82_FR_33914 82 FR 33775 - Walnuts Grown in California; Decreased Assessment Rate

82 FR 33775 - Walnuts Grown in California; Decreased Assessment Rate

DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

Federal Register Volume 82, Issue 139 (July 21, 2017)

Page Range33775-33778
FR Document2017-15304

This rule implements a recommendation from the California Walnut Board (Board) to decrease the assessment rate established for the 2017-18 and subsequent marketing years from $0.0465 to $0.0400 per kernelweight pound of assessable walnuts. The Board is comprised of growers and handlers of walnuts and locally administers the marketing order that regulates the handling of walnuts grown in California. The Board also has a public member who has no financial interest in walnut production or handling. 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 82 Issue 139 (Friday, July 21, 2017)
[Federal Register Volume 82, Number 139 (Friday, July 21, 2017)]
[Rules and Regulations]
[Pages 33775-33778]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-15304]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

========================================================================


Federal Register / Vol. 82, No. 139 / Friday, July 21, 2017 / Rules 
and Regulations

[[Page 33775]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 984

[Doc. No. AMS-SC-17-0031; SC17-984-1 IR]


Walnuts Grown in California; Decreased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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

SUMMARY: This rule implements a recommendation from the California 
Walnut Board (Board) to decrease the assessment rate established for 
the 2017-18 and subsequent marketing years from $0.0465 to $0.0400 per 
kernelweight pound of assessable walnuts. The Board is comprised of 
growers and handlers of walnuts and locally administers the marketing 
order that regulates the handling of walnuts grown in California. The 
Board also has a public member who has no financial interest in walnut 
production or handling. 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 July 24, 2017. Comments received by September 19, 2017 
will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order and Agreement Division, Specialty Crops Program, AMS, 
USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-
0237; Fax: (202) 720-8938; or Internet: http://www.regulations.gov. 
Comments should reference the document number and the date and page 
number of this issue of the Federal Register and will be available for 
public inspection in the Office of the Docket Clerk during regular 
business hours, or can be viewed at: http://www.regulations.gov. All 
comments submitted in response to this rule will be included in the 
record and will be made available to the public. Please be advised that 
the identity of the individuals or entities submitting the comments 
will be made public on the Internet at the address provided above.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Senior Marketing 
Specialist, or Jeffrey Smutny, Regional Director, 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 Richard Lower, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 
Fax: (202) 720-8938, or Email: [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. 
Additionally, because this rule does not meet the definition of a 
significant regulatory action, it does not trigger the requirements 
contained in Executive Order 13771. See the Office of Management and 
Budget's (OMB) Memorandum titled ``Interim Guidance Implementing 
Section 2 of the Executive Order of January 30, 2017, titled `Reducing 
Regulation and Controlling Regulatory Costs'[thinsp]'' (February 2, 
2017).
    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 will be applicable to all assessable walnuts beginning 
on September 1, 2017, 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 will 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 decreases the assessment rate established for the Board 
for the 2017-18 and subsequent marketing years from $0.0465 to $0.0400 
per kernelweight pound of assessable walnuts.
    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. All members of the Board, except the public member, 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 2016-17 and subsequent marketing years, the Board 
recommended, and USDA approved, an assessment rate of $0.0465 per 
kernelweight pound of assessable walnuts that would continue in effect 
from year to year unless modified, suspended, or terminated by USDA 
upon recommendation and information

[[Page 33776]]

submitted by the Board or other information available to USDA.
    The Board met on May 31, 2017, and unanimously recommended 2017-18 
expenditures of $24,140,000 and a decreased assessment rate of $0.0400 
per kernelweight pound of assessable walnuts. In comparison, last 
year's budgeted expenditures were $23,143,050. The assessment rate of 
$0.0400 is $0.0065 per pound lower than the rate currently in effect. 
The quantity of assessable walnuts for the 2017-18 marketing year is 
estimated at a three-year average of 615,000 tons (inshell) or 
553,500,000 kernelweight pounds, which is 62,000 tons more than the 
553,000 tons assessed during the 2016-17 marketing year. At the 
recommended lower assessment rate of $0.0400 per kernelweight pound, 
the Board should collect approximately $22,140,000 in assessment 
income, which, when augmented with funds from the Board's monetary 
reserve, would be adequate to cover its 2017-18 budgeted expenses of 
$24,140,000.
    The following table compares major budget expenditures recommended 
by the Board for the 2016-17 and 2017-18 marketing years:

------------------------------------------------------------------------
        Budget expense categories             2016-17         2017-18
------------------------------------------------------------------------
Employee Expenses.......................      $2,292,000      $1,787,000
Travel/Board Expenses/Annual Audit......         206,000         192,000
Office Expenses.........................         262,000         265,000
Program Expenses, Including Research:
    Controlled Purchases................          10,000          10,000
    Crop Acreage Survey.................               0         103,000
    Crop Estimate.......................         130,000         146,000
    Production Research Director........         175,000          98,000
    Production Research.................       1,800,000       2,000,000
    Sustainability Project..............          75,000               0
    Grades and Standards Research.......         800,000         825,000
    Domestic Market Development.........      18,398,040      19,447,830
    Reserve for Contingency.............          59,010          47,170
------------------------------------------------------------------------

    The assessment rate recommended by the Board was derived by 
dividing anticipated expenses by expected volumes of California walnuts 
certified as merchantable. The 615,000-ton (inshell) estimate for 
merchantable walnut receipts is an average of the three prior years' 
shipments.
    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. The reserve is estimated to be $14,909,800 at 
the end of the marketing year, well within the authorized reserve 
amount.
    The Board met on May 31, 2017, and unanimously approved using a 
three prior years' average walnut production volume to formulate the 
2017-18 crop estimate. Pursuant to Sec.  984.51(b) of the order, this 
figure is converted to a merchantable kernelweight basis using a factor 
of 0.45 (615,000 tons x 2,000 pounds per ton x 0.45), which yields 
553,500,000 kernelweight pounds. At $0.0400 per pound, the new 
assessment rate should generate $22,140,000 in assessment income. The 
assessment income, plus $2,000,000 from the Board's reserve, will be 
adequate to cover its budgeted expenses.
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by USDA 
upon recommendation and information submitted by the Board or other 
available information.
    Although this assessment rate is effective for an indefinite 
period, the Board will continue to meet prior to or during each 
marketing year to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Board meetings are available from the Board or USDA. Board 
meetings are open to the public, and interested persons are encouraged 
to express their views at these meetings. USDA will evaluate Board 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking will 
be undertaken as necessary. The Board's 2017-18 budget and those for 
subsequent marketing years will be reviewed and, as appropriate, 
approved by USDA.

Initial 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 action on small entities. 
Accordingly, AMS has prepared this initial 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 5,700 growers of California walnuts in the 
production area and approximately 90 handlers subject to regulation 
under the marketing order. Small agricultural growers are defined by 
the Small Business Administration (SBA) as those whose annual receipts 
are less than $750,000, and small agricultural service firms are 
defined as those whose annual receipts are less than $7,500,000 (13 CFR 
121.201).
    According to USDA's National Agricultural Statistics Service's 
(NASS) 2012 Census of Agriculture, approximately 86 percent of 
California's walnut farms were smaller than 100 acres. Further, NASS 
reports that the average yield for 2015 was 2.01 tons per acre, and the 
average price received for 2015 was $1,620 per ton. A 100-acre farm 
with an average yield of 2.01 tons per acre would, therefore, have been 
expected to produce about 201 tons of walnuts. At $1,620 per ton, that 
farm's production would have had an approximate value of $325,620. This 
is well below the SBA threshold of $750,000; thus, it may be concluded 
that the majority of California's walnut growers are considered small 
growers according to SBA's definition.
    According to information supplied by the industry, approximately 
two-thirds of California's walnut handlers shipped merchantable walnuts 
valued under $7,500,000 during the 2016-17 marketing year and would, 
therefore, be

[[Page 33777]]

considered small handlers according to the SBA definition.
    This rule decreases the assessment rate established for the Board 
and collected from handlers for the 2017-18 and subsequent marketing 
years from $0.0465 to $0.0400 per kernelweight pound of assessable 
walnuts. The Board unanimously recommended 2017-18 expenditures of 
$24,140,000 and an assessment rate of $0.0400 per kernelweight pound of 
assessable walnuts, which is $0.0065 lower than the assessment rate 
currently in effect. The quantity of assessable walnuts for the 2017-18 
marketing year is estimated to be 615,000 tons, 62,000 tons greater 
than the quantity estimated for the 2016-17 marketing year. Therefore, 
even at the reduced assessment rate, the Board should collect 
approximately $22,140,000 in assessment income, which, when combined 
with $2,000,000 from its reserves, should be adequate to cover its 
budgeted expenses.
    The following table compares major budget expenditures recommended 
by the Board for the 2016-17 and 2017-18 marketing years:

------------------------------------------------------------------------
        Budget Expense Categories             2016-17         2017-18
------------------------------------------------------------------------
Employee Expenses.......................      $2,292,000      $1,787,000
Travel/Board Expenses/Annual Audit......         206,000         192,000
Office Expenses.........................         262,000         265,000
Program Expenses, Including Research:...
    Controlled Purchases................          10,000          10,000
    Crop Acreage Survey.................               0         103,000
    Crop Estimate.......................         130,000         146,000
    Production Research Director........         175,000          98,000
    Production Research.................       1,800,000       2,000,000
    Sustainability Project..............          75,000               0
    Grades and Standards Research.......         800,000         825,000
    Domestic Market Development.........      18,398,040      19,447,830
    Reserve for Contingency.............          59,010          47,170
------------------------------------------------------------------------

    The Board reviewed and unanimously recommended 2017-18 expenditures 
of $24,140,000. Prior to arriving at this budget, the Board considered 
alternative expenditure and assessment levels, as well as a 
recommendation from the Budget and Personnel Committee (Committee). The 
Committee considered the estimated income and expenses, given the 
requests from other committees, such as the Production Research, Market 
Development, and Grades and Standards Committees. The other committees 
each deliberated, formulated their own budgets of expenses, and made 
their recommendations to the Committee. The Committee also considered 
the recommendations and various assessment rates and expenses, then 
made a recommendation to the Board. The Board ultimately determined 
that the recommended levels were reasonable and necessary to properly 
administer the order.
    The assessment rate of $0.0400 per kernelweight pound of assessable 
walnuts was derived by dividing anticipated expenses of $24,140,000 by 
expected 2017-18 volumes of California walnuts certified as 
merchantable. Merchantable walnuts certified for the year are estimated 
at 553,500,000 kernelweight pounds, which should provide $22,140,000 in 
assessment income. Assessment income, coupled with $2,000,000 from the 
Board's reserve funds, should allow the Board to cover its expenses. 
Unexpended funds may be retained in a financial reserve, provided that 
funds in the financial reserve do not exceed approximately two years' 
budgeted expenses. The anticipated reserve should be $14,909,800, which 
is well within the order's requirement.
    According to NASS, the season average grower price for 2015 was 
$1,620 per ton. Dividing this average grower price by 2,000 pounds per 
ton provides an inshell price per pound of $0.81. Dividing this inshell 
price per pound by the 0.45 conversion factor (inshell to kernelweight) 
established in the order yields a potential 2017-18 price of about 
$1.80 per kernelweight pound of assessable walnuts.
    To calculate the percentage of grower revenue represented by the 
assessment rate, the assessment rate of $0.0400 per kernelweight pound 
is divided by the price. The estimated assessment revenue for the 2017-
18 marketing year, stated as a percentage of total grower revenue, 
would be approximately 2 percent.
    This action decreases the assessment obligation imposed on 
handlers. Assessments are applied uniformly on all handlers, and some 
of the costs may be passed on to growers. However, decreasing the 
assessment rate reduces the burden on handlers and may reduce the 
burden on growers.
    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 May 31, 2017, 
meeting was a public meeting, and all entities, both large and small, 
were able to express their views on this issue. Finally, interested 
persons are invited to submit comments on this interim rule, including 
the regulatory and informational impacts of this action on small 
businesses.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the order information collection requirements have been 
previously reviewed by OMB and assigned OMB No.: 0581-0178 (Walnuts 
Grown in California). No changes in those requirements as a result of 
this action are necessary. Should any changes become necessary, they 
would be submitted to OMB for approval.
    This action imposes no additional reporting or recordkeeping 
requirements on either small or large California walnut handlers. As 
with all Federal marketing order programs, reports and forms are 
periodically reviewed to reduce information requirements and 
duplication by industry and public sector agencies.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    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/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Richard Lower

[[Page 33778]]

at the previously mentioned address in the FOR FURTHER INFORMATION 
CONTACT section.
    After consideration of all relevant material presented, including 
the Board's recommendation, and other information, it is 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 upon good 
cause that it is impracticable and contrary to the public interest to 
give preliminary notice prior to putting this rule into effect and that 
good cause exists for not postponing the effective date of this rule 
until 30 days after publication in the Federal Register because: (1) 
The action decreases the assessment rate for merchantable walnuts; (2) 
handlers are aware of this action, which was unanimously recommended by 
the Board at a public meeting and is similar to other assessment rate 
actions issued in past years; and (3) this interim rule provides a 60-
day comment period, and all comments timely received will be considered 
prior to finalization of this 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 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, 2017, an assessment rate of $0.0400 per 
kernelweight pound is established for California merchantable walnuts.

    Dated: July 17, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2017-15304 Filed 7-20-17; 8:45 am]
 BILLING CODE 3410-02-P



                                                                                                                                                                                               33775

                                              Rules and Regulations                                                                                          Federal Register
                                                                                                                                                             Vol. 82, No. 139

                                                                                                                                                             Friday, July 21, 2017



                                              This section of the FEDERAL REGISTER                     date and page number of this issue of                 subject to assessments. Funds to
                                              contains regulatory documents having general             the Federal Register and will be                      administer the order are derived from
                                              applicability and legal effect, most of which            available for public inspection in the                such assessments. It is intended that the
                                              are keyed to and codified in the Code of                 Office of the Docket Clerk during regular             assessment rate will be applicable to all
                                              Federal Regulations, which is published under            business hours, or can be viewed at:                  assessable walnuts beginning on
                                              50 titles pursuant to 44 U.S.C. 1510.
                                                                                                       http://www.regulations.gov. All                       September 1, 2017, and continue until
                                              The Code of Federal Regulations is sold by               comments submitted in response to this                amended, suspended, or terminated.
                                              the Superintendent of Documents.                         rule will be included in the record and                  The Act provides that administrative
                                                                                                       will be made available to the public.                 proceedings must be exhausted before
                                                                                                       Please be advised that the identity of the            parties may file suit in court. Under
                                              DEPARTMENT OF AGRICULTURE                                individuals or entities submitting the                section 608c(15)(A) of the Act, any
                                                                                                       comments will be made public on the                   handler subject to an order may file
                                              Agricultural Marketing Service                           Internet at the address provided above.               with USDA a petition stating that the
                                                                                                       FOR FURTHER INFORMATION CONTACT:                      order, any provision of the order, or any
                                              7 CFR Part 984                                                                                                 obligation imposed in connection with
                                                                                                       Terry Vawter, Senior Marketing
                                              [Doc. No. AMS–SC–17–0031; SC17–984–1                     Specialist, or Jeffrey Smutny, Regional               the order is not in accordance with law
                                              IR]                                                      Director, California Marketing Field                  and request a modification of the order
                                                                                                       Office, Marketing Order and Agreement                 or to be exempted therefrom. Such
                                              Walnuts Grown in California;                                                                                   handler is afforded the opportunity for
                                                                                                       Division, Specialty Crops Program,
                                              Decreased Assessment Rate                                                                                      a hearing on the petition. After the
                                                                                                       AMS, USDA; Telephone: (559) 487–
                                              AGENCY:  Agricultural Marketing Service,                 5901, Fax: (559) 487–5906, or Email:                  hearing, USDA will rule on the petition.
                                              USDA.                                                    Jeffrey.Smutny@ams.usda.gov or                        The Act provides that the district court
                                              ACTION: Interim rule with request for                    Terry.Vawter@ams.usda.gov.                            of the United States in any district in
                                              comments.                                                   Small businesses may request                       which the handler is an inhabitant, or
                                                                                                       information on complying with this                    has his or her principal place of
                                              SUMMARY:   This rule implements a                        regulation by contacting Richard Lower,               business, has jurisdiction to review
                                              recommendation from the California                       Marketing Order and Agreement                         USDA’s ruling on the petition, provided
                                              Walnut Board (Board) to decrease the                     Division, Specialty Crops Program,                    an action is filed not later than 20 days
                                              assessment rate established for the                      AMS, USDA, 1400 Independence                          after the date of the entry of the ruling.
                                              2017–18 and subsequent marketing                         Avenue SW., STOP 0237, Washington,                       This rule decreases the assessment
                                              years from $0.0465 to $0.0400 per                        DC 20250–0237; Telephone: (202) 720–                  rate established for the Board for the
                                              kernelweight pound of assessable                         2491, Fax: (202) 720–8938, or Email:                  2017–18 and subsequent marketing
                                              walnuts. The Board is comprised of                       Richard.Lower@ams.usda.gov.                           years from $0.0465 to $0.0400 per
                                              growers and handlers of walnuts and                      SUPPLEMENTARY INFORMATION: This rule                  kernelweight pound of assessable
                                              locally administers the marketing order                  is issued under Marketing Order No.                   walnuts.
                                              that regulates the handling of walnuts                   984, as amended (7 CFR part 984),                        The California walnut marketing
                                              grown in California. The Board also has                  regulating the handling of walnuts                    order provides authority for the Board,
                                              a public member who has no financial                     grown in California, hereinafter referred             with the approval of USDA, to formulate
                                              interest in walnut production or                         to as the ‘‘order.’’ The order is effective           an annual budget of expenses and
                                              handling. Assessments upon walnut                        under the Agricultural Marketing                      collect assessments from handlers to
                                              handlers are used by the Board to fund                   Agreement Act of 1937, as amended (7                  administer the program. All members of
                                              reasonable and necessary expenses of                     U.S.C. 601–674), hereinafter referred to              the Board, except the public member,
                                              the program. The marketing year begins                   as the ‘‘Act.’’                                       are growers and handlers of California
                                              September 1 and ends August 31. The                         The Department of Agriculture                      walnuts. They are familiar with the
                                              assessment rate will remain in effect                    (USDA) is issuing this rule in                        Board’s needs and with the costs for
                                              indefinitely unless modified,                            conformance with Executive Orders                     goods and services in their local area
                                              suspended, or terminated.                                12866, 13563, and 13175. Additionally,                and are thus in a position to formulate
                                              DATES: Effective July 24, 2017.                          because this rule does not meet the                   an appropriate budget and assessment
                                              Comments received by September 19,                       definition of a significant regulatory                rate. The assessment rate is formulated
                                              2017 will be considered prior to                         action, it does not trigger the                       and discussed in a public meeting.
                                              issuance of a final rule.                                requirements contained in Executive                   Thus, all directly affected persons have
                                              ADDRESSES: Interested persons are                        Order 13771. See the Office of                        an opportunity to participate and
                                              invited to submit written comments                       Management and Budget’s (OMB)                         provide input.
                                              concerning this rule. Comments must be                   Memorandum titled ‘‘Interim Guidance                     For the 2016–17 and subsequent
                                              sent to the Docket Clerk, Marketing                      Implementing Section 2 of the Executive               marketing years, the Board
sradovich on DSK3GMQ082PROD with RULES




                                              Order and Agreement Division,                            Order of January 30, 2017, titled                     recommended, and USDA approved, an
                                              Specialty Crops Program, AMS, USDA,                      ‘Reducing Regulation and Controlling                  assessment rate of $0.0465 per
                                              1400 Independence Avenue SW., STOP                       Regulatory Costs’ ’’ (February 2, 2017).              kernelweight pound of assessable
                                              0237, Washington, DC 20250–0237; Fax:                       This rule has been reviewed under                  walnuts that would continue in effect
                                              (202) 720–8938; or Internet: http://                     Executive Order 12988, Civil Justice                  from year to year unless modified,
                                              www.regulations.gov. Comments should                     Reform. Under the marketing order now                 suspended, or terminated by USDA
                                              reference the document number and the                    in effect, California walnut handlers are             upon recommendation and information


                                         VerDate Sep<11>2014   16:05 Jul 20, 2017   Jkt 241001   PO 00000   Frm 00001   Fmt 4700   Sfmt 4700   E:\FR\FM\21JYR1.SGM   21JYR1


                                              33776                        Federal Register / Vol. 82, No. 139 / Friday, July 21, 2017 / Rules and Regulations

                                              submitted by the Board or other                                           than the rate currently in effect. The                                    $22,140,000 in assessment income,
                                              information available to USDA.                                            quantity of assessable walnuts for the                                    which, when augmented with funds
                                                The Board met on May 31, 2017, and                                      2017–18 marketing year is estimated at                                    from the Board’s monetary reserve,
                                              unanimously recommended 2017–18                                           a three-year average of 615,000 tons                                      would be adequate to cover its 2017–18
                                              expenditures of $24,140,000 and a                                         (inshell) or 553,500,000 kernelweight                                     budgeted expenses of $24,140,000.
                                              decreased assessment rate of $0.0400                                      pounds, which is 62,000 tons more than
                                              per kernelweight pound of assessable                                                                                                                   The following table compares major
                                                                                                                        the 553,000 tons assessed during the
                                              walnuts. In comparison, last year’s                                       2016–17 marketing year. At the                                            budget expenditures recommended by
                                              budgeted expenditures were                                                recommended lower assessment rate of                                      the Board for the 2016–17 and 2017–18
                                              $23,143,050. The assessment rate of                                       $0.0400 per kernelweight pound, the                                       marketing years:
                                              $0.0400 is $0.0065 per pound lower                                        Board should collect approximately

                                                                                                            Budget expense categories                                                                                   2016–17      2017–18

                                              Employee Expenses ................................................................................................................................................        $2,292,000   $1,787,000
                                              Travel/Board Expenses/Annual Audit ......................................................................................................................                    206,000      192,000
                                              Office Expenses .......................................................................................................................................................      262,000      265,000
                                              Program Expenses, Including Research:
                                                   Controlled Purchases .......................................................................................................................................             10,000       10,000
                                                   Crop Acreage Survey .......................................................................................................................................                   0      103,000
                                                   Crop Estimate ...................................................................................................................................................       130,000      146,000
                                                   Production Research Director ..........................................................................................................................                 175,000       98,000
                                                   Production Research ........................................................................................................................................          1,800,000    2,000,000
                                                   Sustainability Project ........................................................................................................................................          75,000            0
                                                   Grades and Standards Research .....................................................................................................................                     800,000      825,000
                                                   Domestic Market Development ........................................................................................................................                 18,398,040   19,447,830
                                                   Reserve for Contingency ..................................................................................................................................               59,010       47,170



                                                 The assessment rate recommended by                                        Although this assessment rate is                                       small entities acting on their own
                                              the Board was derived by dividing                                         effective for an indefinite period, the                                   behalf.
                                              anticipated expenses by expected                                          Board will continue to meet prior to or                                      There are approximately 5,700
                                              volumes of California walnuts certified                                   during each marketing year to                                             growers of California walnuts in the
                                              as merchantable. The 615,000-ton                                          recommend a budget of expenses and                                        production area and approximately 90
                                              (inshell) estimate for merchantable                                       consider recommendations for                                              handlers subject to regulation under the
                                              walnut receipts is an average of the                                      modification of the assessment rate. The                                  marketing order. Small agricultural
                                              three prior years’ shipments.                                             dates and times of Board meetings are                                     growers are defined by the Small
                                                 Section 984.69 of the order authorizes                                 available from the Board or USDA.                                         Business Administration (SBA) as those
                                              the Board to carry over excess funds                                      Board meetings are open to the public,                                    whose annual receipts are less than
                                              into subsequent marketing years as a                                      and interested persons are encouraged                                     $750,000, and small agricultural service
                                              reserve, provided that funds already in                                   to express their views at these meetings.                                 firms are defined as those whose annual
                                              the reserve do not exceed approximately                                   USDA will evaluate Board                                                  receipts are less than $7,500,000 (13
                                              two years’ budgeted expenses. The                                         recommendations and other available                                       CFR 121.201).
                                              reserve is estimated to be $14,909,800 at                                 information to determine whether
                                                                                                                                                                                                     According to USDA’s National
                                              the end of the marketing year, well                                       modification of the assessment rate is
                                                                                                                                                                                                  Agricultural Statistics Service’s (NASS)
                                              within the authorized reserve amount.                                     needed. Further rulemaking will be
                                                                                                                                                                                                  2012 Census of Agriculture,
                                                                                                                        undertaken as necessary. The Board’s
                                                 The Board met on May 31, 2017, and                                                                                                               approximately 86 percent of California’s
                                                                                                                        2017–18 budget and those for
                                              unanimously approved using a three                                                                                                                  walnut farms were smaller than 100
                                                                                                                        subsequent marketing years will be
                                              prior years’ average walnut production                                                                                                              acres. Further, NASS reports that the
                                                                                                                        reviewed and, as appropriate, approved
                                              volume to formulate the 2017–18 crop                                                                                                                average yield for 2015 was 2.01 tons per
                                                                                                                        by USDA.
                                              estimate. Pursuant to § 984.51(b) of the                                                                                                            acre, and the average price received for
                                              order, this figure is converted to a                                      Initial Regulatory Flexibility Analysis                                   2015 was $1,620 per ton. A 100-acre
                                              merchantable kernelweight basis using a                                      Pursuant to requirements set forth in                                  farm with an average yield of 2.01 tons
                                              factor of 0.45 (615,000 tons × 2,000                                      the Regulatory Flexibility Act (RFA) (5                                   per acre would, therefore, have been
                                              pounds per ton × 0.45), which yields                                      U.S.C. 601–612), the Agricultural                                         expected to produce about 201 tons of
                                              553,500,000 kernelweight pounds. At                                       Marketing Service (AMS) has                                               walnuts. At $1,620 per ton, that farm’s
                                              $0.0400 per pound, the new assessment                                     considered the economic impact of this                                    production would have had an
                                              rate should generate $22,140,000 in                                       action on small entities. Accordingly,                                    approximate value of $325,620. This is
                                              assessment income. The assessment                                         AMS has prepared this initial regulatory                                  well below the SBA threshold of
                                              income, plus $2,000,000 from the                                          flexibility analysis.                                                     $750,000; thus, it may be concluded that
                                              Board’s reserve, will be adequate to                                         The purpose of the RFA is to fit                                       the majority of California’s walnut
                                              cover its budgeted expenses.                                              regulatory actions to the scale of                                        growers are considered small growers
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                                                 The assessment rate established in                                     businesses subject to such actions in                                     according to SBA’s definition.
                                              this rule will continue in effect                                         order that small businesses will not be                                      According to information supplied by
                                              indefinitely unless modified,                                             unduly or disproportionately burdened.                                    the industry, approximately two-thirds
                                              suspended, or terminated by USDA                                          Marketing orders issued pursuant to the                                   of California’s walnut handlers shipped
                                              upon recommendation and information                                       Act, and the rules issued thereunder, are                                 merchantable walnuts valued under
                                              submitted by the Board or other                                           unique in that they are brought about                                     $7,500,000 during the 2016–17
                                              available information.                                                    through group action of essentially                                       marketing year and would, therefore, be


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                                                                           Federal Register / Vol. 82, No. 139 / Friday, July 21, 2017 / Rules and Regulations                                                                         33777

                                              considered small handlers according to                                    assessment rate of $0.0400 per                                            Board should collect approximately
                                              the SBA definition.                                                       kernelweight pound of assessable                                          $22,140,000 in assessment income,
                                                This rule decreases the assessment                                      walnuts, which is $0.0065 lower than                                      which, when combined with $2,000,000
                                              rate established for the Board and                                        the assessment rate currently in effect.                                  from its reserves, should be adequate to
                                              collected from handlers for the 2017–18                                   The quantity of assessable walnuts for                                    cover its budgeted expenses.
                                              and subsequent marketing years from                                       the 2017–18 marketing year is estimated
                                              $0.0465 to $0.0400 per kernelweight                                                                                                                    The following table compares major
                                                                                                                        to be 615,000 tons, 62,000 tons greater
                                              pound of assessable walnuts. The Board                                    than the quantity estimated for the                                       budget expenditures recommended by
                                              unanimously recommended 2017–18                                           2016–17 marketing year. Therefore,                                        the Board for the 2016–17 and 2017–18
                                              expenditures of $24,140,000 and an                                        even at the reduced assessment rate, the                                  marketing years:

                                                                                                            Budget Expense Categories                                                                                   2016–17      2017–18

                                              Employee Expenses ................................................................................................................................................        $2,292,000   $1,787,000
                                              Travel/Board Expenses/Annual Audit ......................................................................................................................                    206,000      192,000
                                              Office Expenses .......................................................................................................................................................      262,000      265,000
                                              Program Expenses, Including Research:.
                                                   Controlled Purchases .......................................................................................................................................             10,000       10,000
                                                   Crop Acreage Survey .......................................................................................................................................                   0      103,000
                                                   Crop Estimate ...................................................................................................................................................       130,000      146,000
                                                   Production Research Director ..........................................................................................................................                 175,000       98,000
                                                   Production Research ........................................................................................................................................          1,800,000    2,000,000
                                                   Sustainability Project ........................................................................................................................................          75,000            0
                                                   Grades and Standards Research .....................................................................................................................                     800,000      825,000
                                                   Domestic Market Development ........................................................................................................................                 18,398,040   19,447,830
                                                   Reserve for Contingency ..................................................................................................................................               59,010       47,170



                                                The Board reviewed and unanimously                                      two years’ budgeted expenses. The                                         issue. Finally, interested persons are
                                              recommended 2017–18 expenditures of                                       anticipated reserve should be                                             invited to submit comments on this
                                              $24,140,000. Prior to arriving at this                                    $14,909,800, which is well within the                                     interim rule, including the regulatory
                                              budget, the Board considered alternative                                  order’s requirement.                                                      and informational impacts of this action
                                              expenditure and assessment levels, as                                        According to NASS, the season                                          on small businesses.
                                              well as a recommendation from the                                         average grower price for 2015 was                                            In accordance with the Paperwork
                                              Budget and Personnel Committee                                            $1,620 per ton. Dividing this average                                     Reduction Act of 1995 (44 U.S.C.
                                              (Committee). The Committee considered                                     grower price by 2,000 pounds per ton                                      Chapter 35), the order information
                                              the estimated income and expenses,                                        provides an inshell price per pound of                                    collection requirements have been
                                              given the requests from other                                             $0.81. Dividing this inshell price per                                    previously reviewed by OMB and
                                              committees, such as the Production                                        pound by the 0.45 conversion factor                                       assigned OMB No.: 0581–0178 (Walnuts
                                              Research, Market Development, and                                         (inshell to kernelweight) established in                                  Grown in California). No changes in
                                              Grades and Standards Committees. The                                      the order yields a potential 2017–18                                      those requirements as a result of this
                                              other committees each deliberated,                                        price of about $1.80 per kernelweight                                     action are necessary. Should any
                                              formulated their own budgets of                                           pound of assessable walnuts.                                              changes become necessary, they would
                                              expenses, and made their                                                     To calculate the percentage of grower                                  be submitted to OMB for approval.
                                              recommendations to the Committee.                                         revenue represented by the assessment                                        This action imposes no additional
                                              The Committee also considered the                                         rate, the assessment rate of $0.0400 per                                  reporting or recordkeeping requirements
                                              recommendations and various                                               kernelweight pound is divided by the                                      on either small or large California
                                              assessment rates and expenses, then                                       price. The estimated assessment                                           walnut handlers. As with all Federal
                                              made a recommendation to the Board.                                       revenue for the 2017–18 marketing year,                                   marketing order programs, reports and
                                              The Board ultimately determined that                                      stated as a percentage of total grower                                    forms are periodically reviewed to
                                              the recommended levels were                                               revenue, would be approximately 2                                         reduce information requirements and
                                              reasonable and necessary to properly                                      percent.                                                                  duplication by industry and public
                                              administer the order.                                                        This action decreases the assessment                                   sector agencies.
                                                The assessment rate of $0.0400 per                                      obligation imposed on handlers.                                              AMS is committed to complying with
                                              kernelweight pound of assessable                                          Assessments are applied uniformly on                                      the E-Government Act, to promote the
                                              walnuts was derived by dividing                                           all handlers, and some of the costs may                                   use of the Internet and other
                                              anticipated expenses of $24,140,000 by                                    be passed on to growers. However,                                         information technologies to provide
                                              expected 2017–18 volumes of California                                    decreasing the assessment rate reduces                                    increased opportunities for citizen
                                              walnuts certified as merchantable.                                        the burden on handlers and may reduce                                     access to Government information and
                                              Merchantable walnuts certified for the                                    the burden on growers.                                                    services, and for other purposes.
                                              year are estimated at 553,500,000                                            In addition, the Board’s meeting was                                      USDA has not identified any relevant
                                              kernelweight pounds, which should                                         widely publicized throughout the                                          Federal rules that duplicate, overlap, or
                                              provide $22,140,000 in assessment                                         California walnut industry, and all                                       conflict with this rule.
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                                              income. Assessment income, coupled                                        interested persons were invited to                                           A small business guide on complying
                                              with $2,000,000 from the Board’s                                          attend the meeting and encouraged to                                      with fruit, vegetable, and specialty crop
                                              reserve funds, should allow the Board to                                  participate in Board deliberations on all                                 marketing agreements and orders may
                                              cover its expenses. Unexpended funds                                      issues. Like all Board meetings, the May                                  be viewed at: http://www.ams.usda.gov/
                                              may be retained in a financial reserve,                                   31, 2017, meeting was a public meeting,                                   rules-regulations/moa/small-businesses.
                                              provided that funds in the financial                                      and all entities, both large and small,                                   Any questions about the compliance
                                              reserve do not exceed approximately                                       were able to express their views on this                                  guide should be sent to Richard Lower


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                                              33778                Federal Register / Vol. 82, No. 139 / Friday, July 21, 2017 / Rules and Regulations

                                              at the previously mentioned address in                   DEPARTMENT OF TRANSPORTATION                          www.regulations.gov by searching for
                                              the FOR FURTHER INFORMATION CONTACT                                                                            and locating Docket No. FAA–2016–
                                              section.                                                 Federal Aviation Administration                       6968; or in person at the Docket
                                                 After consideration of all relevant                                                                         Operations Office between 9 a.m. and 5
                                                                                                       14 CFR Part 39                                        p.m., Monday through Friday, except
                                              material presented, including the
                                                                                                       [Docket No. FAA–2016–6968; Directorate                Federal holidays. The AD docket
                                              Board’s recommendation, and other
                                                                                                       Identifier 2015–SW–020–AD; Amendment                  contains this AD, any incorporated-by-
                                              information, it is found that this rule, as
                                                                                                       39–18950; AD 2017–14–06]                              reference service information, the
                                              hereinafter set forth, will tend to                                                                            economic evaluation, any comments
                                              effectuate the declared policy of the Act.               RIN 2120–AA64
                                                                                                                                                             received, and other information. The
                                                 Pursuant to 5 U.S.C. 553, it is also                  Airworthiness Directives; Sikorsky                    street address for the Docket Operations
                                              found and determined upon good cause                     Aircraft Corporation Helicopters (Type                Office (phone: 800–647–5527) is U.S.
                                              that it is impracticable and contrary to                 Certificate Previously Held by                        Department of Transportation, Docket
                                              the public interest to give preliminary                  Schweizer Aircraft Corporation)                       Operations Office, M–30, West Building
                                              notice prior to putting this rule into                                                                         Ground Floor, Room W12–140, 1200
                                              effect and that good cause exists for not                AGENCY:  Federal Aviation                             New Jersey Avenue SE., Washington,
                                              postponing the effective date of this rule               Administration (FAA), DOT.                            DC 20590.
                                              until 30 days after publication in the                   ACTION: Final rule.                                   FOR FURTHER INFORMATION CONTACT:
                                              Federal Register because: (1) The action                 SUMMARY:    We are superseding                        Blaine Williams, Aerospace Engineer,
                                              decreases the assessment rate for                        airworthiness directive (AD) 93–17–13                 Boston Aircraft Certification Office,
                                              merchantable walnuts; (2) handlers are                   for Schweizer Aircraft Corporation and                Engine & Propeller Directorate, 1200
                                              aware of this action, which was                          Hughes Helicopters, Inc. (now Sikorsky                District Avenue, Burlington,
                                              unanimously recommended by the                           Aircraft Corporation) (Sikorsky) Model                Massachusetts 01803; telephone (781)
                                              Board at a public meeting and is similar                 TH55A, 269A, 269A–1, 269B, and 269C                   238–7161; email blaine.williams@
                                              to other assessment rate actions issued                  helicopters. AD 93–17–13 required                     faa.gov.
                                              in past years; and (3) this interim rule                 installing tachometer markings and                    SUPPLEMENTARY INFORMATION:
                                              provides a 60-day comment period, and                    inspecting the lower coupling driveshaft
                                                                                                                                                             Discussion
                                              all comments timely received will be                     (driveshaft). This new AD requires
                                              considered prior to finalization of this                 repetitive inspections of the driveshaft                We issued a notice of proposed
                                              rule.                                                    and expands the applicability to include              rulemaking (NPRM) to amend 14 CFR
                                                                                                       Model 269C–1 helicopters. This AD is                  part 39 to remove AD 93–17–13,
                                              List of Subjects in 7 CFR Part 984                       prompted by reports of accidents                      Amendment 39–8684 (58 FR 51770,
                                                                                                       because of driveshaft failures. The                   October 5, 1993) and add a new AD. AD
                                                Marketing agreements, Nuts,                            actions of this AD are intended to                    93–17–13 applied to Schweizer Aircraft
                                              Reporting and recordkeeping                              prevent the unsafe condition on these                 Corporation and Hughes Helicopters,
                                              requirements, Walnuts.                                   products.                                             Inc. (now Sikorsky) Model TH55A,
                                                For the reasons set forth in the                       DATES: This AD is effective August 25,
                                                                                                                                                             269A, 269A–1, 269B, and 269C
                                              preamble, 7 CFR part 984 is amended as                   2017.                                                 helicopters. AD 93–17–13 required
                                              follows:                                                    The Director of the Federal Register               within 30 days or 100 hours time-in-
                                                                                                       approved the incorporation by reference               service (TIS), whichever occurs first and
                                              PART 984—WALNUTS GROWN IN                                of certain documents listed in this AD                thereafter every 300 hours TIS, visually
                                              CALIFORNIA                                               as of August 25, 2017.                                inspecting for cracks, machining steps,
                                                                                                          The Director of the Federal Register               manufacturing tool marks, surface
                                              ■ 1. The authority citation for part 984                 approved the incorporation by reference               defects, and lack of cleanup during the
                                                                                                       of a certain other publication listed in              production grinding operation. AD 93–
                                              continues to read as follows:
                                                                                                       this AD as of October 20, 1993 (58 FR                 17–13 also required installing engine
                                                  Authority: 7 U.S.C. 601–674.                         51770, October 5, 1993).                              and rotor tachometer markings and
                                                                                                       ADDRESSES: For Schweizer or Sikorsky                  replacing any unairworthy driveshaft
                                              ■ 2. Section 984.347 is revised to read                                                                        before further flight.
                                              as follows:                                              service information identified in this
                                                                                                       final rule, contact Sikorsky Aircraft                   The NPRM published in the Federal
                                              § 984.347    Assessment rate.                            Corporation, Customer Service                         Register on January 5, 2017 (82 FR
                                                                                                       Engineering, 124 Quarry Road,                         1267) and was prompted by a safety
                                                On and after September 1, 2017, an                     Trumbull, CT 06611; telephone 1–800–                  analysis by Sikorsky that determined
                                              assessment rate of $0.0400 per                           Winged–S or 203–416–4299; email wcs_                  the initial and recurrent inspection
                                              kernelweight pound is established for                    cust_service_eng.gr-sik@lmco.com. You                 intervals and inspection method
                                              California merchantable walnuts.                         may review a copy of the referenced                   required by AD 93–17–13 were not
                                                Dated: July 17, 2017.                                  service information at the FAA, Office                adequate to detect all corrosion, pits,
                                                                                                       of the Regional Counsel, Southwest                    nicks, scratches, dents, and cracks.
                                              Bruce Summers,
                                                                                                       Region, 10101 Hillwood Pkwy., Room                    Accidents due to driveshaft failures
                                              Acting Administrator, Agricultural Marketing                                                                   continued to occur after AD 93–17–13
                                                                                                       6N–321, Fort Worth, TX 76177. It is also
                                              Service.                                                                                                       was issued. Therefore, the NPRM
                                                                                                       available on the Internet at http://
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                                              [FR Doc. 2017–15304 Filed 7–20–17; 8:45 am]                                                                    proposed to require, within 25 hours
                                                                                                       www.regulations.gov by searching for
                                              BILLING CODE 3410–02–P                                   and locating Docket No. FAA–2016–                     TIS and thereafter at intervals not to
                                                                                                       6968.                                                 exceed 150 hours TIS, visually
                                                                                                                                                             inspecting the driveshaft. If there are no
                                                                                                       Examining the AD Docket                               cracks, corrosion, or other damage, the
                                                                                                         You may examine the AD docket on                    NPRM proposed performing a magnetic
                                                                                                       the Internet at http://                               particle inspection. If there is a crack or


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Document Created: 2017-07-21 06:00:12
Document Modified: 2017-07-21 06:00:12
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
ActionInterim rule with request for comments.
DatesEffective July 24, 2017. Comments received by September 19, 2017 will be considered prior to issuance of a final rule.
ContactTerry Vawter, Senior Marketing Specialist, or Jeffrey Smutny, Regional Director, 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 Citation82 FR 33775 
CFR AssociatedMarketing Agreements; Nuts; Reporting and Recordkeeping Requirements and Walnuts

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