This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

57485 

Vol. 73, No. 193 

Friday, October 3, 2008 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 984 

[Docket No. AMS–FV–08–0054; FV08–984– 

1 FR] 

Walnuts Grown in California; Increased 

Assessment Rate 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: This rule increases the 

assessment rate established for the 

California Walnut Board (Board) for the 

2008–09 marketing year from $0.0122 to 

$0.0158 per kernelweight pound of 

assessable walnuts. The Board locally 

administers the marketing order which 

regulates the handling of walnuts grown 

in California. Assessments upon walnut 

handlers are used by the Board to fund 

reasonable and necessary expenses of 

the program. The 2008–09 marketing 

year began on September 1, 2008, and 

ends on August 31, 2009. The 

assessment rate will remain in effect 

indefinitely unless modified, 

suspended, or terminated. 

DATES: Effective Date: October 6, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Martin J. Engeler, 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: 

Martin.Engeler@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 rule 

is issued under Marketing Order No. 

984, as amended (7 CFR part 984), 

regulating the handling of walnuts 

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 rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. Under the marketing order now 

in effect, California walnut handlers are 

subject to assessments. Funds to 

administer the order are derived from 

such assessments. It is intended that the 

assessment rate as established herein 

will be applicable to all assessable 

walnuts beginning on September 1, 

2008, and continue 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. 

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. Such 

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 not later than 

20 days after the date of the entry of the 

ruling. 

This rule increases the assessment 

rate established for the Board for the 

2008–09 and subsequent marketing 

years from $0.0122 to $0.0158 per 

kernelweight pound of assessable 

walnuts. The 2008–09 marketing year 

begins on September 1, 2008, and ends 

on August 31, 2009. 

The California walnut marketing 

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. The members 

of the Board are producers and handlers 

of California walnuts. They are familiar 

with the Board’s needs and the costs for 

goods and services in their local area 

and are thus in a position to formulate 

an appropriate budget and assessment 

rate. The assessment rate is formulated 

and discussed at a public meeting. 

Thus, all directly affected persons have 

an opportunity to participate and 

provide input. 

For the 2007–08 and subsequent 

marketing years, the Board 

recommended, and USDA approved, an 

assessment rate of $0.0122 per 

kernelweight pound of assessable 

walnuts that would continue in effect 

from year to year unless modified, 

suspended, or terminated by USDA 

upon recommendation and information 

submitted by the Board or other 

information available to USDA. 

The Board met on May 28, 2008, and 

unanimously recommended 2008–09 

expenditures of $4,594,300 and an 

assessment rate of $0.0158 per 

kernelweight pound of assessable 

walnuts. In comparison, 2007–08 

budgeted expenditures were $3,777,120. 

The assessment rate of $0.0158 per 

kernelweight pound of assessable 

walnuts is $0.0036 per pound higher 

than the 2007–08 assessment rate. The 

increased assessment rate is necessary 

to cover increased expenses in the areas 

of domestic market promotion, 

production research activities, and 

Board operating expenses. The higher 

assessment rate should generate 

sufficient income to cover anticipated 

2008–09 expenses. 

The following table compares major 

budget expenditures recommended by 

the Board for the 2007–08 and 2008–09 

marketing years: 


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57486 Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Rules and Regulations 

Budget expense categories 2007–08 2008–09 

Employee Expenses .................................................................................................................................... $438,600 $410,500 

Travel/Board Expenses ............................................................................................................................... 86,000 100,000 

Office Costs/Annual Audit ............................................................................................................................ 139,500 142,500 

Program Expenses Including Research 

Controlled Purchases ........................................................................................................................... 5,000 5,000 

Crop Acreage Survey ........................................................................................................................... 85,000 

Crop Estimate ....................................................................................................................................... 100,000 110,000 

Production Research* ........................................................................................................................... 730,000 835,000 

Domestic Market Development ............................................................................................................ 2,002,000 2,935,000 

Reserve for Contingency ...................................................................................................................... 191,020 56,300 

*Includes Research Director’s compensation and a contingency for production research issues. 

The assessment rate recommended by 

the Board was derived by dividing 

anticipated expenses by expected 

shipments of California walnuts 

certified as merchantable. Merchantable 

shipments for the year are estimated at 

290,773,800 kernelweight pounds 

which should provide $4,594,300 in 

assessment income and allow the Board 

to cover its expenses. Unexpended 

funds may be retained in a financial 

reserve, provided that funds in the 

financial reserve do not exceed 

approximately two year’s budgeted 

expenses. If not retained in a financial 

reserve, unexpended funds may be used 

temporarily to defray expenses of the 

subsequent marketing year, but must be 

made available to the handlers from 

whom collected within 5 months after 

the end of the year, according to 

§ 984.69 of the order. 

The estimate for merchantable 

shipments is based on historical data, 

which is the prior year’s production of 

323,082 tons (inshell). Pursuant to 

§ 984.51(b) of the order, this figure was 

converted to a merchantable 

kernelweight basis using a factor of 0.45 

(323,082 tons × 2,000 pounds per ton × 

0.45). 

The assessment rate established in 

this rule will continue in effect 

indefinitely unless modified, 

suspended, or terminated by USDA 

upon recommendation and information 

submitted by the Board or other 

available information. 

Although this assessment rate will be 

in effect for an indefinite period, the 

Board will continue to meet prior to or 

during each marketing year to 

recommend a budget of expenses and 

consider recommendations for 

modification of the assessment rate. The 

dates and times of Board meetings are 

available from the Board or USDA. 

Board meetings are open to the public 

and interested persons may express 

their views at these meetings. USDA 

will evaluate Board recommendations 

and other available information to 

determine whether modification of the 

assessment rate is needed. Further 

rulemaking will be undertaken as 

necessary. The Board’s 2008–09 budget 

and those for subsequent fiscal periods 

will be reviewed and, as appropriate, 

approved by USDA. 

Final Regulatory Flexibility Analysis 

Pursuant to requirements set forth in 

the Regulatory Flexibility Act (5 U.S.C. 

601–612) (RFA), the Agricultural 

Marketing Service (AMS) has 

considered the economic impact of this 

rule 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 currently 58 handlers of 

California walnuts subject to regulation 

under the marketing order and 

approximately 4,000 producers in the 

production area. Small agricultural 

service firms are defined by the Small 

Business Administration (SBA) (13 CFR 

121.201) as those whose annual receipts 

are less than $6,500,000, and small 

agricultural producers are defined as 

those whose annual receipts are less 

than $750,000. 

Industry information for the most 

recent complete season indicates that 18 

of 53 handlers (34 percent) shipped over 

$6,500,000 of merchantable walnuts and 

could be considered large handlers by 

the SBA. Thirty-five of 53 walnut 

handlers (66 percent) shipped under 

$6,500,000 of merchantable walnuts and 

could be considered small handlers. 

The number of large walnut growers 

(annual walnut revenue greater than 

$750,000) can be estimated as follows. 

According to the National Agricultural 

Statistics Service (NASS), the two-year 

average yield per acre for 2005 and 2006 

is approximately 1.63 tons. A grower 

with 287 acres with an average yield of 

1.63 tons per acre would produce 

approximately 468 tons. The season 

average of grower prices for 2005 and 

2006 published by NASS is $1,600 per 

ton. At that average price, the 468 tons 

produced on 287 acres would yield 

slightly less than $750,000 in annual 

revenue. The 2002 Agricultural Census 

indicated two percent of walnut farms 

were between 250 and 500 acres in size. 

The 287 acres would produce, on 

average, slightly less than the small 

business threshold level of $750,000 in 

annual revenue from walnuts, and is 

near the lower end of the 250 to 500 

acreage range category of the 2002 

census. Thus, it can be concluded that 

the number of large walnut farms in 

2006 was likely around two percent. 

Based on the foregoing, it can be 

concluded that the majority of 

California walnut handlers and 

producers may be classified as small 

entities. 

This rule increases the assessment 

rate established for the Board and 

collected from handlers for the 2008–09 

and subsequent marketing years from 

$0.0122 per kernelweight pound of 

assessable walnuts to $0.0158 per 

kernelweight pound of assessable 

walnuts. The Board unanimously 

recommended 2008–09 expenditures of 

$4,594,300 and an assessment rate of 

$0.0158 per kernelweight pound of 

assessable walnuts. The assessment rate 

of $0.0158 is $0.0036 higher than the 

2007–08 assessment rate. The quantity 

of assessable walnuts for the 2008–09 

marketing year is estimated at 323,082 

tons, or 290,773,800 kernelweight 

pounds. Thus, the $0.0158 rate should 

provide $4,594,300 in assessment 

income and be adequate to meet the 

year’s expenses. The increased 

assessment rate is primarily due to 

increased budget expenditures. 

The following table compares major 

budget expenditures recommended by 

the Board for the 2007–08 and 2008–09 

fiscal years: 


jlentini on PROD1PC65 with RULES
Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Rules and Regulations 57487 

Budget expense categories 2007–08 2008–09 

Employee Expenses .................................................................................................................................... $438,600 $410,500 

Travel/Board Expenses ............................................................................................................................... 86,000 100,000 

Office Costs/Annual Audit ............................................................................................................................ 139,500 142,500 

Program Expenses Including Research: 

Controlled Purchases ........................................................................................................................... 5,000 5,000 

Crop Acreage Survey ........................................................................................................................... 85,000 ..............................

Crop Estimate ....................................................................................................................................... 100,000 110,000 

Production Research * .......................................................................................................................... 730,000 835,000 

Domestic Market Development ............................................................................................................ 2,002,000 2,935,000 

Reserve for Contingency ...................................................................................................................... 191,020 56,300 

* Includes Research Director’s compensation and contingency for production research issues. 

The Board reviewed and unanimously 

recommended 2008–09 expenditures of 

$4,594,300. Prior to arriving at this 

budget, the Board considered alternative 

expenditure levels, but ultimately 

decided that the recommended levels 

were reasonable to properly administer 

the order. The assessment rate 

recommended by the Board was derived 

by dividing anticipated expenses by 

expected shipments of California 

walnuts certified as merchantable. 

Merchantable shipments for the year are 

estimated at 290,773,800 kernelweight 

pounds which should provide 

$4,594,300 in assessment income and 

allow the Board to cover its expenses. 

Unexpended funds may be retained in 

a financial reserve, provided that funds 

in the financial reserve do not exceed 

approximately two year’s budgeted 

expenses. If not retained in a financial 

reserve, unexpended funds may be used 

temporarily to defray expenses of the 

subsequent marketing year, but must be 

made available to the handlers from 

whom collected within 5 months after 

the end of the year, according to 

§ 984.69 of the order. 

According to NASS, the season 

average grower price for years 2006 and 

2007 were $1,630 and $2,320 per ton, 

respectively. These prices provide a 

range within which the 2008–09 season 

average price could fall. Dividing these 

average grower prices by 2,000 pounds 

per ton provides an inshell price per 

pound range of $0.815 to $1.16. 

Dividing these inshell prices per pound 

by the 0.45 conversion factor (inshell to 

kernelweight) established in the order 

yields a 2008–09 price range estimate of 

$1.81 to $2.58 per kernelweight pound 

of assessable walnuts. 

To calculate the percentage of grower 

revenue represented by the assessment 

rate, the assessment rate of $0.0158 per 

kernelweight pound is divided by the 

low and high estimates of the price 

range. The estimated assessment 

revenue for the 2008–09 marketing year 

as a percentage of total grower revenue 

would thus likely range between 0.612 

and 0.873 percent. 

This action increases the assessment 

obligation imposed on handlers. While 

assessments impose some additional 

costs on handlers, the costs are minimal 

and uniform on all handlers. Some of 

the additional costs may be passed on 

to producers. However, these costs are 

offset by the benefits derived by the 

operation of the marketing order. In 

addition, the Board’s meeting was 

widely publicized throughout the 

California walnut industry and all 

interested persons were invited to 

attend the meeting and participate in 

Board deliberations on all issues. Like 

all Board meetings, the May 28, 2008, 

meeting was a public meeting and all 

entities, both large and small, were 

provided the opportunity to express 

views on this issue. 

This rule imposes no additional 

reporting or recordkeeping requirements 

on either small or large California 

walnut handlers. As with all Federal 

marketing order programs, reports and 

forms are periodically reviewed to 

reduce information requirements and 

duplication by industry and public 

sector agencies. 

AMS is committed to complying with 

the E-Government Act, to promote the 

use of Internet and other information 

technologies to provide increased 

opportunities for citizen access to 

Government information and services, 

and for other purposes. 

As noted in the initial regulatory 

flexibility analysis, USDA has not 

identified any relevant Federal rules 

that duplicate, overlap, or conflict with 

this rule. 

A proposed rule concerning this 

action was published in the Federal 

Register on July 25, 2008 (73 FR 43378). 

Copies of the proposed rule were also 

mailed or sent via facsimile to walnut 

handlers. Finally, the proposal was 

made available through the Internet by 

USDA and the Office of the Federal 

Register. A 15-day comment period 

ending August 11, 2008, was provided 

to allow interested persons to respond 

to the proposal. 

One comment was received during 

the comment period in response to the 

proposed rule. The comment was 

submitted by the Executive Director of 

the Board. The commenter points out 

that the proposed rule would establish 

the 2008–09 marketing year as a 13- 

month period from August 1, 2008, 

through August 31, 2009, and the 

assessment rate increase would be 

effective as of August 1, 2008. The 

commenter further states that the order 

was recently amended to change the 

marketing year from August through 

July to September through August. 

Accordingly, when the Board 

formulated its 2007–08 budget in May 

2007, it established a 13-month period 

beginning on August 1, 2007, and 

ending on August 31, 2008, as its 

marketing year to accommodate the 

order amendment. Expenditures were 

planned and budgeted accordingly. The 

Board subsequently recommended its 

2008–09 marketing year budget in May 

2008 to cover a 12-month period 

beginning September 1, 2008, and 

ending August 31, 2009. The Board also 

intended for the assessment rate to be 

effective with the new marketing year 

beginning September 1, 2008. 

The commenter also noted that one 

section of the proposed rule incorrectly 

references total budgeted expenses of 

$4,954,300. The correct amount, as 

referenced correctly in another section 

of rule should be $4,594,300. The 

commenter also states that Budget 

Expense Category tables in the proposed 

rule are incorrect because it omits a 

$30,000 item for production research 

contingencies and should need 

$835,000 instead of $805,000. Finally, 

the commenter indicated that the 

statement at the asterisk, which explains 

that the Research Director’s 

compensation is included in the 

Production Research budget, should be 

modified to state that production 

research contingencies are also included 

in that budget. 

As a result of this comment, 

modifications to the proposed rule are 

being made in this final rule. In order 


jlentini on PROD1PC65 with RULES
57488 Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Rules and Regulations 

to ensure consistency and continuity in 

the Board’s financial planning and 

operations, and to recognize the recent 

order amendment revising the 

marketing year, the assessment rate 

change and the 2008–09 marketing year 

will become effective September 1, 

2008. Additional modification is made 

to correct the erroneous references to 

the total expenditures. Finally, the rule 

is further modified to change the Budget 

Expense Category tables to include the 

amount budgeted for production 

research contingencies and the 

statement at the asterisk to indicate the 

production research contingencies are 

part of the Production Research budget. 

Although the tables were not necessarily 

intended to capture all the Board’s 

expenses, the modifications may 

provide more clarity. 

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/ 

AMSv1.0/ams.fetchTemplateData.do?

template=TemplateN&page=Marketing

OrdersSmallBusinessGuide. 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 Board and other 

available information, it is hereby found 

that this rule, as hereinafter set forth, 

will tend to effectuate the declared 

policy of the Act. 

Pursuant to 5 U.S.C. 553, it is also 

found and determined that good cause 

exists for not postponing the effective 

date of this rule until 30 days after 

publication in the Federal Register 

because the 2008–09 marketing year 

began on September 1, 2008, and the 

marketing order requires that the rate of 

assessment for each year apply to all 

assessable walnuts handled during the 

year; the Board needs to have sufficient 

funds to pay its expenses which are 

incurred on a continuous basis; and 

handlers are aware of this action which 

was unanimously recommended by the 

Board at a public meeting and is similar 

to other assessment rate actions issued 

in past years. Also, a 15-day comment 

period was provided for in the proposed 

rule and no comments in opposition to 

the rule were received. 

List of Subjects in 7 CFR Part 984 

Walnuts, Marketing agreements, Nuts, 

Reporting and recordkeeping 

requirements. 

■ For the reasons set forth in the 

preamble, 7 CFR part 984 is amended as 

follows: 

PART 984—WALNUTS GROWN IN 

CALIFORNIA 

■ 1. The authority citation for 7 CFR 

part 984 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

■ 2. Section 984.347 is revised to read 

as follows: 

§ 984.347 Assessment rate. 

On and after September 1, 2008, an 

assessment rate of $0.0158 per 

kernelweight pound is established for 

California merchantable walnuts. 

Dated: September 29, 2008. 

Lloyd C. Day, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. E8–23390 Filed 10–2–08; 8:45 am] 

BILLING CODE 3410–02–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 204 

[Regulation D; Docket No. R–1297] 

Reserve Requirements of Depository 

Institutions 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Final rule. 

SUMMARY: The Board is amending 

Regulation D, Reserve Requirements of 

Depository Institutions, to reflect the 

annual indexing of the reserve 

requirement exemption amount and the 

low reserve tranche for 2009. The 

Regulation D amendments set the 

amount of total reservable liabilities of 

each depository institution that is 

subject to a zero percent reserve 

requirement in 2009 at $10.3 million, up 

from $9.3 million in 2008. This amount 

is known as the reserve requirement 

exemption amount. The Regulation D 

amendment also sets the amount of net 

transaction accounts at each depository 

institution that is subject to a three 

percent reserve requirement in 2009 at 

$44.4 million, up from $43.9 million in 

2008. This amount is known as the low 

reserve tranche. The adjustments to both 

of these amounts are derived using 

statutory formulas specified in the 

Federal Reserve Act. 

The Board is also announcing changes 

in two other amounts, the nonexempt 

deposit cutoff level and the reduced 

reporting limit, that are used to 

determine the frequency at which 

depository institutions must submit 

deposit reports. 

DATES: Effective date: November 3, 

2008. 

Compliance dates: For depository 

institutions that report deposit data 

weekly, the new low reserve tranche 

and reserve requirement exemption 

amount will apply to the fourteen-day 

reserve computation period that begins 

Tuesday, December 2, 2008, and the 

corresponding fourteen-day reserve 

maintenance period that begins 

Thursday, January 1, 2009. For 

depository institutions that report 

deposit data quarterly, the new low 

reserve tranche and reserve requirement 

exemption amount will apply to the 

seven-day reserve computation period 

that begins Tuesday, December 16, 

2008, and the corresponding seven-day 

reserve maintenance period that begins 

Thursday, January 15, 2009. For all 

depository institutions, these new 

values of the nonexempt deposit cutoff 

level, the reserve requirement 

exemption amount, and the reduced 

reporting limit will be used to 

determine the frequency at which a 

depository institution submits deposit 

reports effective in either June or 

September 2009. 

FOR FURTHER INFORMATION CONTACT: 

Sophia Allison, Senior Counsel (202/ 

452–3565), Legal Division, or Margaret 

Gillis DeBoer, Senior Financial Analyst 

(202/452–3139), Division of Monetary 

Affairs; for users of 

Telecommunications Device for the Deaf 

(TDD) only, contact (202/263–4869); 

Board of Governors of the Federal 

Reserve System, 20th and C Streets, 

NW., Washington, DC 20551. 

SUPPLEMENTARY INFORMATION: Section 

19(b)(2) of the Federal Reserve Act (12 

U.S.C. 461(b)(2)) requires each 

depository institution to maintain 

reserves against its transaction accounts 

and nonpersonal time deposits, as 

prescribed by Board regulations, for the 

purpose of implementing monetary 

policy. 

Section 11(a)(2) of the Federal Reserve 

Act (12 U.S.C. 248(a)(2)) authorizes the 

Board to require reports of liabilities 

and assets from depository institutions 

to enable the Board to conduct monetary 

policy. The Board’s actions with respect 

to each of these provisions are discussed 

in turn below. 

1. Reserve Requirements 

Pursuant to section 19(b) of the 

Federal Reserve Act (Act), transaction 

account balances maintained at each 

depository institution are subject to 

reserve requirement ratios of zero, three, 

or ten percent. Section 19(b)(11)(A) of 

the Act (12 U.S.C. 461(b)(11)(A)) 

provides that a zero percent reserve 


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