[Federal Register: July 5, 2006 (Volume 71, Number 128)]
[Proposed Rules]
[Page 38115-38118]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05jy06-25]
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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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[[Page 38115]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 916 and 917
[Docket No. FV06-916/917-2 PR]
Nectarines and Peaches Grown in California; Increased Assessment
Rates
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule would increase the assessment rates established for
the Nectarine Administrative Committee and the Peach Commodity
Committee (committees) for the 2006-07 and subsequent fiscal periods
from $0.20 to $0.21 per 25-pound container or container equivalent of
nectarines and peaches handled. The committees locally administer the
marketing orders that regulate the handling of nectarines and peaches
grown in California. Authorization to assess nectarine and peach
handlers enables the committees to incur expenses that are reasonable
and necessary to administer the programs. The fiscal period runs from
March 1 through the last day of February. The assessment rates would
remain in effect indefinitely unless modified, suspended, or
terminated.
DATES: Comments must be received by July 17, 2006.
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: Laurel May, Marketing Specialist, or
Kurt Kimmel, Regional Manager, California Marketing Field Office,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA; Telephone: (559) 487-5901, Fax: (559) 487-5906.
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 Nos. 85 and 124 and Order Nos. 916 and 917, both as amended
(7 CFR parts 916 and 917), regulating the handling of nectarines and
peaches grown in California, respectively, hereinafter referred to as
the ``orders.'' The marketing agreements and orders are 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 orders now in effect, California
nectarine and peach handlers are subject to assessments. Funds to
administer the orders are derived from such assessments. It is intended
that the assessment rates as proposed herein would be applicable to all
assessable nectarines and peaches beginning on March 1, 2006, 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
Nectarine Administrative Committee (NAC) and the Peach Commodity
Committee (PCC) for the 2006-07 and subsequent fiscal periods from
$0.20 to $0.21 per 25-pound container or container equivalent of
nectarines and peaches handled.
The nectarine and peach marketing orders provide authority for the
committees, with the approval of USDA, to formulate annual budgets of
expenses and collect assessments from handlers to administer the
programs. The members of NAC and PCC are producers of California
nectarines and peaches, respectively. They are familiar with the
committees' needs, and with the costs for goods and services in their
local area and are, therefore, in a position to formulate appropriate
budgets and assessment rates. The assessment rates are formulated and
discussed in public meetings. Thus, all directly affected persons have
an opportunity to participate and provide input.
NAC Assessment and Expenses
The NAC recommended, for the 2005-06 fiscal period, and USDA
approved, an assessment rate of $0.20 that would continue in effect
from fiscal period to fiscal period unless modified, suspended, or
terminated by USDA upon recommendation and information submitted by the
committee or other information available to USDA.
The NAC met on April 27, 2006, and discussed and unanimously
recommended 2006-07 expenditures and an assessment rate of $0.21 per
25-pound container or container equivalent of nectarines. At the same
meeting, NAC unanimously recommended 2006-07 expenditures of
$4,473,764. In comparison, the budgeted expenditures for 2005-06 were
$4,919,048. The
[[Page 38116]]
proposed assessment rate of $0.21 is $0.01 higher than the rate
currently in effect.
The rate increase was recommended to ensure that, despite lower
than normal crop production estimates for the 2006 crop season, which
began on March 1, 2006, NAC could meet its 2006-07 anticipated expenses
and carry over a financial reserve that would provide adequate funds
for promotional and other activities at the beginning of the 2007
season before assessment collections begin. Increasing the assessment
rate from $0.20 to $0.21 per 25-pound container or container equivalent
is expected to provide about $178,240 in additional assessment revenue,
and would allow NAC to start the 2007 season with adequate funds.
Expenditures recommended by the NAC for the 2006-07 fiscal period
include $567,856 for administration, $1,070,832 for inspection,
$201,702 for research, and $2,633,374 for domestic and international
promotion. Budgeted expenses for these items in 2005-06 were $899,288
for administration, $1,167,381 for inspection, $203,230 for research,
and $2,649,149 for domestic and international promotion.
The NAC 2006-07 fiscal period assessment rate was derived after
considering anticipated fiscal year expenses; the estimated assessable
nectarines of 17,824,000 25-pound containers or container equivalents;
the estimated income from other sources, such as interest; and the need
for an adequate financial reserve to carry the NAC into the 2007
season. Therefore, the NAC recommended an assessment rate of $0.21 per
25-pound container or container equivalent. According to the committee,
that assessment rate would result in an adequate financial reserve, yet
one well within the maximum of approximately one year's expenses
permitted by the order (Sec. 916.42).
PCC Assessment and Expenses
The PCC recommended, for the 2005-06 fiscal period, and USDA
approved, an assessment rate of $0.20 that would continue in effect
from fiscal period to fiscal period unless modified, suspended, or
terminated by USDA upon recommendation and information submitted by the
committee or other information available to USDA.
The PCC met on April 27, 2006, and discussed and recommended 2006-
07 expenditures and an assessment rate of $0.21 per 25-pound container
or container equivalent of peaches. At the same meeting, PCC
recommended 2006-07 expenditures of $4,988,914. In comparison, last
year's budgeted expenditures were $5,095,709. The proposed assessment
rate of $0.21 is $0.01 higher than the rate currently in effect.
The rate increase was recommended to ensure that PCC could meet its
2006-07 anticipated expenses and carry over a financial reserve that
would provide adequate funds for promotional and other activities at
the beginning of the 2007 season before assessment collections begin.
Increasing the assessment rate from $0.20 to $0.21 per 25-pound
container or container equivalent is expected to provide about $202,420
in additional assessment revenue, and would allow PCC to start the 2007
season with adequate funds.
Expenditures recommended by the PCC for the 2006-07 fiscal period
include $629,024 for administration, $1,299,211 for inspection,
$210,718 for research, and $2,849,961 for domestic and international
promotion. Budgeted expenses for these items in 2005-06 were $918,736
for administration, $1,260,160 for inspection, $204,833 for research,
and $2,711,980 for domestic and international promotion.
The PCC 2006-07 fiscal period assessment rate was derived after
considering anticipated PCC expenses; the estimated assessable peaches
of 20,242,000 25-pound containers or container equivalents; the
estimated income from other sources, such as interest; and the need for
an adequate reserve to carry the PCC into the 2006 season. Therefore,
the PCC recommended an assessment rate of $0.21 per 25-pound container
or container equivalent. According to the committee, that assessment
rate would result in an adequate financial reserve, yet one well within
the maximum of approximately one year's expenses permitted by the order
(Sec. 917.38)
Continuance of Assessment Rates
The proposed assessment rates would continue in effect indefinitely
unless modified, suspended, or terminated by USDA upon recommendation
and information submitted by the committees or other available
information.
Although these assessment rates would be in effect for an
indefinite period, the committees would continue to meet prior to or
during each fiscal period to recommend a budget of expenses and
consider recommendations for modification of the assessment rates. The
dates and times of committee meetings are available from the
committees' website at http://www.eatcaliforniafruit.com or USDA.
Committee meetings are open to the public and interested persons
may express their views at these meetings. USDA would evaluate the
committees' recommendations and other available information to
determine whether modification of the assessment rate for each
committee is needed. Further rulemaking would be undertaken as
necessary. The committees' 2006-07 fiscal period budgets and those for
subsequent fiscal periods 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 150 California nectarine and peach handlers
subject to regulation under the orders covering nectarines and peaches
grown in California, and about 800 producers of these fruits in
California. Small agricultural service firms, which include handlers,
are defined by the Small Business Administration [13 CFR 121.201] as
those whose annual receipts are less than $6,500,000. Small
agricultural producers are defined by the Small Business Administration
as those having annual receipts of less than $750,000. A majority of
these handlers and producers may be classified as small entities.
The committees' staff has estimated that there are fewer than 25
handlers in the industry who could be defined as other than small
entities. For the 2005 season, the committees' staff estimated that the
average handler price received was $10.00 per container or container
equivalent of nectarines or peaches. A handler would have to ship at
least 650,000 containers to have annual receipts of $6,500,000. Given
data on shipments maintained by the committees' staff and the average
handler price received during the 2005 season, the committees' staff
estimates that small handlers represent approximately 83 percent of all
the handlers within the industry.
The committees' staff has also estimated that fewer than 10 percent
of
[[Page 38117]]
the producers in the industry could be defined as other than small
entities. For the 2005 season, the committees' staff estimated the
average producer price received was $5.25 per container or container
equivalent for nectarines and peaches. A producer would have to produce
at least 142,858 containers of nectarines and peaches to have annual
receipts of $750,000. Given data maintained by the committees' staff
and the average producer price received during the 2005 season, the
committees' staff estimates that small producers represent more than 90
percent of the producers within the industry.
With an average producer price of $5.25 per container or container
equivalent, and a combined packout of nectarines and peaches of
38,691,622 containers, the value of the 2005 packout is estimated to be
$203,131,016. Dividing this total estimated grower revenue figure by
the estimated number of producers (800) yields an estimate of average
revenue per producer of about $253,914 from the sales of peaches and
nectarines.
This rule would increase the assessment rates established for NAC
and PCC for the 2006-07 and subsequent fiscal periods from $0.20 to
$0.21 per 25-pound container or container equivalent of nectarines or
peaches.
The NAC recommended 2006-07 fiscal period expenditures of
$4,473,764 for nectarines and an assessment rate of $0.21 per 25-pound
container or container equivalent of nectarines. The proposed
assessment rate of $0.21 is $0.01 higher than the current rate. The PCC
recommended 2006-07 fiscal period expenditures of $4,988,914 for
peaches and an assessments rate of $0.21 per 25-pound container or
container equivalent of peaches. The proposed assessment rate of $0.21
is $0.01 higher than the current rate.
Analysis of NAC Budget
The quantity of assessable nectarines for the 2006-07 fiscal period
is estimated at 17,824,000 25-pound containers or container
equivalents. Thus, the $0.21 rate should provide $3,743,040 in
assessment income. Income derived from handler assessments, along with
interest income and research grants, would be adequate to cover
budgeted expenses and maintain their desired reserve.
The major expenditures recommended by the NAC for the 2006-07 year
include $567,856 for administration, $1,070,832 for inspection,
$201,702 for research, and $2,633,374 for domestic and international
promotion. Budgeted expenses for these items in 2005-06 were $899,288,
$1,167,381, $203,230, and $2,649,149, respectively.
The NAC recommended an increase in the assessment rate to meet
anticipated 2006-07 expenses and maintain an acceptable financial
reserve, which is needed to fund expenses for the following year until
assessments for that year are received. The NAC reviewed and
recommended 2006-07 expenditures of $4,473,764 and the increased
assessment rate.
Analysis of PCC Budget
The quantity of assessable peaches for the 2006-07 fiscal year is
estimated at 20,242,000 25-pound containers or container equivalents.
Thus, the $0.21 rate should provide $4,250,820 in assessment income.
Income derived from handler assessments, along with interest income and
research grants, would be adequate to cover budgeted expenses and
maintain their desired reserve.
The major expenditures recommended by PCC for the 2006-07 year
include $629,024 for administration, $1,299,211 for inspection,
$210,718 for research, and $2,849,961 for domestic and international
promotion. Budgeted expenses for these items in 2005-06 were $918,736,
$1,260,160, $204,833, and $2,711,980, respectively.
The PCC recommended an increase in the assessment rate to meet
anticipated 2006-07 expenses and maintain an acceptable financial
reserve, which is needed to fund expenses for the following year until
assessments for that year are received. The PCC reviewed and
recommended 2006-07 expenditures of $4,988,914 and the increased
assessment rate.
Considerations in Determining Expenses and Assessment Rates
Prior to arriving at these budgets, the committees considered
information and recommendations from various sources, including, but
not limited to: The Executive Committee, the Research Subcommittee, the
International Programs Subcommittee, the Domestic Promotion
Subcommittee, and the Nectarine and Peach Estimating Committees.
Because 2006 crop estimates are lower than those for previous years,
assessment revenues would decrease if the current rates were maintained
through the 2006 season. The committees considered decreasing their
promotional program expenditures in order to avoid raising the
assessment rates. However, they believe that their current promotional
programs are crucial to the success of the industry. Therefore, they
recommended increasing the assessment rates in order to continue
funding those activities at the current level. Both NAC and PCC decided
that an assessment rate of $0.21 per 25-pound container or container
equivalent would allow them to meet their 2006-07 fiscal period
expenses and carry over necessary operating reserves to finance
operations before 2007-08 assessments are collected. The committees
then recommended these rates to USDA.
A review of historical and preliminary information pertaining to
the upcoming fiscal period indicates that the grower price for
nectarines and peaches for the 2006-07 season could range between $4.00
and $6.00 per 25-pound container or container equivalent. Therefore,
the estimated assessment revenue for the 2006-07 fiscal period as a
percentage of total grower revenue could range between 3.5 and 5.25
percent.
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
would be offset by the benefits derived from the operation of the
marketing orders. In addition, the committees' meetings were widely
publicized throughout the California nectarine and peach industries and
all interested persons were invited to attend the meetings and
participate in the committees' deliberations on all issues. Like all
committee meetings, the April 27, 2006 meetings were public meetings
and all entities of all sizes 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 either small or large 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.
[[Page 38118]]
A 10-day comment period is provided to allow interested persons to
respond to this proposal. Ten days is deemed appropriate because: (1)
The 2006-07 fiscal period began on March 1, 2006, and the marketing
order requires that the rate of assessment for each fiscal period apply
to all assessable nectarines and peaches handled during such fiscal
period; (2) the committees need to have sufficient funds to pay their
expenses, which are incurred on a continuous basis; and (3) handlers
are aware of this action, which was discussed by the committees at
public meetings and recommended at their meetings on April 27, 2006,
and is similar to other assessment rate actions issued in past years.
List of Subjects
7 CFR Part 916
Marketing agreements, Nectarines, Reporting and recordkeeping
requirements.
7 CFR Part 917
Marketing agreements, Peaches, Pears, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR parts 916 and 917
are proposed to be amended as follows:
1. The authority citation for 7 CFR parts 916 and 917 continues to
read as follows:
Authority: 7 U.S.C. 601-674.
PART 916--NECTARINES GROWN IN CALIFORNIA
2. Section 916.234 is revised to read as follows:
Sec. 916.234 Assessment rate.
On and after March 1, 2006, an assessment rate of $0.21 per 25-
pound container or container equivalent of nectarines is established
for California nectarines.
PART 917--PEACHES GROWN IN CALIFORNIA
3. Section 917.258 is revised to read as follows:
Sec. 917.258 Assessment rate.
On and after March 1, 2006, an assessment rate of $0.21 per 25-
pound container or container equivalent of peaches is established for
California peaches.
Dated: June 28, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-10425 Filed 7-3-06;8:45 am]
BILLING CODE 3410-02-P