Proposed Rule2025-19224
Walnuts Grown in California; Changes to Administrative Requirements
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
October 1, 2025
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
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.
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<title>Federal Register, Volume 90 Issue 188 (Wednesday, October 1, 2025)</title>
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[Federal Register Volume 90, Number 188 (Wednesday, October 1, 2025)]
[Proposed Rules]
[Pages 47248-47251]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19224]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 984
[Doc. No. AMS-SC-24-0076]
Walnuts Grown in California; Changes to Administrative
Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: 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.
DATES: Comments must be received by October 31, 2025.
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#b3fed2c1d8d6c7daddd4fcc1d7d6c1f0dcdeded6ddc7f3c6c0d7d29dd4dcc5"><span class="__cf_email__" data-cfemail="6e230f1c050b1a070009211c0a0b1c2d0103030b001a2e1b1d0a0f40090118">[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:
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:
<a href="/cdn-cgi/l/email-protection#19537c7f7f7c6b6054374b60747c6b596c6a7d78377e766f"><span class="__cf_email__" data-cfemail="97ddf2f1f1f2e5eedab9c5eefaf2e5d7e2e4f3f6b9f0f8e1">[email protected]</span></a> or <a href="/cdn-cgi/l/email-protection#92d3f0fbf5f3fbfebcdff3faf3e0f3f8d2e7e1f6f3bcf5fde4"><span class="__cf_email__" data-cfemail="dc9dbeb5bbbdb5b0f291bdb4bdaebdb69ca9afb8bdf2bbb3aa">[email protected]</span></a>.
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: <a href="/cdn-cgi/l/email-protection#a8e9c6dcc7c1c6cddcdccd86ebc9dadccddae8dddbccc986cfc7de"><span class="__cf_email__" data-cfemail="cb8aa5bfa4a2a5aebfbfaee588aab9bfaeb98bbeb8afaae5aca4bd">[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. 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.
[[Page 47249]]
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, Sec. 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, Sec. 984.73 of the Order provides the authority to
require handlers to submit reports of their walnut receipts. Under that
authority, Sec. 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 Sec. 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 Sec. 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 Sec. 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 Sec. 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 would
also provide an incentive for handlers to comply with the proposed
payment installment schedule.
Finally, this proposed action would modify the reporting
requirements in Sec. 984.473, ``Report of walnut receipts'' which
requires handlers to report walnut acquisitions on or before January 15
of each marketing year on forms supplied by the Board. This proposed
rule would add provisions for reporting walnuts that are acquired after
the January 15 reporting deadline. Although the occurrence of walnuts
arriving to handlers after January 15 is not common, when it does
occur, it creates confusion concerning how the reporting requirements
and assessment collections are applied to those late arriving walnuts.
As such, the Board proposed a simple solution: each handler acquiring
walnuts from growers after submission of his or her initial report of
walnut receipts would also be required to file a revised report of
walnut receipts by the 15th of the month following such receipt.
Handlers must pay assessments on such receipts upon demand, as
requested by the Board, following receipt of the revised report.
The proposed changes collectively aim to reinforce the integrity of
the walnut marketing order, promote compliance, and reduce reliance on
legal remedies for collection. By fostering transparency, timely
reporting, and punctual payments, these measures are expected to
facilitate the orderly marketing of California walnuts and enhance the
continued effectiveness of the program for the benefit of industry
stakeholders.
[[Page 47250]]
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 essentially small
entities acting on their own behalf.
There are approximately 68 handlers subject to regulation under the
Order and approximately 4,500 growers of California walnuts in the
production area. At the time this analysis was prepared, the Small
Business Administration (SBA) defined small agricultural service firms
as those having annual receipts of less than $34,000,000 (North
American Industry Classification System (NAICS) code 115114,
Postharvest Crop Activities), and small agricultural producers of
walnuts as those having annual receipts of less than $3,750,000 (NAICS
code 111335, Tree Nut Farming) (13 CFR 121.201).
Data from USDA's National Agricultural Statistics Service (NASS),
indicate a three-year average value of utilized inshell walnut
production of $737.1 million for the most recent seasons for which data
is available (2022 through 2024 crop years). Dividing that figure by
the number of walnut growers (4,500) yields an average annual crop
value per grower of approximately $163,787. This figure is well below
the SBA small agricultural producer threshold of $3,750,000 in annual
sales. Assuming a normal distribution, this provides evidence that a
large majority of walnut growers would likely be considered small
agricultural producers according to the SBA definition. Additionally,
data from NASS's 2022 Agricultural Census show that 96 percent of
California farms growing walnuts at the time had walnut sales of less
than $1 million.
Further, based on information from the Board, approximately 78
percent of California's walnut handlers shipped assessable walnuts
valued under $34 million during the 2023-2024 marketing year and would,
therefore, be considered small handlers according to the SBA
definition. Considering the above-mentioned information, it is
reasonable to conclude that a substantial majority of both walnut
growers and handlers would be considered small business entities
according to current SBA definitions.
This proposed rule would provide a defined payment schedule for
required handler assessment payments, establish interest and late
payment charges on overdue handler assessments, and modify the
reporting requirements for walnut acquisitions. These changes were
recommended by the Board to enhance the efficiency of the Board's
administrative function. Authority for this proposed action is provided
in Sec. Sec. 984.69 and 984.73 of the Order.
The Board discussed alternatives to the recommendations contained
in this rule, including different options for the reporting of walnut
acquisitions, the timing of assessment payment installments, various
late payment penalty rates, and the appropriate interest rate charged
on unpaid assessments. The Board also considered making no changes and
maintaining the Order's status quo. However, the Board recognized the
financial and administrative inefficiencies inherent in the existing
administrative provisions and believed that taking no action would have
been imprudent. Further, the Board determined that the late penalty
charge and the interest rate as proposed herein would serve to
incentivize compliance with the Order's provisions without being
excessive and difficult.
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. This proposed rule would require changes to the
Board's existing CWB Form #1. Further, this proposed action may result
in additional report submissions from some handlers. However, the
changes proposed are minor and the currently approved burden for the
form would only be minimally increased by the proposed changes. The
revised form has been submitted to OMB for approval.
This proposed rule may impose some additional reporting or
recordkeeping requirements on either small or large California walnut
handlers. However, the Board anticipates that the requirement to submit
supplemental acquisition reports for walnuts that are acquired after
the submission of the handler's initial CWB Form #1 report would only
impact a small percentage of the total number of 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 Antoinette
Carter 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 Board and other
available information, AMS has determined that this proposed rule is
consistent with and would 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 984
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 984 as follows:
PART 984--WALNUTS GROWN IN CALIFORNIA
0
1. The authority citation for part 984 continues to read as follows:
Authority: 7 U.S.C. 601-674.
0
2. Add Sec. 984.348 to subpart B to read as follows:
Sec. 984.348 Payment of assessments.
(a) Each handler shall pay assessments on walnut receipts reported
by the handler pursuant to Sec. 984.473(a) in three installments,
invoiced by the Board, on January 31, April 30, and July 31 of each
marketing year.
(b) Each handler shall pay assessments on walnut receipts reported
by the handler pursuant to Sec. 984.473(b), as requested by the Board,
on demand.
[[Page 47251]]
0
3. Add Sec. 984.349 to subpart B to read as follows:
Sec. 984.349 Late payment and interest charges.
(a) The Board shall impose a late payment charge of ten percent
(10%) on any handler whose assessment payment has not been received
within sixty (60) days of the invoice date shown on the handler's
assessment statement.
(b) Payments not received more than sixty (60) days after the
invoice date shown on the handler's assessment statement shall be
subject to a one and one-half percent (1.5%) interest charge per month.
Interest shall be applied to the total outstanding assessment balance,
including any late payment charge, at the end of each subsequent thirty
(30) day period until final payment is made.
0
4. Revise Sec. 984.473 to read as follows:
Sec. 984.473 Report of walnut receipts.
(a) Each handler shall file a report of his or her walnut receipts
from growers on or before January 15 of each marketing year on forms
supplied by the Board.
(b) Each handler acquiring walnuts from growers after submission of
their initial report of walnut receipts pursuant to paragraph (a) of
this section shall file a revised report of walnut receipts by the 15th
of the month following such receipt on forms supplied by the Board.
Erin Morris,
Administrator, Agricultural Marketing Service.
[FR Doc. 2025-19224 Filed 9-30-25; 8:45 am]
BILLING CODE 3410-02-P
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