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###### Department of Agriculture

###### Agricultural Marketing Service 

          - 7 CFR Part 983 
          - [Docket No. AMS-FV-07-0095; FV07-983-2 FR] 

# AGENCY:

Agricultural Marketing Service, USDA. 

# ACTION:

Final rule.

# SUMMARY:

This rule changes the current reporting requirements prescribed under the California pistachio marketing order (order). The order regulates the handling of pistachios grown in California and is administered locally by the Administrative Committee for Pistachios (committee). These changes will modify one existing committee form and add a new form to a currently-approved information collection. The information collected will require handlers to report production and producer data, enabling the committee to obtain better information for preparing its annual marketing policy statement and conducting committee nominations and periodic referenda under the order. 

# DATES:

*Effective Date:*                         April 8, 2008.                     

# FOR FURTHER INFORMATION CONTACT:

                        Terry Vawter, Senior Marketing Specialist, or Kurt J. Kimmel, Regional Manager, California Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or E-mail:                         *Terry.Vawter@usda.gov*                         or                         *Kurt.Kimmel@usda.gov.*

                        Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or E-mail:                         *Jay.Guerber@usda.gov.*

# SUPPLEMENTARY INFORMATION:

This final rule is issued under Marketing Order No. 983 (7 CFR part 983), regulating the handling of pistachios grown in California, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” 

The Department of Agriculture (USDA) is issuing this rule in conformance with Executive 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 rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. 

                    The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with 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. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed                           ( print page 18704)                        not later than 20 days after the date of the entry of the ruling.                 

This final rule changes the reporting requirements prescribed under the order. These changes will modify one committee form and add a new form to the currently-approved information collection. The new form will require handlers to report production and producer data. This new data will enable the committee to obtain better information for preparing its annual marketing policy statement and for conducting committee nominations and periodic referenda for pistachio producers. These changes were unanimously recommended by the committee on April 2, 2007. 

Under § 983.47 handlers are required to furnish such reports as the committee, with the approval of the Secretary, needs to enable the Secretary and the committee to perform their functions. 

As a result of a producer referendum, the California Pistachio Commission (CPC), a California State marketing program, was terminated in the spring of 2007. Data historically collected by the CPC and shared with the committee is no longer available. Such data includes information on the total available supply of pistachios grown in California and on the producers who produced the pistachios. 

Thus, the committee unanimously recommended changes to its reporting requirements to capture information necessary for the effective administration of the Federal order that is no longer available through the CPC. Specifically, the committee recommended revising its current ACP Form 7, “Monthly Report of Inventory/Shipments,” and creating a new form, ACP Form 8, “Producer Delivery Report.” These forms will allow the committee to collect production, producer, inventory, and shipment data from handlers.   

Requiring handlers to report such data will enable the committee to obtain better information on the total available supply of pistachios grown in California and to contact pistachio producers. The order requires the committee to prepare an annual marketing policy statement, pursuant to § 983.37. Several elements are required for an acceptable marketing policy statement: production, harvesting, processing, and storage conditions data. The committee is also required to hold annual nominations for seats on the committee, and USDA is required to conduct periodic continuance referenda. The committee needs producer and production data to fulfill order requirements. 

Currently on the ACP Form 7, all handlers must report their beginning inventory, grower deliveries, shipments of pistachios to the domestic market, interhandler transfers, non-handler purchases of California product, inventory adjustments on split and shelled pistachios, and ending inventory on a monthly basis. This final rule will remove the requirement to report inventory adjustments to split and shelled pistachios, as the committee believes that this information is no longer needed. This final rule will also require handlers to report their export shipments. Export data was previously collected by the CPC and provided by some handlers voluntarily to the committee. 

On the new form, ACP Form 8, “Producer Delivery Report,” handlers will be required to annually provide the names of the producers who deliver pistachios to them, the producers’ mailing addresses and other contact information (telephone and facsimile numbers and e-mail addresses), the producers’ employer identification numbers, total receipts of pistachios from each producer, and the counties in which the pistachios were grown. These reports will allow the committee to identify all authorized voters for committee selections and referenda in which each business entity is entitled to cast one vote. Individual producers may produce and deliver pistachios under more than one business entity. The information collected on this report will also allow the committee to determine whether individual producers are eligible to represent more than one business entity, based upon Federal Tax Identification numbers. 

The information on producer deliveries will also allow the committee to track deliveries to handlers and verify that handlers pay the appropriate assessments on pistachios they receive. This information will also streamline handler audits for committee staff. 

Pursuant to § 983.147(c), handlers who handle less than 5,000 pounds annually will be exempt from filing ACP Form 8. These small handlers tend to be producers who handle their own production only and are known to the committee in their producer, as well as their handler, capacity. Therefore, the committee already has business entity, production, and contact information on the producers that are also exempt handlers. 

Such information will provide the committee with production and producer data to enhance the administration of the order. An electronic version of the form will be available to those handlers who file electronically. 

Since the addition of ACP Form 8 will require changes to the order's rules and regulations, § 983.147 will be modified to add a new paragraph (g), and to redesignate current paragraphs (g) and (h) as paragraphs (h) and (i). 

## Final Regulatory Flexibility Analysis 

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), AMS has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis. 

The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. 

There are approximately 740 producers in the production area and approximately 50 handlers of California pistachios subject to regulation under the order. The Small Business Administration (SBA) (13 CFR 121.201) defines small agricultural producers as those having annual receipts less than $750,000, and defines small agricultural service firms as those whose annual receipts are less than $6,500,000. Of the 740 producers, approximately 722 have annual receipts of less than $750,000. Forty-two of the 50 handlers subject to regulation have annual pistachio receipts of less than $6,500,000. Thus, the majority of producers and handlers of California pistachios may be classified as small entities. 

This final rule will change § 983.147 of the order's regulations, and revise a currently-approved information collection. The committee determined that production data the CPC previously collected and made available to the committee was still necessary for the efficient operation of the program. Therefore, the committee agreed that it should require handlers to report production and shipment data directly to the committee. In order to receive this data, the committee unanimously recommended that current ACP Form 7, “Monthly Report of Inventory/Shipments,” be revised and that a new form, ACP Form 8, “Producer Delivery Report,” be developed. Authority for these changes is provided in § 983.47. 

                    On April 2, 2007, the committee deliberated on the value of revising the current form and requiring the new form, and discussed alternatives. It                           ( print page 18705)                        determined that the only alternative would be to not collect such industry data. However, the order requires the committee to prepare an annual marketing policy statement. Several elements are required for an acceptable marketing policy statement: Production, harvesting, processing, and storage conditions data. The committee is also required to hold annual nominations for seats on the committee, and USDA is required to conduct periodic continuance referenda. Thus, the committee needs this data to fulfill order requirements.  The revised ACP Form 7 and the new ACP Form 8 have been approved by the Office of Management and Budget (OMB) under OMB No. 0581-0215, “Pistachios Grown in California.”                 

As with other marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. 

This final rule will impose additional reporting and recordkeeping burdens on handlers. However, any additional burden is expected to be offset by the efficient operation of the order. Handlers will continue to file the ACP Form 7 monthly and will file the ACP Form 8 annually, but the data collected will serve multiple purposes and streamline committee operations. In addition, as noted in the initial regulatory flexibility analysis, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this final rule. 

AMS is committed to complying with the E-Government Act to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to government information and services, and for other purposes. 

Further, the committee's meeting was widely publicized throughout the pistachio industry and all interested persons were encouraged to attend the meeting and participate in the committee's deliberations. Like all committee meetings, the April 2, 2007, meeting was a public meeting, and entities of all sizes were encouraged to express their views on these issues. 

                    A proposed rule was published in the                     **Federal Register**                     on September 7, 2007 (72 FR 173). Copies of the proposed rule were mailed or sent via facsimile to all committee members and handlers. Finally, the proposed rule was made available through the Internet, USDA and the Office of the Federal Register. A 60-day comment period ending November 6, 2007, was provided to allow interested persons to respond to the proposal. One opposing comment was received.                 

The commenter was opposed to the committee collecting and disseminating monthly export shipment and inventory data from handlers. According to the commenter, this data, when collected by the CPC in the past, proved valuable in evaluating market conditions and measuring the effectiveness of marketing efforts by the industry. However, the commenter stated that the export data is no longer necessary because the Federal order only regulates domestically shipped product and not exports. The commenter also expressed concern with the accuracy of the inventory data, and contends that such discrepancies are deliberate or accidental errors in the reporting to the committee. The commenter stated a preference for standardized inventory reporting practices because there are no standards for determining inventory levels. The commenter argues that, without set procedures, handlers could easily manipulate their reported inventory to seek competitive advantage in the marketplace. 

Regarding the concerns about export shipments, the order provides authority for the collection of information from handlers, which includes shipment data. The committee believes that this information is valuable to the industry, and unanimously voted to collect this information under the Federal order. 

Regarding the concerns about the accuracy of the monthly inventory data, the ACP-7 requires handlers to report an “inventory adjustment” figure, which is an adjustment to inventory due to issues including splitting, shelling, shrink, and loss of product. According to committee staff, there is variability in the way handlers store and manage their pistachios, which creates differences in how handlers report inventory adjustments. The committee is exploring ways to improve the accuracy of this information. 

Accordingly, no changes will be made to this rule based on the comment received. 

                    A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at:                     *http://www.ams.usda.gov/​fv/​moab/​html.*                     Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the                     **FOR FURTHER INFORMATION CONTACT**                     section.                 

After consideration of all relevant material presented, including the information and recommendation submitted by the 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 that good cause exists for not postponing the effective date of this rule until 30 days after publication in the                     **Federal Register**                     because the data required through this rule is no longer available from the CPC, and the committee needs this information to ensure proper administration of the Federal order. Further, handlers are aware of this rule, which was unanimously recommended by the committee at a public meeting. Also, a 60-day comment period was provided for the proposed rule.                 

# List of Subjects in 7 CFR Part 983

      - Pistachios
      - Marketing agreements and orders
      - Reporting and recordkeeping requirements

For the reasons set forth in the preamble, 7 CFR part 983 is amended as follows:

# PART 983—PISTACHIOS GROWN IN CALIFORNIA 

1. The authority citation for 7 CFR part 983 continues to read as follows: 

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

2. In § 983.147, current paragraphs (g) and (h) are redesignated as paragraphs (h) and (i), and a new paragraph (g) is added to read as follows: 

§ 983.147 

* * * * *

                            (g)                             *ACP-8, Producer Delivery Report.*                             Each handler of pistachios shall file this report with the committee by the 15th day of December of each production year:                             *Provided,*                             That for the 2007-08 production year, handlers must file this report with the committee by April 17, 2008, to report his/her receipts of pistachios during the current production year, the names of the handlers’ producing entities, business type, and the following information concerning each producing entity: Federal Tax Identification number; mailing and e-mail address; telephone and fax number; total bearing acres; county of production; and for the current production year, the total receipts of open inshell, closed shell, shelling stock of each producing entity; and total pounds of processed pistachios produced by each producing entity.                         

* * * * *

      ( print page 18706)    
Dated: April 2, 2008. 

Lloyd C. Day, 

Administrator, Agricultural Marketing Service. 

[FR Doc. 08-1109 Filed 4-3-08; 1:02 pm] 

BILLING CODE 3410-02-P