[Federal Register Volume 62, Number 198 (Tuesday, October 14, 1997)]
[Rules and Regulations]
[Pages 53225-53227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-27101]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 982

[Docket No. FV97-982-1 IFR]


Hazelnuts Grown in Oregon and Washington; Reduced Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule decreases the assessment rate 
established for the Hazelnut Marketing Board (Board) under Marketing 
Order No. 982 for the 1997-98 and subsequent marketing years. The Board 
is responsible for local administration of the marketing order which 
regulates the handling of hazelnuts grown in Oregon and Washington. 
Authorization to assess hazelnut handlers enables the Board to incur 
expenses that are reasonable and necessary to administer the program. 
The 1997-98 marketing year covers the period July 1 through June 30. 
The assessment rate will continue until amended, suspended, or 
terminated.

DATES: Effective October 15, 1997. Comments received by December 15, 
1997, will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent in triplicate to the Docket 
Clerk, Fruit and Vegetable Division, AMS, USDA, Room 2525-S, P.O. Box 
96456, Washington, DC 20090-6456; Fax (202) 720-5698. Comments should 
reference the docket 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.

FOR FURTHER INFORMATION CONTACT: Teresa L. Hutchinson, or Jadean L. 
Williams, Northwest Marketing Field Office, Fruit and Vegetable 
Division, AMS, USDA, 1220 SW Third Avenue, Room 369, Portland, OR 
97204; telephone: (503) 326-2724, Fax: (503) 326-7440 or George J. 
Kelhart, Marketing Order Administration Branch, Fruit and Vegetable 
Division, AMS, USDA, Room 2525-S, P.O. Box 96456, Washington, DC 20090-
6456; telephone: (202) 720-2491, Fax: (202) 720-5698. Small businesses 
may request information on compliance with this regulation by 
contacting Jay Guerber, Marketing Order Administration Branch, Fruit 
and Vegetable Division, AMS, USDA, Room 2525-S, P.O. Box 96456, 
Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 720-
5698.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 115 and Order No. 982, both as amended (7 CFR part 982), 
regulating the handling of hazelnuts grown in Oregon and Washington 
hereinafter referred to as the ``order.'' The marketing agreement and 
order are 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 (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, hazelnut 
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 hazelnuts 
beginning July 1, 1997, and continuing until amended, suspended, or 
terminated. This rule will not preempt any State or local laws, 
regulations, or

[[Page 53226]]

policies, unless they present an irreconcilable conflict with this 
rule.
    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 the Secretary 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 the Secretary 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 the 
Secretary's ruling on the petition, provided an action is filed not 
later than 20 days after the date of the entry of the ruling.
    This rule decreases the assessment rate established for the Board 
for the 1997-98 and subsequent marketing years from $0.007 to $0.004 
per pound.
    The hazelnut marketing order provides authority for the Board, with 
the approval of the Department, to formulate an annual budget of 
expenses and collect assessments from handlers to administer the 
program. The members of the Board are producers and handlers of 
hazelnuts. They are familiar with the Board's needs and with the costs 
for goods and services in their local area and are thus in a position 
to formulate an appropriate budget and assessment rate. The assessment 
rate is formulated and discussed in a public meeting. Thus, all 
directly affected persons have an opportunity to participate and 
provide input.
    For the 1996-97 and subsequent marketing years, the Board 
recommended, and the Department approved, an assessment rate that would 
continue in effect from marketing year to marketing year indefinitely 
unless modified, suspended, or terminated by the Secretary upon 
recommendation and information submitted by the Board or other 
information available to the Secretary.
    The Board met on August 28, 1997, and unanimously recommended 1997-
98 expenditures of $553,218 and an assessment rate of $0.004 per pound 
of hazelnuts. In comparison, last year's budgeted expenditures were 
$558,974. The assessment rate of $0.004 is $0.003 less than the rate 
currently in effect. At the current rate of $0.007 per pound and an 
estimated 1997 hazelnut production of 70,000,000 pounds, the projected 
reserve on June 30, 1998, would exceed the level the Board believed to 
be adequate to administer the program. Section 982.62 of the order 
allows the Board to establish and maintain an operating monetary 
reserve in an amount not to exceed approximately one marketing year's 
operational expenses. Last year's actual Board expenditures totaled 
$284,894. The reduced assessment rate is expected to result in an 
operating reserve of $257,497, which is about equal to what the Board 
actually spent last year for program expenses.
    The Board discussed lower assessment rates, but decided that an 
assessment rate of less than $0.004 would not generate the income 
necessary to administer the program with an adequate reserve. Major 
expenses recommended by the Board for the 1997-98 marketing year 
include $46,864 for personal service (salaries and benefits), $5,640 
for rent, $5,000 for compliance, $17,000 for a crop survey, $269,000 
for promotion, and $182,364 for an emergency fund. Budgeted expenses 
for these items in 1996-97 were $50,020, $5,640, $5,000, $15,000, 
$275,000, and $182,364, respectively. The Board will consider using 
emergency funds for authorized activities when it is reasonably certain 
that its estimate of assessable hazelnuts is reached. It will not be 
able to make this determination until December 1997, the month in which 
the hazelnut harvest and deliveries to handlers usually are completed. 
Thus, any decision on whether or not to undertake any additional 
activities will not be made until December 1997, at the earliest.
    The assessment rate recommended by the Board was derived by 
dividing anticipated expenses by expected shipments of hazelnuts. With 
hazelnut shipments for the year estimated at 70,000,000 pounds, the 
$0.004 per pound assessment rate should provide $280,000 in assessment 
income. Income derived from handler assessments, along with interest 
and funds from the Board's authorized reserve, will be adequate to 
cover budgeted expenses. Funds in the reserve will be kept within the 
maximum permitted by the order.
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by the 
Secretary upon recommendation and information submitted by the Board or 
other available information.
    Although this assessment rate is effective for an indefinite 
period, the Board will continue to meet prior to or during each 
marketing year to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Board meetings are available from the Board or the Department. 
Board meetings are open to the public and interested persons may 
express their views at these meetings. The Department will evaluate 
Board recommendations and other available information to determine 
whether modification of the assessment rate is needed. Further 
rulemaking will be undertaken as necessary. The Board's 1997-98 budget 
and those for subsequent marketing years will be reviewed and, as 
appropriate, approved by the Department.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on small entities. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business 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. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 1,000 producers of hazelnuts in the 
production area and approximately 25 handlers subject to regulation 
under the marketing order. Small agricultural producers have been 
defined by the Small Business Administration (13 CFR 121.601) as those 
having annual receipts of less than $500,000 and small agricultural 
service firms are defined as those whose annual receipts are less than 
$5,000,000. The majority of hazelnut producers and handlers may be 
classified as small entities.
    This rule decreases the assessment rate established for the Board 
and collected from handlers for the 1997-98 and subsequent marketing 
years. The Board unanimously recommended 1997-98 expenditures of 
$553,218 and an assessment rate of $0.004 per pound of hazelnuts. The 
assessment rate of $0.004 is $0.003 less than the rate currently in 
effect. At the current assessment rate of $0.007 per pound, the Board's 
reserve was projected to exceed the level the Board believed to be 
adequate to administer the program. Therefore, the Board voted to lower 
its assessment rate and use more of the reserve to cover its expenses. 
Section 982.62 of the order allows the Board to establish and maintain 
an operating

[[Page 53227]]

monetary reserve in an amount not to exceed approximately one marketing 
year's operational expenses. Last year's actual Board expenditures 
totaled $284,894. The reduced assessment rate is expected to result in 
an operating reserve of $257,497, which is about equal to what the 
Board actually spent last year for program expenses.
    The Board discussed alternatives to this rule, including 
alternative expenditure levels. Lower assessment rates were considered, 
but not recommended because they would not generate the income 
necessary to administer the program with an adequate reserve. Major 
expenses recommended by the Board for the 1997-98 marketing years 
include $46,864 for personal services (salaries and benefits), $5,640 
for rent, and $5,000 for compliance, $17,000 for a crop survey, 
$269,000 for promotion, and $182,364 for an emergency fund. Budgeted 
expenses for these items in 1996-97 were $50,020, $5,640, $5,000, 
$15,000, $275,000, and $182,364, respectively. As mentioned earlier, 
the Board will not make any decision on using emergency funds until 
December 1997, at the earliest.
    Hazelnut shipments for the year are estimated at 70,000,000 pounds, 
which should provide $280,000 in assessment income. Income derived from 
handler assessments, along with interest and funds from the Board's 
authorized reserve, will be adequate to cover budgeted expenses. Funds 
in the reserve will be kept within the maximum permitted by the order.
    Recent price information indicates that the grower price for the 
1997-98 marketing season will range between $0.32 and $0.43 per pound 
of hazelnuts. Therefore, the estimated assessment revenue for the 1997-
98 marketing years as a percentage of total grower revenue will range 
between .93 and 1.25 percent.
    This action will reduce the assessment obligation imposed on 
handlers. While this rule will impose some additional costs on 
handlers, the costs are minimal and in the form of uniform assessments 
on all handlers. Some of the additional costs may be passed on to 
producers. However, these costs will be offset by the benefits derived 
by the operation of the marketing order. In addition, the Board's 
meeting was widely publicized throughout the hazelnut industry and all 
interested persons were invited to attend the meeting and participate 
in Board deliberations on all issues. Like all Board meetings, the 
August 28, 1997, meeting was a public meeting and all entities, both 
large and small, were able to express views on this issue. Finally, 
interested persons are invited to submit information on the regulatory 
and informational impacts of this action on small businesses.
    This action will not impose any additional reporting or 
recordkeeping requirements on either small or large hazelnut 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.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    After consideration of all relevant matter presented, including the 
information and recommendation submitted by the Board and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect, and that good cause exists for not postponing the effective 
date of this rule until 30 days after publication in the Federal 
Register because: (1) This action reduces the current assessment rate 
for hazelnuts; (2) the 1997-98 marketing year began on July 1, 1997, 
and the marketing order requires that the rate of assessment apply to 
all assessable hazelnuts handled during such marketing year; (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; and (4) this interim final rule provides 
a 60-day comment period, and all comments timely received will be 
considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 982

    Marketing agreements, Hazelnuts, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 982 is 
amended as follows:

PART 982--HAZELNUTS GROWN IN OREGON AND WASHINGTON

    1. The authority citation for 7 CFR part 982 continues to read as 
follows:

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


Sec. 982.340  [Amended]

    2. Section 982.340 is amended by removing the words ``July 1, 
1996,'' and adding in their place the words ``July 1, 1997,'' and by 
removing ``$0.007'' and adding in its place ``$0.004.''

    Dated: October 7, 1997.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 97-27101 Filed 10-10-97; 8:45 am]
BILLING CODE 3410-02-P