Pistachios Grown in California, Arizona, and New Mexico; Increased Assessment Rate, 62615-62617 [2020-21687]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 85, Number 193 (Monday, October 5, 2020)]
[Proposed Rules]
[Pages 62615-62617]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21687]


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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. 85, No. 193 / Monday, October 5, 2020 / 
Proposed Rules

[[Page 62615]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Doc. No. AMS-SC-20-0069; SC20-983-2 PR]


Pistachios Grown in California, Arizona, and New Mexico; 
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 
Administrative Committee for Pistachios (Committee) to increase the 
assessment rate established for the 2020-21 and subsequent production 
years. The proposed assessment rate would remain in effect indefinitely 
unless modified, suspended, or terminated.

DATES: Comments must be received by November 19, 2020.

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 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: Peter Sommers, Marketing Specialist, 
or Terry Vawter, Regional Director, California Marketing Field Office, 
Marketing Order and Agreement Division, Specialty Crops Program, AMS, 
USDA; Telephone: (559)538-1670 or Email: [email protected] or 
[email protected].
    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: [email protected].

SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553, 
proposes to amend regulations issued to carry out a marketing order as 
defined in 7 CFR 900.2(j). This proposed rule is issued under Marketing 
Agreement and Order No. 983, as amended (7 CFR part 983), regulating 
the handling of pistachios grown in California, Arizona, and New 
Mexico. Part 983 (referred to as 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 Committee locally 
administers the Order and is comprised of producers and handlers of 
pistachios operating within the production area, and a public member.
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Orders 13563 and 13175. This proposed 
rule falls within a category of regulatory actions that the Office of 
Management and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this proposed rule does not meet the definition 
of a significant regulatory action, it does not trigger the 
requirements contained in Executive Order 13771. See OMB's 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 proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the Order now in effect, pistachio handlers 
are subject to assessments. Funds to administer the Order are derived 
from such assessments. It is intended that the assessment rate would be 
applicable to all assessable pistachios for the 2020-21 production year 
and continue until amended, suspended, or terminated.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. Such 
handler is afforded the opportunity for a hearing on the petition. 
After the hearing, USDA would rule on the petition. The Act provides 
that the district court of the United States in any district in which 
the handler is an inhabitant, or has his or her principal place of 
business, has jurisdiction to review USDA's ruling on the petition, 
provided an action is filed no later than 20 days after the date of the 
entry of the ruling.
    This proposed rule would increase the assessment rate from $0.00010 
per pound of assessed weight pistachios, the rate that was established 
for the 2017-18 and subsequent production years, to $0.00015 per pound 
of assessed weight pistachios for the 2020-21 and subsequent production 
years.
    The Order authorizes the Committee, with the approval of USDA, to 
formulate an annual budget of expenses and collect assessments from 
handlers to administer the program. The members are familiar with the 
Committee's needs and with the costs of goods and services in their 
local area and are 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 2017-18 and subsequent production years, the Committee 
recommended, and USDA approved, an assessment rate of $0.00010 per 
pound of assessed weight pistachios. That assessment rate continues in 
effect from production year to production year unless modified, 
suspended, or terminated by USDA upon recommendation and information 
submitted by the Committee or other information available to USDA.

[[Page 62616]]

    The Committee met on July 14, 2020, and unanimously recommended 
expenditures of $679,800 and an assessment rate of $0.00015 per pound 
of assessed weight pistachios handled for the 2020-21 and subsequent 
production years. In comparison, last year's budgeted expenditures were 
$677,100. The proposed assessment rate of $0.00015 is $0.00005 higher 
than the rate currently in effect. The Committee recommended increasing 
the assessment rate to provide adequate income, along with California 
Pistachio Research Board (CPRB) management income and reserve funds, to 
cover all of the Committee's budgeted expenses for the 2020-21 
production year. Funds in the reserve are expected to be approximately 
$197,585 at the end of the 2020-21 production year, which is within the 
Order's requirement of carry-over no more than approximately two 
production years' budgeted expenses.
    The major expenditures recommended by the Committee for the 2020-21 
production year include $74,800 for various administrative expenses, 
$10,000 for compliance expenses, $346,500 for salaries and related 
employee expenses, $125,000 for research, and $80,000 for a contingency 
fund. Budgeted expenses for these items for the 2019-20 production year 
were $48,900 for various administrative expenses, $10,000 for 
compliance expenses, $336,500 for salaries and related employee 
expenses, $125,000 for research, and $80,000 for a contingency fund.
    The Committee derived the recommended assessment rate by 
considering anticipated expenses, an estimated crop of 950 million 
pounds of assessed weight pistachios, and the amount of funds available 
in the authorized reserve. Income derived from handler assessments, 
calculated at $142,500 (950,000,000 pounds assessed weight pistachios 
multiplied by $0.00015 assessment rate), along with CPRB management 
income ($175,200), and funds from the Committee's authorized reserve 
($559,685), would be adequate to cover budgeted expenses of $679,800. 
Funds in the reserve are estimated to be $197,585 at the end of the 
2020-21 production year ($142,500 plus $175,200 plus $559,685 minus 
$679,800 equals $197,585).
    The assessment rate proposed in this rule would continue in effect 
indefinitely unless modified, suspended, or terminated by USDA upon 
recommendation and information submitted by the Committee or other 
available information.
    Although this assessment rate would be in effect for an indefinite 
period, the Committee will continue to meet prior to or during each 
production year to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA would evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking would 
be undertaken as necessary. The Committee's 2020-21 production year 
budget, and those for subsequent production 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 21 handlers subject to the regulation under 
the Order, and approximately 1,501 producers of pistachios in the 
production area. Small agricultural producers are defined by the Small 
Business Administration (SBA) as those having annual receipts of less 
than $1,000,000, and small agricultural service firms have been defined 
as those whose annual receipts are less than $30,000,000 (13 CFR 
121.201).
    According to the National Agricultural Statistics Service (NASS), 
the national average producer price for pistachios for the 2018 
production year was $2.65 per pound. Committee data indicates 2018-19 
pistachio total production was 746,858,150 pounds. The total 2018 value 
of the pistachio crop was $1,979,174,098 (746,858,150 pounds times 
$2.65 per pound equals $1,979,174,098). Dividing the crop value by the 
estimated number of producers (1,501) yields an estimated average 
receipt per producer of $1,318,570 which is above the SBA threshold for 
small producers.
    According to USDA Market News data, the reported terminal price for 
2018 for pistachios ranged between $155.00 to $165.00 per 25-pound 
carton. The average of this range is $160.00 ($155.00 plus $165.00 
divided by 2 equals $160.00). Dividing the average value by the 25-
pound carton yields an estimated average price per pound of $6.40 
($160.00 average value for 25-pound carton divided by 25). Multiplying 
the 2018-19 pistachio total production of 746,858,150 pounds by the 
estimated average price per pound of $6.40 equals $4,779,892,160.
    Dividing this figure by 21 regulated handlers yields estimated 
average annual handler receipts of $227,613,912, which is above the SBA 
threshold for small agricultural service firms. Therefore, using the 
above data, and assuming a normal distribution, the majority of 
producers and handlers of pistachios may be classified as large 
entities.
    The proposed assessment rate of $0.00015 that the committee 
approved complies with section 983.71(b) of the Order which states that 
any proposed assessment rate must not exceed one-half of one percent of 
the average price received by producers in the preceding production 
year. The average price received by producers in the preceding 
production year was $2.65 per pound of pistachios. Thus, $2.65 times 
0.5 percent equals $0.01325, which is greater than the assessment rate 
increase of $0.00015.
    This proposal would increase the assessment rate collected from 
handlers for the 2020-21 and subsequent production years from $0.00010 
to $0.00015 per pound assessed weight pistachios. The Committee 
unanimously recommended 2020-21 expenditures of $679,800 and an 
assessment rate of $0.00015 per pound assessed weight pistachios. The 
proposed assessment rate of $0.00015 per pound assessed weight 
pistachios is $0.00005 higher than the current rate. The volume of 
assessable pistachios for the 2020-21 production year is estimated to 
be 950 million pounds. Thus, the $0.00015 per pound assessed weight 
pistachios should provide $142,500 in assessment income (950,000,000 
multiplied by $0.00015). Income derived from handler assessments, along 
with CPRB management income and funds from the Committee's authorized 
reserve, would be adequate to cover budgeted expenses for the 2020-21 
production year.
    The major expenditures recommended by the Committee for the 2020-21 
production year include $74,800 for various administrative expenses, 
$10,000 for compliance

[[Page 62617]]

expenses, $346,500 for salaries and related employee expenses, $125,000 
for research, and $80,000 for a contingency fund. Budgeted expenses for 
these items in the 2019-20 production year were $48,900, $10,000, 
$336,500, $125,000, and $80,000 respectively.
    In recent years, the Committee has utilized reserve funds to 
partially fund its budgeted expenditures. The Committee recommended 
increasing the assessment rate to provide adequate income to cover the 
Committee's budgeted expenses for the 2020-21 production year while 
maintaining its financial reserve. This action would maintain the 
Committee's reserve balance at a level that the Committee believes is 
appropriate and meets the requirements of the Order.
    Prior to arriving at this budget and assessment rate 
recommendation, the Committee discussed various alternatives, including 
maintaining the current assessment rate of $0.00010 per pound assessed 
weight pistachios, and increasing the assessment rate by a different 
amount. However, the Committee determined that the recommended 
assessment rate would fully fund budgeted expenses and avoid drawing 
down reserves at an unsustainable rate.
    This proposed rule would increase the assessment obligation imposed 
on handlers. Assessments are applied uniformly on all handlers, and 
some of the costs may be passed on to producers. However, these costs 
would be offset by the benefits derived by the operation of the Order.
    The Committee's meeting was widely publicized throughout the 
pistachio industry. All interested persons were invited to attend the 
meeting and encouraged to participate in Committee deliberations on all 
issues. Like all Committee meetings, the July 14, 2020, meeting was a 
public meeting, and all entities, both large and small, were able to 
express views on this issue. Interested persons are invited to submit 
comments on this proposed rule, including the regulatory and 
information collection 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 OMB and assigned OMB No. 0581-0215, 
Pistachios Grown in California, Arizona, and New Mexico. No changes in 
those requirements would be necessary as a result of this proposed 
rule. Should any changes become necessary, they would be submitted to 
OMB for approval.
    This proposed rule would not impose any additional reporting or 
recordkeeping requirements on either small or large pistachio 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 proposed 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 at 
the previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    A 45-day comment period is provided to allow interested persons to 
respond to this proposed rule. All written comments timely received 
will be considered before a final determination is made on this matter.

List of Subjects in 7 CFR Part 983

    Marketing agreements, Pistachios, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service proposes to amend 7 CFR part 983 as follows:

PART 983--PISTACHIOS GROWN IN CALIFORNIA, ARIZONA, AND NEW MEXICO

0
1. The authority citation for 7 CFR part 983 continues to read as 
follows:

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

0
2. Section 983.253 is revised to read as follows:


Sec.  983.253   Assessment rate.

    On and after September 1, 2020, an assessment rate of $0.00015 per 
pound is established for California, Arizona, and New Mexico 
pistachios.

Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-21687 Filed 10-2-20; 8:45 am]
BILLING CODE P