[Federal Register: July 27, 2005 (Volume 70, Number 143)]
[Rules and Regulations]
[Page 43270-43273]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27jy05-3]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[Docket No. FV05-981-2 FR]
Almonds Grown in California; Increased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule increases the assessment rate established for the
Almond Board of California (Board) for the 2005-06 and subsequent crop
years from $0.025 to $0.030 per pound of almonds received. Of the
$0.030 per pound assessment, 60 percent (or $0.018 per pound) will be
available as credit-back for handlers who conduct their own promotional
activities. 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
begins August 1 and ends July 31. The assessment rate will remain in
effect indefinitely unless modified, suspended, or terminated.
EFFECTIVE DATE: July 28, 2005.
FOR FURTHER INFORMATION CONTACT: California Marketing Field Office,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 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 will be applicable to all assessable almonds beginning
August 1, 2005, 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.
[[Page 43271]]
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 increases the assessment rate established for the Board
for the 2005-06 and subsequent crop years from $0.025 to $0.030 per
pound of almonds received. Of the $0.030 per pound assessment, 60
percent (or $0.018 per pound) will be available as credit-back for
handlers who conduct their own promotional activities.
The 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 2004-05 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 12, 2005, and unanimously recommended 2005-06
expenditures of $28,756,000. In comparison, last year's budgeted
expenditures were $24,077,344. The recommended assessment rate of
$0.030 is $0.005 higher than the rate in effect for the 2004-05 crop
year, and the credit-back portion of the assessment rate ($0.018 per
pound) is $0.004 more than the 2004-05 credit-back portion currently in
effect.
The major expenditures recommended by the Board for the 2005-06
crop year include $15,423,000 for domestic advertising, market
research, and public relations; $4,920,000 for operational expenses;
$4,873,000 for international public relations and other promotion and
education programs, including a Market Access Program (MAP)
administered by USDA's Foreign Agricultural Service (FAS); $1,200,000
for nutrition research; $850,000 for production research; $830,000 for
food quality programs; and $500,000 for environmental research, plus
other minor sums. Budgeted expenses for these items in 2004-05 were
$12,540,000 for domestic advertising, market research, and public
relations; $3,611,981 for operational expenses; $4,340,000 for
international public relations and other promotion and education
programs, including a MAP administered by USDA's FAS; $1,200,000 for
nutrition research; $947,321 for production research; $858,000 for food
quality programs; and $460,042 for environmental research, plus other
minor sums.
The Board recommended increasing the assessment rate from $0.025
per pound to $0.030 per pound of almonds handled. Of the $0.030 per
pound assessment, 60 percent (or $0.018 per pound) will be 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 increased assessment rate is needed because the
2005-06 crop is projected at 816 million pounds of assessable almonds,
down from the 1.0368 billion pound 2004-05 crop, and projected
assessment revenue will likely be reduced. The increased rate should
generate adequate revenue to fund the Board's 2005-06 budgeted expenses
and to maintain a small financial reserve. Section 981.81(c) authorizes
a financial reserve of approximately one-half year's budgeted expenses.
One-half of the 2005-06 crop year's budgeted expenses of $28,756,000
equals $14,378,000. The Board's financial reserve at the end of the
2005-06 crop year is projected to be $1.1 million which is well within
the authorized reserve.
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 816 million pounds of assessable almonds
for the 2005-06 crop year. If realized, this will provide estimated
assessment revenue of $9,792,000 from all handlers, and an additional
$9,180,000 from those handlers who do not participate in the credit-
back program, for a total of $18,972,000. In addition, it is
anticipated that $10,851,797 will be provided by other sources,
including interest income, MAP funds, grant funds, miscellaneous
income, and reserve/carryover funds. When combined, revenue from these
sources should be adequate to cover budgeted expenses. Any unexpended
funds from the 2005-06 crop year may be carried over to cover expenses
during the succeeding crop year. Funds in the reserve at the end of the
2005-06 crop year are estimated to be approximately $1.1 million which
would be within the amount permitted by the order.
The assessment rate 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 will be in effect 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 would be undertaken as necessary. The
Board's 2005-06 budget and those for subsequent crop years will be
reviewed and, as appropriate, approved by USDA.
Final 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 final 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.
[[Page 43272]]
There are approximately 6,000 producers of almonds in the
production area and approximately 115 handlers subject to regulation
under the order. Small agricultural producers are defined by the Small
Business Administration (13 CFR 121.201) as those having annual
receipts of less than $750,000, and small agricultural service firms
are defined as those whose annual receipts are less than $6,000,000.
Data for the most recently completed crop year indicates that about
48 percent of the handlers shipped over $6,000,000 worth of almonds and
about 52 percent of handlers shipped under $6,000,000 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 $261,248. Based on the foregoing, the majority of
handlers and producers of almonds may be classified as small entities.
This rule increases the assessment rate established for the Board
and collected from handlers for the 2005-06 and subsequent crop years
from $0.025 to $0.030 per pound of almonds. Of the $0.030 per pound
assessment, 60 percent (or $0.018 per pound) will be 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 met on May 12, 2005, and unanimously recommended 2005-06
expenditures of $28,756,000 and an assessment rate of $0.030 per pound.
Of the $0.030 per pound assessment, 60 percent (or $0.018 per pound)
will be available as credit-back for handlers who conduct their own
promotional activities. The assessment rate of $0.030 will be $0.005
higher than the current rate, and the credit-back portion of $0.018 per
pound will be $0.004 more than the 2004-05 credit-back portion. The
quantity of assessable almonds for the 2005-06 crop year is estimated
at 816,000,000 pounds. The assessment rate will provide estimated
assessment revenue of $9,792,000 from all handlers, and an additional
$9,180,000 from those handlers who do not participate in the credit-
back program, for a total of $18,972,000. In addition, it is
anticipated that $10,851,797 will be provided by other sources,
including interest income, MAP funds, grant funds, miscellaneous
income, and reserve/carryover funds. When combined, revenue from these
sources should be adequate to cover budgeted expenses. The projected
financial reserve at the end of 2005-06 should be $1,137,797 which
would be within the maximum permitted under the order.
The major expenditures recommended by the Board for the 2005-06
crop year include $15,423,000 for domestic advertising, market
research, and public relations; $4,920,000 for operational expenses;
$4,873,000 for international public relations and other promotion and
education programs, including a MAP administered by USDA's FAS;
$1,200,000 for nutrition research; $850,000 for production research;
$830,000 for food quality programs; and $500,000 for environmental
research, plus other minor sums. Budgeted expenses for these items in
2004-05 were $12,540,000 for domestic advertising, market research, and
public relations; $3,611,981 for operational expenses; $4,340,000 for
international public relations and other promotion and education
programs, including a MAP administered by USDA's FAS; $1,200,000 for
nutrition research; $947,321 for production research; $858,000 for food
quality programs; and $460,042 for environmental research, plus other
minor sums.
The Board considered alternative assessment rate levels, including
the portion available for handler credit-back. After deliberating the
issue, the Board recommended increasing the assessment rate to $0.030
per pound, with 60 percent (or $0.018 per pound) available for handler
credit-back. In arriving at its budget, the Board considered
information from its various committees. Alternative expenditure levels
were discussed by these groups, based on the value of various
activities to the industry. The committees ultimately recommended
appropriate activities and funding levels, which were adopted by the
Board.
A review of historical information and preliminary information
pertaining to the upcoming crop year indicates that the average grower
price for the 2005-06 season could range between $3.00 and $3.50 per
pound of almonds. Therefore, the estimated assessment revenue for the
2005-06 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 1.00 and 0.86 percent, respectively.
This action increases 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
would be offset by the benefits derived by the operation of the
marketing order. 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 May 12, 2005,
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 rule 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 proposed rule concerning this action was published in the Federal
Register on June 17, 2005 (70 FR 35182). Copies of the proposed rule
were also mailed or sent via facsimile to all almond handlers. Finally,
the proposal was made available through the Internet by USDA and the
Office of the Federal Register. A 10-day comment period ending June 27,
2005, was provided for interested persons to respond to the proposal. A
comment was received that supported the proposal, while another
response was not relevant to the proposal. Accordingly, no changes were
made to the rule, based on the comments received.
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 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
2005-06 crop year begins on August 1, 2005, and the order requires that
the rate of assessment for
[[Page 43273]]
each crop year apply to all assessable almonds handled during such crop
year; (2) the Board needs to have sufficient funds to pay its expenses
which are incurred on a continuous basis; (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) a 10-day comment period was provided for in the proposed
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, 2005, an assessment rate of $0.030 per pound
is established for California almonds. Of the $0.030 assessment rate,
60 percent per assessable pound is available for handler credit-back.
Dated: July 21, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-14770 Filed 7-26-05; 8:45 am]
BILLING CODE 3410-02-P