Proposed Rule2022-03460
Marketing Order Regulations for Almonds Grown in California
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
February 22, 2022
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
This proposed rule would implement a recommendation from the Almond Board of California (Board) to make changes to multiple provisions in the administrative requirements prescribed under the Federal marketing order regulating the handling of almonds grown in California. This action would revise several provisions in the Order's requirements to facilitate the efficient administration of the Order.
Full Text
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[Federal Register Volume 87, Number 35 (Tuesday, February 22, 2022)]
[Proposed Rules]
[Pages 9455-9462]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-03460]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 87, No. 35 / Tuesday, February 22, 2022 /
Proposed Rules
[[Page 9455]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[Doc. No. AMS-SC-21-0076; SC21-981-1 PR]
Marketing Order Regulations for Almonds Grown in California
AGENCY: Agricultural Marketing Service, Department of Agriculture
(USDA).
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement a recommendation from the
Almond Board of California (Board) to make changes to multiple
provisions in the administrative requirements prescribed under the
Federal marketing order regulating the handling of almonds grown in
California. This action would revise several provisions in the Order's
requirements to facilitate the efficient administration of the Order.
DATES: Comments must be received by April 25, 2022. Comments on the
forms and information collection must also be received by April 25,
2022.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule. Comments must be sent to the Docket
Clerk, Market Development Division, Specialty Crops Program, AMS, USDA,
1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; Fax:
(202) 720-8938; or via internet at: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Comments should reference the document number and the date and page
number of this issue of the Federal Register. All comments will be made
available for public inspection in the Office of the Docket Clerk
during regular business hours, or can be viewed at: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. All comments submitted in response to this
proposed rule will be included in the record and will be made available
to the public on the internet at the address provided above. Please be
advised that the identity of individuals or entities submitting
comments will be made public.
FOR FURTHER INFORMATION CONTACT: Peter Sommers, Marketing Specialist,
or Gary Olson, Regional Director, West Region Field Office, Market
Development Division, Specialty Crops Program, AMS, USDA; Telephone:
(559) 487-5901, Fax: (559) 487-5906, or Email: <a href="/cdn-cgi/l/email-protection#cc9ca9b8a9be9ee29fa3a1a1a9bebf8cb9bfa8ade2aba3ba"><span class="__cf_email__" data-cfemail="451520312037176b162a282820373605303621246b222a33">[email protected]</span></a>
or <a href="/cdn-cgi/l/email-protection#ce89afbcb78ae081a2bda1a08ebbbdaaafe0a9a1b8"><span class="__cf_email__" data-cfemail="bafddbc8c3fe94f5d6c9d5d4facfc9dedb94ddd5cc">[email protected]</span></a>.
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) 720-2491, Fax: (202)
720-8938, or Email: <a href="/cdn-cgi/l/email-protection#dd8fb4beb5bcafb9f391b2aab8af9da8aeb9bcf3bab2ab"><span class="__cf_email__" data-cfemail="2d7f444e454c5f490361425a485f6d585e494c034a425b">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: 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. 981, as amended (7 CFR part 981), regulating the handling of
almonds grown in California. Part 981 (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 almonds operating within the production area.
The Department of Agriculture (USDA) is issuing this proposed rule
in conformance with Executive Orders 12866 and 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 agencies to consider whether their rulemaking actions would
have tribal implications. The Agricultural Marketing Service (AMS) has
determined 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 proposed rule 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 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 not later than 20 days after the date of
the entry of the ruling.
This proposed rule would amend administrative requirements in the
Order regulating the roadside stand exemption, credit for market
promotion activities, quality control, exempt dispositions, and
interest and late charges provisions. In addition, the proposed rule
would stay two sections of the administrative requirements that define
almond butter and stipulate disposition in reserve outlets by handlers.
These proposed changes modify the requirements to reflect updates in
industry practices and are expected to help facilitate the orderly
administration of the Order. The Board unanimously recommended these
changes at meetings held on December 7, 2020, and June 17, 2021.
Multiple sections in the Order provide the authority for this
proposed action. The authorities are cited with
[[Page 9456]]
the descriptions of each of the proposed changes in the following
narrative.
Section 981.13 of the Order defines the term ``handler.'' The
definition includes an exemption for roadside stand sales. Section
981.413 of the Order's administrative requirements further expounds
roadside stand sales by setting certain conditions that must be met for
sales to be exempted from regulation under the Order. This proposed
rule would add language to the requirements to clarify that sales of
almonds through E-commerce (electronic commerce) are not exempt from
regulation under the roadside stand exemption.
Section 981.41(c) of the Order provides the authority to establish
provisions for crediting a handler's direct expenditures for marketing
promotion against that handler's assessment obligation. Section 981.441
of the Order's administrative requirements delineates the provisions
that handlers must meet to have a portion of their marketing promotion
expenditures, including paid advertising, credited against their pro
rata assessment obligation. This provision is otherwise known as
Credit-Back. This proposed rule would allow the Board, with the
approval of the Secretary, to annually establish a limit on the Credit-
Back amount allowed for a handler's expenditures on E-commerce.
Further, this rule would modify the receipt submission and
reimbursement requirements for the Credit-Back program and update the
provisions for appealing the Board's Credit-Back decisions.
Section 981.42 of the Order provides the authority to establish
quality control regulations for both incoming and outgoing product.
Section 981.442 of the Order's administrative requirements establishes
quality control regulations under that authority. Section 981.442(a)
establishes the quality requirements for incoming product received by
handlers. Section 981.442(b) establishes the quality requirements for
outgoing product prior to being shipped by handlers.
This proposal would modify provisions in Sec. 981.442(a) to
clarify ambiguous language, remove irrelevant dates, and more clearly
define ``accepted user'' as it is referenced in the regulations. The
proposed rule would also relax the requirements for handlers in meeting
their disposition obligation under the regulations. The incoming
quality requirements would be amended to allow inedible kernels,
foreign material, and other defects sorted from off-site cleaning
facilities to be credited to a handler's disposition obligation. In
addition, almond meal would be allowed to meet the non-inedible portion
of the disposition obligation, with the meal content to be determined
in a manner acceptable to the Board.
In Sec. 981.442(b), the proposed rule would amend the regulations
to facilitate handlers utilizing off-site cleaning and treatment
facilities in fulfillment of their quality control requirements. The
proposal would allow the transfer of product for off-site cleaning
without being considered a shipment, would designate off-site treatment
facilities as ``custom processors,'' and would establish application
and approval procedures for Board authorization of such custom
processors. This action would also clarify the roles of the Technical
Expert Review Panel (TERP) and the Board in administering the program
as detailed in several provisions in Sec. 981.442(b). Lastly, the
proposed rule would refine the duties of a Direct Verifiable (DV)
program auditor to disallow individuals who conduct process validations
from being named as the DV auditor for that same equipment used in the
treatment process.
Section 981.50 of the Order establishes handler reserve obligation
requirements. Under those Order provisions, certain products are
exempted from the reserve obligation, subject to the accountability of
the Board. Section 981.450 establishes the provisions for exempt
dispositions under the reserve obligation. This proposed rule would
enhance the procedures currently in place for the Board to account for
exempt dispositions. Under the proposed rule, outlets for exempted
product would need to be pre-approved by the Board in accordance with
the requirements contained in Sec. 981.442(a)(7).
Section 981.66(b) of the Order establishes the conditions governing
the disposition of reserve product. Within that paragraph, diversion of
reserve almonds to be manufactured into almond butter is listed as an
allowable outlet for such product. Section 981.466 further defines
``almond butter'' as used in Sec. 981.66. The expanded definition of
almond butter is no longer relevant in the administration of the
program. The proposed rule would stay Sec. 981.466 indefinitely.
Section 981.467 establishes the requirements regarding the
disposition in reserve outlets by handlers. The section details the
establishment of agents of the Board, delineates reserve credit in
satisfaction of a reserve obligation, sets minimum prices, and
establishes certain dates pertaining to the reserve disposition
obligations. As the Order is not currently regulating volume, and a
significant portion of the requirements is outdated, the provisions in
Sec. 981.467 are not currently relevant to the administration of the
Order. As such, this proposed rule would stay the entire section
indefinitely.
Lastly, Sec. 981.481 stipulates the requirements for submission of
handler assessment payments, which includes documentary requirements
for proof of timely submission of assessment payments. Other than
actual receipt of payment in the Board's office within 30 days of the
invoice date on the handler's statement, the current provisions only
identify the U.S. Postal Service postmark as proof of timely
submission. This proposed rule would add ``or by some other verifiable
delivery tracking system'' to allow handlers alternative delivery
methods.
The Board believes that the changes recommended herein are
necessary to update the Order's administrative requirements to adapt to
changes in the industry and to reflect current industry practices. Many
of the revisions may be considered conforming changes, but the proposed
rule also makes changes to the Credit-Back provisions and quality
control regulations that the Board views as essential to the continued
efficient administration of the Order. The proposed changes contained
herein are expected to facilitate the orderly marketing of California
almonds and benefit growers and handlers in the industry.
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, are unique in that they are brought about through
group action of essentially small entities acting on their own behalf.
There are approximately 7,600 almond growers in the production area
and approximately 100 handlers subject to regulation under the Order.
Small agricultural producers are defined by the Small Business
Administration (SBA) as those having annual receipts of less than
$1,000,000, and small agricultural service firms are defined as
[[Page 9457]]
those having annual receipts of less than $30,000,000 (13 CFR 121.201).
The National Agricultural Statistics Service (NASS) reported in its
2017 Census of Agriculture (Census) that there were 7,611 almond farms
in the production area, of which 6,683 had bearing acres. Additionally,
the Census indicates that out of the 6,683 California farms with
bearing acres of almonds, 4,425 (66 percent) have fewer than 100
bearing acres.
In another publication, NASS reported a 2019 crop year average
yield of 2,160 pounds per acre and a season average grower price of
$2.43 per pound. Therefore, a 100-acre farm with an average yield of
2,160 pounds per acre would produce about 216,000 pounds of almonds
(2,160 pounds times 100 acres equals 216,000 pounds). At $2.43 per
pound, that farm's production would be valued at $524,880 (216,000
pounds times $2.43 per pound equals $524,880). Since the Census
indicated that 66 percent of California's almond farms are less than
100 acres, it could be concluded that the majority of California almond
growers had annual receipts from the sale of almonds of less than
$524,880 for the 2019-20 crop year, which is below the SBA threshold of
$1,000,000 for small producers. Therefore, the majority of growers may
be classified as small businesses.
To estimate the proportion of almond handlers that would be
considered small businesses, it was assumed that the unit value per
pound of almonds exported in a particular year could serve as a
representative almond price at the handler level. A unit value for a
commodity is the value of exports divided by the quantity exported.
Data from the Global Agricultural Trade System (GATS) database of
USDA's Foreign Agricultural Service showed that the value of almond
exports from August 2019 to July 2020 (combining shelled and inshell)
was $4.691 billion. The quantity of almond exports over that time-
period was 1.78 billion pounds. Dividing the export value by the
quantity yields a unit value of $2.64 per pound ($4.691 billion divided
by 1.78 billion pounds equals $2.64).
NASS estimated that the California almond industry produced 2.55
billion pounds of almonds in 2019. Applying the $2.64 derived
representative handler price per pound to total industry production
results in an estimated total revenue at the handler level of $6.73
billion (2.55 billion pounds x $2.64 per pound). With an estimated 100
handlers in the California almond industry, average revenue per handler
would be approximately $67.3 million ($6.73 billion divided by 100).
Assuming a normal distribution of revenues, most almond handlers
shipped almonds valued at more than $30,000,000 during the 2019-20 crop
year. Therefore, the majority of handlers may be classified as large
businesses.
This proposed rule would revise multiple provisions in the Order's
administrative requirements. This proposal would amend regulations
covering the Order's roadside stand exemption, credit for market
promotion activities, quality control, exempt dispositions, and
interest and late charges provisions. In addition, it would stay
regulations contained in Sec. Sec. 981.466 and 981.467. One of the
sections defines almond butter and the other regulates almond
disposition in reserve outlets by handlers. Both sections would be
stayed indefinitely.
More specifically, the proposed rule would add language in Sec.
981.413 to clarify that sales of almonds through E-commerce are not
exempt from regulation under the roadside stand exemption.
In addition, the action would modify Sec. 981.441 to allow the
Board, with the approval of the Secretary, to annually establish a
limit on the Credit-Back amount allowed for a handler's expenditures on
E-commerce. Further, this rule would modify the receipt submission and
reimbursement requirements for the Credit-Back program, as well as
update the provisions for appealing the Board's Credit-Back decisions.
In Sec. 981.442(a), the proposed rule would clarify ambiguous
language, remove irrelevant dates, and more clearly define the term
``accepted user'' as it is referenced in the regulations. It would also
relax the requirements for handlers in meeting their disposition
obligation under the Order.
In Sec. 981.442(b), the proposed rule would allow the transfer of
product for off-site cleaning without being considered a shipment,
designate off-site treatment facilities as ``custom processors,'' and
establish the application and approval procedures for Board
authorization of custom processors. This proposal would also clarify
the roles of the TERP and the Board in administering the program in
several subparagraphs in the section. Further, the proposed rule would
refine the definition of a DV program auditor to disallow individuals
who conduct process validations from being named as the DV auditor for
that same equipment used in the treatment process.
Additionally, this proposed rule would amend Sec. 981.450 to
require outlets for exempted product be Board-approved, in accordance
with Sec. 981.442(a)(7).
Further, under the proposed action, Sec. 981.466, which defines
``almond butter'' as it is used in Sec. 981.66(b), is no longer
relevant in the administration of the program and would be stayed
indefinitely. In addition, as the Order is not currently regulating
volume, Sec. 981.467 is not necessary for the administration of the
Order and would also be stayed indefinitely.
Lastly, this action would revise Sec. 981.481 by adding ``or by
some other verifiable delivery tracking system'' to the requirements to
allow handlers alternative trackable delivery methods for demonstration
of timely submission of assessment payments.
The authorities for the proposed changes above are contained in
Sec. Sec. 981.13, 981.41, 981.42, 981.50, 981.66, 981.67, and 981.81
of the Order.
The Board believes that the administrative requirement revisions
recommended herein are necessary to reflect changes in the industry and
to update the regulations to reflect current practices. Many of the
modifications may be considered conforming changes, but this proposal
also makes substantive changes to the Credit-Back provisions and
quality control requirements that the Board views as essential to the
efficient administration of the Order. The proposed changes contained
herein are expected to facilitate the orderly marketing of California
almonds and benefit growers and handlers in the industry. The Board
unanimously recommended these changes at meetings held on December 7,
2020, and June 17, 2021.
AMS anticipates that this proposed rule would impose minimal, if
any, additional costs on handlers or growers, regardless of size. The
proposed changes to the administrative requirements are intended to
clarify certain provisions, remove ambiguous and obsolete language, and
adapt the requirements to facilitate the orderly marketing of almonds.
The benefits derived from this proposed rule are not expected to be
disproportionately more or less for small handlers or growers than for
larger entities.
The Board considered alternatives to this action, including making
no changes to the current requirements, only making changes to some of
the requirements, and recommending the changes be considered as two
separate rulemaking actions. Prior to the recommendation of the Board,
the Board's Almond Quality, Food Safety and Services Committee reviewed
the program, surveyed handlers, and unanimously recommended this action
[[Page 9458]]
to the Board. After consideration of all the alternatives, and in
consultation with USDA, the Board determined that making all the
recommended changes, collectively in one rule, would be the best option
to facilitate the Order's administration, contribute to the orderly
marketing of almonds, and provide the greatest benefit to growers and
handlers while maintaining the integrity of the Order.
Further, the Board's meetings were widely publicized throughout the
California almond industry, and all interested persons were invited to
attend the meetings and participate in Board deliberations. Like all
Board and subcommittee meetings, the December 7, 2020, and June 17,
2021, meetings were public meetings, 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 proposed
rule, including the regulatory and information collection impacts of
this proposed 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 Office of Management and Budget (OMB) and
assigned OMB Nos. 0581-0178 (Vegetable and Specialty Crops) and 0581-
0242 (Almond Salmonella). This proposed rule announces AMS's intent to
request approval from OMB for amendments made to existing information
collections under OMB Nos. 0581-0178 and 0581-0242, and for a new
information collection under OMB No. 0581-NEW.
Upon finalization of the proposed rule, AMS will submit a
Justification for Change to OMB for the Statement of Intent form
contained in the ABC Credit-Back Guide (OMB No. 0581-0178). The form is
necessary to administer the Credit-Back provisions as established in
Sec. 981.441 of the Order's requirements. This proposed rule would
change the number of days that the applicant is afforded to submit all
necessary paperwork for proper evaluation of their Credit-Back claim
from 76 days to 60 days. The Credit-Back Statement of Intent form
included in the Credit-Back Guide would be changed accordingly.
In addition, also upon finalization of the proposed rule, AMS will
submit a Justification for Change to OMB for the ABC Form 52--Direct
Verifiable (DV) Program for Further Processing of Untreated Almonds
Application Form (OMB No. 0581-0242). The form is necessary to
administer the DV Program established by Sec. 981.442(b)(6)(i) in the
Order's quality control requirements. The proposed rule would change
the body that approves DV Program applications from the TERP to the
Board. The instructions that accompany ABC Form 52 would need to be
revised accordingly.
Lastly, this proposed rule would create a new form for California
almond handlers, titled ABC Form 55--Custom Processor Application.
Title: Custom Processor Application (7 CFR part 981).
OMB Number: 0581-NEW.
Type of Request: New Collection.
Abstract: The information requirements in this request are
essential to carry out the intent of the Act and to administer the
Order. The Order is effective under the Act, and USDA is responsible
for the oversight of the Order's administration.
The Order's quality control requirements for outgoing product
require handlers to subject their almonds to a treatment process or
processes prior to shipment to reduce potential Salmonella bacteria
contamination. The Order's quality control requirements allow handlers
to utilize off-site treatment facilities to fulfill that requirement.
The Committee unanimously recommended that the Order's quality control
requirements be amended to define off-site treatment facilities located
within the production area as ``custom processors'' and to require such
custom processors to annually apply to the Board for approval.
An individual desiring approval as a custom processor must
demonstrate that their facility meets the Order's treatment process
requirements and must submit an application to the Board. This form,
numbered ABC Form 55 and titled ``Custom Processor Application,'' would
be submitted directly to the Board once each year no later than July
31. The application would provide the Board with the name of the
applicant, the location of each treatment facility covered by the
application, applicant contact information, and certification that the
applicant's technology and equipment provide a treatment process that
has been validated by a Board-approved process authority.
The Order authorizes the Board to collect certain information
necessary for the administration of the Order. The information
collected would only be used by authorized representatives of the USDA,
including the AMS Specialty Crops Program regional and headquarters
staff, and authorized employees of the Board. All proprietary
information would be kept confidential in accordance with the Act and
the Order.
The proposed request for new information collection under the Order
is as follows:
Custom Processor Application
Estimate of Burden: Public reporting burden for this collection of
information is estimated to be an average of 0.5 hours per response.
Respondents: Nut processors located within the Order's area of
production.
Estimated Number of Respondents: 25.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Responses: 25.
Estimated Total Annual Burden on Respondents: 12.5 hours.
Comments are invited on: (1) Whether the proposed collection of
information is necessary for the proper performance of the functions of
the Agency, including whether the information will have practical
utility; (2) the accuracy of the Agency's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility, and clarity of the information to be collected; and (4) ways
to minimize the burden of the collection of information on those who
are to respond, including the use of appropriate automated, electronic,
mechanical, or other technological collection techniques or other forms
of information technology.
Comments should reference OMB No. 0581-NEW and the marketing order
for almonds grown in California. Comments should be sent to the USDA in
care of the Docket Clerk at the previously mentioned address or at
<a href="https://www.regulations.gov">https://www.regulations.gov</a>.
All responses to this notice will be summarized and included in the
request for OMB approval. All comments received will become a matter of
public record and will be available for public inspection during
regular business hours at the address of the Docket Clerk or at <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
If this proposed rule is finalized, this information collection
will be merged with the forms currently approved under OMB No. 0581-
0242 (Almond Salmonella).
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. USDA has not
identified any relevant Federal rules that duplicate, overlap, or
conflict with this proposed rule.
[[Page 9459]]
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.
Further, the Board's meetings are widely publicized throughout the
California almond industry, and all interested persons are invited to
attend the meetings and participate in Board deliberations on all
issues. Like all Board meetings, the December 7, 2020, and June 17,
2021, meetings were open to the public, and all entities, both large
and small, were able to express their views on this issue. Also, the
Board has several appointed committees to review certain issues and
make recommendations to the Board. The Board's Almond Quality, Food
Safety, and Services Committee met several times in 2019 and discussed
this issue in detail. Those meetings were also public meetings, and
both large and small entities were able to participate and express
their views. Finally, interested persons are invited to submit comments
on this proposed rule, including the regulatory and information
collection impacts of this action on small businesses.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at:
<a href="https://www.ams.usda.gov/rules-regulations/moa/small-businesses">https://www.ams.usda.gov/rules-regulations/moa/small-businesses</a>. Any
questions about the compliance guide should be sent to Richard Lower at
the previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
A 60-day comment period is provided to allow interested persons to
respond to this proposal. All written comments timely received will be
considered before a final determination is made on this matter.
List of Subjects in 7 CFR Part 981
Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, the Agricultural
Marketing Service proposes to amend 7 CFR part 981 as follows:
PART 981--ALMONDS GROWN IN CALIFORNIA
0
1. The authority citation for 7 CFR part 981 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Amend Sec. 981.413 by adding a sentence at the end of the paragraph
to read as follows:
Sec. 981.413 Roadside stand exemption.
* * * Sales of almonds through E-commerce are not eligible for this
exemption.
0
3. Amend Sec. 981.441 by revising paragraphs (e)(4)(ii)(K), (e)(5),
(e)(6)(ii) through (iv), and (f) to read as follows:
Sec. 981.441 Credit for market promotion activities, including paid
advertising.
* * * * *
(e) * * *
(4) * * *
(ii) * * *
(K) Development and use of website on the internet for advertising
and public relations purposes, including E-commerce (mail ordering
through the internet): Provided, That Credit-Back for such activities
shall be limited to a specific amount per crop year, to be established
in conjunction with the approval of the Board's annual budget by the
Secretary. No credit shall be given for costs for E-commerce
administration, Extranet (restricted websites within the internet),
Intranet (inter-office communication network), or portions of a website
that target the farming or grower trade.
* * * * *
(5) If the handler is promoting pursuant to a contract with the
Foreign Agricultural Service (FAS) of the U.S. Department of
Agriculture (USDA) and/or the California Department of Food and
Agriculture (CDFA), such activities must also meet the requirements of
paragraphs (e)(1), (2), (3), (4), and (6) of this section. Unless the
Board is administering the foreign marketing program, such activities
shall not be eligible for Credit-Back unless the handler certifies that
it was not and will not be reimbursed by either FAS or the CDFA for the
amount claimed for Credit-Back, and has on record with the Board all
claims for reimbursement made to FAS and/or the CDFA. Foreign market
expenses paid by third parties as part of a handler's contract with FAS
or CDFA will not be eligible for Credit-Back.
(6) * * *
(ii) Handlers may receive credit against their assessment
obligation up to the year-to-date advertising amount of the assessment,
less the year-to-date reimbursed claims: Provided, That handlers submit
the required documentation for a qualified activity at least 2 weeks
prior to the mailing of each of the Board's first and second assessment
notices, and at least 3 weeks prior to the mailing of each of the
Board's third and fourth assessment notices in a crop year. In all
other instances, handlers must remit the advertising assessment to the
Board when billed, and a refund will be issued to the extent of proven,
qualified activities.
(iii) In addition to the credit against an assessment obligation as
provided in paragraph (e)(6)(ii) of this section, the Board will issue
Credit-Back reimbursements, by check or other means, on June 30 for any
claim submission received by May 31 of the same crop year.
(iv) The final opportunity to submit a claim for any given crop
year requires submission of notice to the Board by August 15 of the
following crop year. Notice must be given using the Statement of Intent
form that is included in the Credit-Back Guide. Final claim submissions
for activities outlined in the Statement of Intent must be submitted
with all required elements no more than 60 days after the close of the
crop year.
(f) If a determination is made by the Board staff that a particular
promotional activity is not eligible for Credit-Back because it does
not meet the criteria specified in this section, or for any other
reason, the affected handler may request a Board-designated committee
to review the Board staff's decision. If the affected handler disagrees
with the decision, the handler may request that the Board review the
designated committee's decision. If the handler disagrees with the
decision of the Board, the handler, through the Board, may request that
the Secretary review the Board's decision. Handlers have the right to
request anonymity in the review of their appeal. The Secretary
maintains the right to review any decisions made by the aforementioned
bodies at his/her discretion.
0
4. Amend Sec. 981.442 by:
0
a. Revising paragraphs (a)(1), (a)(4)(i), and (a)(5);
0
b. Revising the introductory text of paragraph (b);
0
c. Revising paragraphs (b)(2), (b)(3)(i) and (v), and (b)(4)(i) and
(v);
0
d. Revising the introductory text of paragraph (b)(6)(i); and
0
e. Revising paragraphs (b)(6)(i)(A), (C), and (D).
The revisions read as follows:
Sec. 981.442 Quality control.
(a) * * *
(1) Sampling. Each handler shall cause a representative sample of
almonds to be drawn from each lot of any variety received from any
incoming source. The sample shall be drawn before inedible kernels are
removed from the lot after hulling/shelling, or before the lot is
processed or stored by the handler. For receipts at premises with
mechanical sampling equipment
[[Page 9460]]
and under contracts providing for payment by the handler to the grower
for sound meat content, samples shall be drawn by the handler in a
manner acceptable to the Board and the inspection agency. The
inspection agency shall make periodic checks of the mechanical sampling
procedures. For all other receipts, including but not limited to field
examination and purchase receipts, accumulations purchased for cash at
the handler's door or from an accumulator, or almonds of the handler's
own production, sampling shall be conducted or monitored by the
inspection agency in a manner acceptable to the Board. All samples
shall be bagged and identified in a manner acceptable to the Board and
the inspection agency.
* * * * *
(4) * * *
(i) The weight of inedible kernels in excess of 2 percent of kernel
weight reported to the Board of any variety received by a handler shall
constitute that handler's disposition obligation. For any almonds sold
inshell, the weight may be reported to the Board and that disposition
obligation for that variety reduced proportionately.
* * * * *
(5) Meeting the disposition obligation. Each handler shall meet its
disposition obligation by delivering packer pickouts, kernels rejected
in blanching, pieces of kernels, meal accumulated in manufacturing, or
other material, to Board-approved accepted users, which can include,
but is not limited to, crushers, feed manufacturers, feeders, or
dealers in nut wastes, located withing the production area. Inedible
kernels, foreign material, and other defects sorted from edible kernels
by off-site cleaning facilities may be used towards that handler's
disposition obligation or destroyed. Handlers shall notify the Board at
least 72 hours prior to delivery of product to an off-site cleaning
facility or accepted user location: Provided, That the Board or its
employees may lessen this notification time whenever it determines that
the 72 hour requirement is impracticable. The Board may supervise
deliveries at its option. In the case of a handler having an annual
total obligation of less than 1,000 pounds, delivery may be to the
Board in lieu of an accepted user, in which case the Board would
certify the disposition lot and report the results to the USDA. For
dispositions by handlers with mechanical sampling equipment, samples
may be drawn by the handler in a manner acceptable to the Board and the
inspection agency. For all other dispositions, samples shall be drawn
by or under supervision of the inspection agency. Upon approval by the
Board and the inspection agency, sampling may be accomplished at the
accepted user's destination. The edible and inedible almond meat
content of each delivery shall be determined by the inspection agency
and reported by the inspection agency to the Board and the handler. The
handler's disposition obligation will be credited upon satisfactory
completion of ABC Form 8. ABC Form 8, Part A, is filled out by the
handler, and Part B by the accepted user. At least 50 percent of a
handler's total crop year inedible disposition obligation shall be
satisfied with dispositions consisting of inedible kernels as defined
in Sec. 981.408: Provided, That this 50 percent requirement shall not
apply to handlers with total annual obligations of less than 1,000
pounds. Each handler's disposition obligation shall be satisfied when
the almond meat content of the material delivered to accepted users
equals the disposition obligation, but no later than September 30
succeeding the crop year in which the obligation was incurred. Almond
meal can be used for meeting the non-inedible portion of the
obligation. Meal content shall be determined in a manner acceptable to
the Board.
* * * * *
(b) Outgoing. Pursuant to Sec. 981.42(b), and except as provided
in Sec. 981.13 and in paragraph (b)(6) of this section, handlers shall
subject their almonds to a treatment process or processes prior to
shipment to reduce potential Salmonella bacteria contamination in
accordance with the provisions of this section. Temporary transfer by a
handler to an off-site cleaning facility is not considered a shipment
under this section. Handlers may utilize off-site cleaning facilities
within the production area, on record with the Board, to provide
sorting services to separate inedible kernels, foreign material, and
other defects from edible kernels. Product sent by a handler to an off-
site cleaning facility is considered a temporary transfer, with
ownership maintained by the handler, and accountability required for
all product fractions and handler obligations pursuant to Sec. 981.42.
* * * * *
(2) On-site versus off-site treatment. Handlers shall subject
almonds to a treatment process or processes prior to shipment either at
their handling facility (on-site) or a custom processor (defined as a
Board-approved off-site treatment facility located within the
production area subject to the provisions of paragraph (b)(4)(v) of
this section). Transportation of almonds by a handler to a custom
processor shall not be deemed a shipment. A handler with an on-site
treatment process or processes may use such facility to act as a custom
processor for other handlers.
(3) * * *
(i) Validation means that the treatment technology and equipment
have been demonstrated to achieve in total a minimum 4-log reduction of
Salmonella bacteria in almonds. Validation data prepared by a Board-
approved process authority must be submitted to the Board, and accepted
by the TERP, for each piece of equipment used to treat almonds prior to
its use under the program.
* * * * *
(v) The TERP, in coordination with the Board, may revoke any
approval for cause. The Board shall notify the process authority in
writing of the reasons for revoking the approval. Should the process
authority disagree with the decision, they may appeal the decision in
writing to the Board, and ultimately to USDA. A process authority whose
approval has been revoked must submit a new application to the TERP and
await approval.
(4) * * *
(i) By May 31, each handler shall submit to the Board a Handler
Treatment Plan (Treatment Plan) for the upcoming crop year. A Treatment
Plan shall describe how a handler plans to treat his or her almonds and
must address specific parameters as outlined by the Board for the
handler to ship almonds. Such plan shall be reviewed by the Board, in
conjunction with the inspection agency, to ensure it is complete and
can be verified, and be approved by the Board. Almonds sent by a
handler for treatment at a custom processing facility affiliated with
another handler shall be subject to the approved Treatment Plan
utilized at that facility. Handlers shall follow their own approved
Treatment Plans for almonds sent to custom processors that are not
affiliated with another handler.
* * * * *
(v) Custom processors shall provide access to the inspection agency
and Board staff for verification of treatment and review of treatment
records. Custom processors shall utilize technologies that have been
determined to achieve, in total, a minimum 4-log reduction of
Salmonella bacteria in almonds, pursuant to a letter of recommendation
issued by FDA or accepted by TERP. Custom processors must submit a
Custom Processor Application, ABC Form XX, to the Board annually by
July
[[Page 9461]]
31. A custom processor who submits a timely application, and utilizes a
treatment process or processes that has been validated by a Board-
approved process authority and approved by the Board in conjunction
with the TERP, shall be approved by the Board for handler use. The
Board may revoke any such approval for cause. The Board shall notify
the custom processor of the reasons for revoking the approval. Should
the custom processor disagree with the Board's decision, it may appeal
the decision in writing to USDA. Handlers may treat their almonds only
at custom processor treatment facilities that have been approved by the
Board.
* * * * *
(6) * * *
(i) Handlers may ship untreated almonds for further processing
directly to manufacturers located within the U.S., Canada, or Mexico.
This program shall be termed the Direct Verifiable (DV) program.
Handlers may only ship untreated almonds to manufacturers who have
submitted ABC Form No. 52, ``Application for Direct Verifiable (DV)
Program for Further Processing of Untreated Almonds,'' and have been
approved by the Board. Such almonds must be shipped directly to
approved manufacturing locations, as specified on Form No. 52. Such
manufacturers (DV Users) must submit an initial Form No. 52 to the
Board for review and approval in conjunction with the TERP. Should the
applicant disagree with the Board's decision concerning approval, it
may appeal the decision in writing to the Board, and ultimately to
USDA. For subsequent crop years, approved DV Users with no changes to
their initial application must send the Board a letter, signed and
dated, indicating that there are no changes to the application the
Board has on file. Approved DV Users desiring to make changes to their
approved application must resubmit Form No. 52 to the Board for
approval. The TERP, in coordination with the Board, may revoke any
approval for cause. The Board shall notify the DV User in writing of
the reasons for revoking the approval. Should the DV User disagree with
the decision, it may appeal the decision in writing to the Board, and
ultimately to USDA. A DV User whose approval has been revoked must
submit a new application to the Board and await approval. The Board
shall issue a DV User code to an approved DV User. Handlers must
reference such code in all documentation accompanying the lot and
identify each container of such almonds with the term
``unpasteurized.'' Such lettering shall be on one outside principal
display panel, at least \1/2\ inch in height, clear and legible. If a
third party is involved in the transaction, the handler must provide
sufficient documentation to the Board to track the shipment from the
handler's facility to the approved DV user. While a third party may be
involved in such transactions, shipments to a third party and then to a
manufacturing location are not permitted under the DV program. Approved
DV Users shall:
(A) Subject such almonds to a treatment process or processes using
technologies that achieve in total a minimum 4-log reduction of
Salmonella bacteria as determined by the FDA or established by a
process authority accepted by the TERP, in accordance with and subject
to the provisions and procedures of paragraph (b)(3) of this section.
Establish means that the treatment process and protocol have been
evaluated to ensure the technology's ability to deliver a lethal
treatment for Salmonella bacteria in almonds to achieve a minimum 4-log
reduction;
* * * * *
(C) Have their treatment technology and equipment validated by a
Board-approved process authority, and accepted by the TERP.
Documentation must be provided with their DV application to verify that
their treatment technology and equipment have been validated by a
Board-approved process authority. Such documentation shall be
sufficient to demonstrate that the treatment processes and equipment
achieve a 4-log reduction in Salmonella bacteria. Treatment technology
and equipment that have been modified to a point where operating
parameters such as time, temperature, or volume change, shall be
revalidated;
(D) Have their technology and procedures verified by a Board-
approved DV auditor to ensure they are being applied appropriately. A
DV auditor may not be an employee of the manufacturer that they are
auditing. A DV auditor may not be the same individual who conducted the
process validation accepted by the TERP for the equipment being
audited. DV auditors must submit a report to the Board after conducting
each audit. DV auditors must submit an initial application to the Board
on ABC Form No. 53, ``Application for Direct Verifiable (DV) Program
Auditors,'' and be approved by the Board in coordination with the TERP.
Should the applicant disagree with the decision concerning approval,
they may appeal the decision in writing to the Board, and ultimately to
USDA. For subsequent crop years, approved DV auditors with no changes
to their initial application must send the Board a letter, signed and
dated, indicating that there are no changes to the application the
Board has on file. Approved DV auditors whose status has changed must
submit a new application. The Board, in coordination with the TERP, may
revoke any approval for cause. The Board shall notify the DV auditor in
writing of the reasons for revoking the approval. Should the DV auditor
disagree with the decision to revoke, it may appeal the decision in
writing to the Board, and ultimately to USDA. A DV auditor whose
approval has been revoked must submit a new application to the Board
and await approval;
* * * * *
0
5. Revise Sec. 981.450 to read as follows:
Sec. 981.450 Exempt dispositions.
As provided in Sec. 981.50, any handler disposing of almonds for
crushing into oil, or for animal feed, may have the kernel weight of
these almonds excluded from their program obligations, so long as:
(a) The handler qualifies as, or delivers such almonds to, a Board-
approved accepted user;
(b) Each delivery is made directly to the accepted user by June 30
of each crop year; and
(c) Each delivery is certified to the Board by the handler on ABC
Form 8.
Sec. Sec. 981.466 and 981.467 [Stayed]
0
6. Sections 981.466 and 981.467 are stayed indefinitely.
0
7. Revise Sec. 981.481 to read as follows:
Sec. 981.481 Interest and late payment charges.
(a) Pursuant to Sec. 981.81(e), the Board shall impose an interest
charge on any handler whose assessment payment has not been received in
the Board's office within 30 days of the invoice date shown on the
handler's statement, or the envelope containing the payment has not
been legibly postmarked by the U.S. Postal Service or some other
verifiable delivery tracking system, as having been remitted within 30
days of the invoice date. The interest charge shall be a rate of one-
and one-half percent per month and shall be applied to the unpaid
assessment balance for the number of days all or any part of the unpaid
balance is delinquent beyond the 30-day payment period.
(b) In addition to the interest charge specified in paragraph (a)
of this section, the Board shall impose a late payment charge on any
handler whose payment has not been received in the Board's office, or
the envelope containing the payment legibly
[[Page 9462]]
postmarked by the U.S. Postal Service or some other verifiable delivery
tracking system, within 60 days of the invoice date. The late payment
charge shall be 10 percent of the unpaid balance.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-03460 Filed 2-18-22; 8:45 am]
BILLING CODE P
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</html>Indexed from Federal Register on February 22, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.