[Federal Register: June 21, 2006 (Volume 71, Number 119)]
[Rules and Regulations]
[Page 35493-35495]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21jn06-3]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 932
[Docket No. FV06-932-1 FIR]
Olives Grown in California; Decreased Assessment Rate
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final
rule, without change, an interim final rule that decreased the
assessment rate established for the California Olive Committee
(committee) for the 2006 and subsequent fiscal years from $15.68 to
$11.03 per assessable ton of olives handled. The committee locally
administers the marketing order that regulates the handling of olives
grown in California. Assessments upon olive handlers are used by the
committee to fund reasonable and necessary expenses of the program. The
fiscal year began January 1 and ends December 31. The assessment rate
will remain in effect indefinitely unless modified, suspended, or
terminated.
DATES: Effective Date: July 21, 2006.
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, 2202 Monterey Street, Suite 102B, Fresno, CA 93721;
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 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.''
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 issued herein will be effective beginning on January
1, 2006, apply to all assessable olives from the current crop year, and
will 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 continues in effect the action that decreased the
assessment rate established for the committee for the 2005 and
subsequent fiscal years from $15.68 to $11.03 per ton of assessable
olives from the applicable crop years.
The California olive marketing order provides authority for the
committee,
[[Page 35494]]
with the approval of USDA, to formulate an annual budget of expenses
and collect assessments from handlers to administer the program. The
fiscal year, which is the 12-month period between January 1 and
December 31, begins after the corresponding crop year, which is the 12-
month period beginning August 1 and ending July 31 of the subsequent
year. Fiscal year budget and assessment recommendations are made after
the corresponding crop year olive tonnage is reported. The members of
the committee are producers and handlers of California olives. They are
familiar with the committee's needs and with 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
discussed in a public meeting. Thus, all directly affected persons have
an opportunity to participate and provide input.
For the 2005 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 13, 2005, and made recommendations
regarding their fiscal year 2006 expenditures and assessment rate.
Subsequently, the committee revised its budget recommendation because
it anticipated higher administrative expenses than it had originally
estimated. In a mail vote completed on January 27, 2006, the committee
unanimously recommended 2006 fiscal year expenditures of $1,301,121 and
an assessment rate of $11.03 per ton of assessable olives. In
comparison, the budgeted expenditures for fiscal year 2005 were
$1,217,014. The assessment rate of $11.03 is $4.65 lower than the rate
previously in effect.
The major expenditures recommended by the committee for the 2006
fiscal year include $800,700 for marketing activities, $290,421 for
administration, and $210,000 for research. Budgeted expenditures for
these items in 2005 were $680,000, $337,014, and $200,000,
respectively.
The assessment rate recommended by the committee was derived by
considering anticipated fiscal year expenses, actual olive tonnage
received by handlers during the 2005-06 crop year, and additional
pertinent factors. The California Agricultural Statistics Service
(CASS) reported assessable olive receipts for the 2005-06 crop year at
114,761 tons, compared to 85,862 tons for the 2004-05 crop year. The
increased production of assessable olives for the 2005-06 crop year is
due in part to the alternate-bearing nature of olives, with heavy
production in one year followed by light production the next. Although
the committee's budgeted expenses for fiscal year 2006 are higher than
those for 2005, the increased production would yield increased total
assessment funds, even at the lower rate, covering the increased
expenditures. Additionally, actual administrative expenditures in 2005
were less than the amount budgeted, enabling the committee to carry
excess funds into the 2006 fiscal year and offset the assessments
needed to cover budgeted expenses.
Income derived from handler assessments, along with interest income
and funds from the committee's authorized reserve, 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 year's
expenses (7 CFR 932.40).
The assessable tonnage for the 2006 fiscal year is expected to be
slightly less than the 2005-06 crop receipts of 114,761 tons reported
by CASS because some olives may be diverted by handlers to uses that
are exempt from marketing order requirements.
The assessment rate will 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 is effective for an indefinite
period, the committee will 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 will evaluate committee
recommendations and other available information to determine whether
modification of the assessment rate is needed. Further rulemaking will
be undertaken as necessary. The committee's 2006 budget and those for
subsequent fiscal years will be reviewed and, as appropriate, approved
by USDA.
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.
There are approximately 850 producers of olives in the production
area. Small agricultural producers are defined by the Small Business
Administration (13 CFR 121.201) as those having annual receipts less
than $750,000. Based upon information from the committee, the majority
of olive producers may be classified as small entities.
There are two handlers subject to regulation under the marketing
order. At the time the interim final rule was published, the definition
of small agricultural service firms included those whose annual
receipts were less than $6,000,000, and both handlers were classified
as large entities. Subsequently, the definition of small agricultural
service firms was changed to include those whose annual receipts are
less than $6,500,000. Based upon information from the committee, both
handlers may be classified as large entities.
This rule continues in effect the action that decreased the
assessment rate established for the committee and collected from
handlers for the 2006 and subsequent fiscal years from $15.68 to $11.03
per ton of assessable olives. The committee unanimously recommended
2006 expenditures of $1,301,121 and an assessment rate of $11.03 per
ton. The assessment rate is $4.65 lower than the rate previously in
effect.
The quantity of assessable olive receipts for the 2005-06 crop year
was reported by CASS to be 114,761 tons, but the actual assessable
tonnage for the 2006 fiscal year is expected to be slightly 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 $11.03 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 year's expenses (7
CFR 932.40).
Expenditures recommended by the committee for the 2006 fiscal year
[[Page 35495]]
include $800,700 for marketing development, $290,421 for
administration, and $210,000 for research. Budgeted expenses for these
items in 2005 were $680,000, $337,014, and $200,000, respectively.
Assessable olive receipts for the 2005-06 crop year were 114,761
tons, compared to 85,862 tons for the 2004-05 crop year. The increased
production of assessable olives will yield increased assessment funds,
even at the lower rate. These funds, along with unused assessments from
the 2005 fiscal year that have been carried into 2006, and interest
income, are adequate to cover the increased expenditures.
The committee reviewed and unanimously recommended 2006
expenditures of $1,301,121. This reflects increases in the committee's
research and market development budgets and a decrease in the
administrative budget compared to the previous year's budget. The
committee recommended a larger research budget intended to further the
study of olive fly management and development of a mechanical olive
harvesting method. The 2006 marketing program recommendation includes
participation in media activities in conjunction with the release of a
new diet plan book; translation of some of the committee's education
and nutrition materials into Spanish; and continuation of several
outreach activities including cookbook contributions, Web site
development, and educational programs for school children. Recommended
decreases in the administrative budget are due mainly to personnel
changes in the committee's staff.
Prior to arriving at this budget, the committee considered
information from various sources, such as the committee's Executive,
Market Development, and Research Subcommittees. 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 $11.03 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 2005-
06 crop year is estimated to be approximately $714 per ton for canning
fruit and $314 per ton for limited-use sizes, leaving the balance as
unusable cull fruit. Approximately 76 percent of a ton of olives are
canning fruit sizes and 17 percent are limited use sizes, leaving the
balance as unusable cull fruit. Total grower revenue on 114,761 tons
would then be $73,485,966, given the percentage of canning and limited-
use sizes and current grower prices for those sizes. Therefore, with an
assessment rate decreased from $15.68 to $11.03, the estimated
assessment revenue is expected to be approximately 1.72 percent of
grower revenue.
This action continues in effect the action that decreased 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 rate reduces the burden
on handlers, and may reduce the burden on producers. In addition, the
committee's meeting was widely publicized throughout the California
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 13, 2005, meeting was a public
meeting and all entities, both large and small, were able to express
views on this issue.
This action imposes no additional reporting or recordkeeping
requirements on either small or large 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.
AMS is committed to compliance with the Government Paperwork
Elimination Act (GPEA), which requires Government agencies in general
to provide the public the option of submitting information or
transacting business electronically to the maximum extent possible.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rule.
An interim final rule concerning this action was published in the
Federal Register on March 13, 2006 (71 FR 12614). Copies of the rule
were faxed to both olive handlers. Finally, the interim rule was made
available through the Internet by USDA and the Office of the Federal
Register. A 60-day comment period was provided for interested persons
to respond to the interim final rule. The comment period ended on May
12, 2006, and no comments were 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 committee and other
available information, it is herby found that this rule, as hereinafter
set forth, will tend to effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 932
Marketing agreements, Olives, Reporting and recordkeeping
requirements.
PART 932--OLIVES GROWN IN CALIFORNIA
0
Accordingly, the interim final rule amending 7 CFR part 932 that was
published at 71 FR 12614 on March 13, 2006, is adopted as a final rule
without change.
Dated: June 15, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-9724 Filed 6-20-06; 8:45 am]
BILLING CODE 3410-02-P