. 139
Friday, July 21, 2017
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Doc. No. AMS–SC–17–0031; SC17–984–1
IR]
Walnuts Grown in California;
Decreased Assessment Rate
Agricultural Marketing Service,
USDA.
ACTION: Interim rule with request for
comments.
AGENCY:
This rule implements a
recommendation from the California
Walnut Board (Board) to decrease the
assessment rate established for the
2017–18 and subsequent marketing
years from $0.0465 to $0.0400 per
kernelweight pound of assessable
walnuts. The Board is comprised of
growers and handlers of walnuts and
locally administers the marketing order
that regulates the handling of walnuts
grown in California. The Board also has
a public member who has no financial
interest in walnut production or
handling. 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 will remain in effect
indefinitely unless modified,
suspended, or terminated.
DATES: Effective July 24, 2017.
Comments received by September 19,
2017 will be considered prior to
issuance of a final rule.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this rule. Comments must be
sent 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
sradovich on DSK3GMQ082PROD with RULES
SUMMARY:
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date and page number of this issue of
the Federal Register and will be
available for public inspection in the
Office of the Docket Clerk during regular
business hours, or can be viewed at:
https://www.regulations.gov. All
comments submitted in response to this
rule will be included in the record and
will be made available to the public.
Please be advised that the identity of the
individuals or entities submitting the
comments will be made public on the
Internet at the address provided above.
FOR FURTHER INFORMATION CONTACT:
Terry Vawter, Senior Marketing
Specialist, or Jeffrey 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:
Jeffrey.Smutny@ams.usda.gov or
Terry.Vawter@ams.usda.gov.
Small businesses may request
information on complying with this
regulation by contacting Richard Lower,
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:
Richard.Lower@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This rule
is issued under Marketing Order No.
984, as amended (7 CFR part 984),
regulating the handling of walnuts
grown in California, hereinafter referred
to as the ‘‘order.’’ The order is effective
under the Agricultural Marketing
Agreement Act of 1937, as amended (7
U.S.C. 601–674), hereinafter referred to
as the ‘‘Act.’’
The Department of Agriculture
(USDA) is issuing this rule in
conformance with Executive Orders
12866, 13563, and 13175. Additionally,
because this rule does not meet the
definition of a significant regulatory
action, it does not trigger the
requirements contained in Executive
Order 13771. See the Office of
Management and Budget’s (OMB)
Memorandum titled ‘‘Interim Guidance
Implementing Section 2 of the Executive
Order of January 30, 2017, titled
‘Reducing Regulation and Controlling
Regulatory Costs’ ’’ (February 2, 2017).
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. Under the marketing order now
in effect, California walnut handlers are
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subject to assessments. Funds to
administer the order are derived from
such assessments. It is intended that the
assessment rate will be applicable to all
assessable walnuts beginning on
September 1, 2017, 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 will rule on the petition.
The Act provides that the district court
of the United States in any district in
which the handler is an inhabitant, or
has his or her principal place of
business, has jurisdiction to review
USDA’s ruling on the petition, provided
an action is filed not later than 20 days
after the date of the entry of the ruling.
This rule decreases the assessment
rate established for the Board for the
2017–18 and subsequent marketing
years from $0.0465 to $0.0400 per
kernelweight pound of assessable
walnuts.
The California walnut marketing
order provides authority for the Board,
with the approval of USDA, to formulate
an annual budget of expenses and
collect assessments from handlers to
administer the program. All members of
the Board, except the public member,
are growers and handlers of California
walnuts. They are familiar with the
Board’s needs and with the costs for
goods and services in their local area
and are thus in a position to formulate
an appropriate budget and assessment
rate. The assessment rate is formulated
and discussed in a public meeting.
Thus, all directly affected persons have
an opportunity to participate and
provide input.
For the 2016–17 and subsequent
marketing years, the Board
recommended, and USDA approved, an
assessment rate of $0.0465 per
kernelweight pound of assessable
walnuts that would continue in effect
from year to year unless modified,
suspended, or terminated by USDA
upon recommendation and information
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Federal Register / Vol. 82, No. 139 / Friday, July 21, 2017 / Rules and Regulations
submitted by the Board or other
information available to USDA.
The Board met on May 31, 2017, and
unanimously recommended 2017–18
expenditures of $24,140,000 and a
decreased assessment rate of $0.0400
per kernelweight pound of assessable
walnuts. In comparison, last year’s
budgeted expenditures were
$23,143,050. The assessment rate of
$0.0400 is $0.0065 per pound lower
than the rate currently in effect. The
quantity of assessable walnuts for the
2017–18 marketing year is estimated at
a three-year average of 615,000 tons
(inshell) or 553,500,000 kernelweight
pounds, which is 62,000 tons more than
the 553,000 tons assessed during the
2016–17 marketing year. At the
recommended lower assessment rate of
$0.0400 per kernelweight pound, the
Board should collect approximately
$22,140,000 in assessment income,
which, when augmented with funds
from the Board’s monetary reserve,
would be adequate to cover its 2017–18
budgeted expenses of $24,140,000.
The following table compares major
budget expenditures recommended by
the Board for the 2016–17 and 2017–18
marketing years:
Budget expense categories
2016–17
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Employee Expenses ................................................................................................................................................
Travel/Board Expenses/Annual Audit ......................................................................................................................
Office Expenses .......................................................................................................................................................
Program Expenses, Including Research:
Controlled Purchases .......................................................................................................................................
Crop Acreage Survey .......................................................................................................................................
Crop Estimate ...................................................................................................................................................
Production Research Director ..........................................................................................................................
Production Research ........................................................................................................................................
Sustainability Project ........................................................................................................................................
Grades and Standards Research .....................................................................................................................
Domestic Market Development ........................................................................................................................
Reserve for Contingency ..................................................................................................................................
The assessment rate recommended by
the Board was derived by dividing
anticipated expenses by expected
volumes of California walnuts certified
as merchantable. The 615,000-ton
(inshell) estimate for merchantable
walnut receipts is an average of the
three prior years’ shipments.
Section 984.69 of the order authorizes
the Board to carry over excess funds
into subsequent marketing years as a
reserve, provided that funds already in
the reserve do not exceed approximately
two years’ budgeted expenses. The
reserve is estimated to be $14,909,800 at
the end of the marketing year, well
within the authorized reserve amount.
The Board met on May 31, 2017, and
unanimously approved using a three
prior years’ average walnut production
volume to formulate the 2017–18 crop
estimate. Pursuant to § 984.51(b) of the
order, this figure is converted to a
merchantable kernelweight basis using a
factor of 0.45 (615,000 tons × 2,000
pounds per ton × 0.45), which yields
553,500,000 kernelweight pounds. At
$0.0400 per pound, the new assessment
rate should generate $22,140,000 in
assessment income. The assessment
income, plus $2,000,000 from the
Board’s reserve, will be adequate to
cover its budgeted expenses.
The assessment rate established in
this rule will continue in effect
indefinitely unless modified,
suspended, or terminated by USDA
upon recommendation and information
submitted by the Board or other
available information.
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Although this assessment rate is
effective for an indefinite period, the
Board will continue to meet prior to or
during each marketing year to
recommend a budget of expenses and
consider recommendations for
modification of the assessment rate. The
dates and times of Board meetings are
available from the Board or USDA.
Board meetings are open to the public,
and interested persons are encouraged
to express their views at these meetings.
USDA will evaluate Board
recommendations and other available
information to determine whether
modification of the assessment rate is
needed. Further rulemaking will be
undertaken as necessary. The Board’s
2017–18 budget and those for
subsequent marketing years will be
reviewed and, as appropriate, approved
by USDA.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA) (5
U.S.C. 601–612), the Agricultural
Marketing Service (AMS) has
considered the economic impact of this
action on small entities. Accordingly,
AMS has prepared this initial regulatory
flexibility analysis.
The purpose of the RFA is to fit
regulatory actions to the scale of
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
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2017–18
$2,292,000
206,000
262,000
$1,787,000
192,000
265,000
10,000
0
130,000
175,000
1,800,000
75,000
800,000
18,398,040
59,010
10,000
103,000
146,000
98,000
2,000,000
0
825,000
19,447,830
47,170
small entities acting on their own
behalf.
There are approximately 5,700
growers of California walnuts in the
production area and approximately 90
handlers subject to regulation under the
marketing order. Small agricultural
growers are defined by the Small
Business Administration (SBA) as those
whose annual receipts are 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).
According to USDA’s National
Agricultural Statistics Service’s (NASS)
2012 Census of Agriculture,
approximately 86 percent of California’s
walnut farms were smaller than 100
acres. Further, NASS reports that the
average yield for 2015 was 2.01 tons per
acre, and the average price received for
2015 was $1,620 per ton. A 100-acre
farm with an average yield of 2.01 tons
per acre would, therefore, have been
expected to produce about 201 tons of
walnuts. At $1,620 per ton, that farm’s
production would have had an
approximate value of $325,620. This is
well below the SBA threshold of
$750,000; thus, it may be concluded that
the majority of California’s walnut
growers are considered small growers
according to SBA’s definition.
According to information supplied by
the industry, approximately two-thirds
of California’s walnut handlers shipped
merchantable walnuts valued under
$7,500,000 during the 2016–17
marketing year and would, therefore, be
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Federal Register / Vol. 82, No. 139 / Friday, July 21, 2017 / Rules and Regulations
considered small handlers according to
the SBA definition.
This rule decreases the assessment
rate established for the Board and
collected from handlers for the 2017–18
and subsequent marketing years from
$0.0465 to $0.0400 per kernelweight
pound of assessable walnuts. The Board
unanimously recommended 2017–18
expenditures of $24,140,000 and an
assessment rate of $0.0400 per
kernelweight pound of assessable
walnuts, which is $0.0065 lower than
the assessment rate currently in effect.
The quantity of assessable walnuts for
the 2017–18 marketing year is estimated
to be 615,000 tons, 62,000 tons greater
than the quantity estimated for the
2016–17 marketing year. Therefore,
even at the reduced assessment rate, the
Board should collect approximately
$22,140,000 in assessment income,
which, when combined with $2,000,000
from its reserves, should be adequate to
cover its budgeted expenses.
The following table compares major
budget expenditures recommended by
the Board for the 2016–17 and 2017–18
marketing years:
Budget Expense Categories
2016–17
sradovich on DSK3GMQ082PROD with RULES
Employee Expenses ................................................................................................................................................
Travel/Board Expenses/Annual Audit ......................................................................................................................
Office Expenses .......................................................................................................................................................
Program Expenses, Including Research:.
Controlled Purchases .......................................................................................................................................
Crop Acreage Survey .......................................................................................................................................
Crop Estimate ...................................................................................................................................................
Production Research Director ..........................................................................................................................
Production Research ........................................................................................................................................
Sustainability Project ........................................................................................................................................
Grades and Standards Research .....................................................................................................................
Domestic Market Development ........................................................................................................................
Reserve for Contingency ..................................................................................................................................
The Board reviewed and unanimously
recommended 2017–18 expenditures of
$24,140,000. Prior to arriving at this
budget, the Board considered alternative
expenditure and assessment levels, as
well as a recommendation from the
Budget and Personnel Committee
(Committee). The Committee considered
the estimated income and expenses,
given the requests from other
committees, such as the Production
Research, Market Development, and
Grades and Standards Committees. The
other committees each deliberated,
formulated their own budgets of
expenses, and made their
recommendations to the Committee.
The Committee also considered the
recommendations and various
assessment rates and expenses, then
made a recommendation to the Board.
The Board ultimately determined that
the recommended levels were
reasonable and necessary to properly
administer the order.
The assessment rate of $0.0400 per
kernelweight pound of assessable
walnuts was derived by dividing
anticipated expenses of $24,140,000 by
expected 2017–18 volumes of California
walnuts certified as merchantable.
Merchantable walnuts certified for the
year are estimated at 553,500,000
kernelweight pounds, which should
provide $22,140,000 in assessment
income. Assessment income, coupled
with $2,000,000 from the Board’s
reserve funds, should allow the Board to
cover its expenses. Unexpended funds
may be retained in a financial reserve,
provided that funds in the financial
reserve do not exceed approximately
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two years’ budgeted expenses. The
anticipated reserve should be
$14,909,800, which is well within the
order’s requirement.
According to NASS, the season
average grower price for 2015 was
$1,620 per ton. Dividing this average
grower price by 2,000 pounds per ton
provides an inshell price per pound of
$0.81. Dividing this inshell price per
pound by the 0.45 conversion factor
(inshell to kernelweight) established in
the order yields a potential 2017–18
price of about $1.80 per kernelweight
pound of assessable walnuts.
To calculate the percentage of grower
revenue represented by the assessment
rate, the assessment rate of $0.0400 per
kernelweight pound is divided by the
price. The estimated assessment
revenue for the 2017–18 marketing year,
stated as a percentage of total grower
revenue, would be approximately 2
percent.
This action decreases the assessment
obligation imposed on handlers.
Assessments are applied uniformly on
all handlers, and some of the costs may
be passed on to growers. However,
decreasing the assessment rate reduces
the burden on handlers and may reduce
the burden on growers.
In addition, the Board’s meeting was
widely publicized throughout the
California walnut industry, and all
interested persons were invited to
attend the meeting and encouraged to
participate in Board deliberations on all
issues. Like all Board meetings, the May
31, 2017, meeting was a public meeting,
and all entities, both large and small,
were able to express their views on this
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33777
2017–18
$2,292,000
206,000
262,000
$1,787,000
192,000
265,000
10,000
0
130,000
175,000
1,800,000
75,000
800,000
18,398,040
59,010
10,000
103,000
146,000
98,000
2,000,000
0
825,000
19,447,830
47,170
issue. Finally, interested persons are
invited to submit comments on this
interim 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 information
collection requirements have been
previously reviewed by 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 action imposes no additional
reporting or recordkeeping requirements
on either small or large California
walnut handlers. As with all Federal
marketing order programs, reports and
forms are periodically reviewed to
reduce information requirements and
duplication by industry and public
sector agencies.
AMS is committed to complying with
the E-Government Act, to promote the
use of the Internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services, and for other purposes.
USDA has not identified any relevant
Federal rules that duplicate, overlap, or
conflict with this rule.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
rules-regulations/moa/small-businesses.
Any questions about the compliance
guide should be sent to Richard Lower
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Federal Register / Vol. 82, No. 139 / Friday, July 21, 2017 / Rules and Regulations
at the previously mentioned address in
the FOR FURTHER INFORMATION CONTACT
section.
After consideration of all relevant
material presented, including the
Board’s recommendation, and other
information, it is found that this rule, as
hereinafter set forth, will tend to
effectuate the declared policy of the Act.
Pursuant to 5 U.S.C. 553, it is also
found and determined upon good cause
that it is impracticable and contrary to
the public interest to give preliminary
notice prior to putting this rule into
effect and that good cause exists for not
postponing the effective date of this rule
until 30 days after publication in the
Federal Register because: (1) The action
decreases the assessment rate for
merchantable walnuts; (2) handlers are
aware of this action, which was
unanimously recommended by the
Board at a public meeting and is similar
to other assessment rate actions issued
in past years; and (3) this interim rule
provides a 60-day comment period, and
all comments timely received will be
considered prior to finalization of this
rule.
List of Subjects in 7 CFR Part 984
Marketing agreements, Nuts,
Reporting and recordkeeping
requirements, Walnuts.
For the reasons set forth in the
preamble, 7 CFR part 984 is amended as
follows:
PART 984—WALNUTS GROWN IN
CALIFORNIA
1. The authority citation for 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, 2017, an
assessment rate of $0.0400 per
kernelweight pound is established for
California merchantable walnuts.
sradovich on DSK3GMQ082PROD with RULES
Dated: July 17, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing
Service.
[FR Doc. 2017–15304 Filed 7–20–17; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2016–6968; Directorate
Identifier 2015–SW–020–AD; Amendment
39–18950; AD 2017–14–06]
RIN 2120–AA64
Airworthiness Directives; Sikorsky
Aircraft Corporation Helicopters (Type
Certificate Previously Held by
Schweizer Aircraft Corporation)
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
AGENCY:
We are superseding
airworthiness directive (AD) 93–17–13
for Schweizer Aircraft Corporation and
Hughes Helicopters, Inc. (now Sikorsky
Aircraft Corporation) (Sikorsky) Model
TH55A, 269A, 269A–1, 269B, and 269C
helicopters. AD 93–17–13 required
installing tachometer markings and
inspecting the lower coupling driveshaft
(driveshaft). This new AD requires
repetitive inspections of the driveshaft
and expands the applicability to include
Model 269C–1 helicopters. This AD is
prompted by reports of accidents
because of driveshaft failures. The
actions of this AD are intended to
prevent the unsafe condition on these
products.
DATES: This AD is effective August 25,
2017.
The Director of the Federal Register
approved the incorporation by reference
of certain documents listed in this AD
as of August 25, 2017.
The Director of the Federal Register
approved the incorporation by reference
of a certain other publication listed in
this AD as of October 20, 1993 (58 FR
51770, October 5, 1993).
ADDRESSES: For Schweizer or Sikorsky
service information identified in this
final rule, contact Sikorsky Aircraft
Corporation, Customer Service
Engineering, 124 Quarry Road,
Trumbull, CT 06611; telephone 1–800–
Winged–S or 203–416–4299; email wcs_
cust_service_eng.gr-sik@lmco.com. You
may review a copy of the referenced
service information at the FAA, Office
of the Regional Counsel, Southwest
Region, 10101 Hillwood Pkwy., Room
6N–321, Fort Worth, TX 76177. It is also
available on the Internet at https://
www.regulations.gov by searching for
and locating Docket No. FAA–2016–
6968.
SUMMARY:
Examining the AD Docket
You may examine the AD docket on
the Internet at https://
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16:05 Jul 20, 2017
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www.regulations.gov by searching for
and locating Docket No. FAA–2016–
6968; or in person at the Docket
Operations Office between 9 a.m. and 5
p.m., Monday through Friday, except
Federal holidays. The AD docket
contains this AD, any incorporated-byreference service information, the
economic evaluation, any comments
received, and other information. The
street address for the Docket Operations
Office (phone: 800–647–5527) is U.S.
Department of Transportation, Docket
Operations Office, M–30, West Building
Ground Floor, Room W12–140, 1200
New Jersey Avenue SE., Washington,
DC 20590.
FOR FURTHER INFORMATION CONTACT:
Blaine Williams, Aerospace Engineer,
Boston Aircraft Certification Office,
Engine & Propeller Directorate, 1200
District Avenue, Burlington,
Massachusetts 01803; telephone (781)
238–7161; email blaine.williams@
faa.gov.
SUPPLEMENTARY INFORMATION:
Discussion
We issued a notice of proposed
rulemaking (NPRM) to amend 14 CFR
part 39 to remove AD 93–17–13,
Amendment 39–8684 (58 FR 51770,
October 5, 1993) and add a new AD. AD
93–17–13 applied to Schweizer Aircraft
Corporation and Hughes Helicopters,
Inc. (now Sikorsky) Model TH55A,
269A, 269A–1, 269B, and 269C
helicopters. AD 93–17–13 required
within 30 days or 100 hours time-inservice (TIS), whichever occurs first and
thereafter every 300 hours TIS, visually
inspecting for cracks, machining steps,
manufacturing tool marks, surface
defects, and lack of cleanup during the
production grinding operation. AD 93–
17–13 also required installing engine
and rotor tachometer markings and
replacing any unairworthy driveshaft
before further flight.
The NPRM published in the Federal
Register on January 5, 2017 (82 FR
1267) and was prompted by a safety
analysis by Sikorsky that determined
the initial and recurrent inspection
intervals and inspection method
required by AD 93–17–13 were not
adequate to detect all corrosion, pits,
nicks, scratches, dents, and cracks.
Accidents due to driveshaft failures
continued to occur after AD 93–17–13
was issued. Therefore, the NPRM
proposed to require, within 25 hours
TIS and thereafter at intervals not to
exceed 150 hours TIS, visually
inspecting the driveshaft. If there are no
cracks, corrosion, or other damage, the
NPRM proposed performing a magnetic
particle inspection. If there is a crack or
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]]>Agencies
[Federal Register Volume 82, Number 139 (Friday, July 21, 2017)]
[Rules and Regulations]
[Pages 33775-33778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15304]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 82, No. 139 / Friday, July 21, 2017 / Rules
and Regulations
[[Page 33775]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Doc. No. AMS-SC-17-0031; SC17-984-1 IR]
Walnuts Grown in California; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: This rule implements a recommendation from the California
Walnut Board (Board) to decrease the assessment rate established for
the 2017-18 and subsequent marketing years from $0.0465 to $0.0400 per
kernelweight pound of assessable walnuts. The Board is comprised of
growers and handlers of walnuts and locally administers the marketing
order that regulates the handling of walnuts grown in California. The
Board also has a public member who has no financial interest in walnut
production or handling. 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 will remain in effect indefinitely unless modified, suspended, or
terminated.
DATES: Effective July 24, 2017. Comments received by September 19, 2017
will be considered prior to issuance of a final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent 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 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: Terry Vawter, Senior Marketing
Specialist, or Jeffrey 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: Jeffrey.Smutny@ams.usda.gov or Terry.Vawter@ams.usda.gov.
Small businesses may request information on complying with this
regulation by contacting Richard Lower, 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: Richard.Lower@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order
No. 984, as amended (7 CFR part 984), regulating the handling of
walnuts grown in California, hereinafter referred to as the ``order.''
The order is effective under the Agricultural Marketing Agreement Act
of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the
``Act.''
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Orders 12866, 13563, and 13175.
Additionally, because this rule does not meet the definition of a
significant regulatory action, it does not trigger the requirements
contained in Executive Order 13771. See the Office of Management and
Budget's (OMB) Memorandum titled ``Interim Guidance Implementing
Section 2 of the Executive Order of January 30, 2017, titled `Reducing
Regulation and Controlling Regulatory Costs'[thinsp]'' (February 2,
2017).
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing order now in effect, California
walnut handlers are subject to assessments. Funds to administer the
order are derived from such assessments. It is intended that the
assessment rate will be applicable to all assessable walnuts beginning
on September 1, 2017, 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 will rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This rule decreases the assessment rate established for the Board
for the 2017-18 and subsequent marketing years from $0.0465 to $0.0400
per kernelweight pound of assessable walnuts.
The California walnut marketing order provides authority for the
Board, with the approval of USDA, to formulate an annual budget of
expenses and collect assessments from handlers to administer the
program. All members of the Board, except the public member, are
growers and handlers of California walnuts. They are familiar with the
Board's needs and with the costs for goods and services in their local
area and are thus in a position to formulate an appropriate budget and
assessment rate. The assessment rate is formulated and discussed in a
public meeting. Thus, all directly affected persons have an opportunity
to participate and provide input.
For the 2016-17 and subsequent marketing years, the Board
recommended, and USDA approved, an assessment rate of $0.0465 per
kernelweight pound of assessable walnuts that would continue in effect
from year to year unless modified, suspended, or terminated by USDA
upon recommendation and information
[[Page 33776]]
submitted by the Board or other information available to USDA.
The Board met on May 31, 2017, and unanimously recommended 2017-18
expenditures of $24,140,000 and a decreased assessment rate of $0.0400
per kernelweight pound of assessable walnuts. In comparison, last
year's budgeted expenditures were $23,143,050. The assessment rate of
$0.0400 is $0.0065 per pound lower than the rate currently in effect.
The quantity of assessable walnuts for the 2017-18 marketing year is
estimated at a three-year average of 615,000 tons (inshell) or
553,500,000 kernelweight pounds, which is 62,000 tons more than the
553,000 tons assessed during the 2016-17 marketing year. At the
recommended lower assessment rate of $0.0400 per kernelweight pound,
the Board should collect approximately $22,140,000 in assessment
income, which, when augmented with funds from the Board's monetary
reserve, would be adequate to cover its 2017-18 budgeted expenses of
$24,140,000.
The following table compares major budget expenditures recommended
by the Board for the 2016-17 and 2017-18 marketing years:
------------------------------------------------------------------------
Budget expense categories 2016-17 2017-18
------------------------------------------------------------------------
Employee Expenses....................... $2,292,000 $1,787,000
Travel/Board Expenses/Annual Audit...... 206,000 192,000
Office Expenses......................... 262,000 265,000
Program Expenses, Including Research:
Controlled Purchases................ 10,000 10,000
Crop Acreage Survey................. 0 103,000
Crop Estimate....................... 130,000 146,000
Production Research Director........ 175,000 98,000
Production Research................. 1,800,000 2,000,000
Sustainability Project.............. 75,000 0
Grades and Standards Research....... 800,000 825,000
Domestic Market Development......... 18,398,040 19,447,830
Reserve for Contingency............. 59,010 47,170
------------------------------------------------------------------------
The assessment rate recommended by the Board was derived by
dividing anticipated expenses by expected volumes of California walnuts
certified as merchantable. The 615,000-ton (inshell) estimate for
merchantable walnut receipts is an average of the three prior years'
shipments.
Section 984.69 of the order authorizes the Board to carry over
excess funds into subsequent marketing years as a reserve, provided
that funds already in the reserve do not exceed approximately two
years' budgeted expenses. The reserve is estimated to be $14,909,800 at
the end of the marketing year, well within the authorized reserve
amount.
The Board met on May 31, 2017, and unanimously approved using a
three prior years' average walnut production volume to formulate the
2017-18 crop estimate. Pursuant to Sec. 984.51(b) of the order, this
figure is converted to a merchantable kernelweight basis using a factor
of 0.45 (615,000 tons x 2,000 pounds per ton x 0.45), which yields
553,500,000 kernelweight pounds. At $0.0400 per pound, the new
assessment rate should generate $22,140,000 in assessment income. The
assessment income, plus $2,000,000 from the Board's reserve, will be
adequate to cover its budgeted expenses.
The assessment rate established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by USDA
upon recommendation and information submitted by the Board or other
available information.
Although this assessment rate is effective for an indefinite
period, the Board will continue to meet prior to or during each
marketing year to recommend a budget of expenses and consider
recommendations for modification of the assessment rate. The dates and
times of Board meetings are available from the Board or USDA. Board
meetings are open to the public, and interested persons are encouraged
to express their views at these meetings. USDA will evaluate Board
recommendations and other available information to determine whether
modification of the assessment rate is needed. Further rulemaking will
be undertaken as necessary. The Board's 2017-18 budget and those for
subsequent marketing years will be reviewed and, as appropriate,
approved by USDA.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS)
has considered the economic impact of this action on small entities.
Accordingly, AMS has prepared this initial regulatory flexibility
analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
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 5,700 growers of California walnuts in the
production area and approximately 90 handlers subject to regulation
under the marketing order. Small agricultural growers are defined by
the Small Business Administration (SBA) as those whose annual receipts
are 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).
According to USDA's National Agricultural Statistics Service's
(NASS) 2012 Census of Agriculture, approximately 86 percent of
California's walnut farms were smaller than 100 acres. Further, NASS
reports that the average yield for 2015 was 2.01 tons per acre, and the
average price received for 2015 was $1,620 per ton. A 100-acre farm
with an average yield of 2.01 tons per acre would, therefore, have been
expected to produce about 201 tons of walnuts. At $1,620 per ton, that
farm's production would have had an approximate value of $325,620. This
is well below the SBA threshold of $750,000; thus, it may be concluded
that the majority of California's walnut growers are considered small
growers according to SBA's definition.
According to information supplied by the industry, approximately
two-thirds of California's walnut handlers shipped merchantable walnuts
valued under $7,500,000 during the 2016-17 marketing year and would,
therefore, be
[[Page 33777]]
considered small handlers according to the SBA definition.
This rule decreases the assessment rate established for the Board
and collected from handlers for the 2017-18 and subsequent marketing
years from $0.0465 to $0.0400 per kernelweight pound of assessable
walnuts. The Board unanimously recommended 2017-18 expenditures of
$24,140,000 and an assessment rate of $0.0400 per kernelweight pound of
assessable walnuts, which is $0.0065 lower than the assessment rate
currently in effect. The quantity of assessable walnuts for the 2017-18
marketing year is estimated to be 615,000 tons, 62,000 tons greater
than the quantity estimated for the 2016-17 marketing year. Therefore,
even at the reduced assessment rate, the Board should collect
approximately $22,140,000 in assessment income, which, when combined
with $2,000,000 from its reserves, should be adequate to cover its
budgeted expenses.
The following table compares major budget expenditures recommended
by the Board for the 2016-17 and 2017-18 marketing years:
------------------------------------------------------------------------
Budget Expense Categories 2016-17 2017-18
------------------------------------------------------------------------
Employee Expenses....................... $2,292,000 $1,787,000
Travel/Board Expenses/Annual Audit...... 206,000 192,000
Office Expenses......................... 262,000 265,000
Program Expenses, Including Research:...
Controlled Purchases................ 10,000 10,000
Crop Acreage Survey................. 0 103,000
Crop Estimate....................... 130,000 146,000
Production Research Director........ 175,000 98,000
Production Research................. 1,800,000 2,000,000
Sustainability Project.............. 75,000 0
Grades and Standards Research....... 800,000 825,000
Domestic Market Development......... 18,398,040 19,447,830
Reserve for Contingency............. 59,010 47,170
------------------------------------------------------------------------
The Board reviewed and unanimously recommended 2017-18 expenditures
of $24,140,000. Prior to arriving at this budget, the Board considered
alternative expenditure and assessment levels, as well as a
recommendation from the Budget and Personnel Committee (Committee). The
Committee considered the estimated income and expenses, given the
requests from other committees, such as the Production Research, Market
Development, and Grades and Standards Committees. The other committees
each deliberated, formulated their own budgets of expenses, and made
their recommendations to the Committee. The Committee also considered
the recommendations and various assessment rates and expenses, then
made a recommendation to the Board. The Board ultimately determined
that the recommended levels were reasonable and necessary to properly
administer the order.
The assessment rate of $0.0400 per kernelweight pound of assessable
walnuts was derived by dividing anticipated expenses of $24,140,000 by
expected 2017-18 volumes of California walnuts certified as
merchantable. Merchantable walnuts certified for the year are estimated
at 553,500,000 kernelweight pounds, which should provide $22,140,000 in
assessment income. Assessment income, coupled with $2,000,000 from the
Board's reserve funds, should allow the Board to cover its expenses.
Unexpended funds may be retained in a financial reserve, provided that
funds in the financial reserve do not exceed approximately two years'
budgeted expenses. The anticipated reserve should be $14,909,800, which
is well within the order's requirement.
According to NASS, the season average grower price for 2015 was
$1,620 per ton. Dividing this average grower price by 2,000 pounds per
ton provides an inshell price per pound of $0.81. Dividing this inshell
price per pound by the 0.45 conversion factor (inshell to kernelweight)
established in the order yields a potential 2017-18 price of about
$1.80 per kernelweight pound of assessable walnuts.
To calculate the percentage of grower revenue represented by the
assessment rate, the assessment rate of $0.0400 per kernelweight pound
is divided by the price. The estimated assessment revenue for the 2017-
18 marketing year, stated as a percentage of total grower revenue,
would be approximately 2 percent.
This action decreases the assessment obligation imposed on
handlers. Assessments are applied uniformly on all handlers, and some
of the costs may be passed on to growers. However, decreasing the
assessment rate reduces the burden on handlers and may reduce the
burden on growers.
In addition, the Board's meeting was widely publicized throughout
the California walnut industry, and all interested persons were invited
to attend the meeting and encouraged to participate in Board
deliberations on all issues. Like all Board meetings, the May 31, 2017,
meeting was a public meeting, and 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 interim 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 information collection requirements have been
previously reviewed by 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 action imposes no additional reporting or recordkeeping
requirements on either small or large California walnut handlers. As
with all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies.
AMS is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions
about the compliance guide should be sent to Richard Lower
[[Page 33778]]
at the previously mentioned address in the FOR FURTHER INFORMATION
CONTACT section.
After consideration of all relevant material presented, including
the Board's recommendation, and other information, it is found that
this rule, as hereinafter set forth, will tend to effectuate the
declared policy of the Act.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable and contrary to the public interest to
give preliminary notice prior to putting this rule into effect and that
good cause exists for not postponing the effective date of this rule
until 30 days after publication in the Federal Register because: (1)
The action decreases the assessment rate for merchantable walnuts; (2)
handlers are aware of this action, which was unanimously recommended by
the Board at a public meeting and is similar to other assessment rate
actions issued in past years; and (3) this interim rule provides a 60-
day comment period, and all comments timely received will be considered
prior to finalization of this rule.
List of Subjects in 7 CFR Part 984
Marketing agreements, Nuts, Reporting and recordkeeping
requirements, Walnuts.
For the reasons set forth in the preamble, 7 CFR part 984 is
amended as follows:
PART 984--WALNUTS GROWN IN CALIFORNIA
0
1. The authority citation for 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, 2017, an assessment rate of $0.0400 per
kernelweight pound is established for California merchantable walnuts.
Dated: July 17, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2017-15304 Filed 7-20-17; 8:45 am]
BILLING CODE 3410-02-P
