Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations 1249

PART 985—MARKETING ORDER

REGULATING THE HANDLING OF

SPEARMINT OIL PRODUCED IN THE

FAR WEST

1. The authority citation for 7 CFR

part 985 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. Section 985.215 is amended by

revising paragraph (b) to read as follows:

Note: This section will not appear in the

annual Code of Federal Regulations.

§985.215 Salable quantities and allotment

percentages 1996–97 marketing year.

* * * * *

(b)Class 3 (Native) oil—a salable

quantity of 1,213,692 pounds and an

allotment percentage of 61 percent.

Dated: January 3, 1997.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 97–450 Filed 1–8–97; 8:45 am]

BILLING CODE 3410–02–P

7 CFR Parts 997, 998, and 999

[Docket Nos. FV96–997–1 FR; FV96–998–

4 FR and FV96–999–3 FR]

Peanuts Marketed in the United States;

Changes in Handling and Disposition

Requirements

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Final rule.

SUMMARY: This rule relaxes, for 1996

and subsequent crop peanuts, several

provisions regulating the handling and

disposition of domestically and foreignproduced peanuts marketed in the

United States. The rule eliminates

several requirements covering the

disposition of inedible peanuts. At the

same time, it provides safeguard

measures including amendments to the

aflatoxin provisions to prevent inedible

peanuts from entering human

consumption outlets. The rule increases

opportunities for reconditioning failing

peanut lots and reduces inspection and

handling costs to handlers and

importers. The changes were

recommended by the Peanut

Administrative Committee (Committee),

the administrative agency which

oversees the quality assurance program

under Peanut Marketing Agreement No.

146 (7 CFR Part 998, Agreement). By

law, the same or similar regulations

issued under the Agreement also must

be issued under Part 997 regulating nonsignatory peanut handlers, and Part

999.600 regulating peanut importers.

This rule includes changes

recommended by the Department to

help ensure effective safeguard

measures. The changes should enable

the industry to be more competitive in

the changing international peanut

market.

EFFECTIVE DATES: 1. Sections 997.20,

997.30, 997.40, 997.50, 997.51, 997.52,

997.53, 997.54, 998.100, and 998.200 are

effective January 13, 1997. Section

999.600 is effective January 14, 1997.

FOR FURTHER INFORMATION CONTACT: Jim

Wendland, Marketing Specialist,

Marketing Order Administration

Branch, Fruit and Vegetable Division,

AMS, USDA, P.O. Box 96456, room

2525–S, Washington, D.C. 20090–6456;

telephone: (202) 720–2170, or 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, P.O. Box 96456, room

2525–S, Washington, D.C., 20090–6456;

telephone: (202) 720–2491, fax: (202)

720–5698.

SUPPLEMENTARY INFORMATION: This final

rule is issued under Peanut Marketing

Agreement No. 146 (7 CFR Part 998); the

non-signatory handler peanut regulation

(7 CFR Part 997); and the peanut import

regulation published in the June 19,

1996, issue of the Federal Register (61

FR 31306, 7 CFR Part 999.600). These

programs regulate the quality of

domestically produced peanuts handled

by Agreement signers and non-signers

as well as imported peanuts. The first

two Parts are effective under the

Agricultural Marketing Agreement Act

of 1937, as amended (7 U.S.C. 601–674),

hereinafter referred to as the ‘‘Act.’’ Part

999 is effective under section 108B(f)(2)

of the Agricultural Act of 1949, as

amended (7 U.S.C. 1445c–3).

The Department of Agriculture

(Department) is issuing this rule in

conformance with Executive Order

12866.

This final rule has been reviewed

under Executive Order 12988, Civil

Justice Reform. This rule is not intended

to have retroactive effect. This final rule

will not preempt any State or local laws,

regulations, or policies, unless they

present an irreconcilable conflict with

this rule. There are no administrative

procedures which must be exhausted

prior to any judicial challenge to the

provisions of this rule.

Domestic peanut production in 1995

was 1.76 million tons, with a farm value

of slightly over $1 billion.

The objective of the two domestic

programs and the import regulation is to

ensure that only high quality and

wholesome peanuts enter human

consumption markets in the United

States. About 70 percent of domestic

handlers, handling approximately 95

percent of the crop, have signed the

Agreement. The remaining 30 percent

are non-signatory handlers handling the

remaining 5 percent of domestic

production. The 1995 duty-free import

quota was equal to approximately 2

percent of 1995 domestic production.

Under the three regulations, farmers

stock peanuts with visible Aspergillus

flavus mold (the principal source of

aflatoxin) are required to be diverted to

inedible uses. Each lot of milled peanuts

must be sampled and the samples

chemically analyzed for aflatoxin

content. Costs to administer the

Agreement and to reimburse the

Department for oversight of the nonsignatory program are paid by an

assessment levied on handlers in the

respective programs.

The Committee, which is composed of

producers and handlers of peanuts,

meets at least annually to review the

Agreement’s rules and regulations,

which are effective on a continuous

basis from one year to the next.

Committee meetings are open to the

public, and interested persons may

express their views at these meetings.

The Department assesses Committee

recommendations, as well as

information from other sources, prior to

making any recommended changes to

the regulations under the Agreement.

Public Law 101–220 amended section

608b of the Act in 1989 to require that

all peanuts handled by persons who

have not entered into the Agreement

(non-signers) be subject to the same

quality and inspection requirements to

the same extent and manner as are

required under the Agreement. The nonsignatory handler regulations have been

amended several times thereafter and

are published in 7 CFR part 997.

Similarly, recent amendments to the

Agricultural Act of 1949 require that all

foreign produced peanuts in the

domestic market fully comply with all

quality standards under the Agreement.

Section 999.600—Specialty Crops;

Import Regulations was added to 7 CFR

part 999 on June 19, 1996 (61 FR 31306),

to establish minimum quality,

identification, certification and

safeguard requirements for foreignproduced farmers stock, shelled and

cleaned-inshell peanuts presented for

importation into the United States.

Thus, the changes to the Agreement’s

regulations, as established in this final

rule, also are established for the peanut

non-signer and import regulations.

According to the Committee, the

domestic peanut industry is undergoing

a period of great change. The Committee

bases its view, in part, on findings in a
1250 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations

May, 1996 study entitled ‘‘United States

Peanut Industry Revitalization Project’’

developed by the National Peanut

Council and the Department’s

Agricultural Research Service.

According to the study, the U.S. peanut

industry has been in a period of

dramatic economic decline since 1991

because of: (1) Decreasing consumption

of peanuts and peanut products; (2)

accompanying decreases in U.S. peanut

production and increases in production

costs; and (3) increasing imports of

peanuts and peanut products.

The study shows that peanut

consumption has declined. Between

1991 and 1994, per capita peanut

consumption steadily declined a total of

11 percent. Peanuts used in primary

products declined 12 percent, and

peanuts used in peanut butter (the

largest product usage) declined 20

percent.

Among other things, the study shows

that harvested acreage of peanuts in the

U.S. declined 25 percent between 1991

and 1995. Production has fluctuated

downward, with 1995 production 30

percent below that of 1991. Farm value

of peanut production has dropped 29

percent (from $1.4 billion to slightly

over $1 billion) in the same period.

The study points to recent increases

in the duty-free import quota for raw

peanuts. The volume of imported

peanuts has, indeed, increased due to

recent relaxations of the duty-free quota

enacted through the legislation to

implement the North American Free

Trade Agreement (NAFTA) and the

Uruguay Round Agreements under the

General Agreement on Tariffs and Trade

(GATT). Prior to 1994, the volume of

imported peanuts was limited, in most

cases, to 1.71 million pounds annually.

However, the Schedule of the United

States annexed to NAFTA, implemented

on January 1, 1994, provided duty-free

entry for up to approximately 7.43

million pounds of qualifying peanuts

from Mexico. The duty-free access for

Mexican peanuts increased to

approximately 7.88 million pounds in

1996 and is scheduled to be

approximately 8.1 million pounds in

1997. In calendar year 2008, access for

Mexican peanuts will be unlimited. In

addition, the United States Schedule to

the Uruguay Round Agreements under

GATT increased the peanut import

quota to 76.8 million pounds in 1996

from all countries except Mexico, with

additional annual increases of

approximately 10 million pounds to

reach a ceiling of 125 million pounds by

the year 2000 for all imported peanuts.

The study shows that imports of

peanut butter from 1991 to 1996

increased 116 percent. More

significantly, the study reports that

imported peanut butter’s share of U.S.

peanut butter consumption increased 12

fold between 1988 and 1993.

The study also makes projections for

the near future. Farmer production costs

and revenue are projected to be equal by

the year 2000, as are handler costs and

revenue. Total imports of shelled

peanuts and paste are expected to

increase 50 percent by the year 2000

and the U.S. position in the world

market is expected to drop 7 percent

between 1995 and 1996.

In addition, the modifications in the

Federal government’s peanut quota and

price support program under the

Federal Agriculture Improvement and

Reform Act of 1996 will result in the

domestic industry undergoing changes

over the next few years. The study

shows that the quota poundage was

reduced over 20 percent between 1991

and 1995, and the support price

dropped from $670 per ton in 1995 to

$610 in 1996.

The Committee contended that all of

these factors combined show that the

domestic peanut industry is in decline

and that the outlook is not expected to

change without some positive

intervention by the industry.

In mid-1994, the Committee

appointed a subcommittee to evaluate

the present program and to recommend

changes. The Agreement’s handling

regulations were evaluated with the

intent of streamlining procedures and

making them consistent with current

industry economies and technological

developments.

Different recommendations were

developed for streamlining both

incoming and outgoing handling

procedures. The recommendations

focused on handlers’ freedom to prepare

and dispose of peanut lots according to

economic incentives of the marketplace.

For instance, restrictions that prevent

certain lots failing quality requirements

from being blanched or remilled would

be removed so that more peanuts could

be reconditioned to meet human

consumption requirements. Also,

provisions throughout the Agreement

regulations require that certain lots be

kept separate and apart from other,

similar peanut lots. For the most part,

these provisions tend to limit handlers’

flexibility to move and recondition

peanuts. The subcommittee contended

that such provisions may work against

optimum utilization of equipment and

facilities and prevent handlers from

making the most economic use of their

peanut inventories. Further, peanut

processing machinery has been

improved through technological

advances to the point that virtually any

lot of peanuts, regardless of original

(incoming) quality, can now be shelled,

remilled and/or blanched (processed) to

meet outgoing quality requirements of

the Agreement and the non-signer

program. It was the opinion of the

subcommittee that handlers should have

the option of deciding whether it is

more economically advantageous to

recondition a lot or send it to an

inedible peanut outlet.

Subcommittee members also

recommended that many of the

requirements controlling disposition of

inedible peanuts be removed because

those requirements should be placed on

buyers rather than handlers. The

subcommittee contended that peanuts

either pass or fail quality and aflatoxin

requirements, and the requirements

limiting disposition based on aflatoxin

content (restricted and unrestricted

dispositions) should be removed.

The subcommittee contended further

that these changes, primarily

relaxations, could be made without

limiting the effectiveness of the

Agreement’s quality assurance program.

As long as all peanut lots intended for

human consumption continue to be

sampled and tested against current

outgoing requirements, the industry’s

high quality standards would be

maintained.

These recommendations represented a

fundamental change in the Agreement’s

handling regulations. The full

Committee met three times from March

to May 1996, to review all of the

recommendations. At a May 23, 1996,

meeting the Committee recommended

the changes to the Agreement’s

incoming and outgoing regulations for

1996 and subsequent crop peanuts.

After review and modifications to some

of the recommendations, the

Department added an additional

safeguard procedure for imported

peanuts and published the

recommendations in the Federal

Register (61 FR 51811) on October 4,

1996. Because of extent of the

recommended changes, the three peanut

regulations were published in their

entirety. A three-week comment period

was provided for interested parties to

submit comments. Twelve comments

were received by the end of the

comment period, October 24, 1996.

Seven comments were received from

signatory handlers, two from growers

cooperatives, and one on behalf of the

Committee. All of the comments

support the changes which effect the

domestic signer and non-signer

programs. Two comments were received

from importers opposing the proposed

additional reporting requirement on

importers.
Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations 1251

The Department requested comments

on whether implementation of the

proposed changes after the beginning of

the crop year would have an unequal

effect on one or more of the production

areas or unequally affect small or large

handlers. Nine commenters responded

that the proposed changes should be

implemented as soon as possible and

should be in effect for the entire 1996

crop year. No comments were received

opposing implementation of the changes

for the 1996 crop year.

Further, seven commenters stated that

the proposed changes would not have

an adverse affect on small peanut

handlers. No comments were received

from persons claiming to be or to

represent small businesses.

The comment submitted on behalf of

the Committee recommended revising

the proposed regulatory text covering

the requirement that all peanuts be

chemically tested for aflatoxin prior to

disposition for human consumption.

The comment does not change the

meaning or intention of the proposal.

This comment is addressed below.

One commenter suggested that the

handling regulations be further changed

by eliminating the Segregation

categories specified in the incoming

regulations. Such a relaxation could

increase the volume of cheaper peanuts

available for processing for edible

consumption. The idea was considered

and ultimately rejected by the

Committee at meetings prior to the May

meeting because no agreement could be

reached on provisions to ensure

appropriate compensation for

producers. After considering the

comment and deliberations taken by the

Committee at the previous meetings, the

Department has determined that the

comment should not be included in this

rulemaking action.

Two commenters correctly pointed

out that the support price of the

Department’s Farm Service Agency

(FSA) peanut quota program is not

scheduled to be reduced below the

current $610 per ton, as indicated in the

proposed rule. This statement is

corrected.

One comment was received from a

peanut producers association which

addressed several issues relating to

FSA’s quota program. The comments

did not have relevance to the proposed

handling changes in this rulemaking.

Three commenters addressed the

Department’s proposed additional

import requirement covering foreignproduced peanuts which are admitted

into the U.S. and stored in warehouses

for more than 30 days prior to the

opening of the duty-free import quota.

Two importers opposed the requirement

and one commenter representing a

domestic growers cooperative agreed

with the additional requirement. The

requirement and the Department’s

decision not to accept the opposing

comments are discussed below.

Of the nine comments received which

addressed the effective date of the

regulations, all indicated that the rule

should be implemented as soon as

possible. Several commenters stated that

the entire industry is expecting the

changes to be made effective for the

entire 1996 crop year. However,

handling actions already taken should

not be subject to such requirements.

Thus, the actions taken in this final rule

are not intended to cover the entire 1996

crop year. Four commenters stated that

additional delays in implementation

will adversely affect the industry.

This final rule changes, for 1996 and

subsequent crop peanuts, several

provisions regulating the handling of

domestic and foreign-produced peanuts

and relaxes disposition requirements of

such peanuts to inedible peanut outlets.

The rule increases the volume of

peanuts that can be handled and used

for human consumption without

decreasing the quality requirements for

such disposition. Restrictions are

removed on handler acquisition for

human consumption use of certain

farmers stock lots failing incoming

inspection because of excess loose

shelled kernels and fall-through

peanuts. Positive lot identification

(P.L.I.) requirements for seed peanuts

are removed. Shelled peanut lots

meeting Indemnifiable Grade or

Superior Grade requirements may be

sent to human consumption outlets

prior to the handler receiving aflatoxin

certification of the lot. Restrictions are

removed on remilling and blanching of

peanut lots exceeding certain damage

and foreign material content levels. The

maximum allowable aflatoxin content of

peanut lots disposed to inedible peanut

outlets, such as animal feed or wildlife

seed, or are exported, is raised from 25

ppb to 300 ppb. Previous provisions on

‘‘restricted’’ and ‘‘unrestricted’’

dispositions, ‘‘fragmented’’ peanuts, and

peanut meal are removed. Peanut lots

testing above 300 ppb aflatoxin content,

which are not reconditioned, may only

be crushed for oil. Safeguard measures

are established requiring aflatoxin

certifications for inedible lots exceeding

15 ppb aflatoxin content. Finally, the

volume and storage location of foreignproduced peanuts arriving in the U.S.,

which are inspected and stored in

Customs bonded warehouses for more

than one month prior to filing for

consumption entry, must be filed with

AMS.

Because this rulemaking involves

substantial changes to the text of the

three peanut regulations, the

explanation of the changes to each

program is repeated in this final rule.

Comments received are included in the

discussion of each change in regulation.

The Department also makes a few

changes to correct inadvertent

omissions and redundancies in the

regulatory text of the three programs.

Incoming Regulations

Loose shelled kernels: The Committee

recommended amending § 998.100

Incoming quality regulation by

removing paragraph (d) Loose shelled

kernels which regulates the acquisition

of loose shelled kernels (LSKs) and

other defective kernels. The regulations

should focus more on outgoing quality

and less on the shelling and milling

processes necessary to meet the

outgoing, human consumption

requirements. New, high technology

milling and blanching equipment

enables handlers to recondition failing

peanut lots that could not have been

reconditioned when the regulations

were promulgated. It is no longer

necessary to impose restrictions that

hinder efficiency of handling operations

and result in the loss of potentially good

quality peanuts. Therefore, this final

rule removes paragraph (d)(1) from the

incoming regulations. In doing so,

restrictions are removed on acquiring

farmers stock peanuts with more than

14.49 percent LSKs and 5 percent fallthrough from specified screen sizes.

For the non-signer regulation,

paragraph (d) Loose shelled kernels in

§ 997.20 corresponds to paragraph (d) of

the Agreement’s § 998.100 and is

removed for the reasons cited above and

to be consistent with corresponding

changes to the Agreement. For the

import regulation, paragraph (b)(1)(iv)

Loose shelled kernels of § 999.600 also

is removed for the reasons cited above.

The Committee recommended

removing paragraph (d)(2) of § 998.100

which requires that handlers submit to

the Committee diagrams of their

handling facilities and procedures. This

provision is no longer considered

necessary for the Committee’s oversight

of the signatory handlers and is

removed.

The non-signer regulation and the

import regulation do not have

paragraphs corresponding to paragraph

(d)(2) of § 998.100.

Seed peanuts: The Committee

recommended removing the

requirement in old § 998.100, paragraph

(e) Seed peanuts that required handlers

who receive or acquire seed residuals to

hold and mill such peanuts separate and
1252 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations

apart from other edible quality peanuts.

As long as the peanuts sent to human

consumption outlets must ultimately

meet outgoing requirements, including

certification as negative to aflatoxin, it

is not necessary to hold those peanuts

separate and apart from other lots also

destined for edible consumption.

Therefore, this final rule amends

paragraph (e) of § 998.100 by removing

the requirement that handlers hold and

mill seed residuals separate and apart

from other edible quality peanuts.

The Department makes a correction to

paragraph (d)(2) as published on page

51824 of the proposed rule. The second

sentence is not correctly worded and

should refer to seed peanuts which

‘‘have’’ visible Aspergillus flavus mold.

The words ‘‘are free from’’ are removed

from the second sentence as published

in the proposed rule. The sentence has

been revised accordingly in this final

rule.

For the non-signer regulation,

paragraph (e) Seed peanuts in § 997.20

contains different wording but the same

meaning and intent as the Agreement

regulation’s seed provisions. The

changes made to paragraph (e) of the

Agreement regulation concerning

holding and milling seed peanuts

separate and apart from other peanuts

also are made to § 997.20 paragraph (e)

of the non-signer regulation for the

reasons cited above and to be consistent

with corresponding changes to the

Agreement.

For the import regulation, paragraph

(b)(2) Seed peanuts in §999.600, also is

changed accordingly. Further, old

paragraph (b)(2) provided that

Segregation 2 and 3 peanuts may be

shelled for seed purposes, but must be

dyed or chemically treated to indicate

the peanuts are unfit for human or

animal consumption. That requirement

was provided in paragraphs (i)(1) and

(2) of §998.200—which are removed in

this final rule (discussed below). Thus,

this rule finalizes changes to import

regulation paragraph (b)(2) by removing

the requirement that Segregation 2 and

3 seed peanuts must be dyed or

chemically treated. Finally, the second

sentence of the import regulation

paragraph (b)(2), which covered

reporting disposition to the Secretary, is

removed because the information is

adequately covered in the last two

sentences of the same paragraph.

Oilstock: In old paragraph (f) of

§998.100, the Committee recommended

removing the prohibition on exporting

inedible quality peanuts to Canada or

Mexico and removing references to

‘‘fragmented’’ peanuts. The Committee

members expressed the point that other

countries ship inedible and

unfragmented peanuts to Canada,

Mexico, and other international

markets, so domestic handlers should

not deny themselves access to the same

international markets. Further,

removing the term ‘‘fragmented’’ from

paragraph (f) of §998.100 allows the

term ‘‘peanuts’’ to refer to peanuts in

any form, including fragmented kernels,

which may be acquired by handlers for

crushing or export. Therefore, this final

rule removes from old paragraph (f), the

prohibition on exporting inedible

quality peanuts to Canada and Mexico,

and references to fragmented peanuts

and the term ‘‘shelled’’ is also removed,

where appropriate, for the same reason.

Old paragraph (f) also is redesignated as

paragraph (e).

For the non-signer regulation, the

prohibition on exports to Canada and

Mexico and the requirement of

fragmentation is removed to make

paragraph (f) of §997.20 consistent with

the changes to the regulations under the

Agreement.

In §999.600 of the import regulation,

paragraph (b)(3) Oilstock and

exportation does not restrict exports and

so no corresponding change is needed.

Finally, in §998.100, the Committee

recommended removing paragraph (j)

which covers disposition of shelled

peanuts for use as animal feed. This

paragraph contained restrictions which

are not necessary to safeguard the

quality of peanuts for human

consumption. Appropriate safeguard

measures are provided in replacement

provisions discussed below. Therefore,

this final rule removes paragraph (j)

from the Agreement regulations.

In this final rule, corresponding

paragraph (h) in §997.20 of the nonsigner regulation is removed for the

reason cited above. Paragraph (i) of

§997.29 is retained because it applies to

producer/handlers handling peanuts of

their own production. Such farm-stored

peanuts must meet the requirements of

the non-signer regulation. Paragraph (i)

is redesignated as paragraph (g) in

§997.20.

The import regulation does not have

a paragraph corresponding specifically

to the Agreement regulation’s paragraph

(j) on animal feed. The topic is

addressed in paragraph (e) of the

outgoing regulations, the removal of

which is discussed below.

Outgoing Regulations

Paragraph (a) of §998.200 Outgoing

quality regulation provides that peanut

lots meeting the indemnifiable grade

requirements in Table 2 do not have to

be tested and certified as negative as to

aflatoxin. The Committee recommended

modifying this requirement to provide

that all lots (including indemnifiable

grade lots) intended for human

consumption be chemically tested and

certified ‘‘negative’’ as to aflatoxin

content. The change makes the

Agreement regulations consistent with

current industry practice. Most, if not

all, buyers require that all peanuts for

human consumption be certified

negative as to aflatoxin. This change has

a twofold purpose—it codifies a practice

which is common in the industry, and

ensures that the regulations effectuate

the objectives of the Agreement. This

final rule modifies paragraph (a)

accordingly.

Currently, peanut lots meeting the

grade requirements of Table 1, Other

Edible Quality, must be certified

negative to aflatoxin prior to shipment

to the buyer. This requirement is not

changed. Further, under previous

industry practice, indemnifiable grade

peanut lots were chemically tested and

certified while the lot was in transit to

the buyer. This practice is continued

under the final rule and the actual

transfer of lot ownership should not

normally occur until certification has

been received by the handler. A shorter

turn-around time for chemical analysis

is now possible with current testing

practices and equipment, overnight and

express mail services, and fax

transmissions of test results.

The comment filed on behalf of the

Committee correctly points out that

proposed paragraph (a)(2) in § 998.200,

which is between the two tables on page

51826, could be interpreted to mean that

all shelled peanut lots must meet

indemnifiable grade requirements. The

Department agrees that this is not the

intent of the Committee’s

recommendation. The commenter

suggested that paragraph (a)(2) in the

proposed rule be re-arranged to read as

follows: ‘‘Prior to disposition to human

consumption outlets, peanuts which

have been certified as meeting the

requirements for indemnifiable grades

must also be certified ‘‘negative’’ as to

aflatoxin. Maximum limitations for

indemnifiable grades are as follows:’’

This final rule makes the commenter’s

recommended change to paragraph

(a)(2) of § 998.200 of the Agreement

regulations and also to paragraph

(a)(1)(ii) of § 997.30 of the non-signer

regulations. The corresponding

paragraph in the import regulation does

not need to be changed.

The Department also corrects the title

of Table 1 in § 998.200 of the Agreement

regulations. The word ‘‘Non’’ was

inadvertently left out of the title, which

should read: Table 1—‘‘Other Edible

Quality’’ (Non-Indemnifiable) Grades—

Whole Kernels and Splits. This error
Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations 1253

appears twice in the proposed rule

because Table 1 begins on page 51825

and is continued on page 51826. The

titles of the corresponding tables in the

non-signer or import regulation do not

refer to ‘‘indemnifiable’’ peanuts and do

not have to be corrected.

The Committee recommended

changing the title of paragraph (c) of

§ 998.200 to read Sampling and testing

shelled peanuts. The new title includes

the peanut sampling process which

comprises a significant part of

paragraph (c). As a conforming change,

the beginning of the first sentence of

revised paragraph (c) is changed to add

the words ‘‘Prior to shipment, * * *.’’

In addition, this final rule designates the

old introductory paragraph (c) as

paragraph (c)(1) because a paragraph

(c)(2) is cited in the Code of Federal

Regulations. New paragraph (c)(1) is

otherwise unchanged.

A conforming change is made to the

title of corresponding paragraph (c) of

§ 997.30 of the non-signer regulation. No

conforming change is necessary in the

import regulation. A conforming change

also is made to non-signer paragraph

(c)(2) to specify that handlers shall

cause samples to be ground by the

Federal or Federal-State Inspection

Service (inspection service) prior to

shipment.

Paragraph (c)(4) of § 998.200 specifies

the maximum allowable aflatoxin

content for edible peanut lots as 15 parts

per billion (ppb). Such lots are certified

as ‘‘negative’’ to aflatoxin. Consistent

with current industry practice, the

aflatoxin certificates for such lots are

not required to specify the numerical

aflatoxin count of the lot. This

requirement is not changed in this final

rule.

Previous paragraph (c)(4) of § 998.200

also specified a ‘‘negative’’ content for

inedible peanut lots as 25 ppb or less.

Under the regulation, failing lots with

aflatoxin content in excess of 15 ppb but

25 ppb or less were considered

‘‘unrestricted,’’ which means the

peanuts could be used in certain nonhuman consumption peanut outlets

such as animal feed, wildlife feed, etc.

‘‘Unrestricted’’ uses could provide more

of a financial return for handlers while

not posing a food safety threat to

consumers. Peanut lots with aflatoxin

content of more than 25 ppb were

certified as ‘‘restricted’’ and could only

be crushed for oil or exported. Aflatoxin

certificates from USDA and Committeeapproved private laboratories specified

unrestricted lots as ‘‘negative’’ and

usually did not include the numerical

count of the lot’s aflatoxin content.

Restricted lot certificates cited the

numerical aflatoxin count of the failing

lot.

The Committee recommended

revising paragraph (h) and removing

paragraphs (j) and (l) of § 998.200 to

remove, among other things, procedures

relevant to ‘‘unrestricted’’ and

‘‘restricted’’ lots of peanuts. Under the

proposal, restrictions on the disposition

of failing peanut lots would be relaxed

under the proposed rule. Failing lots of

peanuts composed of LSKs, fall through

and pickouts from initial shelling

operations would be limited to crushing

or export unless certified as to aflatoxin

content. If so certified, the lots could be

disposed to other non-edible uses. Other

failing lots and residuals from blanching

and remilling also could be sold to any

buyer provided that the lot is PLI,

certified as to aflatoxin content, and in

specified containers. Therefore, under

the proposal, there is no reason to retain

the phrase in paragraph (c)(4) of

§ 998.200 that specifies 25 ppb or less as

‘‘negative’’ to aflatoxin for inedible

peanuts. Continued reference to 25 ppb

relative to inedible peanuts would only

cause confusion in the revised

regulations. The Department accepts

these recommendations of the

Committee and revises, in this final

rule, the paragraphs as stated.

Replacement paragraphs (f), (g), and

(h) of the new § 998.200 (discussed

below) require that failing lots disposed

to inedible outlets other than crushing

or export be ‘‘certified as to aflatoxin

content’’—which means entering a

numerical count rather than a general

statement covering a ppb spread from 16

to 26 ppb. Therefore, this final rule

establishes that, for peanut lots testing

more than 15 ppb, the aflatoxin

certificate must show the lot’s

numerical aflatoxin count.

This final rule establishes that

aflatoxin laboratories specify the

numerical aflatoxin content on

certificates issued on inedible peanut

lots testing more than 15 ppb. Also,

aflatoxin certificates on lots which fail

grade requirements but are tested at 15

ppb or less should be certified as

‘‘negative to aflatoxin’’ for inedible

peanuts. The certificates for such lots

may specify the ppb aflatoxin content of

the lots.

This final rule makes corresponding

changes to paragraph (a)(2) of § 997.30

of the non-signer regulations and

paragraph (f)(3) of § 999.600 of the

import regulation.

The Department believes these

certification guidelines will assist

handlers in marketing inedible quality

peanuts.

Paragraph (d) Identification of

§ 998.200 is amended in this final rule

by adding a clause in the first sentence

establishing the maximum lot size as

200,000 pounds. Two hundred

thousand pounds of peanuts is the

largest lot size which the inspection

service has determined can be

efficiently and accurately sampled. The

maximum limit specification is removed

from other paragraphs in the

Agreement’s regulatory language and is

added to paragraph (d) for consistency

and clarity. The 200,000 pound

maximum lot size applies to all

sampling situations.

The Department makes a correction to

the regulatory text of paragraph (d) of

§ 998.200. Text regarding P.L.I. was

inadvertently left out of the second to

last sentence at the end of paragraph (d).

The corrected text does not change the

meaning or regulatory nature of the

paragraph.

In the non-signer regulation, § 997.50

Inspection, chemical analysis,

certification and identification applies

to identification, among other topics.

While the maximum lot size of 200,000

pounds is specified elsewhere in the

regulations, the 200,000 pound

maximum lot size is added to § 997.50.

In the import regulation, paragraph

(d)(3)(ii) in § 999.600 specifies the

200,000 pound maximum lot size and is

not changed.

Paragraph (f) Interplant transfer of

§ 998.200 was revised last year and

provides that peanut lots may be

transferred to any handler or storage

without P.L.I. and certification, and

that, upon disposition for human

consumption such transferred peanuts

must meet edible requirements. This

paragraph is consistent with the

Committee’s intention to remove

provisions which restrict movement and

increase costs of handling peanuts. As

long as any lot of peanuts intended for

human consumption are required to be

sampled and meet outgoing quality

requirements and are P.L.I., any

additional requirements on the transfer

of peanuts between a handler’s plants,

that do not affect outgoing quality, are

irrelevant. Therefore, paragraph (f) is

not changed in this final rule. Handlers

are required to keep records of all such

transfers.

Corresponding paragraph (f) of

§ 997.30 of the non-signer regulation

covers the transfer of non-signer peanuts

between plants. This paragraph is

removed (as discussed below). The

import regulation does not have

corresponding requirements on the

transfer of imported peanuts between

plants, and, therefore, no conforming

change is necessary.
1254 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations

Disposition of Failing Quality, Inedible

Peanuts

The Committee recommended

streamlining § 998.200 Outgoing

regulation by removing 16 paragraphs

covering disposition requirements and

procedures concerning inedible (failing

quality) peanuts used for research

projects, wildlife feed, rodent bait,

chemically treated seed, fragmented

export, meal from crushing, and animal

feed. The paragraphs removed from

§ 998.200 are:

(1) Paragraph (g)(1) which defined

LSKs, fall through, and pickouts and

inedible quality peanuts;

(2) Paragraph (g)(2) which required

that inedible peanuts be kept separate

and apart from edible quality peanuts;

(3) Paragraph (g)(3) which provided

for: (a) disposition of inedible peanuts

to research projects, wildlife feed,

rodent bait, chemical treatment for seed,

and export to countries other than

Canada and Mexico; (b) designations of

restricted and unrestricted failing lots;

and (c) limits on disposition of meal

from crushing;

(4) Paragraph (g)(4) which specified

further requirements on the transfer of

inedible peanuts;

(5) Paragraph (h)(1) which specified

further requirements on identifying and

reporting the transfer of inedible

peanuts;

(6) Paragraph (h)(3) which specified

further requirements regarding the

disposition of failing quality Segregation

1 peanuts to specified outlets;

(7) Paragraph (i)(1) which specified

disposition of seed peanuts and seed

residuals;

(8) Paragraph (i)(2) which required

chemical treatment of seed peanuts;

(9) Paragraph (j)(1) which specified

requirements on commingling and

disposition of Segregation 2 and 3

peanuts;

(10) Paragraph (j)(2) which specified

further requirements on commingling

and disposition of Segregation 2 and 3

peanuts;

(11) Paragraph (k)(1) which regulated

exportation of Segregation 1 peanuts;

(12) Paragraph (k)(2) which specified

further requirements on the disposition

of Segregation 1 peanuts to inedible

outlets;

(13) Paragraph (l)(1) which specified

categories of unrestricted shelled

peanuts for disposition to crushing or

export;

(14) Paragraph (l)(2) which specified

categories of restricted shelled peanuts

for disposition to crushing or export;

(15) Paragraph (m)(1) which specified

requirements for the disposition of

shelled peanuts for domestic animal

feed; and

(16) Paragraph (m)(2) which specified

coloring or dyeing and other

requirements for inedible peanuts

disposed to domestic animal feed.

This final rule removes paragraphs (j)

and (k) which specified disposition

requirements for farmers stock peanuts.

The Committee believed that these two

paragraphs are no longer needed

because paragraph (f) Oilstock of

§ 998.100 Incoming quality regulation

provides that handlers may acquire

Segregation 2 and 3 peanuts for

crushing or export and that the Area

Association supervise such dispositions.

Handlers may also acquire for crushing

or export peanuts originating from

Segregation 1 farmers stock which are

milled and fail human consumption

quality and are P.L.I.

Under the previous Agreement

regulations, paragraph (j)(3) of § 998.200

provided handlers with an exemption

from assessments for acquisitions of

Segregation 2 and 3 peanuts used for

crushing or export. Paragraph (j)(3) was

added to the regulatory language last

year (60 FR 36208, July 14, 1995) to

clarify Agreement provisions §§ 998.31

and .48. The Department clarifies in this

final rule that the assessment exemption

applies to Segregation 2 and 3 peanuts

acquired only for crushing, whether

domestic or export. The exemption

paragraph is redesignated as paragraph

(i) in § 998.100 of the incoming

regulation, and is revised to remove the

references to the removed paragraphs

(j)(1) and (j)(2) in § 998.200.

This final rule also relaxes restrictions

on blanching and remilling certain

inedible lots. The Committee

recommended relaxing restrictions in

paragraphs (h)(2) and (h)(4) which

prohibited blanching or remilling

peanut lots exceeding defect levels of 10

percent total unshelled peanuts and

damaged kernels, 10 percent foreign

material, and, for remilling, 10 percent

fall through. The restrictions on the

amount of damage and foreign material

in out-of-grade lots are removed so that

handlers have more opportunity to

recondition failing lots. This change

increases handler flexibility, reduces

inspection and handling costs, and

enables more peanuts to be

reconditioned and shipped for human

consumption. The restriction on 10

percent fall-through for remilling

peanuts remains in effect.

The corresponding paragraphs of the

non-signer and import regulations

(§ 997.40(a) and § 999.600(f)

respectively) do not contain similar

limitations on blanching and remilling

of defective lots and do not need to be

changed.

The Committee indicated that the

regulations were too restrictive and

limited handlers’ ability to recondition

potentially edible peanuts. Further, as

long as peanuts are required to meet the

outgoing requirements, including

negative aflatoxin certification, it should

not matter from which categories the

peanuts originated. The Committee

recommended removal of many

restrictions and the addition of

appropriate safeguards. The Committee

believed these safeguard requirements

would help ensure that inedible peanuts

do not end up in human consumption

outlets.

The provisions covering peanut

disposition are replaced by two new

paragraphs and revisions are made in

two existing paragraphs. New

paragraphs (f) (1), (2) and (3) of the

outgoing regulation modify § 998.32 of

the Agreement and specify disposition

requirements for edible and non-edible

peanut lots. New paragraph (g) provides

for disposition of inedible milled

peanuts (‘‘sheller oilstock residuals’’).

New paragraph (h)(1) covers the

blanching of inedible peanuts (revised

from current paragraph (h)(2)). New

paragraph (h)(2) covers the remilling of

inedible peanuts (revised from current

paragraph (h)(4)).

The Committee believed that

safeguard measures in the regulations

should be maintained because peanut

lots sent to human consumption outlets

still need to meet the quality

requirements of paragraph (a) and be

certified negative to aflatoxin. Peanuts

which cannot be reconditioned (or

which a handler chooses not to

recondition) to meet outgoing quality

requirements would continue to be

required to be P.L.I., red tagged, and

maintained in appropriate containers. If

disposed of to inedible peanut outlets

other than domestic or export crushing,

failing peanuts would be required to be

certified as to aflatoxin content and that

certification would accompany the lot to

the inedible peanut outlet. In addition,

new paragraph (f)(2) also requires that

the shipping papers state that the

inedible peanuts are not to be used for

human consumption. All inedible

dispositions would continue to be

reported to the Committee.

In new paragraph (f)(3) of § 998.200,

failing quality peanuts not sent to

inedible outlets such as livestock feed,

wild animal feed, rodent bait, etc., must

be either crushed or exported as

prescribed in new paragraph (g) or

blanched or remilled pursuant to new

paragraphs (h) (1) and (2), respectively.

Segregation 2 and 3 farmers stock

peanuts may be milled for seed.
Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations 1255

New paragraph (g) of § 998.200

provides that peanuts and portions of

peanuts which result from milling

operations be identified as ‘‘sheller

oilstock residuals.’’ Such peanuts

include loose shelled kernels, fall

through, and pick-outs as defined in

that paragraph and whole lots of failing

peanuts that a handler may choose to

crush or export for crushing. Under new

paragraph (g), sheller oilstock residuals

which are certified as to aflatoxin

content may be disposed of

‘‘domestically,’’ which means that the

peanuts may be used for livestock feed,

wild animal feed, rodent bait, or other

non-human consumption uses, pursuant

to paragraph (f)(2), or crushed for oil.

Such peanuts also may be exported.

Seller oilstock residuals not certified as

to aflatoxin content must be crushed or

exported as specified in new paragraph

(g). Further, shipping papers

accompanying such crushed or exported

lots must specify that disposition

limitation. All sheller oilstock residuals

moved under paragraph (g) of § 998.200

must be reported to the Committee—

which is consistent with current

reporting requirements. Corresponding

reporting requirements to report

disposition of inedible peanut lots to the

AMS are established for non-signatory

handlers in paragraph (c) of § 997.40

and for importers in paragraph (e)(4) of

§ 999.600.

This final rule removes nearly all

restrictions on handlers selling peanuts

to inedible peanut outlets. To help

ensure the peanut lots with excessively

high aflatoxin content are not used in

inedible outlets where aflatoxin

contamination could be transferred to

human consumption products, the

Department establishes in this final rule

that no peanut lot exceeding 300 ppb

aflatoxin content may be disposed to an

inedible peanut outlet, other than

crushing or export. The 300 ppb content

ceiling is the maximum aflatoxin

content recommended by the Food and

Drug Administration (FDA) for peanuts

used for finishing (i.e. feedlot) beef

cattle. To make this change, an

additional paragraph (2) specifying the

restriction is added to paragraph (g)

covering sheller oilstock residuals. The

same provision is added to the nonsigner regulation as paragraph (c)(2) of

§ 997.40 and the import regulation as

paragraph (e)(2)(ii) of § 999.600. This

requirement will help ensure peanut

lots which are excessively high in

aflatoxin are not disposed to inedible

outlets such as livestock feed where the

aflatoxin can be transferred in the food

chain to other food products intended

for human consumption.

Thus, this final rule raises the

aflatoxin content limit to 300 ppb from

the current 25 ppb for failing peanut lots

which can be disposed of to any

inedible outlet.

Under this final rule, handlers are

allowed to recondition failing peanut

lots, and have more incentive to do so.

Handlers have the option of crushing a

lot for oil or reconditioning the lot. Lots

above 300 ppb aflatoxin content which

are not economically beneficial to

recondition must be crushed or

exported. Only lots testing 300 ppb or

less should be disposed of for use as

animal feed. With current technologies,

reconditioning should be possible for

most all failing peanut lots. Whole and

residual lots exceeding 300 ppb

aflatoxin content may be commingled

until sufficient volume is accumulated

for crushing disposition.

According to the FDA, residuals from

the reconditioning of lots exceeding 300

ppb and the meal from crushed lots

exceeding 300 ppb should not be used

as animal feed. The recommended

maximum aflatoxin content for

domestic animal feed, provided below,

is summarized from FDA’s Compliance

Policy Guides (Sec. 683.100). The

section is entitled ‘‘Action Levels for

Aflatoxin in Animal Feed’’ and was last

revised March 28, 1994. The action

levels provided below apply to peanut

products, peanuts, peanut meal, peanut

hulls, peanut skins and ground peanut

hay. The FDA guide provides the

following action levels for animal feeds:

—Peanut products intended for

finishing (i.e., feedlot) beef cattle:

Action level 300 ppb.

—Peanut products intended for

finishing swine of 100 pounds or

greater: Action level 200 ppb.

—Peanut products intended for

breeding beef cattle, breeding swine,

or mature poultry: Action level 100

ppb.

—Peanut products and feed ingredients

intended for immature animals:

Action level 20 ppb.

—Peanut products and other feed

ingredients intended for dairy

animals, for animal species or uses

not specified above, or when the

intended use is not known: Action

level 20 ppb.

In the previous Agreement

regulations, inedible peanut lots

certified at 26 or more ppb could not be

sent to inedible peanut outlets where

the peanuts would not be subject to

heating in the preparation for inedible

use or sent to outlets which allow the

aflatoxin to be passed to another food

product entering human consumption

channels. This is a food safety measure

which helps prevent aflatoxincontaminated peanut lots from being

used in certain inedible outlets—such as

dairy cattle feed where the aflatoxin

could be passed to human consumption

in the milk.

This final rule continues to require

that handlers dispose of inedible

peanuts based on aflatoxin content.

However, the action level restricting

inedible disposition is relaxed

significantly and the restrictions

limiting disposition to different inedible

peanut outlets are removed, except that

lots containing aflatoxin in excess of

300 ppb are required to be crushed for

oil.

This final rule retains, as proposed,

the phrase ‘‘which originated from

Segregation 1 peanuts’’ in paragraphs

(h)(1) and (h)(2) of § 998.200. This

phrase was not included in the text for

the revised blanching and remilling

paragraphs recommended by the

Committee and no explanation was

provided by the Committee as to the

benefit of removing this important

safeguard provision. The phrase, at the

very least, serves as a reminder that only

Segregation 1 peanuts may be shelled

and sent to edible consumption outlets.

The phrase is included in corresponding

paragraphs (d) and (e) of § 997.400 and

the introductory paragraph (e) of

§ 999.600.

Also, the Committee recommended

that the titles of the revised blanching

(h)(1) and remilling (h)(2) paragraphs

include reference to Committeeapproved blanchers and remillers.

However, the references are not

necessary for the meaning of the

paragraphs and are not included in this

final rule.

In non-signer § 997.30 Outgoing

regulation, paragraphs (f) Transfer

between plants and (g) Residuals from

seed peanuts correspond to the same

topics covered in the Agreement’s

outgoing regulation, and are removed in

this final rule. The subject matter in the

two paragraphs is replaced with revised

§ 997.40 Reconditioning and disposition

of peanuts failing quality requirements.

Paragraphs (a)(1) and (2) of old § 997.40,

covering remilling and blanching of

inedible shelled peanuts are revised and

the order is reversed to conform with

revised blanching and remilling

paragraphs in § 998.200. The new nonsigner blanching and remilling

paragraphs are designated as paragraphs

(d) and (e), respectively. These new

paragraphs are not identical to the

Agreement’s blanching and remilling

paragraphs because non-signers are not

required to receive approval prior to

moving a failing shelled lot to a

blancher or remiller (as are signatory
1256 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations

handlers under the Agreement

regulations). Also, the non-signer

regulations do not limit remilling and

blanching to Committee-approved

remillers, blanchers or exporters.

Therefore, those requirements are not

included in revised non-signer

paragraphs (d) blanching and (e)

remilling finalized in this rule.

The provisions of the previous nonsigner paragraph (a)(3) of § 997.40

covering the ownership of peanuts

moved for custom blanching or

remilling, and the certification and

reporting of such peanuts, are included

in new § 997.40 blanching and remilling

paragraphs (d) and (e). Likewise,

previous paragraph (a)(4) provisions on

the bagging, red tagging and disposition

of blanched and remilled peanuts are

included in the revised paragraphs (d)

and (e) of § 997.40. These changes make

the non-signer blanching and remilling

paragraphs conform with the Agreement

regulation’s revised blanching and

remilling paragraphs.

Four paragraphs in old § 997.40(b)

Disposition of shelled peanuts failing

quality requirements for human

consumption cover the various

disposition procedures and outlets for

failing quality, inedible peanuts. These

requirements are the same as, but are

organized and worded differently from

corresponding paragraphs (g) through

(m) in § 998.200 of the Agreement

regulations. The provisions removed

from old paragraph (b) of § 997.40 are:

(1) Paragraph (b)(1) which regulated

the disposition of shelled peanuts to

unrestricted crushing, fragmenting or

dyeing, export, animal feed, wildlife

feed, and rodent bait;

(2) Paragraph (b)(2) which specified

further requirements for disposition to

animal feed (coloring or dyeing, P.L.I.,

valid aflatoxin certification, and

reporting);

(3) Paragraph (b)(3) which regulated

the disposition of shelled peanuts to

restricted crushing, and export;

(4) Paragraph (b)(4) which regulated

the disposition of Segregation 2 and 3

farmers stock peanuts to restricted and

unrestricted meal, crushing and export;

and

(5) Paragraph (b)(5) which specified

reporting requirements for LSKs, fall

through, and pickouts.

These paragraphs are removed for the

same reasons cited above and to

correspond to changes to the

Agreement’s outgoing regulation. This

final rule removes all references to

‘‘restricted’’ and ‘‘unrestricted’’ failing

imported peanuts and limitations on the

disposition of restricted and

unrestricted lots.

Old paragraph (b)(6) of § 997.40 is

retained because it exempts from

assessments, Segregation 2 and 3

farmers stock peanuts acquired by nonsignatory handlers for crushing or

export. The corresponding paragraph in

the Agreement is retained and

redesignated in this final rule.

Therefore, such Segregation 2 and 3

peanuts acquired by non-signatory

handlers also continues to be exempt

from assessments. Old paragraph (b)(6)

is revised and redesignated as paragraph

(b) under § 997.51 Assessments and the

existing text in § 997.51 is redesignated

as paragraph (a).

There is no authority to assess

imported peanuts.

Several changes are made to § 999.600

of the import regulation regarding

disposition of inedible peanuts. Old

paragraph (c)(3) (reconditioned peanuts)

is redesignated as the new introductory

paragraph of paragraph (e). Further, the

provisions in old paragraphs (e) and (f)

(disposition and reconditioning of

failing peanuts, respectively) are revised

and combined in new paragraph (e).

Also, paragraphs (g) and (h) (safeguard

procedures and additional

requirements, respectively) are

redesignated as paragraphs (f) and (g),

respectively.

The introductory paragraph of new

paragraph (e) of § 999.600 provides an

overview for reconditioning imported

peanut lots. New paragraphs (e)(1),

(e)(2), and (e)(3) of the import regulation

correspond to new paragraphs (f), (g),

and (h) of the Agreement regulations.

New paragraph (e)(1) covers failing lots

disposed of to inedible uses such as

animal feed, wildlife feed, seed peanuts

and meal—specified in previous

paragraphs (e) and (f). Disposition to

these inedible outlets must be positive

lot identified with red tags, bagged, and

the bill of lading must state that the

peanuts cannot be used for human

consumption.

New paragraph (e)(2) of the import

regulation covers disposition of failing

quality peanuts (‘‘sheller oilstock

residuals’’) to crushing or export.

Peanuts covered under the new

paragraph (e)(3) are primarily loose

shelled kernels, fall through and

pickouts from milling operations, but

may also include any other failing lot

that an importer chooses to crush or

export.

New paragraph (e)(4) specifies that

identification, certification, and

movement of inedible peanuts covered

under paragraph (e) must be reported to

AMS pursuant to safeguard procedures

in paragraphs (f)(2) and (f)(3) of

§ 999.600. This does not represent

additional reporting or recordkeeping

requirements of inedible dispositions

for importers. The requirements

correspond to reporting requirements in

the revised Agreement regulations for

signatory handlers who are required to

report dispositions and maintain

records of all inedible peanut

transactions.

Finally, a new paragraph (i) is added

at the end of § 998.200 of the Agreement

regulations. The new paragraph

specifies that certain records are

required to be maintained pursuant to

§ 998.43 of the Agreement. The records

pertain to peanuts which are not

certified for human consumption. In

addition to maintaining certain records,

the Agreement provides that all records

are made available to Committee staff

and to representatives of the Secretary,

as is necessary to document compliance

with Agreement regulations.

The additional provision does not

represent an increase in the number of

forms handlers and importers complete,

report, or maintain under the three

programs.

No corresponding changes in

reporting and recordkeeping

requirements are necessary in the nonsigner and import regulations. However,

in § 997.52 Reports of acquisition and

shipments and elsewhere in the nonsigner regulation, references regarding

specific Fruit and Vegetable Division

form numbers are replaced with the

generic statement ‘‘forms provided by

the Division.’’ This will enable the

Department to revise the forms and

reduce the number of forms without the

additional rulemaking expense of

changing the non-signer peanut

regulation each time a form is revised or

deleted. All such changes still must be

submitted for approval by the Office of

Management and Budget (OMB) under

the Paperwork Reduction Act of 1995

(44 U.S.C. Chapter 35).

The unchanged portions of incoming

and outgoing regulations of all three

peanut programs, in effect for 1995 and

subsequent crop peanuts, remain in

effect for 1996 and subsequent crop

peanuts.

Additional Change to § 999.600 Import

Regulation

Early Entry and Bonded Storage

Pending New Quota

Experience shows that some

importers ship peanuts to the U.S.

several months prior to filing a

consumption entry for the peanuts.

Such peanuts are sampled and

inspected when off-loaded at the port

and then stored in Customs Service

bonded warehouses until the opening of

the next year’s duty-free quota.
Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations 1257

Depending on how quickly one year’s

quota fills, storage could be as long as

10 or 11 months. For instance, new crop

peanuts from Argentina may be

harvested as early as May or June but

arrive in the U.S. too late to be included

in the duty-free quota that opened a

month or two earlier on April 1. The

peanuts are then placed in bonded

storage awaiting the next quota year the

following April 1. Further, if the quota

is filled before all peanuts in storage can

be entered for one year, it is possible

that some peanuts would have to be

stored for another full year, and the total

storage time could approach 2 years.

Because of the possibility of

deterioration while in storage, the

Department needs to know which

peanut shipments are held in bonded

storage for an extended period of time,

so that the wholesomeness of such

peanuts can be verified, if necessary,

when the peanuts are removed from

storage and entered for consumption.

The Department proposed adding an

additional safeguard measure, new

paragraph (f)(6) Early arrival and

storage, to the import regulation. This

provision requires that importers report

peanut shipments which are sampled,

inspected, and held in bonded storage

in excess of a stated period of time.

AMS sought comments on this new

requirement, including comments as to

whether one month is an appropriate

maximum storage period that does not

have to be reported. Two comments

opposed the new requirement and one

comment concurred with the new

requirement.

Both comments opposing the added

provision stated that similar

requirements concerning reporting are

not required under Agreement

regulations for domestically produced

peanuts placed in storage, and therefore

should not be required of imported

peanuts. Domestic peanut handlers

maintain records of all peanuts placed

in storage and make those records

available to Committee employees

(fieldmen) who routinely visit handler

offices to review records and inspect

facilities. The Department, not the

Committee, is responsible for

monitoring the storage of imported

peanuts. It is not practical for the

Department to make such routine onsite inspections of all importers’ records

and facilities to monitor arrival on new

shipments. Therefore, the Department

believes that such notification of

shipments after arrival and inspection

is, at this time, the least burdensome

and most practical way for the

Department to meet its safeguard

obligation.

AMS is working with the Customs

Service to obtain a weekly data base of

information on shipments of fresh

agricultural commodities, including

peanuts, imported into the U.S. The

data received will include shipments of

commodities submitted for warehouse

entries. When those procedures are

complete, and when AMS has assurance

that all incoming shipments are

included in the weekly computerized

report, AMS will remove this

requirement on importers.

The rule proposed that entry data, as

well as grade and aflatoxin certificates

for the stored peanut lot, be filed with

AMS. One commenter stated that this is

logistically cumbersome and requires

additional paperwork for importers.

After review of the information needed,

AMS agrees that the only information

necessary for AMS awareness is a copy

of the Customs Service documentation

identifying the location and

identification of the storage warehouse,

the quantity of peanuts entered for

storage, and the date of storage entry.

This information is shown on Customs

Form 7501 and is sufficient for

notification of lots placed in bonded

storage. Therefore, it is not necessary, as

stated in the proposed rule, that

importers file copies of the grade and

aflatoxin certificates for peanut lots

admitted for bonded warehouse storage.

This final rule is changed to reflect this

change.

The wording of two comments

indicated a possible misunderstanding

of the focus of this requirement. It is

added to the import regulation to apply

to peanut lots that arrive in the U.S. and

are placed in storage prior to the filing

of a Customs Service consumption entry

when the next quota period opens. It

does not apply to peanut lots which the

Customs Service has already entered for

consumption or peanut lots which have

met all import requirements and are

placed in storage pending shipment to

buyers.

The Department indicated in the

proposed rule, and establishes in this

final rule, that the grade and aflatoxin

certificates issued on such peanuts upon

arrival continue to be valid for the

following quota year. This is consistent

with Agreement regulation which does

not place any time limits on the

applicability of grade and aflatoxin

inspection certificates or the storage of

domestically produced peanuts.

One commenter suggested that as long

as the Customs Service knows the

location of the bonded warehouses

where peanuts are stored, the importer

should not have to report storage to

AMS. Storage data is not currently

available from the Customs Service.

The commenter suggested also that as

long as the Customs Service knows the

condition of the bonded warehouses

where peanuts are stored, the importer

should not have to certify as to the

storage conditions when later filing for

consumption entry. It is true that the

Customs Service inspects and certifies

the structural integrity and security of

bonded warehouses. However, the

Customs Service does not monitor such

things as whether cold storage

equipment is available and maintained,

or whether the peanuts are protected

from rodent or insect infestation or rain

damage from leaks in the roof.

Therefore, for compliance purposes, it is

necessary that the importer certify to the

Customs Service that the peanuts have

been stored consistent with industry

standards.

The commenter suggested that AMS

should inspect the warehouses. AMS

will inspect such warehouses when

necessary. However, inspection does not

guarantee that peanuts subsequently

placed in the warehouses will be

maintained in conditions consistent

with industry standards. Knowledge of

which warehouses contain imported

peanuts will allow AMS to spot check

warehouses which are used and monitor

weather conditions in the area so that

potentially adverse situations are known

to AMS.

Finally, one commenter stated that

the reinspection requirement should not

be included in the import regulations.

However, to meet the Department’s

statutory mandate that all peanuts in the

domestic market meet requirements

applied to peanuts under the Agreement

regulations, it is necessary that the

Secretary have the authority to reinspect

imported peanuts, particularly those

that might be subject to deteriorating

conditions while in storage. As stated

above, the Secretary has the same

reinspection authority over domestically

produced peanuts under Agreement and

non-signer regulations. The Department

exercises this oversight only to ensure

that wholesome peanuts enter human

consumption channels.

The proposed rule asked for

comments on the minimum length of

the storage period which would require

notification of AMS. One month was

proposed. No comments were received

suggesting other lengths of time.

Therefore, this final rule establishes the

minimum storage period requiring

notification of AMS as any period

exceeding one month. Peanuts produced

in Mexico arriving in the U.S. and

placed in storage prior to December 1—

in anticipation of withdrawal and entry

for consumption on or after the

following January 1—must be reported
1258 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations

to AMS. Peanuts produced in Argentina

or any other country, except Mexico,

which arrive and are placed in storage

prior to March 1 of any year—in

anticipation of withdrawal and entry for

consumption on or after the following

April 1—must be reported to AMS. The

reports may be sent via facsimile

transmission or mailed pursuant to

paragraphs (f) (2) and (3) of § 999.600 at

the time of entry into a bonded

warehouse for storage. The report

should be a copy of Customs Form 7501

identifying the importer and showing

the volume of peanuts being stored and

the location of the storage warehouse.

As a safeguard measure, old

paragraph (b)(4) of the import regulation

provided that if the Secretary has reason

to believe that imported peanuts have

been damaged or deteriorated while in

storage, the Secretary may reject the

then effective inspection certificate and

require reinspection of the peanuts. This

paragraph is redesignated as safeguard

paragraph (f)(5) Reinspection. This

reinspection authority corresponds to

paragraph (e) of § 998.200 of the

Agreement regulations.

To avoid deterioration, peanuts

should be stored in clean, dry, odor free,

warehouses and under sanitation and

cold storage conditions consistent with

industry standards. While Agreement

regulations do not specify cold storage

conditions, the following points should

be used as a cold storage guide:

—Temperatures should range from 34 to

41 degrees Fahrenheit with a relative

humidity of 55 to 70 percent.

—Daily or weekly recording charts of

temperature and humidity should be

maintained.

—Interior air circulation should be

adequate to maintain uniform

temperatures.

—Pans under refrigeration equipment

should prevent condensation from

dripping onto the peanuts.

—Peanuts should be gradually removed

from cold storage over 2 to 3 days.

This and other information on

sanitation, facilities, management

practices, and dry storage is taken from

Good Management Practices for Shelled

Goods Cold Storage and Shelled Goods

Dry Storage distributed by the National

Peanut Council. Copies are available for

a nominal price to non-members by

calling (703)–838–9500.

Imported peanut lots certified as

meeting human consumption

requirements and subsequently stored

under such conditions and in

appropriate warehouses, may be entered

for consumption when the next quota

year begins—without further reporting

to AMS.

One commenter stated that importers

should not have to certify to the

Customs Service that stored peanuts

have been stored consistent with

industry standards for the entire length

of the storage period. However, the

Department believes that such

certification is necessary for compliance

purposes.

Paragraph (b)(4) of the import

regulation provides authority for the

Secretary to require a reinspection of an

imported peanut lot. If the

documentation provided to AMS, or if

any evidence subsequently received by

AMS, indicates that appropriate storage

standards have not been met or

maintained and that the peanuts may

have been damaged or deteriorated

while in storage, the Secretary will

demand reinspection of the lot prior to

the importer’s filing for consumption

entry of the lot.

Paragraph (b)(4) of § 999.600 is moved

from incoming quality regulation to

paragraph (f)(5) and entitled

Reinspection. Experience indicates that

reinspections are more likely to be

needed when shelled peanuts are placed

under bonded storage several months

prior to the beginning of the next quota

year, as discussed above. As a safeguard

provision, the paragraph applies to

farmers stock, shelled, and inshell

imported peanuts. The intent and

requirements of the paragraph remain

unchanged.

The new requirements as applied to

imports are effective five days after

publication of this rule in the Federal

Register, should any peanuts be

imported under duty prior to the

opening of the next duty-free quota

periods. The reporting requirement is

not made retroactive for shipments

which have already arrived and been

placed in storage. Peanut shipments

from countries other than Mexico

arriving five days after publication and

before March 1, 1977, should be

reported to AMS under the new

requirement. Importers may voluntarily

notify AMS of shipments which have

been entered into warehouses since

closure of the 1996 duty-free quotas and

currently are in storage pending the

1997 quota year.

Some paragraphs of the three peanut

regulations are not changed in this final

rule. However, for a better

understanding of all changes, the three

regulations are published in their

entirety in this final rule, including

paragraphs which are not changed.

Pursuant to the 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.

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.

About 80 signatory and non-signatory

peanut handlers are subject to

regulation under the two domestic

programs. There are about 47,000

peanut producers in the 16-state

production area. Small agricultural

service firms, which include handlers

and importers, have been defined by the

Small Business Administration (13 CFR

121.601) as those having annual receipts

of less than $5,000,000, and small

agricultural producers have been

defined as those having annual receipts

of less than $500,000. Approximately 25

percent of the signatory handlers, most

all of the non-signers, and virtually all

of the producers may be classified as

small entities. The import requirements

have not been in place long enough to

determine the number of peanut

importers or the percentage which

qualify as small businesses. However, it

can be assumed that some importers are

small entities.

This final rule removes or relaxes

several provisions regulating the

handling and disposition of domestic

and foreign-produced peanuts. Overall,

the changes are intended to increase the

amount of peanuts that can be prepared

for and meet the requirements for

human consumption. Such peanuts

almost always bring the highest prices

in the marketplace. Thus, the value of

farmers stock peanuts that can be

prepared for human consumption is

higher than the value of those that must

be disposed of to inedible outlets.

Producers receive increased returns for

farmers stock peanuts that can be

prepared for human consumption.

Handlers and importers also receive

increased returns from shelled and

inshell peanuts that are prepared for

and meet human consumption

requirements. Peanut lots that fail

human consumption requirements, and

that a handler or importer decides not

to try to recondition, must be disposed

of as inedible peanuts to different

inedible peanut outlets. Such inedible

disposition brings varying prices for the

handler or importer, almost always less

than prices for human consumption

quality peanuts. The changes finalized

in this rulemaking should increase the

value of certain failing peanut lots, and

thus, increase returns for both producers

and handlers.

—Restrictions are removed on

acquisitions of certain farmers stock

lots failing incoming inspection

because of excess loose shelled
Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations 1259

kernels and fall-through peanuts. This

relaxation enables more farmers stock

peanuts to be processed into product

that meets requirements for human

consumption. Producers receive

higher prices for such farmers stock

peanut lots and handlers are able to

shell and recondition those lots into

shelled peanuts which meet human

consumption requirements.

—Restrictions on remilling and

blanching for human consumption

use are removed on shelled peanut

lots exceeding certain damage and

foreign material content levels. This

change enables handlers to

recondition more lots of failing

peanuts for disposition to human

consumption outlets.

—This rule also removes requirements

that handlers and importers maintain

PLI, and report and keep disposition

records on ‘‘restricted’’ and

‘‘unrestricted’’ inedible peanut lots.

This should reduce some inspection

and reporting and recordkeeping

costs.

—The maximum allowable aflatoxin

content of domestically- produced

and imported shelled peanut lots

which could be used as animal feed,

wildlife seed, and rodent bait is raised

from 25 ppb to 300 ppb. Depending

on several market factors, such

inedible peanut use can bring higher

prices than crushing the peanuts. This

change provides more opportunity for

handlers and importers to increase the

value, and thus, the returns, of the

peanuts they handle or import.

—Positive lot identification (PLI)

requirements for seed peanuts are

removed. This will save handlers and

importers inspection costs and enable

better use of storage space.

—Shelled peanut lots meeting

Indemnifiable Grade or Superior

Grade requirements may be sent to

human consumption outlets prior to

the handler or importer receiving

aflatoxin certification of the lot. This

is a clarification of requirements to

make the domestic requirements

consistent with current industry

practice. Handler and importer

inspection costs should not be

increased because of this provision.

The changes to handling requirements

in this final rule will enable more

peanuts to be prepared for human

consumption, save some inspection and

storage costs, enable handlers and

importers to more efficiently manage

their peanut inventories, and make

better use of inedible peanut lots, thus,

increasing returns to both producers,

handlers and importers. The changes are

made without jeopardizing safeguard

provisions in the current domestic and

import regulations because all peanuts

intended for human consumption still

must be certified for such use. Finally,

these changes are intended to benefit

peanut handlers, peanut importers, and

consumers by ensuring that all peanuts

in domestic U.S. human consumption

markets are wholesome.

The proposed rule requested

comments on the effect of the rule on

small businesses and no comments were

received stating that the changes would

adversely affect small entities in the

peanut industry.

This final rule does not increase the

reporting and recordkeeping burden on

domestic peanut handlers and peanut

importers regulated under the three

programs, and should result in an

overall reduction in reporting and

recordkeeping burden. To verify the

reduced burden, another OMB reporting

and recordkeeping burden analysis will

be conducted after the regulations and

the sharing of computerized import data

between Customs Service and AMS

have been implemented.

Therefore, the AMS determines that

this final rule does not have a

significant economic impact on a

substantial number of small entities.

In accordance with the Paperwork

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

Chapter 35), information collection

requirements in this final rule have been

previously approved by the Office of

Management and Budget (OMB) and

have been assigned OMB Nos. 0581–

0067 (for signatory handlers), 0581–

0163 (for non-signatory handlers), and

0581–0176 (for importers).

Because these changes could not be

implemented before the beginning of the

1996 domestic crop year, comments

were requested on whether final

implementation of the changes after the

beginning of the crop year would have

an unequal effect on one or more of the

three production areas. No commenters

claimed implementation after the start

of the year would unequally affect the

three production areas. Seven of the

commenters stated that the regulations

should be in place as soon as possible

for the 1996–97 domestic marketing

season. Several of the comments

suggested that unnecessary delays in

implementation would hurt the

industry.

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 postpone the effective date of

this rule until 30 days after publication

in the Federal Register because: (1) The

changes should be in effect as soon as

possible to cover as much of the

remaining crop year as possible; (2) the

rule relaxes requirements currently in

place with the exception of one

requirement which codifies current

industry practice; (3) the domestic

industry has been aware of the issues

and proposed changes since May when

the Committee recommended the

changes; (4) all known handlers and

other affected members of the domestic

industry, as well as all known

importers, were sent copies of the

proposed rule and they and all other

interested persons were given a 20-day

opportunity to file comments on the

recommended changes; and (5)

comments addressing the effective date

were unanimous in recommending

immediate implementation and several

commented that further delays in

implementation would be harmful to

the industry. Thus, the Department sets

the effective date of this final rule as

three days after publication in the

Federal Register for domestically

produced peanuts and five days after

publication in the Federal Register for

imported peanuts.

List of Subjects

7 CFR Part 997

Food grades and standards, Peanuts,

Reporting and recordkeeping

requirements.

7 CFR Part 998

Marketing agreements, Peanuts,

Reporting and recordkeeping

requirements.

7 CFR Part 999

Dates, Filberts, Food grades and

standards, Imports, Nuts, Peanuts,

Prunes, Raisins, Reporting and

recordkeeping requirements, Walnuts.

For the reasons set forth in the

preamble, 7 CFR parts 997, 998 and 999

are amended as follows:

PART 997—PROVISIONS

REGULATING THE QUALITY OF

DOMESTICALLY PRODUCED

PEANUTS HANDLED BY PERSONS

NOT SUBJECT TO THE PEANUT

MARKETING AGREEMENT

1. The authority citation for 7 CFR

part 997 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. Under the center heading ‘‘Quality

Regulations,’’ §§ 997.20, 997.30, 997.40

and 997.50 are revised to read as

follows:

Quality Regulations

§ 997.20 Incoming regulation.

(a) No handler shall receive or acquire

peanuts intended for human
1260 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations

consumption, either from a producer or

other person, unless such peanuts are

inspected pursuant to § 997.50 and are

determined to be Segregation 1 peanuts

at time of receipt from the producer or,

if received from another person, had not

been mixed with peanuts of a lower

quality than Segregation 1 and meet the

following additional requirements

specified in this section: Provided, That

a handler may—

(1) Acquire shelled peanuts from the

Commodity Credit Corporation (CCC) or

cleaned inshell or shelled peanuts from

other handlers, a handler as defined in

7 CFR 998.8, or from buyers who have

purchased such peanuts from handlers

or from the CCC, if the lot has been

certified as meeting the requirements of

§ 997.30(a) and the identity is

maintained; and/or

(2) Perform services for an area

association pursuant to a peanut

receiving and warehouse contract.

(b) Moisture and foreign material. (1)

Moisture. Except as provided under

paragraph (d) of § 997.20, no handler

shall receive or acquire peanuts

containing more than 10.49 percent

moisture: Provided, That peanuts of a

higher moisture content may be

received and dried to not more than

10.49 percent moisture prior to storing

or milling. For farmers stock peanuts,

moisture determinations shall be

rounded to the nearest whole number.

Moisture determinations on shelled

peanuts shall be carried to the

hundredths place.

(2) Foreign material. No handler shall

receive or acquire farmers stock peanuts

containing more than 10.49 percent

foreign material, except that peanuts

having a higher foreign material content

may be received or acquired if they are

held separately until milled, or moved

over a sand-screen before storage, or

shipped directly to a plant for prompt

shelling. The term sand-screen means

any type of farmers stock cleaner which,

when in use, removes sand and dirt.

(c) Damage. For the purpose of

determining damage, other than

concealed damage, on farmers stock

peanuts, all percentage determinations

shall be rounded to the nearest whole

number.

(d) Seed peanuts. Peanuts which are

not Segregation 1 peanuts and therefore

cannot be acquired for human

consumption may be acquired, shelled

and delivered for seed purposes.

Peanuts intended for seed use, produced

under the auspices of a State agency

which regulates or controls the

production of seed peanuts, which do

not meet Segregation 1 requirements

shall be stored and shelled separate

from peanuts intended for human

consumption. However, Segregation 2

seed peanuts, produced under the

auspices of the State agency, which

contain up to 3.00 percent damaged

kernels and are free from visible

Aspergillus flavus may be stored and

shelled with Segregation 1 peanuts

which are also produced under the

auspices of the State agency. A handler

whose operations include custom seed

shelling may receive, custom shell, and

deliver for seed purposes farmers stock

peanuts, and such peanuts shall be

exempt from the requirements of this

section and, therefore, shall not be

required to be inspected and certified as

meeting these requirements, and the

handler shall report to the Division the

weight of each lot of farmers stock

peanuts received on such basis on a

form provided by the Department.

However, handlers who acquire seed

peanut residuals from their custom

shelling of uninspected (farmers stock)

seed peanuts or from another person

may mill such residuals with other

receipts or acquisitions of the handler,

and such peanuts which meet the

requirements specified in §997.30(a)

may be disposed of by sale to human

consumption outlets.

(e) Oilstock. Handlers may acquire for

disposition to domestic crushing or

export farmers stock peanuts of a lower

quality than Segregation 1 or grades or

sizes of shelled peanuts or cleaned

inshell peanuts which fail to meet the

requirements for human consumption.

Handlers may act as accumulators and

acquire, for other handlers; a handler as

defined in 7 CFR 998.8 or from other

persons, Segregation 2 or 3 farmers

stock peanuts. Handlers may also

acquire shelled peanuts originating from

Segregation 2 or 3 farmers stock or the

entire mill production of peanuts from

Segregation 1 farmers stock or lots of

shelled peanuts originating from

Segregation 1 peanuts and which have

been positive lot identified as specified

in §997.30(d), which failed to meet the

requirements for human consumption

pursuant to §997.30(a): Provided, That

all such acquisitions are held separate

from Segregation 1 peanuts acquired for

milling or from edible grades of shelled

or milled peanuts. Handlers may

commingle the Segregation 2 and 3

peanuts or keep them separate and

apart. Handlers who acquire farmers

stock peanuts of a lower quality than

Segregation 1 or cleaned inshell peanuts

which fail to meet the requirements for

human consumption shall report such

acquisitions to the Division as

prescribed on a form prescribed by the

Division. Handlers who acquire grades

or sizes of shelled peanuts which fail to

meet the requirements for human

consumption for disposition to domestic

crushing and subsequent export to

countries shall report such disposition

on a form provided by the Division.

(f) Shelled peanuts. Handlers may

acquire shelled peanuts (which

originated from ‘‘Segregation 1

peanuts’’) from other handlers or a

handler as defined in 7 CFR 998.8, for

remilling and subsequent disposition to

human consumption outlets. Further

disposition of such peanuts shall be

regulated by §997.40.

(g) No producer may handle, process,

prepare for sale, or otherwise alter

peanuts of his own production from the

condition of farmers stock, for

disposition in human consumption

outlets unless such peanuts are first

inspected and certified pursuant to

§997.50 and meet the applicable

requirements of this section.

§997.30 Outgoing Regulation.

(a) Shelled peanuts. (1)(i) No handler

shall ship or otherwise dispose of

shelled peanuts for human consumption

unless such peanuts are positive lot

identified, certified ‘‘negative’’ as to

aflatoxin and certified as meeting the

requirements in Table 1:
Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations 1261

TABLE 1.—MINIMUM GRADE REQUIREMENTS—PEANUTS FOR HUMAN CONSUMPTION

[Whole Kernels and Splits]

Maximum limitations

Excluding lots of ‘‘splits’’

Type and grade

category

Unshelled

peanuts and

damaged

kernels

(percent)

Unshelled

peanuts,

damaged

kernels and

minor defects

(percent)

Fall through

Foreign materials (percent)

Moisture

Sound split and (percent)

broken kernels

Sound whole

kernels Total

Runner ................... 1.50 2.50 3.00%; 17⁄64 inch

round screen.

3.00%; 16⁄64 x 3⁄4

inch; slot screen.

4.00%; both

screens.

.20 9.00

Virginia (except No.

2).

1.50 2.50 3.00%; 17⁄64 inch;

round screen.

3.00%; 15⁄64 x 1

inch; slot screen.

4.00%; both

screens.

.20 9.00

Spanish and Valencia.1.50 2.50 3.00%; 16⁄64 inch;

round screen.

3.00%; 15⁄64 x 3⁄4

inch; slot screen.

4.00%; both

screens.

.20 9.00

No. 2 Virginia ......... 1.50 3.00 6.00%; 17⁄64 inch;

round screen.

6.00%; 15⁄64 x 1

inch; slot screen.

6.00%; both

screens.

.20 9.00

Lots of ‘‘splits’’

Runner (not more

than 4% sound

whole kernels).

1.50 2.50 3.00%; 17/64 inch;

round screen.

3.00%; 14/64 x 3/4

inch; slot screen.

4.00%; both

screens.

.20 9.00

Virginia (not less

than 90% splits).

1.50 2.50 3.00%; 17⁄64 inch;

round screen.

3.00%; 14⁄64 x 1

inch; slot screen.

4.00%; both

screens.

.20 9.00

Spanish and Valencia (not more

than 4% sound

whole kernels)..

1.50 2.50 3.00%; 16⁄64 inch;

round screen.

3.00%; 13⁄64 x 3⁄4

inch; slot screen.

4.00%; both

screens.

.20 9.00

(ii) Prior to disposition to human consumption outlets, peanuts which have been certified as meeting the requirements

for Indemnifiable Grades must also be certified ‘‘negative’’ as to aflatoxin. Maximum limitations for Indemnifiable Grades

are as follows:

TABLE 2.—SUPERIOR QUALITY REQUIREMENTS—PEANUTS FOR HUMAN CONSUMPTION

[Whole Kernels and Splits]

Maximum limitations

Type and grade

category

Unshelled

peanuts and

damaged

kernels

(percent)

Unshelled

peanutes,

damaged

kernels and

minor defects (percent)

Fall through

Foreign materials (percent)

Moisture

(percent) Sound split and

broken kernels

(percent)

Sound whole kernels (percent) Total

Runner U.S. No. 1

and better.

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 16⁄64×3⁄4

inch, slot screen.

4.00%; both

screens.

.10 9.00

Virginia U.S. No.1

and better.

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 15⁄64×1 inch,

slot screen.

4.00%; both

screens.

.10 9.00

Spanish and Valencia U.S. No.1 and

better..

1.25 2.00 3.00%; 16⁄64 inch,

round screen.

2.00%; 15⁄64×3⁄4

inch, slot screen.

4.00%; both

screens.

.10 9.00

Runner U.S. Splits

(not more than

4% sound, whole

kernels).

1.25 2.00 2.00%; 17⁄64 inch,

round screen.

3.00%; 14⁄64×3⁄4

inch, slot screen.

4.00%; both

screens.

.20 9.00

Virginia U.S. Splits

(not less than

90% splits and

not more than

3.00% sound

whole kernels

and portions

passing through

20⁄64 inch round

screen).

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 14⁄64×1 inch,

slot screen.

4.00%; both

screens.

.20 9.00
1262 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations

TABLE 2.—SUPERIOR QUALITY REQUIREMENTS—PEANUTS FOR HUMAN CONSUMPTION—Continued

[Whole Kernels and Splits]

Maximum limitations

Type and grade

category

Unshelled

peanuts and

damaged

kernels

(percent)

Unshelled

peanutes,

damaged

kernels and

minor defects (percent)

Fall through

Foreign materials (percent)

Moisture

(percent) Sound split and

broken kernels

(percent)

Sound whole kernels (percent) Total

Spanish and Valencia U.S. Splits

(not more than

4% sound, whole

kernels).

1.25 2.00 2.00%; 16⁄64 inch,

round screen.

3.00%; 13⁄64×3⁄4

inch, slot screen.

4.00%; both

screens.

.20 9.00

Runner with splits

(not more than

15% sound splits).

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 16⁄64×3⁄4

inch, slot screen.

4.00%; both

screens.

.10 9.00

Virginia with splits

(not more than

15% sound splits).

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 15⁄64×1 inch,

slot screen.

4.00%; both

screens.

.10 9.00

Spanish and Valencia with splits

(not more than

15% sound splits).

1.25 2.00 3.00%; 16⁄64 inch,

round screen.

2.00%; 15⁄64×3⁄4

inch, slot screen.

4.00%; both

screens.

.10 9.00

(2) The term ‘‘fall through’’, as used

herein, shall mean sound split and

broken kernels and whole kernels which

pass through specified screens. Prior to

shipment, appropriate samples for

pretesting shall be drawn in accordance

with paragraph (c) of this section from

each lot of Superior Quality peanuts.

For the current crop year, ‘‘negative’’

aflatoxin content means 15 parts per

billion (ppb) or less for peanuts which

have been certified as meeting edible

quality grade requirements.

(b) Cleaned inshell peanuts. No

handler shall ship, sell, or otherwise

dispose of cleaned inshell peanuts for

human consumption:

(1) With more than 1.00 percent

kernels with mold present unless a

sample of such peanuts, drawn by an

inspector of the Federal or Federal-State

Inspection Service, was analyzed

chemically by a U.S. Department of

Agriculture laboratory (hereinafter

referred to as ‘‘USDA laboratory’’) or a

laboratory listed in paragraph (c) of this

section and found to be wholesome

relative to aflatoxin;

(2) With more than 2.00 percent

peanuts with damaged kernels;

(3) With more than 10.00 percent

moisture; or

(4) With more than 0.50 percent

foreign material.

(c) Sampling and testing shelled

peanuts. (1) Each handler shall cause

appropriate samples of each lot of edible

quality shelled peanuts to be drawn by

an inspector of the Federal or FederalState Inspection Service. The gross

amount of peanuts drawn shall be large

enough to provide for a grade analysis,

for a grading check-sample, and for

three 48-pound samples for aflatoxin

assay. The three 48-pound samples shall

be designated by the Federal or FederalState Inspection Service as ‘‘Sample

#1N’’, ‘‘Sample #2N’’, and ‘‘Sample

#3N’’ and each sample shall be placed

in a suitable container and ‘‘positive lot

identified’’ by means acceptable to the

Inspection Service. Sample #1N may be

prepared for immediate testing or

Sample #1N, Sample #2N, and Sample

#3N may be returned to the handler for

testing at a later date.

(2) The handler shall cause Sample #1

to be ground by the Federal or FederalState Inspection Service, a USDA

laboratory or a laboratory listed herein,

in a ‘‘subsampling mill’’ approved by

the Division. The resultant ground

subsample from Sample #1N shall be of

a size specified by the Division and

shall be designated as ‘‘Subsample 1—

ABN’’ and at the handler’s or buyer’s

option, a second subsample may also be

extracted from Sample #1N. It shall be

designated as ‘‘Subsample 1—CDN’’.

Subsample 1—CDN may be sent as

requested by the handler or buyer, for

aflatoxin assay, to a USDA laboratory or

other laboratory that can provide

analyses results on such samples in 36

hours. The cost of sampling and testing

Subsample 1—CDN shall be for the

account of the requester. Subsample 1—

ABN shall be analyzed only in a USDA

laboratory or a laboratory listed herein.

Both Subsamples 1—ABN and 1—CDN

shall be accompanied by a notice of

sampling signed by the inspector

containing, at least, identifying

information as to the handler (shipper),

the buyer (receiver), if known, and the

positive lot identification of the shelled

peanuts. A copy of such notice covering

each lot shall be sent to the Division.

(3) The samples designated as Sample

#2N and Sample #3N shall be held as

aflatoxin check-samples by the

Inspection Service or the handler and

shall not be included in the shipment to

the buyer until the analyses results from

Sample #1N are known.

(4) Upon call from the laboratory,

handler shall cause Sample #2N to be

ground by the Inspection Service in a

‘‘subsampling mill.’’ The resultant

ground subsample from Sample #2N

shall be of a size specified by the

Division and it shall be designated as

‘‘Subsample #2—ABN.’’ Upon call from

the laboratory, the handler shall cause

Sample #3N to be ground by the

Inspection Service in a ‘‘subsampling

mill.’’ The resultant ground subsample

from Sample #3N shall be of a size

specified by the Division and shall be

designated as ‘‘Subsample #3—ABN’’.

‘‘Subsamples 2—ABN and 3—ABN’’

shall be analyzed only in a USDA

laboratory or a laboratory listed herein

and each shall be accompanied by a

notice of sampling. A copy of each such

notice shall be sent to the Division. The

results of each assay shall be reported

by the laboratory to the handler and to

the Division. All costs involved in the

sampling and testing of peanuts

required by this regulation shall be for

the account of the applicant.

(5) Information on making

arrangements for the required

inspection and certification can be

obtained by contacting the Fresh
Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations 1263

Products Branch, Fruit and Vegetable

Division, Agricultural Marketing

Service, USDA, P.O. Box 96456, room

2049–S, Washington, DC, 20090–6456,

telephone (202) 690–0604 or facsimile

(202)720–0393.

(i) Laboratories at the following

locations are approved to perform the

chemical analyses required pursuant to

this part. The sampling plan and

procedures may be obtained from the

Science and Technology Division.

Science and Technology Division, AMS,

USDA, P.O. Box 279, 301 West Pearl

St., Aulander, NC 27805, Tel: (919)

345–1661 Ext. 156, Fax: (919) 345–

1991

Science and Technology Division, AMS,

USDA, 1211 Schley Ave., Albany, GA

31707, Tel: (912) 430–8490/8491, Fax:

(912) 430–8534

Science and Technology Division, AMS,

USDA, P.O. Box 488, Ashburn, GA

31714, Tel: (912) 567–3703

Science and Technology Division, AMS,

USDA, 610 North Main St., Blakely,

GA 31723, Tel: (912) 723–4570, Fax:

(912) 723–3294

Science and Technology Division, AMS,

USDA, 1557 Reeves St., Dothan, AL

36303, Tel: (334) 794–5070, Fax: (334)

671–7984

Science and Technology Division, AMS,

USDA, 107 South Fourth St., Madill,

OK 73446, Tel: (405) 795–5615, Fax:

(405) 795–3645

Science and Technology Division, AMS,

USDA, P.O. Box 272, 715 N. Main

Street, Dawson, GA 31742, Tel: (912)

995–7257, Fax: (912) 995–3268

Science and Technology Division, AMS,

USDA, P.O. Box 1130, 308 Culloden

St., Suffolk, VA 23434, Tel: (804) 925–

2286, Fax: (804) 925–2285

ABC Research, 3437 SW 24th Avenue,

Gainesville, FL 32607–4502, Tel:

(904) 372–0436, Fax: (904) 378–6483

J. Leek Associates, Inc., P.O. Box 50395,

1200 Wyandotte (31705), Albany, GA

31703–0395, Tel: (912) 889–8293,

Fax: (912) 888–1166

J. Leek Associates, Inc., P.O. Box 368,

675 East Pine, Colquitt, GA 31737,

Tel: (912) 758–3722, Fax: (912) 758–

2538

J. Leek Associates, Inc., P.O. Box 6, 502

West Navarro St., DeLeon, TX 76444,

Tel: (817) 893–3653, Fax: (817) 893–

3640

Pert Laboratories, P.O. Box 267, Peanut

Drive, Edenton, NC 27932, Tel: (919)

482–4456, Fax: (919) 482–5370

Pert Laboratory South, P.O. Box 149,

Hwy 82 East, Seabrook Drive,

Sylvester, GA 31791, Tel: (912) 776–

7676, Fax: (912) 776–1137

Professional Service Industries, Inc., 3

Burwood Lane, San Antonio, TX

78216, Tel: (210) 349–5242, Fax: (210)

342–9401

Southern Cotton Oil Company, 600 E.

Nelson Street, P.O. Box 180, Quanah,

TX 79252, Tel: (817) 663–5323, Fax:

(817) 663–5091

Quanta Lab, 9330 Corporate Drive, Suite

703, Selma, TX 78154–1257, Tel:

(210) 651–5799, Fax: (210) 651–9271.

(ii) Handlers should contact the

nearest laboratory from the list in

paragraph (c)(5)(i) of this section to

arrange to have samples chemically

analyzed for aflatoxin content, or for

further information concerning the

chemical analyses required pursuant to

this part handlers may contact: The

Science and Technology Division,

Agricultural Marketing Service, USDA,

P.O. Box 96456, room 3507–S,

Washington, D.C., 20090–6456,

telephone (202) 720–5231, facsimile

(202) 720–6496.

(d) Identification. Each lot of shelled

or cleaned inshell peanuts, in lot sizes

not exceeding 200,000 pounds, shall be

identified by positive lot identification

procedures prior to being shipped or

otherwise disposed of. For the purpose

of this regulation, ‘‘positive lot

identification’’ of a lot of shelled or

inshell peanuts is a means of relating

the inspection certificate to the lot

which has been inspected so that there

can be no doubt that the peanuts are the

same ones described on the inspection

certificate. The crop year that is shown

on the positive lot identification tags, or

other means of positive lot

identification shall accurately describe

the crop year in which the peanuts in

the lot were produced. Such procedure

on bagged peanuts shall consist of

attaching a lot numbered tag bearing the

official stamp of the Federal or FederalState Inspection Service to each filled

bag in the lot. The tag shall be sewed

(machine sewed if shelled peanuts) into

the closure of the bag except that in

plastic bags the tag shall be inserted

prior to sealing so that the official stamp

is visible. Any peanuts moved in bulk

or bulk bins shall have their lot identity

maintained by sealing the conveyance

and if in other containers by other

means acceptable to the Federal or

Federal-State Inspection Service. All

lots of shelled or cleaned inshell

peanuts shall be handled, stored, and

shipped under positive lot identification

procedures, except those lots which

have been reconstituted and/or

commingled at the request of the

receiver. All such reconstituted and/or

commingled lots will no longer be

considered positive lot identified and,

therefore, no longer be eligible for

appeal inspection. Handler shall keep

and maintain records of the quantities

involved in each reconstituting and/or

commingling procedure, whether in

single or multiple lots, and such records

shall be available to the Division on

request.

(e) Reinspection. Whenever the

Division has reason to believe that

peanuts may have been damaged or

deteriorated while in storage, the

Division may reject the then effective

inspection certificate and may require

the owner of the peanuts to have a

reinspection to establish whether or not

such peanuts may be disposed of for

human consumption.

§ 997.40 Reconditioning and disposition of

peanuts failing quality requirements.

(a) Lots of peanuts which have not

been certified as meeting the

requirements for disposition to human

consumption outlets, may be disposed

of for non-human consumption uses

which are not regulated or limited by

the provisions specified in this section:

Provided, That each such lot is positive

lot identified, using red tags, and

certified as to aflatoxin content (actual

numerical count). However, on the

shipping papers covering the

disposition of each such lot of inedible

quality peanuts, the handler shall cause

the following statement to be shown:

‘‘The peanuts covered by this bill of

lading (or invoice, etc.) are not to be

used for human consumption.’’

(b) Except for inedible quality peanuts

disposed of under the provisions of

paragraph (f)(2) of this section and

peanuts derived from the milling for

seed of Segregation 2 and 3 farmers

stock peanuts, peanuts which have not

been certified as meeting the standards

set forth in paragraphs (a) or (b) of

§ 997.30 shall be disposed of as

prescribed hereinafter in this section.

(c) Sheller Oil Stock Residuals—For

Crushing or Export. Peanuts, or portions

of peanuts which are separated from

edible quality peanuts by screening or

sorting or other means during the

milling process, may be segregated into

categories or they may be commingled

as sheller oil stock residuals. Such

sheller oil stock residuals shall be

identified pursuant to paragraph (d) of

this section, but using a red tag, and

such peanuts may be disposed of

domestically or to the export market, in

bulk or bags or other suitable containers.

The movement of such peanuts shall be

reported to the Division by the shipping

handler and the crusher, as requested by

the Division.

(1) If the peanuts have not been tested

and certified as to aflatoxin content, as

prescribed in paragraph (c) of this

section, the handler shall cause the
1264 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations

following statement to be shown on the

shipping papers: ‘‘The peanuts covered

by this bill of lading (or invoice, etc.) are

limited to crushing only and may

contain aflatoxin.’’

(2) If the peanuts are certified as 301

ppb or more aflatoxin content,

disposition shall be limited to crushing

or export.

(d) Blanching peanuts failing quality

requirements. Handlers may blanch or

cause to have blanched positive lot

identified shelled peanuts, which

originated from Segregation 1 peanuts,

that fail to meet the requirements of

paragraph (a) of this section because of

excessive damage, minor defects,

moisture, or foreign material or are

positive as to aflatoxin. Lots of peanuts

which are moved under these

provisions must be accompanied by a

valid grade inspection certificate and

the title shall be retained by the handler

until the peanuts are blanched and

certified by an inspector of the Federal

or Federal-State Inspection Service as

meeting the requirements for disposal

into human consumption outlets. To be

eligible for disposal into human

consumption outlets, such peanuts after

blanching, must meet specifications for

unshelled peanuts, damaged kernels,

minor defects, moisture, and foreign

material as listed in paragraph (a) of this

section and be accompanied by a

negative aflatoxin certificate. The

residual peanuts, excluding skins and

hearts, resulting from blanching under

these provisions, shall be bagged and

red tagged and disposition shall be that

such peanuts are returned to the handler

for further disposition; or, in the

alternative, such residuals shall be

positive lot identified by the Federal or

Federal-State Inspection Service, and

shall be disposed of, by the blancher to

crushers who agree to comply with the

terms of paragraph (c) of this section.

(e) Remilling peanuts failing quality

requirements. Handlers may remiller or

cause to have remilled shelled peanuts,

which originated from Segregation 1

peanuts, that fail to meet the

requirements for disposition to human

consumption outlets heretofore

specified in paragraph (a) of this

section: Provided, That such lots of

peanuts contain not in excess of 10

percent fall through. Lots of peanuts

moved under these provisions must be

accompanied by a valid grade

inspection certificate and must be

positive lot identified and the title of

such peanuts shall be retained by the

handler until the peanuts have been

remilled and certified by the Federal or

Federal-State Inspection-Service as

meeting the requirements for

disposition to human consumption

outlets specified in paragraph (a) of this

section, and be accompanied by a

negative aflatoxin certificate. Remilling

under these provisions may include

composite remilling of more than one

such lot of peanuts owned by the same

handler. However, such peanuts owned

by one handler shall be held and

remilled separate and apart from all

other peanuts. The residual peanuts

resulting from remilling under these

provisions, shall be bagged and red

tagged and disposition shall be that

such peanuts are returned to the handler

for further disposition; or, in the

alternative, such residuals shall be

positive lot identified by the Federal or

Federal-State Inspection Service, and

shall be disposed of, by the remiller, to

crushers who agree to comply with the

terms of paragraph (c) of this section.

§ 997.50 Inspection, chemical analysis,

certification and identification.

Each handler shall, at the handler’s

own expense, prior to or upon receiving

and before shipping or disposing of

peanuts, cause an inspection to be made

of any such peanuts not covered by a

valid inspection certificate, to determine

whether such peanuts meet the

applicable grade requirements effective

pursuant to this part, and shall comply

with such identification requirements

prescribed by this part or which the

Secretary may prescribe. Each handler

shall also cause appropriate samples to

be drawn and chemically analyzed by a

USDA laboratory, or laboratory listed in

§ 997.30, for wholesomeness as

provided in § 997.30 of this part. Such

handler shall obtain grade and aflatoxin

certificates stating that such peanuts

meet the aforementioned applicable

requirements and all such certificates

shall be available for examination or use

by the Division. Acceptable certificates

shall be those issued by Federal or

Federal-State inspectors authorized or

licensed by the Secretary and USDA

laboratories or those listed in § 997.30 of

this part. Each handler shall furnish, or

cause the inspection service or the

laboratory to furnish, to the Division, a

copy of the inspection certificate and a

copy of the results of the chemical

analyses issued to the handler on each

lot of shelled peanuts or cleaned inshell

peanuts.

3. Under the center heading

‘‘Assessments,’’ section 997.51 is

revised to read as follows:

Assessments

§ 997.51 Assessments.

(a) Each first handler shall pay to the

Secretary, with respect to Segregation 1

peanuts received or acquired by the

handler, including the handler’s own

production, an administrative

assessment as approved by the

Secretary. The rate of assessment shall

be the same as the administrative

assessment approved by the Secretary

and applied to signatory handlers under

the Peanut Marketing Agreement No.

146. Such administrative assessment

shall be applied during the crop year

beginning July 1 and ending June 30 of

the following year. Each handler’s pro

rata share shall be the rate of assessment

fixed by the Secretary per net ton of

farmers stock peanuts received or

acquired, other than those peanuts

described in § 997.20(a) (1) and (2).

During the crop year, the Secretary may

increase the rate of assessment if such

an increase is established under the

Agreement.

(b) Segregation 2 and Segregation 3

farmers stock peanuts disposed to

crushing or exported are exempt from

assessments under this section.

4. Under the center heading ‘‘Reports,

Books and Records,’’ §§ 997.52, 997.53

and 997.54 are revised to read as

follows:

Reports, Books and Records

§ 997.52 Reports of acquisitions and

shipments.

Each handler shall report acquisitions

of Segregation 1 farmers stock peanuts

on a form provided by the Division and

file such other reports of acquisitions

and shipments of peanuts, as prescribed

in this part. Upon the request of the

Division, each handler shall furnish

such other reports and information as

necessary to enable the Division to carry

out the provisions of this part. All

reports and records furnished or

submitted by handlers to the Division

which include data or information

constituting a trade secret or disclosing

the trade position, financial condition,

or business operations of the particular

handler shall not be disclosed unless

such disclosure is determined necessary

by the Secretary to enforce the

provisions of this part.

§ 997.53 Verification of reports.

For the purpose of checking and

verifying reports filed by handlers or the

operation of handlers under the

provisions of this part, the Secretary,

through its duly authorized agents, shall

have access to any premises where

peanuts may be held by any handler and

at any time during reasonable business

hours and shall be permitted to inspect

any peanuts so held by such handler

and any and all records of such handler

with respect to the acquisition,

movement, holding, processing or

disposition of all peanuts which may be

held or which may have been disposed
Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations 1265

of by the handler. Each handler shall

maintain such records of peanuts

received, held, and disposed of by the

handler, that will substantiate any

required reports and will show

performance under this part. Such

records shall be retained for at least two

years beyond the crop year of their

applicability.

§ 997.54 Agents.

The Secretary may, by a designation

in writing, name any person, including

any officer or employee of the United

States Government, or name any service,

division or branch in the United States

Department of Agriculture, to act as his

agent or representative in connection

with any of the provisions of this part.

PART 998—MARKETING AGREEMENT

REGULATING THE QUALITY OF

DOMESTICALLY PRODUCED

PEANUTS

1. The authority citation for 7 CFR

part 998 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. Under the center heading

‘‘Implementing Regulations,’’ §§ 998.100

and 998.200 are revised to read as

follows:

Implementing Regulations

§ 998.100 Incoming quality regulation for

1996 and subsequent crop peanuts.

The following modify § 998.5 of the

peanut marketing agreement and modify

or are in addition to the restrictions of

section 31 on handler receipts or

acquisitions of peanuts:

(a) Modification of § 998.5,

paragraphs (b), (c), and (d). Paragraphs

(b), (c), and (d) of § 998.5 of the peanut

marketing agreement are modified for

the purposes of this section as to

farmers stock peanuts to read

respectively as follows:

(b) Segregation 1. Segregation 1 peanuts

means farmers stock peanuts with not more

than 2 percent damaged kernels nor more

than 1.00 percent concealed damage caused

by rancidity, mold, or decay and which are

free from visible Aspergillus flavus.

(c) Segregation 2. Segregation 2 peanuts

means farmers stock peanuts with more than

2 percent damaged kernels or more than 1.00

percent concealed damage caused by

rancidity, mold, or decay and which are free

from visible Aspergillus flavus.

(d) Segregation 3. Segregation 3 peanuts

means farmers stock peanuts with visible

Aspergillus flavus.

(b) Moisture and foreign material.—

(1) Moisture. Except as provided

under paragraph (d) of this section, no

handler shall receive or acquire peanuts

containing more than 10.49 percent

moisture: Provided, That peanuts of a

higher moisture content may be

received and dried to not more than

10.49 percent moisture prior to storing

or milling. On farmers stock, such

moisture determinations shall be

rounded to the nearest whole number;

on shelled peanuts, the determinations

shall be carried to the hundredths place

and shall not be rounded to the nearest

whole number.

(2) Foreign material. No handler shall

receive or acquire farmers stock peanuts

containing more than 10.49 percent

foreign material, except that peanuts

having a higher foreign material content

may be received or acquired if they are

held separately until milled, or moved

over a sand-screen before storage, or

shipped directly to a plant for prompt

shelling. The term ‘‘sand-screen’’ means

any type of farmers stock cleaner which,

when in use, removes sand and dirt.

(c) Damage. For the purpose of

determining damage, other than

concealed damage, on farmers stock

peanuts, all percentage determinations

shall be rounded to the nearest whole

number.

(d) Seed peanuts. A handler may

acquire and deliver for seed purposes

farmers stock peanuts which meet the

requirements of Segregation 1 peanuts.

If the seed peanuts are produced under

the auspices of a State agency which

regulates or controls the production of

seed peanuts, they may contain up to 3

percent damaged kernels and have

visible Aspergillus flavus, and, in

addition, the following moisture

content, as applicable:

(1) Seed peanuts produced in the

Southeastern and Virginia-Carolina

areas, may contain up to 10.49 percent

moisture except Virginia type peanuts

which are not stacked at harvest time

may contain up to 11.49 percent

moisture; and

(2) Seed peanuts produced in the

Southwestern area may contain up to

10.49 percent moisture.

Any seed peanuts produced under the

auspices of a State agency which

contain up to 3 percent damaged kernels

and are free from visible Aspergillus

flavus, may be stored and shelled with

Segregation 1 seed peanuts which are

also produced under the auspices of the

State agency. Any seed peanuts with

visible Aspergillus flavus shall be stored

and shelled separate from other peanuts,

and any residuals not used for seed

shall not be used or disposed of for

human consumption unless it is

determined to be wholesome by

chemical assay for aflatoxin. A handler

whose operations include custom

shelling may receive, custom shell, and

deliver for seed purposes farmers stock

peanuts, and such peanuts shall be

exempt from the Incoming Quality

Regulation requirements, and, therefore,

shall not be required to be inspected

and certified as meeting the Incoming

Quality Regulation requirements, and

the handler shall report to the

Committee, as requested, the weight of

each lot of farmers stock peanuts

received on such basis on a form

furnished by the Committee. Handlers

who acquire seed peanut residuals from

their custom shelling of uninspected

(farmers stock) seed peanuts or from

another producer or sheller may mill

such residuals with other receipts or

acquisitions of the handler, and such

residuals which meet the Outgoing

Quality Regulation requirements, may

be disposed of by sale to human

consumption outlets.

(e) Oilstock. Handlers may acquire for

disposition to domestic crushing or

export farmers stock peanuts of a lower

quality than Segregation 1 or grades or

sizes of shelled peanuts or cleaned

inshell peanuts which fail to meet the

requirements for human consumption.

The provision of § 998.31 of the

marketing agreement restricting

acquisitions of such peanuts to handlers

who are crushers is hereby modified

pursuant to § 998.34, to authorize all

handlers to act as accumulators and

acquire, from other handlers or nonhandlers, Segregation 2 or 3 farmers

stock peanuts. Handlers may also

acquire for crushing or export from

other handlers peanuts originating from

Segregation 2 or 3 farmers stock or the

entire mill production of shelled

peanuts from Segregation 1 farmers

stock or lots of peanuts originating from

Segregation 1 peanuts and which have

been positive lot identified as specified

in paragraph (d) of § 998.200, Outgoing

quality regulation, which failed to meet

the requirements for human

consumption pursuant to paragraph (a)

of § 998.200, Outgoing quality

regulation: Provided, That all such

acquisitions are held separate from

Segregation 1 peanuts acquired for

milling or from edible grades of shelled

or milled peanuts. Handlers may

commingle the Segregation 2 and 3

peanuts or keep them separate and

apart. Handlers who acquire farmers

stock peanuts of a lower quality than

Segregation 1 or grades or sizes of

shelled peanuts or cleaned inshell

peanuts which fail to meet the

requirements for human consumption

shall report such acquisitions as

prescribed by the Committee. To be

eligible to receive or acquire Segregation

2 or 3 farmers stock peanuts and shelled

peanuts originating therefrom, a handler

shall pay to the Area Association a fee
1266 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations

for the purpose of covering cost of

supervision of the disposition of such

peanuts.

(f) Segregation 2 and 3 control. To

assure the removal from edible outlets

of any lot of peanuts determined by

Federal or Federal-State Inspection

Service to be Segregation 2 or

Segregation 3, each handler shall inform

each employee, country buyer,

commission buyer, or like person

through whom the handler receives

peanuts of the need to receive and

withhold all lots of Segregation 2 and

Segregation 3 peanuts from milling for

edible use. If any lot of Segregation 2 or

Segregation 3 farmers stock peanuts is

not withheld but returned to the

producer, the handler shall cause the

Inspection Service to forward

immediately a copy of the inspection

certificate on the lot to the designated

office of the handler and a copy to the

Committee which shall be used only for

information purposes.

(g) Farmers stock storage and

handling facilities. Handlers shall report

to the Committee, on a form furnished

by the Committee, all storage facilities

or contract storage facilities which they

will use to store acquisitions of current

crop Segregation 1 farmers stock

peanuts, and all such storage facilities

must be reported prior to storing of any

such handler acquisitions. Handlers

shall also report to the Committee the

locations at which they will receive or

acquire current crop farmers stock

peanuts. All such storage facilities shall

have reasonable and safe access to allow

for inspection of the facility and its

contents. All such storage facilities must

be of sound construction, in good repair,

and built and equipped so as to provide

suitable storage and sufficient

safeguards to prevent moisture

condensation and provide adequate

protection for farmers stock peanuts. All

breaks or openings in the walls, floors,

or roofs of the facilities shall have been

repaired so as to keep out moisture.

Elevator pits and wells must be kept dry

and free of moisture at all times. Insect

control procedures must be carried out

in such a manner as to prevent

undesirable moisture in the storage

facilities. Any conditions in

warehouses, elevators, pits,

transportation equipment, including

trucks and hopper cars, and other

farmers stock handling equipment

conducive to the growth or spread of

Aspergillus flavus mold shall be

corrected to the satisfaction of the

Committee. The Committee may make

periodic inspections of farmers stock

storage and handling facilities and

farmers stock peanuts stored in such

facilities to determine if handlers are

adhering to these requirements.

(h) Shelled peanuts. Handlers may

acquire shelled peanuts, which

originated from ‘‘Segregation 1

peanuts,’’ from other handlers, for

remilling and subsequent disposition to

human consumption outlets.

(i) Segregation 2 and Segregation 3

farmers stock peanuts held separate and

apart or commingled, and disposed of to

domestic or export crushing are exempt

from assessments under this section.

§ 998.200 Outgoing quality regulation for

1996 and subsequent crop peanuts.

The following modify or in addition

to the peanut marketing agreement

restrictions of §998.32 on handler

disposition of peanuts:

(a) Shelled peanuts. (1) No handler

shall ship or otherwise dispose of

shelled peanuts for human consumption

unless such peanuts are positive lot

identified, certified ‘‘negative’’ as to

aflatoxin, and certified as meeting the

requirements in the following ‘‘Other

Edible Quality * * *’’ grades:

TABLE 1.—‘‘OTHER EDIBLE QUALITY’’ (NON-INDEMNIFIABLE) GRADES—WHOLE KERNELS AND SPLITS

[Excluding lots of ‘‘splits’’]

Type and grade

category

Unshelled

peanuts and

damaged

kernels

(percent)

Unshelled

peanuts

damaged

kernels and

minor defects (percent)

Fall through

Foreign materials (percent)

Moisture

Sound split and (percent)

broken kernels

Sound whole kernels Total

Runner ................... 1.50 2.50 3.00%; 17⁄64 inch

round screen.

3.00%; 16⁄64×3⁄4

inch; slot screen.

4.00%; both

screens.

.20 9.00

Virginia (except No.

2).

1.50 2.50 3.00%; 17⁄64 inch;

round screen.

3.00%; 15⁄64×1 inch;

slot screen.

4.00%; both

screens.

.20 9.00

Spanish and Valencia.1.50 2.50 3.00%; 16⁄64 inch;

round screen.

3.00%; 15⁄64×3⁄4

inch; slot screen.

4.00%; both

screens.

.20 9.00

No. 2 Virginia ......... 1.50 3.00 6.00%; 17⁄64 inch;

round screen.

6.00%; 15⁄64×1 inch;

slot screen.

6.00%; both

screens.

.20 9.00

Lots of ‘‘splits’’

Runner (not more

than 4% sound

whole kernels).

1.50 2.50 3.00%; 17⁄64 inch;

round screen.

3.00%; 14⁄64×3⁄4

inch; slot screen.

4.00%; both

screens.

.20 9.00

Virginia (not less

than 90% splits).

1.50 2.50 3.00%; 17⁄64 inch;

round screen.

3.00%; 14⁄64×1 inch;

slot screen.

4.00%; both

screens.

.20 9.00

Spanish and Valencia (not more

than 4% sound

whole kernels).

1.50 2.50 3.00%; 16⁄64 inch;

round screen.

3.00%; 13⁄64×3⁄4

inch; slot screen.

4.00%; both

screens.

.20 9.00

(2) Prior to disposition to human consumption outlets, peanuts which have been certified as meeting the requirements

for Indemnifiable Grades must also be certified ‘‘negative’’ as to aflatoxin. Maximum limitations for Indemnifiable Grades

are as follows:
Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations 1267

TABLE 2.—INDEMNIFIABLE GRADES

[Maximum limitations]

Type and grade

category

Unshelled

peanuts and

damaged

kernels

(percent)

Unshelled

peanuts,

damaged

kernels and

minor defects (percent)

Fall through

Foreign materials (percent)

Moisture

(percent) Sound split and

broken kernels

(percent)

Sound whole kernels (percent) Total

Runner U.S. No.1

and better.

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 16⁄64 x 3⁄4

inch, slot screen.

4.00%; both

screens.

.10 9.00

Virginia U.S. No.1

and better.

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 15⁄64 x 1

inch, slot screen.

4.00%; both

screens.

.10 9.00

Spanish and Valencia U.S. No.1 and

better..

1.25 2.00 3.00%; 16⁄64 inch,

round screen.

2.00%; 15⁄64 x 3⁄4

inch, slot screen.

4.00%; both

screens.

.10 9.00

Runner U.S. Splits

(not more than

4% sound, whole

kernels).

1.25 2.00 2.00%; 17⁄64 inch,

round screen.

3.00%; 14⁄64 x 3⁄4

inch, slot screen.

4.00%; both

screens.

.20 9.00

Virginia U.S. Splits

(not less than

90% splits and

not more than

3.00% sound

whole kernels

and portions

passing through

20⁄64 inch round

screen).

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 14⁄64 x 1

inch, slot screen.

4.00%; both

screens.

.20 9.00

Spanish and Valencia U.S. Splits

(not more than

4% sound, whole

kernels).

1.25 2.00 2.00%; 16⁄64 inch,

round screen.

3.00%; 13⁄64 x 3⁄4

inch, slot screen.

4.00%; both

screens.

.20 9.00

Runner with splits

(not more than

15% sound splits).

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 16⁄64 x 3⁄4

inch, slot screen.

4.00%; both

screens.

.10 9.00

Virginia with splits

(not more than

15% sound splits).

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 15⁄64 x 1

inch, slot screen.

4.00%; both

screens.

.10 9.00

Spanish and Valencia with splits

(not more than

15% sound splits).

1.25 2.00 3.00%; 16⁄64 inch,

round screen.

2.00%; 15⁄64 x 3⁄4

inch, slot screen.

4.00%; both

screens.

.10 9.00

(3) The term ‘‘fall through’’, as used

herein, shall mean sound split and

broken kernels and whole kernels which

pass through specified screens.

(b) Cleaned inshell peanuts. No

handler shall ship or otherwise dispose

of cleaned inshell peanuts for human

consumption:

(1) With more than 1.00 percent

kernels with mold present unless a

sample of such peanuts, drawn by an

inspector of the Federal or Federal-State

Inspection Service, was analyzed

chemically by laboratories approved by

the Committee or by a U.S. Department

of Agriculture laboratory (hereinafter

referred to as ‘‘USDA laboratory’’) and

found to be wholesome relative to

aflatoxin;

(2) with more than 2.00 percent

peanuts with damaged kernels;

(3) with more than 10.00 percent

moisture; or

(4) with more than 0.50 percent

foreign material. The lot size of such

peanuts in bags or bulk shall not exceed

200,000 pounds.

(c) Sampling and testing shelled

peanuts. (1) Prior to shipment, each

handler shall cause appropriate samples

of each lot of edible quality shelled

peanuts to be drawn by an inspector of

the Federal or Federal-State Inspection

Service. The gross amount of peanuts

drawn shall be large enough to provide

for a grade analysis, for a grading checksample, and for three 48-pound samples

for aflatoxin assay. The three 48-pound

samples shall be designated by the

Federal or Federal-State Inspection

Service as ‘‘Sample #1,’’ ‘‘Sample #2,’’

and ‘‘Sample #3’’ and each sample shall

be placed in a suitable container and

‘‘positive lot identified’’ by means

acceptable to the Inspection Service and

the Committee. Sample #1 may be

prepared for immediate testing or

Sample #1, Sample #2, and Sample #3

may be returned to the handler for

testing at a later date. However, before

shipment of the lot to the buyer

(receiver), the handler shall cause

Sample #1 to be ground by the Federal

or Federal-State Inspection Service or a

USDA or designated laboratory in a

‘‘subsampling mill’’ approved by the

Committee. The resultant ground

subsample from Sample #1 shall be of a

size specified by the Committee and be

designated as ‘‘Subsample 1–AB’’ and at

the handler’s or buyer’s option, a second

subsample may also be extracted from

Sample #1. It shall be designated as

‘‘Subsample 1–CD.’’ Subsample 1–CD

may be sent as requested by the handler

or buyer, for aflatoxin assay, to a

laboratory listed on the most recent

Committee list of approved laboratories

that can provide analyses results on
1268 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations

such samples in 36 hours. Subsample 1–

AB shall be analyzed only in USDA or

designated laboratories. Both

Subsamples 1–AB and 1–CD shall be

accompanied by a notice of sampling

signed by the inspector containing, at

least, identifying information as to the

handler (shipper), the buyer (receiver),

if known, and the positive lot

identification of the shelled peanuts. A

copy of such notice covering each lot

shall be sent to the Committee office.

(2) The samples designated as Sample

#2 and Sample #3 shall be held as

aflatoxin check-samples by the

Inspection Service or the handler and

shall not be included in the shipment to

the buyer until the analyses results from

Sample #1 are known. Upon call from

the USDA or designated laboratory or

the Committee, the handler shall cause

Sample #2 to be ground by the

Inspection Service in a ‘‘subsampling

mill.’’ The resultant ground subsample

from Sample #2 shall be of the size

specified by the Committee and it shall

be designated as ‘‘Subsample 2–AB.’’

Upon call from the USDA or designated

laboratory or the Committee, the

handler shall cause Sample #3 to be

ground by the Inspection Service in a

‘‘subsampling mill.’’ The resultant

ground subsample from Sample #3 shall

be of the size specified by the

Committee and it shall be designated as

‘‘Subsample 3–AB.’’ Subsamples 2–AB

and 3–AB shall be analyzed only in

USDA or designated laboratories and

each shall be accompanied by a notice

of sampling. A copy of each such notice

shall be sent to the Committee office

and the cost of delivery of Subsamples

2–AB and 3–AB to the laboratory and

the cost of assay on them shall be at the

Committee’s expense.

(3) All costs involved in sampling and

testing Subsample 1–CD shall be for the

account of the buyer of the lot and at the

buyer’s expense. However, if the

handler elects to pay any portion of

these cost the handler shall charge the

buyer accordingly. Aflatoxin sampling

and testing cost for the AB subsamples

shall be included as a separate item in

the handler’s invoice to the buyer at the

rate of $0.0027 per pound or $0.27 per

hundredweight of the peanuts covered

by the invoice. When any of the samples

or subsamples have been lost,

misplaced, or spoiled and replacement

samples are needed, the entire cost of

drawing the replacement samples shall

be for the account of the handler. The

results of each assay shall be reported to

the buyer listed on the notice of

sampling and, if the handler desires, to

the handler. If a buyer is not listed on

the notice of sampling, the results of the

assay shall be reported to the handler,

who shall promptly cause notice to be

given to the buyer of the contents

thereof, and such handler shall not be

required to furnish additional samples

for assay.

(4) For the current crop year,

‘‘negative’’ aflatoxin content means 15

parts per billion (ppb) or less for

peanuts which have been certified as

meeting edible quality grade

requirements as determined by the

Committee’s sampling plan applicable

to the respective grade categories.

(d) Identification. Each lot of shelled

or cleaned inshell peanuts, in lot sizes

not exceeding 200,000 pounds, shall be

identified by positive lot identification

procedures prior to being shipped or

otherwise disposed of. For the purpose

of this regulation, ‘‘positive lot

identification’’ of a lot of shelled or

inshell peanuts is a means of relating

the inspection certificate to the lot

which has been inspected so that there

can be no doubt that the peanuts are the

same ones described on the inspection

certificate. The crop year that is shown

on the positive lot identification tags, or

other means of positive lot

identification shall accurately describe

the crop year in which the peanuts in

the lot were produced. Such procedure

on bagged peanuts shall consist of

attaching a lot numbered tag bearing the

official stamp of the Federal or FederalState Inspection Service to each filled

bag in the lot. The tag shall be sewed

(machine sewed if shelled peanuts) into

the closure of the bag except that in

plastic bags the tag shall be inserted

prior to sealing so that the official stamp

is visible. Any peanuts moved in bulk

or bulk bins shall have their lot identity

maintained by sealing the conveyance

and if in other containers by other

means acceptable to the Federal or

Federal-State Inspection Service and to

the Committee. All lots of shelled or

cleaned inshell peanuts shall be

handled, stored, and shipped under

positive lot identification procedures,

except those lots which have been

reconstituted and/or commingled at the

request of the receiver. All such

reconstituted and/or commingled lots

will no longer be considered positive lot

identified and, therefore, no longer be

eligible for indemnification or for

appeal inspection. Handlers shall keep

and maintain records of the quantities

involved in each reconstituting and/or

commingling procedure, whether in

single or multiple lots, and such records

shall be available to the Committee on

request.

(e) Reinspection. Whenever the

Committee has reason to believe that

peanuts may have been damaged or

deteriorated while in storage, the

Committee may reject the then effective

inspection certificate and may require

the owner of the peanuts to have a

reinspection to establish whether or not

such peanuts may be disposed of for

human consumption.

(f) Further modification of § 998.32.

(1) The provisions of § 998.32(a)

restricting the disposition of peanuts

which fail to meet the requirements

specified heretofore in this section to

the Commodity Credit Corporation or in

such manner as may be prescribed by

the Committee with the approval of the

Secretary, is hereby modified to specify

that only peanuts which have been

certified as meeting the requirements

specified in paragraphs (a) or (b) of this

section, which have been sampled

pursuant to paragraph (c) of this section,

and which have been identified

pursuant to paragraph (d) of this section

are eligible for disposition to human

consumption outlets.

(2) Lots of peanuts which have not

been certified as meeting the

requirements for disposition to human

consumption outlets, may be disposed

for non-human consumption uses which

are not regulated or limited by the

provisions specified hereinafter in this

section: Provided, That each such lot is

positive lot identified, using red tags,

and certified as to aflatoxin content

(actual numerical count). However, on

the shipping papers covering the

disposition of each such lot of inedible

quality peanuts, the handler shall cause

the following statement to be shown:

‘‘The peanuts covered by this bill of

lading (or invoice, etc.) are not to be

used for human consumption.’’

(3) Except for inedible quality peanuts

disposed of under the provisions of

paragraph (f)(2) of this section and

peanuts derived from the milling for

seed of Segregation 2 and 3 farmers

stock peanuts, peanuts which have not

been certified as meeting the standards

set forth in paragraphs (a) or (b) of this

section shall be disposed of as

prescribed hereinafter in this section.

(g) Sheller oil stock residuals—for

crushing or export. Peanuts and

portions of peanuts which are separated

from edible quality peanuts by

screening or sorting or other means

during the milling process, may be

segregated into categories or

commingled as sheller oil stock

residuals. Such sheller oil stock

residuals shall be identified pursuant to

paragraph (d) of this section, but using

a red tag, and such peanuts may be

disposed of domestically or to the

export market in bulk or bags or other

suitable containers. Disposition to

crushing may be to handlers who are

crushers or to domestic crushers who
Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations 1269

are not handlers under the Agreement

only on the condition that they agree to

comply with the terms of this paragraph

and all other applicable requirements of

the Agreement. The movement of such

peanuts shall be reported to the

Committee by the shipping handler and

the crusher, as requested by the

Committee.

(1) If the peanuts have not been tested

and certified as to aflatoxin content, as

prescribed in paragraph (c) of this

section, the handler shall cause the

following statement to be shown on the

shipping papers: ‘‘The peanuts covered

by this bill of lading (or invoice, etc.) are

limited to crushing only and may

contain aflatoxin.’’

(2) If the peanuts are certified as 301

ppb or more aflatoxin content,

disposition shall be limited to crushing

or export.

(h) Blanching and remilling peanuts

failing quality requirements. (1)

Handlers may blanch or cause to have

blanched positive lot identified shelled

peanuts, which originated from

Segregation 1 peanuts, that fail to meet

the requirements of paragraph (a) of this

section because of excessive damage,

minor defects, moisture, or foreign

material or are positive as to aflatoxin.

Prior to movement of such peanuts to a

blancher, handlers shall report to the

Committee, on a form furnished by the

Committee, and receive authorization

from the Committee for movement and

blanching of each such lot. Lots of

peanuts which are moved under these

provisions must be accompanied by a

valid grade inspection certificate and

the title shall be retained by the handler

until the peanuts are blanched and

certified by an inspector of the Federal

or Federal-State Inspection Service as

meeting the requirements for disposal

into human consumption outlets. To be

eligible for disposal into human

consumption outlets, such peanuts after

blanching, must meet specifications for

unshelled peanuts, damaged kernels,

minor defects, moisture, and foreign

material as listed in paragraph (a) of this

section and be accompanied by an

aflatoxin certificate determined to be

negative by the Committee. The residual

peanuts, excluding skins and hearts,

resulting from blanching under these

provisions, shall be bagged and red

tagged and disposition shall be that

such peanuts are returned to the handler

for further disposition; or, in the

alternative, such residuals shall be

positive lot identified by the Federal or

Federal-State Inspection Service, and

shall be disposed of, by the blancher, to

handlers who are crushers, or to

domestic crushers who are not handlers

under the Agreement only on the

condition that they agree to comply

with the terms of paragraph (g) of this

section and all other applicable

requirements of the Agreement.

Blanching under the provisions of this

paragraph shall be performed only by

those firms who agree to procedures

acceptable to the Committee and who

are approved by the Committee to do

such blanching.

(2) Handlers may contract with

Committee-approved remillers for

remilling shelled peanuts, which

originated from Segregation 1 peanuts,

that fail to meet the requirements for

disposition to human consumption

outlets heretofore specified in paragraph

(a) of this section: Provided, That such

lots of peanuts contain not in excess of

10 percent fall through. Prior to

movement of such peanuts under these

provisions to a Committee-approved

remiller, handlers shall report to the

Committee, on a form furnished by the

Committee, and receive authorization

from the Committee for movement and

remilling of each such lot. Lots of

peanuts moved under these provisions

must be accompanied by a valid grade

inspection certificate and must be

positive lot identified and the title of

such peanuts shall be retained by the

handler until the peanuts have been

remilled and certified by the Federal or

Federal-State Inspection-Service as

meeting the requirements for

disposition to human consumption

outlets specified in paragraph (a) of this

section, and be accompanied by an

aflatoxin certificate determined to be

negative by the Committee. Remilling

under these provisions may include

composite remilling of more than one

such lot of peanuts owned by the same

handler. However, such peanuts owned

by one handler shall be held and

remilled separate and apart from all

other peanuts. The residual peanuts

resulting from remilling under these

provisions, shall be bagged and red

tagged and disposition shall be that

such peanuts are returned to the handler

for further disposition; or, in the

alternative, such residuals shall be

positive lot identified by the Federal or

Federal-State Inspection Service, and

shall be disposed of, by the remiller, to

handlers who are crushers, or to

domestic crushers who are not handlers

under the Agreement only on the

condition that they agree to comply

with the terms of paragraph (g) of this

section and all other applicable

requirements of the Agreement.

Remilling under the provisions of this

paragraph shall be performed only by

those firms who agree to procedures

acceptable to the Committee and who

are approved by the Committee to do

such remilling.

(i) Documentation of compliance.

Each handler shall keep and maintain

records of all receipts and acquisitions

and all milling, remilling, blanching,

use and disposition of peanuts which

have not been certified as meeting the

requirements for disposition to human

consumption, pursuant to paragraph (a)

or (b) of this section, as will document

and substantiate compliance and

performance under this agreement.

PART 999—SPECIALTY CROPS;

IMPORT REGULATIONS

1. The authority citation for 7 CFR

part 999 continues to read as follows:

Authority: 7 U.S.C. 601–674; and 7 U.S.C.

1445c–3.

2. Section 999.600 is revised to read

as follows:

§ 999.600 Regulation governing imports of

peanuts.

(a) Definitions. (1) Peanuts means the

seeds of the legume Arachis hypogaea

and includes both inshell and shelled

peanuts produced in countries other

than the United States, other than those

marketed in green form for consumption

as boiled peanuts.

(2) Farmers stock peanuts means

picked and threshed raw peanuts which

have not been shelled, crushed, cleaned

or otherwise changed (except for

removal of foreign material, loose

shelled kernels, and excess moisture)

from the form in which customarily

marketed by producers.

(3) Inshell peanuts means peanuts, the

kernels or edible portions of which are

contained in the shell.

(4) Incoming inspection means the

sampling and inspection of farmers

stock peanuts to determine Segregation

quality.

(5) Segregation 1 peanuts, unless

otherwise specified, means farmers

stock peanuts with not more than 2.00

percent damaged kernels nor more than

1.00 percent concealed damage caused

by rancidity, mold, or decay and which

are free from visible Aspergillus flavus

mold.

(6) Segregation 2 peanuts, unless

otherwise specified, means farmers

stock peanuts with more than 2.00

percent damaged kernels or more than

1.00 percent concealed damage caused

by rancidity, mold, or decay and which

are free from visible Aspergillus flavus

mold.

(7) Segregation 3 peanuts, unless

otherwise specified, means farmers

stock peanuts with visible Aspergillus

flavus mold.
1270 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations

(8) Shelled peanuts means the kernels

of peanuts after the shells are removed.

(9) Outgoing inspection means the

sampling and inspection of either:

shelled peanuts which have been

cleaned, sorted, sized and otherwise

prepared for human consumption

markets; or inshell peanuts which have

been cleaned, sorted and otherwise

prepared for inshell human

consumption markets.

(10) Negative aflatoxin content means

15 parts-per-billion (ppb) or less for

peanuts which have been certified as

meeting edible quality grade

requirements, and 25 ppb or less for

inedible quality peanuts.

(11) Person means an individual,

partnership, corporation, association, or

any other business unit.

(12) Secretary means the Secretary of

Agriculture of the United States or any

officer or employee of the United States

Department of Agriculture (Department

or USDA) who is, or who may hereafter

be, authorized to act on behalf of the

Secretary.

(13) Inspection service means the

Federal or Federal-State Inspection

Service, Fruit and Vegetable Division,

Agricultural Marketing Service, USDA.

(14) USDA laboratory means

laboratories of the Science and

Technology Division, Agricultural

Marketing Service, USDA, that

chemically analyze peanuts for aflatoxin

content.

(15) PAC approved laboratories means

laboratories approved by the Peanut

Administrative Committee, pursuant to

Peanut Marketing Agreement No. 146 (7

CFR Part 998), that chemically analyze

peanuts for aflatoxin content.

(16) Conditionally released means

released from Customs Service custody

for further handling (sampling,

inspection, chemical analysis, or

storage) before final release.

(17) Importation means the arrival of

a peanut shipment at a port-of-entry

with the intent to enter the peanuts into

channels of commerce of the United

States.

(b) Incoming regulation. (1) Farmers

stock peanuts presented for

consumption must undergo incoming

inspection. Only Segregation 1 peanuts

may be used for human consumption.

All foreign produced farmers stock

peanuts for human consumption must

be sampled and inspected at a buying

point or other handling facility capable

of performing incoming sampling and

inspection. Sampling and inspection

shall be conducted by the inspection

service. Only Segregation 1 peanuts

certified as meeting the following

requirements may be used in human

consumption markets:

(i) Moisture. Except as provided under

paragraph (b)(2) Seed peanuts, of this

section, peanuts may not contain more

than 10.49 percent moisture: Provided,

That peanuts of a higher moisture

content may be received and dried to

not more than 10.49 percent moisture

prior to storage or milling.

(ii) Foreign material. Peanuts may not

contain more than 10.49 percent foreign

material, except that peanuts having a

higher foreign material content may be

held separately until milled, or moved

over a sand-screen before storage, or

shipped directly to a plant for prompt

shelling. The term ‘‘sand-screen’’ means

any type of farmers stock cleaner which,

when in use, removes sand and dirt.

(iii) Damage. For the purpose of

determining damage, other than

concealed damage, on farmers stock

peanuts, all percentage determinations

shall be rounded to the nearest whole

number.

(2) Seed peanuts. Farmers stock

peanuts determined to be Segregation 1

quality, and shelled peanuts certified

negative to aflatoxin (15 ppb or less),

may be imported for seed purposes.

Residuals from the shelling of

Segregation 1 seed peanuts may be

milled with other imported peanuts of

the importer, and such residuals

meeting quality requirements specified

in paragraph (c)(1) of this section may

be disposed to human consumption

channels. Any portion not meeting such

quality requirements shall be disposed

to inedible peanut channels pursuant to

paragraphs (f) and (g) of this section. All

disposition of seed peanuts and

residuals from seed peanuts , whether

commingled or kept separate and apart,

shall be reported to the Secretary

pursuant to paragraphs (f)(2) and (f)(3)

of this section. The receiving seed outlet

must retain records of the transaction,

pursuant to paragraph (g)(7) of this

section.

(3) Oilstock and exportation. Farmers

stock peanuts of lower quality than

Segregation 1 (Segregation 2 and 3

peanuts) shall be used only in inedible

outlets. Segregation 2 and 3 peanuts

may be commingled but shall be kept

separate and apart from edible quality

peanut lots. Commingled Segregation 2

and 3 peanuts and Segregation 3

peanuts shall be disposed only to

oilstock or exported. Shelled peanuts

and cleaned-inshell peanuts which fail

to meet the requirements for human

consumption in paragraphs (c)(1) or

(c)(2), respectively, of § 997.600, may be

crushed for oil or exported.

(c) Outgoing regulation. No person

shall import peanuts for human

consumption into the United States

unless such peanuts are lot identified

and certified by the inspection service

as meeting one of the following

requirements:

(1) Shelled peanuts. (i) No importer

shall ship or otherwise dispose of

shelled peanuts to human consumption

markets unless such peanuts are lot

identified, certified as ‘‘negative’’ to

aflatoxin, and meet the requirements

specified in Table 1.

TABLE 1.—MINIMUM GRADE REQUIREMENTS—PEANUTS FOR HUMAN CONSUMPTION

[Whole Kernels and Splits]

Maximum limitations

Excluding lots of ‘‘splits’’

Type and grade

category

Unshelled

peanuts and

damaged

kernels

(percent)

Unshelled

peanuts,

damaged

kernels and

minor defects (percent)

Fall through

Foreign materials (percent)

Moisture

Sound split and (percent)

broken kernels

Sound whole kernels Total

Runner ................... 1.50 2.50 3.00%; 17⁄64 inch

round screen.

3.00%; 16⁄64 × 3⁄4

inch; slot screen.

4.00%; both

screens.

.20 9.00

Virginia (except No.

2).

1.50 2.50 3.00%; 17⁄64 inch;

round screen.

3.00%; 15⁄64 × 1

inch; slot screen.

4.00%; both

screens.

.20 9.00

Spanish and Valencia.1.50 2.50 3.00%; 16⁄64 inch;

round screen.

3.00%; 15⁄64 × 3⁄4

inch; slot screen.

4.00%; both

screens.

.20 9.00
Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations 1271

TABLE 1.—MINIMUM GRADE REQUIREMENTS—PEANUTS FOR HUMAN CONSUMPTION—Continued

[Whole Kernels and Splits]

Maximum limitations

Excluding lots of ‘‘splits’’

Type and grade

category

Unshelled

peanuts and

damaged

kernels

(percent)

Unshelled

peanuts,

damaged

kernels and

minor defects (percent)

Fall through

Foreign materials (percent)

Moisture

Sound split and (percent)

broken kernels

Sound whole kernels Total

No. 2 Virginia ......... 1.50 3.00 6.00%; 17⁄64 inch;

round screen.

6.00%; 15⁄64 × 1

inch; slot screen.

6.00%; both

screens.

.20 9.00

Lots of ‘‘splits’’

Runner (not more

than 4% sound

whole kernels).

1.50 2.50 3.00%; 17⁄64 inch;

round screen.

3.00%; 14⁄64 × 3⁄4

inch; slot screen.

4.00%; both

screens.

.20 9.00

Virginia (not less

than 90% splits).

1.50 2.50 3.00%; 17⁄64 inch;

round screen.

3.00%; 14⁄64 × 1

inch; slot screen.

4.00%; both

screens.

.20 9.00

Spanish and Valencia (not more

than 4% sound

whole kernels).

1.50 2.50 3.00%; 16⁄64 inch;

round screen.

3.00%; 13⁄64 × 3⁄4

inch; slot screen.

4.00%; both

screens.

.20 9.00

(ii) Shelled peanuts which are lot identified, certified as ‘‘negative’’ to aflatoxin pursuant to paragraph (d)(4)(v)

of this section, and meet requirements specified in the Table 2, may be shipped to human consumption markets prior

to the importer receiving such aflatoxin certification.

TABLE 2.—SUPERIOR QUALITY REQUIREMENTS—PEANUTS FOR HUMAN CONSUMPTION

[Whole Kernels and Splits]

Maximum limitations

Type and grade

category

Unshelled

peanuts and

damaged

kernels

(percent)

Unshelled

peanuts,

damaged

kernels and

minor defects (percent)

Fall through

Foreign materials (percent)

Moisture

(percent) Sound split and

broken kernels

(percent)

Sound whole kernels (percent) Total

Runner U.S. No.1

and better.

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 16⁄64 × 3⁄4

inch, slot screen.

4.00%; both

screens.

.10 9.00

Virginia U.S. No.1

and better.

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 15⁄64 × 1

inch, slot screen.

4.00%; both

screens.

.10 9.00

Spanish and Valencia U.S. No.1 and

better.

1.25 2.00 3.00%; 16⁄64 inch,

round screen.

2.00%; 15⁄64 × 3⁄4

inch, slot screen.

4.00%; both

screens.

.10 9.00

Runner U.S. Splits

(not more than

4% sound, whole

kernels)..

1.25 2.00 2.00%; 17⁄64 inch,

round screen.

3.00%; 14⁄64 × 3⁄4

inch, slot screen.

4.00%; both

screens.

.20 9.00

Virginia U.S. Splits

(not less than

90% splits and

not more than

3.00% sound

whole kernels

and portions

passing through

20⁄64 inch round

screen)..

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 14⁄64 × 1

inch, slot screen.

4.00%; both

screens.

.20 9.00

Spanish and Valencia U.S. Splits

(not more than

4% sound, whole

kernels)..

1.25 2.00 2.00%; 16⁄64 inch,

round screen.

3.00%; 13⁄64 × 3⁄4

inch, slot screen.

4.00%; both

screens.

.20 9.00

Runner with splits

(not more than

15% sound

splits)..

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 16⁄64 × 3⁄4

inch, slot screen.

4.00%; both

screens.

.10 9.00
1272 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations

TABLE 2.—SUPERIOR QUALITY REQUIREMENTS—PEANUTS FOR HUMAN CONSUMPTION—Continued

[Whole Kernels and Splits]

Maximum limitations

Type and grade

category

Unshelled

peanuts and

damaged

kernels

(percent)

Unshelled

peanuts,

damaged

kernels and

minor defects (percent)

Fall through

Foreign materials (percent)

Moisture

(percent) Sound split and

broken kernels

(percent)

Sound whole kernels (percent) Total

Virginia with splits

(not more than

15% sound

splits)..

1.25 2.00 3.00%; 17⁄64 inch,

round screen.

3.00%; 15⁄64 × 1

inch, slot screen.

4.00%; both

screens.

.10 9.00

Spanish and Valencia with splits

(not more than

15% sound

splits)..

1.25 2.00 3.00%; 16⁄64 inch,

found screen.

2.00%; 15⁄64 × 3⁄4

inch, slot screen.

4.00%; both

screens.

.10 9.00

(iii) The term ‘‘fall through’’, as used

herein, shall mean sound split and

broken kernels and whole kernels which

pass through specified screens. Prior to

shipment, appropriate samples for

pretesting shall be drawn in accordance

with paragraph (d) of this section from

each lot of Superior Quality peanuts.

(2) Cleaned-inshell peanuts. Peanuts

declared as cleaned-inshell peanuts may

be presented for sampling and outgoing

inspection in bags at the port-of-entry.

Alternatively, peanuts may be

conditionally released as cleanedinshell peanuts but shall not

subsequently undergo any cleaning,

sorting, sizing or drying process prior to

presentation for outgoing inspection as

cleaned-inshell peanuts. Cleanedinshell peanuts which fail outgoing

inspection may be reconditioned or

redelivered to the port-of-entry, at the

option of the importer. Cleaned-inshell

peanuts determined to be unprepared

farmers stock peanuts must be inspected

against incoming quality requirements

and determined to be Segregation 1

peanuts prior to outgoing inspection for

cleaned-inshell peanuts. Cleanedinshell peanuts intended for human

consumption may not contain more

than:

(i) 1.00 percent kernels with mold

present, unless a sample of such

peanuts is drawn by the inspection

service and analyzed chemically by a

USDA or PAC approved laboratory and

certified ‘‘negative’’ as to aflatoxin.

(ii) 2.00 percent peanuts with

damaged kernels;

(iii) 10.00 percent moisture (carried to

the hundredths place); and

(iv) 0.50 percent foreign material.

(d) Sampling and inspection. (1) All

sampling and inspection, quality

certification, chemical analysis, and lot

identification, required under this

section, shall be done by the inspection

service, a USDA laboratory, or a PACapproved laboratory, as applicable, in

accordance with the procedures

specified herein. The importer shall

make arrangements with the inspection

service for sampling, inspection, lot

identification and certification of all

peanuts accumulated by the importer.

The importer also shall make

arrangements for the appropriate

disposition of peanuts failing edible

quality requirements of this section. All

costs of sampling, inspection,

certification, identification, and

disposition incurred in meeting the

requirements of this section shall be

paid by the importer. Whenever peanuts

are offered for inspection, the importer

shall furnish any labor and pay any

costs incurred in moving and opening

containers as may be necessary for

proper sampling and inspection.

(2) For farmers stock inspection, the

importer shall cause the inspection

service to perform an incoming

inspection and to issue an CFSA–1007,

‘‘Inspection Certificate and Sales

Memorandum’’ form designating the lot

as Segregation 1, 2, or 3 quality peanuts.

For shelled and cleaned-inshell peanuts,

the importer shall cause the inspection

service to perform an outgoing

inspection and issue an FV–184–9A,

‘‘Milled Peanut Inspection Certificate’’

reporting quality and size of the shelled

or cleaned-inshell peanuts, whether the

lot meets or fails to meet quality

requirements for human consumption of

this section, and that the lot originated

in a country other than the United

States. The importer shall provide to the

Secretary copies of all CFSA 1007 and

FV–184–9A applicable to each peanut

lot conditionally released to the

importer. Such reports shall be

submitted as provided in paragraphs

(f)(2) and (f)(3) of this section.

(3) Procedures for sampling and

testing peanuts. Sampling and testing of

peanuts for incoming and outgoing

inspections of peanuts presented for

consumption into the United States will

be conducted as follows:

(i) Application for sampling. The

importer shall request inspection and

certification services from one of the

following inspection service offices

convenient to the location where the

peanuts are presented for incoming and/

or outgoing inspection. To avoid

possible delays, the importer should

make arrangements with the inspection

service in advance of the inspection

date. A copy of the Customs Service

entry document specific to the peanuts

to be inspected shall be presented to the

inspection official prior to sampling of

the lot.

(A) The following offices provide

incoming farmers stock inspection:

Dothan, AL, tel: (334) 792–5185,

Graceville, FL, tel: (904) 263–3204,

Winter Haven, FL, tel: (941) 291–5820,

ext 260,

Albany, GA, tel: (912) 432–7505,

Williamston, NC, tel: (919) 792–1672,

Columbia, SC, tel: (803) 253–4597,

Suffolk, VA, tel: (804) 925–2286,

Portales, NM, tel: (505) 356–8393,

Oklahoma City, OK, tel: (405) 521–3864,

Gorman, TX, tel: (817) 734–3006,

Yuma, AZ, tel: (602) 344–3869.

(B) The following offices, in addition

to the offices listed in paragraph (A),

provide outgoing sampling and/or

inspection services, and certify shelled

and cleaned-inshell peanuts as meeting

or failing the quality requirements of

this section:

Eastern U.S.

Mobile, AL, tel: (205) 690–6154,
Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations 1273

Jacksonville, FL, tel: (904) 359–6430,

Miami, FL, tel: (305) 592–1375,

Tampa, FL, tel: (813) 272–2470,

Presque Isle, ME, tel: (207) 764–2100,

Baltimore/Washington, tel: (301) 344–

1860,

Boston, MA, tel: (617) 389–2480,

Newark, NJ, tel: (201) 645–2670,

New York, NY, tel: (212) 718–7665,

Buffalo, NY, tel: (716) 824–1585,

Philadelphia, PA, tel: (215) 336–0845,

Norfolk, VA, tel: (804) 441–6218,

Central U.S.

New Orleans, LA, tel: (504) 589–6741,

Detroit, MI, tel: (313) 226–6059,

St. Paul, MN, tel: (612) 296–8557,

Las Cruces, NM, tel: (505) 646–4929,

Alamo, TX, tel: (210) 787–4091,

El Paso, TX, tel: (915) 540–7723,

Houston, TX, tel: (713) 923–2557,

Western U.S.

Nogales, AZ, tel: (602) 281–0783,

Los Angeles, CA, tel: (213) 894–2489,

San Francisco, CA, tel: (415) 876–9313,

Honolulu, HI, tel: (808) 973–9566,

Salem, OR, tel: (503) 986–4620,

Seattle, WA, tel: (206) 859–9801.

(C) Questions regarding inspection

services or requests for further

assistance may be obtained from: Fresh

Products Branch, P.O. Box 96456, room

2049–S, Fruit and Vegetable Division,

AMS, USDA, Washington, D.C. 20090–

6456, telephone (202) 690–0604, fax

(202) 720–0393.

(ii) Sampling. Sampling of bulk

farmers stock lots shall be performed at

a facility that utilizes a pneumatic

sampler or approved automatic

sampling device. The size of farmers

stock lots, shelled lots, and cleanedinshell lots, in bulk or bags, shall not

exceed 200,000 pounds. For farmers

stock, shelled and cleaned-inshell lots

not completely accessible for sampling,

the applicant shall be required to have

lots made accessible for sampling

pursuant to inspection service

requirements. The importer shall cause

appropriate samples of each lot of edible

quality shelled peanuts to be drawn by

the inspection service. The amount of

such peanuts drawn shall be large

enough to provide for a grade and size

analysis, for a grading check-sample,

and for three 48-pound samples for

aflatoxin assay. Because there is no

acceptable method of drawing official

samples from bulk conveyances of

shelled peanuts, the importer shall

arrange to have bulk conveyances of

shelled peanuts sampled during the

unloading process. A bulk lot sampled

in this manner must be positive lot

identified by the inspection service and

held in a sealed bin until the associated

inspection and aflatoxin test results

have been reported.

(4) Aflatoxin assay. (i) The importer

shall cause appropriate samples of each

lot of shelled peanuts intended for

edible consumption to be drawn by the

inspection service. The three 48-pound

samples shall be designated by the

inspection service as ‘‘Sample 1IMP,’’

‘‘Sample 2IMP,’’ and ‘‘Sample 3IMP’’

and each sample shall be placed in a

suitable container and lot identified by

the inspection service. Sample 1IMP

may be prepared for immediate testing

or Samples 1IMP, 2IMP and 3IMP may

be returned to the importer for testing at

a later date, under lot identification

procedures.

(ii) The importer shall cause Sample

1IMP to be ground by the inspection

service or a USDA or PAC-approved

laboratory in a subsampling mill. The

resultant ground subsample shall be of

a size specified by the inspection

service and shall be designated as

‘‘Subsample 1–ABIMP.’’ At the

importer’s option, a second subsample

may also be extracted from Sample

1IMP and designated ‘‘Subsample 1–

CDIMP’’ which may be sent for aflatoxin

assay to a USDA or PAC-approved

laboratory. Both subsamples shall be

accompanied by a notice of sampling

signed by the inspector containing

identifying information as to the

importer, the lot identification of the

shelled peanut lot, and other

information deemed necessary by the

inspection service. Subsamples 1–

ABIMP and 1–CDIMP shall be analyzed

only in a USDA or PAC-approved

laboratory. The methods prescribed by

the Instruction Manual for Aflatoxin

Testing, SD Instruction-1, August 1994,

shall be used to assay the aflatoxin

level. The cost of testing and

notification of Subsamples 1–ABIMP

and 1–CDIMP shall be borne by the

importer.

(iii) The samples designated as

Sample 2IMP and Sample 3IMP shall be

held as aflatoxin check-samples by the

inspection service or the importer until

the analyses results from Sample 1IMP

are known. Upon call from the USDA or

PAC-approved laboratory, the importer

shall cause Sample 2IMP to be ground

by the inspection service in a

subsampling mill. The resultant ground

subsample from Sample 2IMP shall be

designated as ‘‘Subsample 2–ABIMP.’’

Upon further call from the laboratory,

the importer shall cause Sample 3IMP to

be ground by the inspection service in

a subsampling mill. The resultant

ground subsample shall be designated

as ‘‘Subsample 3–ABIMP.’’ The

importer shall cause Subsamples 2–

ABIMP and 3–ABIMP to be sent to and

analyzed only in a USDA or PACapproved laboratory. Each subsample

shall be accompanied by a notice of

sampling. The results of each assay shall

be reported by the laboratory to the

importer. All costs involved in the

sampling, shipment and assay analysis

of subsamples required by this section

shall be borne by the importer.

(iv)(A) Importers should contact one

of the following USDA or PAC-approved

laboratories to arrange for chemical

analysis.

Science and Technology Division, AMS,

USDA, P.O. Box 279, 301 West Pearl

St., Aulander, NC 27805, Tel: (919)

345–1661 Ext. 156, Fax: (919) 345–

1991

Science and Technology Division, AMS,

USDA, 1211 Schley Ave., Albany, GA

31707, Tel: (912) 430–8490 / 8491,

Fax: (912) 430–8534

Science and Technology Division, AMS,

USDA, P.O. Box 488, Ashburn, GA

31714, Tel: (912) 567–3703

Science and Technology Division, AMS,

USDA, 610 North Main St., Blakely,

GA 31723, Tel: (912) 723–4570, Fax:

(912) 723–3294

Science and Technology Division, AMS,

USDA, 1557 Reeves St., Dothan, AL

36303, Tel: (334) 794–5070, Fax: (334)

671–7984

Science and Technology Division, AMS,

USDA, 107 South Fourth St., Madill,

OK 73446, Tel: (405) 795–5615, Fax:

(405) 795–3645

Science and Technology Division, AMS,

USDA, P.O. Box 272, 715 N. Main

Street, Dawson, GA 31742, Tel: (912)

995–7257, Fax: (912) 995–3268

Science and Technology Division, AMS,

USDA, P.O. Box 1130, 308 Culloden

St., Suffolk, VA 23434, Tel: (804) 925–

2286, Fax: (804) 925–2285

ABC Research, 3437 SW 24th Avenue,

Gainesville, FL 32607–4502, Tel:

(904) 372–0436, Fax: (904) 378–6483

J. Leek Associates, Inc., P.O. Box 50395,

1200 Wyandotte (31705), Albany, GA

31703–0395, Tel: (912) 889–8293,

Fax: (912) 888–1166

J. Leek Associates, Inc., P.O. Box 368,

675 East Pine, Colquitt, GA 31737,

Tel: (912) 758–3722, Fax: (912) 758–

2538

J. Leek Associates, Inc., P.O. Box 6, 502

West Navarro St., DeLeon, TX 76444,

Tel: (817) 893–3653, Fax: (817) 893–

3640

Pert Laboratories, P.O. Box 267, Peanut

Drive, Edenton, NC 27932, Tel: (919)

482–4456, Fax: (919) 482–5370

Pert Laboratory South, P.O. Box 149,

Hwy 82 East, Seabrook Drive,

Sylvester, GA 31791, Tel: (912) 776–

7676, Fax: (912) 776–1137

Professional Service Industries, Inc., 3

Burwood Lane, San Antonio, TX

78216, Tel: (210) 349–5242, Fax: (210)

342–9401
1274 Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations

Southern Cotton Oil Company, 600 E.

Nelson Street, P.O. Box 180, Quanah,

TX 79252, Tel: (817) 663–5323, Fax:

(817) 663–5091

Quanta Lab, 9330 Corporate Drive, Suite

703, Selma, TX 78154–1257, Tel:

(210) 651–5799, Fax: (210) 651–9271.

(B) Further information concerning

the chemical analyses required pursuant

to this section may be obtained from:

Science and Technology Division, AMS,

USDA, P.O. Box 96456, room 3507–S,

Washington, DC 20090–6456, telephone

(202) 720–5231, or facsimile (202) 720–

6496.

(v) Reporting aflatoxin assays. A

separate aflatoxin assay certificate, Form

CSSD–3 ‘‘Certificate of Analysis for

Official Samples’’ or equivalent PAC

approved laboratory form, shall be

issued by the laboratory performing the

analysis for each lot. The assay

certificate shall identify the importer,

the volume of the peanut lot assayed,

date of the assay, and numerical test

result of the assay. The results of the

assay shall be reported as follows.

(A) For the current peanut quota year,

‘‘negative’’ aflatoxin content means 15

parts per billion (ppb) or less aflatoxin

content for peanuts which have been

certified as meeting edible quality grade

requirements. Such lots shall be

certified as ‘‘Meets U.S. import

requirements for edible peanuts under

§ 999.600 with regard to aflatoxin.’’

(B) Lots containing more than 15 ppb

aflatoxin content shall be certified as

‘‘Fails to meet U.S. import requirements

for edible peanuts under § 999.600 with

regard to aflatoxin.’’ The certificate of

any inedible peanut lot also shall

specify the aflatoxin count in ppb. The

importer shall file USDA Form CSSD–

3, or equivalent form, with the

Secretary, regardless of the test result.

(5) Appeal inspection. In the event an

importer questions the results of a

quality and size inspection, an appeal

inspection may be requested by the

importer and performed by the

inspection service. A second sample

will be drawn from each container and

shall be double the size of the original

sample. The results of the appeal

sample shall be final and the fee for

sampling, grading and aflatoxin analysis

shall be charged to the importer.

(e) Disposition of peanuts failing

edible quality requirements. Peanuts

shelled, sized and sorted in another

country prior to arrival in the U.S. and

shelled peanuts which originated from

imported Segregation 1 peanuts that fail

quality requirements of Table 1

(excessive damage, minor defects,

moisture, or foreign material) or are

positive to aflatoxin may be

reconditioned by remilling and/or

blanching. After such reconditioning,

peanuts meeting the quality

requirements of Table 1 and which are

negative to aflatoxin (15 ppb or less)

may be disposed for edible peanut use.

Residual peanut lots resulting from

milling or reconditioning of such lots

shall be disposed of as prescribed

below:

(1) Failing peanut lots may be

disposed for non-human consumption

uses (such as livestock feed, wild

animal feed, rodent bait, seed, etc.)

which are not otherwise regulated by

this section; Provided, that each such lot

is lot identified and certified as to

aflatoxin content (actual numerical

count). On the shipping papers covering

the disposition of each such lot, the

importer shall cause the following

statement to be shown: ‘‘The peanuts

covered by this bill of lading (or

invoice) are not to be used for human

consumption.’’

(2) Peanuts, and portions of peanuts

which are separated from edible quality

peanuts by screening or sorting or other

means during the milling process

(‘‘sheller oilstock residuals’’), may be

sent to inedible peanut markets

pursuant to paragraph (e)(1) of this

section, crushed or exported. Such

peanut may be commingled with other

milled residuals. Such peanuts shall be

positive lot identified, red tagged in

bulk or bags or other suitable containers.

(i) If such peanuts have not been

certified as to aflatoxin content, as

prescribed in paragraph (d) of this

section, disposition is limited to

crushing and the importer shall cause

the following statement to be shown on

the shipping papers: ‘‘The peanuts

covered by this bill of lading (or invoice,

etc.) are limited to crushing only and

may contain aflatoxin.’’

(ii) If the peanuts are certified as 301

ppb or more aflatoxin content,

disposition shall be limited to crushing

or export.

(3) Shelled peanuts which originated

from Segregation 1 peanuts that fail

quality requirements of Table 1, peanuts

derived from the milling for seed of

Segregation 2 and 3 farmers stock

peanuts, and peanuts which are positive

to aflatoxin may be remilled or

blanched. Residuals of remilled and/or

blanched peanuts which continue to fail

quality requirements of Table 1 shall be

disposed of pursuant to paragraphs (e)

(1) or (2) of this section.

(4) All certifications, lot

identifications, and movement to

inedible dispositions, sufficient to

account for all peanuts in each

consumption entry, shall be reported to

the Secretary by the importer pursuant

to paragraphs (f)(2) and (f)(3) of this

section.

(f) Safeguard procedures. (1) Prior to

arrival of a foreign produced peanut lot

at a port-of-entry, the importer, or

customs broker acting on behalf of the

importer, shall mail or send by facsimile

transmission (fax) a copy of the Customs

Service entry documentation for the

peanut lot or lots to the inspection

service office that will perform sampling

of the peanut shipment. More than one

lot may be entered on one entry

document. The documentation shall

include identifying lot(s) or container

number(s) and volume of the peanuts in

each lot being entered, and the location

(including city and street address), date

and time for inspection sampling. The

inspection office shall sign, stamp, and

return the entry document to the

importer. The importer shall present the

stamped document to the Customs

Service at the port-of-entry and send a

copy of the document to the Secretary.

The importer also shall cause a copy of

the entry document to accompany the

peanut lot and be presented to the

inspection service at the inland

destination of the lot.

(2) The importer shall file with the

Secretary copies of the entry document

and grade, aflatoxin, and lot

identification certifications sufficient to

account for all peanuts in each lot listed

on the entry document filed by the

importer. Positive lot identification of

residual lots, transfer certificates, and

other documentation showing inedible

disposition or export, such as bills of

lading and sales receipts, export

declarations, or certificates of burying,

which report the weight of peanuts

being disposed and the name, address

and telephone number of the inedible

peanut receiver, must be sent to the

Marketing Order Administration

Branch, Attn: Report of Imported

Peanuts. Facsimile transmissions and

overnight mail may be used to ensure

timely receipt of inspection certificates

and other documentation. Fax reports

should be sent to (202) 720–5698.

Overnight and express mail deliveries

should be addressed to USDA, AMS,

FV, Marketing Order Administration

Branch, 14th and Independence

Avenue, SW, Room: 2525–S,

Washington, D.C., 20250, Attn: Report

of Imported Peanuts. Regular mail

should be sent to FV, AMS, USDA, P.O.

Box 96456, Room 2525–S, Washington,

DC 20090–6456, Attn: Report of

Imported Peanuts. Telephone inquiries

should be made to (202) 720–6862.

(3) Certificates and other

documentation for each peanut lot must

be filed within 23 days of the date of

filing for consumption entry, or, if a
Federal Register / Vol. 62, No. 6 / Thursday, January 9, 1997 / Rules and Regulations 1275

redelivery notice is issued on the peanut

lot, subsequently filed prior to

conclusion of the redelivery period

which will be 60 days, unless otherwise

specified by the Customs Service.

(4) The Secretary shall ask the

Customs Service to issue a redelivery

demand for foreign produced peanut

lots failing to meet requirements of this

section. Extensions in a redelivery

period granted by the Customs Service

will be correspondingly extended by the

Secretary, upon request of the importer.

Importers unable to account for the

disposition of all peanuts covered in a

redelivery order, or redeliver such

peanuts, shall be liable for liquidated

damages. Failure to fully comply with

quality and handling requirements or

failure to notify the Secretary of

disposition of all foreign produced

peanuts, as required under this section,

may result in a compliance investigation

by the Secretary. Falsification of reports

submitted to the Secretary is a violation

of Federal law punishable by fine or

imprisonment, or both.

(5) Reinspection. Whenever the

Secretary has reason to believe that

peanuts may have been damaged or

deteriorated while in storage, the

Secretary may reject the then effective

inspection certificate and may require

the importer to have the peanuts

reinspected to establish whether or not

such peanuts may be disposed of for

human consumption.

(6) Early arrival and storage. Peanut

lots sampled and inspected upon arrival

in the United States, but placed in

storage for more than one month prior

to beginning of the quota year for which

the peanuts will be entered, must be

reported to AMS at the time of

inspection. The importer shall file

copies of the Customs Service

documentation showing the volume of

peanuts placed in storage and location,

including any identifying number of the

storage warehouse. Such peanuts should

be stored in clean, dry warehouses and

under cold storage conditions consistent

with industry standards. Pursuant to

paragraph (f)(5) of this section, the

Secretary may require reinspection of

the lot at the time the lot is declared for

entry with the Customs Service.

(g) Additional requirements. (1)

Nothing contained in this section shall

preclude any importer from milling or

reconditioning, prior to importation,

any shipment of peanuts for the purpose

of making such lot eligible for

importation into the United States.

However, all peanuts presented for

entry for human consumption use must

be certified as meeting the quality

requirements specified in paragraph (c)

of this section.

(2) Conditionally released peanut lots

of like quality and belonging to the same

importer may be commingled. Defects in

an inspected lot may not be blended out

by commingling with other lots of

higher quality. Commingling also must

be consistent with applicable Customs

Service regulations. Commingled lots

must be reported and disposed of

pursuant to paragraphs (f)(2) and (f)(3)

of this section.

(3) Inspection by the Federal or

Federal-State Inspection Service shall be

available and performed in accordance

with the rules and regulations governing

certification of fresh fruits, vegetables

and other products (7 CFR part 51). The

importer shall make each conditionally

released lot available and accessible for

inspection as provided herein. Because

inspectors may not be stationed in the

immediate vicinity of some ports-ofentry, importers must make

arrangements for sampling, inspection,

and certification through one of the

offices and laboratories listed in

paragraphs (d)(3) and (d)(4) of this

section, respectively.

(4) Imported peanut lots sampled and

inspected at the port-of-entry, or at other

locations, shall meet the quality

requirements of this section in effect on

the date of inspection.

(5) A foreign-produced peanut lot

entered for consumption or for

warehouse may be transferred or sold to

another person: Provided, That the

original importer shall be the importer

of record unless the new owner applies

for bond and files Customs Service

documents pursuant to 19 CFR

§§141.113 and 141.20; and Provided

further, That such peanuts must be

certified and reported to the Secretary

pursuant to paragraphs (f)(2) and (f)(3)

of this section.

(6) The cost of transportation,

sampling, inspection, certification,

chemical analysis, and identification, as

well as remilling and blanching, and

further inspection of remilled and

blanched lots, and disposition of failing

peanuts, shall be borne by the importer.

Whenever peanuts are presented for

inspection, the importer shall furnish

any labor and pay any costs incurred in

moving, opening containers, and

shipment of samples as may be

necessary for proper sampling and

inspection. The inspection service shall

bill the importer for fees covering

quality and size inspections; time for

sampling; packaging and delivering

aflatoxin samples to laboratories;

certifications of lot identification and lot

transfer to other locations, and other

inspection certifications as may be

necessary to verify edible quality or

inedible disposition, as specified herein.

The USDA and PAC-approved

laboratories shall bill the importer

separately for fees for aflatoxin assay.

The importer also shall pay all required

Customs Service costs as required by

that agency.

(7) Each person subject to this section

shall maintain true and complete

records of activities and transactions

specified in these regulations. Such

records and documentation

accumulated during entry shall be

retained for not less than two years after

the calendar year of acquisition, except

that Customs Service documents shall

be retained as required by that agency.

The Secretary, through duly authorized

representatives, shall have access to any

such person’s premises during regular

business hours and shall be permitted,

at any such time, to inspect such

records and any peanuts held by such

person.

(8) The provisions of this section do

not supersede any restrictions or

prohibitions on peanuts under the

Federal Plant Quarantine Act of 1912,

the Federal Food, Drug and Cosmetic

Act, any other applicable laws, or

regulations of other Federal agencies,

including import regulations and

procedures of the Customs Service.

Dated: December 31, 1996.

Larry B. Lace,

Acting Director, Fruit and Vegetable Division.

[FR Doc. 97–283 Filed 1–8–97; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 96–NM–51–AD; Amendment

39–9878; AD 97–01–07]

RIN 2120–AA64

Airworthiness Directives; British

Aerospace Model BAe 146 and Avro

146–RJ Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule.

SUMMARY: This amendment adopts a

new airworthiness directive (AD),

applicable to all British Aerospace

Model BAe 146 and Avro 146–RJ series

airplanes, that requires modification of

the left and right elevators, and

replacement of the elevator spring with

a stiffer spring. This amendment is

prompted by reports indicating that

water and ice have accumulated at the

trailing edge of the left and right

elevators; this accumulation can cause