[Federal Register: March 10, 2003 (Volume 68, Number 46)]
[Proposed Rules]
[Page 11340-11342]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10mr03-8]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 932
[Docket No. FV03-932-1 PR]
Olives Grown in California; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule would increase the assessment rate established for
the California Olive Committee (committee) for the 2003 and subsequent
fiscal years from $10.09 to $13.89 per ton of olives handled. The
committee locally administers the marketing order regulating the
handling of olives grown in California. Authorization to assess olive
handlers enables the committee to incur expenses that are reasonable
and necessary to administer the program. The fiscal year began January
1 and ends December 31. The assessment rate would remain in effect
indefinitely unless modified, suspended, or terminated.
DATES: Comments must be received by April 9, 2003.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938, or E-mail: moab.docketclerk@usda.gov.
Comments should reference the docket number and the date and page
number of this issue of the Federal Register and will be available for
public inspection in the Office of the Docket Clerk during regular
business hours, or can viewed at: http//www.ams.usda.gov/fv/moab.html.
FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Program Assistant,
California Marketing Field Office, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 2202 Monterey Street,
Suite 102B, Fresno, California 93721; telephone: (559) 487-5901, Fax:
(559) 487-5906; or George Kelhart, Technical Advisor, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400
Independence Avenue SW., STOP 0237, Washington, DC 20250-0237;
telephone: (202) 720-2491, Fax: (202) 720-8938.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone (202) 720-
2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement No. 148 and Order No. 932, both as amended (7 CFR part 932),
regulating the handling of olives grown in California, hereinafter
referred to as the ``order.'' 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 Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the marketing order now in effect, California
olive handlers are subject to assessments. Funds to administer the
order are derived from such assessments. It is intended that the
assessment rate as proposed herein would be applicable to all
assessable olives beginning on January 1, 2003, and continue until
amended, suspended, or terminated. This rule will not preempt any State
or local laws, regulations, or policies, unless they present an
irreconcilable conflict with this rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. Such
handler is afforded the opportunity for a hearing on the petition.
After the hearing USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This rule would increase the assessment rate established for the
committee for the 2003 and subsequent fiscal years from $10.09 per ton
to $13.89 per ton of olives.
The California olive marketing order provides authority for the
committee, with the approval of USDA, to formulate an annual budget of
expenses and collect assessments from handlers to administer the
program. The members of the committee are producers and handlers of
California olives. They are familiar with the committee's needs and
with the costs for 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 discussed in a public meeting.
Thus, all directly affected persons have an opportunity to participate
and provide input.
For the 2002 and subsequent fiscal years, the committee
recommended, and USDA approved, an assessment rate that would continue
in effect from fiscal year to fiscal year unless modified, suspended,
or terminated by USDA upon recommendation and information submitted by
the committee or other information available to USDA.
The committee met on December 11, 2002, and unanimously recommended
fiscal year 2003 expenditures of $1,230,590 and an assessment rate of
$13.89 per ton of olives. In comparison, last year's budgeted
expenditures were $1,428,585. The assessment rate of $13.89 is $3.80
higher than the $10.09 rate currently in effect.
Expenditures recommended by the committee for the 2003 fiscal year
include $633,500 for marketing development, $347,090 for
administration, and $250,000 for research. Budgeted expenses for these
items in 2002 were $811,935 for marketing development, $339,650 for
administration, and $250,000 for research.
The assessment rate recommended by the committee was derived by
considering anticipated expenses, actual olive tonnage received by
handlers, and additional pertinent factors. The California Agricultural
Statistics Service (CASS) reported olive receipts for the 2002-03 crop
year at 89,006 tons, which compares to 123,439 for the 2001-02 crop
year. The reduction in the crop size for the 2002-03 crop year, due in
large part to the alternate-bearing
[[Page 11341]]
characteristics of olives, has made it necessary for the committee to
recommend an increase in the assessment rate from the current $10.09
per assessable ton to $13.89 per assessable ton, an increase of $3.80
per ton. Income derived from handler assessments, interest, and
utilization of reserve funds will be adequate to cover budgeted
expenses. Funds in the reserve will be kept within the maximum
permitted by the order of approximately one fiscal period's expenses
(Sec. 932.40).
The assessable tonnage for the 2003 fiscal year is expected to be
less than the receipts of 89,006 tons reported by CASS, because some
olives may be diverted by handlers to uses that are exempt from
marketing order requirements. The quantity of olives that is expected
to be diverted cannot be published in this document. The olive industry
consists of only three handlers, two of which are much larger than the
third, and the confidentially of this handler information must be
maintained to protect the proprietary business positions of each of the
handlers.
The proposed assessment rate would continue in effect indefinitely
unless modified, suspended, or terminated by USDA upon recommendation
and information submitted by the Committee or other available
information.
Although this assessment rate would be in effect for an indefinite
period, the committee would continue to meet prior to or during each
fiscal year to recommend a budget of expenses and consider
recommendations for modification of the assessment rate. The dates and
times of committee meetings are available from the committee or USDA.
Committee meetings are open to the public and interested persons may
express their views at these meetings. USDA would evaluate committee
recommendations and other available information to determine whether
modification of the assessment rate is needed. Further rulemaking would
be undertaken as necessary. The committee's 2003 budget and those for
subsequent fiscal years would be reviewed and, as appropriate, approved
by USDA.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this 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
business 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. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 1,200 producers of olives in the production
area and 3 handlers subject to regulation under the marketing order.
Small agricultural producers are defined by the Small Business
Administration (13 CFR 121.601) as those having annual receipts less
than $750,000, and small agricultural service firms are defined as
those whose annual receipts are less than $5,000,000.
Based upon information from the committee, the majority of olive
producers may be classified as small entities. One of the handlers may
be classified as a small entity, but the majority of the handlers may
be classified as large entities.
This rule would increase the assessment rate established for the
committee and collected from handlers for the 2003 and subsequent
fiscal years from $10.09 per ton to $13.89 per ton of olives. The
committee unanimously recommended 2003 expenditures of $1,230,590 and
an assessment rate of $13.89 per ton. The proposed assessment rate of
$13.89 per ton is $3.80 per ton higher than the 2002 rate. The quantity
of olive receipts for the 2002-03 crop year was reported by CASS to be
89,006 tons, but the actual assessable tonnage for the 2003 fiscal year
is expected to be lower. This is because some of the receipts are
expected to be diverted by handlers to exempt outlets on which
assessments are not paid. The amount of assessable tonnage cannot be
reported in this document. The amount of the exempt tonnage must be
kept confidential so the business position of each of the three olive
handlers is not revealed. The $13.89 per ton assessment rate should be
adequate to meet this year's expenses when combined with funds from the
authorized reserve and interest income. Funds in the reserve will be
kept within the maximum permitted by the order of about one fiscal
period's expenses (Sec. 932.40).
Expenditures recommended by the committee for the 2003 fiscal year
include $633,500 for marketing development, $347,090 for
administration, and $250,000 for research. Budgeted expenses for these
items in 2002 were $811,935 for marketing development, $339,650 for
administration, and $250,000 for research.
Last year's olive receipts totaled 123,439 tons compared to this
year's tonnage of 89,006. Although the committee decreased 2003
expenses, the significant decrease in olive production makes the higher
assessment rate necessary.
The research expenditures will fund studies to develop chemical and
scientific defenses to counteract a threat from the olive fruit fly in
the California production area. Market development expenditures are
lower because the committee's marketing program for 2003 is limited to
consumer and nutritionist activities. The committee reviewed and
unanimously recommended 2003 expenditures of $1,230,590, which reflects
decreases in the research, market development, and administrative
budgets.
Prior to arriving at this budget, the committee considered
information from various sources, such as the committee's Executive
Subcommittee and the Market Development Subcommittee. Alternate
spending levels were discussed by these groups, based upon the relative
value of various research and marketing projects to the olive industry
and the anticipated olive production. The assessment rate of $13.89 per
ton of assessable olives was derived by considering anticipated
expenses, the volume of assessable olives, and additional pertinent
factors.
A review of historical and preliminary information pertaining to
the upcoming fiscal year indicates that the grower price for the 2002-
03 crop year is estimated to be approximately $672 per ton for canning
fruit and $306 per ton for limited-use size fruit. Approximately 85
percent of a ton of olives are canning fruit sizes and 10 percent are
limited-use sizes, leaving the balance as unusable cull fruit. Total
grower revenue on 89,006 tons would then be $53,563,811 given the
percentage of canning and limited-use sizes and current grower prices
for those sizes. Therefore, if the assessment rate is increased from
$10.09 to $13.89, the estimated assessment revenue is expected to be
approximately 2.3 percent of grower revenue.
This action would increase the assessment obligation imposed on
handlers. While assessments impose some additional costs on handlers,
the costs are minimal and uniform on all handlers. Some of the
additional costs may be passed on to producers. However, these costs
are offset by the benefits derived by the operation of the marketing
order. In addition, the committee's meeting was widely publicized
throughout the California
[[Page 11342]]
olive industry and all interested persons were invited to attend the
meeting and participate in committee deliberations on all issues. Like
all committee meetings, the December 11, 2002, 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
information on the regulatory and informational impacts of this action
on small businesses.
This proposed rule would impose no additional reporting or
recordkeeping requirements on California olive 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.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http:/
/www.ams.usda.gov/fv/moab.html.
Any questions about the compliance
/www.ams.usda.gov/fv/moab.html. Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
A 30-day comment period is provided to allow interested persons to
respond to this proposed rule. Thirty days is deemed appropriate
because: (1) The 2003 fiscal year began on January 1, 2003, and the
marketing order requires that the rate of assessment for each fiscal
year apply to all assessable olives handled during such fiscal year;
(2) the committee needs to have sufficient funds to pay its expenses
which are incurred on a continuous basis; and (3) handlers are aware of
this action which was unanimously recommended by the committee at a
public meeting and is similar to other assessment rate actions issued
in past years.
List of Subjects in 7 CFR Part 932
Marketing agreements, Olives, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 932 is
proposed to be amended as follows:
PART 932--OLIVES GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 932 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 932.230 is revised to read as follows:
Sec. 932.230 Assessment rate.
On and after January 1, 2003, an assessment rate of $13.89 per ton
is established for California olives.
Dated: March 4, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-5561 Filed 3-7-03; 8:45 am]
BILLING CODE 3410-02-P