Walnuts Grown in California; Increased Assessment Rate

<RULE> DEPARTMENT OF AGRICULTURE <SUBAGY>Agricultural Marketing Service</SUBAGY> <CFR>7 CFR Part 984</CFR> <DEPDOC>[Doc. No. AMS-SC-24-0039]</DEPDOC> <SUBJECT>Walnuts Grown in California; Increased Assessment Rate</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Agricultural Marketing Service, Department of Agriculture (USDA). <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This final rule implements a recommendation from the California Walnut Board (Board) to increase the assessment rate established for the 2024-2025 and subsequent marketing years from $0.011 to $0.0125 per inshell pound of California walnuts. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Effective December 26, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Joshua R. Wilde, Marketing Specialist, or Barry Broadbent, Chief, Northwest Region Branch, Market Development Division, Specialty Crops Program, AMS, USDA; Telephone: (503) 326-2724, or Email: <E T="03">Joshua.R.Wilde@usda.gov</E> or <E T="03">Barry.Broadbent@usda.gov</E> . Small businesses may request information on complying with this regulation by contacting Richard 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: <E T="03">Richard.Lower@usda.gov</E> . </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> This action, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This 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 comprises growers and handlers of California walnuts operating within the area of production, and a public member. The Agricultural Marketing Service (AMS) is issuing this final rule in conformance with Executive Orders 12866, 13563, and 14094. Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 14094 reaffirms, supplements, and updates Executive Orders 12866 and further directs agencies to solicit <E T="03"> and consider input from a wide range of affected and interested parties through a variety of means.</E> This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review. This final rule has been reviewed under Executive Order 13175—Consultation and Coordination with Indian Tribal Governments, which requires Federal agencies to consider whether their rulemaking actions would have Tribal implications. AMS has determined that this rule is unlikely to have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. This final 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 will be applicable to all assessable California walnuts for the 2024-2025 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 final rule increases the assessment rate for California walnuts handled under the Order from $0.011 per inshell pound, the rate that was established for the 2023-2024 and subsequent marketing years, to $0.0125 per inshell pound for the 2024-2025 and subsequent marketing years. Sections 984.68 and 984.69 authorize the Board, with the approval of AMS, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Board are familiar with the Board's needs and with the costs of goods and services in their local area and are 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 2023-2024 and subsequent marketing years, the Board recommended, and AMS approved, an assessment rate of $0.011 per inshell pound of California walnuts within the production area. That rate continues in effect from marketing year to marketing year until modified, suspended, or terminated by AMS upon recommendation and information submitted by the Board or other information available to AMS. The Board met on May 15, 2024, and unanimously recommended 2024-2025 marketing year expenditures of $19,886,800 and an assessment rate of $0.0125 per inshell pound of California walnuts for the 2024-2025 marketing year. In comparison, last year's budgeted expenditures were $16,811,250. The assessment rate of $0.0125 per inshell pound is $0.0015 higher than the rate currently in effect. The Board recommended increasing the assessment rate to better align assessment revenue with budgeted expenses, due in part to a smaller estimated crop. The Board projects handler receipts of 730,000 tons (equivalent to 1.46 billion pounds) of assessable California walnuts for the 2024-2025 marketing year, down from the approximately 820,000 tons (1.64 billion pounds) handled during the 2023-2024 marketing year. The major expenditures recommended by the Board for the 2024-2025 marketing year include $13,330,200 for domestic marketing, $2,838,600 for employee expenses, $2,425,000 for production and post-harvest research, $435,000 for office expenses, $473,000 for travel and other operating expenses, and $385,000 for crop and acreage reporting. For comparison, budgeted expenses for these items during the 2023-2024 marketing year were $10,588,750, $2,472,500, $2,425,000, $350,000, $390,000, and $585,000, respectively. The Board derived the recommended assessment rate by considering anticipated expenses, the estimated volume of assessable walnuts, and the amount of funds available in the authorized reserve. The estimated 730,000 tons (1.46 billion pounds) of California walnuts from the 2024-2025 marketing year crop is expected to generate approximately $18,250,000 in assessment revenue at the amended assessment rate (1.46 billion pounds multiplied by the $0.0125 assessment rate). The remaining $1,636,800 needed to cover budgeted expenditures will come from an approved administrative services agreement with the California Walnut Commission, which shares staff and office expenses with the Board. The income generated from assessments, along with non-assessment revenue, is expected to be sufficient to meet the Board's estimated program expenditures of $19,886,800. Funds available in the financial reserve (currently about $14,665,274) will be kept within the maximum permitted by the Order (approximately two years' budgeted expenses as authorized in § 984.69). The assessment rate established herein will continue in effect indefinitely unless modified, suspended, or terminated by AMS upon recommendation and information submitted by the Board or other available information. Although this assessment rate will be in effect for an indefinite period, the Board will continue to meet prior to or during each marketing year to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Board meetings are available from the Board or AMS. Board meetings are open to the public and interested persons may express their views at these meetings. AMS 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 2024-2025 marketing year budget, and those for subsequent marketing years, will be reviewed and, as appropriate, approved by AMS. <HD SOURCE="HD1">Final Regulatory Flexibility Analysis</HD> Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of this final 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 ord ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 20k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━