Walnuts Grown in California; Decreased Assessment Rate
| Published date | 23 June 2021 |
| Citation | 86 FR 32721 |
| Record Number | 2021-13039 |
| Section | Rules and Regulations |
| Court | Agricultural Marketing Service |
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.
Rules and Regulations Federal Register
32721
Vol. 86, No. 118
Wednesday, June 23, 2021
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Doc. No. AMS–SC–20–0075; SC20–984–2
FR]
Walnuts Grown in California;
Decreased Assessment Rate
AGENCY
: Agricultural Marketing Service,
USDA.
ACTION
: Final rule.
SUMMARY
: This final rule implements a
recommendation from the California
Walnut Board (Board) to decrease the
assessment rate established for the
2020–21 and subsequent marketing
years. The assessment rate will remain
in effect indefinitely unless modified,
suspended, or terminated.
DATES
: Effective July 23, 2021.
FOR FURTHER INFORMATION CONTACT
:
Bianca Bertrand, Management and
Program Analyst, California Marketing
Field Office, Marketing Order and
Agreement Division, Specialty Crops
Program, AMS, USDA; Telephone: (559)
487–5901, Fax: (559) 487–5906, or
Email: Biancam.Bertrand@usda.gov or
Gary Olson, Acting Regional Director;
Telephone: (503) 326–2055, or Email:
GaryD.Olson@usda.gov.
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, or Email: Richard.Lower@
usda.gov.
SUPPLEMENTARY INFORMATION
: This
action, pursuant to 5 U.S.C. 553,
implements an amendment to
regulations issued to carry out a
marketing order as defined in 7 CFR
900.2(j). This rule is issued under
Marketing Order No. 984, as amended (7
CFR part 984), regulating the handling
of walnuts grown in California. Part 984,
(referred to as ‘‘the Order’’) is effective
under the Agricultural Marketing
Agreement Act of 1937, as amended (7
U.S.C. 601–674), hereinafter referred to
as the ‘‘Act.’’ The Board locally
administers the Order and is comprised
of growers and handlers operating
within the area of production, and a
public member.
The Department of Agriculture
(USDA) is issuing this rule in
conformance with Executive Orders
13563 and 13175. In accordance with
Executive Order 13175, AMS has not
identified any tribal implications as a
result of this rule. This rule falls within
a category of regulatory actions that the
Office of Management and Budget
(OMB) exempted from Executive Order
12866 review.
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. Under the 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 be applicable to all
assessable walnuts for the 2020–21
marketing year, 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 decreases the assessment
rate from $0.0400 per kernelweight
pound assessable walnuts, the rate that
was established for the 2017–18 and
subsequent marketing years, to $0.0250
per kernelweight pound of assessable
walnuts handled for the 2020–21 and
subsequent marketing years.
The 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 are familiar with the Board’s
needs and with the costs of goods and
services in their local area and are thus
able to formulate an appropriate budget
and assessment rate. The assessment
rate is formulated and discussed in a
public meeting and all directly affected
persons have an opportunity to
participate and provide input.
For the 2017–18 and subsequent
marketing periods, the Board
recommended, and USDA approved, an
assessment rate of $0.0400 per
kernelweight pound of assessable
walnuts handled. That assessment rate
continued until modified, suspended, or
terminated by USDA upon
recommendation and information
submitted by the Board or other
information available to USDA.
On September 11, 2020, the Board
unanimously recommended 2020–21
expenditures of $17,990,000 and an
assessment rate of $0.0250 per
kernelweight pound of assessable
walnuts. In comparison, last year’s
budgeted expenditures were
$25,760,000. The assessment rate of
$0.0250 is $0.0150 lower than the rate
currently in effect. The Board
recommended decreasing the
assessment rate to reduce the
assessment burden on handlers. Funds
from assessments and from the Board’s
reserve will be sufficient to cover
proposed expenses, while maintaining
the Board’s reserve within the
requirements of the Order at no more
than two years’ budgeted expenses.
The major expenditures
recommended by the Board for the
2020–21 marketing year include
$1,930,000 for employee expenses,
$283,000 for office expenses, $1,600,000
for production research, $825,000 for
grades and standards activities, and
$13,112,000 for domestic market
development. Budgeted expenses for
these items in 2019–20 were $1,896,000,
$293,000, $2,000,000, $825,000, and
$20,700,000, respectively.
The Board derived the recommended
assessment rate by considering
anticipated expenses; estimated
certification (‘‘certification’’ means
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Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Rules and Regulations
having the walnuts inspected) of
650,000 tons (inshell), based on a three-
year average; and the amount of funds
available in the authorized reserve.
Pursuant to § 984.51(b) of the Order,
the estimated production is converted to
a merchantable kernelweight basis using
a factor of 0.45 (650,000 tons × 2,000
pounds per ton × 0.45), which yields
585,000,000 kernelweight pounds. At
$0.0250 per pound, the assessment rate
will generate $14,625,000 in assessment
income and, along with funds from the
reserve, will meet estimated expenses of
$17,990,000.
Funds in the reserve (currently
$20,133,075) will be kept within the
maximum permitted in § 984.69 of the
Order of approximately two marketing
years’ budgeted expenses. The reserve at
the end of the 2020–21 marketing year
is anticipated to be $13,258,075.
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 the assessment rate will be
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 may express
their views at these meetings. USDA
will evaluate Board recommendations
and other available information to
determine whether modification of the
assessment rate is needed. Further
rulemaking would be undertaken as
necessary. The Board’s 2020–21 budget
and those for subsequent marketing
years will 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 90 handlers
subject to regulation under the Order
and approximately 4,400 walnut
growers in the production area. The
Small Business Administration (SBA)
defines small agricultural service firms
as those having annual receipts of less
than $30,000,000, and small agricultural
producers as those having annual
receipts of less than $1,000,000 (13 CFR
121.201).
The Board reported that
approximately 82 percent of California’s
walnut handlers shipped merchantable
walnuts valued under $30 million
during the 2018–2019 marketing year
and would, therefore, be considered
small handlers according to the SBA
definition.
Data from the 2017 Agricultural
Census, published by USDA’s National
Agricultural Statistics Service (NASS),
show that 86 percent of California farms
growing walnuts had walnut sales of
less than $1 million.
An alternative computation includes
more recent NASS data, starting with a
three-year average value of utilized
production of $1.263 billion for the
most recent seasons for which data is
available (2017/18 through 2019/20).
Dividing that figure by the number of
walnut growers (4,400) yields an
average annual crop value per grower of
approximately $287,045. This figure is
well below the SBA small agricultural
producer threshold of $1,000,000 in
annual sales. Assuming a normal
distribution, this provides evidence that
a large majority of walnut growers can
be considered small agricultural
producers according to the SBA
definition.
This rule decreases the assessment
rate collected from handlers for the
2020–21 and subsequent marketing
years from $0.0400 to $0.0250 per
kernelweight pound of assessable
walnuts. The Board unanimously
recommended 2020–21 expenditures of
$17,990,000 and an assessment rate of
$0.0250 per kernelweight pound of
assessable walnuts. The assessment rate
of $0.0250 is $0.0150 lower than the rate
currently in effect. The quantity of
assessable walnuts for the 2020–21
marketing year is estimated at 650,000
tons (inshell), which is equivalent to
585,000,000 kernelweight pounds.
Thus, the $0.0250 rate should provide
$14,625,000 in assessment income. The
Board anticipates that the income
derived from handler assessments, along
with funds from the Board’s authorized
reserve, will be adequate to cover
budgeted expenses for the 2020–2021
marketing year.
The major expenditures
recommended by the Board for the
2020–21 marketing year include
$1,930,000 for employee expenses,
$283,000 for office expenses, $1,600,000
for production research, $825,000 for
grades and standards activities, and
$13,112,000 for domestic market
development. Budgeted expenses for
these items in 2019–20 were $1,896,000,
$293,000, $2,000,000, $825,000, and
$20,700,000, respectively.
The Board unanimously
recommended decreasing the
assessment rate to reduce the
assessment burden on handlers, and
recommended utilizing funds from the
authorized reserve to help cover the
portion of the Board expenses.
Prior to arriving at this budget and
assessment rate, the Board considered
information from various sources, such
as the Board’s Executive Committee.
The Board discussed alternative
expenditure levels, based upon the
relative value of various activities to the
California walnut industry. The Board
recommended the assessment rate of
$0.0250 to provide $14,625,000 in
assessment income based on the
estimation. The Board determined that
assessment revenue, along with funds
from the authorized reserve will be
adequate to cover budgeted expenses for
the 2020–21 marketing year.
Based upon information from the
National Agricultural Statistics Service
(NASS), the grower price reported for
walnuts in 2019 was $1,970 per ton
($0.99 per pound) of walnuts. In order
to determine the estimated assessment
revenue as a percentage of the total
grower revenue, we calculate the
assessment rate ($0.0250 per
kernelweight pound) times the
estimated production (585,000,000
kernelweight pounds), which equals the
assessment revenue of $14,625,000. The
grower revenue is calculated by
multiplying the grower price of $1,970
per ton ($0.99 per kernelweight pound)
times the estimated production
(585,000,000 kernelweight pounds),
which equals the grower revenue of
$579,150,000. The final step, dividing
the assessment revenue by the grower
revenue, indicates that, for the 2020–21
marketing year, the estimated
assessment revenue as a percentage of
total grower revenue would be about 2.5
percent.
This rule 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 also
reduce the burden on growers.
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1
This interpretive rule uses the terms
‘‘supervised nonbank’’ and ‘‘very large bank or
credit union’’ for convenience. The more precise
definitions of the persons that are subject to the
Bureau’s supervisory authority under sections 1024
and 1025 of the CFPA are set out in the statute. 12
U.S.C. 5514(a), 5515(a). The Bureau also has certain
additional supervisory authority regarding service
providers to these persons, and the reasoning of this
interpretive rule also extends to those service
providers. 12 U.S.C. 5514(e), 5515(d).
The Board’s meeting was widely
publicized throughout the California
walnut industry. All interested persons
were invited to attend the meeting and
participate in Board deliberations on all
issues. Like all Board meetings, the
September 11, 2020, meeting was a
public meeting and all entities, both
large and small, were able to express
views on this issue. Finally, interested
persons were invited to submit
comments on this rule, including the
regulatory and information collection
impacts of this action on small
businesses.
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
chapter 35), the Order’s information
collection requirements have been
previously approved by the OMB and
assigned OMB No. 0581–0178 Vegetable
and Specialty Crops. No changes in
those requirements will be necessary as
a result of this rule. Should any changes
become necessary, they would be
submitted to OMB for approval.
This rule will not impose any
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 final rule.
A proposed rule concerning this
action was published in the Federal
Register on March 5, 2021 (86 FR
12837). The Board notified all California
walnut handlers of the proposed
assessment rate decrease. The proposed
rule was made available through the
internet by USDA and the Office of the
Federal Register. A 30-day comment
period ending April 5, 2021, was
provided for interested persons to
respond to the proposal. No comments
were received. Accordingly, no changes
will be made to the proposed rule.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://
www.ams.usda.gov/rules-regulations/
moa/small-businesses. Any questions
about the compliance guide should be
sent to Richard Lower 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
information available, it is hereby found
that this rule will tend to effectuate the
declared policy of the Act.
List of Subjects in 7 CFR Part 984
Marketing agreements, Reporting and
recordkeeping requirements, and
Walnuts.
For the reasons set forth in the
preamble, 7 CFR part 984 is amended as
follows:
PART 984—WALNUTS GROWN IN
CALIFORNIA
■1. The authority citation for part 984
continues to read as follows:
Authority: 7 U.S.C. 601–674.
■2. Section 984.347 is revised to read
as follows:
§ 984.347 Assessment rate.
On and after September 1, 2020, an
assessment rate of $0.0250 per
kernelweight pound is established for
California merchantable walnuts.
Erin Morris,
Associate Administrator, Agricultural
Marketing Service.
[FR Doc. 2021–13039 Filed 6–22–21; 8:45 am]
BILLING CODE P
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Chapter X
Examinations for Risks to Active-Duty
Servicemembers and Their Covered
Dependents
AGENCY
: Bureau of Consumer Financial
Protection.
ACTION
: Interpretive rule.
SUMMARY
: The Bureau of Consumer
Financial Protection (Bureau) has
statutory authority to conduct
examinations, at those institutions that
it supervises, regarding the risks to
active-duty servicemembers and their
covered dependents that are presented
by conduct that violates the Military
Lending Act. This interpretive rule
explains the basis for that authority.
DATES
: This interpretive rule is effective
on June 23, 2021.
FOR FURTHER INFORMATION CONTACT
:
Christopher Shelton, Senior Counsel,
Legal Division, (202) 435–7700. If you
require this document in an alternative
electronic format, please contact CFPB_
Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION
:
I. Introduction
The Consumer Financial Protection
Act of 2010 (CFPA) authorizes the
Bureau to conduct examinations of
supervised nonbanks for the purposes of
assessing and detecting ‘‘risks to
consumers.’’ As explained below, the
risks to active-duty servicemembers and
their dependents from conduct that
violates the Military Lending Act (MLA)
fall squarely within that category. The
CFPA also authorizes the Bureau to
conduct examinations of very large
banks and credit unions for purposes of
detecting and assessing those ‘‘risks to
consumers’’ that are ‘‘associated’’ with
‘‘activities subject to’’ Federal consumer
financial laws, such as the Truth in
Lending Act (TILA) or the CFPA.
1
Because conduct that violates the MLA
is associated with activities that are
subject to TILA and the CFPA, that
standard is also satisfied here. The
Bureau’s interpretation is also entirely
consistent with the enforcement scheme
of the MLA, which by incorporating
TILA’s enforcement scheme authorizes
the Bureau to use formal administrative
adjudications, civil enforcement actions,
and other authorities to enforce the
MLA. That enforcement scheme is
complemented by the Bureau’s use of
the examination process to detect and
assess risks to consumers arising from
violations of the MLA. This reading also
avoids an unworkable gap in Bureau
examinations that can otherwise only be
potentially filled by the formal
enforcement process; based on the
Bureau’s experience, that gap leads to
wasteful inefficiencies for both the
Bureau and supervised institutions.
Additionally, the Bureau is no longer
persuaded by counterarguments that it
does not have the relevant authority, for
reasons that will also be discussed
below.
This part I is followed by part II,
which provides some general
background about the CFPA, the MLA,
TILA, and the history of Bureau
examinations regarding the MLA. Part
III sets out the Bureau’s analysis of its
authority with respect to supervised
nonbanks, including the statutory text;
the statutory scheme; and
counterarguments that the Bureau no
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