[Federal Register: January 8, 2004 (Volume 69, Number 5)]
[Rules and Regulations]
[Page 1269-1271]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08ja04-1]
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Rules and Regulations
Federal Register
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[[Page 1269]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[Docket No. FV04-981-1 IFR]
Almonds Grown in California; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule decreases the assessment rate established for the
Almond Board of California (Board) for the 2003-04 and subsequent crop
years from $0.025 to $0.020 per pound of almonds received. The Board
locally administers the marketing order which regulates the handling of
almonds grown in California. Authorization to assess almond handlers
enables the Board to incur expenses that are reasonable and necessary
to administer the program. The crop year began August 1 and ends July
31. The assessment rate will remain in effect indefinitely unless
modified, suspended, or terminated.
DATES: Effective January 9, 2004. Comments received by March 8, 2004,
will be considered prior to issuance of a final rule.
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 be viewed at: http://www.ams.usda.gov/fv/moab.html
.
FOR FURTHER INFORMATION CONTACT: Toni Sasselli, Marketing Assistant, or
Martin Engeler, Assistant Regional Manager, 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 Order
No. 981, as amended (7 CFR part 981), regulating the handling of
almonds 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
almond handlers are subject to assessments. Funds to administer the
order are derived from such assessments. It is intended that the
assessment rate as issued herein will be applicable to all assessable
almonds beginning August 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 decreases the assessment rate established for the Board
for the 2003-04 and subsequent crop years from $0.025 to $0.020 per
pound of almonds received.
The California almond marketing order provides authority for the
Board, 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 Board are producers and handlers of
California almonds. They are familiar with the Board'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 1998-99 and subsequent crop years, the Board recommended,
and USDA approved, an assessment rate that would continue in effect
from crop year to crop year unless modified, suspended, or terminated
by USDA upon recommendation and information submitted by the Board or
other information available to USDA.
The Board met on May 15, 2003, and unanimously recommended 2003-04
expenditures of $20,358,304. In comparison, last year's budgeted
expenditures were $19,407,437. The assessment rate of $0.025 has
remained unchanged since the 1998-99 crop year.
The major expenditures recommended by the Board for the 2003-04
crop year include $6,375,312 for advertising and market research,
$7,587,750 for public relations and other promotion and education
[[Page 1270]]
programs including a Market Access Program (MAP) administered by USDA's
Foreign Agriculture Service (FAS), $1,500,000 for salaries and wages,
$1,000,000 for nutrition research, $850,332 for production research,
$823,948 for quality programs, $254,903 for environmental programs,
$200,000 for travel, $122,472 for office rent, $120,750 for a crop
estimate, and $90,780 for an acreage survey. Budgeted expenses for
these items in 2002-03 were $6,125,312 for advertising and market
research, $6,877,750 for public relations and other promotion and
education programs including a MAP program administered by FAS,
$1,760,000 for salaries and wages, $1,000,000 for nutrition research,
$622,131 for production research, $472,964 for quality programs,
$172,500 for econometric modeling and analysis, $230,550 for travel,
$122,850 for office rent, $120,762 for a crop estimate, and $125,000
for compliance audits and analysis.
In September 2003, the Board recommended an increase in 2003-04
expenses due to an increased availability of funds from FAS. USDA
approved an increased expenditure level of $20,547,385.
The Board met again on November 6, 2003, and recommended decreasing
the assessment rate from $0.025 per pound to $0.020 per pound of
almonds handled. Of the $0.020 per pound assessment, $0.01 per pound is
available as credit-back for handlers who conduct their own promotional
activities consistent with Sec. 981.441 of the order s regulations and
subject to Board approval. The Board recommended reducing the
assessment rate because the 2002-03 financial audit revealed that the
Board s financial reserve exceeded the amount authorized under Sec.
981.81(c) of the order.
Section 981.81(c) authorizes a financial reserve of approximately
one-half year's budgeted expenses. One-half of the 2003-04 crop year's
budgeted expenses of $20,547,385 equals $10,273,692. The financial
audit revealed a reserve of $12,681,596 at the end of the 2002-03 crop
year, which is $2,407,904 more than the authorized reserve.
Section 981.81(b) of the order requires excess funds held in the
financial reserve to be refunded to handlers or used to reduce the
assessment rate in the subsequent crop year. The Board considered both
options, and recommended the latter. By reducing the assessment rate
and projected assessment revenue, the Board's estimated financial
reserve at the end of the 2003-04 crop year will be $7,338,087, which
is within the parameters authorized under the order.
The assessment rate recommended by the Board was derived by
considering anticipated expenses and production levels of California
almonds, and additional pertinent factors. In its recommendation, the
Board utilized an estimate of 907,200,000 pounds of assessable almonds
for the 2003-04 crop year. If realized, this will provide estimated
assessment revenue of $9,072,000 from all handlers, and an additional
$4,989,600 from those handlers who do not participate in the credit-
back program, for a total of $14,061,600. In addition, it is
anticipated that $13,678,872 will be provided by other sources,
including interest income, MAP funds, miscellaneous income, and
reserve/carryover funds. When combined, revenue from these sources will
be adequate to cover budgeted expenses. Any unexpended funds from the
2003-04 crop year may be carried over to cover expenses during the
succeeding crop year. As previously mentioned, funds in the reserve at
the end of the 2003-04 crop year are estimated to be approximately
$7,338,087, which is within the amount permitted by the order.
The assessment rate established in this rule will continue in
effect indefinitely unless modified, suspended, or terminated by USDA
upon recommendation and information submitted by the Board or other
available information.
Although this assessment rate is effective for an indefinite
period, the Board will continue to meet prior to or during each crop
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 USDA. Board meetings are open
to the public and interested persons may express their views at these
meetings. USDA will evaluate Board recommendations and other available
information to determine whether modification of the assessment rate is
needed. Further rulemaking will be undertaken as necessary. The Board's
2003-04 budget and those for subsequent crop years will 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 6,000 producers of almonds in the
production area and approximately 119 handlers subject to regulation
under the marketing order. Small agricultural producers are defined by
the Small Business Administration (13 CFR 121.201) 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.
Data for the most recently completed crop year indicate that about
38 percent of the handlers shipped over $5,000,000 worth of almonds and
about 62 percent of handlers shipped under $5,000,000 worth of almonds.
In addition, based on production and grower price data reported by the
California Agricultural Statistics Service (CASS), and the total number
of almond growers, the average annual grower revenue is estimated to be
approximately $199,000. Based on the foregoing, the majority of
handlers and producers of almonds may be classified as small entities.
This rule decreases the assessment rate established for the Board
and collected from handlers for the 2003-04 and subsequent crop years
from $0.025 to $0.020 per pound of almonds. Of the $0.020 per pound
assessment, $0.01 per pound is available as credit-back for handlers
who conduct their own promotional activities consistent with Sec.
981.441 of the order's regulations and subject to Board approval. The
Board initially recommended, and USDA approved, 2003-04 expenditures of
$20,358,304 and an unchanged assessment rate of $0.025 per pound in May
2003. In September 2003, the Board recommended an increase in 2003-04
expenses due to an increased availability of funds from FAS. USDA
approved an increased expenditure level of $20,547,385.
On November 5, 2003, the Board subsequently recommended reducing
the assessment rate to $0.020 per pound due to excess funds in the
financial reserve. The 2002-03 crop year financial audit revealed that
the Board's financial reserves exceeded the order's limitation of
approximately one-half year's budgeted expenses, by $2,407,904. The
[[Page 1271]]
assessment rate of $0.020 is $0.005 lower than the prior rate. The
quantity of assessable almonds for the 2003-04 crop year is estimated
at 907,200,000 pounds. Thus, the $0.020 assessment rate should provide
$14,061,000 in assessment income and be adequate to meet this year's
expenses, when combined with other revenues including financial
reserves. The projected financial reserve at the end of 2003-04 is
$7,338,087, which is within the parameters of the order.
The major expenditures recommended by the Board for the 2003-04
crop year include $6,375,312 for advertising and market research,
$7,587,750 for public relations and other promotion and education
programs including a MAP program administered by USDA's FAS, $1,500,000
for salaries and wages, $1,000,000 for nutrition research, $850,332 for
production research, $823,948 for quality programs, $254,903 for
environmental programs, $200,000 for travel, $122,472 for office rent,
$120,750 for a crop estimate, and $90,780 for an acreage survey.
Budgeted expenses for these items in 2002-03 were $6,125,312 for
advertising and market research, $6,877,750 for public relations and
other promotion and education programs including a MAP administered by
FAS, $1,760,000 for salaries and wages, $1,000,000 for nutrition
research, $622,131 for production research, $472,964 for quality
programs, $172,500 for econometric modeling and analysis, $230,550 for
travel, $122,850 for office rent, $120,762 for a crop estimate, and
$125,000 for compliance audits and analysis.
The Board considered two available alternatives to remedy the
excess financial reserve situation as provided for in Sec. 981.81(b)
of the order: refund the excess funds to handlers, or reduce the
assessment rate. After deliberating the issue, the Board recommended
reducing the assessment rate.
A review of historical information and preliminary information
pertaining to the upcoming crop year indicates that the average grower
price for the 2003-04 season could range between $1.50 and $1.80 per
pound of almonds. Therefore, the estimated assessment revenue for the
2003-04 crop year (disregarding any amounts credited pursuant to
Sec. Sec. 981.41 and 981.441) as a percentage of total grower revenue
could range between 1.1 and 1.3 percent.
This action decreases the assessment obligation imposed on
handlers. Assessments are applied uniformly on all handlers, and some
of the costs may be passed on to producers. However, decreasing the
assessment reduces the burden on handlers, and may reduce the burden on
producers. In addition, the Board's meeting was widely publicized
throughout the California almond industry and all interested persons
were invited to attend the meeting and participate in Board
deliberations on all issues. Like all Board meetings, the November 6,
2003, 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 action imposes no additional reporting or recordkeeping
requirements on either small or large California almond 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
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
After consideration of all relevant material presented, including
the information and recommendation submitted by the Board and other
available information, it is hereby found that this rule, as
hereinafter set forth, will tend to effectuate the declared policy of
the Act.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect, and that good cause exists for not postponing the effective
date of this rule until 30 days after publication in the Federal
Register because: (1) The 2003-04 crop year began on August 1, 2003,
and the marketing order requires that the rate of assessment for each
crop year apply to all assessable almonds received during such crop
year; (2) the action decreases the assessment rate for assessable
almonds beginning with the 2003-04 crop year; (3) handlers are aware of
this action which was unanimously recommended by the Board at a public
meeting and is similar to other assessment rate actions issued in past
years; and (4) this interim final rule provides a 60-day comment
period, and all comments timely received will be considered prior to
finalization of this rule.
List of Subjects in 7 CFR Part 981
Almonds, Marketing agreements, Reporting and recordkeeping
requirements.
0
For the reasons set forth in the preamble, 7 CFR part 981 is amended 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. Section 981.343 is revised to read as follows:
Sec. 981.343 Assessment rate.
On and after August 1, 2003, an assessment rate of $0.020 per pound
is established for California almonds. Of the $0.020 assessment rate,
$0.010 per assessable pound is available for handler credit-back.
Dated: January 5, 2004.
Kenneth C. Clayton,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 04-398 Filed 1-5-04; 4:47 pm]
BILLING CODE 3410-02-P