[Federal Register Volume 87, Number 63 (Friday, April 1, 2022)]
[Proposed Rules]
[Pages 19020-19024]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-06521]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 87, No. 63 / Friday, April 1, 2022 / Proposed 
Rules

[[Page 19020]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Doc. No. 22-J-0011; AMS-SC-22-0010; SC22-981-1]


Marketing Order for Walnuts Grown and Handled in California (M.O. 
No. 984); Hearing

AGENCY: Agricultural Marketing Service, Department of Agriculture 
(USDA).

ACTION: Notification of hearing on proposed rulemaking.

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SUMMARY: Notice is hereby given of a public hearing to receive evidence 
on proposed amendments to Federal Marketing Order No. 984 (Order) 
regulating the handling of walnuts grown in California. The California 
Walnut Board (Board), which locally administers the Order, recommended 
proposed amendments that would eliminate mandatory inspection and 
certification of inshelled and shelled walnuts, and of shelled walnuts 
for processing; create a new mechanism for determining and collecting 
handler assessments; add authority to charge interest for late 
payments; and remove volume control authority. In addition, the 
Agricultural Marketing Service (AMS) proposes to make changes to the 
Order as may be necessary to conform to any amendment that may result 
from the hearing.

DATES: The hearing will be held April 19-20, 2022, from 8:00 a.m. to 
5:00 p.m. Pacific Time (PT) and, if deemed necessary by the presiding 
administrative law judge, will continue until any other such time as 
determined by the judge.

ADDRESSES: USDA will conduct the hearing remotely, without gathering in 
a central location, using the ZOOM audio-video conferencing system. 
Individuals will be able to testify before the administrative law judge 
for the hearing record through their own computer or any other 
technology that supports the ZOOM application. To participate remotely 
in the hearing via audio-video technology, participant's computers must 
have operating camera, microphone and audio functions. While not 
required, individuals wanting to participate as audience members may 
pre-register by providing their name, phone number and email address to 
Geronimo Quinones and Matthew Pavone of the Market Development 
Division, Specialty Crops Program, AMS, USDA, whose contact information 
is listed in the FOR FURTHER INFORMATION CONTACT section below, by 5:00 
p.m. Eastern Time (ET), April 12, 2022. All pre-registered individuals 
will receive an invitation via email prior to the hearing. The 
invitation will include a link the individuals can click at the start 
of the hearing on April 19, 2022, and April 20, 2022. Individuals who 
choose not to pre-register may access the hearing on-line by cutting 
and pasting https://www.zoomgov.com/j/1609318451 into their web 
browser.
    Cellular or land-line telephones may be used by individuals who do 
not have access to a computer with operating camera, microphone and 
audio functions. To access the on-line hearing by telephone, 
participants may dial either of the following Zoom generated phone 
numbers: [669-254-5252 or 646-828-7666 or 669-216-1590 or 551-285-
1373].
    Individuals who would like to testify (witnesses) may provide 
electronic copies of any prepared statements and supporting documents 
to LaShawn Williams of the Market Development Division, Specialty Crops 
Program, AMS, USDA, via email at <a href="/cdn-cgi/l/email-protection#4905281a21283e27671e2025252028243a093c3a2d28672e263f"><span class="__cf_email__" data-cfemail="b1fdd0e2d9d0c6df9fe6d8ddddd8d0dcc2f1c4c2d5d09fd6dec7">[email protected]</span></a>, so that 
they can be made public at the time of the hearing. These documents 
will be published to the AMS website at the following location https://www.ams.usda.gov/rules-regulations/moa/984-california-walnuts.

FOR FURTHER INFORMATION CONTACT: Geronimo Quinones, Market Development 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW, Stop 0237, Washington, DC 20250-0237; Telephone: (202) 308-2339 or 
Andrew Hatch, Market Development Division, Specialty Crops Program, 
AMS, USDA, 1400 Independence Avenue SW, Stop 0237, Washington, DC 
20250-0237; Telephone: (202) 720-2491, or Email: 
<a href="/cdn-cgi/l/email-protection#fabd9f889594939795d4ab8f939495949f89ba8f899e9bd49d958c"><span class="__cf_email__" data-cfemail="afe8caddc0c1c6c2c081fedac6c1c0c1cadcefdadccbce81c8c0d9">[email protected]</span></a> or <a href="/cdn-cgi/l/email-protection#f9b8979d8b9c8ed7b1988d9a91b98c8a9d98d79e968f"><span class="__cf_email__" data-cfemail="a6e7c8c2d4c3d188eec7d2c5cee6d3d5c2c788c1c9d0">[email protected]</span></a>.
    Small businesses may request information on this proceeding by 
contacting Richard E. Lower, Market Development Division, Specialty 
Crops Program, AMS, USDA, 1400 Independence Avenue SW, Stop 0237, 
Washington, DC 20250-0237; Telephone: (202) 720-2491, or Email: 
<a href="/cdn-cgi/l/email-protection#b0e2d9d3d8d1c2d49efcdfc7d5c2f0c5c3d4d19ed7dfc6"><span class="__cf_email__" data-cfemail="e3b18a808b829187cdaf8c948691a396908782cd848c95">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This administrative action is instituted 
pursuant to the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.'' 
This action is governed by the provisions of sections 556 and 557 of 
title 5 of the United States Code and, therefore, is excluded from the 
requirements of Executive Order 12866, 13563, and 13175. The 
Agricultural Marketing Service (AMS) provided notice of the upcoming 
hearing to tribal governments through USDA's Office of Tribal 
Relations.
    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) seeks to 
ensure that within the statutory authority of a program, the regulatory 
and informational requirements are tailored to the size and nature of 
small businesses. Interested persons are invited to present evidence at 
the hearing on the possible regulatory and informational impacts of the 
proposals on small businesses.
    The amendments proposed herein have been reviewed under Executive 
Order 12988, Civil Justice Reform. They are not intended to have 
retroactive effect.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with USDA a petition 
stating that the order, any provision of the order, or any obligation 
imposed in connection with the order is not in accordance with law and 
request a modification of the order or to be exempted therefrom. A 
handler is afforded the opportunity for a hearing on the petition. The 
Act provides that the district court of the United States in any 
district in which the handler is an inhabitant, or has his or her 
principal place of business, has jurisdiction to review USDA's ruling 
on the petition, provided an action is filed no later than

[[Page 19021]]

20 days after the date of the entry of the ruling.
    The hearing is convened in accordance with the provisions of the 
Act and the applicable rules of practice and procedure governing the 
formulation and amendment of marketing agreements and orders (7 CFR 
part 900).
    On October 28, 2021, the proposed amendments to Marketing Order No. 
984 (7 CFR part 984 (hereinafter referred to as the ``Order'')) were 
recommended to the Secretary with a request for a public hearing by the 
Board. The Board also requested the current moratorium on enforcement 
of mandatory inspection requirements be extended until the effective 
date of the proposed amendments summarized in this notification, if 
approved. After reviewing the proposals and other information submitted 
by the Board, USDA concludes that the proposed amendments to the Order 
will tend to effectuate the declared policy of the Act, and therefore 
decided to schedule this matter for a hearing.
    The Board administers the Order, with the oversight of USDA. The 
Board's proposed amendments would modify quality control provisions to 
remove inspection and certification requirements, create a new 
mechanism for determining and collecting handler assessments, add 
authority to charge interest for late payments, and remove volume 
control authority. The proposals also include changes to various 
provisions in the ``Assessment Rates'' and ``Administrative 
Requirements'' subparts of the Order. As proposed, inspection and 
certification of outbound walnuts would no longer be required, and 
handler assessments would be calculated based on a proposed assessment 
rate recommended by the Board and applied to handlers' inbound walnuts 
instead of outbound walnuts.
    In its request to USDA for a public hearing, the Board stated that 
the proposed amendments are necessary to streamline the Order and if 
implemented, the resulting Order will better meet current and future 
industry needs. The Board believes the proposed amendments would 
eliminate current redundancies in inspection, reduce costs and 
administrative burden to handlers and the Board, and provide a cost 
savings to growers.
    The Board's request further explained that current handler quality 
control programs across industry have advanced since the enactment of 
the Order in 1948. For example, over 300,000 tons of growth of 
additional production in the last decade has coincided with higher 
consumer expectations and present-day customer specifications, and each 
exceed the grades and standards currently required under the Order. As 
such, the Board is seeking to modernize the Order by eliminating 
inspection and certification requirements and removing volume control 
provisions so that the Order focuses primarily on research and 
promotion.
    In the Board's justification for its recommendation to remove 
volume control, the Board cited how this authority has not been 
utilized since 1987 and following the indefinite suspension of this 
authority on June 8, 2020 (85 FR 27107), no economic harm came to 
producers, handlers or consumers. The Board does not expect to use this 
authority in the future, and therefore proposed to permanently remove 
it from the Order.
    In the justification for the recommendation on revising quality 
control regulations, the Board explains that significant investments in 
processing, storage, technology, and equipment have ensured better food 
safety programs that are able to maintain higher walnut quality and 
conditions that exceed the minimum grades and standards currently set 
forth in the Order. The Board further stated that it is common practice 
for industry to conduct quality inspections on inbound shipments of 
walnuts. Current quality regulations for grade and size under the Order 
require an additional inspection and certification on outbound walnuts. 
This resulted in two forms of inspections being conducted by handlers: 
One performed on inbound walnuts and a second on outbound walnuts. The 
Board stated that these inspections are redundant and unnecessary. 
Therefore, the Board proposes to remove current grade and size 
requirements; however, the authority to recommend regulation if needed 
in the future would remain in place. The inspection and certification 
requirements for outbound walnuts and walnuts for processing currently 
prescribed under the Order would also be removed under this proposal. 
If implemented, the Board states the proposed amendments would remove 
the redundancy of the outbound inspection, thus reducing costs to both 
handlers and producers and reducing administrative burden to the Board. 
Accordingly, inspection and certification requirements for imported 
walnuts would also be removed.
    In the Board's justification for creating a new mechanism to 
determine assessments, the Board explained that current requirements 
established under the Order are based on kernelweight pound of walnuts 
inspected and certified. As such, the proposed elimination of mandatory 
inspection and certification requirements would remove the Board's 
ability to collect handler assessments. The proposed new mechanism 
would change the type of weight used in the calculation, replacing 
kernelweight with inshell pound. It would also establish the 
calculating of assessments on walnuts received rather than on walnuts 
shipped by handlers. If implemented, the Board states this new 
mechanism, which is adapted from the California Walnut Commission, 
would require handlers to provide inbound walnut receipts from growers 
to the Board. The Board has proposed an initial assessment rate of 
$0.0125 per inshell pound of walnuts that would go into effect with the 
start of the proposed new mechanism, if it were to be effectuated. The 
Order provides authority for the Board, with the approval of USDA, to 
formulate an annual budget of expenses and collect assessments from 
handlers to administer the program. If the assessment proposal is 
effectuated, the new assessment mechanism, the annual budget, and the 
assessment rate would be communicated to handlers through annual pre-
season packets and bulletins.
    The Board states the current Order language does not provide for 
the changes necessary for its alignment with current industry practices 
without undertaking substantive formal and informal rulemaking. As 
such, the Board recommended several amendments to the Order and 
associated administrative requirements, summarized as follows:
    <bullet> Remove Sec.  984.49 Volume regulation, reserve pool 
authority, and subsequent sections including provisions for volume 
control. This includes removing: Sec. Sec.  984.23, 984.26, 984.33, 
984.54, 984.56, 984.66, 984.69(b), 984.450(a) and (b), 984.451(c), 
984.456, and 984.464(a), and revising: Sec. Sec.  984.48 and 984.67.
    <bullet> Modify Sec.  984.50 Grade, quality, and size regulations 
to remove quality and size regulations and include only the Board's 
authority and eliminate Sec. Sec.  984.51 and 984.52 inspection and 
certification of inshell and shelled walnuts and shelled walnuts for 
processing. This includes revising: Sec. Sec.  984.12, 984.32, 984.64, 
984.69, 984.77, 984.459(a)(3), and 984.472(b) and removing: Sec. Sec.  
984.450(c), 984.451(a) and (b), 984.452, and 984.464(b) and (c).
    <bullet> Modifying the definition in Sec.  984.13 ``To handle'' to 
include ``receive''.
    <bullet> Revise Sec.  984.69 by changing the calculation of 
assessments from kernelweight to inshell pound in paragraph (a) and 
revising paragraph (b) to include an authority to charge for late

[[Page 19022]]

payments and/or interest as prescribed by the Board with approval from 
the Secretary. Corresponding changes would be made to Sec. Sec.  
984.37, 984.48, 984.69, and 984.347.
    <bullet> Revise Sec.  984.347 to establish an assessment rate of 
$0.0125 per inshell pound of walnuts.
    <bullet> Any additional conforming changes resulting from the above 
proposed amendments.
    In its recommendation, the Board stated that the above proposed 
changes were discussed at several meetings where stakeholders were 
provided the opportunity to express their views and provide input, and 
have the broadest possible support from the industry. The Board 
discussed and recommended the proposed amendments at public meetings on 
August 17 and September 10, 2021. The Board then voted and approved the 
proposed amendments. Four of the five proposals received unanimous 
support, and the proposal to establish an initial assessment rate 
received seven votes in favor and two opposed.
    In addition to the proposed amendments submitted by the Board, AMS 
proposes to make any such conforming changes to the Order as may be 
necessary to conform to any amendment that may result from the hearing, 
or to correct minor inconsistencies and typographical errors.
    USDA will oversee this formal rulemaking proceeding. The issuance 
of this notification of public hearing is the first of several steps in 
the amendatory rulemaking process, including the issuance of a 
recommended decision, public comment period, Secretary's decision, 
grower referendum, and handler sign-up (if the prior steps prove 
favorable).
    The public hearing process will further explain the merits of the 
proposed amendments. At the hearing, interested persons may provide 
testimony in support of or in opposition to the proposed amendments. 
Interested persons will be invited to testify on the possible 
regulatory and informational impact of the proposed amendments on small 
businesses.
    Interested persons will also be provided the opportunity to file 
briefs in support of or in opposition to the proposed amendments after 
the hearing, as well as file exceptions to any recommended decision 
that may be issued. Finally, any proposed amendments must be approved 
in a grower referendum before they can be implemented.
    USDA will hold the public hearing for the purposes of: (i) 
Receiving evidence about the economic and marketing conditions which 
relate to the proposed amendments of the Order; (ii) determining 
whether there is a need for the proposed amendments to the Order; (iii) 
determining if there are other alternatives to this program or 
duplicates of the proposed program; and (iv) determining whether the 
proposed amendments or appropriate modifications thereof will tend to 
effectuate the declared policy of the Act.
    Testimony is invited at the hearing on all the proposals and 
recommendations contained in this notification, as well as any 
appropriate modifications or alternatives.
    All persons wishing to submit written material as evidence at the 
hearing in advance should submit electronic copies of such material to 
LaShawn Williams of the Market Development Division, Specialty Crops 
Program, AMS, USDA, via email at <a href="/cdn-cgi/l/email-protection#b7fbd6e4dfd6c0d999e0dedbdbded6dac4f7c2c4d3d699d0d8c1"><span class="__cf_email__" data-cfemail="206c41734841574e0e77494c4c49414d5360555344410e474f56">[email protected]</span></a>. These 
documents will be published to the AMS website at the following 
location https://www.ams.usda.gov/rules-regulations/moa/984-california-walnuts. Electronic copies of prepared testimony for presentation at 
the hearing and electronic copies of evidentiary exhibits and testimony 
prepared as an exhibit should also be made available on the day of 
appearance at the hearing. Any requests for preparation of USDA data 
for this rulemaking hearing should be made at least 10 days prior to 
the beginning of the hearing.
    From the time the notification of hearing is issued until the 
issuance of a final decision in this proceeding, USDA employees 
involved in the decisional process are prohibited from discussing the 
merits of the hearing issues on an ex parte basis with any person 
having an interest in the proceeding. The prohibition applies to 
employees who are or may reasonably be expected to be involved in the 
decisional process of the proceeding in the following organizational 
units: Office of the Secretary of Agriculture; Office of the 
Administrator, AMS; Office of the General Counsel; and the Specialty 
Crops Program, AMS.
    Procedural matters are not subject to the above prohibition and may 
be discussed at any time.
    USDA may make other such changes to the Order as necessary to 
conform with amendments that may result from the hearing, or correct 
minor inconsistencies and typographical errors.
    Testimony is invited on the recommended proposals to 7 CFR part 
984, or appropriate alternatives or modifications to such proposals.

List of Subjects in 7 CFR Part 984

    Marketing agreements, Nuts, Reporting and recordkeeping 
requirements.

PART 984--WALNUTS GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 984 continues to read as 
follows:

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

0
2. Section 984.12 is revised to read as follows:


Sec.  984.12  Substandard walnuts.

    Substandard walnuts means all walnuts (whether inshell or shelled) 
that do not meet the minimum standard prescribed for merchantable 
walnuts whenever regulations are in effect pursuant to Sec.  984.50.
0
3. Section 984.13 is revised to read as follows:


Sec.  984.13  To handle.

    To handle means to receive, pack, sell, consign, transport, or ship 
(except as a common or contract carrier of walnuts owned by another 
person), or in any other way to put walnuts, inshell or shelled, into 
the current of commerce either within the area of production or from 
such area to any point outside thereof, or for a manufacturer or 
retailer within the area of production to purchase directly from a 
grower. However, sales and deliveries by a grower to handlers, hullers, 
or other processors within the area of production shall not, in itself, 
be considered as handling by a grower. The term ``to handle'' shall not 
include sales and deliveries within the area of production between 
handlers.
0
4. Section 984.21 is revised to read as follows:


Sec.  984.21  Handler inventory.

    Handler inventory as of any date means all walnuts, inshell or 
shelled, wherever located, then held by a handler or for his or her 
account.


Sec. Sec.  984.23 and 984.26  [Removed and Reserved]

0
5. Lift the stays on Sec. Sec.  984.23 and 984.26 and remove and 
reserve the sections.
0
6. Section 984.32 is revised to read as follows:


Sec.  984.32  To certify.

    To certify means the issuance of a certification of inspection of 
walnuts in accordance with regulations issued pursuant to Sec.  984.50.


Sec.  984.33  [Removed and Reserved]

0
7. Lift the stay on Sec.  984.33 and remove and reserve the section.

[[Page 19023]]

0
8. Amend Sec.  984.37 by revising paragraphs (b) and (c)(4) to read as 
follows:


Sec.  984.37  Nominations.

* * * * *
    (b) Nominations for handler members shall be submitted on ballots 
mailed by the Board to all handlers in their respective Districts. All 
handlers' votes shall be weighted by the weight of inshell walnuts 
handled by each handler during the preceding marketing year. Each 
handler in the production area may vote for handler member nominees and 
their alternates. However, no handler with less than 35% of the crop 
shall have more than one member and one alternate member. The person 
receiving the highest number of votes for each handler member position 
shall be the nominee for that position.
    (c) * * *
    (4) Nominations for handler members representing handlers that do 
not handle 35% or more of the crop shall be submitted on ballots mailed 
by the Board to those handlers. The votes of these handlers shall be 
weighted by the weight of inshell walnuts handled by each handler 
during the preceding marketing year. Each handler in the production 
area may vote for handler member nominees and their alternates of this 
paragraph (c)(4). However, no handler shall have more than one person 
on the Board either as member or alternate member. The person receiving 
the highest number of votes for a handler member position of this 
paragraph (c)(4) shall be the nominee for that position.
* * * * *
0
9. Amend Sec.  984.48 by:
0
a. Revising paragraphs (a) introductory text and (a)(3);
0
b. Lifting the stays on paragraphs (a)(6) and (7); and
0
c. Removing paragraphs (a)(6) and (7) and redesignating paragraphs 
(a)(8) and (9) as paragraphs (a)(6) and (7), respectively.
    The revisions read as follows:


Sec.  984.48  Marketing estimates and recommendations.

    (a) Each marketing year the Board shall hold a meeting, prior to 
October 20, for the purpose of recommending to the Secretary a 
marketing policy for such year. Each year such recommendation shall be 
adopted by the affirmative vote of at least 60% of the Board and shall 
include the following:
* * * * *
    (3) Its estimate of the walnuts in the production area;
* * * * *


Sec.  984.49  [Removed and Reserved]

0
10. Lift the stay on Sec.  984.49 and remove and reserve the section.
0
11. Amend Sec.  984.50 by lifting the stay on paragraph (e) and 
revising the section to read as follows:


Sec.  984.50  Grade, quality, and size regulations.

    (a) The Board may recommend, subject to the approval of the 
Secretary, regulations that:
    (1) Establish handling requirements for particular grades, sizes, 
or qualities, or any combination thereof, of any or all varieties or 
classifications of walnuts during any period;
    (2) Establish different handling requirements and tolerance limits 
for particular grades, sizes, or qualities, or any combination thereof, 
for different market destinations;
    (3) Establish different handling requirements for the processing of 
shelled walnuts and the handling thereof; and
    (4) Establish inspection and certification requirements for the 
purposes of this paragraph (a) and paragraph (b) of this section.
    (b) During any period regulations issued under this section are in 
effect, no handler shall handle or process walnuts into manufactured 
items or products unless they meet the applicable requirements under 
this section as evidenced by certification acceptable to the Board.
    (c) Regulations issued under this section may be amended, modified, 
suspended, or terminated whenever it is determined:
    (1) That such action is warranted upon recommendation of the Board 
and approval by the Secretary, or other available information; or
    (2) That regulations issued under this section no longer tend to 
effectuate the declared policy of the Act.


Sec. Sec.  984.51 and 984.52  [Removed and Reserved]

0
12. Remove and reserve Sec. Sec.  984.51 and 984.52


Sec. Sec.  984.54 and 984.56  [Removed and Reserved]

0
13. Lift the stays on Sec. Sec.  984.54 and 984.56 and remove and 
reserve the sections.
0
14. Amend Sec.  984.64 by:
0
a. Revising the first sentence; and
0
b. Removing ``(a)'' and ``(b)'' in the second sentence.
    The revision reads as follows:


Sec.  984.64  Disposition of substandard walnuts.

    During any period when regulations are in effect pursuant to Sec.  
984.50, substandard walnuts may be disposed of only for manufacture 
into oil livestock feed, or such others uses as the Board determines to 
be noncompetitive with existing domestic and export markets for 
merchantable walnuts and with proper safeguards to prevent such walnuts 
from thereafter entering channels of trade in such markets. * * *


Sec.  984.66  [Removed and Reserved]

0
15. Lift the stay on Sec.  984.66 and remove and reserve the section.


Sec.  984.67  [Amended]

0
16. Amend Sec.  984.67 by lifting the stay on paragraph (a) and 
removing and reserving paragraph (a).
0
17. Amend Sec.  984.69 by lifting the stay on paragraph (b) and 
revising the section to read as follows:


Sec.  984.69  Assessments.

    (a) Requirement for payment. Each handler shall pay the Board, on 
demand, his or her pro rata share of the expenses authorized by the 
Secretary for each marketing year. Each handler's pro rata share shall 
be the rate of assessment per inshell pound of walnuts fixed by the 
Secretary times the pounds of walnuts received by him or her for his or 
her own account (except as to receipt from other handlers on which 
assessments have been paid). At any time during or after the marketing 
year the Secretary may increase the assessment rate as necessary to 
cover authorized expenses and each handler's pro rata share shall be 
adjusted accordingly.
    (b) Assessment rate. The rate set out in this section may be 
modified by the Secretary, based upon a recommendation of the Board or 
other available data.
    (c) Late payment. If a handler does not pay assessments within the 
time prescribed by the Board, the assessment may be increased by a late 
payment charge and/or an interest rate charge at amounts prescribed by 
the Board with approval of the Secretary.
    (d) Accounting. If at the end of a marketing year the assessments 
collected are in excess of expenses incurred, such excess shall be 
accounted for in accordance with one of the following:
    (1) If such excess is not retained in a reserve, as provided in 
paragraph (d)(2) or (3) of this section, it shall be refunded to 
handlers from whom collected, and each handler's share of such excess 
funds shall be the amount of assessments he or she has paid in excess 
of his or her pro rata share of the actual expenses of the Board.

[[Page 19024]]

    (2) Excess funds may be used temporarily by the Board to defray 
expenses of the subsequent marketing year provided each handler's share 
of such excess shall be made available to him or her by the Board 
within five months after the end of the year.
    (3) The Board may carry over such excess into subsequent marketing 
years as a reserve: Provided, that funds already in reserve do not 
exceed approximately two years' budgeted expenses. In the event that 
funds exceed two marketing years' budgeted expenses, future assessments 
will be reduced to bring the reserves to an amount that is less than or 
equal to two marketing years' budgeted expenses. Such reserve funds may 
be used:
    (i) To defray expenses, during any marketing year, prior to the 
time assessment income is sufficient to cover such expenses;
    (ii) To cover deficits incurred during any year when assessment 
income is less than expenses;
    (iii) To defray expenses incurred during any period when any or all 
provisions of this part are suspended; and
    (iv) To meet any other such costs recommended by the Board and 
approved by the Secretary.
    (e) Advanced assessments and commercial loans. To provide funds for 
the administration of the provisions of this part during the part of a 
fiscal period when neither sufficient operating reserve funds nor 
sufficient revenue from assessments on the current season's 
certifications are available, the Board may accept payment of 
assessments in advance or may borrow money from a commercial lending 
institution for such purposes.
    (f) Termination. Any money collected from assessments hereunder and 
remaining unexpended in the possession of the Board upon termination of 
this part shall be distributed in such manner as the Secretary may 
direct.
0
18. Section 984.77 is revised to read as follows:


Sec.  984.77  Verification of reports.

    For the purpose of verifying and checking reports filed by handlers 
or the operations of handlers, the Secretary and the Board through its 
duly authorized representatives shall have access to any premises where 
walnuts and walnut records are held. Such access shall be available at 
any time during reasonable business hours. Authorized representatives 
shall be permitted to inspect any walnuts held and any and all records 
of the handler with respect to matters within the purview of this part. 
Each handler shall maintain complete records on the receiving, holding, 
and disposition of both inshell and shelled walnuts. Each handler shall 
furnish all labor necessary to facilitate such inspections at no 
expense to the Board or the Secretary. Each handler shall store all 
walnuts held by him or her in such manner as to facilitate inspection 
and shall maintain adequate storage records, which will permit accurate 
identification of respective lots and of all such walnuts held or 
disposed of theretofore. The Board, with the approval of the Secretary, 
may establish any methods and procedures needed to verify reports.
0
19. Section 984.347 is revised to read as follows:


Sec.  984.347  Assessment rate.

    An assessment rate shall be fixed at $0.125 per inshell pound of 
walnuts.


Sec.  Sec.  984.450 and 984.451  [Removed and Reserved]

0
20. Lift the stays on Sec. Sec.  984.450(a) and (b) and 984.451(c) and 
remove and reserve the sections.


Sec.  984.452  [Removed and Reserved]

0
21. Remove and reserve Sec.  984.452.


Sec.  984.456  [Removed and Reserved]

0
22. Lift the stay on Sec.  984.456 and remove and reserve the section.


Sec.  984.459  [Amended]

0
23. Amend Sec.  984.459 by removing and reserving paragraph (a)(3).


Sec.  984.464  [Removed and Reserved]

0
24. Lift the stay on Sec.  984.464(a) and remove and reserve the 
section.
0
25. Amend Sec.  984.472 by revising paragraph (b) to read as follows:


Sec.  984.472  Reports of merchantable walnuts, received, shipped, and 
committed.

* * * * *
    (b) Reports of walnuts purchased directly from growers by handlers 
who are manufacturers or retailers shall be submitted to the Board on 
CWB Form No. 6, not later than the 5th day of the month following the 
month in which the walnuts were purchased. Such reports shall show the 
quantity of walnuts purchased.
* * * * *
0
26. Section 984.476 is revised to read as follows:


Sec.  984.476  Report of walnut receipts produced outside California or 
the United States.

    Each handler who receives walnuts from outside California or the 
United States shall file with the Board, on CWB Form No. 7, a report of 
the receipt of such walnuts. The report shall be filed as follows: On 
or before December 5 for such walnuts received during the period 
September 1 to November 30; on or before March 5 for such walnuts 
received during the period December 1 to February 28 (February 29 in a 
leap year); on or before June 5 for such walnuts received during the 
period March 1 to May 31; and on or before September 5 for such walnuts 
received during the period June 1 to August 31. The report shall 
include the quantity of such walnuts received, the country of origin 
for such walnuts, and whether such walnuts are inshell or shelled.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-06521 Filed 3-31-22; 8:45 am]
BILLING CODE P


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