Increased Assessment Rate for Pistachios, 68932-68934 [2021-26256]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 86, Number 231 (Monday, December 6, 2021)]
[Proposed Rules]
[Pages 68932-68934]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26256]


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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. 86, No. 231 / Monday, December 6, 2021 / 
Proposed Rules

[[Page 68932]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 983

[Doc. No. AMS-SC-21-0068; SC21-983-1 PR]


Increased Assessment Rate for Pistachios

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 2021-22 and subsequent production 
years. The proposed assessment rate would remain in effect indefinitely 
unless modified, suspended, or terminated.

DATES: Comments must be received by January 5, 2022.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments must be sent to the Docket 
Clerk electronically by Email: [email protected] 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 
individuals or entities submitting comments will be made public on the 
internet at the address provided above.

FOR FURTHER INFORMATION CONTACT: Peter Sommers, Marketing Specialist, 
or Gary Olson, Regional Director, West Region Branch, Market 
Development Division, Specialty Crops Program, AMS, USDA; Telephone: 
(503) 326-2724 or Email: [email protected] or 
[email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Market Development Division, 
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 
0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 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 12866 and 13563. Executive Orders 
12866 and 13563 direct agencies to assess all costs and benefits of 
available regulatory alternatives and, if regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects, 
distributive impacts and equity). Executive Order 13563 emphasizes the 
importance of quantifying both costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility. This action falls within 
a category of regulatory actions that the Office of Management and 
Budget (OMB) exempted from Executive Order 12866 review.
    This proposed rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which 
requires agencies to consider whether their rulemaking actions would 
have tribal implications. AMS has determined this proposed rule is 
unlikely to have substantial direct effects on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian tribes.
    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 2021-22 production year 
and continue until amended, suspended, or terminated. The production 
year runs from September 1 to August 31. This proposed rule is not 
intended to have retroactive effect.
    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 $0.00015 
per pound of pistachios, the rate established for 2020-21 and 
subsequent production years, to $0.0007 per pound of pistachios for 
2021-22 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. Members are familiar with the 
Committee's needs and with 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, and all directly affected

[[Page 68933]]

persons have an opportunity to participate and provide input.
    For 2020-21 and subsequent production years, the Committee 
recommended, and USDA approved, an assessment rate of $0.00015 per 
pound of pistachios. This assessment rate would continue to be 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.
    The Committee met on July 20, 2021, and unanimously recommended 
expenditures of $828,000 and an assessment rate of $0.0007 per pound of 
pistachios handled for 2021-22 and subsequent production years. In 
comparison, the prior year's budgeted expenditures were $679,800. The 
proposed assessment rate of $0.0007 is $0.00055 higher than the rate 
currently in effect. The Committee recommended increasing the 
assessment rate to pay for additional Committee staff in preparation 
for the retirement of key staff positions (manager and administrative 
assistant) and to provide adequate income to cover all of the 
Committee's budgeted expenses for the 2021-22 production year.
    Major expenditures recommended by the Committee for the 2021-22 
production year include $462,500 for personnel expenses, $125,000 for 
research, $100,000 for a contingency fund, $82,700 for administration, 
and $57,800 for office expenses. Budgeted expenses for these items in 
the 2020-21 production year were $336,500, $125,000, $80,000, $80,700, 
and $57,600, respectively.
    The Committee derived the recommended assessment rate by 
considering anticipated expenses, an estimated crop of 975,000 million 
pounds of pistachios, and the amount of funds available in the 
authorized reserve. Income derived from handler assessments, calculated 
at $682,500 (975,000,000 pounds multiplied by $0.0007 assessment rate), 
along with other income ($220,200), would be adequate to cover budgeted 
expenses of $828,000. Excess assessment revenue would be added to the 
Committee's reserve fund. Funds in the Committee's financial reserve 
are expected to be approximately $385,157 at the end of the 2021-22 
production year, which would be within the Order's requirement of no 
more than approximately two production years' budgeted expenses.
    The assessment rate proposed in this rulemaking 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. 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 will evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking will 
be undertaken as necessary. The Committee's 2022-23 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 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 19 handlers subject to regulation under the 
Order, and approximately 1,624 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 2019-20 
production year was $2.75 per pound. Committee data indicates 2019-20 
production year total pistachio production was 582,111,271 pounds. The 
total 2019-20 production year value of the pistachio crop was 
calculated as $1,600,805,995 (582,111,271 pounds times $2.75 per pound 
equals $1,600,805,995). Dividing the crop value by the estimated number 
of producers (1,624) yields an estimated average receipt per producer 
of $985,718, which is just below the SBA threshold for small producers.
    According to USDA Market News data, the reported terminal price for 
2021 for pistachios ranged between $150.00 to $250.00 per 25-pound 
carton. The average of this range is $200.00 ($150.00 plus $250.00 
divided by 2 equals $200.00). Dividing the average value by 25-pounds 
per carton yields an estimated average price per pound of $8.00 
($200.00 average value for 25-pound carton divided by 25). Multiplying 
the 2019-20 production year total pistachio production of 582,111,271 
pounds by the estimated average price per pound of $8.00 equals 
$4,656,890,168. Dividing this figure by 19 regulated handlers yields 
estimated average annual handler receipts of $245,099,483, which is 
well above the SBA threshold for small agriculture service firms.
    Therefore, using the above data, and assuming a normal 
distribution, the majority of pistachio producers may be classified as 
small entities and the majority of handlers of pistachios may be 
classified as large entities.
    The proposed assessment rate of $0.0007 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 $2.75 per pound of pistachios. Thus, $2.75 times 0.5 percent 
equals $0.01375, which is greater than the proposed assessment rate of 
$0.0007.
    This proposal would increase the assessment rate collected from 
handlers for 2021-22 and subsequent production years from $0.00015 to 
$0.0007 per pound of pistachios. The Committee unanimously recommended 
2021-22 production year expenditures of $828,000 and an assessment rate 
of $0.0007 per pound of pistachios handled. The proposed assessment 
rate of $0.0007 per pound of pistachios is $0.00055 higher than the 
current rate. The volume of assessable pistachios for the 2021-22 
production year is estimated to be 975 million pounds. Thus, the 
$0.0007 per pound assessment rate should provide $682,500 in assessment 
income (975,000,000 multiplied by $0.0007). Income derived from handler 
assessments, along with an estimated $220,000 of other income,

[[Page 68934]]

would be adequate to cover budgeted expenses for the 2021-22 production 
year.
    Major expenditures recommended by the Committee for the 2021-22 
production year include $462,500 for personnel expenses, $125,000 for 
research, $100,000 for a contingency fund, $82,700 for administration, 
and $57,800 for office expenses. Budgeted expenses for these items in 
the 2020-21 production year were $336,500, $125,000, $80,000, $80,700, 
and $57,600, respectively.
    The Committee recommended increasing the assessment rate due to 
cover the Committee's budgeted expenses for the 2021-22 production year 
and maintain its financial reserve. Additionally, the Committee has 
approved a hiring search for both the Manager and Administrative 
Assistant, as both are expected to retire in the near future. The 
increased assessment income would accommodate the hiring of additional 
staff to aid in the transition.
    Prior to arriving at this budget and assessment rate 
recommendation, the Committee discussed an alternative that considered 
the timing of when additional staff salaries would be required to 
assist the management transition. However, the Committee determined 
that the recommended assessment rate would fully fund budgeted 
expenses, avoid utilizing reserves, and permit the Committee to hire 
the needed staff to facilitate the replacement of the key management 
positions.
    This proposed rule would increase the assessment obligation imposed 
on handlers. Assessments are applied uniformly on all handlers, and a 
portion of assessment costs may be passed on to producers. However, 
these costs would be offset by 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 20, 2021, 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 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 OMB and assigned OMB No. 0581-0178, Vegetable 
and Specialty Crops. 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.
    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 30-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 reasons set forth in the preamble, 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, 2021, an assessment rate of $0.0007 per 
pound is established for California, Arizona, and New Mexico 
pistachios.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2021-26256 Filed 12-3-21; 8:45 am]
BILLING CODE 3410-02-P