Proposed Rule2023-24793
Hazelnuts Grown in Oregon and Washington; Decreased Assessment Rate
Primary source
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Published
November 9, 2023
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
This proposed rule would implement a recommendation from the Hazelnut Marketing Board (Board) to decrease the assessment rate established for the 2023-2024 marketing year and subsequent marketing years. The proposed assessment rate would remain in effect indefinitely unless modified, suspended, or terminated.
Full Text
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<title>Federal Register, Volume 88 Issue 216 (Thursday, November 9, 2023)</title>
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[Federal Register Volume 88, Number 216 (Thursday, November 9, 2023)]
[Proposed Rules]
[Pages 77233-77236]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-24793]
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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. 88, No. 216 / Thursday, November 9, 2023 /
Proposed Rules
[[Page 77233]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 982
[Doc. No. AMS-SC-23-0034]
Hazelnuts Grown in Oregon and Washington; Decreased Assessment
Rate
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
Hazelnut Marketing Board (Board) to decrease the assessment rate
established for the 2023-2024 marketing year and subsequent marketing
years. The proposed assessment rate would remain in effect indefinitely
unless modified, suspended, or terminated.
DATES: Comments must be received by December 11, 2023 to be assured
consideration.
ADDRESSES: 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: <a href="/cdn-cgi/l/email-protection#a6ebc7d4cdc3d2cfc8c1e9d4c2c3d4e5c9cbcbc3c8d2e6d3d5c2c788c1c9d0"><span class="__cf_email__" data-cfemail="e5a884978e80918c8b82aa97818097a68a8888808b91a590968184cb828a93">[email protected]</span></a> or via the 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.
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: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. 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.
FOR FURTHER INFORMATION CONTACT: Virginia Tjemsland, Marketing
Specialist, or Gary Olson, Chief, West Region Branch, Market
Development Division, Specialty Crops Program, AMS, USDA; Telephone:
(503) 326-2724, or Email: <a href="/cdn-cgi/l/email-protection#b4e2ddc6d3dddaddd59af89ae0ded1d9c7d8d5dad0f4c1c7d0d59ad3dbc2"><span class="__cf_email__" data-cfemail="98cef1eafff1f6f1f9b6d4b6ccf2fdf5ebf4f9f6fcd8edebfcf9b6fff7ee">[email protected]</span></a> or
<a href="/cdn-cgi/l/email-protection#236442515a670d6c4f504c4d63565047420d444c55"><span class="__cf_email__" data-cfemail="347355464d701a7b58475b5a74414750551a535b42">[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) 720-8085, or Email:
<a href="/cdn-cgi/l/email-protection#ffad969c979e8d9bd1b390889a8dbf8a8c9b9ed1989089"><span class="__cf_email__" data-cfemail="d684bfb5beb7a4b2f89ab9a1b3a496a3a5b2b7f8b1b9a0">[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
Agreement No. 115 and Order No. 982, both as amended (7 CFR part 982),
regulating the handling of hazelnuts grown in Oregon and Washington.
Part 982 (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 hazelnuts
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, 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 supplements and reaffirms Executive Orders 12866 and 13563
and directs agencies to conduct proactive outreach to engage interested
and affected parties through a variety of means, such as through field
offices, and alternative platforms and media. 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. 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 proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. Under the Order now in effect, hazelnut handlers
are subject to assessments. Funds to administer the Order are derived
from such assessments. It is intended that the assessment rate would be
applicable to all assessable hazelnuts for the 2023-2024 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
requesting 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.
Section 982.61 provides authority for the Board, with the approval
of AMS, to formulate an annual budget of expenses and collect
assessments from handlers to administer the program. Members are
familiar with the Board's needs and with the costs of goods and
services in their local area and are, thus, in a position to formulate
an appropriate budget and assessment rate. The assessment rate is
formulated and
[[Page 77234]]
discussed in a public meeting. Thus, all directly affected persons have
an opportunity to participate and provide input.
For the 2017-2018 marketing year and subsequent marketing years,
the Board recommended, and AMS approved, an assessment rate of $12 per
ton (equivalent to $0.006 per pound) of hazelnuts. 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. This
proposed rule would decrease the assessment rate from $0.006 per pound
to $0.005 per pound for the 2023-2024 marketing year and subsequent
marketing years.
The Board met on June 29, 2023, and recommended 2023-2024 marketing
year expenditures of $1,815,000 and an assessment rate of $10 per ton
(the equivalent of $0.005 per pound) of hazelnuts handled for the 2023-
2024 marketing year and subsequent marketing years. In comparison, last
year's budgeted expenditures were $2,378,550. The proposed assessment
rate of $0.005 per pound is $0.001 lower than the rate currently in
effect. The Board recommended decreasing the assessment rate to better
align assessment revenue with budgeted expenses and to reduce the
financial burden on the industry in a period of low commodity prices.
The Board projects handler receipts of 85,000 tons (170 million pounds)
of hazelnuts for the 2023-2024 marketing year, which is 10,000 tons (20
million pounds) more than was projected for the 2022-2023 marketing
year.
The expenditures totaling $1,815,000 recommended by the Board for
the 2023-2024 marketing year include $670,000 for promotional
activities, $300,000 for contingency/undesignated, $100,000 for
marketing research, $100,000 for research endowment, $378,000 for
administrative activities, and $267,000 for miscellaneous expenses. By
comparison, budgeted expenditures for the 2022-2023 marketing year for
promotional activities, contingency, marketing research, research
endowment, administrative activities and miscellaneous expenses were
$1,251,200, $200,000, $150,000, $100,000, $347,350, and $330,000,
respectively. The Board's 2023-2024 marketing year budget was reduced
to account for generally lower commodity prices and decreased industry
revenue.
The expected 170 million pounds of assessable hazelnuts from the
2023 crop would generate $850,000 in assessment revenue at the proposed
assessment rate (170 million pounds multiplied by $0.005 assessment
rate). The remaining $965,000 needed to cover budgeted expenditures
would come from new grant funds and reserve funds carried over from
previous marketing years. The Board anticipates $495,000 in federal
grants administered by USDA's Foreign Agricultural Service.\1\ The
remaining $470,000 necessary to cover budgeted expenditures would come
from its monetary reserve. The recommended assessment rate should be
appropriate to ensure that the Board has sufficient revenue, along with
grants awarded and reserve funds, to fully fund its recommended 2023-
2024 marketing year budgeted expenditures and still maintain a level of
reserve funds that the Board believes is appropriate.
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\1\ Specifically, $110,000 in Agricultural Trade Promotion
program funds, $300,000 in Market Access Program funds, and $85,000
in Technical Assistance for Specialty Crop program funds.
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The Board derived the recommended assessment rate by considering
anticipated expenses, an estimated 2023 crop volume of 170 million
pounds of assessable hazelnuts, grants that have been awarded, and the
amount of funds available in the authorized reserve. Income derived
from handler assessments ($850,000), and funds from other sources
($965,000), is expected to be adequate to cover budgeted expenses
($1,815,000).
The proposed assessment rate would 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 would be in effect for an indefinite
period, the Board would 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 would 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 2023-2024 marketing year budget and those for
subsequent marketing years will be reviewed and, as appropriate,
approved by AMS.
Initial Regulatory Flexibility Analysis
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 proposed rule 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, and the rules issued thereunder, are unique in
that they are brought about through group action of typically small
entities acting on their own behalf.
There are approximately 1,103 producers of hazelnuts in the
production area and 14 handlers subject to regulation under the Order.
At the time this analysis was prepared, small agricultural producers of
hazelnuts were defined by the Small Business Administration (SBA) as
those having annual receipts equal to or less than $3,750,000 (North
American Industry Classification System code 111335), and small
agricultural service firms were defined as those whose annual receipts
are equal to or less than $34,000,000 (North American Industry
Classification System code 115114) (13 CFR 121.201).
According to the National Agricultural Statistics Service (NASS),
the average producer price received for hazelnuts sold in Oregon
specifically in 2022 was $1,300 per ton. Total production of hazelnuts
for the 2022 season was reported by the NASS to be 68,000 tons. Using
the average price and production data from the 2022 crop year, the most
recent year for which there is NASS data available, the total 2022 crop
value of hazelnuts could be estimated to be $88,400,000 (68,000 tons
times $1,300 per ton). Dividing the crop value by the estimated number
of producers (1,103) yields estimated average receipts per hazelnut
producer of $80,145, which is well below the SBA threshold for small
producers.
In addition, according to AMS Market News data, the reported
average 2021-2022 marketing year shipping point price for hazelnuts was
$126.82 per 50-pound container, or $2.54 per pound ($126.82 per 50-
pound container divided by 50 pounds). Multiplying the 2022 hazelnut
production of 136,000,000 pounds (68,000 tons) by the estimated average
price per pound of $2.54 equals $345,440,000 of estimated handler
receipts. Dividing this figure by the 14 regulated handlers yields
estimated average annual handler receipts of approximately $24,674,286
($345,440,000 divided by 14 handlers), which is below the SBA threshold
for small agricultural service firms. Therefore, using the above data,
most of
[[Page 77235]]
the producers and handlers of hazelnuts may be classified as small
entities.
This proposal would decrease the assessment rate collected from
handlers for the 2023-2024 marketing year and subsequent marketing
years from $0.006 to $0.005 per pound of assessable hazelnuts. The
Board unanimously recommended 2023-2024 marketing year expenditures of
$1,815,000 and an assessment rate of $10 per ton ($0.005 per pound) of
assessable hazelnuts. The proposed assessment rate of $0.005 per pound
is $.001 lower than the current rate. The Board expects the industry to
handle 85,000 tons (170 million pounds) of assessable hazelnuts during
the 2023-2024 marketing year. Thus, at the $0.005 per pound rate, the
Board anticipates $850,000 in assessment income (170 million pounds
multiplied by $0.005 per pound). The Board also expects to use grant
funds and the Board's monetary reserve to cover the remaining $965,000
of expenses. Income derived from handler assessments, along with grants
and reserve funds, should be adequate to meet budgeted expenditures for
the 2023-2024 marketing year.
The major expenditures recommended by the Board for the 2023-2024
marketing year include $670,000 for promotional activities, $300,000
for contingency/undesignated, $100,000 for marketing research, $100,000
for research endowment, $378,000 for administrative activities, and
$267,000 for miscellaneous expenses. Budgeted expenditures for the
2022-2023 marketing year were $1,251,200 for promotional activities,
$200,000 for contingency/undesignated, $150,000 for marketing research,
$100,000 for research endowment, $347,350 for administrative
activities, and $330,000 for miscellaneous, respectively.
The Board's 2023-2024 marketing year budget was reduced $563,550
from the prior year's budget to account for generally lower commodity
prices and decreased industry revenue. In addition, the Board
recommended decreasing the assessment rate to reduce the financial
burden on the handlers and growers during the current environment of
depressed prices. In recent years, the Board has utilized reserve funds
to partially fund its budgeted expenditures. The Board's 2023-2024
marketing year budget again utilizes funds from the financial reserve
to subsidize expenditures, but at a lower amount than in previous
years. With this action, the Board's reserve balance would be
maintained at a level that the Board believes is appropriate and is
compliant with the provisions of the Order.
Prior to arriving at the budget and proposed assessment rate, the
Board discussed various alternatives, including maintaining the current
assessment rate of $0.006 per pound and reducing the assessment rate to
$0.0055 per pound ($11 per ton). However, the Board determined that the
recommended assessment rate would be able to reduce the financial
burden on the industry and still fund most of the Board's budgeted
expenses without drawing down reserves at an unsustainable rate. The
assessment rate of $0.005 per pound of hazelnuts was derived by
considering anticipated expenses, the projected volume of assessable
hazelnuts, the projected monetary balance held in reserve, and
additional pertinent factors.
A review of NASS information indicates that the average producer
price for the 2022 crop year was $0.65 per pound ($1,300 per ton).
Further, NASS reported the quantity of hazelnuts harvested in the 2022
crop year was 136 million pounds (68,000 tons), which yields estimated
total producer revenue for 2022 of $88,400,000 ($0.65 per pound
multiplied by 136 million pounds). Therefore, utilizing the assessment
rate of $0.005 per pound, the estimated assessment revenue as a
percentage of total producer revenue would be approximately 0.77
percent ($0.005 per pound multiplied by 136 million pounds divided by
$88,400,000 and multiplied by 100).
This proposed action would decrease the assessment obligation
imposed on handlers. Assessments are applied uniformly on all handlers,
and some of the costs may be passed on to growers. However, these costs
are expected to be offset by the benefits derived by the operation of
the Order.
The Board's meetings are widely publicized throughout the
production area. The hazelnut industry and all interested persons are
invited to attend the meetings and participate in Board deliberations
on all issues. Like all Board meetings, the June 29, 2023, meeting was
a public meeting and all entities, both large and small, were able to
express 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 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 OMB and assigned OMB No. 0581-0178, Vegetable
and Specialty Crops. No changes in those requirements would be
necessary as a result of this proposed rule. Should any changes become
necessary, they would be submitted to OMB for approval.
This proposed rule would not impose any additional reporting or
recordkeeping requirements on either small or large hazelnut handlers.
As with all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies.
AMS is committed to complying with the E-Government Act to promote
the use of the internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
AMS has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this proposed rule.
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.
After consideration of all relevant material presented, including
the information and recommendations submitted by the Committee and
other available information, USDA has determined that this proposed
rule is consistent with and will effectuate the purposes of the Act.
A 30-day comment period is provided to allow interested persons to
respond to this proposed rule. All written comments timely received
will be considered before a final determination is made on this rule.
List of Subjects in 7 CFR Part 982
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 982 as follows:
PART 982--HAZELNUTS GROWN IN OREGON AND WASHINGTON
0
1. The authority citation for 7 CFR part 982 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Revise 982.340 to read as follows:
Sec. 982.340 Assessment rate.
On and after July 1, 2023, an assessment rate of $0.005 per pound
is
[[Page 77236]]
established for Oregon and Washington hazelnuts.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-24793 Filed 11-8-23; 8:45 am]
BILLING CODE P
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