Source: https://www.federalregister.gov/documents/2020/04/08/2020-06619/pecans-grown-in-the-states-of-alabama-arkansas-arizona-california-florida-georgia-kansas-louisiana
Timestamp: 2020-06-04 11:21:36
Document Index: 294871065

Matched Legal Cases: ['art 986', 'art 986', '§\u2009986', '§\u2009986', '§\u2009986', '§\u2009986', 'art 986']

Federal Register :: Pecans Grown in the States of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas; Changes to Reporting Requirements
A Rule by the Agricultural Marketing Service on 04/08/2020
Effective May 8, 2020.
85 FR 19651
19651-19655 (5 pages)
Doc. No. AMS-SC19-0029, SC19-986-2 FR
https://www.federalregister.gov/d/2020-06619 https://www.federalregister.gov/d/2020-06619
Start Preamble Start Printed Page 19651
This final rule, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This final rule is issued under Marketing Agreement and Order No. 986, (7 CFR part 986), regulating the handling of pecans grown in the states of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas. Part 986 (referred to as 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 American Pecan Council (Council) locally administers the Order and is comprised of growers and handlers of pecans operating within the production area, and one accumulator and one public member.
The Department of Agriculture (USDA) is issuing this final rule in conformance with Executive Orders 13563 and 13175. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review. Additionally, because this final 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).
This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This final rule is not intended to have retroactive effect.
This final rule revises the reporting requirements under the Order by reducing the number of monthly reports from six to three and revising the inter-handler report from a monthly to an annual report. This action also makes other conforming and clarifying changes to the reporting requirements. These changes will help reduce the regulatory burden on handlers by reducing reporting requirements. This action was unanimously recommended by the Council at its December 18, 2018, meeting.
Section 986.162 outlines the reporting requirements for inter-handler transfers, and § 986.175 establishes the requirements for the annual year-end inventory report. Section 986.177 prescribes the monthly reporting requirements for pecans received by handlers and for pecans purchased outside the United States. Section 986.178 includes requirements for a monthly report of shipments and inventory, a monthly report of exports, and a monthly report of pecans exported to Mexico for shelling to be returned to the United States.
During the promulgation of the Order, the data collection component was considered one of the most important aspects of the Order. Consequently, when discussing establishing reporting requirements, the Council wanted to ensure the data needed was being collected so valuable reports could be provided to the industry. The Council recommended the initial reporting requirements in 2017, which required handlers to submit six different reports each month and an annual report including pecans received, shipped, held in inventory, transferred, exported for sale or shelling, and purchased from outside the United States. To facilitate this information collection, the Council Start Printed Page 19652held handler information sessions throughout 2018 to explain the reporting process and gather feedback on which, if any, reports were difficult to complete.
The Council agreed the information on pecans received could easily be combined with the report of shipments and inventory to create one monthly summary report. The Council believes this consolidated report will be easier for handlers to complete and still provide the necessary information.
The changes will require handlers to submit a report following the first transfer of the fiscal year. By filing the Inter-Handler Transfer Form with the Council, the receiving and transferring handlers establish an agreement that remains in effect for the entire fiscal year. The receiving and transferring handlers need to complete their portions of the form and file it annually with the Council. It also removes the requirement for the report to include the associated volume transferred. Instead, the volume associated with the inter-handler transfer will be reported by the receiving handler. Handlers will still maintain the option of designating who is responsible for paying the assessments on the pecans transferred, as currently authorized in § 986.162(a)(5). The Council expects the change to provide some reporting relief to small handlers and create a more efficient method of tracking transferred pecans.
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has Start Printed Page 19653considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.
Evidence presented at the formal rulemaking hearing, held in 2015, indicated an average handler margin of $0.58 per pound. Adding this margin to the average grower price of $2.59 per pound of inshell pecans results in an estimated handler price of $3.17 per pound. With a total 2017 production of 269 million pounds, the total value of production in 2017 was $853 million ($3.17 per pound multiplied by 269 million pounds). Taking the total value of production of pecans and dividing it by the total number of pecan handlers provides an average return per handler of $3.4 million. Using this estimated price, the utilization volume, number of handlers, and assuming a normal distribution among handlers, the majority of handlers have annual receipts of less than $30,000,000. Thus, the majority of growers and handlers regulated by the Order may be classified as small entities.
This final rule revises the reporting requirements in the Order by reducing the number of monthly reports from six to three and revising the inter-handler report from a monthly to an annual report. This rule also makes other conforming changes to the reporting requirements. This final rule revises §§ 986.162, 986.175, 986.177, and 986.178. The authority for these actions is provided in §§ 986.75, 986.76, 986.77, and 986.78 of the Order.
It is not anticipated that this action will impose additional costs on handlers or growers, regardless of size. Handlers should see a savings in time and labor cost due to the reduced number of forms submitted each month. The change to an annual inter-handler transfer report in place of a monthly report will provide additional time savings to both handlers involved in the transaction. Council members, including those representing small businesses, recommended these changes in order to ease the reporting and regulatory burden on industry handlers. The benefits of this rule are expected to be equally available to all pecan growers and handlers, regardless of their size.
The Council discussed other alternatives to this action, including eliminating the inter-handler transfer option. However, removing the inter-handler transfer option from the Order could involve a lengthy process. Also, the inter-handler transfer was supported during promulgation of the marketing order as a way to ease reporting burdens on small businesses.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0291 Federal Marketing Order for Pecans. This final rule will require changes to the Council's existing forms by combining forms and shifting one form from a monthly report to an annual report. Modifying the forms as indicated will decrease the burden on pecan handlers required to complete the forms and enhance Board efficiencies related to information collection. The revised forms have been submitted to OMB for approval.
Further, the Council's meetings were widely publicized throughout the pecan industry and all interested persons were invited to attend the meetings and participate in Council deliberations on all issues. Additionally, the Council's meeting held on December 18, 2018, was a public meeting and all entities, both large and small, were able to express views on this issue.
A proposed rule concerning this action was published in the Federal Register on November 20, 2019, (84 FR 64028). Copies of the rule were sent via email to Council members and known pecan handlers. Finally, the rule was made available through the internet by USDA and the Office of the Federal Register. A 30-day comment period ending December 20, 2019, was provided to allow interested persons to respond to the proposal.
During the comment period, five comments were received in response to the proposal. Of the comments received, two fully supported the regulation as proposed, one was in support but requested changes to the proposal, one was opposed, and one questioned the need to make the proposed changes.
The three commenters supporting the regulation stated that the recommended changes would simplify the reporting process for handlers. One comment mentioned the changes would support industry compliance and the long-term management of pecans. Another mentioned the consolidation of the reports would increase accurate reporting and efficiency.
One comment received expressed opposition to all the changes in the proposed action. The comment recommended that the Council maintain their current reporting requirements because consolidating the forms would cause a compromise of important data. In 2017, the Council initially recommended the reporting requirements to collect valuable industry data. Once the forms were Start Printed Page 19654implemented, both staff and industry members realized handlers were having trouble keeping up with multiple reports each month. As previously stated, the Council reviewed the feedback from handlers and staff and determined the necessary information could be collected in fewer reports.
The only data points being eliminated by this action are volumes by variety, which handlers indicated were nearly impossible to accurately report due to the prevalence of mixed loads; and inter-handler transfer volumes, which the industry expressed were not valuable in decision-making. As such, this action will allow the Council to continue collecting relevant information by converting four of the monthly reporting requirements into two, and converting the inter-handler transfer report form a monthly report into an annual report. This action will simplify the reporting process by reducing the number of monthly reports from six to three, which will benefit handlers.
Two of the comments submitted, one with partial support and one in opposition, raised concerns regarding the proposed changes to the inter-handler transfer report. One commenter stated the proposed action would lead to inaccurate information and records. The other added that reducing the frequency of the inter-handler report was insufficient to accurately track and collect necessary data for industry members. Both comments recommended the Council consider quarterly or bi-annual reporting as an alternative to the proposal.
The Council considered all of these alternatives when reviewing the reporting requirements. The inter-handler transfer form was initially intended to relieve the reporting burden on small handlers. Industry members suggested, and the Council agreed, the annual report will still achieve this goal. Industry feedback indicated that transfers normally occur between the same two handlers throughout the year. This action requires handlers to submit a report following the first transfer of the fiscal year and will remain in effect for the entire fiscal year. Agreements between new handlers will require submission of a new form with the Council. Reporting transferred volume was intended to aid in the collection of assessments, not for its value in reporting to the industry. The new report eliminates the need to track multiple transfers between the same parties. As such, this action will provide reporting relief to small handlers and create administrative efficiencies in collecting assessments.
One last commenter took no position on the proposed changes, but rather questioned if changing the reporting requirements would result in a significant enough change to justify the process. The benefits of this action will help reduce the regulatory burden on all handlers by reducing the number of reports submitted and eliminating details that were burdensome to track and not highly valuable to the industry. This action reduces the number of monthly reports from six to three and revises the inter-handler report from a monthly to an annual report. This action will also make other conforming and clarifying changes to the reporting requirements so the requirements and the corresponding information provided meets the needs of the industry.
After consideration of all relevant material presented, including the information and recommendation submitted by the Council and other available information, it is hereby found that this rule will tend to effectuate the declared policy of the Act.
For the reasons set forth in the preamble, 7 CFR part 986 is amended as follows:
a. Revising paragraphs (a) introductory text and (a)(3) and (4);
b. Removing the period at the end of paragraph (a)(5) and adding a semicolon in its place;
c. Adding paragraphs (a)(6) through (10);
e. Removing “and,” from the end of paragraph (b)(4);
f. Removing the period at the end of paragraph (b)(5) and adding a semicolon in its place; and
g. Adding paragraphs (b)(6) through (9).
(a) Summary report. Handlers shall submit to the Council, by the tenth day of the month, a summary report of inshell domestic pecans received, and all shipments, inventory, and committed inventory for pecans following the month of activity. Should the tenth day of the month fall on a weekend or holiday, reports are due by the first business day following the tenth day of the month. The report shall be submitted to the Council on APC Start Printed Page 19655Form 1 and contain the following information:
[FR Doc. 2020-06619 Filed 4-7-20; 8:45 am]