[Federal Register Volume 63, Number 148 (Monday, August 3, 1998)]
[Rules and Regulations]
[Pages 41182-41184]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20641]



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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 997 and 998

[Docket Nos. FV98-997-1 IFR and FV98-998-1 IFR]


Domestically Produced Peanuts; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule decreases the administrative assessment rate 
established for the Peanut Administrative Committee (Committee) under 
Marketing Agreement No. 146 (Agreement) for the 1998-99 and subsequent 
crop years from $0.35 to $0.33 per net ton of assessable peanuts. The 
Committee is responsible for local administration of the Agreement 
which regulates the handling of peanuts grown in 16 States. 
Authorization to assess peanut handlers who have signed the Agreement 
enables the Committee to incur expenses that are reasonable and 
necessary to administer the program. The Agreement is effective under 
the Agricultural Marketing Agreement Act of 1937, as amended (Act). The 
Act also requires the Department of Agriculture (Department) to impose 
the same administrative assessment rate on assessable peanuts received 
or acquired by handlers who have not signed the Agreement. The 1998-
1999 crop year covers the period July 1 through June 30. The assessment 
rate will continue in effect indefinitely unless modified, suspended, 
or terminated.

DATES: Effective August 4, 1998. Comments received by October 2, 1998, 
will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-6456; Fax 
(202) 205-6632. Comments should reference the docket numbers and the 
date and page number of this issue of the Federal Register and will be 
available for public inspection in the Office of the Docket Clerk 
during regular business hours.

FOR FURTHER INFORMATION CONTACT: Jim Wendland, Marketing Specialist, DC 
Marketing Field Office, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 2525-S, 
Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 205-
6632. Small businesses may request information on compliance with this 
regulation by contacting Jay Guerber, also at the above address, 
telephone, and fax number.

SUPPLEMENTARY INFORMATION: This rule is issued pursuant to the 
requirements of the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereafter referred to as the ``Act'', under 
Marketing Agreement No. 146 (7 CFR part 998), and under the Peanut Non-
Signer Program (7 CFR part 997). The marketing agreement and non-signer 
program, and the regulations issued thereunder regulate the quality of 
domestically produced peanuts.
    The Department is issuing this rule in conformance with Executive 
Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Farmers stock peanuts received or acquired by non-
signatory handlers and farmers stock peanuts received or acquired by 
handlers signatory to the Agreement, other than from those described in 
Sec. 998.31(c) and (d), are subject to the same assessment rate. It is 
intended that the assessment rates issued herein will be applicable to 
all assessable peanuts beginning July 1, 1998, and continue in effect 
until amended, suspended, or terminated. This 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.
    This rule decreases the assessment rate established for the 
Committee and non-signer handlers for the 1998-99 and subsequent crop 
years from $0.35 to $0.33 per net ton of assessable peanuts.
    The Agreement provides authority for the Committee, with the 
approval of the Department, to formulate an annual budget of expenses 
and collect assessments from handlers to administer the program. Funds 
to administer the Agreement program are paid to the Committee and are 
derived from signatory handler assessments. The Committee members 
include nine handlers and nine producers of peanuts. They are familiar 
with the Committee's needs and with the costs for goods and services in 
their local areas and, thus, are in a position to formulate an 
appropriate budget and assessment rate. The assessment rate is 
formulated and discussed in public meetings. Thus, all directly 
affected persons have an opportunity to participate and provide input. 
The handlers of peanuts who are directly affected have voluntarily 
signed the Agreement authorizing the expenses that may be incurred and 
the imposition of assessments.
    For the 1996-97 and subsequent crop years, the Committee 
recommended, and the Department approved, an assessment rate that would 
continue in effect from crop year to crop year indefinitely unless 
modified, suspended, or terminated by the Secretary, upon 
recommendation and information submitted by the Committee or other 
information available to the Secretary.
    The Committee met on May 27, 1998, and unanimously recommended for 
1998-99 a reduction in the administrative assessment rate from $0.35 to 
$0.33 per net ton of assessable peanuts, and administrative 
expenditures of $495,000. In comparison, last year's budgeted 
administrative expenditures were $525,000. The assessment rate of $0.33 
is $0.02 less than the rate currently in effect.
    Major expenditures recommended by the Committee for the 1998-99 
crop year compared with those budgeted for 1997-98 (in parentheses) 
include: $58,000 for executive salaries ($55,000), $43,500 for clerical 
salaries ($50,000), $129,000 for compliance officers salaries 
($125,000), $19,000 for payroll taxes ($18,000), $70,000 for employee 
benefits, ($65,000), $40,000 for committee members travel ($40,000), 
$55,000 for compliance officers travel ($60,000), $13,000 for office 
rent ($19,000), and $10,400 for the audit fee ($10,400).
    The Committee discussed alternatives to this rule, including 
alternative expenditure levels but decided that each of the budgeted 
expenses was reasonable and appropriate. It also discussed the 
alternative of not decreasing the assessment rate but decided it needed 
to decrease the rate to reduce handlers' costs as much as possible. The 
Committee also discussed an even lower rate, but decided that an 
assessment rate of less than $0.33 would not generate the income 
necessary to administer the program.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected receipts and acquisitions of 
farmers stock peanuts. Farmers stock peanuts received or acquired by 
handlers signatory to the Agreement, other than those peanuts described 
in Sec. 998.31(c) and (d), are subject to the assessments. Assessments 
are due on the 15th of the month following the month in which the 
farmers stock peanuts are received or acquired by signatory handlers.

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Peanut receipts and acquisitions for the year under the Agreement are 
estimated at 1,500,000 tons, which should provide $495,000 in 
assessment income. Approximately 95 percent of the domestically 
produced peanut crop is handled by handlers who signed the Agreement. 
The remaining 5 percent is handled by non-signer handlers.
    The Act provides for mandatory assessment of farmers stock peanuts 
acquired by non-signatory peanut handlers. Section 608b of the Act 
specifies that: (1) Any assessment (except indemnification assessments) 
imposed under the Agreement with signatory handlers also shall apply to 
non-signatory handlers, and (2) such assessment shall be paid to the 
Secretary. Thus, the assessment rate of $0.33 per net ton of assessable 
peanuts also applies to non-signatory handlers of domestic peanuts.
    The assessment rates established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by the 
Secretary upon recommendation and information submitted by the 
Committee or other available information.
    Although these assessment rates are effective for an indefinite 
period, the Committee will continue to meet prior to or during each 
crop year to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate for signatory 
handlers. The dates and times of Committee meetings are available from 
the Committee or the Department. Committee meetings are open to the 
public and interested persons may express their views at these 
meetings. The Department will evaluate Committee recommendations and 
other available information to determine whether modification of the 
assessment rate is needed. Further rulemaking will be undertaken as 
necessary. The Committee's 1998-99 budget and those for subsequent crop 
years will be reviewed and, as appropriate, approved by the Department.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule on small entities. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. There are approximately 
80 peanut handlers who are subject to regulation under the Agreement or 
the non-signer program and approximately 25,000 commercial peanut 
producers in the 16-State production area. Small agricultural service 
firms, which include handlers, are 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 are defined as those 
having annual receipts of less than $500,000. Approximately 25 percent 
of the signatory handlers, virtually all of the non-signer handlers, 
and most of the producers may be classified as small entities.
    This rule decreases the assessment rate established for the 
Committee and to be collected from handlers for the 1998-99 and 
subsequent crop years from $0.35 to $0.33 per net ton. The rate is 
$0.02 less than the 1997-98 rate.
    The Committee discussed alternatives to this rule, including 
alternative expenditure levels but decided that each of the budgeted 
expenses was reasonable and appropriate. It also discussed the 
alternative of not decreasing the assessment rate. However, it decided 
against this course of action. The peanut industry has been in a state 
of economic decline since 1991, with the Committee attempting to cut 
costs where possible. The Committee's budget for 1998-99 is $495,000, 
$30,000 less than the amount budgeted for 1997-98. Based on an 
estimated 1,500,000 net tons of assessable peanuts, income derived from 
handler assessments during 1998-99 will be adequate to cover budgeted 
expenses.
    Major expenditures recommended by the Committee for the 1998-99 
crop year compared with those budgeted for 1997-98 (in parentheses) 
include: $58,000 for executive salaries ($55,000), $43,500 for clerical 
salaries($50,000), $129,000 for compliance officers salaries 
($125,000), $19,000 for payroll taxes ($18,000), $70,000 for employee 
benefits, ($65,000), $40,000 for committee members travel ($40,000), 
$55,000 for compliance officers travel ($60,000), $13,000 for office 
rent ($19,000), and $10,400 for the audit fee ($10,400).
    The Committee reviewed historical information and preliminary 
information pertaining to the 1998-99 crop year. The Department 
reported 1.463 million acres planted in peanuts for the 1998 crop. The 
Committee projected shipments for the 1998-99 crop year to be 1.5 
million net tons. Based on 1997-98 crop figures, the approximately 
$560,000 in total assessments collected by the Committee as a 
percentage of the $932,000,000 total peanut crop value was only 0.0006 
percent. With a decreased assessment rate, the relationship of total 
assessment cost as a percentage of total crop value is expected to be 
even smaller for the 1998-99 crop.
    This action decreases the administrative assessment obligation 
imposed on all domestic peanut handlers, whether signers or non-
signers. Assessments are applied uniformly on all handlers, and some of 
the costs may be passed on to producers. However, decreasing the 
assessment rate reduces the burden on handlers, and may reduce the 
burden on producers. In addition, the Committee's meeting was widely 
publicized throughout the peanut industry and all interested persons 
were invited to attend the meeting and participate in deliberations on 
all issues. Like all Committee meetings, the May 27, 1998, meeting was 
a public meeting and all entities, both large and small, were able to 
express views on this issue. Finally, interested persons are invited to 
submit information on the regulatory and informational impacts of this 
action on small businesses.
    This action will not impose any additional reporting or 
recordkeeping requirements on either small or large peanut handlers. As 
with all Federal marketing agreement and order programs, reports and 
forms are periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule.
    After consideration of all relevant matter presented, including the 
information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this action until 30 days after publication in the Federal Register 
because: (1) This action reduces the 1997-98 assessment rate for signer 
and non-signer handlers; (2) the Committee needs to have sufficient 
funds to pay its expenses which are incurred on a continuous basis; (3) 
the Act requires the Department to impose an administrative assessment 
on assessable peanuts received or acquired for the

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account of signatory and non-signatory handlers; (4) the 1998-99 crop 
year began on July 1, 1998, and the Agreement and the Act require that 
the rate of assessment for each crop year apply to all assessable 
peanuts received or acquired during such crop year; (5) signatory 
handlers are aware of this action which was unanimously recommended by 
the Committee at a public meeting and is similar to other assessment 
rate actions issued in past years; and (6) this interim final rule 
provides a 60-day comment period, and all written comments timely 
received will be considered prior to finalization of this rule.

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.

    For the reasons set forth in the preamble, 7 CFR parts 997 and 998 
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 parts 997 and 998 continues to 
read as follows:

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

    2. Section 997.101 is revised to read as follows:


Sec. 997.101  Assessment rate.

    On and after July 1, 1998, an administrative assessment rate of 
$0.33 per net ton of assessable farmers stock peanuts received or 
acquired by each non-signatory first handler is established for 
peanuts.

PART 998--MARKETING AGREEMENT REGULATING THE QUALITY OF 
DOMESTICALLY PRODUCED PEANUTS

    3. Section 998.409 is revised to read as follows:


Sec. 998.409  Assessment rate.

    On and after July 1, 1998, an administrative assessment rate of 
$0.33 per net ton of farmers stock peanuts received or acquired other 
than those described in Sec. 998.31(c) and (d) is established for 
handlers signatory to the Agreement. Assessments are due on the 15th of 
the month following the month in which the farmers stock peanuts are 
received or acquired.

    Dated: July 28, 1998
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-20641 Filed 7-31-98; 8:45 am]
BILLING CODE 3410-02-P