80_FR_66091 80 FR 65883 - Walnuts Grown in California; Increased Assessment Rate

80 FR 65883 - Walnuts Grown in California; Increased Assessment Rate

DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

Federal Register Volume 80, Issue 208 (October 28, 2015)

Page Range65883-65886
FR Document2015-27359

This rule implements a recommendation from the California Walnut Board (Board) for an increase of the assessment rate established for the 2015-16 and subsequent marketing years from $0.0189 to $0.0379 per kernelweight pound of walnuts handled under the marketing order. The Board locally administers the marketing order and is comprised of growers and handlers of walnuts operating within the area of production. Assessments upon walnut handlers are used by the Board to fund reasonable and necessary expenses of the program. The marketing year begins September 1 and ends August 31. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated.

Federal Register, Volume 80 Issue 208 (Wednesday, October 28, 2015)
[Federal Register Volume 80, Number 208 (Wednesday, October 28, 2015)]
[Rules and Regulations]
[Pages 65883-65886]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-27359]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Doc. No. AMS-FV-15-0026; FV15-984-1 FR]


Walnuts Grown in California; Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule implements a recommendation from the California 
Walnut Board (Board) for an increase of the assessment rate established 
for the 2015-16 and subsequent marketing years from $0.0189 to $0.0379 
per kernelweight pound of walnuts handled under the marketing order. 
The Board locally administers the marketing order and is comprised of 
growers and handlers of walnuts operating within the area of 
production. Assessments upon walnut handlers are used by the Board to 
fund reasonable and necessary expenses of the program. The marketing 
year begins September 1 and ends August 31. The assessment rate will 
remain in effect indefinitely unless modified, suspended, or 
terminated.

DATES: Effective October 29, 2015.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Senior Marketing 
Specialist, or Martin Engeler, Regional Manager, California Marketing 
Field Office, Marketing Order and Agreement Division, Specialty Crops 
Program, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or 
Email: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Jeffrey Smutny, 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: [email protected].

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 Orders 12866, 13563, and 13175.

[[Page 65884]]

    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 issued herein will be applicable to all assessable 
walnuts beginning on September 1, 2015, and continue until amended, 
suspended, or terminated.
    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 2015-16 and subsequent marketing years from $0.0189 to $0.0379 
per kernelweight pound of assessable walnuts handled.
    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 growers and handlers of 
California walnuts. They are familiar with the Board's needs and with 
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 in a public meeting. Thus, 
all directly affected persons have an opportunity to participate and 
provide input.
    For the 2013-14 and subsequent marketing years, the Board 
recommended, and USDA approved, an assessment rate of $0.0189 per 
kernelweight pound of assessable walnuts that would continue in effect 
from marketing year to marketing 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 June 4, 2015, and unanimously recommended 2015-16 
expenditures of $22,668,980, and an assessment rate of $0.0379 per 
kernelweight pound of assessable walnuts. In comparison, last year's 
budgeted expenditures were $9,861,810. The assessment rate of $0.0379 
is $0.019 per pound higher than the rate currently in effect. The 
quantity of assessable walnuts for the 2015-16 marketing year is 
estimated at 518,000 tons inshell or 466,200,000 kernelweight pounds, 
which is the five-year average of walnut production. At the recommended 
higher assessment rate of $0.0379 per kernelweight pound, the Board 
should collect approximately $17,668,980 in assessment income. The 
Board also recommended using $5,000,000 from its monetary reserve to 
help fund the increase in the expenditures. Assessments and funds from 
the reserve will be adequate to cover its 2015-16 budgeted expenses of 
$22,668,980.
    The Board noted that sales of California walnuts in the domestic 
market have been declining in recent years, and believes that more 
market development and promotion would reverse the trend. Thus, they 
are committed to increasing expenditures on domestic marketing 
promotion projects and programs.
    The following table compares major budget expenditures recommended 
by the Board for the 2014-15 and 2015-16 marketing years:

                                 Chart 1
------------------------------------------------------------------------
     Budget expense categories           2014-15            2015-16
------------------------------------------------------------------------
Employee Expenses.................        $ 1,711,000         $1,846,500
Travel/Board Expenses/Annual Audit            190,000            191,000
Office Expenses...................            241,000            254,000
Controlled Purchases..............             10,000             10,000
Crop Acreage Survey...............                  0            100,000
Crop Estimate.....................            126,000            130,000
Production Research Director......             94,500             94,500
Production Research...............          1,600,000          1,700,000
Sustainability Project............             75,000             75,000
Grades and Standards Research.....            600,000            600,000
Domestic Market Development.......          5,742,000         18,478,440
Reserve for Contingency...........            166,310             32,790
------------------------------------------------------------------------

    The assessment rate recommended by the Board was derived by 
dividing anticipated assessment revenue needed by estimated shipments 
of California walnuts certified as merchantable. The 518,000 ton 
(inshell) estimate for merchantable shipments is an average of 
shipments during five prior years. Pursuant to Sec.  984.51(b) of the 
order, this figure is converted to a merchantable kernelweight basis 
using a factor of 0.45 (518,000 tons x 2,000 pounds per ton x 0.45), 
which yields 466,200,000 kernelweight pounds. At $0.0379 per pound, the 
new assessment rate should generate $17,668,980 in assessment income. 
Along with $5,000,000 from the Board's monetary reserve, this 
assessment rate will allow the Board to cover its expenses.
    Section 984.69 of the order authorizes the Board to carry over 
excess funds into subsequent marketing years as a reserve, provided 
that funds already in the reserve do not exceed approximately two 
years' budgeted expenses. Using $5,000,000 of reserve funds would leave 
an estimated $5,895,932 in reserve at the end of the 2015-16 marketing 
year, well within the requirements of the marketing order.
    The assessment rate will be 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 established by this rule 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

[[Page 65885]]

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 
would evaluate Board recommendations and other available information to 
determine whether modification of the assessment rate is needed. 
Further rulemaking would be undertaken as necessary. The Board's 2015-
16 budget and those for subsequent marketing years would be reviewed, 
and, as appropriate, approved by USDA.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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 
businesses 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 4,500 growers of California walnuts in the 
production area and approximately 90 handlers subject to regulation 
under the marketing order. The Small Business Administration (SBA) 
defines small agricultural producers as those having annual receipts of 
less than $750,000, and small agricultural service firms are defined as 
those having annual receipts of less than $7,000,000. (13 CFR 121.201)
    According to USDA's National Agricultural Statistics Service's 
(NASS's) 2012 Census of Agriculture, approximately 89 percent of 
California's walnut farms were smaller than 100 acres. Further, NASS 
reports that the average yield for 2014 was 1.95 tons per acre, and the 
average price received for 2013 was $3,710 per ton. The average price 
for 2014 has not been reported yet.
    A 100-acre farm with an average yield of 1.95 tons per acre would 
therefore have been expected to produce about 195 tons of walnuts 
during 2010-11. At $3,710 per ton, that farm's production would have 
had an approximate value of $723,450. Since Census of Agriculture 
information indicates that the majority of California's walnut farms 
are smaller than 100 acres, it could be concluded that the majority of 
the growers had receipts of less than $723,450 in 2014-15, below the 
SBA threshold of $750,000. Thus, the majority of California's walnut 
growers would be considered small growers according to SBA's 
definition.
    According to information supplied by the Board, approximately two-
thirds of California's walnut handlers each shipped merchantable 
walnuts valued under $7,000,000 during the 2014-15 marketing year and 
would, therefore, be considered small handlers according to the SBA 
definition.
    This rule increases the assessment rate established by the Board 
and applicable to handlers for the 2015-16 and subsequent marketing 
years from $0.0189 to $0.0379 per kernelweight pound of assessable 
walnuts. The Board unanimously recommended 2015-16 expenditures of 
$22,668,980 and an assessment rate of $0.0379 per kernelweight pound of 
assessable walnuts. The assessment rate of $0.0379 is $0.019 higher 
than the 2014-15 rate. The quantity of assessable walnuts for the 2015-
16 marketing year is estimated at 518,000 tons inshell weight, or 
466,200,000 kernelweight pounds. Thus, the $0.0379 rate should provide 
$17,668,980 in assessment income.
    The Board also recommended using $5,000,000 from its monetary 
reserve to augment the assessment income. Thus, assessment income plus 
the $5,000,000 should be adequate to meet this year's expenses. The 
increased assessment rate is primarily due to increased domestic 
marketing promotion and programs. The Board has become concerned with 
the declining sales of California walnuts in the domestic market, and 
believes that sagging sales can be improved through increased 
promotional activities. Thus, they recommended an increase in domestic 
market development from approximately $5.7 million during the 2014-15 
marketing year to approximately $18.4 million for the 2015-16 marketing 
year.
    The major expenses for the 2015-16 marketing year, as outlined in 
Chart 1 include: $1,846,500 for employee expenses; $191,000 for travel, 
board, and annual audit expenses; $254,000 for office expenses; $10,000 
for controlled purchases; $100,000 for the crop acreage survey; 
$130,000 for the crop estimate; $94,500 for the salary of the 
Production Research Director; $1,700,000 for production research; 
$75,000 for a sustainability project; $600,000 for grades and standards 
research; $18,478,440 for domestic market development projects; and 
$32,790 for the contingency reserve.
    In comparison, these expenditures for the 2014-15 marketing year 
were: $1,711,000 for employee expenses; $190,000 for travel, board, and 
annual audit expenses; $241,000 for office expenses; $10,000 for 
controlled purchases; $126,000 for the crop estimate; $94,500 for the 
salary of the Production Research Director; $1,600,000 for production 
research; $75,000 for the sustainability project; $600,000 for grades 
and standards research; $5,742,000 for domestic market development 
projects; and $166,310 for the contingency reserve. There was no 
acreage survey expense in the 2014-15 marketing year.
    The Board reviewed and unanimously recommended 2015-16 expenditures 
of $22,668,980. Prior to arriving at this budget, the Board considered 
alternative expenditure levels, such as spending an additional 
$5,000,000, or $10,000,000 for domestic market development projects, as 
well as alternate assessment rate levels. They ultimately determined 
that the recommended expenditure and assessment levels were reasonable 
and necessary to assist in improving domestic sales, as well as 
properly administering the order.
    The assessment rate of $0.0379 per kernelweight pound of assessable 
walnuts was derived by dividing anticipated assessment revenue needed 
by expected shipments of California walnuts certified as merchantable. 
Merchantable shipments for the year are estimated at 466,200,000 
pounds. It was determined that $17,668,980 in assessment income was 
needed, and assessment income combined with funds from the monetary 
reserve should allow the Board to cover its expenses of $22,668,980.
    The Board also considered information from various committees who 
deliberate and formulate their own budgets of expenses and make 
recommendations to the Board. The committees include the Market 
Development, Production Research, Budget and Personnel, and Grades and 
Standards Committees.
    Unspent funds may be retained in a financial reserve, provided that 
funds in the financial reserve do not exceed approximately two years' 
budgeted expenses.
    According to NASS, the season average grower prices for the years 
2012 and 2013 were $3,030 and $3,710 per ton, respectively. Prices have 
not yet been reported for 2014. The 2012 and 2013 prices provide a 
range within which the 2015-16 season average price could fall. 
Dividing these average grower prices by 2,000 pounds per ton provides 
an inshell price per pound

[[Page 65886]]

range of $1.52 to $1.86. Dividing these inshell per pound prices by the 
0.45 conversion factor (inshell to kernelweight) established in the 
order yields a 2015-16 price range estimate of $3.38 to $4.13 per 
kernelweight pound of assessable walnuts.
    To calculate the percentage of grower revenue represented by the 
assessment rate, the assessment rate of $0.0379 per kernelweight pound 
is divided by the low and high estimates of the price range. The 
estimated assessment revenue for the 2015-16 marketing year as a 
percentage of total grower revenue will thus likely range between 0.92 
and 1.11 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. 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 encouraged to participate in Board deliberations 
on all issues. Like all Board meetings, the June 4, 2015, meeting was a 
public meeting and all entities, both large and small, were free to 
express views on this issue.
    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 the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0178 (Walnuts Grown in California). No changes in 
those requirements are necessary as a result of this action. Should any 
changes become necessary, they would be submitted to OMB for approval.
    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. As noted in the 
initial regulatory flexibility analysis, USDA has not identified any 
relevant Federal rules that duplicate, overlap, or conflict with this 
action.
    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.
    A proposed rule concerning this action was published in the Federal 
Register on August 18, 2015, (80 FR 49930). Copies of the proposed rule 
were also provided to all walnut handlers. Finally, the proposal was 
made available through the Internet by USDA and the Office of the 
Federal Register. A 30-day comment period ending September 17, 2015, 
was provided for interested persons to respond to the proposal. No 
complete comments were received. Accordingly, no changes will be made 
to the rule as proposed.
    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/MarketingOrderSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Jeffrey Smutny 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 handlers are 
already receiving 2015-16 crop walnuts from growers, the marketing year 
began on September 1, 2015, and the assessment rate applies to all 
walnuts received during the 2015-16 and subsequent marketing years. 
Further, handlers are aware of this rule which was recommended at a 
public meeting. Also, a 30-day comment period was provided in the 
proposed rule.

List of Subjects in 7 CFR Part 984

    Marketing agreements, Nuts, Reporting and recordkeeping 
requirements, Walnuts.

    For the reasons set forth in the preamble, 7 CFR part 984 is 
amended as follows:

PART 984--WALNUTS GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 984 continues to read as 
follows:

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


0
2. Section 984.347 is revised to read as follows:


Sec.  984.347  Assessment rate.

    On and after September 1, 2015, an assessment rate of $0.0379 per 
kernelweight pound is established for California merchantable walnuts.

    Dated: October 22, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-27359 Filed 10-27-15; 8:45 am]
BILLING CODE 3410-02-P



                                                            Federal Register / Vol. 80, No. 208 / Wednesday, October 28, 2015 / Rules and Regulations                                        65883

                                              (iv) After an involuntary enrollment                  § 890.301(n) of this section. The                     DEPARTMENT OF AGRICULTURE
                                           under paragraph (l)(4)(ii) or (iii) of this              effective date of enrollment changes
                                           section becomes effective, the annuitant                 under this provision will be set by OPM               Agricultural Marketing Service
                                           may change the enrollment to another                     when it makes the announcement
                                           option of the plan into which he or she                  allowing such changes;                                7 CFR Part 984
                                           was enrolled or another health plan of                      (v) A former spouse who is unable, for             [Doc. No. AMS–FV–15–0026; FV15–984–1
                                           his or her choice prospectively within                   causes beyond his or her control, to                  FR]
                                           90-days after OPM advises the annuitant                  make an enrollment change within the
                                           of the new enrollment;                                   60 days following a disaster and is, as               Walnuts Grown in California; Increased
                                              (v) If the discontinuance of the plan,                a result, enrolled in the lowest-cost                 Assessment Rate
                                           whether permanent or temporary, is due                   nationwide plan as defined in
                                           to a disaster, an annuitant must change                                                                        AGENCY:  Agricultural Marketing Service,
                                                                                                    § 890.301(n), may request a belated                   USDA.
                                           the enrollment within 60 days of the                     enrollment into the plan of his or her
                                           disaster, as announced by OPM. If an                                                                           ACTION: Final rule.
                                                                                                    choice subject to the requirements of
                                           annuitant does not change the                            paragraph (c) of this section.                        SUMMARY:    This rule implements a
                                           enrollment within the time frame                                                                               recommendation from the California
                                           announced by OPM, the annuitant will                     *      *    *     *     *
                                                                                                                                                          Walnut Board (Board) for an increase of
                                           be enrolled in the lowest-cost                           ■ 5. Amend § 890.1108 by revising                     the assessment rate established for the
                                           nationwide plan option, as defined in                    paragraphs (h)(4)(ii) through (iv) and                2015–16 and subsequent marketing
                                           § 890.301(n). The effective date of                      adding paragraph (h)(4)(v) to read as                 years from $0.0189 to $0.0379 per
                                           enrollment changes under this provision                  follows:                                              kernelweight pound of walnuts handled
                                           will be set by OPM when it makes the                                                                           under the marketing order. The Board
                                           announcement allowing such changes;                      § 890.1108 Opportunities to change
                                                                                                    enrollment; effective dates.                          locally administers the marketing order
                                              (vi) An annuitant who is unable, for                                                                        and is comprised of growers and
                                           causes beyond his or her control, to                     *       *     *     *    *
                                                                                                                                                          handlers of walnuts operating within
                                           make an enrollment change within the                        (h) * * *                                          the area of production. Assessments
                                           60 days following a disaster and is, as                     (4) * * *                                          upon walnut handlers are used by the
                                           a result, enrolled in the lowest-cost                                                                          Board to fund reasonable and necessary
                                           nationwide plan as defined in                               (ii) If the whole plan is discontinued,
                                                                                                    an enrollee who does not change the                   expenses of the program. The marketing
                                           § 890.301(n), may request a belated                                                                            year begins September 1 and ends
                                           enrollment into the plan of his or her                   enrollment within the time set will be
                                                                                                    enrolled in the lowest-cost nationwide                August 31. The assessment rate will
                                           choice subject to the requirements of                                                                          remain in effect indefinitely unless
                                           paragraph (c) of this section.                           plan option, as defined in § 890.301(n);
                                                                                                                                                          modified, suspended, or terminated.
                                           *      *      *    *    *                                   (iii) If one or more options of a plan
                                                                                                                                                          DATES: Effective October 29, 2015.
                                                                                                    are discontinued, an enrollee who does
                                           ■ 4. Amend § 890.806 by revising                                                                               FOR FURTHER INFORMATION CONTACT:
                                                                                                    not change the enrollment will enrolled
                                           paragraphs (j)(4)(ii) through (iv) and                                                                         Terry Vawter, Senior Marketing
                                                                                                    in the remaining option of the plan, or
                                           adding paragraph (j)(4)(v) to read as                                                                          Specialist, or Martin Engeler, Regional
                                                                                                    in the case of a plan with two or more
                                           follows:                                                                                                       Manager, California Marketing Field
                                                                                                    options remaining, the lowest-cost
                                           § 890.806 When can former spouses                        remaining option that is not a High                   Office, Marketing Order and Agreement
                                           change enrollment or reenroll and what are               Deductible Health Plan (HDHP);                        Division, Specialty Crops Program,
                                           the effective dates?                                                                                           AMS, USDA; Telephone: (559) 487–
                                                                                                       (iv) If the discontinuance of the plan,
                                           *       *     *     *    *                                                                                     5901, Fax: (559) 487–5906, or Email:
                                                                                                    whether permanent or temporary, is due
                                              (j) * * *                                                                                                   Terry.Vawter@ams.usda.gov or
                                                                                                    to a disaster, the enrollee must change
                                              (4) * * *                                                                                                   Martin.Engeler@ams.usda.gov.
                                                                                                    the enrollment within 60 days of the                     Small businesses may request
                                              (ii) If the whole plan is discontinued,               disaster, as announced by OPM. If the
                                           a former spouse who does not change                                                                            information on complying with this
                                                                                                    enrollee does not change the enrollment               regulation by contacting Jeffrey Smutny,
                                           the enrollment within the time set will                  within the time frame announced by
                                           be enrolled in the lowest-cost                                                                                 Marketing Order and Agreement
                                                                                                    OPM, the enrollee will be enrolled in                 Division, Specialty Crops Program,
                                           nationwide plan option, as defined in                    the lowest-cost nationwide plan option,
                                           § 890.301(n);                                                                                                  AMS, USDA, 1400 Independence
                                                                                                    as defined in § 890.301(n). The effective             Avenue SW., STOP 0237, Washington,
                                              (iii) If one or more options of a plan
                                                                                                    date of enrollment changes under this                 DC 20250–0237; Telephone: (202) 720–
                                           are discontinued, a former spouse who
                                                                                                    provision will be set by OPM when it                  2491, Fax: (202) 720–8938, or Email:
                                           does not change the enrollment will be
                                                                                                    makes the announcement allowing such                  Jeffery.Smutny@ams.usda.gov.
                                           enrolled in the remaining option of the
                                                                                                    changes;
                                           plan, or in the case of a plan with two                                                                        SUPPLEMENTARY INFORMATION: This rule
                                           or more options remaining, the lowest-                      (v) An enrollee who is unable, for                 is issued under Marketing Order No.
                                           cost remaining option that is not a High                 causes beyond his or her control, to                  984, as amended (7 CFR part 984),
                                           Deductible Health Plan (HDHP);                           make an enrollment change within the                  regulating the handling of walnuts
                                              (iv) If the discontinuance of the plan,               60 days following a disaster and is, as               grown in California, hereinafter referred
                                           whether permanent or temporary, is due                   a result, enrolled in the lowest-cost                 to as the ‘‘order.’’ The order is effective
                                           to a disaster, the former spouse must                    nationwide plan as defined in                         under the Agricultural Marketing
                                           change the enrollment within 60 days of                  § 890.301(n), may request a belated                   Agreement Act of 1937, as amended (7
Lhorne on DSK5TPTVN1PROD with RULES




                                           the disaster, as announced by OPM. If                    enrollment into the plan of his or her                U.S.C. 601–674), hereinafter referred to
                                           a former spouse does not change the                      choice subject to the requirements of                 as the ‘‘Act.’’
                                           enrollment within the time frame                         paragraph (c) of this section.                           The Department of Agriculture
                                           announced by OPM, the former spouse                      *       *     *     *    *                            (USDA) is issuing this rule in
                                           will be enrolled in the lowest-cost                      [FR Doc. 2015–27378 Filed 10–27–15; 8:45 am]          conformance with Executive Orders
                                           nationwide plan option, as defined in                    BILLING CODE 6325–63–P                                12866, 13563, and 13175.


                                      VerDate Sep<11>2014    15:03 Oct 27, 2015   Jkt 238001   PO 00000   Frm 00003   Fmt 4700   Sfmt 4700   E:\FR\FM\28OCR1.SGM   28OCR1


                                           65884               Federal Register / Vol. 80, No. 208 / Wednesday, October 28, 2015 / Rules and Regulations

                                             This rule has been reviewed under                                         This rule increases the assessment                                      expenditures of $22,668,980, and an
                                           Executive Order 12988, Civil Justice                                      rate established for the Board for the                                    assessment rate of $0.0379 per
                                           Reform. Under the marketing order now                                     2015–16 and subsequent marketing                                          kernelweight pound of assessable
                                           in effect, California walnut handlers are                                 years from $0.0189 to $0.0379 per                                         walnuts. In comparison, last year’s
                                           subject to assessments. Funds to                                          kernelweight pound of assessable                                          budgeted expenditures were $9,861,810.
                                           administer the order are derived from                                     walnuts handled.                                                          The assessment rate of $0.0379 is $0.019
                                           such assessments. It is intended that the                                   The California walnut marketing                                         per pound higher than the rate currently
                                           assessment rate as issued herein will be                                  order provides authority for the Board,                                   in effect. The quantity of assessable
                                                                                                                     with the approval of USDA, to formulate                                   walnuts for the 2015–16 marketing year
                                           applicable to all assessable walnuts
                                                                                                                     an annual budget of expenses and                                          is estimated at 518,000 tons inshell or
                                           beginning on September 1, 2015, and
                                                                                                                     collect assessments from handlers to                                      466,200,000 kernelweight pounds,
                                           continue until amended, suspended, or                                     administer the program. The members                                       which is the five-year average of walnut
                                           terminated.                                                               of the Board are growers and handlers                                     production. At the recommended higher
                                             The Act provides that administrative                                    of California walnuts. They are familiar                                  assessment rate of $0.0379 per
                                           proceedings must be exhausted before                                      with the Board’s needs and with the                                       kernelweight pound, the Board should
                                           parties may file suit in court. Under                                     costs for goods and services in their                                     collect approximately $17,668,980 in
                                           section 608c(15)(A) of the Act, any                                       local area and are thus in a position to                                  assessment income. The Board also
                                           handler subject to an order may file                                      formulate an appropriate budget and                                       recommended using $5,000,000 from its
                                           with USDA a petition stating that the                                     assessment rate. The assessment rate is                                   monetary reserve to help fund the
                                           order, any provision of the order, or any                                 formulated and discussed in a public                                      increase in the expenditures.
                                           obligation imposed in connection with                                     meeting. Thus, all directly affected                                      Assessments and funds from the reserve
                                           the order is not in accordance with law                                   persons have an opportunity to                                            will be adequate to cover its 2015–16
                                           and request a modification of the order                                   participate and provide input.                                            budgeted expenses of $22,668,980.
                                           or to be exempted therefrom. Such                                           For the 2013–14 and subsequent
                                                                                                                     marketing years, the Board                                                   The Board noted that sales of
                                           handler is afforded the opportunity for                                                                                                             California walnuts in the domestic
                                                                                                                     recommended, and USDA approved, an
                                           a hearing on the petition. After the                                                                                                                market have been declining in recent
                                                                                                                     assessment rate of $0.0189 per
                                           hearing, USDA would rule on the                                           kernelweight pound of assessable                                          years, and believes that more market
                                           petition. The Act provides that the                                       walnuts that would continue in effect                                     development and promotion would
                                           district court of the United States in any                                from marketing year to marketing year                                     reverse the trend. Thus, they are
                                           district in which the handler is an                                       unless modified, suspended, or                                            committed to increasing expenditures
                                           inhabitant, or has his or her principal                                   terminated by USDA upon                                                   on domestic marketing promotion
                                           place of business, has jurisdiction to                                    recommendation and information                                            projects and programs.
                                           review USDA’s ruling on the petition,                                     submitted by the Board or other                                              The following table compares major
                                           provided an action is filed not later than                                information available to USDA.                                            budget expenditures recommended by
                                           20 days after the date of the entry of the                                  The Board met on June 4, 2015, and                                      the Board for the 2014–15 and 2015–16
                                           ruling.                                                                   unanimously recommended 2015–16                                           marketing years:

                                                                                                                                                CHART 1
                                                                                                    Budget expense categories                                                                                2014–15         2015–16

                                           Employee Expenses ....................................................................................................................................              $ 1,711,000     $1,846,500
                                           Travel/Board Expenses/Annual Audit ..........................................................................................................                           190,000        191,000
                                           Office Expenses ...........................................................................................................................................             241,000        254,000
                                           Controlled Purchases ..................................................................................................................................                  10,000         10,000
                                           Crop Acreage Survey ..................................................................................................................................                        0        100,000
                                           Crop Estimate ..............................................................................................................................................            126,000        130,000
                                           Production Research Director .....................................................................................................................                       94,500         94,500
                                           Production Research ...................................................................................................................................               1,600,000      1,700,000
                                           Sustainability Project ...................................................................................................................................               75,000         75,000
                                           Grades and Standards Research ................................................................................................................                          600,000        600,000
                                           Domestic Market Development ...................................................................................................................                       5,742,000     18,478,440
                                           Reserve for Contingency .............................................................................................................................                   166,310         32,790



                                              The assessment rate recommended by                                     pound, the new assessment rate should                                     the end of the 2015–16 marketing year,
                                           the Board was derived by dividing                                         generate $17,668,980 in assessment                                        well within the requirements of the
                                           anticipated assessment revenue needed                                     income. Along with $5,000,000 from the                                    marketing order.
                                           by estimated shipments of California                                      Board’s monetary reserve, this                                              The assessment rate will be in effect
                                           walnuts certified as merchantable. The                                    assessment rate will allow the Board to                                   indefinitely unless modified,
                                           518,000 ton (inshell) estimate for                                        cover its expenses.                                                       suspended, or terminated by USDA
                                           merchantable shipments is an average of                                     Section 984.69 of the order authorizes                                  upon recommendation and information
                                           shipments during five prior years.                                        the Board to carry over excess funds                                      submitted by the Board or other
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                                           Pursuant to § 984.51(b) of the order, this                                into subsequent marketing years as a                                      available information.
                                           figure is converted to a merchantable                                     reserve, provided that funds already in                                     Although this assessment rate
                                           kernelweight basis using a factor of 0.45                                 the reserve do not exceed approximately                                   established by this rule will be in effect
                                           (518,000 tons x 2,000 pounds per ton x                                    two years’ budgeted expenses. Using                                       for an indefinite period, the Board will
                                           0.45), which yields 466,200,000                                           $5,000,000 of reserve funds would leave                                   continue to meet prior to or during each
                                           kernelweight pounds. At $0.0379 per                                       an estimated $5,895,932 in reserve at                                     marketing year to recommend a budget


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                                                            Federal Register / Vol. 80, No. 208 / Wednesday, October 28, 2015 / Rules and Regulations                                      65885

                                           of expenses and consider                                 are smaller than 100 acres, it could be                  In comparison, these expenditures for
                                           recommendations for modification of                      concluded that the majority of the                    the 2014–15 marketing year were:
                                           the assessment rate. The dates and times                 growers had receipts of less than                     $1,711,000 for employee expenses;
                                           of Board meetings are available from the                 $723,450 in 2014–15, below the SBA                    $190,000 for travel, board, and annual
                                           Board or USDA. Board meetings are                        threshold of $750,000. Thus, the                      audit expenses; $241,000 for office
                                           open to the public and interested                        majority of California’s walnut growers               expenses; $10,000 for controlled
                                           persons may express their views at these                 would be considered small growers                     purchases; $126,000 for the crop
                                           meetings. USDA would evaluate Board                      according to SBA’s definition.                        estimate; $94,500 for the salary of the
                                           recommendations and other available                         According to information supplied by               Production Research Director;
                                           information to determine whether                         the Board, approximately two-thirds of                $1,600,000 for production research;
                                           modification of the assessment rate is                   California’s walnut handlers each                     $75,000 for the sustainability project;
                                           needed. Further rulemaking would be                      shipped merchantable walnuts valued                   $600,000 for grades and standards
                                           undertaken as necessary. The Board’s                     under $7,000,000 during the 2014–15                   research; $5,742,000 for domestic
                                           2015–16 budget and those for                             marketing year and would, therefore, be               market development projects; and
                                           subsequent marketing years would be                      considered small handlers according to                $166,310 for the contingency reserve.
                                           reviewed, and, as appropriate, approved                  the SBA definition.                                   There was no acreage survey expense in
                                           by USDA.                                                    This rule increases the assessment                 the 2014–15 marketing year.
                                                                                                    rate established by the Board and                        The Board reviewed and unanimously
                                           Final Regulatory Flexibility Analysis                    applicable to handlers for the 2015–16                recommended 2015–16 expenditures of
                                              Pursuant to requirements set forth in                 and subsequent marketing years from                   $22,668,980. Prior to arriving at this
                                           the Regulatory Flexibility Act (RFA) (5                  $0.0189 to $0.0379 per kernelweight                   budget, the Board considered alternative
                                           U.S.C. 601–612), the Agricultural                        pound of assessable walnuts. The Board                expenditure levels, such as spending an
                                           Marketing Service (AMS) has                              unanimously recommended 2015–16                       additional $5,000,000, or $10,000,000
                                           considered the economic impact of this                   expenditures of $22,668,980 and an                    for domestic market development
                                           rule on small entities. Accordingly,                     assessment rate of $0.0379 per                        projects, as well as alternate assessment
                                           AMS has prepared this final regulatory                   kernelweight pound of assessable                      rate levels. They ultimately determined
                                           flexibility analysis.                                    walnuts. The assessment rate of $0.0379               that the recommended expenditure and
                                              The purpose of the RFA is to fit                      is $0.019 higher than the 2014–15 rate.               assessment levels were reasonable and
                                           regulatory actions to the scale of                       The quantity of assessable walnuts for                necessary to assist in improving
                                           businesses subject to such actions in                    the 2015–16 marketing year is estimated               domestic sales, as well as properly
                                           order that small businesses will not be                  at 518,000 tons inshell weight, or                    administering the order.
                                           unduly or disproportionately burdened.                   466,200,000 kernelweight pounds.                         The assessment rate of $0.0379 per
                                           Marketing orders issued pursuant to the                  Thus, the $0.0379 rate should provide                 kernelweight pound of assessable
                                           Act, and the rules issued thereunder, are                $17,668,980 in assessment income.                     walnuts was derived by dividing
                                           unique in that they are brought about                       The Board also recommended using                   anticipated assessment revenue needed
                                           through group action of essentially                      $5,000,000 from its monetary reserve to               by expected shipments of California
                                           small entities acting on their own                       augment the assessment income. Thus,                  walnuts certified as merchantable.
                                           behalf.                                                  assessment income plus the $5,000,000                 Merchantable shipments for the year are
                                              There are approximately 4,500                         should be adequate to meet this year’s                estimated at 466,200,000 pounds. It was
                                           growers of California walnuts in the                     expenses. The increased assessment rate               determined that $17,668,980 in
                                           production area and approximately 90                     is primarily due to increased domestic                assessment income was needed, and
                                           handlers subject to regulation under the                 marketing promotion and programs. The                 assessment income combined with
                                           marketing order. The Small Business                      Board has become concerned with the                   funds from the monetary reserve should
                                           Administration (SBA) defines small                       declining sales of California walnuts in              allow the Board to cover its expenses of
                                           agricultural producers as those having                   the domestic market, and believes that                $22,668,980.
                                           annual receipts of less than $750,000,                   sagging sales can be improved through                    The Board also considered
                                           and small agricultural service firms are                 increased promotional activities. Thus,               information from various committees
                                           defined as those having annual receipts                  they recommended an increase in                       who deliberate and formulate their own
                                           of less than $7,000,000. (13 CFR                         domestic market development from                      budgets of expenses and make
                                           121.201)                                                 approximately $5.7 million during the                 recommendations to the Board. The
                                              According to USDA’s National                          2014–15 marketing year to                             committees include the Market
                                           Agricultural Statistics Service’s                        approximately $18.4 million for the                   Development, Production Research,
                                           (NASS’s) 2012 Census of Agriculture,                     2015–16 marketing year.                               Budget and Personnel, and Grades and
                                           approximately 89 percent of California’s                    The major expenses for the 2015–16                 Standards Committees.
                                           walnut farms were smaller than 100                       marketing year, as outlined in Chart 1                   Unspent funds may be retained in a
                                           acres. Further, NASS reports that the                    include: $1,846,500 for employee                      financial reserve, provided that funds in
                                           average yield for 2014 was 1.95 tons per                 expenses; $191,000 for travel, board,                 the financial reserve do not exceed
                                           acre, and the average price received for                 and annual audit expenses; $254,000 for               approximately two years’ budgeted
                                           2013 was $3,710 per ton. The average                     office expenses; $10,000 for controlled               expenses.
                                           price for 2014 has not been reported yet.                purchases; $100,000 for the crop acreage                 According to NASS, the season
                                              A 100-acre farm with an average yield                 survey; $130,000 for the crop estimate;               average grower prices for the years 2012
                                           of 1.95 tons per acre would therefore                    $94,500 for the salary of the Production              and 2013 were $3,030 and $3,710 per
                                           have been expected to produce about                      Research Director; $1,700,000 for                     ton, respectively. Prices have not yet
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                                           195 tons of walnuts during 2010–11. At                   production research; $75,000 for a                    been reported for 2014. The 2012 and
                                           $3,710 per ton, that farm’s production                   sustainability project; $600,000 for                  2013 prices provide a range within
                                           would have had an approximate value                      grades and standards research;                        which the 2015–16 season average price
                                           of $723,450. Since Census of                             $18,478,440 for domestic market                       could fall. Dividing these average
                                           Agriculture information indicates that                   development projects; and $32,790 for                 grower prices by 2,000 pounds per ton
                                           the majority of California’s walnut farms                the contingency reserve.                              provides an inshell price per pound


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                                           65886            Federal Register / Vol. 80, No. 208 / Wednesday, October 28, 2015 / Rules and Regulations

                                           range of $1.52 to $1.86. Dividing these                  49930). Copies of the proposed rule                     Dated: October 22, 2015.
                                           inshell per pound prices by the 0.45                     were also provided to all walnut                      Rex A. Barnes,
                                           conversion factor (inshell to                            handlers. Finally, the proposal was                   Associate Administrator, Agricultural
                                           kernelweight) established in the order                   made available through the Internet by                Marketing Service.
                                           yields a 2015–16 price range estimate of                 USDA and the Office of the Federal                    [FR Doc. 2015–27359 Filed 10–27–15; 8:45 am]
                                           $3.38 to $4.13 per kernelweight pound                    Register. A 30-day comment period                     BILLING CODE 3410–02–P
                                           of assessable walnuts.                                   ending September 17, 2015, was
                                              To calculate the percentage of grower                 provided for interested persons to
                                           revenue represented by the assessment                    respond to the proposal. No complete                  DEPARTMENT OF AGRICULTURE
                                           rate, the assessment rate of $0.0379 per                 comments were received. Accordingly,
                                           kernelweight pound is divided by the                     no changes will be made to the rule as                Agricultural Marketing Service
                                           low and high estimates of the price                      proposed.
                                           range. The estimated assessment                             A small business guide on complying                7 CFR Part 987
                                           revenue for the 2015–16 marketing year                   with fruit, vegetable, and specialty crop             [Docket No. AMS–FV–15–0034; FV15–987–
                                           as a percentage of total grower revenue                  marketing agreements and orders may                   1 IR]
                                           will thus likely range between 0.92 and                  be viewed at: http://www.ams.usda.gov/
                                           1.11 percent.                                            MarketingOrderSmallBusinessGuide.                     Domestic Dates Produced or Packed in
                                              This action increases the assessment                  Any questions about the compliance                    Riverside County, California;
                                           obligation imposed on handlers. While                    guide should be sent to Jeffrey Smutny                Decreased Assessment Rate
                                           assessments impose some additional                       at the previously mentioned address in
                                           costs on handlers, the costs are minimal                                                                       AGENCY:  Agricultural Marketing Service,
                                                                                                    the FOR FURTHER INFORMATION CONTACT                   USDA.
                                           and uniform on all handlers. These                       section.
                                           costs are offset by the benefits derived                                                                       ACTION: Interim rule with request for
                                                                                                       After consideration of all relevant                comments.
                                           by the operation of the marketing order.                 material presented, including the
                                           In addition, the Board’s meeting was                     information and recommendation                        SUMMARY:   This rule implements a
                                           widely publicized throughout the                         submitted by the Board and other                      recommendation from the California
                                           California walnut industry, and all                      available information, it is hereby found             Date Administrative Committee
                                           interested persons were invited to                       that this rule, as hereinafter set forth,             (committee) for a decrease in the
                                           attend the meeting and encouraged to                     will tend to effectuate the declared                  assessment rate established for the
                                           participate in Board deliberations on all                policy of the Act.                                    2015–16 and subsequent crop years
                                           issues. Like all Board meetings, the June                   Pursuant to 5 U.S.C. 553, it is also               from $0.20 to $0.10 per hundredweight
                                           4, 2015, meeting was a public meeting                    found and determined that good cause                  of dates handled. The committee locally
                                           and all entities, both large and small,                                                                        administers the marketing order, which
                                                                                                    exists for not postponing the effective
                                           were free to express views on this issue.                                                                      regulates the handling of dates grown or
                                                                                                    date of this rule until 30 days after
                                              In accordance with the Paperwork
                                                                                                    publication in the Federal Register                   packed in Riverside County, California.
                                           Reduction Act of 1995, (44 U.S.C.
                                                                                                    because handlers are already receiving                Assessments upon date handlers are
                                           Chapter 35), the order’s information
                                                                                                    2015–16 crop walnuts from growers, the                used by the committee to fund
                                           collection requirements have been
                                                                                                    marketing year began on September 1,                  reasonable and necessary expenses of
                                           previously approved by the Office of
                                                                                                    2015, and the assessment rate applies to              the program. The crop year begins
                                           Management and Budget (OMB) and
                                                                                                    all walnuts received during the 2015–16               October 1 and ends September 30. The
                                           assigned OMB No. 0581–0178 (Walnuts
                                                                                                    and subsequent marketing years.                       new assessment rate will remain in
                                           Grown in California). No changes in
                                                                                                    Further, handlers are aware of this rule              effect indefinitely unless modified,
                                           those requirements are necessary as a
                                                                                                    which was recommended at a public                     suspended, or terminated.
                                           result of this action. Should any changes
                                           become necessary, they would be                          meeting. Also, a 30-day comment period                DATES: Effective October 29, 2015.
                                           submitted to OMB for approval.                           was provided in the proposed rule.                    Comments received by December 28,
                                              This rule imposes no additional                       List of Subjects in 7 CFR Part 984                    2015, will be considered prior to
                                           reporting or recordkeeping requirements                                                                        issuance of a final rule.
                                                                                                      Marketing agreements, Nuts,                         ADDRESSES: Interested persons are
                                           on either small or large California
                                                                                                    Reporting and recordkeeping                           invited to submit written comments
                                           walnut handlers. As with all Federal
                                                                                                    requirements, Walnuts.                                concerning this rule. Comments must be
                                           marketing order programs, reports and
                                           forms are periodically reviewed to                         For the reasons set forth in the                    sent to the Docket Clerk, Marketing
                                           reduce information requirements and                      preamble, 7 CFR part 984 is amended as                Order and Agreement Division,
                                           duplication by industry and public                       follows:                                              Specialty Crops Program, AMS, USDA,
                                           sector agencies. As noted in the initial                                                                       1400 Independence Avenue SW., STOP
                                                                                                    PART 984—WALNUTS GROWN IN                             0237, Washington, DC 20250–0237; Fax:
                                           regulatory flexibility analysis, USDA
                                                                                                    CALIFORNIA                                            (202) 720–8938; or Internet: http://
                                           has not identified any relevant Federal
                                           rules that duplicate, overlap, or conflict                                                                     www.regulations.gov. Comments should
                                                                                                    ■ 1. The authority citation for 7 CFR
                                           with this action.                                                                                              reference the docket number and the
                                                                                                    part 984 continues to read as follows:
                                              AMS is committed to complying with                                                                          date and page number of this issue of
                                           the E-Government Act, to promote the                         Authority: 7 U.S.C. 601–674.                      the Federal Register and will be
                                           use of the Internet and other                            ■ 2. Section 984.347 is revised to read               available for public inspection in the
                                           information technologies to provide                      as follows:                                           Office of the Docket Clerk during regular
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                                           increased opportunities for citizen                                                                            business hours, or can be viewed at:
                                           access to Government information and                     § 984.347    Assessment rate.                         http://www.regulations.gov. All
                                           services, and for other purposes.                          On and after September 1, 2015, an                  comments submitted in response to this
                                              A proposed rule concerning this                       assessment rate of $0.0379 per                        rule will be included in the record and
                                           action was published in the Federal                      kernelweight pound is established for                 will be made available to the public.
                                           Register on August 18, 2015, (80 FR                      California merchantable walnuts.                      Please be advised that the identity of the


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Document Created: 2018-02-27 08:57:45
Document Modified: 2018-02-27 08:57:45
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesEffective October 29, 2015.
ContactTerry Vawter, Senior Marketing Specialist, or Martin Engeler, Regional Manager, California Marketing Field Office, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906, or Email: [email protected] or [email protected]
FR Citation80 FR 65883 
CFR AssociatedMarketing Agreements; Nuts; Reporting and Recordkeeping Requirements and Walnuts

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