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

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new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

77327 

Vol. 78, No. 246 

Monday, December 23, 2013 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 42 

Standards for Condition of Food 

Containers 

CFR Correction 

In Title 7 of the Code of Federal 

Regulations, Parts 27 to 52, revised as of 

January 1, 2013, on page 203, in 

§ 42.132, in paragraph (a), in the table, 

for the entry 6.5, under ‘‘Reduced’’, in 

column T, the entry ‘‘1’’ is added. 

[FR Doc. 2013–30654 Filed 12–20–13; 8:45 am] 

BILLING CODE 1505–01–D 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 984 

[Doc. No. AMS–FV–13–0056; FV13–984–1 

FR] 

Walnuts Grown in California; Increased 

Assessment Rate 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: This rule increases the 

assessment rate established for the 

California Walnut Board (Board) for the 

2013–14 and subsequent marketing 

years from $0.0175 to $0.0189 per 

kernelweight pound of merchantable 

walnuts. The Board locally administers 

the marketing order, which regulates the 

handling of walnuts grown in 

California. Assessments upon walnut 

handlers are used by the Board to fund 

reasonable and necessary expenses of 

the program. The marketing year begins 

on September 1 and ends on August 31. 

The assessment rate will remain in 

effect indefinitely unless modified, 

suspended, or terminated. 

DATES: Effective Date: December 24, 

2013. 

FOR FURTHER INFORMATION CONTACT: 

Andrea Ricci, Marketing Specialist, or 

Martin Engeler, Regional Director, 

California Marketing Field Office, 

Marketing Order and Agreement 

Division, Fruit and Vegetable Program, 

AMS, USDA; Telephone: (559) 487– 

5901, Fax: (559) 487–5906, or Email: 

Andrea.Ricci@ams.usda.gov or 

Martin.Engeler@ams.usda.gov. 

Small businesses may request 

information on complying with this 

regulation by contacting Jeffrey 

Smutney, Marketing Order and 

Agreement Division, Fruit and 

Vegetable Program, AMS, USDA, 1400 

Independence Avenue SW., STOP 0237, 

Washington, DC 20250–0237; 

Telephone: (202) 720–2491, Fax: (202) 

720–8938, or Email: Jeffrey.Smutney@

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 and 13563. 

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 as issued herein will be 

applicable to all assessable walnuts 

beginning on September 1, 2013, 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 not later than 

20 days after the date of the entry of the 

ruling. 

This rule increases the assessment 

rate established for the Board for the 

2013–14 and subsequent marketing 

years from $0.0175 to $0.0189 per 

kernelweight pound of merchantable 

walnuts handled. 

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. The members 

of the Board are growers and handlers 

of California walnuts. They are familiar 

with the Board’s needs and with the 

costs of goods and services in their local 

area and are therefore 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 2011–12 and subsequent 

marketing years, the Board 

recommended, and USDA approved, an 

assessment rate of $0.0175 per 

kernelweight pound of merchantable 

walnuts that would continue in effect 

from year to year unless modified, 

suspended, or terminated by USDA 

upon recommendation and information 

submitted by the Board or other 

information available to USDA. 

The Board met on June 6, 2013, and 

unanimously recommended 2013–14 

expenditures of $10,166,860 and an 

assessment rate of $0.0189 per 

kernelweight pound of merchantable 

walnuts. In comparison, last year’s 

budgeted expenditures were $8,840,000. 

The assessment rate of $0.0189 is 

$0.0014 per pound higher than the rate 

currently in effect. The quantity of 

assessable walnuts for the 2013–14 

marketing year is estimated at 486,000 

tons (inshell), which is 6,000 tons 

higher than last year’s. At the 

recommended higher assessment rate of 


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77328 Federal Register / Vol. 78, No. 246 / Monday, December 23, 2013 / Rules and Regulations 

$0.0189 per kernelweight pound, the 

Board should collect approximately 

$8,266,860 in assessment income. 

Assessment income plus funds from the 

Board’s authorized prior year’s carry-in 

financial reserve and Foreign 

Agricultural Service (FAS) funding 

would be adequate to cover its 2013–14 

anticipated expenditures of 

$10,166,860. 

The major expenditures 

recommended by the Board for the 

2013–14 marketing year include 

$830,000 for employee expenses, 

$146,500 for office expenses, $225,000 

for operating expenses, and $8,965,360 

for program expenses, which include 

domestic market development, 

production research, post-harvest 

research, and industry communications. 

In comparison, budgeted expenses for 

these items for the 2012–13 marketing 

year were $797,000, $119,000, $219,000, 

and $7,705,000, respectively. 

The assessment rate recommended by 

the Board was derived by evaluating 

expected shipments of California 

walnuts certified as merchantable, 

budgeted expenses, the level of 

available prior year’s carry-in financial 

reserve, and the desired 2013–14 ending 

financial reserve. The Board met on 

June 6, 2013, and unanimously 

approved using a three prior years’ 

average to formulate the 2013–14 

estimate of 486,000 tons (inshell) for 

merchantable shipments. Pursuant to 

§ 984.51(b) of the order, this figure is 

converted to a merchantable 

kernelweight basis using a factor of 0.45 

(486,000 tons × 2,000 pounds per ton × 

0.45), which yields 437,400,000 

kernelweight pounds. The Board 

determined that it could utilize $1.9 

million from its carry-in financial 

reserve and still maintain an adequate 

2013–2014 ending financial reserve. The 

remaining $8,266,860 needed to meet 

budgeted expenses would need to be 

raised through assessments. Dividing 

the $8,266,860 in necessary assessment 

revenue by 2013 estimated 

merchantable shipments of 437,400,000 

kernelweight pounds, results in an 

assessment rate of $0.0189 per pound. 

Income derived from handler 

assessments, combined with funds from 

the Board’s financial reserve and FAS 

funding for the last year of a three-year 

project, would adequately cover 

budgeted expenses. 

Reserve funds by the end of the 2013– 

14 marketing year are projected to be 

$6,234,895, which is well within the 

maximum permitted by the order of 

approximately two marketing years’ 

expenses. Section 984.69 of the order 

authorizes the Board to maintain a 

financial reserve of not more than two 

years’ budgeted expenses. Excess 

assessment funds may be retained in the 

reserve or may be used temporarily to 

defray expenses of the subsequent 

marketing year, but if so used, must be 

made available to the handlers from 

whom they were collected within five 

months after the end of the marketing 

year. 

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 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 to modify 

the assessment rate. The dates and times 

of Board meetings are available from the 

Board or USDA. Board meetings are 

open to the public and interested 

persons may express their views at these 

meetings. USDA would evaluate Board 

recommendations and other available 

information to determine whether 

modification of the assessment rate is 

needed. Further rulemaking would be 

undertaken as necessary. The Board’s 

2013–14 budget and those for 

subsequent marketing years would be 

reviewed and, as appropriate, approved 

by USDA. 

Final 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 

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 4,100 

growers of California walnuts in the 

production area and approximately 90 

handlers subject to regulation under the 

marketing order. Small agricultural 

producers are defined by the Small 

Business Administration (SBA) as those 

having annual receipts of less than 

$750,000, and small agricultural service 

firms are defined as those whose annual 

receipts are less than $7,000,000. (13 

CFR 121.201) 

Current census data from the USDA’s 

National Agricultural Statistics Service 

(NASS) indicates that approximately 90 

percent of California’s walnut farms are 

smaller than 100 acres. 

NASS reports that the average yield 

for the 2011–12 crop was 1.88 tons per 

acre and the average price received for 

the 2011–12 crop was $2,900 per ton. 

A 100-acre farm with an average yield 

of 1.88 tons per acre would therefore 

have been expected to produce about 

188 tons of walnuts during the 2011–12 

season. At $2,900 per ton, that farm’s 

production would have had an 

approximate value of $545,200. 

Assuming that the majority of 

California’s walnut farms are smaller 

than 100 acres, it could be concluded 

that the majority of the growers had 

receipts of less than $545,200 in 2011– 

12, which is well below the SBA 

threshold of $750,000. Thus, the 

majority of California’s walnut growers 

would be classified as small growers 

according to SBA’s definition. 

According to information supplied by 

the industry, approximately 40 percent 

of California’s walnut handlers shipped 

merchantable walnuts valued under 

$7,000,000 during the 2011–12 

marketing year and would therefore be 

considered small handlers according to 

the SBA definition. 

This rule increases the assessment 

rate established by the Board and 

applicable to merchantable walnut 

handlers for the 2013–14 and 

subsequent marketing years from 

$0.0175 to $0.0189 per kernelweight 

pound. The Board unanimously 

recommended 2013–14 expenditures of 

$10,166,860 and an assessment rate of 

$0.0189 per kernelweight pound of 

merchantable walnuts. The assessment 

rate of $0.0189 is $0.0014 higher than 

the 2012–13 rate. The quantity of 

merchantable walnuts for the 2013–14 

marketing year is estimated at 486,000 

tons inshell weight, or 437,400,000 

pounds kernelweight. Thus, the $0.0189 

rate should provide $8,266,860 in 

assessment income. Assessment income, 

along with funds from the Board’s 

authorized prior year’s carry-in financial 

reserve, plus FAS funding for the last 

year of a three-year project would 

adequately cover its 2013–14 

anticipated expenditures. 

The major expenditures 

recommended by the Board for the 

2013–14 marketing year include 

$830,000 for employee expenses, 

$146,500 for office expenses, $225,000 

for operating expenses, and $8,965,360 

for program expenses, which include 

domestic market development, 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 78, No. 246 / Monday, December 23, 2013 / Rules and Regulations 77329 

production research, post-harvest 

research, and industry communications. 

In comparison, budgeted expenses for 

these items for the 2012–13 marketing 

year were $797,000, $119,000, $219,000, 

and $7,705,000, respectively. 

The Board recommended the 

increased assessment rate because the 

rate currently in effect would not 

generate sufficient revenue to meet its 

budgeted expenses. The increased 

assessment rate applied to estimated 

assessable walnuts in the 2013–14 

marketing year is expected to generate 

sufficient revenue to meet expenses, 

when combined with funds from the 

financial reserve and grant funds from 

FAS. 

Prior to arriving at this budget, the 

Board considered alternative 

expenditure levels but ultimately 

decided that the recommended levels 

were reasonable to properly administer 

the order. 

According to the National 

Agricultural Statistical Service (NASS), 

the season average grower prices for the 

years 2010 and 2011 were $2,040 and 

$2,900 per ton, respectively. These 

prices provide a range within which the 

2013–14 season average prices could 

fall. Dividing these average grower 

prices by 2,000 pounds per ton provides 

an inshell price per pound range of 

$1.02 to $1.45. Dividing these inshell 

prices per pound by the 0.45 conversion 

factor (inshell to kernelweight) 

established in the order, yields a 2013– 

14 price range estimate of $2.27 to $3.22 

per kernelweight pound of 

merchantable walnuts. 

Utilizing these estimates and the 

assessment rate of $0.0189 per 

kernelweight pound, estimated 

assessment revenue as a percentage of 

total estimated grower revenue should 

likely range between 0.59 and 0.83 

percent for the 2013–14 marketing year 

(assessment rate divided by price per 

kernelweight pound). 

This action increases the assessment 

obligation imposed on handlers. While 

assessments impose some additional 

costs on handlers, the costs are minimal 

and uniform on all handlers. Some of 

the additional costs may be passed on 

to growers. However, these costs are 

offset by the benefits derived from the 

operation of the marketing order. In 

addition, the Board’s meeting was 

widely publicized throughout the 

California walnut industry. All 

interested persons were invited to 

attend the meeting and participate in 

Board deliberations on all issues. Like 

all Board meetings, the June 6, 2013, 

meeting was a public meeting. All 

entities, both large and small, were able 

to express their views on this issue. 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

Chapter 35), the order’s information 

collection requirements have been 

previously approved by the Office of 

Management and Budget (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 rule 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. As noted in the initial 

regulatory flexibility analysis, USDA 

has not identified any Federal rules that 

duplicate, overlap, or conflict with this 

final rule. 

AMS is committed to complying with 

the E-Government Act, to promote the 

use of the internet and other 

information technologies to provide 

more opportunities for citizens to access 

Government information and services, 

and for other purposes. 

A proposed rule concerning this 

action was published in the Federal 

Register on September 17, 2013 (78 FR 

57101). Copies of the proposed rule 

were also made available to all walnut 

handlers by Board staff. Finally, the 

proposal was made available through 

the internet by the USDA and the Office 

of Federal Register. A 30-day comment 

period ending October 17, 2013, was 

provided for interested persons to 

respond to the proposal. One comment 

was received. The commenter raised a 

question about the effect of this action 

in regard to black walnut trees. Black 

walnut trees aren’t regulated by the 

marketing order; therefore, no changes 

will be made 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: www.ams.usda.gov/

MarketingOrderSmallBusinessGuide. 

Any questions about the compliance 

guide should be sent to Jeffrey Smutney 

at the previously mentioned address in 

the FOR FURTHER INFORMATION CONTACT

section. 

After consideration of all relevant 

material presented, including the 

information and recommendation 

submitted by the Board and other 

available information, it is hereby found 

that this rule, and hereinafter set forth, 

will tend to effectuate the declared 

policy of the Act. 

Pursuant to 5 U.S.C. 553, it also found 

and determined 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 

2013–14 marketing year began on 

September 1, 2013, and the marketing 

order requires that the rate of 

assessment for each marketing year 

apply to all merchantable walnuts 

handled during the year; (2) the Board 

needs to have sufficient funds to pay its 

expenses, which are incurred on a 

continuous basis; and (3) handlers are 

aware of this action, which was 

unanimously recommended by the 

Board at a public meeting and is similar 

to other assessment rate actions issued 

in past years. Also, a 30-day comment 

period was provided for in the proposed 

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 7 CFR 

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, 2013, an 

assessment rate of $0.0189 per 

kernelweight pound is established for 

California merchantable walnuts. 

Dated: December 17, 2013. 

Rex A. Barnes, 

Associate Administrator, Agricultural 

Marketing Service. 

[FR Doc. 2013–30414 Filed 12–20–13; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 1217 

[Document Number AMS–FV–13–0038] 

Softwood Lumber Research, 

Promotion, Consumer Education and 

Industry Information Order; Changes 

to the Membership of the Softwood 

Lumber Board 

AGENCY: Agricultural Marketing Service. 

ACTION: Final rule. 


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