Walnuts Grown in California; Increased Assessment Rate, 93148-93151 [2024-27605]
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93148
Federal Register / Vol. 89, No. 228 / Tuesday, November 26, 2024 / Rules and Regulations
(referred to as the ‘‘Order’’) is effective
DEFINITIONS OF WAGE AREAS AND
WAGE AREA SURVEY AREAS—Con- under the Agricultural Marketing
Agreement Act of 1937, as amended (7
tinued
Appendix D to Subpart B of Part 532—
Nonappropriated Fund Wage and
Survey Areas
DEFINITIONS OF WAGE AREAS AND
WAGE AREA SURVEY AREAS
*
*
*
ALABAMA
Madison
Survey Area
*
*
Alabama:
Madison
Area of Application. Survey area plus:
Alabama:
Jefferson
Tennessee:
Coffee
Davidson
Hamilton
Rutherford
Montgomery
Survey Area
Alabama:
Montgomery
Area of Application. Survey area plus:
Alabama:
Dale
Dallas
Macon
*
*
*
GEORGIA
Chatham
Survey Area
*
DOUGHERTY
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Survey Area
Georgia:
Dougherty
Area of Application. Survey area.
HOUSTON
Survey Area
Georgia:
Houston
Area of Application. Survey area plus:
Georgia:
Laurens
Lowndes
Survey Area
Georgia:
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*
*
*
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[FR Doc. 2024–27662 Filed 11–25–24; 8:45 am]
BILLING CODE 6325–39–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Doc. No. AMS–SC–24–0039]
Walnuts Grown in California; Increased
Assessment Rate
*
Georgia:
Chatham
Area of Application. Survey area plus:
Georgia:
Glynn
Liberty
South Carolina:
Beaufort
Cobb
Survey Area
Georgia:
Cobb
Area of Application. Survey area plus:
Alabama:
Calhoun
Georgia:
Bartow
De Kalb
Fulton
Columbus
Survey Area
Georgia:
Columbus
Area of Application. Survey area plus:
Georgia:
Chattahoochee
Lowndes
Area of Application. Survey area plus:
Florida:
Leon
Richmond
Survey Area
Georgia:
Richmond
Area of Application. Survey area plus:
South Carolina:
Aiken
Agricultural Marketing Service,
Department of Agriculture (USDA).
ACTION: Final rule.
AGENCY:
This final rule implements a
recommendation from the California
Walnut Board (Board) to increase the
assessment rate established for the
2024–2025 and subsequent marketing
years from $0.011 to $0.0125 per inshell
pound of California walnuts. The
assessment rate will remain in effect
indefinitely unless modified,
suspended, or terminated.
DATES: Effective December 26, 2024.
FOR FURTHER INFORMATION CONTACT:
Joshua R. Wilde, Marketing Specialist,
or Barry Broadbent, Chief, Northwest
Region Branch, Market Development
Division, Specialty Crops Program,
AMS, USDA; Telephone: (503) 326–
2724, or Email: Joshua.R.Wilde@
usda.gov or Barry.Broadbent@usda.gov.
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) 720–8085, or Email:
Richard.Lower@usda.gov.
SUPPLEMENTARY INFORMATION: This
action, pursuant to 5 U.S.C. 553,
amends regulations issued to carry out
a marketing order as defined in 7 CFR
900.2(j). This rule is issued under
Marketing Order No. 984, as amended (7
CFR part 984), regulating the handling
of walnuts grown in California. Part 984
SUMMARY:
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U.S.C. 601–674), hereinafter referred to
as the ‘‘Act.’’ The Board locally
administers the Order and comprises
growers and handlers of California
walnuts operating within the area of
production, and a public member.
The Agricultural Marketing Service
(AMS) is issuing this final rule in
conformance with Executive Orders
12866, 13563, and 14094. 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. Executive Order
14094 reaffirms, supplements, and
updates Executive Orders 12866 and
further directs agencies to solicit and
consider input from a wide range of
affected and interested parties through
a variety of means. This action falls
within a category of regulatory actions
that the Office of Management and
Budget (OMB) exempted from Executive
Order 12866 review.
This final rule has been reviewed
under Executive Order 13175—
Consultation and Coordination with
Indian Tribal Governments, which
requires Federal agencies to consider
whether their rulemaking actions would
have Tribal implications. AMS has
determined that this 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 final rule has been reviewed
under Executive Order 12988—Civil
Justice Reform. Under the 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 California walnuts for the
2024–2025 marketing 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
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Federal Register / Vol. 89, No. 228 / Tuesday, November 26, 2024 / Rules and Regulations
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 final rule increases the
assessment rate for California walnuts
handled under the Order from $0.011
per inshell pound, the rate that was
established for the 2023–2024 and
subsequent marketing years, to $0.0125
per inshell pound for the 2024–2025
and subsequent marketing years.
Sections 984.68 and 984.69 authorize
the Board, with the approval of AMS, to
formulate an annual budget of expenses
and collect assessments from handlers
to administer the program. The
members of the Board are familiar with
the Board’s needs and with the costs of
goods and services in their local area
and are able to formulate an appropriate
budget and assessment rate. The
assessment rate is formulated and
discussed in a public meeting, and all
directly affected persons have an
opportunity to participate and provide
input.
For the 2023–2024 and subsequent
marketing years, the Board
recommended, and AMS approved, an
assessment rate of $0.011 per inshell
pound of California walnuts within the
production area. That rate continues in
effect from marketing year to marketing
year until modified, suspended, or
terminated by AMS upon
recommendation and information
submitted by the Board or other
information available to AMS.
The Board met on May 15, 2024, and
unanimously recommended 2024–2025
marketing year expenditures of
$19,886,800 and an assessment rate of
$0.0125 per inshell pound of California
walnuts for the 2024–2025 marketing
year. In comparison, last year’s
budgeted expenditures were
$16,811,250. The assessment rate of
$0.0125 per inshell pound is $0.0015
higher than the rate currently in effect.
The Board recommended increasing the
assessment rate to better align
assessment revenue with budgeted
expenses, due in part to a smaller
estimated crop. The Board projects
handler receipts of 730,000 tons
(equivalent to 1.46 billion pounds) of
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assessable California walnuts for the
2024–2025 marketing year, down from
the approximately 820,000 tons (1.64
billion pounds) handled during the
2023–2024 marketing year.
The major expenditures
recommended by the Board for the
2024–2025 marketing year include
$13,330,200 for domestic marketing,
$2,838,600 for employee expenses,
$2,425,000 for production and postharvest research, $435,000 for office
expenses, $473,000 for travel and other
operating expenses, and $385,000 for
crop and acreage reporting. For
comparison, budgeted expenses for
these items during the 2023–2024
marketing year were $10,588,750,
$2,472,500, $2,425,000, $350,000,
$390,000, and $585,000, respectively.
The Board derived the recommended
assessment rate by considering
anticipated expenses, the estimated
volume of assessable walnuts, and the
amount of funds available in the
authorized reserve. The estimated
730,000 tons (1.46 billion pounds) of
California walnuts from the 2024–2025
marketing year crop is expected to
generate approximately $18,250,000 in
assessment revenue at the amended
assessment rate (1.46 billion pounds
multiplied by the $0.0125 assessment
rate). The remaining $1,636,800 needed
to cover budgeted expenditures will
come from an approved administrative
services agreement with the California
Walnut Commission, which shares staff
and office expenses with the Board. The
income generated from assessments,
along with non-assessment revenue, is
expected to be sufficient to meet the
Board’s estimated program expenditures
of $19,886,800. Funds available in the
financial reserve (currently about
$14,665,274) will be kept within the
maximum permitted by the Order
(approximately two years’ budgeted
expenses as authorized in § 984.69).
The assessment rate established
herein will continue in effect
indefinitely unless modified,
suspended, or terminated by AMS upon
recommendation and information
submitted by the Board or other
available information. Although this
assessment rate will be in effect 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 AMS. Board meetings are open
to the public and interested persons
may express their views at these
meetings. AMS will evaluate Board
recommendations and other available
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93149
information to determine whether
modification of the assessment rate is
needed. Further rulemaking would be
undertaken as necessary. The Board’s
2024–2025 marketing year budget, and
those for subsequent marketing years,
will be reviewed and, as appropriate,
approved by AMS.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA) (5
U.S.C. 601–612), AMS has considered
the economic impact of this final rule
on small entities. Accordingly, AMS has
prepared this final 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 68 handlers
subject to regulation under the Order
and approximately 4,500 growers of
California walnuts in the production
area. At the time this analysis was
prepared, the Small Business
Administration (SBA) defined small
agricultural service firms as those
having annual receipts of less than
$34,000,000 (North American Industry
Classification System (NAICS) code
115114, Postharvest Crop Activities),
and small agricultural producers of
walnuts as those having annual receipts
of less than $3,750,000 (NAICS code
111335, Tree Nut Farming) (13 CFR
121.201).
Data from USDA’s National
Agricultural Statistics Service (NASS),
indicate a three-year average value of
utilized walnut production of $828.2
million for the most recent seasons for
which data is available (2020–2021
through 2022–2023 marketing years).
Dividing that figure by the number of
walnut growers (4,500) yields an
average annual crop value per grower of
approximately $184,000. This figure is
well below the SBA small agricultural
producer threshold of $3,750,000 in
annual sales. Assuming a normal
distribution, this provides evidence that
a large majority of walnut growers
would likely be considered small
agricultural producers according to the
SBA definition. Additionally, data from
NASS’s 2017 Agricultural Census show
that 86 percent of California farms
growing walnuts at the time had walnut
sales of less than $1 million.
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Federal Register / Vol. 89, No. 228 / Tuesday, November 26, 2024 / Rules and Regulations
Based on information from the Board,
approximately 78 percent of California’s
walnut handlers shipped assessable
walnuts valued under $34 million
during the 2023–2024 marketing year
and would, therefore, be considered
small handlers according to the SBA
definition. Considering the
abovementioned, it is reasonable to
conclude that a substantial majority of
both walnut growers and handlers
would be considered small business
entities according to current SBA
definitions.
This final rule increases the
assessment rate collected from handlers
for the 2024–2025 and subsequent
marketing years from $0.011 to $0.0125
per inshell pound of California walnuts.
The Board unanimously recommended
2024–2025 marketing year expenditures
of $19,886,800 and an assessment rate of
$0.0125 per inshell pound of California
walnuts. The $0.0125 assessment rate is
$0.0015 higher than the rate previously
in effect. The Board expects the industry
to handle 730,000 tons (1.46 billion
pounds) of California walnuts during
the 2024–2025 marketing year. Thus,
the $0.0125 per inshell pound
assessment rate is expected to provide
$18,250,000 in assessment income (1.4
billion pounds multiplied by $0.0125).
The Board also expects to receive
$1,636,800 from an administrative
services agreement with the California
Walnut Commission. Income derived
from these sources should be adequate
to meet budgeted expenditures for the
2024–2025 marketing year.
The major expenditures
recommended by the Board for the
2024–2025 marketing year include
$13,330,200 for domestic marketing,
$2,838,600 for employee expenses,
$2,425,000 for production and postharvest research, $435,000 for office
expenses, $473,000 for travel and other
operating expenses, and $385,000 for
crop and acreage reporting. For
comparison, budgeted expenses for
these items during the 2023–2024
marketing year were $10,588,750,
$2,472,500, $2,425,000, $350,000,
$390,000, and $585,000, respectively.
The Board recommended increasing
the assessment rate to meet necessary
expenses, due in part to a smaller
estimated crop for the 2024–2025
marketing year. The Board estimates
shipments for the 2024–2025 marketing
year to be approximately 730,000 tons
(equivalent to 1.46 billion pounds).
Given the Board’s estimate for 2024–
2025 marketing year walnut shipments,
the current assessment rate of $0.011
would generate $16,060,000 in
assessment income (1.46 billion pounds
multiplied by $0.011 assessment rate),
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which would not cover budgeted
expenses. By increasing the assessment
rate to $0.0125, assessment income is
expected to be $18,250,000 (1.46 billion
pounds multiplied by $0.0125
assessment rate). This amount should
provide sufficient funds to meet
anticipated 2024–2025 marketing year
expenses without needing to draw from
the Board’s financial reserve.
Prior to arriving at this budget and
assessment rate recommendation, the
Board considered information from
various sources, such as the Board’s
Executive Committee, and discussed
various alternatives, including
maintaining the current assessment rate
of $0.011 per inshell pound of
assessable walnuts and increasing the
assessment rate by a different amount.
However, the Board determined that the
recommended assessment rate is
necessary to effectively achieve the
Board’s goals of covering budgeted
expenses for the 2024–2025 marketing
year and maintaining adequate funds in
its financial reserve. Consequently,
these alternative assessment rates were
rejected.
Based upon information from the
National Agricultural Statistics Service
(NASS), the average grower price
reported for walnuts over the past three
crop years (2020–2023) was
approximate $1,093 per ton ($0.547 per
pound). In order to determine the
estimated assessment revenue as a
percentage of the total grower revenue,
we calculate the assessment rate
($0.0125 per inshell pound) divided by
the grower price ($0.547 per pound) and
multiply that number by 100. Therefore,
estimated assessment revenue as a
percentage of total grower revenue for
the 2024–2025 marketing year is
expected to be about 2.3 percent
(0.0125/0.547 * 100 = 2.29)
This action increases 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, these
costs are expected to be offset by the
benefits derived by the operation of the
Order.
The Board’s meetings are widely
publicized throughout the California
walnut industry and all interested
persons are invited to attend the
meetings and participate in Board
deliberations on all issues. Like all
Board meetings, the May 15, 2024,
meeting was a public meeting and all
entities, both large and small, were able
to express views on this issue. Finally,
interested persons were invited to
submit comments on this rule,
including the regulatory and
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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 will be
necessary as a result of this action.
Should any changes become necessary,
they would be submitted to OMB for
approval.
This rule will not impose any
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.
AMS has not identified any relevant
Federal rules that duplicate, overlap, or
conflict with this rule.
A proposed rule was published in the
Federal Register on August 16, 2024 (89
FR 66639). A 30-day comment period
ending September 16, 2024, was
provided to all interested persons to
respond to the proposal. AMS received
one comment in opposition to the
proposal from a walnut grower who
expressed that the Board should rely on
financial reserve funds during difficult
years, instead of increasing assessments,
because the Board is ‘‘flush with
money.’’ However, consideration of the
Board’s reserve fund was part of the
Board’s public deliberations. In recent
years, the Board has relied more on its
financial reserves to fund expenditures,
and the current reserve balance is now
below what the Board generally
considers to be ideal. The Order
authorizes the Board to maintain a
financial reserve ‘‘not to exceed two
years’ budgeted expenses.’’ The Board’s
financial reserve at the end of the 2024–
25 marketing year is expected to be
approximately $14,665,274, which is
within the maximum amount permitted
under the Order. Accordingly, AMS
made no changes to the rule as
proposed.
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
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Federal Register / Vol. 89, No. 228 / Tuesday, November 26, 2024 / Rules and Regulations
about the compliance guide should be
sent to Richard Lower at the previously
mentioned address in the FOR FURTHER
INFORMATION CONTACT section.
After consideration of all relevant
material presented, including the
information and recommendations
submitted by the Board and other
available information, AMS has
determined that this rule is consistent
with and will effectuate the declared
policy of the Act.
List of Subjects in 7 CFR Part 984
Marketing agreements, Nuts,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, the Agricultural Marketing
Service amends 7 CFR part 984 as
follows:
A. Act and Commission Regulations
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:
■
Assessment rate.
On and after September 1, 2024, an
assessment rate of $0.0125 per inshell
pound is established for California
walnuts.
Erin Morris,
Associate Administrator, Agricultural
Marketing Service.
[FR Doc. 2024–27605 Filed 11–25–24; 8:45 am]
BILLING CODE P
FEDERAL ELECTION COMMISSION
11 CFR Part 104
[Notice 2024–26]
Requirement To File FEC Form 3–Z
Federal Election Commission.
Final rule.
AGENCY:
This final rule amends
Federal Election Commission
regulations by removing the
requirement that the principal campaign
committee of a candidate with multiple
authorized committees must report
information on FEC Form 3–Z.
DATES: The effective date is February 1,
2025.
FOR FURTHER INFORMATION CONTACT:
Amy Rothstein, Assistant General
Counsel for Policy, or Jennifer
Waldman, Attorney, 1050 First Street
NE, Washington, DC, (202) 694–1650 or
(800) 424–9530.
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SUMMARY:
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16:25 Nov 25, 2024
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Before promulgating rules or
regulations to carry out the provisions of
the Federal Election Campaign Act, the
Commission transmits the rules or
regulations to the Speaker of the House
of Representatives and the President of
the Senate for a thirty-legislative-day
review period. 52 U.S.C. 30111(d).
These final rules were transmitted to
Congress on November 19, 2024.
I. Background
■
ACTION:
Transmitting Final Rules to Congress
Explanation and Justification
PART 984—WALNUTS GROWN IN
CALIFORNIA
§ 984.347
The
Commission is amending its regulations
to remove the requirement that the
principal campaign committee of a
candidate with multiple authorized
committees must report information on
FEC Form 3–Z.
SUPPLEMENTARY INFORMATION:
The Federal Election Campaign Act
(the ‘‘Act’’) 1 and Commission
regulations require each candidate to
register a principal campaign committee
within 15 days of becoming a
candidate.2 A candidate may also
authorize other political committees to
receive contributions or make
expenditures on the candidate’s behalf
by designating the committees in
writing and filing the designations with
the candidate’s principal campaign
committee.3
The Act requires ‘‘each designation,
statement or report of receipts or
disbursements made by an authorized
committee’’ to be filed with the
candidate’s principal campaign
committee.4 The Act further requires
each principal campaign committee, in
turn, to ‘‘receive’’ these designations,
statements and reports and to ‘‘compile
and file’’ them pursuant to the Act.5
In 1980, the Commission promulgated
a regulation (11 CFR 104.3(f)) to
implement these requirements: Section
104.3(f) requires each candidate’s
principal campaign committee to file
reports submitted to it by the
candidate’s other authorized
1 52
U.S.C. 30101–45.
30102(e)(1); 11 CFR 101.1(a); see also 52
U.S.C. 30101(5) (‘‘The term ‘principal campaign
committee’ means a political committee designated
and authorized by a candidate under section
30102(e)(1) of this title.’’); 11 CFR 100.5(e)(1).
3 52 U.S.C. 30102(e)(1); 11 CFR 101.1(b); see also
52 U.S.C. 30101(6) (‘‘The term ‘authorized
committee’ means the principal campaign
committee or any other political committee
authorized by a candidate under section 30102(e)(1)
of this title to receive contributions or make
expenditures on behalf of such candidate.’’); 11 CFR
100.5(f)(1).
4 52 U.S.C. 30102(f)(1).
5 Id. 30102(f)(2).
2 Id.
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93151
committees, along with its own report.6
In addition, § 104.3(f) requires the
principal campaign committee to file
FEC Form 3–Z to report specific
consolidated information gleaned from
the authorized committees’ reports
when it submits those reports to the
Commission.7 It is this FEC Form 3–Z
that the Commission is now removing.
When the Commission first started
requiring FEC Form 3–Z, political
committees filed their reports only in
paper form and the Commission made
the reports publicly available on paper
and microfiche in the Commission’s
Public Records room. By requiring a
candidate’s principal campaign
committee to consolidate information
about the financial activity of all of the
candidate’s authorized committees on
FEC Form 3–Z, the Commission made it
easier for the public to obtain a
comprehensive picture of the
candidate’s receipts and disbursements
during the reporting period.
B. Electronic Filing
Public access to political committees’
reports has expanded dramatically since
1980, however, due in large part to
statutory revisions and technological
developments. In 1999, Congress
amended the Act to provide for
electronic filing; 8 as a result, all
political committees that have or
reasonably expect to have contributions
or expenditures exceeding $50,000 in a
calendar year must electronically file
their reports directly with the
Commission, and other persons may do
so if they choose.9 Further, Congress
amended the Act to require the
Commission to make all reports filed
electronically with the Commission
publicly available on the internet within
24 hours of receipt and within 48 hours
of receipt for reports not filed
electronically.10
More recently, Congress amended the
Act to require the Commission to
maintain a central website ‘‘to make
accessible to the public all publicly
available election-related reports and
information’’ required to be filed under
6 11
CFR 104.3(f).
7 Id.
8 Appropriations, 2000, Public Law 106–58, sec.
639(a), 113 Stat. 430, 476 (1999); 52 U.S.C.
30104(a)(11)(A).
9 11 CFR. 104.18(a) (requiring electronic filing for
certain political committee); id. § 104.18(b)
(authorizing other committees to file electronically
if they choose to do so); Electronic Filing of Reports
by Political Committees, 65 FR 38415 (June 21,
2000), https://sers.fec.gov/fosers/showpdf.
htm?docid=382.
10 52 U.S.C. 30104(a)(11)(B), (d)(2).
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Agencies
[Federal Register Volume 89, Number 228 (Tuesday, November 26, 2024)]
[Rules and Regulations]
[Pages 93148-93151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-27605]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Doc. No. AMS-SC-24-0039]
Walnuts Grown in California; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, Department of Agriculture
(USDA).
ACTION: Final rule.
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SUMMARY: This final rule implements a recommendation from the
California Walnut Board (Board) to increase the assessment rate
established for the 2024-2025 and subsequent marketing years from
$0.011 to $0.0125 per inshell pound of California walnuts. The
assessment rate will remain in effect indefinitely unless modified,
suspended, or terminated.
DATES: Effective December 26, 2024.
FOR FURTHER INFORMATION CONTACT: Joshua R. Wilde, Marketing Specialist,
or Barry Broadbent, Chief, Northwest 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) 720-8085, or Email:
[email protected].
SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553,
amends regulations issued to carry out a marketing order as defined in
7 CFR 900.2(j). This rule is issued under Marketing Order No. 984, as
amended (7 CFR part 984), regulating the handling of walnuts grown in
California. Part 984 (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 Board locally
administers the Order and comprises growers and handlers of California
walnuts operating within the area of production, and a public member.
The Agricultural Marketing Service (AMS) is issuing this final rule
in conformance with Executive Orders 12866, 13563, and 14094. 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. Executive Order 14094
reaffirms, supplements, and updates Executive Orders 12866 and further
directs agencies to solicit and consider input from a wide range of
affected and interested parties through a variety of means. This action
falls within a category of regulatory actions that the Office of
Management and Budget (OMB) exempted from Executive Order 12866 review.
This final rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which
requires Federal agencies to consider whether their rulemaking actions
would have Tribal implications. AMS has determined that this 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 final rule has been reviewed under Executive Order 12988--
Civil Justice Reform. Under the 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 California walnuts for the 2024-
2025 marketing 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
[[Page 93149]]
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 final rule increases the assessment rate for California
walnuts handled under the Order from $0.011 per inshell pound, the rate
that was established for the 2023-2024 and subsequent marketing years,
to $0.0125 per inshell pound for the 2024-2025 and subsequent marketing
years.
Sections 984.68 and 984.69 authorize the Board, with the approval
of AMS, to formulate an annual budget of expenses and collect
assessments from handlers to administer the program. The members of the
Board are familiar with the Board's needs and with the costs of goods
and services in their local area and are able to formulate an
appropriate budget and assessment rate. The assessment rate is
formulated and discussed in a public meeting, and all directly affected
persons have an opportunity to participate and provide input.
For the 2023-2024 and subsequent marketing years, the Board
recommended, and AMS approved, an assessment rate of $0.011 per inshell
pound of California walnuts within the production area. That rate
continues in effect from marketing year to marketing year until
modified, suspended, or terminated by AMS upon recommendation and
information submitted by the Board or other information available to
AMS.
The Board met on May 15, 2024, and unanimously recommended 2024-
2025 marketing year expenditures of $19,886,800 and an assessment rate
of $0.0125 per inshell pound of California walnuts for the 2024-2025
marketing year. In comparison, last year's budgeted expenditures were
$16,811,250. The assessment rate of $0.0125 per inshell pound is
$0.0015 higher than the rate currently in effect. The Board recommended
increasing the assessment rate to better align assessment revenue with
budgeted expenses, due in part to a smaller estimated crop. The Board
projects handler receipts of 730,000 tons (equivalent to 1.46 billion
pounds) of assessable California walnuts for the 2024-2025 marketing
year, down from the approximately 820,000 tons (1.64 billion pounds)
handled during the 2023-2024 marketing year.
The major expenditures recommended by the Board for the 2024-2025
marketing year include $13,330,200 for domestic marketing, $2,838,600
for employee expenses, $2,425,000 for production and post-harvest
research, $435,000 for office expenses, $473,000 for travel and other
operating expenses, and $385,000 for crop and acreage reporting. For
comparison, budgeted expenses for these items during the 2023-2024
marketing year were $10,588,750, $2,472,500, $2,425,000, $350,000,
$390,000, and $585,000, respectively.
The Board derived the recommended assessment rate by considering
anticipated expenses, the estimated volume of assessable walnuts, and
the amount of funds available in the authorized reserve. The estimated
730,000 tons (1.46 billion pounds) of California walnuts from the 2024-
2025 marketing year crop is expected to generate approximately
$18,250,000 in assessment revenue at the amended assessment rate (1.46
billion pounds multiplied by the $0.0125 assessment rate). The
remaining $1,636,800 needed to cover budgeted expenditures will come
from an approved administrative services agreement with the California
Walnut Commission, which shares staff and office expenses with the
Board. The income generated from assessments, along with non-assessment
revenue, is expected to be sufficient to meet the Board's estimated
program expenditures of $19,886,800. Funds available in the financial
reserve (currently about $14,665,274) will be kept within the maximum
permitted by the Order (approximately two years' budgeted expenses as
authorized in Sec. 984.69).
The assessment rate established herein will continue in effect
indefinitely unless modified, suspended, or terminated by AMS upon
recommendation and information submitted by the Board or other
available information. Although this assessment rate will be in effect
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 AMS.
Board meetings are open to the public and interested persons may
express their views at these meetings. AMS will 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 2024-2025 marketing year
budget, and those for subsequent marketing years, will be reviewed and,
as appropriate, approved by AMS.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of
this final rule on small entities. Accordingly, AMS has prepared this
final 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 68 handlers subject to regulation under the
Order and approximately 4,500 growers of California walnuts in the
production area. At the time this analysis was prepared, the Small
Business Administration (SBA) defined small agricultural service firms
as those having annual receipts of less than $34,000,000 (North
American Industry Classification System (NAICS) code 115114,
Postharvest Crop Activities), and small agricultural producers of
walnuts as those having annual receipts of less than $3,750,000 (NAICS
code 111335, Tree Nut Farming) (13 CFR 121.201).
Data from USDA's National Agricultural Statistics Service (NASS),
indicate a three-year average value of utilized walnut production of
$828.2 million for the most recent seasons for which data is available
(2020-2021 through 2022-2023 marketing years). Dividing that figure by
the number of walnut growers (4,500) yields an average annual crop
value per grower of approximately $184,000. This figure is well below
the SBA small agricultural producer threshold of $3,750,000 in annual
sales. Assuming a normal distribution, this provides evidence that a
large majority of walnut growers would likely be considered small
agricultural producers according to the SBA definition. Additionally,
data from NASS's 2017 Agricultural Census show that 86 percent of
California farms growing walnuts at the time had walnut sales of less
than $1 million.
[[Page 93150]]
Based on information from the Board, approximately 78 percent of
California's walnut handlers shipped assessable walnuts valued under
$34 million during the 2023-2024 marketing year and would, therefore,
be considered small handlers according to the SBA definition.
Considering the abovementioned, it is reasonable to conclude that a
substantial majority of both walnut growers and handlers would be
considered small business entities according to current SBA
definitions.
This final rule increases the assessment rate collected from
handlers for the 2024-2025 and subsequent marketing years from $0.011
to $0.0125 per inshell pound of California walnuts. The Board
unanimously recommended 2024-2025 marketing year expenditures of
$19,886,800 and an assessment rate of $0.0125 per inshell pound of
California walnuts. The $0.0125 assessment rate is $0.0015 higher than
the rate previously in effect. The Board expects the industry to handle
730,000 tons (1.46 billion pounds) of California walnuts during the
2024-2025 marketing year. Thus, the $0.0125 per inshell pound
assessment rate is expected to provide $18,250,000 in assessment income
(1.4 billion pounds multiplied by $0.0125). The Board also expects to
receive $1,636,800 from an administrative services agreement with the
California Walnut Commission. Income derived from these sources should
be adequate to meet budgeted expenditures for the 2024-2025 marketing
year.
The major expenditures recommended by the Board for the 2024-2025
marketing year include $13,330,200 for domestic marketing, $2,838,600
for employee expenses, $2,425,000 for production and post-harvest
research, $435,000 for office expenses, $473,000 for travel and other
operating expenses, and $385,000 for crop and acreage reporting. For
comparison, budgeted expenses for these items during the 2023-2024
marketing year were $10,588,750, $2,472,500, $2,425,000, $350,000,
$390,000, and $585,000, respectively.
The Board recommended increasing the assessment rate to meet
necessary expenses, due in part to a smaller estimated crop for the
2024-2025 marketing year. The Board estimates shipments for the 2024-
2025 marketing year to be approximately 730,000 tons (equivalent to
1.46 billion pounds). Given the Board's estimate for 2024-2025
marketing year walnut shipments, the current assessment rate of $0.011
would generate $16,060,000 in assessment income (1.46 billion pounds
multiplied by $0.011 assessment rate), which would not cover budgeted
expenses. By increasing the assessment rate to $0.0125, assessment
income is expected to be $18,250,000 (1.46 billion pounds multiplied by
$0.0125 assessment rate). This amount should provide sufficient funds
to meet anticipated 2024-2025 marketing year expenses without needing
to draw from the Board's financial reserve.
Prior to arriving at this budget and assessment rate
recommendation, the Board considered information from various sources,
such as the Board's Executive Committee, and discussed various
alternatives, including maintaining the current assessment rate of
$0.011 per inshell pound of assessable walnuts and increasing the
assessment rate by a different amount. However, the Board determined
that the recommended assessment rate is necessary to effectively
achieve the Board's goals of covering budgeted expenses for the 2024-
2025 marketing year and maintaining adequate funds in its financial
reserve. Consequently, these alternative assessment rates were
rejected.
Based upon information from the National Agricultural Statistics
Service (NASS), the average grower price reported for walnuts over the
past three crop years (2020-2023) was approximate $1,093 per ton
($0.547 per pound). In order to determine the estimated assessment
revenue as a percentage of the total grower revenue, we calculate the
assessment rate ($0.0125 per inshell pound) divided by the grower price
($0.547 per pound) and multiply that number by 100. Therefore,
estimated assessment revenue as a percentage of total grower revenue
for the 2024-2025 marketing year is expected to be about 2.3 percent
(0.0125/0.547 * 100 = 2.29)
This action increases 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, these costs are
expected to be offset by the benefits derived by the operation of the
Order.
The Board's meetings are widely publicized throughout the
California walnut industry and all interested persons are invited to
attend the meetings and participate in Board deliberations on all
issues. Like all Board meetings, the May 15, 2024, meeting was a public
meeting and all entities, both large and small, were able to express
views on this issue. Finally, interested persons were invited to submit
comments on this 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 OMB and assigned OMB No. 0581-0178, Vegetable
and Specialty Crops. No changes in those requirements will be necessary
as a result of this action. Should any changes become necessary, they
would be submitted to OMB for approval.
This rule will not impose any 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.
AMS has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
A proposed rule was published in the Federal Register on August 16,
2024 (89 FR 66639). A 30-day comment period ending September 16, 2024,
was provided to all interested persons to respond to the proposal. AMS
received one comment in opposition to the proposal from a walnut grower
who expressed that the Board should rely on financial reserve funds
during difficult years, instead of increasing assessments, because the
Board is ``flush with money.'' However, consideration of the Board's
reserve fund was part of the Board's public deliberations. In recent
years, the Board has relied more on its financial reserves to fund
expenditures, and the current reserve balance is now below what the
Board generally considers to be ideal. The Order authorizes the Board
to maintain a financial reserve ``not to exceed two years' budgeted
expenses.'' The Board's financial reserve at the end of the 2024-25
marketing year is expected to be approximately $14,665,274, which is
within the maximum amount permitted under the Order. Accordingly, AMS
made no changes to the rule as proposed.
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
[[Page 93151]]
about the compliance guide should be sent to Richard Lower at the
previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
After consideration of all relevant material presented, including
the information and recommendations submitted by the Board and other
available information, AMS has determined that this rule is consistent
with and will effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 984
Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, the Agricultural
Marketing Service amends 7 CFR part 984 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, 2024, an assessment rate of $0.0125 per
inshell pound is established for California walnuts.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-27605 Filed 11-25-24; 8:45 am]
BILLING CODE P