Walnuts Grown in California; Changes to Administrative Requirements

DEPARTMENT OF AGRICULTURE <SUBAGY>Agricultural Marketing Service</SUBAGY> <CFR>7 CFR Part 984</CFR> <DEPDOC>[Doc. No. AMS-SC-24-0076]</DEPDOC> <SUBJECT>Walnuts Grown in California; Changes to Administrative Requirements</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Agricultural Marketing Service, USDA. <HD SOURCE="HED">ACTION:</HD> Proposed rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This proposed rule would implement a recommendation from the California Walnut Board (Board) to make changes to the administrative requirements prescribed under the Federal marketing order for walnuts grown in California (Order). This proposed rule would provide a schedule for required handler assessment payments, establish interest and late payment charges on overdue assessments owed, and modify the existing reporting requirements for handler acquisitions of walnuts. </SUM> <DATES> <HD SOURCE="HED">DATES:</HD> Comments must be received by October 31, 2025. </DATES> <HD SOURCE="HED">ADDRESSES:</HD> Interested persons are invited to submit written comments concerning this proposed rule. Comments can be sent to the Docket Clerk, Market Development Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237. Comments can also be submitted to the Docket Clerk electronically by email: <E T="03">MarketingOrderComment@usda.gov</E> or via the internet at: <E T="03">https://www.regulations.gov.</E> Comments should reference the document number and the date and page number of this issue of the <E T="04">Federal Register</E> . Comments submitted in response to this proposed rule will be included in the record and will be made available to the public and can be viewed at: <E T="03">https://www.regulations.gov.</E> 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. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Jeffery Rymer, Marketing Specialist, or Abigail Maharaj, Chief, West Region Branch, Market Development Division, Specialty Crops Program, AMS, USDA; telephone: (559) 487-5905; or email: <E T="03">JefferyM.Rymer@usda.gov</E> or <E T="03">Abigail.Maharaj@usda.gov.</E> Small businesses may request information on complying with this regulation by contacting Antoinette Carter, 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">Antoinette.Carter@usda.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> This action, pursuant to 5 U.S.C. 553, proposes to amend regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This proposed 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 of California walnuts operating within the area of production, and a public member. The Agricultural Marketing Service (AMS) is issuing this proposed rule in conformance with Executive Orders 12866, as amended by Executive Order 13563. 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. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review. This proposed 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 proposed 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 action has been reviewed under Executive Order 12988, “Civil Justice Reform.” This proposed rule is not intended to have retroactive effect. The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 8c(15)(A) of the Act (7 U.S.C. 608c(15)(A)), any handler subject to an order may file with the 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 proposed rule would provide a defined payment schedule for required handler assessment payments. Additionally, the proposal would establish interest and late payment charges on overdue handler assessments owed under the Order. Lastly, the proposed action would modify the reporting requirements for walnut acquisitions. These proposed changes were unanimously approved, in two separate votes, with eight in favor and none opposed, during Board meetings held on August 8, and November 6, 2024. Section 984.69(a) of the Order provides that each handler shall pay the Board, on demand, his or her pro rata share of the Boards authorized expenses. Currently, each handler's assessment obligation is invoiced throughout the marketing year based upon the quantity of walnuts the handler has acquired and reported to the Board by January 15 of each year on the Order's CWB Form #1. However, the schedule of when assessments are invoiced, and payments are due, is not yet specified in the Order's regulations. Further, § 984.69(c) of the Order provides the authority to establish late payment charges and interest charges on assessments that are not paid within the time period specified by the Board. While such late payment penalties are authorized under the Order, specific late payment charges and interest rate charges on past due assessments have not yet been established in the Order's regulations. Additionally, § 984.73 of the Order provides the authority to require handlers to submit reports of their walnut receipts. Under that authority, § 984.473, “Report of walnut receipts,” was established to require handlers to report walnut acquisitions, on or before January 15 of each marketing year, on forms supplied by the Board. Currently, under that section of the Order, handlers are only required to submit one report each marketing year, with no provision providing instruction for reporting walnuts that may be acquired after January 15. This proposed rule would modify the Order's current administrative requirements to enhance the efficient collection of assessments from handlers, strengthening the Board's oversight of the program operations and administration of the Order. The Board believes that the changes and additions proposed herein would serve to augment the Order's administrative requirements and incentivize compliance. Specifically, this proposed rule would add a new § 984.348, “Payment of assessments,” to the Order's requirements to establish the payment schedule for handler assessments. Each handler would pay assessments, based on the quantity of walnut receipts reported by the handler pursuant to § 984.473, in three equal installments invoiced by the Board, on January 31, April 30, and July 31 of each marketing year. This specific payment schedule, as proposed, is based on industry practice. Based on Board discussions, establishing this proposed schedule in the Order itself would help to stabilize and smooth revenue streams. Such stability would help the Board's operability by reducing uncertainty about when assessments are due and provide handlers with clear expectations and timeframe. This proposed schedule is not clear in the Order or provided for in its administrative regulations. In addition, through the authority provided by § 984.69(c) of the Order, this proposed rule would also establish late payment penalties and interest charges for handler assessment payments under a new § 984.349, “Late payment and interest charges.” This, in conjunction with the establishment of the payment schedule, would help the Board address the issue of handler confusion with late payment submissions. A late payment charge of ten percent (10%) would be imposed on any assessment payment that has not been received within sixty (60) days of the invoice date on the handler's assessment statement. Further, assessment payments not received within sixty (60) days after the invoice date would also be subject to an ongoing one and one-half percent (1.5%) per month interest charge, accruing monthly until the total balance due, including any late payment charge, is paid. The inclusion of a late payment penalty and interest charges provision as proposed would establish a clear calculation for the Board to apply to a handler's account when in arrears. This proposal wou ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 20k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━