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.

Proposed Rules Federal Register

45208 

Vol. 82, No. 187 

Thursday, September 28, 2017 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 982 

[Doc. No. AO–SC–16–0136; AMS–SC–16– 

0074; SC16–982–1] 

Hazelnuts Grown in Oregon and 

Washington; Secretary’s Decision and 

Referendum Order on Proposed 

Amendments to Marketing Order No. 

982 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule and referendum 

order. 

SUMMARY: This decision proposes 

amendments to Marketing Order No. 

982 (order), which regulates the 

handling of hazelnuts grown in Oregon 

and Washington, and provides growers 

with the opportunity to vote in a 

referendum to determine if they favor 

the changes. Two amendments are 

proposed by the Hazelnut Marketing 

Board (Board), which is responsible for 

local administration of the order. The 

proposed amendments would add both 

the authority to regulate quality for the 

purpose of pathogen reduction and the 

authority to establish different 

regulations for different markets. In 

addition, the Agricultural Marketing 

Service (AMS) proposed to make any 

such changes as may be necessary to the 

order to conform to any amendment that 

may result from the public hearing. The 

proposals would aid in pathogen 

reduction and the industry’s ability to 

meet the needs of different market 

destinations. 

DATES: The referendum will be 

conducted from October 16, 2017, 

through November 3, 2017. The 

representative period for the purpose of 

the referendum is July 1, 2016, through 

June 30, 2017. 

ADDRESSES: Marketing Order and 

Agreement Division, Specialty Crops 

Program, AMS, USDA, 1400 

Independence Avenue SW., Stop 0237, 

Washington, DC 20250–0237. 

FOR FURTHER INFORMATION CONTACT: 

Melissa Schmaedick, Marketing Order 

and Agreement Division, Specialty 

Crops Program, AMS, USDA, Post Office 

Box 952, Moab, UT 84532; Telephone: 

(202) 557–4783, Fax: (435) 259–1502, or 

Julie Santoboni, Marketing Order and 

Agreement Division, Specialty Crops 

Program, AMS, USDA, 1400 

Independence Avenue SW., Stop 0237, 

Washington, DC 20250–0237; 

Telephone: (202) 720–2491, Fax: (202) 

720–8938, or Email: 

Melissa.Schmaedick@ams.usda.gov or 

Julie.Santoboni@ams.usda.gov. 

Small businesses may request 

information on this proceeding by 

contacting Richard Lower, Marketing 

Order and Agreement Division, 

Specialty Crops Program, AMS, USDA, 

1400 Independence Avenue SW., Stop 

0237, Washington, DC 20250–0237; 

Telephone: (202) 720–2491, Fax: (202) 

720–8938, or Email: Richard.Lower@

ams.usda.gov. 

SUPPLEMENTARY INFORMATION: Prior 

documents in this proceeding: Notice of 

Hearing issued on September 27, 2016, 

and published in the September 30, 

2016, issue of the Federal Register (81 

FR 67217) and a Recommended 

Decision issued on June 5, 2017, and 

published in the June 12, 2017, issue of 

the Federal Register (82 FR 26859). 

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 Orders 

12866, 13563, and 13175. Additionally, 

because this rule does not meet the 

definition of a significant regulatory 

action it does not trigger the 

requirements contained in Executive 

Order 13771. See OMB’s Memorandum 

titled ‘‘Interim Guidance Implementing 

Section 2 of the Executive Order of 

January 30, 2017 titled ‘Reducing 

Regulation and Controlling Regulatory 

Costs’ ’’ (February 2, 2017). 

Notice of this rulemaking action was 

provided to tribal governments through 

the Department of Agriculture’s (USDA) 

Office of Tribal Relations. 

Preliminary Statement 

The proposed amendments are based 

on the record of a public hearing held 

on October 18, 2016, in Wilsonville, 

Oregon. The hearing was held pursuant 

to the provisions of the Agricultural 

Marketing Agreement Act of 1937, as 

amended (7 U.S.C. 601–674), hereinafter 

referred to as the ‘‘Act,’’ and the 

applicable rules of practice and 

procedure governing the formulation of 

marketing agreements and orders (7 CFR 

part 900). Notice of this hearing was 

published in the Federal Register 

September 30, 2016 (81 FR 67217. The 

notice of hearing contained two 

proposals submitted by the Board and 

one submitted by USDA. 

The amendments in this decision 

would: 

(1) Add authority to regulate quality 

for the purpose of pathogen reduction; 

(2) Add authority to establish 

different outgoing quality regulations for 

different markets; and 

(3) Make any such changes as may be 

necessary to the order to conform to any 

amendment that may be adopted, or to 

correct minor inconsistencies and 

typographical errors. 

USDA is recommending one 

clarifying change to the language in the 

proposed new paragraph 982.45(c), 

which would add authority to regulate 

quality. USDA has determined that the 

language as presented in the Notice of 

Hearing was redundant and, therefore, 

confusing. USDA has revised the 

proposed language in the new paragraph 

§ 982.45 (c) so that its intent is more 

clearly stated. This new language is 

included in the proposed regulatory text 

of this decision. 

Upon the basis of evidence 

introduced at the hearing and the record 

thereof, the Administrator of AMS on 

June 5, 2017, filed with the Hearing 

Clerk, USDA, a Recommended Decision 

and Opportunity to File Written 

Exceptions thereto by July 12, 2017. No 

exceptions were filed. 

Final Regulatory Flexibility Analysis 

Pursuant to the 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 

businesses subject to such actions so 

that small businesses will not be unduly 

or disproportionately burdened. 

Marketing orders and amendments 

thereto are unique in that they are 

normally brought about through group 


jstallworth on DSKBBY8HB2PROD with PROPOSALS
Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Proposed Rules 45209 

action of essentially small entities for 

their own benefit. 

Hazelnut Industry Background and 

Overview 

According to the hearing transcript, 

there are currently over 800 hazelnut 

growers in the production area. 

According to National Agricultural 

Statistics Service (NASS) data presented 

at the hearing, 2015 grower receipts 

averaged $2,800 per ton. With a total 

2015 production of 31,000 tons, the 

farm gate value for hazelnuts in that 

year totaled $86.8 million ($2,800 per 

ton multiplied by 31,000 tons). Taking 

the total value of production for 

hazelnuts and dividing it by the total 

number of hazelnut growers provides a 

return per grower of $108,500. A small 

grower as defined by the Small Business 

Administration (SBA) (13 CFR 121.201) 

is one that grosses less than $750,000 

annually. Therefore, a majority of 

hazelnut growers are considered small 

entities under the SBA standards. 

Record evidence indicates that 

approximately 98 percent of hazelnut 

growers are small businesses. 

According to the industry, there are 

17 hazelnut handlers, four of which 

handle 80 percent of the crop. While 

market prices for hazelnuts were not 

included among the data presented at 

the hearing, an estimation of handler 

receipts can be calculated using the 

2015 grower receipt value of $86.8 

million. Multiplying $86.8 million by 80 

percent ($86.8 million × 80 percent = 

$69.4 million) and dividing by four 

indicates that the largest hazelnut 

handlers received an estimated $17.3 

million each. Dividing the remaining 20 

percent of $86.8 million, or $17.4 

million, by the remaining 13 handlers, 

indicates average receipts of $1.3 

million each. A small agricultural 

service firm is defined by the SBA as 

one that grosses less than $7,500,000. 

Based on the above calculations, a 

majority of hazelnut handlers are 

considered small entities under SBA’s 

standards. 

The production area regulated under 

the order covers Oregon and 

Washington. According to the record, 

Eastern Filbert Blight has heavily 

impacted hazelnut production in 

Washington. One witness stated that 

there currently is no commercial 

production in that state. As a result, 

production data entered into the record 

pertains almost exclusively to Oregon. 

NASS data indicates bearing acres of 

hazelnuts reached a fifteen-year high 

during the 2013–2014 crop year at 

30,000 acres. Acreage has remained 

steady, at 30,000 bearing acres for the 

2015–2016 crop year. By dividing 

30,000 acres by 800 growers, NASS data 

indicate there are approximately 37.5 

acres per grower. Industry testimony 

estimates that due to new plantings, 

there are potentially 60,000 bearing 

acres of hazelnuts, or an estimated 75 

bearing acres per hazelnut grower. 

During the hearing held October 18, 

2016, interested parties were invited to 

present evidence on the probable 

regulatory impact of the proposed 

amendments to the order on small 

businesses. The evidence presented at 

the hearing shows that none of the 

proposed amendments would have a 

significant economic impact on a 

substantial number of small agricultural 

growers or firms. 

Material Issue Number 1—Adding 

Authority To Regulate Quality 

The proposal described in Material 

Issue 1 would amend § 982.45 to 

authorize the Board to establish 

minimum quality requirements and 

§ 982.46 to allow for certification and 

inspection to enforce quality 

regulations. 

Presently, the Board is charged with 

assuring hazelnuts meet grade and size 

standards. The Board also has the 

authority to employ volume control. If 

finalized, this proposal would authorize 

the Board to propose quality regulations 

that require a treatment to reduce 

pathogen load prior to shipping 

hazelnuts. Witnesses supported this 

proposal and stated that treatment 

regulation would not significantly 

impact the majority of handlers since 

most handlers already treat product 

prior to shipment. Witness testimony 

indicated that the proposed amendment 

would lower the likelihood of a product 

recall incident and the associated 

negative economic impacts. Witnesses 

noted that the proposed amendment 

would give the Board flexibility to 

ensure consumer confidence in the 

quality of hazelnuts. 

It is determined that the additional 

costs incurred to regulate quality would 

be greatly outweighed by the increased 

flexibility for the industry to respond to 

changing quality regulation and food 

safety. There is expected to be no 

financial impact on growers. Mandatory 

treatment requirements should not 

cause dramatic increases in handler 

operating costs, as most already 

voluntarily treat hazelnuts. Handlers 

bear the direct cost associated with 

installing and operating treatment 

equipment or contract out the treatment 

of product to a third party. 

According to the industry, most 

domestic hazelnut product is shipped to 

California for treatment with propylene 

oxide. The cost to ship and treat product 

is estimated to be 10 cents per pound or 

less. Using 2014–2015 shipment data, at 

10 cents per pound, the cost to ship and 

treat the 6.5 million pounds of Oregon 

hazelnuts shipped to the domestic 

market is not expected to exceed 

$650,000. Shipments to foreign markets 

typically do not require treatment and 

therefore have no associated treatment 

costs. Large handlers who wish to 

install treatment equipment may face 

costs ranging from $100,000 to 

$5,000,000 depending on the treatment 

system. 

One witness noted that mandatory 

treatment would benefit the industry by 

addressing the free-rider situation in 

which handlers who do not treat the 

product benefit from consumer 

confidence while incurring additional 

risks. Handlers that do treat product 

absorb all costs of treatment while 

building the reputation of the industry. 

The record shows that the proposal to 

add authority to establish different 

outgoing quality requirements for 

different markets would, in itself, have 

no economic impact on growers or 

handlers of any size. Regulations 

implemented under that authority could 

impose additional costs on handlers 

required to comply with them. 

However, witnesses testified that 

establishing mandatory regulations for 

different markets could increase the 

industry’s credibility and reduce the 

risk that shipments of substandard 

product could jeopardize the entire 

industry’s reputation. Record evidence 

shows that any additional costs are 

likely to be offset by the benefits of 

complying with those requirements. 

For the reasons described above, it is 

determined that the costs attributed to 

the above-proposed changes are 

minimal; therefore, the proposal would 

not have a significant economic impact 

on a substantial number of small 

entities. 

Material Issue Number 2—Adding 

Authority for Different Market 

Regulations 

The proposal described in Material 

Issue 2 would allow for the 

establishment of different outgoing 

quality regulations for different markets. 

Witnesses testified that allowing 

different regulations for different 

markets would likely lower the costs to 

handlers and prevent multiple 

treatments of hazelnuts while 

preserving hazelnut quality. 

Certain buyers of hazelnuts do not 

require prior treatment and perform 

their own kill-step processes such as 

roasting, baking or pasteurization. A 

witness stated that two of the largest 

buyers of hazelnuts, Diamond of 


jstallworth on DSKBBY8HB2PROD with PROPOSALS
45210 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Proposed Rules 

California and Kraft Foods, Inc. choose 

to treat product after arrival. 

Shipments to foreign markets often do 

not require treatment and are treated 

after exportation. Testimony indicated 

that during the 2014–2015 season, of the 

9.5 million pounds of kernel hazelnuts 

shipped to Canada, almost all were 

further treated by the customers. In 

conjunction with the proposed quality 

authority discussed in Material Issue 1, 

specific regulation could be developed 

to exempt exported product, subject to 

further pathogen-reduction treatment in 

the country of purchase, from 

mandatory treatment. In Canada, the 

purchaser, not the handler, is 

responsible for providing pathogen 

reduction treatment. Requiring handlers 

to treat hazelnuts before export would 

be duplicative in cost and treatment. At 

10 cents per pound, it is estimated that 

on sales to Canada alone, handler 

savings could reach as much as 

$950,000 (9.5 million pounds of 

shipments multiplied by 10 cents per 

pound), if exempted from the 

mandatory treatment requirement. 

Hazelnuts shipped to China are 

typically processed after arrival and also 

do not necessitate treatment by handlers 

in the United States. 

China is a major export market for 

inshell hazelnuts. According to the 

hearing transcript, from 2011–2015, 54 

percent of inshell hazelnuts were 

exported. The total value of inshell 

exports was approximately $41,340,780, 

if 54 percent is multiplied by the 

$76,557,000 total hazelnut exports. In 

2015–2016 China received 90 percent of 

U.S. inshell hazelnut exports. The 

2015–2016 value of U.S. hazelnut 

exports to China is estimated to be 

approximately $37,206,702, or 90 

percent of the value of all U.S. inshell 

exports. Oregon hazelnuts compete 

primarily with Turkish (kernel) and 

Chilean (inshell) hazelnuts. Testimony 

indicates that multiple treatments of 

hazelnuts would likely affect the quality 

of hazelnuts. Allowing for different 

regulations for different markets would 

help Oregon and Washington hazelnuts 

compete in foreign markets and 

maintain U.S. market share. It is 

estimated that 80 to 90 percent of 

product is already being treated, and 

thus, the cost has already been 

incorporated into the price purchasers 

pay. 

One witness noted that shipments to 

the European Union may require 

different regulations since this market 

prefers certain treatment processes. 

The record shows that the proposal to 

add authority to establish different 

outgoing quality requirements for 

different markets would, in itself, have 

no economic impact on growers or 

handlers of any size. Regulations 

implemented under that authority could 

potentially impose additional costs on 

handlers required to comply with them. 

For the reasons described above, it is 

determined that the benefits of adding 

authority for different market 

regulations to the order would outweigh 

the potential costs of future 

implementation. 

USDA has not identified any relevant 

Federal rules that duplicate, overlap or 

conflict with this proposed rule. These 

amendments are intended to improve 

the operation and administration of the 

order and to assist in the marketing of 

hazelnuts. 

Board meetings regarding these 

proposals, as well as the hearing date 

and location, were widely publicized 

throughout the Oregon and Washington 

hazelnut industry, and all interested 

persons were invited to attend the 

meetings and the hearing to participate 

in Board deliberations on all issues. All 

Board meetings and the hearing were 

public forums, and all entities, both 

large and small, were able to express 

views on these issues. Finally, 

interested persons are invited to submit 

information on the regulatory impacts of 

this action on small businesses. 

Paperwork Reduction Act 

Current information collection 

requirements for part 982 are approved 

by OMB, under OMB Number 0581– 

0189—‘‘Generic OMB Fruit Crops.’’ No 

changes are anticipated in these 

requirements as a result of this 

proceeding. Should any such changes 

become necessary, they would be 

submitted to OMB for approval. 

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 Government Paperwork Elimination 

Act, which requires Government 

agencies in general to provide the public 

the option of submitting information or 

transacting business electronically to 

the maximum extent possible. 

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. 

Civil Justice Reform 

The amendments to the order 

proposed herein have been reviewed 

under Executive Order 12988, Civil 

Justice Reform. They are not intended to 

have retroactive effect. If adopted, the 

proposed amendments would not 

preempt any State or local laws, 

regulations, or policies, unless they 

present an irreconcilable conflict with 

this proposal. 

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 

no later than 20 days after the date of 

entry of the ruling. 

Findings and Conclusions 

The findings and conclusions, rulings, 

and general findings and determinations 

included in the Recommended Decision 

set forth in the June 12, 2017, issue of 

the Federal Register (82 FR 26859) are 

hereby approved and adopted. 

Marketing Order 

Annexed hereto and made a part 

hereof is the document entitled ‘‘Order 

Amending the Order Regulating the 

Handling of Hazelnuts Grown in Oregon 

and Washington.’’ This document has 

been decided upon as the detailed and 

appropriate means of effectuating the 

foregoing findings and conclusions. 

It is hereby ordered, that this entire 

decision be published in the Federal 

Register. 

Referendum Order 

It is hereby directed that a referendum 

be conducted in accordance with the 

procedure for the conduct of referenda 

(7 CFR 900.400–407) to determine 

whether the annexed order amending 

the order regulating the handling of 

hazelnuts grown in Oregon and 

Washington is approved or favored by 

growers, as defined under the terms of 

the order, who during the representative 

period were engaged in the production 

of hazelnuts in the production area. 

The representative period for the 

conduct of such referendum is hereby 

determined to be July 1, 2016, through 

June 30, 2017. 


jstallworth on DSKBBY8HB2PROD with PROPOSALS
Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Proposed Rules 45211 

1This order shall not become effective unless and 

until the requirements of § 900.14 of the rules of 

practice and procedure governing proceedings to 

formulate marketing agreements and marketing 

orders have been met. 

The agents of the Secretary to conduct 

such referendum are hereby designated 

to be Dale Novotny and Gary Olson, 

California Marketing Field Office, 

Marketing Order and Agreement 

Division, Specialty Crops Program, 

AMS, USDA, 1220 SW Third Avenue, 

Suite 305, Portland, Oregon 97204; 

telephone: (503) 326–2724; or fax: (503) 

326–7440 or Email: DaleJ.Novotny@

ams.usda.gov or GaryD.Olson@

ams.usda.gov, respectively. 

Order Amending the Order Regulating 

the Handling of Hazelnuts Grown in 

Oregon and Washington 1

Findings and Determinations 

The findings and determinations 

hereinafter set forth are supplementary 

to the findings and determinations that 

were previously made in connection 

with the issuance of the marketing 

order; and all said previous findings and 

determinations are hereby ratified and 

affirmed, except insofar as such findings 

and determinations may be in conflict 

with the findings and determinations set 

forth herein. 

(a) Findings and Determinations 

Upon the Basis of the Hearing Record 

Pursuant to the provisions of the 

Agricultural Marketing Agreement Act 

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

and the applicable rules of practice and 

procedure effective thereunder (7 CFR 

part 900), a public hearing was held 

upon proposed further amendment of 

Marketing Order No. 982, regulating the 

handling of hazelnuts grown in Oregon 

and Washington. 

Upon the basis of the record, it is 

found that: 

(1) The marketing order, as amended, 

and as hereby proposed to be further 

amended, and all of the terms and 

conditions thereof, would tend to 

effectuate the declared policy of the Act; 

(2) The marketing order, as amended, 

and as hereby proposed to be further 

amended, regulates the handling of 

hazelnuts grown in the production area 

in the same manner as, and are 

applicable only to, persons in the 

respective classes of commercial and 

industrial activity specified in the 

marketing order upon which a hearing 

has been held; 

(3) The marketing order, as amended, 

and as hereby proposed to be further 

amended, is limited in its application to 

the smallest regional production area 

that is practicable, consistent with 

carrying out the declared policy of the 

Act, and the issuance of several orders 

applicable to subdivisions of the 

production area would not effectively 

carry out the declared policy of the Act; 

(4) The marketing order, as amended, 

and as hereby proposed to be further 

amended, prescribes, insofar as 

practicable, such different terms 

applicable to different parts of the 

production area as are necessary to give 

due recognition to the differences in the 

production and marketing of hazelnuts 

grown in Oregon and Washington; and 

(5) All handling of hazelnuts grown in 

the production area as defined in the 

marketing order is in the current of 

interstate or foreign commerce or 

directly burdens, obstructs, or affects 

such commerce. 

Order Relative to Handling 

It is therefore ordered, that on and 

after the effective date hereof, all 

handling of hazelnuts grown in Oregon 

and Washington shall be in conformity 

to, and in compliance with, the terms 

and conditions of the said order as 

hereby proposed to be amended as 

follows: 

The provisions of the proposed 

marketing order amending the order 

contained in the Recommended 

Decision issued on June 5, 2017, and 

published in the June 12, 2017, issue of 

the Federal Register (82 FR 26859) will 

be and are the terms and provisions of 

this order amending the order and are 

set forth in full herein. 

List of Subjects in 7 CFR Part 982 

Hazelnuts, Marketing agreements, 

Nuts, Reporting and recordkeeping 

requirements. 

Recommended Further Amendment of 

the Marketing Order 

For the reasons set out in the 

preamble, 7 CFR part 989 is proposed to 

be amended as follows: 

PART 982—HAZELNUTS GROWN IN 

OREGON AND WASHINGTON 

■ 1. The authority citation for 7 CFR 

part 982 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

Subpart A—[Amended] 

■ 2. Designate the subpart labeled 

‘‘Order Regulating Handling’’ as subpart 

A. 

■ 3. Revise § 982.12 to read as follows: 

§ 982.12 Merchantable hazelnuts. 

Merchantable hazelnuts means 

inshell hazelnuts that meet the grade, 

size, and quality regulations in effect 

pursuant to § 982.45 and are likely to be 

available for handling as inshell 

hazelnuts. 

■ 4. Amend § 982.40 by revising 

paragraph (d) to read as follows: 

§ 982.40 Marketing policy and volume 

regulation. 

* * * * * 

(d) Grade, size, and quality 

regulations. Prior to September 20, the 

Board may consider grade, size, and 

quality regulations in effect and may 

recommend modifications thereof to the 

Secretary. 

* * * * * 

■ 5. Revise the undesignated center 

heading prior to § 982.45 to read as 

follows: 

Grade, Size, and Quality Regulation 

■ 6. In § 982.45: 

■ a. Revise the section heading; and 

■ b. Add new paragraphs (c) and (d). 

The revisions to read as follows: 

§ 982.45 Establishment of grade, size, and 

quality regulations. 

* * * * * 

(c) Quality regulations. For any 

marketing year, the Board may establish, 

with the approval of the Secretary, such 

minimum quality and inspection 

requirements applicable to hazelnuts to 

facilitate the reduction of pathogens as 

will contribute to orderly marketing or 

will be in the public interest. In such 

marketing year, no handler shall handle 

hazelnuts unless they meet applicable 

minimum quality and inspection 

requirements as evidenced by 

certification acceptable to the Board. 

(d) Different regulations for different 

markets. The Board may, with the 

approval of the Secretary, recommend 

different outgoing quality requirements 

for different markets. The Board, with 

the approval of the Secretary, may 

establish rules and regulations 

necessary and incidental to the 

administration of this provision. 

■ 7. Amend § 982.46 by adding 

paragraph (d) to read as follows: 

§ 982.46 Inspection and certification. 

* * * * * 

(d) Whenever quality regulations are 

in effect pursuant to § 982.45, each 

handler shall certify that all product to 

be handled or credited in satisfaction of 

a restricted obligation meets the quality 

regulations as prescribed. 

Subpart B—Grade and Size 

Requirements 

■ 8. Designate the subpart labeled 

‘‘Grade and Size Regulation’’ as subpart 

B and revise the heading as shown 

above. 


jstallworth on DSKBBY8HB2PROD with PROPOSALS
45212 Federal Register / Vol. 82, No. 187 / Thursday, September 28, 2017 / Proposed Rules 

Subpart C—[Amended] 

■ 9. Designate the subpart labeled ‘‘Free 

and Restricted Percentages’’ as subpart 

C. 

Subpart D—[Amended] 

■ 10. Designate the subpart labeled 

‘‘Assessment Rates’’ as subpart D. 

Subpart E—Administrative 

Requirements 

■ 11. Designate the subpart labeled 

‘‘Administrative Rules and Regulations’’ 

as subpart E and revise the heading as 

shown above. 

Dated: September 14, 2017. 

Bruce Summers, 

Acting Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2017–19920 Filed 9–27–17; 8:45 am] 

BILLING CODE 3410–02–P 

SMALL BUSINESS ADMINISTRATION 

13 CFR Part 134 

RIN 3245–AG87 

Rules of Practice for Protests and 

Appeals Regarding Eligibility for 

Inclusion in the U.S. Department of 

Veterans Affairs, Center for 

Verification and Evaluation Database 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Proposed rule. 

SUMMARY: The U.S. Small Business 

Administration (SBA) is proposing to 

amend the rules of practice of its Office 

of Hearings and Appeals (OHA) to 

implement procedures for protests of 

eligibility for inclusion in the 

Department of Veterans Affairs (VA) 

Center for Verification and Evaluation 

(CVE) database, and procedures for 

appeals of denials and cancellations of 

inclusion in the CVE database. These 

amendments would be in accordance 

with Sections 1832 and 1833 of the 

National Defense Authorization Act for 

Fiscal Year 2017 (NDAA 2017). 

DATES: Comments must be received on 

or before October 30, 2017. 

ADDRESSES: You may submit comments, 

identified by RIN 3245–AG87 by any of 

the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail, Hand Delivery/Courier: 

Delorice Price Ford, Assistant 

Administrator for Hearings and 

Appeals, U.S. Small Business 

Administration, 409 Third Street SW., 

Washington, DC 20416. 

SBA will post all comments on 

www.regulations.gov. If you wish to 

submit confidential business 

information (CBI) as defined in the User 

Notice at www.regulations.gov, please 

submit the information to Daniel K. 

George, Attorney Advisor, Office of 

Hearings and Appeals, U.S. Small 

Business Administration, 409 Third 

Street SW., Washington, DC 20416, or 

send an email to Daniel.George@

sba.gov. Highlight the information that 

you consider to be CBI and explain why 

you believe SBA should hold this 

information as confidential. SBA will 

review the information and make the 

final determination whether it will 

publish the information. 

FOR FURTHER INFORMATION CONTACT: 

Daniel K. George, Attorney Advisor, at 

(202) 401–8200 or Daniel.George@

sba.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

Sections 1832 and 1833 of the NDAA 

2017 authorized the SBA’s OHA to 

determine protests and appeals related 

to inclusion in the CVE database. In 

order to implement these sections, this 

proposed rule would amend OHA’s 

jurisdiction at subparts A and B of 13 

CFR part 134 to include protests of 

eligibility for inclusion in the CVE 

database and appeals of denials and 

cancellations of inclusion in the CVE 

database. In addition, the proposed rule 

would create a new subpart J in 13 CFR 

part 134 to set out detailed rules of 

practice for protests of eligibility for 

inclusion in the VA CVE database, and 

a new subpart K to set out detailed rules 

of practice for appeals of denials and 

cancellations of verification for 

inclusion in the VA’s CVE database. 

Section-by-Section Analysis 

A. 13 CFR Part 134 Subparts A and B 

SBA proposes to amend § 134.102, the 

rules for establishing OHA jurisdiction, 

to add protests of eligibility for 

inclusion in the CVE database and 

appeals of denials and cancellations of 

inclusion in the CVE database, as two 

new types of proceedings over which 

OHA would have jurisdiction. New 

§ 134.102(u) would allow for protests of 

eligibility for inclusion in the CVE 

database. New § 134.102(v) would allow 

for appeals of denials and cancellations 

of inclusion in the CVE database. 

SBA also proposes to amend 

§ 134.201(b) by adding new paragraphs 

(8) and (9) to include protests of 

eligibility for inclusion in the CVE 

database and appeals of denials and 

cancellations of inclusion in the CVE 

database. As a result of these new 

paragraphs, existing § 134.201(b)(8) 

would be redesignated as 

§ 134.201(b)(10). 

B. 13 CFR Part 134, Subpart J 

SBA proposes to add new subpart J, 

consisting of §§ 134.1001–1013, in order 

to conform OHA’s rules of practice for 

protests of eligibility for inclusion in the 

CVE database (CVE Protests). As a 

result, the new rules of practice for 

protests of eligibility for inclusion in the 

CVE database would mirror SBA’s 

existing rules for protests of servicedisabled veteran owned small 

businesses, found in 13 CFR part 125 

subpart D. 

Proposed § 134.1001(b) states that the 

provisions of subparts A and B also 

apply to protests of eligibility for 

inclusion in the CVE database. Section 

134.1001(c) adds that the protest 

procedures are separate from those 

governing Service-Disabled VeteranOwned Small Business Concern (SDVO 

SBC) protests for non-VA procurements, 

which are subject to 13 CFR part 125. 

Section 134.1001(d) states that protests 

of a concern’s eligibility for a non-VA 

procurement as an SDVO SBC are 

governed by 13 CFR part 125. In 

addition, § 134.1001(e) specifies that 

appeals that relate to a determination 

made by the SBA’s Director, Office of 

Government Contracting (D/GC) are 

governed by subpart E of 13 CFR part 

125. 

As proposed in § 134.1002, the 

Secretary of the VA, or his/her designee, 

as well as the Contracting Officer (CO) 

or an offeror in a VA procurement 

awarded to a small business may file a 

CVE Protest. A protesting offeror need 

not be the offeror next in line for award. 

Section 134.1003 establishes the 

grounds for filing a CVE Protest as 

status, and ownership and control. 

Paragraph (c) requires the Judge to 

determine a protested concern’s 

eligibility for inclusion in the CVE as of 

the date the protest was filed. 

Section 134.1004(a) establishes the 

deadlines for filing a CVE Protest, which 

is at any time for the Secretary of the VA 

and any time during the life of a 

contract for the CO. Paragraph (a)(2)(i) 

instructs that an offeror must file its 

protest within five days of being 

notified of the identity of the apparent 

awardee. Paragraphs (a)(3) and (4) 

indicate the rule for counting days and 

that any untimely protest will be 

dismissed. Paragraph (b) describes the 

methods for filing a CVE Protest by 

interested parties. A CVE Protest 

brought by an offeror is filed with the 

CO, who then forwards the protest to 

OHA. 


jstallworth on DSKBBY8HB2PROD with PROPOSALS