[Federal Register Volume 61, Number 218 (Friday, November 8, 1996)]
[Proposed Rules]
[Pages 57782-57788]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28609]


 ========================================================================
 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.
 
 ========================================================================
 

  Federal Register / Vol. 61, No. 218 / Friday, November 8, 1996 / 
Proposed Rules  

[[Page 57782]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 932 and 944

[Docket No. FV-96-932-2-PR]


Olives Grown in California and Imported Olives; Establishment of 
Minimum Quality Requirements for California and Imported Olives, and 
Revision of Outgoing Inspection Requirements and Procedures for 
California Olives

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposal invites comments on the establishment of minimum 
quality requirements for California olives under Marketing Order 932 
and imported olives to replace grade requirements currently in effect 
which are based on the U.S. Standards for Grades of Canned Ripe Olives 
(standards). This proposal would also revise outgoing inspection 
requirements and procedures for California olives. This action is 
expected to result in reduced handling costs, especially inspection 
costs, and improved consumer satisfaction.

DATES: Comments must be received by November 25, 1996.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments must be sent in triplicate to the 
Docket Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S, 
P.O. Box 96456, Washington, DC 20090-6456, Fax # (202) 720-5698. All 
comments should reference the docket number and the date and page 
number of this issue of the Federal Register and will be made available 
for public inspection in the Office of the Docket Clerk during regular 
business hours.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Marketing Specialist, 
California Marketing Field Office, Marketing Order Administration 
Branch, F&V, AMS, USDA, 2202 Monterey Street, suite 102B, Fresno, 
California 93721; telephone (209) 487-5901; Fax # (209) 487-5906; or 
Caroline Thorpe, Marketing Specialist, Marketing Order Administration 
Branch, F&V, AMS, USDA, room 2522-S, P.O. Box 96456, Washington, D.C. 
20090-6456; telephone (202) 720-8139; Fax # (202) 720-5698. Small 
businesses may request information on compliance with this regulation 
by contacting: Jay Guerber, Marketing Order Administration Branch, 
Fruit and Vegetable Division, AMS, P.O. Box 96456, room 2523-S, 
Washington, D.C. 20090-6456; telephone (202) 720-2491; Fax # (202) 720-
5698.

SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing 
Order No. 932 (7 CFR Part 932), as amended, 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.''
    This proposed rule is also issued under section 8e of the Act, 
which provides that whenever certain specified commodities, including 
olives, are regulated under a Federal marketing order, imports of these 
commodities into the United States are prohibited unless they meet the 
same or comparable grade, size, quality, or maturity requirements as 
those in effect for the domestically produced commodities.
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This proposal 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 the Secretary 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. A handler is afforded the opportunity for a hearing on the 
petition. After the hearing the Secretary 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 the Secretary's 
ruling on the petition, provided an action is filed not later than 20 
days after the date of the entry of the ruling.
    There are no administrative procedures which must be exhausted 
prior to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on small entities.
    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 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. Import regulations issued under 
the Act are based on those established under Federal marketing orders.
    There are 5 handlers of olives who are subject to regulation under 
the order, and approximately 1,350 producers of olives in the regulated 
area. There are approximately 25 importers of olives subject to the 
olive import regulation. Small agricultural service firms, which 
includes handlers and importers, have been defined by the Small 
Business Administration (13 CFR 121.601) as those having annual 
receipts of less than $5,000,000, and small agricultural producers are 
defined as those having annual receipts of less than $500,000. None of 
the handlers is considered a small entity, but the majority of olive 
producers and importers may be classified as small entities.
    The California Olive Committee (committee) met on March 27, 1996, 
and unanimously recommended establishing minimum quality requirements 
to be incorporated within the rules and regulations of the order and 
revising

[[Page 57783]]

outgoing inspection requirements and procedures. At a meeting on July 
10, 1996, the committee recommended a change in their recommendations 
of March 27, 1996, with regard to an outgoing inspection requirement.
    Currently under the marketing order, incoming inspection 
requirements at Sec. 932.51 require handlers to weigh and size-grade 
olives prior to processing, and dispose of non-canning size 
(undersized) olives into appropriate non-canning outlets. Such weighing 
and size-grading is done under the supervision of the Federal or 
Federal-State Inspection Service. These requirements provide the basis 
for handler payments to producers, and ensure that olives are properly 
sized into the various canning and non-canning size categories.
    Once the olives have been size-graded, they are stored in tanks, 
ensuring that the various sizes of olives remain segregated. Non-
canning size olives are disposed of into appropriate outlets, such as 
in frozen or acidified forms, or crushed for oil.
    Outgoing inspection requirements at Sec. 932.52 and Sec. 932.149 
specify the minimum quality of canned ripe olives as a modified U.S. 
Grade C as certified by inspectors of the USDA, Processed Products 
Branch (PPB). Certification as to grade provides handlers and their 
customers with a uniform level of quality familiar to both parties. The 
outgoing inspection requirements also ensure that canned ripe olives 
meet applicable size designations prior to shipment. Two methods of 
outgoing inspection are authorized: a Quality Assurance Program (QAP) 
approved by the PPB or in-line inspection.
    This rule adds the option of lot inspection to assist handlers in 
reducing inspection costs. Currently, during in-line inspection, an 
inspector is required to be present any time olives are in the final 
stage of processing prior to packaging. The current cost for an 
inspector ranges from $34.00 to $42.00 per hour. For an 8-hour day the 
cost of one inspector ranges from $272.00 to $328.00. Because of this, 
handlers may benefit from economies of scale: the more olives produced, 
the less cost per can of olives.
    In 1994, QAPs were added as an option to reduce inspection costs. 
Under QAPs, savings are more likely to accrue to larger-volume 
handlers, who are more likely to have sufficient olives to operate 
year-round and realize savings by employing trained quality-control 
personnel. When there is a large crop, more handlers may benefit from 
QAPs for similar reasons.
    Adding lot inspection will offer handlers a less-costly inspection 
option. During lot inspection, an inspector does not need to be present 
during the final processing, unlike in-line inspection. However, an 
inspector will inspect a statistical percentage of a lot of olives 
whether the lot is large or small. Thus, there is less benefit of 
economies of scale because for large lots more olives will be inspected 
and for small lots fewer olives will be inspected.
    The committee recommended changes in some of the inspection 
requirements to reduce handlers' costs, especially the costs of 
inspection, and to address the concerns of consumers of canned ripe 
olives. The changes would simplify the inspection process by 
eliminating steps which have been made unnecessary by modern olive 
processing and pitting equipment. This would reduce handling costs, 
including inspection costs, thereby improving returns to California 
producers and handlers. Similar cost savings should accrue to importers 
because of simplified inspection procedures.
    The changes would also address consumer concerns, as identified 
through a 1995 consumer survey which the committee undertook. Surveyed 
consumers indicated that flavor, color, and character (softness) are 
quality criteria most important to them. The changes would address 
consumer concerns by evaluating quality based upon those criteria. This 
would ensure that consumer satisfaction is met, benefitting the 
California olive industry, importers, and consumers.
    Therefore, the AMS has determined that this action would not have a 
significant economic impact on a substantial number of small entities. 
Interested persons are invited to submit information on the regulatory 
and informational impacts of this action on small businesses.

Establishment of Minimum Quality Requirements

    Currently, Sec. 932.149 specifies that canned olives meet a minimum 
grade requirement of a modified U.S. Grade C. Additional specific 
requirements are established for the various styles of canned ripe 
olives, including whole, pitted, broken pitted, halved, segmented 
(wedged), sliced, and chopped styles. Section 932.149 references 
various definitions from the standards.
    In place of these grades and definitions, the committee has 
proposed a set of minimum quality requirements for four styles of 
canned olives: (1) Whole and pitted style olives; (2) sliced, segmented 
(wedged), and halved style olives; (3) chopped style olives; and (4) 
broken pitted olives. These quality requirements include criteria 
pertaining to flavor, saltiness, color, character (softness), 
uniformity of size and freedom from defects. These factors are similar 
to those currently specified in the standards and handling regulations, 
and have been determined to be of importance to consumers through the 
committee's consumer survey.
    Olives are currently graded based upon five factors: flavor, 
saltiness, color, character (softness), and defects. Currently, Table I 
in Sec. 932.149 only sets limits for defects of canned ripe olives. 
Limits for the other four factors, flavor, saltiness, color, and 
character, are defined in the standards. In place of Table I, based 
upon information from the 1995 consumer survey, the committee has 
proposed establishing four new tables which would specify the limits 
for defects for each of the canned ripe olive styles (whole and pitted 
styles; sliced, segmented (wedged), and halved styles; chopped style; 
and broken pitted style). The new tables would also define the limits 
of the four characteristics (flavor, saltiness, color, and character) 
currently defined in the standards. The four new tables would provide 
all the definitions and tolerances necessary to establish minimum 
quality requirements in place of grade requirements.
    To effectuate the proposed establishment of minimum quality 
requirements, references to ``grade'' in Sec. 932.149 would be replaced 
with ``quality'', canned broken pitted olives would be defined 
separately in a new paragraph designated as (a)(4), and four new tables 
depicting minimum quality requirements for (1) canned whole and pitted 
olives; (2) canned sliced, segmented (wedged), and halved olives; (3) 
canned chopped style olives; and (4) canned broken pitted style olives 
would be added to Sec. 932.149, replacing the current Table 1.
    In conforming changes, the word ``grade'' would be replaced with 
the words ``minimum quality'' or ``minimum quality requirements,'' as 
necessary, in Sec. 932.150, Sec. 932.153, and Sec. 932.155.
    Section 932.149(a)(2) currently sets the tolerance for identifiable 
pieces of pit caps, end slices, and slices at 5 percent, by weight, for 
canned chopped style olives. The committee recommended a relaxed 
tolerance of 10 percent, by weight, in an effort to encourage handlers 
to cut olives of the chopped style in larger pieces. The committee was 
concerned that canned chopped style olives are currently chopped too 
finely, rendering the product nearly an olive ``flour'' rather

[[Page 57784]]

than identifiable pieces of olives consumers indicated they preferred. 
This change would reduce the costs of packing canned chopped style 
olives.
    The committee recommended that the definition of ``broken pitted'' 
olives be modified from the definition provided in the standards. To 
accomplish this, the committee proposed a modified definition in 
Sec. 932.149 of the regulations. The current definition is considered 
too restrictive by the committee. Under the current definition, broken 
pitted olives are defined as ``olives [which] consist substantially of 
large pieces that may have been broken in pitting but have not been 
sliced or cut.'' Currently, each handler packing broken pitted olives 
is prohibited from using olives which have been improperly pitted but 
unbroken because the olives have not been ``broken'' in the pitting 
process. (Improperly pitted olives do not contain pits or pit 
fragments.) Each such handler, therefore, pays an employee to ``break'' 
the unbroken, improperly pitted olives so that such olives meet the 
requirement for broken pitted olives. As recommended by the committee, 
the proposed definition for broken pitted olives would delete the word 
``substantially,'' thereby permitting a greater percentage of unbroken, 
improperly pitted olives to be included in the broken pitted style 
category. Such change is intended to reduce the costs of packing broken 
pitted olives while maintaining the quality of the product.
    The committee further recommended basing outgoing inspections on a 
pass-fail basis, eliminating the requirement that the inspection 
service certify that canned ripe olives are either Grade A, Grade B, or 
Grade C. Under a pass-fail outgoing inspection, canned ripe olives 
would either meet the minimum quality requirements and pass inspection, 
or fail to meet the minimum quality requirements and not pass 
inspection. There would be no need to calculate the grade of each 
sample in order to assign Grade A, Grade B, or Grade C. Elimination of 
the requirement to certify to a grade would simplify the inspection of 
such olives, thereby reducing inspection time and overall inspection 
costs.

Authorized Methods of Outgoing Inspection

    Pursuant to Sec. 932.52 of the order and Sec. 932.152 of the 
current outgoing regulations, handlers are required to maintain 
continuous in-line outgoing inspection or a certified QAP. Under 
continuous in-line outgoing inspection, at least one inspector must be 
present at all times when a plant is in operation to make in-process 
checks on the preparation, processing, packing, and warehousing of all 
products. The current cost for an inspector ranges from $34.00 to 
$42.00 per hour. For an 8-hour day the cost of one inspector ranges 
from $272.00 to $328.00.
    By contrast, under a QAP, each certified plant has trained quality-
control personnel who perform most of the same functions as a PPB 
inspector. The PPB inspectors continue to issue certificates of 
inspection based upon the outgoing inspection records maintained by the 
certified quality-control personnel. These records are verified through 
spot-checks and samples taken by PPB inspectors.
    A QAP may decrease outgoing inspection costs for a handler compared 
to inspection costs under continuous in-line outgoing inspection. 
However, cost savings under a QAP accrue more to larger-volume 
handlers, who are more likely to have sufficient olives to operate 
year-round and realize savings by employing trained quality-control 
personnel. When there is a large crop, more handlers may benefit from a 
QAP for similar reasons. However, olive crop sizes may vary 
substantially from one year to the next due to the alternate-bearing 
characteristics. This variability further reduces the efficiency of 
operations at most of the olive processing plants and the cost-savings 
of QAP, since handlers' fixed costs must be paid independent of the 
size of the crop.
    To enable handlers to minimize their inspection costs, the 
committee recommended that handlers be allowed to utilize any 
inspection method permitted by PPB, so that each may choose the method 
most economical for their operations. Thus, in addition to a QAP and 
in-line inspection, lot inspection would also be authorized for meeting 
outgoing inspection requirements. Under lot inspection, a specified 
number of containers of the same size and type, containing olives of 
the same type and style, at the same location, are inspected. Lot 
inspection occurs after processing, rather than during processing. 
Inspecting by lot has the potential to reduce costs for handlers 
because lot inspection does not require the presence of an inspector at 
all times while olives are being processed.
    To effectuate this change, paragraphs (a) and (b)(1) of 
Sec. 932.152, Outgoing regulations, would be revised to add authority 
for handlers to use either continuous in-line outgoing inspection, QAP, 
or lot inspection. Because lot inspection does not require the presence 
of an inspector at all times during the processing of olives, paragraph 
(b)(1) would also be revised by deleting the final sentence, thereby 
removing the requirement that an inspector be present when olives are 
processed. This change is expected to reduce overall inspection costs 
by eliminating overtime hours which accrue when an inspector is 
required to remain in an olive processing plant at all times while 
processing is underway. Under this proposal, for example, an inspector 
could work a fixed shift, first providing lot inspection on olives 
processed during the previous night, then converting to in-line 
outgoing inspection for the remainder of the shift.

Outgoing Inspection for Size of Canning-Size Olives

    The committee also recommended revising the current requirements 
that canning-size olives, which have been sized and stored in tanks 
prior to pitting, be inspected for size prior to packaging. Currently, 
such olives are required under incoming inspection requirements to be 
weighed and size-graded. Olives are then stored in tanks prior to 
processing. The outgoing requirements mandate that such olives be 
submitted for size inspection prior to packaging. However, handlers 
size olives upon receipt and keep the sizes separate throughout the 
packaging process because doing so facilitates more efficient operation 
of modern processing and pitting equipment. Eliminating the requirement 
for inspection for size prior to packaging would simplify the 
inspection process and reduce overall inspection costs while 
maintaining the integrity and quality of canned ripe olives.
    To effectuate this change, paragraph (b)(2) of Sec. 932.152 would 
be deleted. This deletion would necessitate the redesignation of 
paragraph (b)(1) as (b).
    However, olives which are smaller than authorized for use as canned 
ripe olives (undersized olives) would still be held under surveillance 
by the inspection service, as required in the incoming inspection 
requirements and specified in paragraph (e)(2) of Sec. 932.151, since 
handlers must dispose of such olives into appropriate outlets, such as 
in frozen or acidified forms, or crushed for oil.

Outgoing Inspection for Size of Limited-Use Olives

    Section 932.152, paragraphs (g)(1) and (g)(2), of the current 
outgoing regulations specify that olives used in the production of 
limited-use styles are not required to be submitted for an outgoing 
inspection for size prior to packaging if they were size-graded by

[[Page 57785]]

the inspection service during the incoming inspection process. Limited-
use styles include halved, segmented (wedged), sliced, or chopped 
styles. Typically, smaller olives may be used for limited-use styles 
than for whole styles.
    According to the requirements of Sec. 932.51(a)(ii) of the order, 
canning size olives are sized by the inspection service during the 
incoming inspection process. The olives are then either placed in 
storage tanks or sent immediately to processing.
    Olives process more efficiently when all the olives in the 
processing tank are uniform in size. Modern, high-speed pitting 
equipment produces higher yields and inflicts less damage to olives 
when the sizes being pitted are uniform. This is especially true for 
the smaller canning sizes. Currently, over 95 percent of all olives are 
pitted prior to packaging.
    Olive handlers have an additional incentive to maintain strict 
control over various sizes of olives--retail customers' demands for 
uniform size and quality.
    For those reasons, the committee recommended changes in 
Sec. 932.152, paragraphs (g)(1) and (g)(2) to eliminate the requirement 
for inspection for size prior to packaging.
    To effectuate the change, the words ``without an outgoing 
inspection for size designation'' would be deleted from Sec. 932.152, 
paragraphs (g)(1) and (g)(2).
    These changes would establish minimum quality requirements of 
flavor, saltiness, color, character, and defects for whole and pitted 
style olives; sliced, segmented (wedged), and halved style olives; 
chopped style olives; and broken pitted style olives. They would also 
revise outgoing inspection requirements and procedures under the 
marketing order by eliminating requirements that sized and stored 
olives be submitted for sizing prior to packaging, and permitting lot 
inspection. These revisions would eliminate requirements no longer 
deemed necessary, thereby reducing handling costs, while maintaining 
quality and size requirements needed to ensure customer satisfaction.
    This rule also would make changes to Sec. 932.153 (as amended in 
the Federal Register on August 5, 1996, 61 FR 40507), which specifies 
current minimum grade and size requirements for limited use olives. All 
references to ``grade'' in that section would be replaced by the words 
``minimum quality'' or ``minimum quality requirements,'' as necessary.

Olive Import Requirements

    Section 8e of the Act requires that whenever grade, size, quality, 
or maturity requirements are in effect for olives under a domestic 
marketing order, imported olives must meet the same or comparable 
requirements. This rule proposes establishing minimum quality 
requirements to replace current minimum grade requirements for 
California olives under the marketing order. Therefore, a corresponding 
change is needed in the olive import regulation.
    This rule proposes modifying paragraphs (a)(8), (b)(1), (g), and 
(j) of Sec. 944.401 to delete certain references to the standards and 
add specific quality criteria for imported olives which are the same as 
those being proposed for California olives.
    In accordance with section 8e of the Act, the U.S. Trade 
Representative has concurred with the issuance of this proposed rule.
    This rule provides a 15-day comment period to allow interested 
persons to respond to this proposal. This period is deemed appropriate 
because the crop year began August 1, 1996, and this proposal needs to 
become effective as soon as possible. The proposal was recommended by 
the committee at a public meeting and all interested persons were 
invited to provide input. This proposal will also reduce handler costs 
and help ensure consumer satisfaction. All written comments timely 
received will be considered prior to finalization of this rule.

List of Subjects

7 CFR Part 932

    Marketing agreements, Olives, Reporting and recordkeeping 
requirements.

7 CFR Part 944

    Avocados, Food grades and standards, Grapefruit, Grapes, Imports, 
Kiwifruit, Limes, Olives, Oranges.

    For the reasons set forth in the preamble, 7 CFR parts 932 and 944 
are proposed to be amended as follows:
    1. The authority citation for 7 CFR parts 932 and 944 continues to 
read as follows:

    Authority: 7 U.S.C. 601-674.

PART 932--OLIVES GROWN IN CALIFORNIA

    2. Section 932.149 is revised to read as follows: Sec. 932.149 
Modified minimum quality requirements for specified styles of canned 
olives of the ripe type.
    (a) Except as otherwise provided in this section, the minimum 
quality requirements prescribed in Sec. 932.52(a)(1) are modified as 
follows, for specified styles of canned olives of the ripe type:
    (1) Canned whole and pitted olives of the ripe type shall meet the 
minimum quality requirements as prescribed in Table 1 of this section;
    (2) Canned sliced, segmented (wedged), and halved olives of the 
ripe type shall meet the minimum quality requirements as prescribed in 
Table 2 of this section;
    (3) Canned chopped olives of the ripe type shall meet the minimum 
quality requirements as prescribed in Table 3 of this section; and 
shall be practically free from identifiable units of pit caps, end 
slices, and slices (``practically free from identifiable units'' means 
that not more than 10 percent, by weight, of the unit of chopped style 
olives may be identifiable pit caps, end slices, or slices); and
    (4) Canned broken pitted olives of the ripe type shall meet the 
minimum quality requirements as prescribed in Table 4 of this section.

                                        Table 1.--Whole and Pitted Style                                        
                                        [Defects by count per 50 olives]                                        
----------------------------------------------------------------------------------------------------------------
                                                                                                                
----------------------------------------------------------------------------------------------------------------
FLAVOR.............................................................  Reasonably good; no ``off'' flavor.        
FLAVOR (Green Ripe Type)...........................................  Free from objectionable flavors of any     
                                                                      kind.                                     
SALOMETER..........................................................  Acceptable Range in degrees: 3.0 to 14.0.  
COLOR..............................................................  Reasonably uniform with not less than 60%  
                                                                      having a color equal or darker than       
                                                                      comparator for Ripe Type.                 
CHARACTER..........................................................  Not more than 5 soft units or 2 excessively
                                                                      soft units.                               
UNIFORMITY OF SIZE.................................................  60%, by visual inspection, of the most     
                                                                      uniform in size. The diameter of the      
                                                                      largest does not exceed the smallest by   
                                                                      more than 4mm.                            

[[Page 57786]]

                                                                                                                
DEFECTS:                                                                                                        
    Pitter Damage (Pitted Style Only)..............................  15.                                        
    Major Blemishes................................................  5.                                         
    Major Wrinkles.................................................  5.                                         
    Pits and Pit Fragments (Pitted Style Only).....................  Not more than 1.3 average by count.        
    Major Stems....................................................  Not more than 3.                           
    HEVM...........................................................  Not more than 1 unit per sample.           
    Mutilated......................................................  Not more than 3.                           
    Mechanical Damage..............................................  Not more than 5.                           
    Split Pits or Misshapen........................................  Not more than 5.                           
----------------------------------------------------------------------------------------------------------------


                             Table 2.--Sliced, Segmented (Wedged), and Halved Styles                            
                                        [Defects by count per 255 grams]                                        
----------------------------------------------------------------------------------------------------------------
                                                                                                                
----------------------------------------------------------------------------------------------------------------
FLAVOR...........................................................  Reasonably good; no ``off'' flavor.          
SALOMETER........................................................  Acceptable Range in degrees: 3.0 to 14.0.    
COLOR............................................................  Reasonably uniform with no units lighter than
                                                                    the comparator for Ripe Type.               
CHARACTER........................................................  Not more than 13 grams excessively soft.     
DEFECTS:                                                                                                        
    Pits and Pit Fragments.......................................  Average of not more than 1 by count per 300  
                                                                    grams.                                      
    Major Stems..................................................  Not more than 3.                             
    HEVM.........................................................  Not more than 2 units per sample.            
    Broken Pieces and End Caps...................................  Not more than 125 grams by weight.           
----------------------------------------------------------------------------------------------------------------


                                             Table 3.--Chopped Style                                            
                                        [Defects by count per 255 grams]                                        
----------------------------------------------------------------------------------------------------------------
                                                                                                                
----------------------------------------------------------------------------------------------------------------
FLAVOR...........................................................  Reasonably good; no ``off'' flavor.          
SALOMETER........................................................  Acceptable Range in degrees: 3.0 to 14.0.    
COLOR............................................................  Reasonably uniform with no units lighter than
                                                                    the comparator for Ripe Type.               
DEFECTS:                                                                                                        
    Pits and Pit Fragments.......................................  Average of not more than 1 by count per 300  
                                                                    grams.                                      
    Major Stems..................................................  Not more than 3.                             
    HEVM.........................................................  Not more than 2 units per sample.            
----------------------------------------------------------------------------------------------------------------


                                          Table 4.--Broken Pitted Style                                         
                                        [Defects by count per 255 grams]                                        
----------------------------------------------------------------------------------------------------------------
                                                                                                                
----------------------------------------------------------------------------------------------------------------
FLAVOR...........................................................  Reasonably good; no ``off'' flavor.          
SALOMETER........................................................  Acceptable Range in degrees: 3.0 to 14.0.    
COLOR............................................................  Reasonably uniform with no units lighter than
                                                                    the comparator for Ripe Type.               
CHARACTER........................................................  Not more than 13 grams excessively soft.     
DEFECTS:                                                                                                        
    Pits and Pit Fragments.......................................  Average of not more than 1 by count per 300  
                                                                    grams.                                      
    Major Stems..................................................  Not more than 3.                             
    HEVM.........................................................  Not more than 2 units per sample.            
----------------------------------------------------------------------------------------------------------------

    (b) Terms used in this section shall have the same meaning as are 
given to the respective terms in the current U.S. Standards for Grades 
of Canned Ripe Olives (7 CFR part 52): Provided, That the definition of 
``broken pitted olives'' is as follows: ``Broken pitted olives'' 
consist of large pieces that may have been broken in pitting but have 
not been sliced or cut.
    3. Section 932.150 is revised to read as follows: Sec. 932.150 
Modified minimum quality requirements for canned green ripe olives.
    The minimum quality requirements prescribed in Sec. 932.52 (a)(1) 
are hereby modified with respect to canned green ripe olives so that no 
requirements shall be applicable with respect to color and blemishes of 
such olives.
    4. In Sec. 932.152, paragraphs (a), (b), (c)(2), the heading of 
(d), (d)(1), (g)(1) introductory text, and (g)(2) introductory text are 
revised to read as follows:


Sec. 932.152  Outgoing regulations.

    (a) Inspection stations. Processed olives shall be sampled and 
graded only at an inspection station which shall be any olive 
processing plant having facilities for in-line or lot inspection which 
are satisfactory to the Inspection Service and the Committee; or an 
olive processing plant which has an approved Quality Assurance Program 
in effect.
    (b) Inspection--General. Inspection of packaged olives for 
conformance with Sec. 932.52 shall be by a Quality Assurance Program 
approved by the Processed Products Branch (PPB), USDA; or by in-line or 
lot inspection. A PPB approved Quality Assurance Program shall be 
pursuant to a Quality Assurance contract as referred to in Sec. 52.2.
    (c) * * *
    (2) The Inspection Service shall issue for each day's pack a signed 
certificate covering the quantities of such packaged olives which meet 
all applicable minimum quality and size

[[Page 57787]]

requirements. Each such certificate shall contain at least the 
following:
    (i) Date;
    (ii) Place of inspection;
    (iii) Name and address of handler;
    (iv) Can code;
    (v) Variety;
    (vi) Fruit size;
    (vii) Can size;
    (viii) Style;
    (ix) Total number of cases;
    (x) Number of cans per case; and
    (xi) Statement that packaged olives meet the effective minimum 
standards for canned ripe olives as warranted by the facts.
    (d) Olives which fail to meet minimum quality and size 
requirements. (1) Whenever any portion of a handler's daily pack of 
packaged olives fails to meet all applicable minimum quality and size 
requirements, the Inspection Service shall issue a signed report 
covering such olives. Each such report shall contain at least the 
following:
    (i) Date;
    (ii) Place of inspection;
    (iii) Name and address of handler;
    (iv) Can code;
    (v) Variety;
    (vi) Fruit size;
    (vii) Can size;
    (viii) Style;
    (ix) Total number of cases;
    (x) Number of cans per case; and
    (xi) Reason why the applicable requirements were not met.
* * * * *
    (g) Size certification. (1) When limited-use size olives for 
limited-use styles are authorized during a crop year and a handler 
elects to have olives sized pursuant to Sec. 932.51(a)(2)(i), any lot 
of limited-use size olives may be used in the production of packaged 
olives for limited-use styles if such olives are within the average 
count range in Table II contained herein for that variety group, and 
meet such further mid-point or acceptable count requirements for the 
average count range in each size as approved by the committee.
* * * * *
    (2) When limited-use size olives are not authorized for limited-use 
styles during a crop year and a handler elects to have olives sized 
pursuant to Sec. 932.51(a)(2)(ii), any lot of canning-sized olives may 
be used in the production of packaged olives for whole, pitted, or 
limited-use styles if such olives are within the average count range in 
Table III contained herein for that variety group, and meet such 
further mid-point or acceptable count requirements for the average 
count range in each size as approved by the committee.
* * * * *
    5. In Sec. 932.153, the section heading and paragraph (a) are 
revised to read as follows:


Sec. 932.153  Establishment of minimum quality and size requirements 
for processed olives for limited uses.

    (a) Minimum Quality Requirements. On or after August 1, 1996, any 
handler may use processed olives of the respective variety group in the 
production of limited use styles of canned ripe olives if such olives 
were processed after July 31, 1996, and meet the minimum quality 
requirements specified in Sec. 932.52(a)(1) as modified by 
Sec. 932.149.
* * * * *
    6. In Sec. 932.155, paragraph (c) is revised to read as follows:


Sec. 932.155  Special purpose shipments.

* * * * *
    (c) In accordance with the provisions of Sec. 932.55(b), any 
handler may use processed olives in the production of packaged olives 
for repackaging, and ship packaged olives for repackaging, if the 
packaged olives meet the minimum quality requirements, except for the 
requirement that the packaged olives possess a normal flavor: Provided, 
That the failure to possess a normal flavor is due only to excessive 
sodium chloride.

PART 944--FRUITS; IMPORT REGULATIONS

    7. In Sec. 944.401, paragraphs (a)(8), (b)(1), (g), and (j) are 
revised to read as follows:


Sec. 944.401  Olive Regulation 1.

    (a) * * *
    (8) Terms used in this section shall have the same meaning as are 
given to the respective terms in the current U.S. Standards for Grades 
of Canned Ripe Olives (7 CFR part 52) including the terms ``size'', 
``character'', ``defects'' and ``ripe type'': Provided, That the 
definition of ``broken pitted olives'' is as follows: ``Broken pitted 
olives'' consist of large pieces that may have been broken in pitting 
but have not been sliced or cut.
    (b) * * *
    (1) Minimum quality requirements. Canned ripe olives shall meet the 
following quality requirements, except that no requirements shall be 
applicable with respect to color and blemishes for canned green ripe 
olives:
    (i) Canned whole and pitted olives of the ripe type shall meet the 
minimum quality requirements prescribed in Table 1 of this section;
    (ii) Canned sliced, segmented (wedged), and halved olives of the 
ripe type shall meet the minimum quality requirements prescribed in 
Table 2 of this section;
    (iii) Canned chopped olives of the ripe type shall meet the minimum 
quality requirements prescribed in Table 3 of this section and shall be 
practically free from identifiable units of pit caps, end slices, and 
slices (``practically free from identifiable units'' means that not 
more than 10 percent, by weight, of the unit of chopped style olives 
may be identifiable pit caps, end slices, or slices); and
    (iv) Canned broken pitted olives of the ripe type shall meet the 
minimum quality requirements prescribed in Table 4 of this section, 
Provided, That broken pitted olives consist of large pieces that may 
have been broken in pitting but have not been sliced or cut.

                                        Table 1.--Whole and Pitted Style                                        
                                        [Defects by count per 50 olives]                                        
----------------------------------------------------------------------------------------------------------------
                                                                                                                
----------------------------------------------------------------------------------------------------------------
FLAVOR...........................................................  Reasonably good; no ``off'' flavor.          
FLAVOR (GREEN RIPE TYPE).........................................  Free from objectionable flavors of any kind. 
SALOMETER........................................................  Acceptable Range in degrees: 3.0 to 14.0.    
COLOR............................................................  Reasonably uniform with not less than 60%    
                                                                    having a color equal or darker than         
                                                                    comparator for Ripe Type.                   
CHARACTER........................................................  Not more than 5 soft units or 2 excessively  
                                                                    soft units.                                 
UNIFORMITY OF SIZE...............................................  60%, by visual inspection, of the most       
                                                                    uniform in size. The diameter of the largest
                                                                    does not exceed the smallest by more than   
                                                                    4mm.                                        
DEFECTS:                                                                                                        
    Pitter Damage (Pitted Style Only)............................  15.                                          
    Major Blemishes..............................................  5.                                           

[[Page 57788]]

                                                                                                                
    Major Wrinkles...............................................  5.                                           
    Pits and Pit Fragments (Pitted Style Only)...................  Not more than 1.3 average by count.          
    Major Stems..................................................  Not more than 2.                             
    HEVM.........................................................  Not more than 1 unit per sample.             
    Mutilated....................................................  Not more than 3.                             
    Mechanical Damage............................................  Not more than 5.                             
    Split Pits or Misshapen......................................  Not more than 5.                             
----------------------------------------------------------------------------------------------------------------


                             Table 2.--Sliced, Segmented (Wedged), and Halved Styles                            
                                           [Defects by count per 255]                                           
----------------------------------------------------------------------------------------------------------------
                                                                                                                
----------------------------------------------------------------------------------------------------------------
FLAVOR...........................................................  Reasonably good; no ``off'' flavor.          
SALOMETER........................................................  Acceptable Range in degrees: 3.0 to 14.0.    
COLOR............................................................  Reasonably uniform with no units lighter than
                                                                    the comparator for Ripe Type.               
CHARACTER........................................................  Not more than 13 grams excessively soft.     
DEFECTS:                                                                                                        
    Pits and Pit Fragments.......................................  Average of not more than 1 by count per 300  
                                                                    grams.                                      
    Major Stems..................................................  Not more than 3.                             
    HEVM.........................................................  Not more than 2 units per sample.            
    Broken Pieces and End Caps...................................  Not more than 125 grams by weight.           
----------------------------------------------------------------------------------------------------------------


                                             Table 3.--Chopped Style                                            
                                        [Defects by count per 255 grams]                                        
----------------------------------------------------------------------------------------------------------------
                                                                                                                
----------------------------------------------------------------------------------------------------------------
FLAVOR...........................................................  Reasonably good; no ``off'' flavor.          
SALOMETER........................................................  Acceptable Range in degrees: 3.0 to 14.0.    
COLOR............................................................  Reasonably uniform with no units lighter than
                                                                    the comparator for Ripe Type.               
DEFECTS:                                                                                                        
    Pits and Pit Fragments.......................................  Average of not more than 1 by count per 300  
                                                                    grams.                                      
    Major Stems..................................................  Not more than 3.                             
    HEVM.........................................................  Not more than 2 units per sample.            
----------------------------------------------------------------------------------------------------------------


                                          Table 4.--Broken Pitted Style                                         
                                        [Defects by count per 255 grams]                                        
----------------------------------------------------------------------------------------------------------------
                                                                                                                
----------------------------------------------------------------------------------------------------------------
FLAVOR...........................................................  Reasonably good; no ``off'' flavor.          
SALOMETER........................................................  Acceptable Range in degrees: 3.0 to 14.0.    
COLOR............................................................  Reasonably uniform with no units lighter than
                                                                    the comparator for Ripe Type.               
CHARACTER........................................................  Not more than 13 grams excessively soft.     
DEFECTS:                                                                                                        
    Pits and Pit Fragments.......................................  Average of not more than 1 by count per 300  
                                                                    grams.                                      
    Major Stems..................................................  Not more than 3.                             
    HEVM.........................................................  Not more than 2 units per sample.            
----------------------------------------------------------------------------------------------------------------

* * * * *
    (g) It is hereby determined, on the basis of the information 
currently available, that the minimum quality requirements and size 
requirements set forth in this regulation are comparable to those 
applicable to California canned ripe olives.
* * * * *
    (j) The minimum quality, size, and maturity requirements of this 
section shall not be applicable to olives imported for charitable 
organizations or processing for oil, but shall be subject to the 
safeguard provisions contained in Sec. 944.350.

    Dated: November 1, 1996.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 96-28609 Filed 11-7-96; 8:45 am]
BILLING CODE 3410-02-P