Walnuts Grown in California; Order Amending Marketing Order No. 984
| Court | Agricultural Marketing Service |
| Citation | 88 FR 56745 |
| Published date | 21 August 2023 |
| Record Number | 2023-17753 |
| Section | Rules and Regulations |
Federal Register, Volume 88 Issue 160 (Monday, August 21, 2023)
[Federal Register Volume 88, Number 160 (Monday, August 21, 2023)]
[Rules and Regulations]
[Pages 56745-56750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-17753]
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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.
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Federal Register / Vol. 88, No. 160 / Monday, August 21, 2023 / Rules
and Regulations
[[Page 56745]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Doc. No. 22-J-0011; AMS-SC-22-0010; SC22-981-1]
Walnuts Grown in California; Order Amending Marketing Order No.
984
AGENCY: Agricultural Marketing Service, Department of Agriculture
(USDA).
ACTION: Final rule.
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SUMMARY: This final rule amends Marketing Order No. 984, which
regulates the handling of walnuts grown in California. USDA approved
and adopted amendments proposed by the California Walnut Board (the
Board) after due consideration of a public hearing record, and after
California walnut producers voted in favor of such amendments in a
referendum. This rule eliminates mandatory inspection and certification
of inshell and shelled walnuts, and of shelled walnuts for processing;
creates a new mechanism for determining and collecting handler
assessments; adds the authority to charge interest for late payments;
establishes an assessment rate of $0.0125 per inshell pound of walnuts;
expands the definition of ``to handle'' to include ``receive''; and
removes volume control authority. In addition, the Agricultural
Marketing Service (AMS) made necessary changes to the marketing order
to conform to the amendments adopted.
DATES: This rule is effective September 20, 2023.
FOR FURTHER INFORMATION CONTACT: Geronimo Quinones, Market Development
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue
SW, Stop 0237, Washington, DC 20250-0237; Telephone: (202) 308-2339 or
Matthew Pavone, Market Development Division, Specialty Crops Program,
AMS, USDA, 1400 Independence Avenue SW, Stop 0237, Washington, DC
20250-0237; Telephone: (202) 720-8085, or Email:
[email protected] or [email protected].
Small businesses may request information on this proceeding by
contacting Richard E. Lower, Market Development Division, Specialty
Crops Program, AMS, USDA, 1400 Independence Avenue SW, Stop 0237,
Washington, DC 20250-0237; Telephone: (202) 720-8085, or Email:
[email protected].
SUPPLEMENTARY INFORMATION: Prior documents in this proceeding: Notice
of Hearing published in the April 1, 2022, issue of the Federal
Register (87 FR 19020); a Recommended Decision published in the October
25, 2022, issue of the Federal Register (87 FR 64385); and a
Secretary's Decision and Referendum Order published in the March 7,
2023, issue of the Federal Register (88 FR 14083).
This action is governed by the provisions of sections 556 and 557
of title 5 of the United States Code and, therefore, is excluded from
the requirements of Executive Orders 12866, 13563, and 13175.
Notice of this rulemaking action was provided to Tribal governments
through the USDA Office of Tribal Relations.
Preliminary Statement
This action finalizes amendments 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 final rule was formulated on the record of a public
hearing held via videoconference technology on April 19 and 20, 2022.
The hearing was conducted pursuant to the provisions of the Act, and
the applicable rules of practice and procedure governing the
formulation of marketing agreements and orders (7 CFR part 900). Notice
of this hearing was published in the Federal Register on April 1, 2022
(87 FR 19020), and outlined each of the proposed amendments to the
Order.
Upon the basis of evidence introduced at the hearing and the record
thereof, the Administrator of AMS on November 4, 2022, filed with the
Hearing Clerk, USDA, a Recommended Decision and Opportunity to File
Written Exceptions thereto by November 25, 2022. No exceptions were
filed.
A Secretary's Decision and Referendum Order published in the
Federal Register on March 7, 2023 (88 FR 14083), directed that a
referendum be conducted during the period of April 3 through April 21,
2023, among eligible California walnut growers to determine whether
they favored the amendments to the Order. To become effective, per the
Order, the proposed amendments required approval by at least two-thirds
of those growers voting, or by voters representing at least two-thirds
of the volume of walnuts represented by voters voting in the
referendum. The amendment to eliminate mandatory inspection and
certification of inshell and shelled walnuts, and of shelled walnuts
for processing was favored by 81.06 percent of the growers voting in
the referendum, representing 87.95 percent of the total volume of
walnuts produced by those voting. The amendment to create a new
mechanism for determining handler assessments and to add the authority
to charge interest for late payments was favored by 81.39 percent of
the growers voting in the referendum, representing 86.74 percent of the
total volume of walnuts produced by those voting. The amendment to
establish an assessment rate of $0.0125 per inshell pound of walnuts
was favored by 77.25 percent of the growers voting in the referendum,
representing 84.69 percent of the total volume of walnuts produced by
those voting. The amendment to create a new mechanism for collecting
handler assessments and to expand the definition of ``to handle'' to
include ``receive'' was favored by 85.56 percent of the growers voting
in the referendum, representing 89.16 percent of the total volume of
walnuts produced by those voting. The amendment to remove volume
control authority was favored by 86.34 percent of the growers voting in
the referendum, representing 91.40 percent of the total volume of
walnuts produced by those voting.
The amendments favored by voters included in this final rule remove
from the Order quality and size regulations, including mandatory
inspection and
[[Page 56746]]
certification requirements, and retain the authority to allow the Board
to recommend new handling regulations in the future; modify the method
of calculation of assessments to be based on inshell pounds and add the
authority to allow the Board to recommend late payment charges and/or
interest; establish an initial assessment rate of $0.0125 per inshell
pound of walnuts; expand the definition of ``to handle'' to include
``receive''; and remove volume control authority, including reserve
pool authority, and revise subsequent sections of the Order to remove
volume control provisions.
AMS also recommended changes as necessary to the Order to conform
to the amendments adopted, or to correct minor inconsistencies and
typographical errors. Accordingly, AMS did the following: added
language regarding exemptions in Sec. 984.67; removed the reference to
the term ``merchantable'' in Sec. 984.22 and from the headings and
paragraphs in Sec. Sec. 984.72 and 984.472(a) and (c); revised the
heading in Sec. 984.21 from ``Eligibility'' to ``Handler inventory'';
revised Sec. Sec. 984.69(e) and 984.89(b)(4) to replace the term
``fiscal period'' with ``marketing year''; revised the figure in Sec.
984.347; and revised 984.69(e) to replace ``current season's
certifications'' with ``current marketing year''.
AMS reinserted language regarding exemptions under Sec. 984.67
after determining that the language was inadvertently omitted in a
prior rulemaking conducted in May 2020. AMS removed the term
``merchantable'' in Sec. 984.22 and from the headings and paragraphs
in Sec. Sec. 984.72 and 984.472(a) and (c) after determining that
there would be no grade and size regulations in effect to distinguish
``merchantable'' walnuts from other walnuts due to the elimination of
mandatory inspection and certification. AMS revised the heading in
Sec. 984.21 from ``Eligibility'' to ``Handler inventory'' after
determining that the heading, ``Eligibility'', did not reflect the
purposes of the provision, which defines handler inventory. AMS revised
Sec. Sec. 984.69(e) and 984.89(b)(4) to replace the term ``fiscal
period'' with ``marketing year'' after determining that the term
``fiscal period'' is not defined in the Order, whereas ``marketing
year'' is defined and already used throughout the Order. This rule
revises Sec. 984.347 to establish an assessment rate of $0.0125 per
pound of inshell walnuts.\1\ Finally, 7 CFR 984.69(d) currently refers
to permitting advanced assessments when assessments based on the
``current season's certifications'' are not yet available. AMS
determined that because Sec. 984.51 will be removed, assessments will
no longer be based on certifications, and we amended the language in
revised Sec. 984.69(e) to refer to ``assessments from the current
marketing year.'' The regulatory text included in this final rule
reflects these changes.
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\1\ A typographical error in the April 1, 2022, hearing notice
listed a proposed assessment rate of $0.125 per pound of inshell
walnuts, which was subsequently corrected at the hearing and in the
Recommended and Secretary's Decisions.
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Small Business Considerations
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA), AMS considered the economic impact of this
action on small entities. Accordingly, AMS prepared this final
regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
businesses subject to such actions so that small businesses will not be
unduly or disproportionately burdened. Marketing orders and amendments
thereto are unique in that they are normally brought about through
group action of essentially small entities for their own benefit. The
RFA requires, where feasible, an estimate of the number of small
businesses affected by the rule. This regulatory flexibility analysis
estimates the proportion of small businesses because it is not feasible
to estimate numbers.
According to the hearing record, there are approximately 4,500
producers and 85 handlers in the production area. Record evidence
includes reference to a study showing that the walnut industry
contributes 85,000 jobs to the economy, directly and indirectly.
The Small Business Administration (SBA) establishes size standards
that determine whether a business entity is defined as a small
business. The size standards are based on the entity's economic
activity, or industry, and generally use the North American Industry
Classification System (NAICS). The size standards are expressed in
annual receipts in millions of dollars or in number of employees, and
indicate the maximum allowed for an entity to be considered a small
business.
The SBA defines small agricultural service firms (handlers) as
those having annual receipts (sales) equal to or less than $34 million
(Postharvest Crop Activities, NAICS code 115114). Small walnut
producers are defined as those having annual receipts equal to or less
than $3.75 million (Tree Nut Farming, NAICS code 111335). (See 13 CFR
121.201.)
Effective May 2, 2022, SBA issued a final rule updating small
business size standards for agriculture (86 FR 18607). The tree nut
farming (NAICS 111335) size standard changed from $1 million to $3.25
million. Effective December 19, 2022, SBA issued a final rule again
updating the tree nut size small business size standard, raising it to
$3.75 million.
The witnesses who identified themselves as small producers did so
using the SBA size standard in effect at the time of the hearing ($1.0
million of gross annual receipts); they are also small under the
current standard of $3.75 million of gross annual receipts.
Record evidence showed that approximately 82 percent of California
walnut handlers (70 out of 85) shipped walnuts valued under $34 million
during the 2018-2019 marketing year and would therefore be considered
small handlers according to the SBA definition.
Data in the hearing record from the 2017 Agricultural Census,
published by USDA'S National Agricultural Statistics Service (NASS),
showed that 4,885 California farms growing walnuts (86.06 percent of
the total) had walnut sales of less than $1 million which is well below
the SBA small business size threshold of equal to or less than $3.75
million. In the 2017 Agricultural Census, the largest sales value size
category for walnuts was $1.0 million.
To obtain an alternative estimate of the number and percentage of
small walnut farms, using NASS data from the hearing record, the first
step was computing a 3-year average crop value, which was roughly
$1.077 billion for the period 2018-19 to 2020-21. The average walnut
bearing acreage over that same 3-year period was 372,500 acres.
Dividing crop value by bearing acreage shows a per acre revenue
estimate of $2,891. Using these numbers, it would take approximately
1,297 acres ($3,750,000 divided by $2,891) to yield roughly $3,750,000
in annual walnut sales. The 2017 Agricultural Census data show that
5,330 walnut farms in 2017 (93.9 percent of the total) were below 1,000
acres. One thousand acres is the Census size category closest to the
1,297-acre estimate for an average walnut farm to have $3.75 million in
annual receipts). Therefore, 5,330 of the California walnut farms
counted in the 2017 Agricultural Census (93.9 percent or more), would
be considered small businesses according to the current SBA definition
of $3.75 million or less in gross annual receipts.
During the hearing held April 19 and 20, 2022, interested parties
were invited to present evidence on the probable regulatory impact of
the amendments to the Order on small businesses. The hearing record
showed that none of the
[[Page 56747]]
amendments would have a significant economic impact on a substantial
number of small agricultural growers or firms.
Material Issues
This action amends the Order to eliminate mandatory inspection and
certification of inshell and shelled walnuts, and of shelled walnuts
for processing; create a new mechanism for determining and collecting
handler assessments; add the authority to charge interest for late
payments; establish an assessment rate of $0.0125 per inshell pound of
walnuts; expand the definition of ``to handle'' to include ``receive'';
and remove volume control authority.
The hearing record showed that a key reason for the amendments is
to reduce the costs and administrative burden to handlers and the Board
while providing a cost savings to growers. Witnesses (both large and
small) testified to major technological improvements in sorting,
processing and storage, and the adoption of new varieties, as key
evidence of how current industry practices result in walnut quality
that exceeds USDA standards, making the mandatory inspection
requirement redundant. Record evidence also showed that the elimination
of mandatory inspection and certification will result in cost savings
of approximately $6 million per year and will benefit all handlers and
producers.
The new assessment mechanism is based on walnuts received instead
of walnuts certified, and the calculation of assessments is based on
receipts submitted to the Board. Invoicing begins after January 15, and
billings are generated in January, April, and July and as prescribed by
the Board. Payments are due to the Board in February, May, and August.
Hearing evidence showed that this new mechanism is an equitable change
that decreases the administrative burden for all handlers and the
Board.
Hearing evidence also showed that producers and handlers of all
sizes will benefit from the amendments adopted and that there will be
no negative implications on small agricultural firms. Handlers will
benefit from reduced operational process redundancies, resulting in
lower associated costs and administrative burdens. In addition,
producers will benefit from higher grower returns through cost savings
passed on from increased handler efficiencies. Consumers are also
anticipated to benefit from lower prices resulting from reduced handler
costs.
Lastly, the volume control authority in the Order has been
suspended for over 30 years. The record showed that a key reason for
removing volume control authority from the Order is that the walnut
industry is comprised of mostly small businesses which do not intend to
use volume regulation in the future.
These amendments align the Order with current market-driven
practices that result in a more efficient industry for producers and
handlers of all sizes. USDA did not identify any relevant Federal rules
that duplicate, overlap or conflict with this final rule. These
amendments are intended to improve the operation and administration of
the Order and to assist in the marketing of California walnuts.
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.
Paperwork Reduction Act
Current information collection requirements that are part of the
Federal marketing order for California walnuts (7 CFR part 984) are
approved under OMB No. 0581-0178 Vegetables and Specialty Crops. No
changes in these requirements are anticipated because of this
proceeding. Should any such changes become necessary, they would be
submitted to OMB for approval.
As with all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies.
Civil Justice Reform
The amendments to the Order herein have been reviewed under
Executive Order 12988, Civil Justice Reform. They are not intended to
have retroactive effect. The amendments do not preempt any State or
local laws, regulations, or policies, unless they present an
irreconcilable conflict with this rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under Sec. 608c(15)(A) of the
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. A
handler is afforded the opportunity for a hearing on the petition.
After the hearing, USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed no later than 20 days after the date of
entry of the ruling.
Order Amending the Order Regulating the Handling of Walnuts Grown in
California 2
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\2\ This order shall not become effective unless and until the
requirements of Sec. 900.14 of the rules of practice and procedure
governing proceedings to formulate marketing agreements and
marketing orders have been met.
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Findings and Determinations
The findings and determinations hereinafter set forth are
supplementary to the findings and determinations that were previously
made in connection with the issuance of the marketing order; and all
said previous findings and determinations are hereby ratified and
affirmed, except insofar as such findings and determinations may be in
conflict with the findings and determinations set forth herein.
(a) Findings and Determinations Upon the Basis of the Hearing Record
Pursuant to the provisions of the Agricultural Marketing Agreement
Act of 1937, as amended (7 U.S.C. 601-674), and the applicable rules of
practice and procedure effective thereunder (7 CFR part 900), a public
hearing was held upon proposed further amendment of Marketing Order No.
984, regulating the handling of walnuts grown in California.
Upon the basis of the record, it is found that:
(1) The marketing order, as amended, and as hereby further amended,
and all of the terms and conditions thereof, would tend to effectuate
the declared policy of the Act;
(2) The marketing order, as amended, and as hereby further amended,
regulates the handling of walnuts grown in the production area in the
same manner as, and is applicable only to, persons in the respective
classes of commercial and industrial activity specified in the
marketing order upon which a hearing has been held;
(3) The marketing order, as amended, and as hereby further amended,
is limited in its application to the smallest regional production area
that is practicable, consistent with carrying out the declared policy
of the Act, and the issuance of several orders applicable to
subdivisions of the production area would not effectively carry out the
declared policy of the Act;
(4) The marketing order, as amended, and as hereby further amended,
prescribes, insofar as practicable, such
[[Page 56748]]
different terms applicable to different parts of the production area as
are necessary to give due recognition to the differences in the
production and marketing of walnuts grown in California; and
(5) All handling of walnuts grown in the production area as defined
in the marketing order is in the current of interstate or foreign
commerce or directly burdens, obstructs, or affects such commerce.
Order Relative To Handling
It is therefore ordered, that on and after the effective date
hereof, all handling of walnuts grown in California shall be in
conformity to, and in compliance with, the terms and conditions of the
said order as hereby amended as follows:
The provisions of the proposed marketing order amending the Order
contained in the Recommended Decision published in the October 25,
2022, issue of the Federal Register (87 FR 64385), and as revised in
the Secretary's Decision (88 FR 14083), will be and are the terms and
provisions of this order amending the Order and are set forth in full
herein.
List of Subjects in 7 CFR Part 984
Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
Recommended Further Amendment of the Marketing Order
For the reasons set out in the preamble, the Agricultural Marketing
Service amends 7 CFR part 984 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. Revise Sec. 984.12 to read as follows:
Sec. 984.12 Substandard walnuts.
Substandard walnuts means all walnuts (whether inshell or shelled)
that do not meet the minimum standard prescribed for merchantable
walnuts whenever regulations are in effect pursuant to Sec. 984.50.
0
3. Revise Sec. 984.13 to read as follows:
Sec. 984.13 To handle.
To handle means to receive, pack, sell, consign, transport, or ship
(except as a common or contract carrier of walnuts owned by another
person), or in any other way to put walnuts, inshell or shelled, into
the current of commerce either within the area of production or from
such area to any point outside thereof, or for a manufacturer or
retailer within the area of production to purchase directly from a
grower. However, sales and deliveries by a grower to handlers, hullers,
or other processors within the area of production shall not, in itself,
be considered as handling by a grower. The term ``to handle'' shall not
include sales and deliveries within the area of production between
handlers.
0
4. Amend Sec. 984.21 by revising the section heading to read as
follows:
Sec. 984.21 Handler inventory.
* * * * *
Sec. 984.22 [Amended]
0
5. Amend Sec. 984.22 by removing the word ``merchantable'' in
paragraphs (a) and (b).
Sec. Sec. 984.23 and 984.26 [Removed and Reserved]
0
6. Amend Sec. Sec. 984.23 and 984.26 by lifting the stay of May 7,
2020, and removing and reserving the sections.
0
7. Revise Sec. 984.32 to read as follows:
Sec. 984.32 To certify.
To certify means the issuance of a certification of inspection of
walnuts in accordance with regulations issued pursuant to Sec. 984.50.
Sec. 984.33 [Removed and Reserved]
0
8. Amend Sec. 984.33 by lifting the stay of May 7, 2020, and removing
and reserving the section.
0
9. Amend Sec. 984.37 by revising paragraphs (b) and (c)(4) to read as
follows:
Sec. 984.37 Nominations.
* * * * *
(b) Nominations for handler members shall be submitted on ballots
mailed by the Board to all handlers in their respective Districts. All
handlers' votes shall be weighted by the weight of inshell walnuts
handled by each handler during the preceding marketing year. Each
handler in the production area may vote for handler member nominees and
their alternates. However, no handler with less than 35% of the crop
shall have more than one member and one alternate member. The person
receiving the highest number of votes for each handler member position
shall be the nominee for that position.
(c) * * *
(4) Nominations for handler members representing handlers that do
not handle 35% or more of the crop shall be submitted on ballots mailed
by the Board to those handlers. The votes of these handlers shall be
weighted by the weight of inshell walnuts handled by each handler
during the preceding marketing year. Each handler in the production
area may vote for handler member nominees and their alternates of this
paragraph (c)(4). However, no handler shall have more than one person
on the Board either as member or alternate member. The person receiving
the highest number of votes for a handler member position of this
paragraph (c)(4) shall be the nominee for that position.
* * * * *
0
10. Amend Sec. 984.48 by:
0
a. Revising paragraph (a) introductory text;
0
b. Removing the words ``merchantable and substandard'' in paragraph
(a)(3);
0
c. Lifting the stay of May 7, 2020, on paragraphs (a)(6) and (7) and
removing both paragraphs; and
0
d. Redesignating paragraphs (a)(8) and (9) as paragraphs (a)(6) and
(7), respectively.
The revision reads as follows:
Sec. 984.48 Marketing estimates and recommendations.
(a) Each marketing year the Board shall hold a meeting, prior to
October 20, for the purpose of recommending to the Secretary a
marketing policy for such year. Each year such recommendation shall be
adopted by the affirmative vote of at least 60% of the Board and shall
include the following:
* * * * *
Sec. 984.49 [Removed and Reserved]
0
11. Amend Sec. 984.49 by lifting the suspension of paragraph (b)(1) of
August 7, 1995, and the stay of May 7, 2020, and removing and reserving
the section.
0
12. Amend Sec. 984.50 by lifting the stay of May 7, 2020, on paragraph
(e) and revising the section to read as follows:
Sec. 984.50 Grade, quality, and size regulations.
(a) The Board may recommend, subject to the approval of the
Secretary, regulations that:
(1) Establish handling requirements for particular grades, sizes,
or qualities, or any combination thereof, of any or all varieties or
classifications of walnuts during any period;
(2) Establish different handling requirements and tolerance limits
for particular grades, sizes, or qualities, or any combination thereof,
for different market destinations;
(3) Establish different handling requirements for the processing of
shelled walnuts and the handling thereof; and
[[Page 56749]]
(4) Establish inspection and certification requirements for the
purposes of this paragraph (a) and paragraph (b) of this section.
(b) During any period, regulations issued under this section are in
effect, no handler shall handle or process walnuts into manufactured
items or products unless they meet the applicable requirements under
this section as evidenced by certification acceptable to the Board.
(c) Regulations issued under this section may be amended, modified,
suspended, or terminated whenever it is determined:
(1) That such action is warranted upon recommendation of the Board
and approval by the Secretary, or other available information; or
(2) That regulations issued under this section no longer tend to
effectuate the declared policy of the Act.
Sec. Sec. 984.51 and 984.52 [Removed and Reserved]
0
13. Remove and reserve Sec. Sec. 984.51 and 984.52
Sec. Sec. 984.54 and 984.56 [Removed and Reserved]
0
14. Amend Sec. Sec. 984.54 and 984.56 by lifting the stay of May 7,
2020, and removing and reserving the sections.
0
15. Revise Sec. 984.64 to read as follows:
Sec. 984.64 Disposition of substandard walnuts.
During any period when regulations are in effect pursuant to Sec.
984.50, substandard walnuts may be disposed of only for manufacture
into oil, livestock feed, or such other uses as the Board determines to
be noncompetitive with existing domestic and export markets for
merchantable walnuts and with proper safeguards to prevent such walnuts
from thereafter entering channels of trade in such markets. Each
handler shall submit, in such form and at such intervals as the Board
may determine, reports of his production and holdings of substandard
walnuts and the disposition of all substandard walnuts to any other
person, showing the quantity, lot, date, name and address of the person
to whom delivered, the approved use and such other information
pertaining thereto as the Board may specify.
Sec. 984.66 [Removed and Reserved]
0
16. Amend Sec. 984.66 by lifting the stay of May 7, 2020, and removing
and reserving the section.
0
17. Amend Sec. 984.67 by:
0
a. Lifting the stay of May 7, 2020, on paragraph (a) and removing the
paragraph;
0
b. Redesignating paragraphs (b) and (c) as paragraphs (a) and (b),
respectively; and
0
c. Revising newly designated paragraph (a).
The revision reads as follows:
Sec. 984.67 Exemptions.
(a) Exemptions from assessments and quality regulations--(1) Sales
by growers direct to consumers. Any walnut grower may handle walnuts of
his production free of the regulatory and assessment provisions of this
part if he sells such walnuts in the area of production directly to
consumers under the following types of exemptions:
(i) At roadside stands and farmers' markets;
(ii) In quantities not exceeding an aggregate of 500 pounds of
inshell walnuts or 200 pounds of shelled walnuts during any marketing
year (at locations other than those specified in paragraph (a)(1)(i) of
this section); and
(iii) If shipped by parcel post or express in quantities not
exceeding 10 pounds of inshell walnuts or 4 pounds of shelled walnuts
to any one consumer in any one calendar day.
(2) Green walnuts. Walnuts which are green and which are so
immature that they cannot be used for drying and sale as dried walnuts
may be handled without regard to the provisions of this part.
(3) Noncompetitive outlets. Any person may handle walnuts, free of
the provisions of this part, for use by charitable institutions, relief
agencies, governmental agencies for school lunch programs, and
diversion to animal feed or oil manufacture pursuant to an authorized
governmental diversion program.
* * * * *
0
18. Amend Sec. 984.69 by lifting the stay of May 7, 2020, on paragraph
(b) and revising the section to read as follows:
Sec. 984.69 Assessments.
(a) Requirement for payment. Each handler shall pay the Board, on
demand, his or her pro rata share of the expenses authorized by the
Secretary for each marketing year. Each handler's pro rata share shall
be the rate of assessment per inshell pound of walnuts fixed by the
Secretary times the pounds of walnuts received by him or her for his or
her own account (except as to receipt from other handlers on which
assessments have been paid). At any time during or after the marketing
year the Secretary may increase the assessment rate as necessary to
cover authorized expenses and each handler's pro rata share shall be
adjusted accordingly.
(b) Assessment rate. The assessment rate set out may be modified by
the Secretary, based upon a recommendation of the Board or other
available data.
(c) Late payment. If a handler does not pay assessments within the
time prescribed by the Board, the assessment may be increased by a late
payment charge and/or an interest rate charge at amounts prescribed by
the Board with approval of the Secretary.
(d) Accounting. If at the end of a marketing year the assessments
collected are in excess of expenses incurred, such excess shall be
accounted for in accordance with one of the following:
(1) If such excess is not retained in a reserve, as provided in
paragraph (d)(2) or (3) of this section, it shall be refunded to
handlers from whom collected, and each handler's share of such excess
funds shall be the amount of assessments he or she has paid in excess
of his or her pro rata share of the actual expenses of the Board.
(2) Excess funds may be used temporarily by the Board to defray
expenses of the subsequent marketing year provided each handler's share
of such excess shall be made available to him or her by the Board
within five months after the end of the year.
(3) The Board may carry over such excess into subsequent marketing
years as a reserve: Provided, that funds already in reserve do not
exceed approximately two years' budgeted expenses. In the event that
funds exceed two marketing years' budgeted expenses, future assessments
will be reduced to bring the reserves to an amount that is less than or
equal to two marketing years' budgeted expenses. Such reserve funds may
be used:
(i) To defray expenses, during any marketing year, prior to the
time assessment income is sufficient to cover such expenses;
(ii) To cover deficits incurred during any year when assessment
income is less than expenses;
(iii) To defray expenses incurred during any period when any or all
provisions of this part are suspended; and
(iv) To meet any other such costs recommended by the Board and
approved by the Secretary.
(e) Advanced assessments and commercial loans. To provide funds for
the administration of the provisions of this part during the part of a
marketing year when neither sufficient operating reserve funds nor
sufficient revenue from assessments for the current marketing year are
available, the Board may accept payment of assessments in
[[Page 56750]]
advance or may borrow money from a commercial lending institution for
such purposes.
(f) Termination. Any money collected from assessments hereunder and
remaining unexpended in the possession of the Board upon termination of
this part shall be distributed in such manner as the Secretary may
direct.
0
19. Revise Sec. 984.72 to read as follows:
Sec. 984.72 Reports of walnuts handled.
Each handler who handles walnuts, inshell or shelled, at any time
during a marketing year shall submit to the Board in such form and at
such intervals as the Board may prescribe, reports showing the quantity
so handled and such other information pertinent thereto as the Board
may specify.
0
20. Revise Sec. 984.77 to read as follows:
Sec. 984.77 Verification of reports.
For the purpose of verifying and checking reports filed by handlers
or the operations of handlers, the Secretary and the Board through its
duly authorized representatives shall have access to any premises where
walnuts and walnut records are held. Such access shall be available at
any time during reasonable business hours. Authorized representatives
shall be permitted to inspect any walnuts held and any and all records
of the handler with respect to matters within the purview of this part.
Each handler shall maintain complete records on the receiving, holding,
and disposition of both inshell and shelled walnuts. Each handler shall
furnish all labor necessary to facilitate such inspections at no
expense to the Board or the Secretary. Each handler shall store all
walnuts held by him or her in such manner as to facilitate inspection
and shall maintain adequate storage records, which will permit accurate
identification of respective lots and of all such walnuts held or
disposed of theretofore. The Board, with the approval of the Secretary,
may establish any methods and procedures needed to verify reports.
Sec. 984.89 [Amended]
0
21. Amend Sec. 984.89 in paragraph (b)(4) by removing the term
``fiscal period'' and adding in its place the term ``marketing year''.
0
22. Revise Sec. 984.347 to read as follows:
Sec. 984.347 Assessment rate.
On and after September 1, 2023, an assessment rate shall be fixed
at $0.0125 per inshell pound of California walnuts.
Sec. 984.450 [Removed and Reserved]
0
23. Amend Sec. 984.450 by lifting the stay of May 7, 2020, on
paragraphs (a) and (b) and removing and reserving the section.
Sec. 984.451 [Removed and Reserved]
0
24. Amend Sec. 984.451 by lifting the stay of May 7, 2020, on
paragraph (c) and removing and reserving the section.
Sec. 984.452 [Removed and Reserved]
0
25. Remove and reserve Sec. 984.452.
Sec. 984.456 [Removed and Reserved]
0
26. Amend Sec. 984.456 by lifting the stay of May 7, 2020, and
removing and reserving the section.
Sec. 984.459 [Amended]
0
27. Amend Sec. 984.459 by removing and reserving paragraph (a)(3).
Sec. 984.464 [Removed and Reserved]
0
28. Amend Sec. 984.464 by lifting the stay of May 7, 2020, on
paragraph (a) and removing and reserving the section.
0
29. Revise Sec. 984.472 to read as follows:
Sec. 984.472 Reports of walnuts, received, shipped, and committed.
(a) Reports of walnuts shipped during a month shall be submitted to
the Board on California Walnut Board (CWB) Form No. 6 not later than
the 5th day of the following month. Such reports shall include all
shipments during the preceding month and shall show for inshell and
shelled walnuts: the quantity shipped; whether they were shipped into
domestic or export channels; and for exports, the quantity by country
of destination. If a handler makes no shipments during any month, he/
she shall submit a report marked ``None.'' If a handler has completed
his/her shipments for the season, he/she shall mark the report
``Completed,'' and he/she shall not be required to submit any
additional CWB Form No. 6 reports during the remainder of that
marketing year.
(b) Reports of walnuts purchased directly from growers by handlers
who are manufacturers or retailers shall be submitted to the Board on
CWB Form No. 6, not later than the 5th day of the month following the
month in which the walnuts were purchased. Such reports shall show the
quantity of walnuts purchased.
(c) Reports of walnuts on which handlers have made purchase
commitments with buyers during the month, but which have not yet been
shipped, shall be submitted to the Board on CWB Form No. 6, not later
than the 5th day of the month following the month in which the walnuts
were committed. Such reports shall show the quantity of walnuts
committed in either inshell or shelled pounds. If the handler made no
commitments during any month, he/she shall mark ``None'' in the
``Purchase Commitments'' section of CWB Form No. 6.
0
30. Revise Sec. 984.476 to read as follows:
Sec. 984.476 Report of walnut receipts produced outside California or
the United States.
Each handler who receives walnuts from outside California or the
United States shall file with the Board, on CWB Form No. 7, a report of
the receipt of such walnuts. The report shall be filed as follows: On
or before December 5 for such walnuts received during the period
September 1 to November 30; on or before March 5 for such walnuts
received during the period December 1 to February 28 (February 29 in a
leap year); on or before June 5 for such walnuts received during the
period March 1 to May 31; and on or before September 5 for such walnuts
received during the period June 1 to August 31. The report shall
include the quantity of such walnuts received, the country of origin
for such walnuts, and whether such walnuts are inshell or shelled.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-17753 Filed 8-18-23; 8:45 am]
BILLING CODE P
